Is There Another Methodology...?

[Mr Squirrel]

Here goes...

So there's Technical Analysis and Fundamental Analysis. What about a methodology solely based on Risk Management, Statistics and Probability? Does this exist and if so, what is it called?

I know I'm a newbie, but I've always believed that a mathematical approach could work on its own. And if a method could work purely on maths, then apply price action to the equation and the probability is improved dramatically. Any thoughts...?

Many thanks,

Stephen

 

[foredog]

Google infiniteyield blogspot

Trades entered every week based solely on being X% of previous weeks range from weeks open.

 

[MrGecko]

There sure is - Quantitative analysis. Big field, plenty of resources.

Try Wilmott as a start, far more content than here.

 

[luckyd1976]

Contrairian should be it's own methodology. It's not (unfortunately) always talked about in context with Value Investing but it isnt. Can you truly say Dogs of the Dow has anything to do with value and or fundamentals??? Nope just pure contrairian. And when you mix contrairian with a PivotPoint LongerTerm you can get some great results for the LongerTerm trader.

 

[mauzj]

Google infiniteyield blogspot

Trades entered every week based solely on being X% of previous weeks range from weeks open.

The site is here:

Dangerous Secrets that Guarantee Automatic Forex Profits!!!

Have you tried it foredog? Can anyone verify the backtest results?

I'm not sure how exactly he exits on the open price of Monday morning on forex as there isn't really an open price.

 

[mauzj]

Other methodologies include:

- sitting on the bid/offer of a non moving stirs contract, trying to get hit on either side.
- waiting for a news announcement, and trying to trade the direction it implies before the market moves
- arbitrage across different markets.

 

[dilesh23]

Gambling blows your mind review | Non-fiction book reviews - Times Online

theres one in there somewhere

 

[Mr Squirrel]

Dangerous Secrets that Guarantee Automatic Forex Profits!!!

I haven't looked at the link yet, but I have concerns about most of the words in the title!

Other methodologies include:

- sitting on the bid/offer of a non moving stirs contract, trying to get hit on either side. What is a stirs contract? I have checked the Traderpeida, but no luck...

- waiting for a news announcement, and trying to trade the direction it implies before the market moves Hmm, are you pulling my plonker? My research so far says trade the price reaction to news, not try and predict it. But if it works for you, who am I to knock it?

- arbitrage across different markets. Seen mention of it, but a bit complex for newbies, no?

Thank you for your reply... S

 

[Mr Squirrel]

Contrairian should be it's own methodology. It's not (unfortunately) always talked about in context with Value Investing but it isnt. Can you truly say Dogs of the Dow has anything to do with value and or fundamentals??? Nope just pure contrairian. And when you mix contrairian with a PivotPoint LongerTerm you can get some great results for the LongerTerm trader.

Thanks for your reply. I've not really looked into contrarian yet, but I will add it to my list! I've read briefly about 'Dogs of the Dow'. Do you play it? Surely if too many people were to do it, it would fail? Obviously not I guess!

Saying that, I've always wondered if nearly everyone uses support, resistance and pivots, how come they still work? It's all madness.

 

[mauzj]

> > Dangerous Secrets that Guarantee Automatic Forex Profits!!!
> I haven't looked at the link yet, but I have concerns about most of the words in
> the title!

It was recommended by foredog above, and he appears to have good rep, so hopefully there's something to it. But I have not backtested it. Hopefully someone else here has?

>> - sitting on the bid/offer of a non moving stirs contract, trying to get hit on either
>> side.
> What is a stirs contract? I have checked the Traderpeida, but no luck...

Short Term INterest Rate. There's a book on the subject, "Trading STIR Futures" I think. They used to move very little, so locals would just sit on the bid and offer all day. Or try to leg into and out of calendars via other calendars. I'm no expert on the subject and can't provide you with any good info on the subject, so maybe someone with more experience could elaborate on this?

> > - waiting for a news announcement, and trying to trade the direction it implies
>> before
>>> the market moves
> Hmm, are you pulling my plonker? My research so far says trade the price
> reaction to news, not try and predict it. But if it works for you, who am I to knock it?

