Has anyone traded at the forex market and made money?

[TraderNumber7]

....[insert quote here]....

May I please have a trade? Been waiting since yesterday. If you have more important things to do, I understand.

If not, can you please help me with EURGBP and GBPCHF? They seem to be misbehaving, don't they.

Funny, how GBPCAD finally got its act together and decide to carry its own load. I thought I might seek your advice on that one too, but I think the "peer pressure" got to it just a bit.

I little help would be much appreciated here, please.

 

[DionysusToast]

May I please have a trade? Been waiting since yesterday. If you have more important things to do, I understand.

If not, can you please help me with EURGBP and GBPCHF? They seem to be misbehaving, don't they.

Funny, how GBPCAD finally got its act together and decide to carry its own load. I thought I might seek your advice on that one too, but I think the "peer pressure" got to it just a bit.

I little help would be much appreciated here, please.

Actually - I had nothing particularly important to do as I was not trading yesterday. The lure of free beer with cod & chips at a local get-together of investors won out.

I did fire up the system after the beers and had a quick fumble in your honour though. The first few characters of the account number are there to show it's not SIM.

Unfortunately, this was the only drunken fumble I had last night. No forex I'm afraid. I don't swing that way.

Now - let me qualify my posts as you seem to not understand why you are being 'attacked' as you put it. The typical poster here that comes on with $9K-$14M in 6.75 month type claims is generally selling something. The posters that come here and claim to have mathematically resolved the markets are generally selling something. These practices are particularly rife in the Forex market.

The lure of a mathematical solution to the markets for a newbie is obvious. It gives them 1 single thing to learn, 1 set of defined rules to go by, a bit of curve-fitting on historical data to prove their point and voila - they have done all the work necessary and now can sit back, reaping the rewards without ever having to learn the markets or using any discretion.

This is what TA is really about. Its allure is the fact that (they say) it applies to all types of market and in all market conditions. This is what makes it so popular, despite the fact that it doesn't work. This is also what attracts people to automation, it takes the decision from their hands and absolves them from having to actually learn about the market because 'it's all in the price'. There are also claims that all information is known ahead of time and some mysterious 'they' are trading on future information and therefore making it visible. Once again, this absolves the trader of having to do research. The whole TA story makes sense because it is spun to make sense.

Ehlers 'Cybernetics' book is a case in point on the extremes that this type of 'decision avoidance' can go. Ehlers book on applying DSP techniques to market data is obviously the result of a large amount of research. The problem is that Ehler made his money from selling books and not the market.

So - here's where TA fails people. It pulls them in with the allure of less work yet on this site, there are people that have been attempting to apply TA for YEARS and are still looking to TA for the answers. Had they not attempted to use the shortcuts promised with traditional TA, then they may have studied the markets and would probably already be profitable.

My expectations, based on the claims in your posts, is that you are hooking people into something. In particular - the following statement really does make me think the sales pitch is just around the corner.

"No one individual needs that much money to live very comfortably: Private jets, private yachts, 30 thousand square foot homes, fast super-cars that do 254 mph, etc. All of that can be easily taken care of with a lot less than all the money there is inside the Forex"

Or perhaps you are just being genuine. Perhaps you really do believe that one Ferrari is enough for the common man and that honestly - do you really have to have 2 supermodels in that bed instead of just one ? Some people really are vulgar, aren't they ?

 

[DionysusToast]

This post discloses so much about you. You appear to have a fear of loss. Personally I couldnt give a dam about the outcome of a trade, win, lose, its all the same to me, the probabilities always play out over a sufficient sample size. If **** happens, then you take a loss, its that simple.

You also use that ridiculous word PREDICT. Noone is predicting anything because they dont need to.

Not really - we all take losses in our stride. What I was actually referring to was mathematically derived relationships not being able to factor in 'black swan' events. Particularly at this moment when there's 'trouble in Europe'.

Statistical arbitrage is something I would never subscribe to over anything but the shortest of periods primarily because of the fact you can't rely on mathematical predictions in the real world. I would inlcude mathematically derived relationships as a prediction, you are predicting that the relationship will continue or revert to mean.The longer the time in a trade based on such a model, the longer your risk that the relationship breaks down.

