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The Holy Grail - Found

  • #341
  • Dec 18, 2007 5:47pm Dec 18, 2007 5:47pm
Is this it ?

‘Bread-and-butter’ play gives Seahawks heartburn
DAVE BOLING; THE NEWS TRIBUNE
Published: November 5th, 2007 01:00 AM

Maybe market trades in a football shape.
  • #342
  • Dec 18, 2007 5:48pm Dec 18, 2007 5:48pm
No, how about this one:

The Bread & Butter trade is a DiNapoli pattern (B&B). It is a high probability trade with lower risk.
The objective is to take advantage of a thrust, and capture a small piece of the continuation move.
Not how the market reached the profit objective and immediately reversed after the trade was exited.
  • #343
  • Dec 18, 2007 6:05pm Dec 18, 2007 6:05pm
A Big Bank capturing a small piece? maybe, but I doubt it. I would think they'd want a BIG piece. Actually, big money buys at absolute
wholesale and sells at absolute retail over periods of time.
  • #344
  • Dec 18, 2007 6:28pm Dec 18, 2007 6:28pm
Big banks and other big money players do not care what we do. There are going to put their trades under whatever their requuirements are. Does anyone really think they are looking for the little traders and where their stops are. They have money to put in and take out of the markets. Nothing to hard to see.
  • #345
  • Dec 18, 2007 6:32pm Dec 18, 2007 6:32pm
I can see a conspiracy theory thread formulating.

'THERE ALL OUT TO GET ME!!'

lol

LG
  • #346
  • Dec 18, 2007 6:43pm Dec 18, 2007 6:43pm
Quoting SunTrader
Big banks and other big money players do not care what we do. There are going to put their trades under whatever their requuirements are. Does anyone really think they are looking for the little traders and where their stops are. They have money to put in and take out of the markets. Nothing to hard to see.
Well, there are big banks, and there are big traders, and there are traders for big banks.

The big banks, sometimes they have a job to do - money to buy, and they just have to get it done, and probably try not to run the price on themselves too much, but may not care too much either, since they have a service to deliver to a client.

Big traders, and that includes big traders for banks, their job is to trade to make money, but they can't trade like us. They accumulate or liquidate a position over time.

You see big fund managers on TV every day saying what stocks they like, then they put up the chart -- ever notice how the stock has always run way up? I'm sure they DO like it! And they're ready to take their profits. But they have to sell to someone, so they MARKET the stock...

Currency traders can't do this quite the same way, but we can bet that they have their own bag of tricks and psychological tools. Like the whales that take turns - all but one swim in a circle blowing bubbles to scare the fish into a column, then once they're compressed in just right, the whale whose turn it is to feed swims up from the bottom with his mouth open ....

In the evening, if the big traders are out having a brew, the conversation probably parallels that of those whales...
  • #347
  • Dec 18, 2007 6:44pm Dec 18, 2007 6:44pm
Hey LG, Maybe they gottcha a few times in the past. Don't let it happen again.
  • #348
  • Dec 18, 2007 6:55pm Dec 18, 2007 6:55pm
Quoting tdion
I don't believe in win expectancy ratios.
 I'm not saying that I disagree, but the implication is that without expectancy ($ won/$ lost) we have no objective way of comparing systems. Moreover, how can one prove that one's method even has an edge?

I remember your post where you asked "Have I simply curve-fit a set of random data, or have I found patterns that predict market psychology?". IMHO, that question is key. A positive expectancy method – whether mechanical or discretionary – must somehow identify and exploit a recurring market inefficiency (created by underlying psychology, machinations, "self-fulfilling prophecy", fundamentals, etc). If/when that inefficiency ceases to recur, any edge is lost, and the method becomes impotent. In this sense, every system is potentially susceptible to eventual breakdown.

With casino-type games of chance, it's possible to compute precise odds; with price movement, it's not. Despite this, all technical methods make the assumption that past performance will be (approximately) repeated into the future. We can tabulate levels of statistical confidence from back-test results; there's no reason to assume that the results won't ultimately approximate a normal distribution. But all of this similarly assumes that whatever inefficiency that's being exploited will continue to recur, i.e. that the "game conditions" will remain the same; alternatively (especially if the sample size is too small, or otherwise not statistically representative) we may have, as you suggest, simply curve-fit a set of random data.

If JohnW's trading results are typically representative, then he has found an inefficiency (caused by stop hunting) that can potentially be exploited.

Quoting tdion
For example, 2007 for the Nicotina High Low Systems made a few thousand pips. In 2006 it lost a few thousand pips.
Same goes for tkimble's Daily System.
 I'm not familiar with either Nicotina or Tkimble, so I don't know how these operate. However, we're told that there are traders who, despite having unprofitable weeks, and even months, claim that they make money every year. Either we believe their claims or we don't. These apparently include some full-time pros whose income comes solely from trading, hence I assume that their income must be reasonably consistent. Whether rightly or wrongly – I can not say – some of these folk apparently place credence on expectancy ratios.