This is a very common strategy. When news is announced, there can be a few seconds before price reacts. Over stuff like NFP it's a fraction of a second. Price only moves to the new level once the market participants have priced it there.

Example... NFP is released. Results are better than expected. If you are fast, you can place a buy order a few ticks up in the ESX. If you're filled, it should rally, and you could make cash. Alas...

- If the news is revised price will fall.
- The price might fall anyway
- You'll probably miss the price if you're too slow.

> - arbitrage across different markets. Seen mention of it, but a bit complex for
> newbies, no?

You need fast computers and low commissions to do this. So it's only suitable for full time traders who can sit there watching the markets all day.

 

[foredog]

I know the title sounds a bit like SPAM but if you go to the blog

Infiniteyield Forex

All the trades taken since he started are on there and he emails out the entries monday morning.

If you email him he sends out the criteria for entries and exits so it's all in black and white for you to see

As far as i can see it's not a scam but a mathmatical system that over time makes a profit.

Put simply buy/sell if the market moves x% of the previous weeks range above/below the open which is classed as 6am GMT as the action in the Asian session can be mimimal.

I've got an Oanda account setup and wil be trading this method within the next few weeks, other than that it's nothing to do with me, i just found it and it made sense to me.

 

[Claudia123]

I know the title sounds a bit like SPAM but if you go to the blog

Infiniteyield Forex

All the trades taken since he started are on there and he emails out the entries monday morning.

If you email him he sends out the criteria for entries and exits so it's all in black and white for you to see

As far as i can see it's not a scam but a mathmatical system that over time makes a profit.

Put simply buy/sell if the market moves x% of the previous weeks range above/below the open which is classed as 6am GMT as the action in the Asian session can be mimimal.

I've got an Oanda account setup and wil be trading this method within the next few weeks, other than that it's nothing to do with me, i just found it and it made sense to me.

FirstStrike Plus trades executed this week:

gbp/usd: Long @ 1.4970, stopped at 1.4653 for a 318 pip loss.
eur/usd: Long @ 1.3038, stopped at 1.2892 for a 146 pip loss.
gbp/jpy: Short @ 130.86, stop 135.46. Trade in progress.

usd/chf: Short @ 1.1510, stopped at 1.1648 for 138 pip loss.
usd/jpy: Short @ 90.07, stopped at 91.54 for 147 pip loss.

Certainly looks a good system to me. What is the plan - take his tips then do the opposite ?? Did i read he dont trade Fridays - not surprised he must be suicidal by then.

 

[luckyd1976]

Thanks for your reply. I've not really looked into contrarian yet, but I will add it to my list! I've read briefly about 'Dogs of the Dow'. Do you play it? Surely if too many people were to do it, it would fail? Obviously not I guess!

Saying that, I've always wondered if nearly everyone uses support, resistance and pivots, how come they still work? It's all madness.

I do play LongerTerm Contrair w/pivots. With my LT porfolio, I play LT trend then switch to Contrair when the Bears show their teeth.

Madness yes but thats what makes trading interesting!

Support, Resistance, and Pivots. Yes everyone knows them. But the funny thing is, NO ONE plays them the same...

Take S & R, do you wait for the confirmation? Do you jump in at $0.01 past the last high/low? Do you play a +/- 1% as your breakout? And then factor in traders with SIZE. If they are waiting at +/- 0.001 and it triggers there's the big gap. Everyone has their different take on breakouts etc... And that doesnt even include Time Frames...

Pivots are confusing by themselves. There's like 5+ Pivots Calculations out there. And that gets into the "which one is right?" conversation... Pivots for Intraday are a joke. Learn Price... But Pivots work great for the LTerm trader. Use the Monthly and Or weekly Pivots for Position Sizing, Limit orders, Especially in Bear Markets. You can catch some quick trades (B-S2 moves back up to R1) and you will outperform any benchmark, In a LT Down Tape. And trust me, the LTerm down tape is the best time to show outperformance.