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Kiwi
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Posts posted by Kiwi
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I am going to take what James said and take it a step further.
By way of background I have a number of degrees which required varying mathematical skills and was one of those who preferred calculus to other maths disciplines at school because it was easier to get 100% in calculus.
So here it is:
You Need No Maths beyond the most basic arithmetic to succeed in trading. It helps to be quick to add and subtract if you have a minimum win/loss ratio in mind and want to check before entry. But nothing more. And someone could have set up that test for you in excel ... I think the Sam Seiden worksheet I posted over at FF did that as one of its trade quality criteria.
Probability and stats are not needed. They can help if you want to design systems and get clever with money management but you don't need them even for that - you can just read around and use simple heuristics.
You can pursue clever option strategies and find ways to benefit from maths but you don't need it. I suspect that most good traders get aways with some basic rules like "risk no more than 2% ...." but could hire someone with good maths if they ever needed to take it further.
This has been one of the greatest disappointments for me in trading - a bloody tragedy really.
The key to trading is to find an edge or set of edges that gives you a profit and have the mindset required to be able to execute the trades that come your way.
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It depends what your criteria is MMS.
Is it "smallest spreads"
Is it "greatest move per spread"
Is it "current hot markets"
Is it "which ones respect S&R and which ones are tails on a dog"
Is it "what works with my type of strategy"
Is it "which ones can be grouped into similar strategies"
I like "respect for S&R" a lot so it's majors for me as with the crosses you'll get screwed up if you're not watching mum and dad. I also like a particular style. I can trade exactly that style on EU and AU. And I can trade a mod on GU and a slightly different mod on UJ. All in all the 4 pairs average 2 really nice setups a day between 6am gmt and 10am gmt (the times when I'm willing to be around consistently) so they're enough.
In my case I add my favourite bitch, HSI, for another couple of setups a day, half of them overlapping with my preferred forex times. Very similar setups to forex but hsi is on much shorter timeframes than fx because that bitch is greyhound
PS. You've got a great momo pair in EJ but what about GJ. Most of the brits seem to love that one.
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Good Post MMS.
Two bits of idiocy there and for new traders the second bit is more important that the first because so many do it. The revenge trade.
When we experience emotional pain; out of the market depression; disgust at our error generated loss; we desperately want to get in and get it back.
Even when we don't feel the emotions imprinting from earlier trades will cause it to happen. This is my greatest error ... turning a small loss into one two or three times bigger. It's so big for me that I have written software to take me off line after a losing trade. I have the discipline then to stay off line for a cool down period but if I keep watching the market I have an uncanny ability to clearly see the next obvious trade ... only to find a loser three times out of four.
In the old days, before I constructed my emotion detecting and despising headmistress, I used to get some spectacular recovery winners. But they are the worst because they reinforce a bad habit. And, warmed by those recoveries I would do it a few more times over the next days until I had lost far more in reentries than I had won. If you have this conditioned response then you must stop it!
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SPI, HSI, MHI, HHI, Nikkei (sgx and osaka), STW
then the currencies from 6am or 8am gmt.
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LOL. Love the last three posts.
One can only hope that some of these folk hang around beyond the "defend my guru" phase and contribute something useful to the board.
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Another guru; another defensive attack.
Whenever you get a stack of one post wonders I suspect that its like old Covell stacking the Amazon reviews in his favour so people would waste their money on his book.
The gang is here. And one day, if they survive their infatuation with someone calling their trades for them they just might become traders. For now they are just another type of spammer.
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The other day I posted this on another thread:
I agree with the first post and would have fully agreed with some of the intermediate posts ... but have changed my mind over the last 8 years.I have come to believe that different markets will have times best suited to various approaches. It might be that those times correspond with maximum volatility but that depends if the strategy does best in those circumstances; volatility is also a crude measure of what is happening.
IMO, crude measures are most appropriate when trading auto systems. In my recent experience of automating and trying to automate trading approaches I've found this to be true and I've also discovered value in indicators that I abandoned as I became more discretionary.
When trading a discretionary strategy then the strategy and time of day may match not because of size of moves but because of the nature of the moves. For example, with HSI I skip the first 45 minutes, which are also the most volatile times. Later trend and flow become more readable to an extent that overcomes any loss of volatility.
Similarly in some markets there are specific situations that seem to favour different approaches:
- 6am gmt the early risers begin often pushing the market over an hour or two to a desirable position. this push process is both readable and tradable.
