My Revolutionary New Trading System - page 3
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Fxcm's SSI and Oanda's chart (both of which show Dealer Book information) are contrary indicators. If the majority are doing A, you do B. It's never a good idea to do what the Herd is doing. 90% of traders fail, so if 80% of them are buying USD/JPY I want to be selling it. I agree with you about the long-period indicators and I think that we can use this information with them.
Here is today's SSI report on USD/JPY:
"USDJPY - The ratio of long to short positions in the USDJPY stands at 3.38 as nearly 77% of traders are long. Yesterday, the ratio was at 3.01 as 75% of open positions were long. In detail, long positions are 0.5% higher than yesterday and 1.8% stronger since last week. Short positions are 10.6% lower than yesterday and 51.2% stronger since last week. Open interest is 2.2% weaker than yesterday and 117.1% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses."
If the majority are doing A, you do B. It's never a good idea to do what the Herd is doing. "
That's very assertive. If (and IF) the provided statistics is right (and it is delayed anyways), there is no indication that working against the majority will give a good result. In fact, I bet the one will loose playing against the crowd.
Cause the specific moment of entry and exit cannot be calculated out of this. It's the MM thing.
I hope, you can prove me wrong, but with all of your innovative and fresh systems, I'm quite sure, you will be loosing money.
And, first of all - who obligates those FX dealers to give you the right information? How are you going to check it?
That's very assertive. If (and IF) the provided statistics is right (and it is delayed anyways), there is no indication that working against the majority will give a good result. In fact, I bet the one will loose playing against the crowd.
Cause the specific moment of entry and exit cannot be calculated out of this. It's the MM thing.
I hope, you can prove me wrong, but with all of your innovative and fresh systems, I'm quite sure, you will be loosing money.
And, first of all - who obligates those FX dealers to give you the right information? How are you going to check it?It's very simple. Most traders are bad traders. If I see 70% of FXCM's clients trading agains't the trend then there is a very good chance that the price is going to resume in the direction of the trend in a big way when it moves just a little bit against them and all of those stop losses get triggered. This is how the big banks have played Forex for years. In order for the panicked Longs to close their positions they have to SELL the currency back, which drives prices further down.
Economics 101.
I know it seems counter-intuitive. You would think that if most of the traders are buying, you should too. The thing to remember is that you should never, ever trade against the prevailing trend. If 70% of your friends decided to jump off a bridge I don't think you would too. What these traders are going through is a mental trap that is the hallmark of the inexperienced trader. They look at the daily chart and see that it's been in a down trend for a while and they decide that the price can't possibly go down any further, so they buy. This is fallacy, illusion, and wishful thinking. At least they are in good company, but I'll be the one taking their money on the way down.
Finally, it is a fact that 90% of retail traders fail. Their for it follows that the "Herd", if we define "Herd" as being the majority of traders moving in one direction, is full of bad, misinformed traders. Why on earth would you want to do what they do?
As to your other points: The SSI indicator is updated twice daily, so it's always up to date. Also, it would serve FXCM no purpose whatsoever to feed their clients bad data. If they did they would just lose all of their clients. What purpose would that serve? They get their spread irregardless of whether we make money so they have no need to create elaborate plots to get more money from us.
Oh, and about the specific time that the orders are placed: we are talking about hundreds of thousands of clients here, of course we can't see when they all bought. We can however, monitor the SSI index twice a day, which keeps us up to date on what the Herd is doing, and that's all we need to know. What time John Smith actually bought and how much he bought is irrelevant.
"it would serve FXCM no purpose whatsoever to feed their clients bad data. If they did they would just lose all of their clients. "
Why? How do you think those FX brokers make their money if not by ruining clients?
Honesty?
Bluntly and openly, they pull this positions statistics out of their ass. And rates, too. There is no way to check it. Not for an outsider.
Unless you have a share, how will you verify if it has anything to do with the truth, let alone trade on that?Hate to be a spoil-sport, but... have survived too many monetary revolutions in my home country... trust noone
Finally, it is a fact that 90% of retail traders fail. Their for it follows that the "Herd", if we define "Herd" as being the majority of traders moving in one direction, is full of bad, misinformed traders. Why on earth would you want to do what they do?
If only it where that simple. Most losing traders still lose even when they call the direction correctly, and most profitable traders will occassionally still profit even when they call the direction incorrectly.