Of course, this is the same with all methods of trading. The longer the holding period, the more likely an external factor will blow your assumptions. The difference though is that methods such as statistical arbitrage tend to blow up more spectacularly when the relationships break down. You essentially have a lot more trades on and your risk management assumptions are based on mathematical models and not hard stops. Of course, these positions are also harder to unwind if they do blow up.

If somethings going up you buy it, if its going down you sell it, cut losses short, let profits run. Once you've defined whats up and whats down, what constitutes a profit and loss, and whats just noise, it all becomes very simple.

Whetever methods you use, price action, TA, astralogical predictions, or tossing a coin, at the end of the day you have to trade it within the framework that I describe, so you might as well cut to the chase, and focus on whats important rather than perhipehery nonsense.

I have no issue with that.

 

[TraderNumber7]

Now - let me qualify my posts as you seem to not understand why you are being 'attacked' as you put it.

Don't hold your breath waiting for imaginary sales calls lurking around the corner, you won't make it if you do and you will end up in the hospital on a Code Blue.

The typical poster here that comes on with $9K-$14M in 6.75 month type claims is generally selling something....

That only applies to someone selling something, I would gather. Therefore, by definition, it can't possibly apply to me, firstly. Secondly, starting with a false assumptive declarative that has no historical background or evidence for its existence, is not the way to prove that a thing actually exists. Consider the Archeologists, Paleontologist, Historian, Theoretical Physicists, etc. Do any of them approach their peers using an unprovable assumptive declarative as their way of writing their names into the history books of Discovery and Progress? I think not.

The lure of a mathematical solution to the markets for a newbie is obvious....

Yes, I've heard it all before from people that don't quite understand what they are rebutting and my reply is always the same. Until you know the subject matter, you cannot possibly have an opinion. What's my opinion of the Grand Canyon? I don't have one. Why? Because I've never been there.

You can't possibly know the TA that was created in the mind of another from scratch, dirt. So, claiming that "all TA" is this, or "all TA" is that, is like hearing somebody after they purchased a ticket to a Football game in the NFL, sit in the stands, drinking beer and having a "serious opinion" about what the Offensive Coordinator should be doing down on the field.

Technical Analysis, is just as varied as their are grains of sand on a beach. So too, will be the results obtained by those who attempt to deploy it. Technical Analysis practitioners are just as varied as grains of sand on a beach, as well. There are no two alike in all the world.

Even those using the exact same conventional indicators are more times than not, tweaking parameters to suit their individual needs. There is conventional inside the box TA and there is unconventional, outside the box TA, which is typically something that somebody else spent years developing.

The last false assumption about TA is that somehow, the one using TA is not using their "brain" when they trade. That somehow, the TA practitioner merely sits back and lets it all happen for him/her and that Fundamental Traders are out there in the markets with their "brains" fully engaged in what they are doing. L....O.....L, to that false assumption.

Why? Because the guy or gal that has a TA system that truly works, got there, because they worked their butt off for most likely years before they began to see consistent synergy between their ideas and their profitability. The notion that somehow, TA Traders are disengaged, is ludicrous! You build a House once. After that, you live in the house! You don't sit around hammering nails through 2 by 4's all day long, or sit on the top of your roof in the boiling sun laying roof shingles. You don't move furniture for the rest of your life, once your house is completed - you sit down on your furniture and enjoy the fruits of your labor.

Building your TA system is precisely the same as building a house.

Once your system is completed, all you need to do is cut the grass and trim a few "hedges" over week or two. You don't even have to water the lawn anymore, if you were smart enough to integrate a auto-irrigation system into your house. And, if you were truly smart - you ran Cat-5/Ethernet and Fiber Optics throughout your new house and you routed everything through a central server in your in-home IT room and then out to a Full Digital Control, LED Panel, House Awareness System that drives everything from indoor lighting, outdoor lighting, irrigation, windows, security, home entertainment, fire alarm and emergency medical. In other words, if you were smart, you designed and built a house that worked for you instead of you working for it.

Lastly, and then I'm going to let this go, you should be fully aware that that one of the largest and most successful Model Funds in the world, was built using outside the box TA. Banks use TA, Institutions use TA - many of the entities that you trade against using Fundamental Analysis, are trading against you, using some form of TA.

The fact of the matter is that we ALL use a System of some sort, whether manually or automated, we ALL use protocol to make trade decisions. And, what exactly do you think Protocol means? It means Rules Based Trading, whether inside a Box (computer) or inside your head, it is all a system of trading the markets. Rules make systems, not Economic Reports. You still have to establish a Protocol and attach that Protocol to a specific action, AFTER you have digested your Economic Reports for the day.

