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What was your "holy grail"?

  • #101
  • Jun 7, 2017 4:36am Jun 7, 2017 4:36am
Quoting Hitrader
You can almost win with any strategy, if you follow proper money management and discipline. Holy grail is nothing but your mindset.
Some strategies are less profitable than others and some people have difficulty understanding some strategies. That said, I do agree about proper money management and discipline. Whatever one does, those are always essential to good trading.
  • #102
  • Jun 7, 2017 11:51am Jun 7, 2017 11:51am
Understanding market manipulation dynamics.
  • #103
  • Jun 7, 2017 2:37pm Jun 7, 2017 2:37pm
Best way to make money:
always trading with bias and momentum = always trading against sucker pockets.
  • #104
  • Jun 7, 2017 7:00pm Jun 7, 2017 7:00pm
Quoting The-Flipper
Best way to make money: always trading with bias and momentum = always trading against sucker pockets.
  • #105
  • Jun 8, 2017 5:33am Jun 8, 2017 5:33am
I have a question, feel free to chime in with your thoughts.

The 4HR timeframe seems to be very accurate when looking at swings. As I mentioned before, you have 6 signals every 24 hours. But you still need at least 8 hours of sleep! ... if you could somehow check once or twice a day on the 4HR timeframe, you'd miss a couple of candle closings, so is there anyway to go about this? What times would you check and the times you would go to sleep? Because I'm sure checking every 4 hours would be counterproductive as most of the time, the market is quiet; there's no need to lose sleep over a quiet market.
  • #106
  • Jun 8, 2017 6:04am Jun 8, 2017 6:04am
Quoting Ganative
I have a question, feel free to chime in with your thoughts. The 4HR timeframe seems to be very accurate when looking at swings. As I mentioned before, you have 6 signals every 24 hours. But you still need at least 8 hours of sleep! ... if you could somehow check once or twice a day on the 4HR timeframe, you'd miss a couple of candle closings, so is there anyway to go about this? What times would you check and the times you would go to sleep? Because I'm sure checking every 4 hours would be counterproductive as most of the time, the market is quiet;...
I wouldn't "busy" myself with the swings when the trend can be clearly shown in the D1 ... Change the D1 into line mode to know the ongoing trend, then turn into candlesticks to determine at which level we could start playing ... (need only to do this once a day after closing)
Market is not random but unpredictable
  • #107
  • Jun 8, 2017 6:37am Jun 8, 2017 6:37am
Quoting 4for4
{quote} I wouldn't "busy" myself with the swings when the trend can be clearly shown in the D1 ... Change the D1 into line mode to know the ongoing trend, then turn into candlesticks to determine at which level we could start playing ... (need only to do this once a day after closing)
seems like you have a very strong distaste for any timeframe lower than the daily. I can see why, way less stress and the price action is clearer.
  • #108
  • Jun 8, 2017 7:04am Jun 8, 2017 7:04am
Quoting Ganative
{quote} seems like you have a very strong distaste for any timeframe lower than the daily. I can see why, way less stress and the price action is clearer.
Too many "false noises" during the day because of the scalpers and hft computers ...
Market is not random but unpredictable
  • #109
  • Jun 8, 2017 7:19am Jun 8, 2017 7:19am
Quoting 4for4
{quote} Too many "false noises" during the day because of the scalpers and hft computers ...
But to some people, those "noises" are clear signals. Like when I scalped the 5M TF... it was still the same. The dynamics were more zigzag in comparison to the daily TF but when the pattern is present, it's present. I followed wherever price went, just like the daily. When people claim that the lower timeframes is just noise, I still don't quite understand. The technical patterns are still there, which transpire into the higher timeframes, is it not? Am I correct? Or, what is your reason why most people and you think that it is just false noises?
  • #110
  • Jun 8, 2017 7:49am Jun 8, 2017 7:49am
Quoting Ganative
{quote} But to some people, those "noises" are clear signals. Like when I scalped the 5M TF... it was still the same. The dynamics were more zigzag in comparison to the daily TF but when the pattern is present, it's present. I followed wherever price went, just like the daily. When people claim that the lower timeframes is just noise, I still don't quite understand. The technical patterns are still there, which transpire into the higher timeframes, is it not? Am I correct? Or, what is your reason why most people and you think that it is just false...
What I meant by "false noises" is that the direction changes too often and too fast within a day ... I feel comfortable making daily analysis, but some people might be better in analyzing lower timeframes (nothing wrong with that) ...
Market is not random but unpredictable
  • #111
  • Jun 8, 2017 9:36am Jun 8, 2017 9:36am
Quoting 4for4
{quote} What I meant by "false noises" is that the direction changes too often and too fast within a day ... I feel comfortable making daily analysis, but some people might be better in analyzing lower timeframes (nothing wrong with that) ...
That, I agree with. Yes, the direction does change quite fast and frequently during intraday. Which I feel like beginners when they first start out, they have this mindset that more opportunities are present within the lower timeframes, so they try to get rich quick by scalping the market. That is true... but they really have no idea what they are looking for, I say this because I was a victim as well lol. The only solution I came to was that big money leave traces behind... just be patient and follow the footsteps on the higher timeframes. This is our only defense as retail traders. Candlesticks, additional indicators, etc. are all lagging. That is why you must anticipate your next trade and knowing exactly where you want to buy/sell. Your first post regarding, "plan the trade, trade the plan" applies greatly.
  • #112
  • Jun 8, 2017 4:53pm Jun 8, 2017 4:53pm
Quoting Ganative
{quote} That, I agree with. Yes, the direction does change quite fast and frequently during intraday. Which I feel like beginners when they first start out, they have this mindset that more opportunities are present within the lower timeframes, so they try to get rich quick by scalping the market. That is true... but they really have no idea what they are looking for, I say this because I was a victim as well lol. The only solution I came to was that big money leave traces behind... just be patient and follow the footsteps on the higher timeframes....
Here's my thought: Since most traders are losing, the winning ones must have been doing something "opposite" (or "differently") because the market can only go two-ways, right? ...
(if all the trades that was made by the losing traders is reversed, they'll be winning, won't they?)
Market is not random but unpredictable
  • #113
  • Jun 8, 2017 6:37pm Jun 8, 2017 6:37pm
Quoting 4for4
{quote} Here's my thought: Since most traders are losing, the winning ones must have been doing something "opposite" (or "differently") because the market can only go two-ways, right? ... (if all the trades that was made by the losing traders is reversed, they'll be winning, won't they?)
So you're suggesting, when you are about to take a trade... choose the opposite option in regards to your first choice? Like if you were about to buy at a certain level, you would really want to sell? I'm not so sure if that would work but I can definitely see why you would think that, it's logical right?