Personally I couldnt care less whats causing the market to go up or down. If its going up I'll buy it. Most of the time it'll be the right thing to do, and on the odd occassion the trend reverses and I'm part of the dumb money, its not a problem, thats what stops are for.
The real issue is that the herd dont actually have a sense of direction. If you show them a chart of price going up they really couldnt tell you if its going up or down. In addition they dont undertand price action, they have no idea about the magnitude of volatility they might need to endure, their ignorance of position sizing is usually enough to ensure they'll fail even if they get lucky, and they dont undertand the probabilistic nature of the game that theyre playing.
There might well be an edge in what your proposing, but the cynic in me is telling me if the information as of any value, the broker wouldnt publish it. If anything, brokers tend to encourage the disemination of misinformation. Regardless, it seams to me that taking the opposite position to the herds mainly random behaviour is still a random position.
It's very simple. Most traders are bad traders. If I see 70% of FXCM's clients trading agains't the trend then there is a very good chance that the price is going to resume in the direction of the trend in a big way when it moves just a little bit against them and all of those stop losses get triggered. This is how the big banks have played Forex for years. In order for the panicked Longs to close their positions they have to SELL the currency back, which drives prices further down.
Economics 101.
I know it seems counter-intuitive. You would think that if most of the traders are buying, you should too. The thing to remember is that you should never, ever trade against the prevailing trend. If 70% of your friends decided to jump off a bridge I don't think you would too. What these traders are going through is a mental trap that is the hallmark of the inexperienced trader. They look at the daily chart and see that it's been in a down trend for a while and they decide that the price can't possibly go down any further, so they buy. This is fallacy, illusion, and wishful thinking. At least they are in good company, but I'll be the one taking their money on the way down.
Finally, it is a fact that 90% of retail traders fail. Their for it follows that the "Herd", if we define "Herd" as being the majority of traders moving in one direction, is full of bad, misinformed traders. Why on earth would you want to do what they do?
As to your other points: The SSI indicator is updated twice daily, so it's always up to date. Also, it would serve FXCM no purpose whatsoever to feed their clients bad data. If they did they would just lose all of their clients. What purpose would that serve? They get their spread irregardless of whether we make money so they have no need to create elaborate plots to get more money from us.
Oh, and about the specific time that the orders are placed: we are talking about hundreds of thousands of clients here, of course we can't see when they all bought. We can however, monitor the SSI index twice a day, which keeps us up to date on what the Herd is doing, and that's all we need to know. What time John Smith actually bought and how much he bought is irrelevant.Cyclesufer,
You make me sick.
Could you please discribe have MT4 is working?
This platfor has 2 separate platforms (or folders).
Could you named????
Did't you speek with MT4 sale office in Cyprus.
Ask for Gaies?
Bongo
P.S.
How is working in this forum.
Idiots giving advices to honest traders.
If only it where that simple. Most losing traders still lose even when they call the direction correctly, and most profitable traders will occassionally still profit even when they call the direction incorrectly.
Personally I couldnt care less whats causing the market to go up or down. If its going up I'll buy it. Most of the time it'll be the right thing to do, and on the odd occassion the trend reverses and I'm part of the dumb money, its not a problem, thats what stops are for.
The real issue is that the herd dont actually have a sense of direction. If you show them a chart of price going up they really couldnt tell you if its going up or down. In addition they dont undertand price action, they have no idea about the magnitude of volatility they might need to endure, their ignorance of position sizing is usually enough to ensure they'll fail even if they get lucky, and they dont undertand the probabilistic nature of the game that theyre playing.
There might well be an edge in what your proposing, but the cynic in me is telling me if the information as of any value, the broker wouldnt publish it. If anything, brokers tend to encourage the disemination of misinformation. Regardless, it seams to me that taking the opposite position to the herds mainly random behaviour is still a random position.Well said. The reason most people fail is because they don't fully understand the risk they are taking. You could give anyone a 10K account and allow them to only trade 0.01 lots and they would have a very hard time busting it...
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Finally, it is a fact that 90% of retail traders fail. Their for it follows that the "Herd", if we define "Herd" as being the majority of traders moving in one direction, is full of bad, misinformed traders. Why on earth would you want to do what they do?
.............................It is a very big miss-understanding that people like you and me and even traders in banks are responsible for price going up or down on forex.
It is global commercial business that mainly makes the currency market going up or down.