Quoting tdion
Because markets are random, and no two years are alike, it is impossible to gauge a ratio.
 Not quite sure what you mean by "random". If (and I stress, IF) markets are completely random, i.e. a la Burton Malkiel, then nobody has a positive expectancy system. It follows that all wins are fortuitous; to think otherwise is to be "fooled by randomness". Any attempt at long-term profitable trading would be a pointless exercise.

David
  • #349
  • Edited 8:12pm Dec 18, 2007 7:18pm | Edited 8:12pm
I know one guy on this forum that makes good money on breakouts, and He does notice at tmes that strong factors are at work at those exact points.
His win/loss ratio is 65-75% I believe. I'm hoping to increase that just enough to drop the consecutive losses lower than 6-8 in a row.
4 losses in a row is about all my stress factor can handle. 12 losses in a row and I'd be committed.

I think JohnW picked up on those "factors' and figured out a way to exploit them thru P/A and increasing his win percentage dramatically to say the least!

Breakouts are profitable and I'm going to make them MORE profitable. I have nothing to lose, and I may learn something.
  • #350
  • Dec 18, 2007 7:30pm Dec 18, 2007 7:30pm
Quoting blueruby
I didn't read it that way. JohnW said he "liked to see an up bias and uptrend".

He didn't mean to say that he only trades long; all he was saying is that he likes to see what he calls "bias" match the visual trend.
Blue, I read it much the same way as you. There's supposed to be no structural bias to the forex market. In other words, it should be possible to turn a chart upside down and employ the same trading strategy.

The underlying premise is stop hunting. I guess the question that needs answering is: do the hunters employ the same strategy taking out stops below swing lows? Perhaps somebody more qualified than me could comment definitively, but I can't see any reason why they wouldn't.

My take is that this is a discretionary rather than an optimized system (the round numbers 10,20,30 suggest that the SLs and TPs haven't been rigorously optimized to fit the volatility/idiosyncrasies of each pair). JohnW has stressed that the key lies with the "who" and "why". In other words, the stronger, or more conspicuous, the S/R (e.g. confluence between a trendline and a swing point), the more incentive there is for the stop hunters are to take a close look. Likewise, my assumption is that exactly how the trend is determined isn't that important, it's just that the probability is improved by trading in the direction of the daily trend. Beyond the method that he's shared, JohnW's point seems to be to get all of the pretty indicators off the chart, study price action and think about the players and the reasons that underlie price movement. At least that's my take.

I don't see any point in trying to prove or disprove whether a 97% win rate is acheivable. I'm simply going to take the concept in its broadest terms, and try to develop it into a trading system that's as profitable as possible.

David
  • #351
  • Dec 18, 2007 7:31pm Dec 18, 2007 7:31pm
Case and point David (always enjoy a dialogue w/ you)

Crack open GBPJPY's D1 chart for the past 4 or 5 years..... 06/07 were very strong trends, critical for the success of most systems. Those years you would have made a killing.

However 05 was extremely flat, hence randomness.... You see, future market conditions are unpredictable.... I would trade TKimble if I knew the trends would continue, but I don't.

LOL One final thought.... had you asked me in 05 to trade Tkimble's system (just as an example) in 06 I would have said HELL NO -9000 pips in 05! But I would have been laughing my way to the bank had I done that irrational course of action. Do you see my point?

Quoting hanover
Not quite sure what you mean by "random". If (and I stress, IF) markets are completely random, i.e. a la Burton Malkiel, then nobody has a positive expectancy system. It follows that all wins are fortuitous; to think otherwise is to be "fooled by randomness". Any attempt at long-term profitable trading would be a pointless exercise.

David
  • #352
  • Edited 9:17pm Dec 18, 2007 8:20pm | Edited 9:17pm
Take a look at gbp/aud, 5 hits in 7 hours on the 30 min chart. Downside breakout at 2.3367 its not a trade because of the ranging trend. Damn spread is 12 pips.

Its about 1 hr later, price broke down to 2.3339. 28 pips so far.
  • #353
  • Dec 19, 2007 3:28am Dec 19, 2007 3:28am
Quoting tdion
Do you see my point?
I get it exactly.

Expectancy is calculated after the fact.

Past performance is no guarantee, etc.