Nah, I only think traders lose because they don't know what they're doing/have no specific plan. They don't know what they're looking for. The market, when it goes in one direction, it goes in one direction until it reaches a certain price, then it will reverse. I have this mindset that price MUST reach a certain point before it can go another direction.

I remember being in that exact, confused stage. Oh my god it was so frustrating. When I opened up my charts I didn't really understand when to buy or sell... when I saw a "trend" I automatically assume it's going in that one direction and I get in way too late, I would just literally enter with no cause or reason... and then when the market reversed I REFUSED to get out because I thought it was gonna go back in my direction sooner or later. How naive I was. You must have some sort of education and study quite a bit if you want to get in this business. People like me (earlier when I first started out) were the shark bait that just gave my money away because I just didn't have a clue what I was doing. That's the thing with this business... I mentioned this before but there will be waves of newcomers all the time... there's enough money to go around because these new guys think they can get rich quick.
  • #114
  • Jun 8, 2017 7:10pm Jun 8, 2017 7:10pm
Quoting Ganative
{quote} So you're suggesting, when you are about to take a trade... choose the opposite option in regards to your first choice? Like if you were about to buy at a certain level, you would really want to sell? I'm not so sure if that would work but I can definitely see why you would think that, it's logical right?
No, I didn't mean that kind of "opposite" ... Let me elaborate:
Whenever we make a trading plan based on whatever method/strategy, we should all come out with the "Holy Trinity" of EP-SL-TP ...

Here's what I sometimes do when the trend isn't that clear: I'll make a trading plan based on what I see/think the market should be doing, thus come up with the "trinity" ... but I didn't put in the order but wait (1) to see if the EP is executed and then (2) if the TP is reached ... If either one isn't reached, I might go the other way at SL (and determine/calculate the SL-TP for the new trade) ...

When a trend is clear, I'll wait until I see trend-reversal patterns forming, then I'll start planning my trade to get on the new trend as early as possible (but not trying to catch top/bottom) ...
Market is not random but unpredictable
  • #115
  • Edited 8:01pm Jun 8, 2017 7:17pm | Edited 8:01pm
Quoting Ganative
{quote} So you're suggesting, when you are about to take a trade... choose the opposite option in regards to your first choice? Like if you were about to buy at a certain level, you would really want to sell? I'm not so sure if that would work but I can definitely see why you would think that, it's logical right? Nah, I only think traders lose because they don't know what they're doing/have no specific plan.
Edit: Sorry guys I posted this before 4for4's response. It deals with 'flipping an unsuccessful strategy'.......On reading 4for4's post above, this post is not relevant to your discussion.