- 8am gmt is the traditional start for breakouts and seems to be promoted for trends (which do sometimes develop beautifully during the european morning)
- 8:30am nyt is news time (I think, its not time I pay attention too as I sleep) which has high volatility but poor trendiness because of US news shocks. An hour or so later Steven obviously finds the post news market to be more readable and trades any resulting action.
One trader's opinions of course
Then today I came across this article from the free periodical Currency Trader. Although it was written before the debt crisis it adds to my comments and I think that the information is definitely of value to fx traders.
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Its another religious argument. My belief is true and you are going to hell.
The funniest thing is that at this moment in history he concludes: you should all buy and hold.
He points out some inefficiencies that have died and one approach that hasn't. Then, despite that he says its all dead. It's like the low end "News;" how do you sell newspapers and tv to the peasants: blood, fear, controversy.
Edit: LMAO; I googled him. He started real trading in October 2009. He's a 20+ year old lawyer who writes a good fable. No more need be said.
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Frank's course is a simple actionable approach to Market Profile. Even if you choose not to use it in the end, the benefit of understanding the way your tradable market moves (they are all different in their own sweet little ways) will be over $150. He is one of those people who wants to help people so you should be able to get significant extra value by asking his advice as well.
I don't use MP myself; I'm more S&R and trends although my definition of S&R is richer than many peoples. But if I look at a chart I can see how the MP would stack up on it and that's due to some time spent with Frank's material and helps make my feel for market action richer.
I don't know anything about Erik's course.
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I agree with the first post and would have fully agreed with some of the intermediate posts ... but have changed my mind over the last 8 years.
I have come to believe that different markets will have times best suited to various approaches. It might be that those times correspond with maximum volatility but that depends if the strategy does best in those circumstances; volatility is also a crude measure of what is happening.
IMO, crude measures are most appropriate when trading auto systems. In my recent experience of automating and trying to automate trading approaches I've found this to be true and I've also discovered value in indicators that I abandoned as I became more discretionary.
When trading a discretionary strategy then the strategy and time of day may match not because of size of moves but because of the nature of the moves. For example, with HSI I skip the first 45 minutes, which are also the most volatile times. Later trend and flow become more readable to an extent that overcomes any loss of volatility.
Similarly in some markets there are specific situations that seem to favour different approaches:
- 6am gmt the early risers begin often pushing the market over an hour or two to a desirable position. this push process is both readable and tradable.
- 8am gmt is the traditional start for breakouts and seems to be promoted for trends (which do sometimes develop beautifully during the european morning)
- 8:30am nyt is news time (I think, its not time I pay attention too as I sleep) which has high volatility but poor trendiness because of US news shocks. An hour or so later Steven obviously finds the post news market to be more readable and trades any resulting action.
One trader's opinions of course
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Its not volume.
Its about time at price. So value area is where 70% of the time was spent not 70% of volume was printed.
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I can't tell you how often my "hope" has just ended up losing me even more money. Seems when you really are looking to "just get even" or "bailed out" the opposite will happen.....MMS
Like so many situations in trading the worst thing is if you do the wrong thing then apply hope and it actually comes out profitable.
What just happened has strengthened a dysfunctional behaviour and you will play the same sequence out again and again until you've finally convinced yourself to stop playing to hope (lost enough money).
I can't count the number of times I got away with something - only to lose everything I gained and more over the next 10 or 20 trades.
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Sierra Chart have data from fxcm and another forex provider. I know that the fxcm data includes a volume figure (as much as I always doubt them in forex).
SC also has a full Market Profile set up so you could use it to get all of the data.
Now given my doubts about the efficacy of MP trading even in the ways that it was originally intended to be used I dont recommend it. But, horses for courses.
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It's only "small" if it drops under 25k usd (or 17k gbp) .
The site warns that it can happen that part of your order might get picked off and a fragment filled on ideal (with resulting worse costs) but because people seem to work in multiples of the minimums it seems to be pretty rare.
I do recall it happening to me but it was about 6 months ago (as you can imagine it got the WTF reaction).
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IB do allow you to have a pound denominated account. If you go with interactive brokers then you can also use their ecn forex. This is (IMO) as good a market as the futures market and has the benefit that you can trade mini-size with good liquidity (unlike the mini futures contracts).
The forex small size is 25,000 USD vs 125,000 USD for the full size futures contract and because it's and ECN you do actually get an honest forex market.
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If you think about bollinger bands as a statistical measure of crowd emotion then being the standard deviation over a certain period and given that the simple moving average is actually the moving average it makes sense. Why not use the statistical measures (with the old assumptions that price data can be contained by a Normal curve)?
EMAs and other weighted mas (many of which are not really averages but price filters) are later developments to get a "better" fit or achieve a particular result.