Otherwise, you are not a Fundamental Trader, you are a Fundamental Guesser.

Making decisions based on the Fundamental Reports, well, that is a system, too - whether you know it or not. You might not have codified it the exact same way a TA practitioner does, but you still use Rule and Protocol based on what you get out of the prevailing news, bottom line. That's called a systematic decision tree. And, you use one every single time you trade AFTER digesting a report/news.

So, the only real question is: Just how systematic is your system. Because the fact the you trade with one, is undeniable if you trade at all. You can't trade these markets on a wing and a prayer. You must have Rules and Protocols to follow, whether encoded or not - regardless of the market you trade, unless you have and use insider knowledge and that is illegal.

A system, is still a system, is still a system. Like it or not, we all use one. Some of us just like to pretend we don't. Show me somebody trading the markets without a system and I'll show you somebody who is not trading at all - rather, gambling and guessing instead while calling it "trading."

We are ALL System Traders or System Money Managers because we ALL deploy Rule and Protocol in our decision tree.

TradeSMART. Manage your trade. :smart:

 

[TraderNumber7]

Not really - we all take losses in our stride. What I was actually referring to was mathematically derived relationships not being able to factor in 'black swan' events.

Not so! That's just flat out wrong and a total misunderstanding about how mathematics is applied to trading.

The math you apply, will encompass all historical events unless you intentionally filter that data. All historical upsets in the market are present and accounted for inside the data. And, it is the data upon which the math gets applied full spectrum. So, in any spectral analysis of the historicity of the markets, all data points are taken into consideration - all P(t) events are considered. So, the "data normal," contains all inputs that derive all P(t) data points that yield the ATR for any interval of "t." And, nothing, absolute nothing happens in the market outside of the domain of the ATR. Price cannot exist outside the domain of ATR, period. Thus, all so-called Black Swans exist inside the ATR.

Hello?

The issue here is that you really don't yet understand what TA guys and gals do for a living, that's all. You are not a bad guy or anything like that, you just don't get it yet. Nothing more, nothing less.

TradeSMART. Manage your trade. :smart:

 

[DionysusToast]

My understanding is that TA guys do not make a living trading. I do however understand and have outlined why many people look to TA.

You are an engineer and so are looking for the finite and repeatable. Like many engineers approaching the market, you look to the skills that helped you in the IT world to define the markets. This is how a lot of engineers approach the market. You are not alone. You are confident that you have identified everything and your mathematical model covers every eventuality. To you - everything has to be a system.

What is fascinating is your incredulity that someone would doubt you. I am one of few on this site that holds these opinions and they are not popular precisely because many people are seeking to define the markets using math. Granted, most do not reach the level of sophistication you claim but it is the same path.

The reason you see everything as a system that must adhere to a fixed ruleset is simply that you are an engineer and this is the way engineers think. I should know, i'm an engineer too.

The fact is that smarter people than you managed to blow up LTCM with these models. If the words of Norden, Triana and Taleb are anything to go by, these models have been shown again and again to have failings in their assessment of risk and probability. Even nobel prize winners Black Scholes were proved eventually to be wrong with disastrous results.

When these models fail, what to engineers do ? Do they say that the markets can't be modelled ? No - they say that the model has faults and needs to be refined.

You can continue to attempt to define me and belittle me and tell me how much I don't understand. The fact is - your model will work - until it doesn't because of something you didn't foresee or take into account.

Like I say - I am not alone in this view. There is much research and literature to be read on the subject. There are a growing number of case studies of the problems caused by people relying on faulty mathematical models on which they base trading decisions.

I wish you luck when you go live with this - I sincerely hope you don't meet your Black Swan.

 

[dcraig1]

$5 Trillion per day Global Forex -vs- $32.7 Billion per year all Major U.S. Stock Exchanges combined.

Methinks your numbers are way off for the equity markets. For example yesterday INTC traded about 70 mil shares. Thats > $1.3 bil for INTC alone in one day. SPY traded ~330 mil shares. Thats > $35 billlion for one day for SPY.

Your numbers are seriously wrong.

 

[dcraig1]

all so-called Black Swans exist inside the ATR.

