karoshiman

Okay, which are these tactics and strategies? Can you be more specific?

Great post gosu! It was worth at least 3 cents I am of the same opinion that the performance statistics of any fund are irrelevant for us individual traders. People often forget the huge advantage we have over them. That is, we don't have to move gazillions of money around. Hence, we can participate in many more market movements than they can. It's like comparing a speed boat with a large cruiser. We are much more flexible than they are. Just one question re. MF Global and leverage. You mean you want to increase your leverage to generate more return in order to pull out money out of your trading account faster, so that a similar occurrence as with MF Global will not wipe out everything you have?

I think you have a distorted view on how the industry works. Brokers make money by collecting commission and/or the spread. So, in fact, they are interested that you STAY in business for as long as possible and that you trade as much as possible. The latter could lead to overtrading and hence, to more than the normal amount of losses, but that's a different matter and up to you. In most cases brokers try to hedge client positions so that they don't have market risk on their books. However, I agree that the courses provided by brokers will not make you a "market wizard"... EDIT: Did not see that there is a 3rd page on this thread already... hence, didn't see SIUYA's comment either... just clicked the reply button

Reminds me of the two efficient market theorists who pass a $50 bill lying in the street. They leave it untouched and congratulate each other on realizing that if it presented an opportunity for profit someone else would have picked it up already...

Exactly! And that is why it is difficult to analyze the way academics analyze... plus, of course, the subjective element in applying certain types of TA. PS: I guess we don't get many contrarian views to our view on TA on this forum...

Good point! I think the motivation of individuals is very important in finding a profitable application of TA. And the motivation to conduct a good academic study is a lot less powerful IMO than the motivation to earn money to make a living. You can see that also in the existing studies on that subject. The approaches they test (at least the ones I saw so far) are not very creative from my point of view...

The funny thing is, in the final section of the text the author admits that TA works, as it will help with "timing of investments" and "understanding why a stock moves"... well, that's enough reason for me to use mainly TA Also, it is not true that empirical evidence for TA is negligible. There are many well-known equity market anomalies which are recognized by efficient market theorists (that's why these are called "anomalies"). Though, I agree that the right, i.e. profitable, application of TA is more art than science. Hence, it is difficult for some to grasp. By the way, in the first Market Wizards book there was - as far as I recall - only one pure FA guy (J. Rogers) and he had such a long investment horizon that timing was almost irrelevant (> 2 years in most cases). The rest were all TA focused guys. That says also a lot.

Man... these are some deep thoughts and deductions as a response to his tiny comment...

I've interpreted it as "Profitable Trading to you guys!" (An alternative would be "Trade agricultural futures!"... but that did not make sense to me ) EDIT: Did not see Voltrader's reply yet. It was published with a time lag as his posts are still moderated.

Also, we have the FOMC Minutes release in the afternoon. Could mean that it will happen not too much until then...

I do definitely sympathize with this request. However, I've realized that for some folks (including me) it is a disadvantage to their trading if trade calls are being made. I personally start to worry about my trades more than without making a call and get attached to my earlier call and am not flexible anymore But on the other hand, it's interesting to see how other traders see the same market I am observing and how their methodology works. So, for me personally, it is okay to see hindsight comments about how they perceived the market (less where they got in and out but more their "logic" behind the market's movements). It is up to me to judge the about the value of the respective comments. In some cases, these might appear useless to me but in other cases I can possibly see some value in them. But this depends whether I can relate to that person's view of the market, I guess. Also, you can evaluate such comments quite well over time. Now, having said that, the style of writing and personal attacks are a different matter and not related to the above. And I agree that we should try to be polite in such forum irrespective of the different views we have on the same thing.

I like the picture with the aftershocks of an earthquake! What do you exactly mean with "... timing of each market open"?

I'd like to correct my statement above in bold letters. A "tick" in spot forex and the futures market is different. Period. You can have many ticks in the futures market at the same price. So, it's totally a different definition.

Well, I'm not an expert in this. I've just read about this in several books and on websites and it makes sense to me. In spot forex a "tick" is defined differently than in futures due to its decentralized character. In the futures market a "tick" is defined like you mention it, as a transaction taking place, irrespective of the size of the transaction (with one traded contract being sufficient). So, by definition, there has to be a trade. But in spot forex you have no central exchange, so a "tick" is defined as a change in price. That comes somewhat close to the above but it's not the same. I guess, in most cases there are somewhere in the world transactions in order for price to change, but theoretically there is no need for a trade to take place to change the price. So, the correct answer is indeed "theoretically zero". The way your broker or data provider records it might also be crucial. Retail brokers have a spread on the prices of their data source (that's where they make their money if they have no commissions). So, differently negotiated spreads of different retail brokers lead to slightly different prices for retail clients. I do not know how ECN's record this. But they cannot deviate too much with their prices from what the large banks bid or offer. I guess, there must be some arbitrage mechanism be in place. The surest thing is to ask your broker or data provider on how they do it exactly. By the way, I do not trade forex anymore but only (non-forex) futures, actually only the ES. And my trading style makes use of volume information. So, for me, that is an argument against trading spot forex. But I've heard/read that some guys trade spot forex and use the corresponding futures volume as a substitute for actual volume. Don't know about their results though.

