Hunting secrets revealed

[cpngtw]

Trading is a probability business, even with fundamental view. Don't tell us you don't have some percentage of failure when using fundamental. And therefore, higher probability of winning + good money management = winning in the long run.

 

[tenbobtrader]

You need an Edge

ambush all set !

 

[Trader333]

But if you trade entry signals via CCI/stock/MACD/3ma's what you are doing is playing a probability game, not trading.

Does this mean that you have zero probability of making a loss when you place a trade ? If so can you say more about your approach ?


Paul

 

[Black Swan]

Probability and 'stuff', c/o Mark Douglas

A probabilistic trading mindset consists of 5 fundamental truths:

1) Anything can happen
2) You can make Money without knowing what is going to happen next
3) There is a random distribution of wins and losses that define an edge
4) An edge is just the greater probability of one thing happening over an other
5) Every moment in the market is unique

I am a consistent winner because: (The 7 principles of consistency)

1) I objectively identify my edges
2) I predefine the risk of every trade
3) I completely accept the risk or I am willing to let go of the trade
4) I act on my edges without reservation or hesitation
5) I pay myself as the market makes money available to me
6) I continually monitor my susceptibility for making errors
7) I understand the absolute necessity of these principles of consistent success and therefore never violate them

Three stages in the development of a trader:

1) The Mechanical stage – this is where you:

- Build the self trust necessary to operate in an unlimited environment
- Learn to flawlessly execute a trading system
- Train your mind to think in probabilities (the 5 fundamental truths)
- Create a strong unshakeable belief in your consistency as a trader

2) The Subjective stage

Once you have completed the mechanical stage you advance to the subjective stage this is where you use everything you have learned about the nature of market movement to do what ever it is you want to do. There is a lot of freedom in this stage and as such a susceptibility to make a lot of trader based errors as the result of self valuation issues.

3) The Intuitive Stage

This is the advanced form of trading. Problem is our rational mind tends to override our intuition.

How easy is trading eh guys?

 

[Pippy5000]

I've never made a trade based on the stochastic oscillator alone.. I believe 1.58 will hold on the first try and the oversold reading on the stochastics (which will be increased further if spot reaches my entry within the specified amount of time), will indicate that more than 85% (approx) of the market is short, i.e. sellers.. a precarious point to be short in the face of major monthly support.

REGARDLESS of what will happen 2 weeks or 2 months from now the long at 1.58 is a bet on what will happen when an oversold market (too many sellers) reaches a point where there are no more sellers and allied sellers become buyers (profit takers)..

It's fine if you don't use indicators to HELP you make trades.. it really is fine if you don't believe in the mathematics involved, but here's why you're wrong.. many, many other traders DO believe in them and will use them to enter and exit trades. So whether or not they are merely voodoo in your eyes, the voodoo becomes real when enough people believe in the voodoo.. and they do..

Really though if you want a 1,000 page thread you need to stick your neck out, call out trades in advance, take all the sneers and jeers, be honest about your losses, but most of all you need to be right consistently far more than 50% of the time and be nice to traders who have good questions.. That's quite a rarity on this site and every other trading site on the net.. Successful traders who aren't in a contest to see who can be the most obnoxious when a "dumb" question is asked..

Also, you have to be prepared for the unhappy troll who isn't familiar with yoru trading style to read one post out of 10,000 and say, "oh, he's making a trade based on the stochastics." .. not really worth replying to, smacks of jealousy, but it is the weekend and I'm bored.. but if you'll excuse me now the market has opened..

 

[Black Swan]

It's fine if you don't use indicators to HELP you make trades.. it really is fine if you don't believe in the mathematics involved, but here's why you're wrong.. many, many other traders DO believe in them and will use them to enter and exit trades. So whether or not they are merely voodoo in your eyes, the voodoo becomes real when enough people believe in the voodoo.. and they do..

