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Thread: An Edge In The Markets

  1. #21
    Quote Originally Posted by ;
    I respectfully disagree with this, mostly academic, comprehension of the markets. I would define edge as the ability to profit in the motions in markets in a fashion that is consistent with no regard to the method that was utilized to arrive at a profit. If you are a huge bank that's centered on arbitrage opportunities then you really do want inefficiencies to catch profits. You might profit by taking trades depending on the pricing of economic fundamentals as it applies to exchange rates. These are areas where the academic translation employs *....
    Wow....very smart post!!! Very very good explanation!!

  2. #22
    Hello Guys,

    I'm exploring the forex society for only two weeks now so that you may call me very noob and thats true! But I am a hard-working noob

    After reading so many books, surfing so lots of forums, testing so many systems, blowing so many micro accounts, I believe I'm finally getting closer to the bitter reality.

    If there's some Edge exists, then its Self-Control! Its the capability to make a money management coverage and follow it no matter what. When nothing can predict another 20 seconds of this chart, then its the best that you can do - risk your money in a limit. Even a stoch, RSI and EMA is most likely all needed for a normal trader however, you have to have to restrain your-self till you see the opportunity to exchange, bury your emotion when you are wrong and take the reduction, take the fact that this is an unpredictable market.

    Its not the indiors that make a PRO trader, its the mentality one develops together with his experience.

  3. #23
    Do not fall into the trap...

    Examining your trades (after they are closed) you can falsely label your lack of profits as deficiencies of your plogy.

    The trade that moved against you fast (and also far).
    You: I didn't cut my loser fast enough.

    The commerce that was profitable but you left too shortly.
    You: I didn't hold my winning commerce long enough.

    We have some very smart people on this forum, which can program a few'monster' EAs... they could handle risk perfectly, have no need for plogy, they'll take every valid signal never influenced by their current P/L or current losses or fatigue or a crying baby in the background.

    Random chance plays a large part, we trick ourselves into believing we have some'edge' (if we actually don't ) and it is our plogy beating us.

    If that were true, there would be more profitable EAs.
    (even when the top were kept super-secret)

    Without great plogy and risk management, you will defeat yourself.
    I concur. I do it all of the time.

  4. #24
    Quote Originally Posted by ;
    Its not the indiors which produce a PRO trader, its the mindset one develops with his experience.
    I'm sorry to break your bubble in this way but this isn't true. Without a working knowledge of the markets (what goes why, how and when) and without a proven method of entry/exit you're no nearer to making profits irrespective of your efforts within the business of personal plogy management. Only focusing on money management and your plogy limits the rate at which you flip out your account to traders but does nothing to improve your account balance.

    I think plogy is an important part of what makes for a consistently successful trader, part of a tripod as it had been. I am tempted to agree with all the members here who believe there's been a lot of focus on plogy so perhaps it's not a tripod. If I were to position knowledge of how the markets operate and a proven egy I would rank since the last one. You can actually do without plogy (more about that in a different article ).Why? It's a lot simpler to'fix' your own plogy whenever you have the two.

    Cases
    If you understand how the market reacts to key levels and see that your position reverse you will get out and wait for another chance (or take the reverse commerce ). If you don't have the slightest notion of the way the market functions then you'll stay in, see your commerce neglect blame your mindset as it wasn't your mindset whatsoever that caused one to lose. It was inadequate eduion.

    Let us take another example
    in case you don't understand the differences between fx pairs you're going to be enticed to analyse them all as if they were the same. But they're not! You might have a egy which works fine on fiber but doesn't do all that on cable. For the sake of argument we will assume you don't understand that at this stage. The difference in liquidity and surprising 10 pip market moves is higher in cable but having no prior knowledge of that, it can throw you off the train and to the ditch called'plogy'. Self-loathing you and lying in the ditch regretting'll find a selection of authors who can't trade themselves but have a variety of ideas about what you ought to do on your plogy to better your bottom line. Climb the hell out of the ditch and start eduing yourself! There are plenty of (free) tools out there so there is nothing stopping you. I've started two threads to gather interesting and useful and you will discover some of the there. But there is plenty here on FF as well as elsewhere. Do some looking.

    Suggested reading about the same topic: Significant -- Why systems are profitable (or not)

  5. #25
    Quote Originally Posted by ;
    You can do without plogy (more about this in another post)
    Watch below.

    Quote Originally Posted by ;
    Examining your trades (after they are closed) you're able to label your lack of profits as portion of your plogy.

    The trade that moved against you fast (and too far).
    You: I did not cut my failure fast enough.

    The commerce that was profitable but you left too shortly.
    You: I did not hold my winning commerce long enough.
    Intu, you're onto it. Let me see if I can better clarify what I think it is that you're trying to state:
    If by statistical analysis you determine that you might have made more or less lost less, then fix your rules. Playing with your rules because two trades or one left you feeling bad is dumb. Practice the rules and be done with that. If the rules don't reflect current market conditions (anymore), tweak them.