In spot forex there does not even have to be volume at all to record a tick. All is needed is a new bid/ask price from the bank (or whatever institution) to which your broker is connected.

Hm... that is exactly my point. Of course, one should be careful about confirmation bias. My point is, if you are careful about confirmation bias in your statistical analysis of hard facts many of our initial observations will NOT be valid anymore. So, what I am saying is, we tend to assign significance to observations where there is none (I said in my first comment "...you'll become surprised of how few of your observations still stay valid"... maybe you did not notice the "few" in that sentence?). Now, maybe I've misunderstood your point here...? That's a good question of how we know which time frame we start our analysis with. At the end it is pretty much random, I guess. We are influenced by some sort of theory at the beginning of our journey, but from there we move on with our discovery of "how the markets work"... and it's good to question our theories with thoughts like the ones in this thread. I do not focus on the close of bars, by the way, except for the daily... (... but I don't say, that it's not possible to build a profitable trading system on the basis of some intraday time frame closes.)

I thought, it's because the vast majority of professional money (and, hence, the big volume) is traded at the daily open and close. Well, maybe they trade at the daily open and close because of the "clearly defined sessions"... but anyway, what's the point in arguing about the reasons of their trades... all I need to know is that a lot of volume is traded during daily open and close... that's what gives them significance (by the way, I'm not talking about the ONE opening price at 3.30pm, but view the open more as an extended time period). I've had similar observations on hourly bars, on volume bars and other stuff. The problem is, we tend to try to make sense of everything we see and so we observe certain "recurring" patterns. But what I've experienced is that if you start to analyze these observations with statistically significant amounts of data you'll become surprised of how few of your observations still stay valid.

Good point! Preparations are also helpful to get a "feel" for the market before starting the actual trading. So, it's not only about sticking to a pre-defined plan but also preparing your mind to get in tune with the markets.

I thought anyway, that this was timing-wise related to the JP Morgan news... after last Friday's action (at the latest) this could have been also only the reason for the market to make its predetermined move down...

Nobody watching/trading the ETH action? It's amazing... Expected price to go up after the cash close... was surprised by the strong down move and reversed... Haven't seen such action so far right after the cash close...

Hi cma, I don't want to post the URL here because the link leads to another trading forum... Just put in Google: "hershey" and one or two of the "foreign words" gosu uses (distinctive ones). Regards, k

Well, there is still the decision to make on which fractal and at which level on that chart the horizontal line has to be drawn... But I agree, that it's probable that experienced traders would place these at the same level on the same fractal. lol

That's the good thing about trading. Once you've built a model with which you can identify these operating points you just have to wait until they appear and then trade. Once realized, you think "Can it really be THAT easy?" What do you mean by "10m container"? "AS" is "after session" or something similar? Yeah, I don't use them in my trading decisions, but do draw "important" ones (multiple times tested S/R) on larger fractal charts just to see where they are. Guess it's a habit from former times... What do you mean with "S"? Couldn't find it in the Hershey dictionary I've found online.

Anyway, I just wanted to mention that this is a great forum! I've tried also other forums, but except for one, they all attract a lot of childish folks and the quality of the discussions suck big time. No fun to be around there... MMS, you somehow managed to attract some intelligent people here and, more importantly, some good traders. To me, quality is more important than quantity... Thank you for that! Keep up the great work! Thanks also to TheNegotiator for posting such great thread topics which often lead to very interesting discussions!

Great entry, gosu! I would have entered also on Monday, but in general I don't feel too comfortable about the ETH action where you have sometimes bigger head fake moves. So, I prefer to not trade before London open. Hence, I choose to be on the safe side (from my point of view at that time). In hindsight, I saw that the Monday entry would have been the safe side... :doh: Well, maybe because of the strong price action on Friday one could expect that a major up move will not happen overnight. Do you trade with stops in place? And if so, what was your stop Monday night? Just curious... And do you "cheat" often, if you get a signal from your methodology at RTH close/ETH open? Anyway, I've made a very nice profit yesterday on the down move, but got too greedy at the end. Otherwise I would have made my whole week's profit target yesterday... lol. Your exit was excellent, too!