Also, bb's were originally used on daily I believe and you'll see a lot more attention paid to smas than emas up in the multi-day timeframe.
But seeing Tams is being helpful in his inimitable way lets see if I can find my copy of the book. Hmmm you have to go to the history section. To quote: "Trading bands are bands contructed above and below some measure of central tendency." Actually, he doesn't say there why he used smas (he originally didn't use mas at all) but he was using daily data and the majors on daily are the smas (50, 200 and perhaps 20). And at this point my interest in the subject is outweighed by my lack of willingness to spend more time on it.
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I recommend that you use the free Notepad++ which is what we use with Sierra Chart. It's very good for C++ style formatted code such as SC and AB use.
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Not often I find myself agreeing 100% with Tams but I do this time. Nice blog. And nicely written too.
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Yeah.
Another half witted spammer playing the same old stuff. I wonder if anyone was stupid enough to get suckered by they/them/it?
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I am planning to try my luck in forex market. I have read about many automated forex trading softwares online. But I wanna here from yahoo answers community their opinion about the best automated forex trading software for beginners. Please help me choose the best automated forex trading software.You deserve metatrader.
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Wow. This is an old thread. You could start a "where are they now?"
A good way of keeping track of which news events might matter is the Forex Factory front page. If you open an account you can filter by the currencies that you are interested in - and it also shows holidays (like your one tomorrow that I'd forgotten about).
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It depends what you're trying to achieve bbc.
You don't want to go down so far that you get shaken out. But it might be that you get a superior pattern entry on a lower timeframe. On a longer timeframe you might treat a break of bars as a reason to exit. On the lower you might require a break of a more complex structure.
So it does depend what you design as your entry and management methods. It also depends whether you can maintain discipline at any particular level.
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Following up MMS's post.
Most beginners cheerfully risk 5% to 10%. And in doing so cause themselves extremes of psychological pain, because, as MMS said, you make mistakes.
This has the very bad effect of maximizing unplanned emotional learning. And building bad habits on top of mistakes.
So, most beginners should start by:
- initially risking zero (paper) to see if the system actually works in a walk forward test with no stress on the trader
- then risk the minimum amount possible (less than 1% and preferably under 0.5%) to put a little strain on the trader.
- then when its working ok gradually work their way up towards 1% or 2% risk per trade.
Going above 2% (a heuristic suited to systems with 50% win ratios, experienced disciplined traders, and few errors) requires 1. a history of your trades for analysis and 2. the ability to analyse then and work out your risk of ruined based on that series, and 3. the ability to translate that into some reasonable analysis of future risk.
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The Wiki doesn't give full information.
Try going to his site for more info including examples. The MQ4 version is readable code. I haven't finished working through it yet but NORM is most likely just to be a normalizing factor to keep the ma lined up with price.
Concept of a Beginner How to Start (pls Give Me Advice)
in Beginners Forum
Posted · Edited by Kiwi
Some comments on the issues.
If you have 100,000 and you are day trading then 30% is too low. If it was a billion then slippage would be an issue but with 100k it isn't.
Lets say you have finally figured out how to achieve an expectancy of 1.8 from a strategy that averages 60% wins. So you bet a dollar and 60% give you twice your risk; 40% lose your risk; slippage and commissions included.
How many trades per day? If its a fast index future 3 would seem reasonable. If its forex you might get 3 over 4 pairs. So 3 a day.
How much risk? 1% to 2% would be very reasonable with a 60% win rate.
So, 3 x a day you risk 1% of equity with an expected return of 0.8 on each trade. 250 days per year. Lets not compound as that gets nuts and I don't think most day traders aggressively compound anyway. So its 3 x 1000 x 0.8 x 250 = $600,000 pa. A little more than your mum makes.
That is the promise of day trading. Your challenge is to achieve it. I don't know whether I agree about the seminars or not. Screen time may only strengthen certain views - and if your views are not the "right" ones then a seminar or book might be just what was needed to move you slightly.
Just thought I'd add some comments on the issues with trading:
- you do add something useful: your buys and sells can add to the process of price/value discovery and provide needed liquidity to your markets
- it's really really important not to get your excitement from trading; sure you can get a professionals satisfaction at a job well done but don't go for excitement as it's too close to the realm of the losing gambler.
- actively seeking company elsewhere is important as is seeking outside activities that provide excitement because once you master trading and yourself it is primarily a "job" and it is solitary for most of us.
- it is also a tough job because its one where you can actively lose your money either through the will of the gods or, worse, through your own mistakes.
- so compartmentalize your professional trading activity and its job satisfaction from the other things that give you joy, company and excitement in life.