A big truth about forex - page 9
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MM,
the coin theory is true , but trading is biased, so even if we assume that the trend is random, trader change it to non random , because its a surviving nature to follow each other and that what gives the momentum ... and if you have momentum its not random any more because you will see where the price is heading.
This is going round and round, random or not, who really cares. Is the market trending or not, that is the question. Trends can be found in both random and non random time series. Your ability to find the main cycles in the price data and determine primairy trend direction is the answer. The dominat cycles points are what is needed in determining trends and non trend conditions. Your responds, (trade system) to that will determine if your profitable. Even if one believes that the markets are non random that in itself will not in any way give him the ability to predict price levels to the point of being consistance, and the good news is one doesnot have too.
There are many cycles going on with in any time series and one can not only determine the primary cycles but the secondary and minor ones too. The information contained in these will give you the information needed to fine points of retracements and contertrend possibilities within the trends.
One says that minor cycles / trends are not important and easily broken. how ever, the minor cycles are what is needed to determine were price is over extended and retracements vary possible. Also when the primary trend is broken one must assume that a non trending period is appond us not that of a trend reversal at lease not till the primary cycle so dictates.
The cycles within the data are not that hard to see the question is, is the cycle points in question that of the primary, secondary or minor cycles. which determines primary, secondary and minor trends or lack of trends contained in the data. In a tradable range one may not see all three cycles not because they are not there its because all three are on top of each other and the cycle highs and lows will determine your limits to the range. A break from those levels may indicate break outs and the start of a new trend.
There is a little more imformation is needed to determine the reliablity of the cycles one finds in the data. The noise level, the volatility and price effieicency of movment.
One should only consider the data that one is trading. In the past I made a comment about triple screen displays in that if one uses a time intival above the chart intival he is trading, to find the primary trende, then one is not trading his data, but the higher chart data. using the lower interval as his signal points. This only tends to comfuse the trader IMO and should not be done. All the information needed is contained within the data your trading (looking at). The lower time internals will contain some important information, as well. Lower intervals reveals whats coming at you, so to speak. The higher ones show what has already passed you.
If one believes what I have posted here or not, makes no differance to me. This one post contains a lot of imformation if one is open minded enough to really think about it.
So is price data random or not ? Will that answer help you make a profit ? Do you really think price is predictable ?
Ask yourself instead;
Is price trending or not ? If trending is it up or down ? If price is not trending is it in a tradable range or in a tight consolidations ? Is price overextended ? If so is there room for a possible contertrend trade ?
Have a nice day
Keit
Keit,
Very nice post. IMHO, you have summed up an "edge" that most will never take the time to understand.
Best,
cl
This is going round and round, random or not, who really cares. Is the market trending or not, that is the question. Trends can be found in both random and non random time series. Your ability to find the main cycles in the price data and determine primairy trend direction is the answer. The dominat cycles points are what is needed in determining trends and non trend conditions. Your responds, (trade system) to that will determine if your profitable. Even if one believes that the markets are non random that in itself will not in any way give him the ability to predict price levels to the point of being consistance, and the good news is one doesnot have too.
There are many cycles going on with in any time series and one can not only determine the primary cycles but the secondary and minor ones too. The information contained in these will give you the information needed to fine points of retracements and contertrend possibilities within the trends.
One says that minor cycles / trends are not important and easily broken. how ever, the minor cycles are what is needed to determine were price is over extended and retracements vary possible. Also when the primary trend is broken one must assume that a non trending period is appond us not that of a trend reversal at lease not till the primary cycle so dictates.
The cycles within the data are not that hard to see the question is, is the cycle points in question that of the primary, secondary or minor cycles. which determines primary, secondary and minor trends or lack of trends contained in the data. In a tradable range one may not see all three cycles not because they are not there its because all three are on top of each other and the cycle highs and lows will determine your limits to the range. A break from those levels may indicate break outs and the start of a new trend.
There is a little more imformation is needed to determine the reliablity of the cycles one finds in the data. The noise level, the volatility and price effieicency of movment.
One should only consider the data that one is trading. In the past I made a comment about triple screen displays in that if one uses a time intival above the chart intival he is trading, to find the primary trende, then one is not trading his data, but the higher chart data. using the lower interval as his signal points. This only tends to comfuse the trader IMO and should not be done. All the information needed is contained within the data your trading (looking at). The lower time internals will contain some important information, as well. Lower intervals reveals whats coming at you, so to speak. The higher ones show what has already passed you.
If one believes what I have posted here or not, makes no differance to me. This one post contains a lot of imformation if one is open minded enough to really think about it.
So is price data random or not ? Will that answer help you make a profit ? Do you really think price is predictable ?
Ask yourself instead;
Is price trending or not ? If trending is it up or down ? If price is not trending is it in a tradable range or in a tight consolidations ? Is price overextended ? If so is there room for a possible contertrend trade ?
Have a nice day
KeitSo is price data random or not ? Will that answer help you make a profit ? Do you really think price is predictable ?
Ask yourself instead;
Is price trending or not ? If trending is it up or down ? If price is not trending is it in a tradable range or in a tight consolidations ? Is price overextended ? If so is there room for a possible contertrend trade ?
Have a nice day
KeitHi Keith,
I fully understand what you explain because it is the logic itself. I have the tendency to call them oscillations in oscillations
If one looks to a daily chart you only see 1 bar. If you take a 1 hour chart you suddenly have 8 or 24 bars that show an oscillation. If you drop to a 5 min chart you have again 12 bars that show an oscillation in the previous oscillation.
If you drop to a tick chart you have again an oscillation in the previous oscillation.
But for myself since I have fully accepted that price moves randomly I don't need to ask anymore of those questions that you summed up.
The way I now trade I couldn't care less if price is in trend up or trend down or strong or weak trend or in range or in a consolidation or over-extended.
It feels quite liberating and less stressful if one does not need to ask those questions anymore.
Not that I mean that you have it wrong it is just a different aproach that makes trading easier.
Friendly regards...iGoR
...
Years and years ago, a man called Alan Turing had proved that if a machine could process 3 states (yes,no and or) it could solve any problem in finite time.
Situation is somewhat similar in forex (I am saying only forex because in forex you can not have a valueless peace of paper in your hand - a currency pair either has some value or that currency pair does not exist) Trends can be up, down and sideways. All of them are trends. I wish it was sideways all the time (no freaking way to loose in a sideway market) but it is not. But also there are some good ways to detect either of these (some of them even posted on TSD by me)
Is it trending : I use something like this as my secondary setup. Decision if it is showing trends I leave to anyone looking at the attached picture
PS: the picture is wide on purpose, to show more data
A big truth about Mladen:a great man!
Nostradamus
I was reading some stuff about the famous prophet, Nostradamus... and found the following statement about his abilities to "see the future". It seemed fitting to drop it in this thread.
And I quote...
"His prophecies have a magical quality for those who study them: they are muddled and obscure before the predicted event, but become crystal clear after the event has occurred."
Reminds me of my last my last SMA crossover strategy