Lord Flasheart
Legendary member
- Messages
- 9,826
- Likes
- 985
weve got next doors left overs
weve got next doors left overs
be-positive
Veteren member
- Messages
- 4,969
- Likes
- 488
.
Last edited:
I like it.
IMO Essential not to doubt the system (if it's statistically proven to work)
Yep, you'll eventually work it out that what you're doing does not stastically work, ever.
You can not back test 20 to 50 pip trades for more than a few months which means you will never know how worthwhile those drawdowns really are.....
I like this thread except for a few egotistical ones ( including me) , but I still fail to see how any of you make any money even when I record yourbtrades day by day,,,,BS trades look impressive though!!!
jon1971
Well-known member
- Messages
- 495
- Likes
- 27
Hi Guys, I hope all are well and raking up pips...
Just been looking at a scalping strategy from The Rumpled One over at TL and wondered what your opinions on it were.
Basically trade in direction of current H1 bar (better if D1 agrees) and take entries on passes through psychological levels xx00, xx25, xx50 & xx75.
SL & TPs are intuitive based on PA.
Very simple and provides multiple entries for day trading. I intend to initially demo it for a few days.
Any thoughts?
Jon
Just been looking at a scalping strategy from The Rumpled One over at TL and wondered what your opinions on it were.
Basically trade in direction of current H1 bar (better if D1 agrees) and take entries on passes through psychological levels xx00, xx25, xx50 & xx75.
SL & TPs are intuitive based on PA.
Very simple and provides multiple entries for day trading. I intend to initially demo it for a few days.
Any thoughts?
Jon
What makes you so sure that a strategy looking for 20-50 pips cannot be statistically proven to work? Hell, even 10 pip moves can be caught on a high probability basis... In markets that move within a daily range of 100+ pips why is it beyond the realm of possibility to day trade with small stops\targets?
I've seen you say it a few times but haven't yet seen an explanation that proves the point.. I do however see others catching 10-50 pip moves consistently and I've had a fair bit of success over the last month or so myself although I don't consider what I've done as proof due to the sample size.
Please share your thoughts, I'm genuinely interested.
No problem LiamH, please believe me I am not trying to be difficult for the sake of being difficult.
The fact is that the market moves up and down daily for millions of reasons beyond "speculation", this is because these transactions are for a "commercial" reason which means there is no way in hell you can predict 20 - 30 pip movements (in the commercial world, 20-30 pips does not exists, only cents rounded up or rounded down), after commercial reasons, currencies will drift hourly for other reasons, e.g. bonds.
The point is that there are so many reasons for a currency going up 30 pips or down 30 pips that these moves are "random", it's the same as betting on red or black at rollette. You'll be right a hell of a lot of the time, but over time that little number called zero (i.e. spread) will mean you loose or you'll make some money but no more than a full time job at Mac D's.
Financial transactions that effect daily currency movements are enormous, liquidity is a perfect example. I am a company in the FTSE 100 and I want to make an aquisition in Korea for £50m, and I must transfer the funds today (that's how acquisitions work, the money moves at the last minute), my broker/or bank needs to hunt down all those sellers without pushing the price of the currency up too high, this will result in random movements chasing liquidity (it could last all day or also be over just as quickly as it started).
So, if you think you can "consistently" anticipate these random movements (that you will never be able to explain), then you're a genius...but hey....someone out there is probably a genius!!
So back to your question "What makes you so sure that a strategy looking for 20-50 pips cannot be statistically proven to work?". I'm yet to find anyone doing this over a long enough period, a couple of months does not count (nobody wants a full time job for 2 months only), I mean at least 12 to 24 months (we'll start low).
I could be wrong, but then prove it (not the way BS does btw).
Moving averages say a lot more about a currency direction than actual price does which eliminates many random movements! but that's a whole other world with it's own gremlins!!
wackypete2
Legendary member
- Messages
- 10,211
- Likes
- 2,058
Let us know how it works for you. The TRO method you describe is no different than some entry methods I use. See here with chart: http://www.trade2win.com/boards/for...ading-live-calls-set-ups-200.html#post1328760
I wait for a break of S/R line then a retrace back over it. I use S/R lines, TRO uses
psychological levels (same thing??). Same idea, different lines.
Peter
ADDED: I just noticed the support line on my previous chart is exactly the same as th xx50 level in TRO method. Pure coincidence on that one, but like I said, same idea.
