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!!