Don't be silly, who uses ATR's of periods pf 50 or 100 years? And even if they did, they would give an extremely lopsided picture of the risk of ruin in a "black swan" scenario. It's the "Average" bit of ATR that is the problem.

 

[dcraig1]

This is what happens when you start to dabble.

I never knew "Ehler" was a Trader and I always thought of him as "Euler." But, I am quite certain that I never knew him as "Joseph Fourier." Though for credit sake, you completely dishonored the previous contributions to Fourier from Lagrange, Bernoulli and Clairaut, no doubt. How you missed them, having an understanding of Fourier, only you can explain. But, rest assured, "Ehler" - whomever that individual might be, had nothing to do with it.

The "real world" (as you refer to it here) is physics and it is best described using mathematics. The very nature of your physical existence can be described mathematically through the window of physics. In fact, it is true that you are not what you think you are. In fact, again, you are a miraculous, far reaching and highly complex set of subatomic material, engineered by the Infinite Mind in such a way that is so far beyond human understanding, that it cannot even be derived to 0.0000001% of the exponentially advanced understanding necessary to comprehend it. Every orbiting electron in every single atom that makes you an intact, fully sentient, corporeal being, was put there by design and has very predictable structure, or you would cease to exist.

Since, there is "nothing new under the sun," I believe that likewise, mankind is not capable of producing that which has no structure. Why? Because the Created will always exhibit the characteristics and attributes of the Creator.

Thus, since the FX market was Created and did not create itself, it must therefore, exhibit characteristics and attributes of its Creator. That being: Structure.

As soon as you get your head around this idea, the sooner you will start seeing the structure in Price and where said structure Repeats itself.

TradeSMART. :smart:

TraderNumber7,

You sound to me like you are selling something. A little humility would be in order. You do not know everything you claim to know about trading, otherwise you would not be confusing John Ehlers with Euler. John Ehlers has applied digital signal processing techniques to trading to produce indicators for such things as cycle length, cycle signal to noise ratio, trend etc. You can buy his MESA software or have a look at a number of papers on his web site which contain the code for a number of freebies. They are somewhat interesting, but unfortunately don't seem to deliver the goods as far a profitability is concerned.

 

[dcraig1]

I don't know how many retail traders make serious money in fx. I suspect not many. But I do think that talk of some mathematical purity in the price time series because of some claimed stability in the fundamentals hardly constitutes a reason to prefer fx over equities markets.

If such a situation did pertain, then it would suggest an exceptionally efficient market and exceptionally efficient means exceptionally difficult to make money out of.

Making a virtue out of the poverty of technical data available to a technical fx trader has never made any sense to me at all. There is a wealth of technical data available for equities which just doesn't exist for forex.

 

[LittleKnown]

So Mr TradeSMART - when do you reveal the name of your website & fees for this amazing system ?

If you are trading all of those symbols over that amount of time, relying on some sort of mathematical relationship between pairs involved, then this math must also be able to predict that in the 7 days your trades are open there will be :

No more countries looming into defaults
No country announcing a suprise interest rate change
No central bank intervention of any type
etc.

I would be most interested to hear how the correlations you mathematically calculate manage to cater for what's happening in all of those central banks in all of the countries whose currencies you trade.

As it is - the most likely explanation is as follows:

1 - you are here selling something
2 - you are not trading
3 - your $9K->$14 million in 6.75 months is just newbie baiting

Interestingly, I note that despite you being an expert in this field, that you only have $470k equity in trade yet you say that someone should have $5.5M equity in trade after 6.75 months.

One must assume then, that you have only been at this for .58 months. :smart:

As you are so smart - here's a bonus puzzle. Seeing as I am nought more than a collection of subatomic material and you are so smart. Perhaps you'd like to tell the crowd what colour underpants I'm wearing right now.

Black underpants Could also ask TN7 about no stop losses as I thought that was a crucial part of trading, unless i'm missing something!

 

[LittleKnown]

Reading through these threads makes things quite, no, very difficult for a newbie,(me), to know where to start when trying to learn forex, I think a brain transplant is needed.
TN7 I could agree, knowing pretty much nothing, with the view on The Big Dogs using TA to get my stop losses hit more times than not, although no stop loss would seem to be p*****g into the wind..