LiamH, I'll give you a high probability trade that will knock your socks off, and I'll give it to you for free!!!
Why? because although it is high probability it is one of many you will need in your bag because you can wait a while for a setup and then it's only good for a bout 50 pips, it's maybe good for 2 or 3 times a month but then you need to be able to stomach drawdowns, btw I back tested this 6 months ago, still works for me today so have not bothered to back test again. This takes into account those "random" movements, I'll post next with some examples of the past week:
Why? because although it is high probability it is one of many you will need in your bag because you can wait a while for a setup and then it's only good for a bout 50 pips, it's maybe good for 2 or 3 times a month but then you need to be able to stomach drawdowns, btw I back tested this 6 months ago, still works for me today so have not bothered to back test again. This takes into account those "random" movements, I'll post next with some examples of the past week:
17th Nov low = 13461 ish, 18th Nov High = 13670 ish :therefore price will retrace from 18th high from 17th Low by 23% (99% probability), by 38% (89% probability), by 50% (76% probability), by 62% (66% probability)...my back test results a few months ago, please do your own!!
The reverse of the above is also true, look at 16th Nov high and 17th Nov low, the problem is, at what point will the low or high be achieved? well average daily trading range helps, but mostly retracement normally starts at 8p.m. GMT on most days. (i only look for the 38%, and thus 89% probability trades btw as you will need a nice 150 pip stop loss to ride this one).
See, very high probability trades are out there for 50 pips targets but you'll need to occasionally suffer a high drawdown and the opportunities are a handful every month (boring for you day traders)but you will be right 90% of the time
The reverse of the above is also true, look at 16th Nov high and 17th Nov low, the problem is, at what point will the low or high be achieved? well average daily trading range helps, but mostly retracement normally starts at 8p.m. GMT on most days. (i only look for the 38%, and thus 89% probability trades btw as you will need a nice 150 pip stop loss to ride this one).
See, very high probability trades are out there for 50 pips targets but you'll need to occasionally suffer a high drawdown and the opportunities are a handful every month (boring for you day traders
)but you will be right 90% of the time
jon1971
Well-known member
- Messages
- 495
- Likes
- 27
Hey Pete, hope you are well, yeah I was looking at maybe substituting with pivots or even murrey levels... what I am really looking for is a high volume of entry signals for scalps.
Yep, should work, it's kind of like making sure you always P$ss down wind all the time!! Bit of a mess when the wind turns though
as H1 takes a long time to catch up with you when day trading.wackypete2
Legendary member
- Messages
- 10,211
- Likes
- 2,058
Pivot points should work well. You could also use previous day's high/low/close prices too. Don't clog up your chart with so many lines that you can't keep track of them all though!
Peter
Cheers for the explanation InfinityP - What you say makes perfect sense although I would argue that even these random movements, with tight MM can be profitable but that's for a different thread
Just an example - Pull up a 5 min chart on EUR\USD - Look for tightening ranges to less than 10 pips (triangle\wedge), draw your lines and trade the breakout of the range with a 1:1 RR and your stop 1 pip beyond the opposite line to that of the breakout - This works for me but then I only have 150-ish trades under my belt.
My thoughts for the reason this works? Well, like you say - 20-30 pips is nothing so this range could be 7 or 8 pips for 15-20 minutes and at some point it WILL move so when it does there is a high likelyhood that it will move the 10 pips or so needed to cover the spread and give you a 1:1 RR. In fact, I would say that around 50% of these winners carry on to go 30 pips plus but I don't hold on to them as it would lower the win rate more than I'm comfortable with.
Just an example - Pull up a 5 min chart on EUR\USD - Look for tightening ranges to less than 10 pips (triangle\wedge), draw your lines and trade the breakout of the range with a 1:1 RR and your stop 1 pip beyond the opposite line to that of the breakout - This works for me but then I only have 150-ish trades under my belt.
My thoughts for the reason this works? Well, like you say - 20-30 pips is nothing so this range could be 7 or 8 pips for 15-20 minutes and at some point it WILL move so when it does there is a high likelyhood that it will move the 10 pips or so needed to cover the spread and give you a 1:1 RR. In fact, I would say that around 50% of these winners carry on to go 30 pips plus but I don't hold on to them as it would lower the win rate more than I'm comfortable with.
Lord Flasheart
Legendary member
- Messages
- 9,826
- Likes
- 985
morning all and goodnight BP if your just going to bed
