The Ultimate FX Predictor
- Thread starter Olly79
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jammie
Power Member
- Feb 24, 2008
- 773
- 379
WhiskerBiscuit,
sorry, i can't find a reference, but if you look around the net you'll see its a figure between 80-95% of traders lose money (i.e. down on equity exactly a year later). http://tinyurl.com/6t2nw4 or similar.
Admitedly, i have no idea how any of these results are generated. Of course, if a trader is up, withdraws their profits, then they are technically down, but they have won etc. I'll check sometime.
All i was saying was that everyone gets it wrong. No single system is bullet proof which is why EA's fail i guess. You're obviously experienced enough not to fall for simple mistakes that a suprisingly large amount of traders make!
Fundamentalists get it wrong too; if you're on the wrong side of an NFP because of your analysis etc. Theres always alot of slippage etc. sometimes even on stops.
I will agree with both you and azibi, fundamentals with some technical analysis thrown in will get you where you wanna go. Its what i used very well until august, then my whole system went to pot and i lost alot of money. Thats the only reason i'm really bitter about everything. I used RSI, MACD and a slow stochastic for my TA. They work perfectly together but just cannot deal with the economy at the moment.
However, since then i've found a system which has worked flawlessly through all great depressions, through both of the world wars and everything else up until the present day. And it uses alot of mathematics, specifically fractal geometry. And to be honest, i love math.
Just trading this way makes sense to me, and it works and i'm yet to be burned (although it will happen due to my errors).
To be honest, i'm just glad there are some traders here who are on the right side of the winning line. Almost every trader i've ever met (stock, commodity, futures or forex) has been destroyed one way or another. I'm glad people here haven't, and i hope the glory continues.
Oh, and plut0, thats what alot of EA's do - take one strategy, then if it doesn't work; reverse it. Thats why some EA's are ranked both best and worst on some charts. Its simply the exact opposite!
sorry, i can't find a reference, but if you look around the net you'll see its a figure between 80-95% of traders lose money (i.e. down on equity exactly a year later). http://tinyurl.com/6t2nw4 or similar.
Admitedly, i have no idea how any of these results are generated. Of course, if a trader is up, withdraws their profits, then they are technically down, but they have won etc. I'll check sometime.
All i was saying was that everyone gets it wrong. No single system is bullet proof which is why EA's fail i guess. You're obviously experienced enough not to fall for simple mistakes that a suprisingly large amount of traders make!
Fundamentalists get it wrong too; if you're on the wrong side of an NFP because of your analysis etc. Theres always alot of slippage etc. sometimes even on stops.
I will agree with both you and azibi, fundamentals with some technical analysis thrown in will get you where you wanna go. Its what i used very well until august, then my whole system went to pot and i lost alot of money. Thats the only reason i'm really bitter about everything. I used RSI, MACD and a slow stochastic for my TA. They work perfectly together but just cannot deal with the economy at the moment.
However, since then i've found a system which has worked flawlessly through all great depressions, through both of the world wars and everything else up until the present day. And it uses alot of mathematics, specifically fractal geometry. And to be honest, i love math.
Just trading this way makes sense to me, and it works and i'm yet to be burned (although it will happen due to my errors).
To be honest, i'm just glad there are some traders here who are on the right side of the winning line. Almost every trader i've ever met (stock, commodity, futures or forex) has been destroyed one way or another. I'm glad people here haven't, and i hope the glory continues.
Oh, and plut0, thats what alot of EA's do - take one strategy, then if it doesn't work; reverse it. Thats why some EA's are ranked both best and worst on some charts. Its simply the exact opposite!