 

[temporarilylight]

Reading through these threads makes things quite, no, very difficult for a newbie,(me), to know where to start when trying to learn forex, I think a brain transplant is needed.

lol, I know what you mean! And im not even necessarily talking about the advanced maths.
Theres been a few posters who talk about having to 'think outside the box'. 'look beyond both fundamentals and techincals' etc. I dont know what else there is!
I sit there racking my brains before realising that im just NOT gonna know what they're talking about from the info ive been given! lol. Maybe some people can, but im just NOT that smart.

The only things that give me comfort is that I KNOW there are people who make consistent gains simply trading the price, and that despite the apparent gaps in knowledge, I have done 'OK' so far in my 5 year trading life without having the capacity for the 'outside the box thinking' that a retail trader apparently needs in order to gain an 'edge'!

 

[DionysusToast]

Black underpants Could also ask TN7 about no stop losses as I thought that was a crucial part of trading, unless i'm missing something!

I think the answer to that is yes and no.

Let's say you trade a pair of instruments that are normally correlated but may have diverged. You place trades on each of the pair to take advantage of them reverting to mean. This is a form of arbitrage called pair trading.

Now - in this case, you don't care how much the price of the instruments go up or down as long as they converge. In such a system, a traditional stop loss makes no sense. The stop really would be the maximum amount of divergence between the 2 instruments that you could tolerate.

The problem is - you have 1 way to make money - by the reversion to mean and you have a limited amount of money you can make. On the other hand, there are a number of ways you can lose an unlimited amount of money. Either or both instruments could go through some fundamental change that breaks the relationship.

Statistical arbitrage systems take this a step further by applying similar concepts (again based on historical correlations) to a portfolio across many instruments. This is what killed LTCM. Events transpired that their models didn't account for. These events tend to effect many people in the market, so not only do you need to unwind - everybody else is trying to get out too. Hence - you lose your shirt.

 

[DionysusToast]

TN7 I could agree, knowing pretty much nothing, with the view on The Big Dogs using TA to get my stop losses hit more times than not

I doubt that is not happening. No-one is actually hunting your stops. It's probably just random wiggle.

Remember that the Forex market is primarily there to facilitate trade. Every time someone goes on vacation, every time an invoice is paid across countries - there is a Forex transaction. This is quite a different dynamic to Stocks & Futures (yet people say the same TA concepts apply equally to both).

I am sure someone can dig up the figures but I would say that the majority of Forex volume is actually people moving money to pay for things as opposed to pure speculation on behalf of currency traders. If this is the case, how can someone move that behemoth of a market just to hit the stop on your tiny little trade?

I am sure GammaJammer would be able to provide insight.

 

[LittleKnown]

Cheers Temp, Dino, what I meant is if everyone is placing the stop around the same area e.g pivot points and such, would that not be hunting season..

 

[fxtrader85]

Cheers Temp, Dino, what I meant is if everyone is placing the stop around the same area e.g pivot points and such, would that not be hunting season..

forex is a $2.5 TRILLION market daily. a few people placing stops at similar places is not enough to move the market...

 

[LittleKnown]

Was going to give in depth meaning to what I was trying to say, but am just going for the brain transplant! TN7 said 95% traders or whatever fail therefore is that not us all,(as in institutions and world), except the 5% successful, looking at pretty much same entrys, exits, stop losses..
Sorry if am sounding thicker by the message but am new, and there is alot to go through when trying to get off on the right foot...

 

[Jumpinjack]

Has anyone of you ever traded at the forex market and won trading currencies. If yes, then please share your trading techniques with others, so we can learn something from you.

That question is perfect – because most fail!

Forex is full of rubbish, some intentional, some naive, and some just trying to help. The fact is, you will only make money by doing your own analysis/charts, and then pulling the trigger when necessary. If you do charts, create a trade plan, but then find you can’t pull the trigger, then you are better of doing something else..Systems will never work in Forex, it changes too much. You can’t simply have a system that tells you buy/sell , sell/buy. You have to make that decision alone…

The fact remains that there will be an increasing amount of new Millionaires from Forex in the future, and they will the traders who think alone.

What I don`t understand is why do people come into this business and expect information for free?

 

[Shakone]

What I don`t understand is why do people come into this business and expect information for free?

Probably because most people were able to attend school from a young age for free (to them at least) and so they are used to it. But anyway, I don't think this 'info for free' idea is always the case. Time is costly, more for some than others. To post a question on a board and read through replies and try to learn is not expecting anything for free, it is just asking for help.