    No plogy neededâ„¢

  6. #26
    Quote Originally Posted by ;
    I am sorry to break your bubble in this way but this isn't true. With no working knowledge of the markets (what goes why, how and when) and without a proven technique of entry/exit you are no nearer to making profits irrespective of your attempts within the business of private plogy management. Simply focusing on cash management and your plogy restricts the rate at which you hand out your account to traders but does nothing to increase your account balance.

    I think plogy is an significant part what makes for a consistently successful...
    That was a great post. Pretty much my thoughts precisely. You underestimate in the professional viewpoint. When you are a thriving professional trader you aren't reaching your entire potential. It usually has something to do with personality and plogy makeup. What makes the difference between a 200,000 profit per quarter trader along with a 1,000,000 per quarter trader? If they have similar access to capital. It usually is not related but plogy related. Thats hedgies and prop desks set so much funds to trader growth.

  7. #27
    Quote Originally Posted by ;
    See below.

    If by statistical analysis you decide that you could really have made more or lost less, then adjust your rules. Playing with your rules because two transactions or one left you feeling awful is stupid. Follow the rules and be done with it. If the rules do not reflect current market conditions (anymore), tweak them.

    No plogy wanted â„¢
    Well said

    Can you provide me an example of what you mean by'tweaking' rules based on market conditions changing? In case you dont mind...

    cheers

  8. #28
    Quote Originally Posted by ;
    Why is the difference between a 200,000 profit per quarter trader along with a 1,000,000 per quarter trader? If they have comparable access to funding. It is not methodology related but related.
    I concur that the larger the account, the larger role plogy starts to perform with. I think this is evident if you look at the trades Paul Tudor Jones took with the subprime debt. It took a little time to workout. The chance that news items and price action cumulatively begin to work against you's a true threat. I think the exact same can be said about long term investing a'la Warren Buffet. He is always criticized for this and that deal but the majority of them work out well. I believe most people would have trouble holding up to billions worth of rankings for such periods of time. But then again, he's a guy who digs deep down into numbers and maybe he does not care for sentiment.

    As an improvement I want to point out that not only the amount of money, but the length of time if chooses to work out can perform tricks on your mind (Troikaone1 already knows this). I must still mention that my account can't be measured in billions (without putting a zero, a point and a couple more zeros then ) so this is mainly theoretical as far as HUGE accounts are concerned. The logic applies to $40 vs $1000 accounts this is not and from experience theoretical in any way.

    PS. I intended to write that all into my prior article but I was taken by the train of thought another route. Thank you for pointing out that.

    Quote Originally Posted by ;
    Well stated

    Could you provide me an example of exactly what you mean by'tweaking' rules based on market conditions changing? If you dont mind...

    cheers
    Sure. Say I have. I look for a moving average crossover, a 123 pattern or a double top/bottom and enter the trade. My SL and TP are mended. Things work out for a while but I all sudden I have stopped out and my trades do not bring in enough to cover my losses. It might be that markets are becoming more or less explosive in which situation upgrading the SL and TP according to changes in average daily range should help. Of course, an astute trader has his eye ATR every day (many here use an onscreen indior that shows ATR/ADR).

    Some solutions require you to'go all Excel on it' and might not be that visible without proper analysis. The above is the simplest and most straight-forward instance I could think of but I hope that now you know exactly what I mean by simply tweaking.

  9. #29
    Many will claim to get a system of some sort and indior, a border or a method. I will try to offer you the advantage

    You are the advantage.

    Its not a system or plogy, as a robot could do so better than a person. A robot can be quicker, doesnt have feelings, and implements to perfection. That's not the border.

    The advantage comes from your mentality, plogy is part of it, the purpose and reason for trading, the will to succeed, the hunger for knowledge and the courage not to give up.

    There's absolutely no system which will provide you the advantage, again is you.
    Know the market you are trading, reevaluate the charts and price moves, be aware of major economic and policy changes by the central banks.
    Trading is an art not a science cannot be predicted by math and its not true that patterns repeat.

    No pattern will be the same and chart candles or pubs are lots of price, with expertise, studying the rhythms of wave motions, the force power time of price advance, trading at the now, and knowingly questioning if you'd like to be on your position. That the market is alive, be water, the water which flows according to the terrain. Have a egy, understand your self to use the tools which you have.

    Understanding when to hold, media, scale back, or liquidate your position.
    Do not gamble. One of the most important things is not to learn to take a loss.
    Like its educated conventionally but to understand how to generate a lousy position into a winning position.

  10. #30
    Quote Originally Posted by ;
    .. .too a lot of people get frustrated or look for the fail err I mean holy grail their trading careers instead of sitting down and spending some excellent time grinding some knowledge out .
    Yes.

    Thing is, I do not think most people realize they're on the lookout for a holy grail. They do not equate the constant searching and leaping from method to method, altering of rules, etc., to searching for the holy grail. So they, when I started and this includes me, do not even pay attention to it. They are not searching for the holy grail they don't give a second thought to it like it is so obvious. Well, if you do not stop for a second and really stick for a length of time to something and test it completely, then yes, then you are currently looking for the holy grail and you'll never be prosperous. You have to adhere to something and see through it.

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