First of all I think that the reason 97% of "traders" lose big time is becasue of overleverage. If you want to make consistent profits without jeopardizing your capital just leverage up to 1:2 to 1:3. Perhaps once you are more advanced go to a 1:5 leverage per trade. You might have 2 trades up so you are leverage wise at 1:10. And that should be your absolute limit. This is no guarantee for winning but it WILL keep you long enough in the game to learn from your mistakes. Thats rule nr.1 imho. As a result of low leverage the need of placing stop losses won't be that necesarry. Ok you might want to place a SL 150 points below your level, just in case some country nukes the other. You know, stops not so far away will usually be hit. Your broker will manipulate the price between the NY close and the Tokyo open that you are "just" hit after which it came your way again. So, I am stronly against the use of stop losses. Banks never use them, only on behalf of customer orders. That was rule nr 2 to preserve capital. I admit that pure use of TA does work in , for instance a range trading markets. Often bots seem to be build on that, but once the market conditions change from range trading to trending, the system will fail just like the other way around. There is no bot that can decide WHEN a market goes range bound and when it starts trending. Only human beings could asses this, usually based on fundamental analysis. So never use bots. They just can't work. I loved the markets from August on as certain fundamentals on which I was breeding a long time finally came out. Same thing counts for next year. With all the money printing in the USA It is clear that the US$ will collapse against the currencies but also against Oil, Gold and other commodities. Esp Aud and Cad should benefit from this.
I have heard about fractals. They were introduced to me during a presentation in Zurich back in around 1990 by an American futures trader Bill Williams. He has done a lot of research on that and if I remember well it has to do with chaos theory. Fractals should bring order in the chaos. Actually EW analysis is a sort of fractional analysis. But unfortunately I am not a mathematician like Jammie and I do not know the fine details about it. I am very interested in those formulas anyways. Thank you for bringing that subject under my attention Jammie. Sorry guys my post got a bit longer as I intended......
Kind regards and healthy 2009
Azibi
I have heard about fractals. They were introduced to me during a presentation in Zurich back in around 1990 by an American futures trader Bill Williams. He has done a lot of research on that and if I remember well it has to do with chaos theory. Fractals should bring order in the chaos. Actually EW analysis is a sort of fractional analysis. But unfortunately I am not a mathematician like Jammie and I do not know the fine details about it. I am very interested in those formulas anyways. Thank you for bringing that subject under my attention Jammie. Sorry guys my post got a bit longer as I intended......
Kind regards and healthy 2009
Azibi
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jammie
Power Member
- Feb 24, 2008
- 773
- 379
Bill williams is the pinoneer of it all, and hes got a few good ideas. He has alot of material floating about; it's 100% worth reading and it really changed my whole perspective.
It is exactly what you said - bringing order to chaos. Looking under the surface to see the order which lies "hidden". You're lucky you got a lecture off of him!
I'm not a mathematician, but i read math in my spare time (weird i know, but its amazing what some people can do with such little data!). I did formally study alot of maths, but if it's not applicable, its not as fun!
Your rules are spot on and i couldn't agree more - most traders are over leveraged and insufficiently funded thus cannot preserve capital.
I do however disagree (respectfully!) that pure TA doesn't work (in theory! as it does in practice) - TA only works because of the gamblers fallacy (the past dictates the future) however, since people believe this, it's a self fulfilling prophecy. I.e. so many people use fib lines, they work! It'll hit .618 and reverse because so many people are using that as a pivot etc.
Of course, you can use this to your advantage and profit from it, as i'm sure you already do, but i like things "precise" and "absolute" (please don't ask why i look to forex for this though!), but i guess thats why i like the mathematical side of it i guess - trying to find a definate answer when everything seems so "random". bringing order to the chaos as it seems!
Of course, we could argue about forex, its systems, methods and theories all day, but the fact of the matter is; your system works for you, and nothing will ever change that! Trading, is a skill, and you'll never loose it!
Hope you have a prosperous 2009 azibi, i'm sure you will, without a shadow of a doubt!
It is exactly what you said - bringing order to chaos. Looking under the surface to see the order which lies "hidden". You're lucky you got a lecture off of him!
I'm not a mathematician, but i read math in my spare time (weird i know, but its amazing what some people can do with such little data!). I did formally study alot of maths, but if it's not applicable, its not as fun!