You can compare expectancy of 2 systems, but only for the past.
  • #354
  • Dec 19, 2007 4:24am Dec 19, 2007 4:24am
always needed
http://chivas88chi.blogspot.com

Quoting JohnW
The Holy Grail……..Found

I have been live trading forex exclusively for the last 4 years and losing consistently. I have spent thousands on what must be at least a hundred courses/systems. I even paid $2000 for a mentorship program from a trader that eventually was proven to be a fraud (I personally did the investigation). Nothing I ever tried worked consistently enough to generate the promised steady stream of income. I have read books from Douglas' "Trading in the Zone" to Horner's "Trading Forex" to Williams' "Trading Chaos". Nothing worked. I slowly have come to the decision that all forex system vendors/gurus are frauds (Birdwatching in Lion Country comes to mind).

Several months ago I purchased another valueless system that after purchase was found to be based on moving averages, Fibonacci, and divergences. Literally, at the same time that I felt duped again by purchasing this system, I had that famous "Ah-ha" moment that psychologists have talked about (and I never believed in). Quite suddenly I realized the correct way to trade. This epiphany was massively overwhelming. Since that day six months ago, I have solely traded my method, which incidentally uses only one indicator. Forget Fibonacci, forget pivots. How many more traders must proclaim that lagging indicators don't work before failing traders, like I was, believe them? I, for one, have passed that hurdle. I have had 6 losses in the 240 trades taken since I started using my method. Unquestionably, it is the Holy Grail (and they say it doesn't exist - HA!). It is both profoundly logical and simple. It is the result of subtle input from many systems that fail because they ignore the simple truth of who drives prices and they attempt to predict price movement. But these systems each had a kernel of truth behind them, and I suspect that these kernels of truth finally reached a critical mass in my brain that resulted in my epiphany.

For the first time I am consistently profitable using an approach that I did not have to buy and is way more logical than anything I have ever seen. I now trade without fear, quite a novelty. I needed to be exposed to (and fleeced by) trading mentors/gurus until I discovered that the Holy Grail does exist but no vendor will sell it. No vendor/mentor that I have come in contact with has anything even close.

The purpose of this post is not to tease readers into buying a system that I will be selling at a later date (the only valid way to train a student to trade a system is to do it 1-1 in person with a live account). Its purpose is only to let them know that the Holy Grail does exist and can be found by all that persist. I am no genius. Here is some advice to facilitate its discovery.

I have never found a system vendor or mentor that could prove he traded live. Think about that.
There is only one reason why a vendor/mentor won’t divulge a live account statement.

Monitor posts daily at the forex factory forums. Many have helped because they have stimulated thought. Think about what should work and why. Never stop thinking.

James16 forum is worth the money if only for one month. Of all the systems that I studied, his is closest to the Holy Grail. His forum could put you on the right path. Sorry, Dial, but PIN bars are not reliable enough for me, but PA is king.

The more expensive the system, the more money spent on its marketing than its content. The most expensive system I bought was a fancy 5/13EMA crossover with an RSI filter. It had very nice packaging, though.

The primary requirements for successful live forex trading are courage and patience. The market is made up of traders with varying strength. This last statement is the key.

I hope this post was helpful. There is light at the end of the tunnel, but it is only for the determined few. With persistence, just when you get completely fed up with discretionary systems, arcane indicators, and blowhard fraudulent vendors/gurus, the fog will clear and you, too, will find the Holy Grail.
  • #355
  • Dec 19, 2007 5:31am Dec 19, 2007 5:31am
Hi

Mary Christmas to all

I am new in this forum and no Forex experience.

Studying charts and forex systems for some time now.

Pretty critical of idea of trading without indicators.
While reading historical results - a number of them have consistent positive results. Can't beat that. Some of you on forum have doubts about the indicators. It is like claiming that during the trading indicator is wrong. Later,
historically it proves right. Get real. Those traders that hate indicators most probably haven't unlocked the powers of good leading indicators.
Even emas crossovers, if setting is right can be a leading indicator.

If you don't see it, work on this issue a little longer. Ema crossover can become a leading indicator with 100% consistence.
Then he comes with the idea that nothing apart of PA is needed for a decision. He uses 50 and 100 emas bias. He thinks that
emas are not indicators. Adding to more confusion.

Some of the analysis on forum are thoughts provoking....It is pretty sure
that trend direction registered on higher time frame most of time has no real significance on PA on lower time frames. 20p can be easily scored in contarary direction to that supposed influential bias.

Also if trend on higher frame gets flat - does this stop you
from trading due to no guidance?

Many thread on this forum are from useful to very useful.
Some great traders share heaps of good trading advice.
MT4 platform is very good. It is easy to implement
custom indicators that circulate freely around and to be able to compare various methodologies.
Coffee can be used positively for health
and can benefit all, not only traders. Those traders
who don't use coffee are missing much.
screen action instead of price action
  • #356
  • Dec 19, 2007 7:16am Dec 19, 2007 7:16am
Quoting system_s
Hi

Mary Christmas to all

I am new in this forum and no Forex experience.

Studying charts and forex systems for some time now.

