Can anyone recommend a strategy?

[darktone]

Id say trying to trade profitably based on the size and colour of a candle stick might well be pretty pointless. lard jebus

 

[dbphoenix]

I wouldn't say it's pointless. Debates have a tendency to spark thought. My intentions are not to convince or argue but rather have an open discussion.

Intransigence is not conducive to productive discussion.

 

[forker]

Actually I find these sorts of discussions more productive than one where there is agreement. You don't evolve through harmony, you evolve through friction.

 

[dbphoenix]

Actually I find these sorts of discussions more productive than one where there is agreement. You don't evolve through harmony, you evolve through friction.

Disagreement is fine. Intransigence, however, tends to shut the discussion down.

 

[forker]

Let me describe the typical response when I challenge someone's thinking:

1) Conversation is reduced to name calling because there is nothing mature or intelligent to be said to me. In other words they have no argument and have to resort to childish behaviour

2) The conversation is shutdown as you have done.

I am tired to expecting more from people in regards to having a mature conversation about something. Going forward expect a different attitude from me as this one way street is not working.

 

[forker]

Disagreement is fine. Intransigence, however, tends to shut the discussion down.

It goes nowhere perhaps because there is a lack of being open minded or a lack of being able to produce tangible content to back a claim. Whatever it is I am through with accommodating people who can't accommodate themselves.

 

[dbphoenix]

Perhaps a definition of "fundamentals" along with an explanation of how to initiate and manage a trade would be conducive to discussion. Otherwise it's just a back-and-forth over undefined terms which, as I said earlier, is essentially pointless.

I'm not trying to shut the "discussion" down, just move it past alternating monologues.

 

[forker]

Happy to participate in the context you are offering. Same applies to you then shall we move forward with a sensible discussion then? Have to put my daughter to sleep after which I'll contribute my part

 

[forker]

Perhaps a definition of "fundamentals" along with an explanation of how to initiate and manage a trade would be conducive to discussion. Otherwise it's just a back-and-forth over undefined terms which, as I said earlier, is essentially pointless.

I'm not trying to shut the "discussion" down, just move it past alternating monologues.

Definition of the fundamental trading:

On a high level, its deriving trade opportunities through understanding the factors that influence the valuation of the underlying instrument. In context to the market I trade, which is fx, that means understanding how a given economy is performing and how the central bank is planning its next move in policy. It is also pairing economies against each other to access the best opportunities.

How to initiate a trade:

There are 3 types of trades that can be derived from this approach.

1) trading to capture economic policy shifts (like QE or interest rates)

2) trading on deviations in expectations. In other words if PMI was previously 55 and the estimated range is a low of 54.1 and a high of 55.9. Then an actual of anything greater than the high or low estimated range is a deviation which hasn't been priced in.

3) trading a news event that influences sentiment (risk off)

Each week is planned ahead where economic releases that are important are noted. It's absolutely critical for success to be have working knowledge of what to do in any event. If a specific data point is to be released on a day, you need to know what is the risk sentiment and which economies need to be paired if the data point is positive or negative. Risk sentiment is derived from inter-market analysis. Also on hand is the pairs average daily range which is used to derive deviation and risk off trade targets (each is slightly different). Targets for point 1 is derived by a percentage change in price.

So for example, using my most recent trade which was last nights open. Pair closen was eurjpy paired for euro selling and safe haven flows. The reasoning behind the trade was risk off reaction driven by a pole of voters leaving the voting points. On risk off trades there is a fear factor and you tend to get 1.5 to 2 times the average daily range in reaction. Eurjpy I have as 111 for its average daily range. Being on the conservative side I don't ever go for the whole range and in this case I locked half profit in at 80 and full at 140. Stops are placed at approximately 30% of target in distance to entry.

My biggest criticism of trading TA is probability. You have to take every opportunity because that's the rules of probability - you don't know which one will work. The reason I feel it's a game changer is because you can't possibly find a legitimate way of filtering trades based on TA. It is only when I expanded my horizon into the actual drivers of price where I fully understood why.