Your rules are spot on and i couldn't agree more - most traders are over leveraged and insufficiently funded thus cannot preserve capital.
I do however disagree (respectfully!) that pure TA doesn't work (in theory! as it does in practice) - TA only works because of the gamblers fallacy (the past dictates the future) however, since people believe this, it's a self fulfilling prophecy. I.e. so many people use fib lines, they work! It'll hit .618 and reverse because so many people are using that as a pivot etc.
Of course, you can use this to your advantage and profit from it, as i'm sure you already do, but i like things "precise" and "absolute" (please don't ask why i look to forex for this though!), but i guess thats why i like the mathematical side of it i guess - trying to find a definate answer when everything seems so "random". bringing order to the chaos as it seems!
Of course, we could argue about forex, its systems, methods and theories all day, but the fact of the matter is; your system works for you, and nothing will ever change that! Trading, is a skill, and you'll never loose it!
Hope you have a prosperous 2009 azibi, i'm sure you will, without a shadow of a doubt!
Thank you for your friendly words Jammie. I think we misunderstood a little about TA. I fully agree with you that its self fulfilling prophecy. ANd hence it can only work to a very limited time and or range. If it would be so easy after all 97% would become rich. Just find the turning points before the crowd does, as once everyone starts to shout out its a pivot point or whatever it isnt anymore!
Same to you and all the best for 2009.
Kind regards
Azibi
Same to you and all the best for 2009.
Kind regards
Azibi
Whisker
Senior Member
- Dec 26, 2007
- 841
- 945
I will second that over leveraging is a downfall for a large number of traders as well, it's simply extending your balance which in turn can mean elevated risk. And you're right, we could argue nonstop about everything associated with forex, fractional and non-fractional pips, leverages, entry/exit indicators, the significance of current events, etc so there is no need for that. Whatever works for you personally is all that matters. It's just a little astonishing that people think 95% of traders are failing, maybe I just talk with a small group that make rational trades and we comprise a portion of that 5%. Who knows, all I care to see is substance when people put claims on the table like 95% of traders are failing and it's a terrible time to trade.
My personal feeling is that '09 will be rocky and volatile for a few more months, and then start to even out, where in 2010 will present a more favorable investing environment.
PS. Not to nitpick Jammie, just trying to get people on the right track .
http://www.merriam-webster.com/dictionary/lose
http://www.merriam-webster.com/dictionary/loose
Good luck to everyone in '09.
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jammie
Power Member
- Feb 24, 2008
- 773
- 379
heh, sorry whisker, my grammar is terrible sometimes (and especially when it's xmas and i've had a few drinks!)
I guess its like everything though; sucessful people in the IM market are always around sucessful people in the IM market, world class traders are always with other world class traders etc. Just just attract i guess!
My philosophy is that forex can be seen as just an extension of the 80/20 (or 90/10) principle. As for every dollar someone loses, someone else "wins" it. So there is no way everyone can profit.
If everyone was winning; books, systems, indicators and the rest wouldn't be selling like hotcakes!
I'm aiming to get back into forex fully in april/may when i feel things will have settled. I'll trade abit from the start of feb though to get my feet wet again though before i dive in head first!
I think 2009 will be great. Best of luck to the both of you whisker and azibi, but i'm sure luck isn't needed
I guess its like everything though; sucessful people in the IM market are always around sucessful people in the IM market, world class traders are always with other world class traders etc. Just just attract i guess!
My philosophy is that forex can be seen as just an extension of the 80/20 (or 90/10) principle. As for every dollar someone loses, someone else "wins" it. So there is no way everyone can profit.
If everyone was winning; books, systems, indicators and the rest wouldn't be selling like hotcakes!
I'm aiming to get back into forex fully in april/may when i feel things will have settled. I'll trade abit from the start of feb though to get my feet wet again though before i dive in head first!
I think 2009 will be great. Best of luck to the both of you whisker and azibi, but i'm sure luck isn't needed