I agree with you G :-)

Unfortunately by reversing an unsuccessful strategy, there is no guarantee you will achieve positive performance results. The impact of frictional costs such as commissions, SWAP and slippage create an asymmetrical profile to return distributions.

For example the strategy below highlights the conundrum.

Attached Image (click to enlarge)
Click to Enlarge Name: Capture.JPG Size: 275 KB


In this typical mean reversion strategy strategy we have the results of 3342 trades of which we have a Pwin of 69.8% and a reward to risk ratio of $193.99/$335.25 = 0.58. These performance metrics are typical of this type of strategy.

It produces a solid performance over a 17 year time horizon offering an annual return of 2.67% (note profits are not reinvested). We have some great years and some poor years with a max drawdown of 6.9% for the entire period.

Attached Image


On a risk weighted basis we could scale things up with position sizing of approximately 4x to achieve a 11% CAGR with a max drawdown of 30% for the risk junkies out there. The result would multiply the annual returns accordingly where some years would deliver returns of >40%.

However note the total gross profit before frictional costs are taken into account of $262K. Of this gross profit, commissions take a whopping 53% of total gross profit and SWAP takes 3.4% of total gross profit. Of course for longer term strategies, SWAP will be higher but these results reflect a fairly short term strategy with a short trade duration.

So what this says is that you need to expect over the long term for commissions (spread) to chew at least 50% of your gross performance returns alone. This showcases the fact that a trader's success is attributed to only a small edge and that frictional costs have a significant say in whether or not your trading strategy will be successful in the long run.

So then let's assume we have an unprofitable strategy. We actually may find that before frictional costs, the strategy is actually a positive performer. If we flip it, then we could easily find that the reverse result puts us deeper into negative territory.

The bottom line is that there is not much available alpha in the market and what determines your long term success is actually a very fine edge which only over a long term magnifies to a substantial position. A significant component of your edge needs to be able to overcome the excessive frictional costs that impede your growth prospects. It is essential therefore that we take frictional costs seriously and look around for the best offerings as a small saving can result in turning an unprofitable strategy into a profitable one.

This post from Black Bird presenting opinions from a pro (Anton Kreil) gives a rare insight into the brutal playing field that we as retail traders need to face.....and the reason why we need to find strategies that conclusively deliver an edge on a very uneven playing field.
  • #116
  • Jun 9, 2017 3:38am Jun 9, 2017 3:38am
Quoting Copernicus
{quote} Edit: Sorry guys I posted this before 4for4's response. It deals with 'flipping an unsuccessful strategy'.......On reading 4for4's post above, this post is not relevant to your discussion. I agree with you G :-) Unfortunately by reversing an unsuccessful strategy, there is no guarantee you will achieve positive performance results. The impact of frictional costs such as commissions, SWAP and slippage create an asymmetrical profile to return distributions. For example the strategy below highlights the conundrum. {image} In this typical mean...
Ok, so what I interpret from your post is that spreads/commission will chew into your profits... and if you have an unprofitable strategy, spreads/commission will screw you over even more. So what is the solution? What 4for4 mentioned previously, find a strategy that is 50/50 (because the market can only go two ways right? Up or down) and then slowly redefine that strategy to adhere to your preference by understanding what works for you and what doesn't, and then modify it into a 60% or 70% win rate.

