I know the perfect way to win at forex - page 5
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lol, alright fair enough
ok, I'll try on my wife first if you insist, but who's gonna cook then?
That's interesting. I will always finish with negative balance on both trades ? Why that ? Tell me if you know some advanced knowlwdge about that, I can face it.
Try to learn statistics and you will find the answer.
Gl
Try to learn statistics and you will find the answer. Gl
Wow, wait a minute.
I think I have learned enough statistics since I have studied theoretical physics.
Now, it seems to me that I should have better studied psychology , because the graphics are the behavior of masses in Forex.
Facts show that beginners lose all the time (in a determined period of time, a month for example). If statistics were the main engine of the markets , there wouldn't be 95% loosers and only 5 % winners. There should be, if not an equidistant ratio like a Gaussian distribution, at least another well known distribution, maybe student or who knows whatever else.
If someone relied only on statistics he would win some months and lose in other months. But no, he will lose 95 months and win 5 months. What kind of statistics is that ? Some exponential one ?
I think the thing to remember when weighing questions such as these (which are more like boulders) is that there is no answer. It's not psychology, statistics or even experience...these things will help you but in my honest opinion success lies in the moment.
You are dealing with a living entity (the market) composed of many other living entities (people) and to assume that any system (mathematical, psychological or otherwise) will allow you to understand the market to a "T" is reckless.
Do what you can with what you have, practice (demos), stay nimble, learn(READ take NOTES) and never assume.
It wont work, but at least you will learn something by doing it.
Here is the reason why:
a) You currently know absolutely nothing about trading.
b) any entry or exit you take is simply a random decision (and so is any silly system you'll fnd on an internet forum) or worse still an emotional response to winning or losing.
c) a system based on random entries and exits is at best break even minus transaction costs.
d) the opposite of a random entry and exit is just another random entry and exit, and therefore the results will be the same i.e breakeven minus transaction costs
e) you are psychologically pre programmed to do exactly the wrong thing. The moment you look at your results in the other account the same psychological weaknesses that ensure that you are currently a loser will come into play
If you understand statistics as you claim, then this should be completely obvious.
e) you are psychologically pre programmed to do exactly the wrong thing. The moment you look at your results in the other account the same psychological weaknesses that ensure that you are currently a loser will come into play
This is correct. Your idea is good, the problem is you are trying to figure out how to beat yourself. It is your foreknowledge of what you are trying to do that kills the concept. Every time you take a trade on your demo account, you will be THINKING about the live trade that is being taken in the opposite direction. When a trade goes in your direction on your demo account, you will be THINKING about how much money your are losing on your live account, and you will close out your profitable trade on your demo account so your live account doesnt lose more money. What might end up happening is that your demo account will actually end up being profitable while your live account still ends up as a loser.
It wont work, but at least you will learn something by doing it.
Here is the reason why:
a) You currently know absolutely nothing about trading.
b) any entry or exit you take is simply a random decision (and so is any silly system you'll fnd on an internet forum) or worse still an emotional response to winning or losing.
c) a system based on random entries and exits is at best break even minus transaction costs.
d) the opposite of a random entry and exit is just another random entry and exit, and therefore the results will be the same i.e breakeven minus transaction costs
e) you are psychologically pre programmed to do exactly the wrong thing. The moment you look at your results in the other account the same psychological weaknesses that ensure that you are currently a loser will come into play
If you understand statistics as you claim, then this should be completely obvious.One single observation I have here.
The trader I plan to hire is not meant to place random orders, but to use his own imagination, beliefs and intuition to win. This has nothing in common with randomness.
Then, if suppose we can set up an automatic system that placed random orders, then half of the orders wolud be wins and the other half losses. Of course minus spread. Well, it may be, but this is a fact that for the moment I don't want to test.
People are far far away to beeing able to make random decissions. Even the computers barely can do that.
One single observation I have here. The trader I plan to hire is not meant to place random orders, but to use his own imagination, beliefs and intuition to win. This has nothing in common with randomness.
Its a reasonably good observation.
If you do some testing, you'll find that random systems result in an approximately 50/50 win rate presuming an equal risk to reward ratio. This gets skewed towards a lower win rate when the size of stop or taget is very small. The cost of spread means that these systems are ultimately losing systems. If you increase the size of your profit target, or decrease the size of your stop win rate will decrease, and if you increase the size of your stop, or reduce the size of your profit target win rate will increase. Mathematical expectancy will remain constant.
You are partially right in your assumption that the new trader will not act randomly. If the trader where truly random then they'd lose the spread. The psychological bias's in your trader will of course ensure that they do significantly worse than a mechanical random system.
I think that you'd probably agree with me that if you where trading a mechanical system without the psychological bias then the answer would be most definately not.
If you where to try this experiment then you really do need to completely seperate the two people involved. You need to put the first trader under as much pressure as possible, hire someone, offer them a decent bonus but unrealistic targets. The second trader incentivise them to only follow instructions (or automate the 2nd trader role).
If you have any hands on involvement this wont work becuase your own psychological bias's will influence the outcome.
Using your wife is a great idea, particularly if she's going to suffer financially as a consequence of the trades she makes, its that kind of pressure that might possibly give you an edge.
I do think however you are underestimating the role of random chance in all this. Its very common to see completely clueless people with very health equity curves ! The way around this problem is diversification, and if you think about it, thats exactly what most MT4 based brokers do, they take the other side of trades made by people psychologically programmed to fail.
Failure in trading has nil to do with being "psychologically programmed" to fail or whatever you want to call it. That is nothing more than an excuse for not doing due diligence.
Failure in forex trading comes because of various reasons, which ultimately can be defined as not having a winning system.
- Not knowing how to be patient
- Not knowing how to set a stop loss
- Not knowing when to take profit
- Not having a daily or weekly goal
- Not being aware of economical news announcements
- Not knowing when to trade and when not to trade
- Not having a set of reliable indicators
- Not being able to recognizing a useless indicator.
- Not managing money well.
- Trading lot sizes that are too big for the account
-Etc
And I'm sure everyone here could add many more things to the list of reasons why people fail in forex trading.
If someone were to sit and learn from a successful trader, and then replicate and execute the successful traders exact system, then ultimately that person would begin to succeed.
Failure has nothing to do with being "programmed" to failure.
Failure has to do with a lack of knowledge and wisdom that are necessary for success.
The Oracle of Omaha read ever single book about the market that his library had to offer.
Due diligence rewards. Excuses do not.