Pretty critical of idea of trading without indicators.
While reading historical results - a number of them have consistent positive results. Can't beat that. Some of you on forum have doubts about the indicators. It is like claiming that during the trading indicator is wrong. Later,
historically it proves right. Get real. Those traders that hate indicators most probably haven't unlocked the powers of good leading indicators.
Even emas crossovers, if setting is right can be a leading indicator.

If you don't see it, work on this issue a little longer. Ema crossover can become a leading indicator with 100% consistence.
Then he comes with the idea that nothing apart of PA is needed for a decision. He uses 50 and 100 emas bias. He thinks that
emas are not indicators. Adding to more confusion.

Some of the analysis on forum are thoughts provoking....It is pretty sure
that trend direction registered on higher time frame most of time has no real significance on PA on lower time frames. 20p can be easily scored in contarary direction to that supposed influential bias.

Also if trend on higher frame gets flat - does this stop you
from trading due to no guidance?

Many thread on this forum are from useful to very useful.
Some great traders share heaps of good trading advice.
MT4 platform is very good. It is easy to implement
custom indicators that circulate freely around and to be able to compare various methodologies.
Coffee can be used positively for health
and can benefit all, not only traders. Those traders
who don't use coffee are missing much.
I can't drink coffee, I did for years, and only when I quit did I see it was really, reallly messing me up, seriously. Some people live on it, that's great. I'm very high strung and it doesn't work for me.

I can't use indicators. I did for years, and only when I quit, did I see they were really, really messing me up, seriously. Some people make money with them, that's great. I'm very high strung and it doesn't work for me.

Sorry that you're confused. When you get some forex experience, well, then I guess you'll have some experience. How it works out for you is up to you.

Most or all of the people who trade naked are very experienced traders who have tried everything, many times, and lost some real money getting here. But, I felt the same as you at one time.

I don't want to argue about it, if you don't like this method, and you like indicators, then just find a good thread where people agree with you, there are many.

Make sure and bookmark this thread, in a year from now you'll decide you want to try it out and won't be able to find it with a search for "Holy Grail".

Merry Christmas and a pippy new year to you!
  • #357
  • Dec 19, 2007 8:16am Dec 19, 2007 8:16am
FXNorm-

Did you catch the gpb/jpy move around 6:30gmt? It broke the 227.93 big time! I grabbed 20 pips but could've taken a hell of a lot more! Just happy to see another good call for Johns method.
  • #358
  • Dec 19, 2007 8:21am Dec 19, 2007 8:21am
Quoting system_s
Get real. Those traders that hate indicators most probably haven't unlocked the powers of good leading indicators.
Even emas crossovers, if setting is right can be a leading indicator.
Ignorance is bliss.

Price is a leading indicator.

Everything else lags.

MA's
CCI
RSI
MACD
Stoch
Etc
Etc
Etc

Good start for a first post. Its all uphill from there.
  • #359
  • Dec 19, 2007 9:28am Dec 19, 2007 9:28am
Iced - I was in snooze land when "they" raided the longs, price dropped 160 pips in 1 hr
If you can watch the break you can keep your stop close instead of closing out at +20. Problem is the momentum may be to fast to react.
Just gotta fig this all out in the coming days. Least its simple.

Hey Blue! Liked your post over at skunny's, you have quite a talent.

Blue - What we need is an ea or something that will alert to several hits
on a s/r level BEFORE the price breaks. Then all we need to watch are trendline breaks and maybe 50% fib levels.
Watching 28 pairs and all these levels should produce lots of break points.
  • #360
  • Dec 19, 2007 10:19am Dec 19, 2007 10:19am
Quoting FXNorm
Iced - I was in snooze land when "they" raided the longs, price dropped 160 pips in 1 hr
If you can watch the break you can keep your stop close instead of closing out at +20. Problem is the momentum may be to fast to react.
Just gotta fig this all out in the coming days. Least its simple.

Hey Blue! Liked your post over at skunny's, you have quite a talent.

Blue - What we need is an ea or something that will alert to several hits
on a s/r level BEFORE the price breaks. Then all we need to watch are trendline breaks and maybe 50% fib levels.
Watching 28 pairs and all these levels should produce lots of break points.

has anyone considered a simple sysytem like nicotina excet make your tp profit target only 20 pips? seems like daily high low (like nicotina) at correct time period is a natural s/r level determined by most recent pa and setting trades in advance is very mechanical and low risk since your are targeting a break out in either direction ( see the nicotina trading suystem here on ff) since you will only enter a trade if your trade is triggered as price moves in your direction and then your tp is very close to your entry seems like a no brainer....(and since your sl is very tight) but someone with ea expereience could backtest i.e nicotina + john w = high percentage sysytem e.g stop buy and sell stop above and below daily high low set before asian/eur session as per nicotina rules with tp of 20 and sl of 30 ... anyone care to make an ea and backtest?
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