Ex. If I am a company like Britisch Airways and I make a deal with Boeing in the US to buy severall new airplaines like the new 747-7 and I sign that billion dollar contract with them (which will be in USD) then I'm going to contact emmidiatly my bank and ask them to reserve for me that capital today in dollars.
This means that I ask my bank to buy dollars and I am going to sell british pounds. The reason for this is because I can not take the risk that the moment I will need to pay ,which be severall years later on delivery, that the the dollar would have raised against the gbp. This could lead to finacial catastrophys for a company
My example was now with the most expencieve objects around but the same goes for every serious business. It can be oil or wine or cars or whatever that has a risk that could inluence the invoice that needs to be payed, in a bad way.
Now just think of all the business that is done and all the contracts that are signed and this every single day and worldwide between all the countrys.
Then you should start to have a feeling why they call a 4.5 trillion dollar/day turnover.
Once a company asked the bank to reserve that capital in the currency they signed the contract they do not give a damm if that currency goes up or down. The deal and price was agreed and that is it.
We traders (are only a fraction of that market) and are only surfing on the waves of world wide economics which is driven by interest rate and supply and demand.
Friendly regards...iGoR
real issue is that the herd dont actually have a sense of direction. If you show them a chart of price going up they really couldn't tell you if its going up or down. In addition they dont undertand price action, they have no idea about the magnitude of volatility they might need to endure, their ignorance of position sizing is usually enough to ensure they'll fail
Most traders are bad traders.: " losers, eat my shorts " If I see 70% of FXCM's clients trading against the trend then there is a very good chance that the price is going to resume in the direction of the trend in a big way when it moves just a little bit against them and all of those stop losses get triggered.
They look at the daily chart and see that it's been in a down trend for a while and they decide that the price can't possibly go down any further, so they buy. This is fallacy, illusion, and wishful thinking
tried that before, my direction is correct, and I get hit by SL
my wishful thinking is always SWINGING like a playground swing, then it consolidate for extra long time (half day) and then go higher i.e. big up trend , long flat , then swing up slowly at the end
--- criticize a strategy AFTER you test it live
don't be too harsh on people , WHO is the whistle blower
==== we could have some reflective thinking on ourselves, are we the "perfect loser habit" build in our mind == just like biology, those explanation are always "hope for the best"
e.g. a biologist / green environmentalist could argue
that BP put a minute poison in the mexican gulf, then the bivalve and crab accumulate the poison up the food chain, finally the BP could trigger use of nuclear energy , as the worst accident would not have such a widespread effect as stupid engineers could have impact us === illustration of wishful thinking -- make everything sound good
how many occasion, that we enter because
we see a long outbreak bar, then we tell ourself -- how good that if I haven't missed it, then the investment bank traders are happy == I guess, if they make a bad transaction, they could pass the bad transactions to another skillful weekly trader on the floor while they could stand BIG LOSS until the end of the week, while we usually use a bank note amount to measure our tolerable SL == most of the weeks (52 a year) -- is weekly analysis still swinging ?
If only it where that simple. Most losing traders still lose even when they call the direction correctly, and most profitable traders will occassionally still profit even when they call the direction incorrectly.
Personally I couldnt care less whats causing the market to go up or down. If its going up I'll buy it. Most of the time it'll be the right thing to do, and on the odd occassion the trend reverses and I'm part of the dumb money, its not a problem, thats what stops are for.
The real issue is that the herd dont actually have a sense of direction. If you show them a chart of price going up they really couldnt tell you if its going up or down. In addition they dont undertand price action, they have no idea about the magnitude of volatility they might need to endure, their ignorance of position sizing is usually enough to ensure they'll fail even if they get lucky, and they dont undertand the probabilistic nature of the game that theyre playing.
There might well be an edge in what your proposing, but the cynic in me is telling me if the information as of any value, the broker wouldnt publish it. If anything, brokers tend to encourage the disemination of misinformation. Regardless, it seams to me that taking the opposite position to the herds mainly random behaviour is still a random position.Wow. All I can say to you people who think that your broker is out to get you is..I don't even know. Maybe, MAYBE there has been a few brokers who have swindled their clients in the past but if you stick to a huge, internationally known broker you don't need to worry about this.
The value of contrarian indicators like the SSI has been documented for a long time in the stock and options markets. The Herd can not accuratly predict price action. We don't do the opposite just for the sake of doing the opposite. You do the opposite because you know that all of those traders are going to provide great momentum for the price when they bust. This isn't really that complicated.