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gianno
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Posts posted by gianno
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Which Book
in Books
Forex Price Action Scalping by Bob VolmanJust bought it, havn't actually started it yet.
Would appreciate some sort of a summary what it is all about because to me scalping forex is the impossible task.
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Gold trend is down and fighting it is not a good idea imo.
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A trader who doesn't know how to take money from other traders is in a losing streak the day he starts trading and stays in the losing streak the entire time. Paper trading won't get him out of his losing streak. Pure silliness.I agree more or less with your points.
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One problem, however, is that these patterns are subjective. Some traders make the mistake of using pattern recognition software, and then use those signals as if they are accurate in all cases.I sense that you use the term "price patterns" to mean chart patterns, things like triangles, double bottoms, etc. which are indeed subjective to some extend. But when people talk about price patterns they usually mean things like inside days, island reversals, closing winning streaks, etc. which are more or less objective. See how this guy has made objective the search for price patterns and the methods he uses for their validation that include portfolio backtests, cross-validation and sensitivity analysis.
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What some see as random is pretty much business as usual to an experienced gambler.
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Backtesting is one of the most dangerous practices known to man.
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Another post in the blog @equtrader mentioned where it is explained how TA and backtesting lead to randomness but it falls short of any suggestions for solution. -
It's not the same if you are profitable with 1% gain and 200% gain. Profitable must be measured against some normalized index. If you make $1 at the end of the year you have lost a lot of money actually.
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What a day...Out of my Crude Oil short with a loss. Now long from 86.30. Will add if price breaches 87.
Re-entered silver long at 33.41.
Very good thread and your thinking about swing trading and adequate capitalization is correct but still your stops are too tight in my opinion. Have you back-tested your method? I think you should do that. I am not sure but it may or may not be a profitable method. I tried swing trading GBPUSD before with 40 pips stops max and I lost 40% of account no matter how hard I tried. Then I saw the system they have in the price action lab blog (here, click on GBPUSD patterns) and I got suspicious that my stops were too tight. I now use 120 pip stops and I have doubled my account in 5 months.
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I traded a system with more than 90% wins. I sold GC call and put options 120 points OTM. I averaged $500/day with it. It averaged this 60 days in a row. Then, the day of the European debt crisis, this happened overnight:"Gold prices exploded Wednesday-posting the biggest one-day gain ever in dollar terms-as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying. Gold for December delivery rose $90.40."
I lost $40k that morning.
btw, I still trade something like this system (I've built in offsets), but don't advise that anyone else do it.
Bottom line:
Percent wins is a ridiculous test. You need to know the net profit, but also the drawdown.*
Good luck!
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* In my case, the drawdown was bearable, although on that day, it was double the maximum my testing had indicated could happen. (which leads to another learning).
Thanks for a good, honest and informative post.
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As described TitleI want a strategic win at least 90%
And are not an old thought And be simple and easy and uncomplicated
awaited your responses:helloooo:
Read this fresh blog and you see that 90% is a candidate for a reversed system:
Developing Mean Reverting Systems with Price Action Lab | Price Action Lab Blog
In other words, if you can find one with 90% up to time t, then that is possibly unsustainable in the near future and you can reverse the system and profit.
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Yes, i agree. I fact i have been only optimizing MM stops and Exits for sometime now. It makes sense as well if you are using indicators for the basis of a system and you optimize those that the curve fit is much more likely to fail, almost certin IMO. Them being the PAL, using only price patterns of course they are selling that particular POV.PAL posted another article yesterday on their blog about curve-fitting. I think it points to programs that offer a lot of different stop options to nicely curve-fit results
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Thanks but how many traders know to code in C#?
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Very few trades in the testing period. Performance can be random and a statistical fluke. IMO nobody with minimum experience in trading system development relies on 60 or 70 trades in more than 15 years of data.
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Exactly, and that's where the debate starts going about what is curve fitting and what is over fitting...Many are saying that curve fitting is ok for intraday systems as long as they prove themselves on OOS data. I'm still trying to get the difference between curve fitting and over-fitting.....XS
I think the point is not fitting or over-fitting. The point is if your parameter adjustment creates a completely different random animal. There is an interesting thread in the Adaptrade forum where a user tries to reverse engineer a system and he ends up getting a different each time he tries. I think this is not only fitting but random fitting:
Reverse engineering a known system - Adaptrade Builder | Google Groups
I like the classification of curve-fitted systems this guy has come up with:
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This analysis is interesting:
Gold May Soon Test Resistance Near $1,800 An Ounce | Price Action Lab Blog
It seems that $1,800 may act as a barrier. I won't buy unless this level is broken. I will put 30% of my money in gold if this level breaks.
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I do not view intraday candle patterns as significant;I agree but let us say they are much more insignificant than the already insignificant ones found in daily data.
I think what those patterns mean depends on context. Theat can be very subjective. Also as mentioned in another thread candle formations are a small subset of price pattern formations. If you are going to use such methods better to use the expanded set. In this blog you will find many examples of such patterns. The author shows how slight variations in the pattern description/formulation produce very different results. For the 4 candles in SPY he gets 12 variants. As you see there are many stories told at once, not only one.
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The market has a language and many fail to interpret its language.I was sure this sounded like something I read a month ago. The thing is that the author of that blog doesn't just keep on talking but he does instead the hard work necessary to understand market price action. He was spot on as a matter of fact.
I highly recommend you to take physical printouts of market activity in different time frames and study them well. Studying them on screen will not replace the pen and paper.If you must scan 1000 stocks every day and 100 future contracts there is no time for that. Speed is part of the edge. Take you time printing out charts while quants make money.
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We do support import of MetaStock data.See the "Understanding the import options" section.
The data format is strange. Why not having a semicolon after the date in tick and minute data as in daily data?
I have another question: can your program read text files for startegy building purposes? I want to read code generated by Price Action Lab in text file format to build strategies. Can I do that? Do you have a text file reading function?
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MAs work fine for me and several people I know. All have made a killing using MAs. Most robust trend indicator. Not good for scalpers and penny chasers.
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Following on from "The Question of Randomness" thread. How do people know the markets aren't random? I'm up for creating some random data to see if someone can show me how they know it's random or not - just for fun... DMThe concept of randomness is not very well-defined or even understood by science even nowadays.
First define randomness mathematically,
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Just remember this after you read the above thread, Japanese Candlestick Analysis was designed for use "within context" of having a strong understanding of the market environment prior to the appearance of any candlestick pattern.If you have such a strong understanding of the market enviroment, any indicator will work. The objective of technical methods is to remove the need for this understanding and the emotions and other negative things that come with it.
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this might be of interest to youThanks. Very interesting. Do you have any experience with using EL code in this program. Is it 100% compatible? I use Price Action Lab to search for patterns and it generates EL code. If it is 100% compatible the code can be easily transferred to this program.
Advantages in Trend Trading
in Forex
Posted
...or bigger drawdown. Trend in stock indices has been good but CTAs are having a problem after 2008. The biggest problem is not how to follow a trend but where to look for one. If you are in the wrong market the price paid is high.