Really though if you want a 1,000 page thread you need to stick your neck out, call out trades in advance, take all the sneers and jeers, be honest about your losses, but most of all you need to be right consistently far more than 50% of the time and be nice to traders who have good questions.. That's quite a rarity on this site and every other trading site on the net.. Successful traders who aren't in a contest to see who can be the most obnoxious when a "dumb" question is asked..

Also, you have to be prepared for the unhappy troll who isn't familiar with yoru trading style to read one post out of 10,000 and say, "oh, he's making a trade based on the stochastics." .. not really worth replying to, smacks of jealousy, but it is the weekend and I'm bored.. but if you'll excuse me now the market has opened..[/QUOTE]

 

[Pippy5000]

I don't consider the 1.582 a real test, just GJ drag.. although it did bounce nicely.. official entry is 1.58112..

 

[Pippy5000]

30 pips bounce.. not what I wanted, but not a straight push through.. jump up and down in whichever fashion pleases you most.. I believe a half-assed breakout has been signaled.. I'm not selling it however.. happy with what I have.

 

[pedro01]

Ah-ha!! Yes I am and TBH I make no apologies for it. Doubtless we have both read Mark Douglas' - trading in the zone. Yes it's chocker full of NLP, but on several fundamental points I agree with him. My edge is based on the fact that (IMHO) trading (my trading) is all about probabilities. The probability is if I take the trade, with all (or most) of my indicators 'signalling', then the trade will go in my favour.

Do you have an explanation of why "CCI/Stoch/MACD/3 MAs = consistent success" ? Or is it something you have observed and now rely on without having an explanation of why the math indicates a high probability of a move in a specific direction ?

The indicators are all just mathematical representations of what has happened after all.

MACD is merely showing you the difference between a pair of EMA's. If you use MA's & MA, then one or the other must be redundant.

Next add in CCi & Stochastics:

Both Oscillators are roughly the same. In fact, most oscillators are the same. Give an oscillator a shorter lookback period & it will be more reactive (but give more false signals) give it a longer lookback & it will be less reactive. It is a demonstrable fact, that the market changes 'speed' from time to time and so there is no single oscillator setting that can be considered best. The past 4 weeks on the US indices would be an excellent example of when an oscillator would need to be re-tuned to fit the pace of the market, There are no 'best' settings, there are only settings that are best for current conditions.

So - do you us these indicators because they work ?

Alternatively, do you use them because you understand the math behind the oscilators inside out and you understand why a combination of them should work based on the conditions in the market they are supposed to represent ?

One of the interesting concepts with oscillators is the idea of 'overbrought' and 'oversold'. These are misnomers. Overbrought is not a technical derivative of past price. Overbrought is a fundamental state of a market, it is a psychological state more than a mathematical one. Oscillators can stay overbrought for an extended period of time in a trend. There should be another name for oscillators being in their extreme ranges because overbrought and oversold imply the market has gotten ahead of itself in some manner. These oscillators cannot show that.

I have yet to see someone predict the bursting of a bubble based on an oscillator.

 

[pedro01]

I've never made a trade based on the stochastic oscillator alone.. I believe 1.58 will hold on the first try and the oversold reading on the stochastics (which will be increased further if spot reaches my entry within the specified amount of time), will indicate that more than 85% (approx) of the market is short, i.e. sellers.. a precarious point to be short in the face of major monthly support.

REGARDLESS of what will happen 2 weeks or 2 months from now the long at 1.58 is a bet on what will happen when an oversold market (too many sellers) reaches a point where there are no more sellers and allied sellers become buyers (profit takers)..

I would be interested in how stochastics represents the NUMBER of sellers and buyers, especially in the Forex market.

I have to bow down to Virtuos0 as I haven't researched it but if only 2% of the Forex market is retail and the bulk of foreign exchange is driven by people (like me) moving money around the world to pay invoices etc, with no regard at all for the forex markets, how do you explain the 'too many sellers' part ?