I realized that the only thing that makes sense to me in this market is S/D levels... or S/R basically. It is so logical and it is right there in front of every trader that opens up their charts... they just have no idea the true significance behind it. I have read many posts where people claim, "everything about forex is a lie, including S/R levels, indicators, stop-losses, they're all lies!" But it's only a matter of how you utilize it... if you follow textbooks and what most forums/websites say, you ARE the mass that gets their money taken from them. You must follow your own way and what works for you. I am correct, am I not?
  • #117
  • Jun 9, 2017 5:15am Jun 9, 2017 5:15am
Quoting Ganative
{quote} Ok, so what I interpret from your post is that spreads/commission will chew into your profits... and if you have an unprofitable strategy, spreads/commission will screw you over even more. So what is the solution? What 4for4 mentioned previously, find a strategy that is 50/50 (because the market can only go two ways right? Up or down) and then slowly redefine that strategy to adhere to your preference by understanding what works for you and what doesn't, and then modify it into a 60% or 70% win rate. I realized that the only thing that makes...
Rather than re-invent the wheel, as this trading gig has been going on since the great Tulip bubble, the best advice I have received to-date is to apply the principles that are engaged by the professional fund managers who have an audited verifiable track record. For some reason us retail traders think their is some 'golden chalice' out there capable of satiating our unrealistic appetites. When you are forced to recognise the reality, you can quickly identify the difference between luck versus skill and short term dreaming versus long term reality.
  • #118
  • Edited 1:44pm Jun 10, 2017 10:03am | Edited 1:44pm
I realized that "traders" just make trading harder than it needs to be... it is all psychological. 4for4, you are probably the only person I know that trades similar to me (given that I just made this account and only opened one thread, I'm sure there are more traders out there that trade like us ). I do not know how to put this in a simpler context but BIG MONEY LEAVE TRACES BEHIND... follow the traces. ANTICIPATE. You must anticipate... otherwise you are purely gambling. If you do not have an idea of where you want to buy/sell, you do not have a clear reason why you would want to buy/sell in the first place. I believe that brokers and the big boys are not out to get your money... lol you think they care about your $200 stop loss? It's not like they are directly targeting you. They are targeting a mass of people, snatching money from the thousands of people who DON'T know what they're doing... you just happened to be a part of the herd of suckers. That is all, have a great weekend everybody.
  • #119
  • Edited 10:27am Jun 10, 2017 10:06am | Edited 10:27am
Quoting Copernicus
{quote} Rather than re-invent the wheel, as this trading gig has been going on since the great Tulip bubble, the best advice I have received to-date is to apply the principles that are engaged by the professional fund managers who have an audited verifiable track record. For some reason us retail traders think their is some 'golden chalice' out there capable of satiating our unrealistic appetites. When you are forced to recognise the reality, you can quickly identify the difference between luck versus skill and short term dreaming versus long term...
"For some reason us retail traders think there is some 'golden chalice' out there capable of satisfying our unrealistic appetites." That is simply because when newcomers get introduced to this business, they are lured in by colorful charts and people with fake track records and promises of getting rich fast with very little money. "You don't need thousands of dollars to invest in this market like with stocks!! You can open an account with just as little as $1,000 and you can be a millionaire in a couple of months with high leverage!" Then, they would blow their account in a matter of a few days, or a couple of weeks. So, they go and deposit even more money, creating a constant cycle, until they realize that instead of working on their weaknesses (if they even understand where they are weak), they continue to keep searching for a high leveraged system that will make them filthy rich. Lol, honestly it still makes me laugh because I was fooled too.

Edit: you know what? When I mentioned high leverage... wow I realized that's what gets the newbie. They don't quite understand leverage. Because I know I didn't really comprehend it when I first started out... I honestly kind of ignored it and thought it wasn't as significant as the other factors. But boy, it is very crucial to understand what is leverage and how to leverage according to your account. Leveraging can even be seen as an illusion in my eyes because you can just discipline yourself by opening smaller positions but the attractiveness of high leverage and the potential to make even more money lures in new guys so they believe it's a good thing, setting the highest leverage their broker offers and opening the biggest position size possible. That's a no no.
  • #120
  • Edited 12:24pm Jun 10, 2017 11:54am | Edited 12:24pm
Quoting Ganative
{quote} "For some reason us retail traders think there is some 'golden chalice' out there capable of satisfying our unrealistic appetites." That is simply because when newcomers get introduced to this business, they are lured in by colorful charts and people with fake track records and promises of getting rich fast with very little money. "You don't need thousands of dollars to invest in this market like with stocks!! You can open an account with just as little as $1,000 and you can be a millionaire in a couple of months with high leverage!" Then,...
Leverage is just a tool. It's extremely useful if you know how to use it and you can become a millionaire in months starting with just $1000 and using high leverage. However, most people are extremely likely to lose several thousand at first while attempting it. Most will never reach that level of control. It can be done, but, most newbies don't have the experience yet to know how to do it. They lack the wisdom.

You should take the highest leverage available but just because a tool is in your toolbox does not mean it's the proper time to use it. Most trades are small gambles where you don't want to risk much. You'll barely break even with them. Then you have a few that are great odds and you'll want to risk more. That's how you become profitable. There are rare occasions where the market screams at you to take it's money. It's at those times you want as much leverage as possible. Newbies just can't identify what the situation is yet. A good trader can control themselves enough not to lose money on the first kind. A great trader focuses on creating the second kind. The third kind are rare gifts from the market itself and no one should presume that it is within their own skill to create them. The only thing a newbie can hope for is that with time they'll figure out how to identify them.
"The fun is in the hunt. Not the kill."
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