In brief, it comes down to context which is why I use the metaphors I do. No 2 setups are alike and although you can have 2 that react the same, you can be sure the underlying basis of those 2 moves are completely different. This is why it's impossible to apply any sort of TA filtering on the probability of an outcome. You ultimately have 2 moves for different reasons so how can you apply a TA based filter when you have no inputs that account for this. For this reason you don't know how far price is likely to go because you don't have the necessary inputs that describe if the scenario is priced in or not.

The biggest difference in my trading now is being able to enter the market when something isn't priced in and staying out when it is. I can rely on it 9 times out of 10 and on the occasion when I am wrong it's because I missed a piece of data and the market doesn't react. In most cases I get out with a few pips in the bag and others well before my stop. I know this is a foreign concept to a TA trader because they operate purely on probability whereas I operate on the process of new data being priced in.

I fully comprehend the TA approach and did it for 10 years with at least half of those profitability. It's the fact that I was profitable that I know it works but it was my discontent with TA limits of being able to filter probability that drove me to look at things differently. My last losing trade was in August and it was a small loss off the back of no reaction because I didn't pair the currency with the right one (an honest mistake)

So there you have it. Explanation + context + reasoning.

Over to you.

 

[darktone]

with all respect, that sounds like a pile of work forker. did you ever put any efforts into fading TA / ditching stops?

 

[forker]

with all respect, that sounds like a pile of work forker. did you ever put any efforts into fading TA / ditching stops?

I was making money trading TA but make more now. Sure it's a lot of work but no more than the time you spend looking at charts daily.

I had tested so many methods copied and self derived which all shared a common trait which is losses are a natural function of probability. Everything you have mentioned I have not only tried but most likely tried in dozens of flavours. I spent several years programming automated tests. I spent several more manually testing scenarios to complex to translate to code under the available api capabilities. It was in this later stage where I introduced a different aspect and mastered (approx 3 years) what I needed to know where I realised you don't need to trade probabilities.

 

[dbphoenix]

Over to you.

If I "can't possibly find a legitimate way of filtering trades based on TA" and "it's impossible to apply any sort of TA filtering on the probability of an outcome", how shall I respond?

 

[forker]

If I "can't possibly find a legitimate way of filtering trades based on TA" and "it's impossible to apply any sort of TA filtering on the probability of an outcome", how shall I respond?

Look its not a tit for tat thing. I am not asking you to respond defensively although thats exactly where you are headed with your approach here. Are you not capable of having a conversation with someone who has a different take on something other than your own? I'm not looking for an argument but this consistent defensive stance like I have just stepped on the toes is getting boring very quickly.

 

[forker]

Actually I have changed my mind. I don't want you to respond so save yourself some time and just move along as though this conversation never happened.

 

[SmartGeek]

The best strategy would be to modify the one, yourself. You need to create your own strategy if you really wanna become a successful trader.

 

[NVP]

The best strategy would be to modify the one, yourself. You need to create your own strategy if you really wanna become a successful trader.

Agreed there is just one personality you need to be......the market

N

 

[Pat494]

The best strategy would be to modify the one, yourself. You need to create your own strategy if you really wanna become a successful trader.

Are you not expecting a whole lot from the average Joe . Mr average probably isn't a quant with a Phd in maths and it is beyond him to figure out a winning strategy all on his own. But not impossible. That's why we are all here looking at and learning from others.
May your mental capacity be improved.

:smart:

 

[XxixixX]

imho, I find that my trades are much more successful with these three things are in sync: fundamentals, technical, and understanding sentiment for the day. Have developed over 1000 systems over the years so it comes from experience. Again imho learn to swim with the whales in trading.

 

[Fugazsy]

imho, I find that my trades are much more successful with these three things are in sync: fundamentals, technical, and understanding sentiment for the day. Have developed over 1000 systems over the years so it comes from experience. Again imho learn to swim with the whales in trading.

"In waters infested by sharks always swim between fat people"

 

[NVP]

"In waters infested by sharks always swim between fat people"

or buy a boat and stay in it .......