I move a relatively small amount of USD into THB every year - about $2 million. The people I trade in are doing the same thing on a much larger basis, with many more currencies. The only conversation we ever have about exchange rates is when we start to look at re-negotiating billing rates when one particular currency goes out of line. Other than that, the only conversation we have on the timing of a currency transaction is "Have you paid my f*#&ing invoice yet ?".

I can understand in other markets that have a larger %age of retail trade making up that market but in Forex, I don't understand how there's enough people trading on the basis of stochastics for it to make a difference.

I am not saying you aren't profitable but I would be very interested in hearing why you think this works with such a small percentage of people following these types of indicators.

It's fine if you don't use indicators to HELP you make trades.. it really is fine if you don't believe in the mathematics involved, but here's why you're wrong.. many, many other traders DO believe in them and will use them to enter and exit trades. So whether or not they are merely voodoo in your eyes, the voodoo becomes real when enough people believe in the voodoo.. and they do..

See above.

Really though if you want a 1,000 page thread you need to stick your neck out, call out trades in advance, take all the sneers and jeers, be honest about your losses, but most of all you need to be right consistently far more than 50% of the time and be nice to traders who have good questions.. That's quite a rarity on this site and every other trading site on the net.. Successful traders who aren't in a contest to see who can be the most obnoxious when a "dumb" question is asked..

Why is it anyone would want a thread of any length ? 1 page or 1000, All we are doing here is having a debate. The length of the debate is irrelevant. This is not a competition.

Please, I would like to hear your comments. No-one is trying to insult you. It is not personal.

Also, you have to be prepared for the unhappy troll who isn't familiar with yoru trading style to read one post out of 10,000 and say, "oh, he's making a trade based on the stochastics." .. not really worth replying to, smacks of jealousy, but it is the weekend and I'm bored.. but if you'll excuse me now the market has opened..

Then join the debate but don't start calling people jealous because it only makes it look like your ego got bruised.

 

[Pippy5000]

1.58 trade...

short-termers.. you're welcome.. but give my share to poor Africans..

medium-termers.. sorry.. looks like we missed it by 11 pips..

long-termers.. I'm not sorry.. if you had a long-term trade setup and you put in a 30 pip stop.. well... greed is the blah of blah

Mr. Thai,

Just stop it.. we all understand that disobeying your genius results in after the fact obnoxiousness.. but PLEASE.. OH PLEASE.. post an actual trade before the fact and stick your neck out for ridicule from the peanut gallery of mediocre cowardly traders..

Today by sticking my neck out I've pleased the high-leverage short-termers and left myself open for ridicule from cowardly know-nothings such as yourself.. I'm absolutely positive that no one is intersted in the musings of an after-the-fact coward, but could you please, please, please at least try to stick your neck out.. day after day?? PLEASE?? me love you long time if you will little feller [pinches cheek]

oh but you need to be right more than 70% of the time for 11 months.. oh, and in front of at least 20 traders.. as soon as you do that then.. oh buddy your Thai stick will be rock hard, but until then you're a talking head in a sea of cowards..

see you soon when you put your money where your ample mouth is..

it's called "I'm Shorting Euros" .. wear a diaper..

 

[pedro01]

oh buddy your Thai stick will be rock hard, but until then you're a talking head in a sea of cowards..

 

[Pippy5000]

go ahead drink coffee and read your paper.. were it not for German pedophiles your country would have...

oh, nevermind.. I'll stick to my guns and invite you over for a contest.. 10 trades out of 10.. 30 pip stop, 60 pip limit.. let's say by some miracle you win..

I will do the unthinkable and think of something positive to say about your country

not Thailand.. Spain..

You need Anglo-Saxon rule to be truly happy..

 

[pedro01]

go ahead drink coffee and read your paper.. were it not for German pedophiles your country would have...

I will do the unthinkable and think of something positive to say about your country

not Thailand.. Spain..

Good to see you are sticking to the debate at hand.

For your next post, call me an old, fat sex tourist that moved to Thailand because I couldn't get laid at home. You'll be half way through the stereotypes then.

Or, you could discuss why Sochastics would represent an oversold condition when the 'self-fulfilling prophecy' doesn't make a lot of sense because of such a low %age of retail traders entering/exiting based on that indicator.

How about dropping the personal stuff & actually talking about the issues at hand ?

 

[cpngtw]

pedro01, I don't think you are a TA trader, and therefore, I don't think you have a deep knowledge of how to use technical analysis. Using indicators alone won't tell you anything about what trade you should take, no matter how many indicators you add to your beautiful charts.

 

[Pippy5000]

Man, I never said you couldn't get laid at home!

Here's how I went wrong.. I recommended a trade which would have gone unnoticed by outsiders had I not included the Stoch Oscil.. Yet, somehow by including that I have attracted the crowd of unhappy trading types who need to argue.. Had I merely placed an order for a scalp at monthly support I would have been mildly lauded by the after the fact trading community.

In reality, "after the fact" my trade only pleased the $1,000,000 demo traders I dared to placed a trade for 30 pips.. otherwise, the trade (so far) did break 1.58 (barely) before a slight ambiguous bounce. This is due to cross action from GJ but I never mentioned that in my original assesment and as such is irrelevant. I wasn't entirely right in my recommendations for longer period traders.. end of story. If they lost money due to my recommendations then I would invite them to try again based on another recommendation.. and as always I would happily donate my first, second and third born children to any trader who would take up my challenge of 10 for 10..

I'm not the best trader on this site, I know who they are, but I am the most honest trader on this site.. I pay attention to the musings of greater traders than myself and follow their triumphs, yet never witness their mistakes. The stoch osc. is pure gold, yet isn't 100% correct! How could it be?

 

[Pippy5000]

JESUS! I was just sitting here and minding my own bidness and then I caught a glimpse of my avatar.. At first I was shocked because I thought I was looking at a package of Brawny paper towels due to the manliness, but then I realized it was me..

 

[pedro01]

It would actually be incorrect to say I don't use TA. I do not use indicators, although I did go through the phase as do many other people when they start out.

The jist of this thread is that you should understand what you are trading. The reason I bring up indicators is that you should also understand the indicators you use, how they are derived and what they represent.

If you don't, you may jump at convergence when in fact the convergence is brought about because the math behind the indicators is the same.

MACD & MAs in the example above, multiple oscillators too.

 

[pedro01]

BTW Pippy.

You are a successful trader, we all get that. This thread is not a poke at you.

I am genuinely interested in whether you think the Forex market is driven by people trading the market or by movement of money to pay invoices & take advantage of other things like that countries stock market/interest rates etc.

If you believe the latter, then do you agree that the 'self fulfilling prophecy' theory of TA doesn't apply because the bulk of trades aren't being made on the basis of TA.

If you find the indicators work but have not looked into them in depth, that's fine. If you have though, I'd be interested in why you think they work.

 

[Pippy5000]

movement of money

that one but it's a trick question as spot "bounces" or "fails" due to trading rather than due to everpresent flows (on my charts) .. retail traders aren't the tiniest blip in the cosmic web. Be with the banks.. That money you're using to trade came from a bank!

I want you to understand what I do so that you can help me in return Imagine spot brushing against s/r after a big move.. what is the likelihood of spot breaking that s/r??

It doesn't matter because it isn't your business .. Your business is to setup a limit scalp at the next s/r but sometimes you shouldn't do it.. Why? Because there's still room for /buyerssellers.. When there is no room for buyers/sellers there is a far greater probability of a bounce or failure from s/r.. In addition after previous s/r breaks you will notice that the responsible parties are generally satisfied and will take profit thereby becoming allies..

A good way of determining the ratio of buyers to sellers is the stochastic oscillator.. I'm sorry if it hurts your feelings, but it's true

by the way.. this works amazingly well and if you'd like to learn and to teach me as well then you would be very much welcome on my thread.. all of you..