I'm a big fan of Van K Tharp and his position sizing theories and yes its about expectancy, risk multiples and above all risk management. My biggest quest is trying to find a system that allows you to place breakeven stops almost immediately and essentially play the markets money. All systems so far dictate that you need at least a 10-20pip SL but then your TP must be at least 2:1 or preferably 3:1. This in my mind is the elusive Holy Grail. Risk per trade must NEVER be more than 2% of account balance. The EUR prediction method works but needs deep SL.
I'm long the EUR since 28th July for the target of 4500. I'm long around the 4200 level and adding small positions daily. The next immediate target is 4387.
the logic is that
if you can do price prediction, then you can at least got CERTAINTY of your entry (80% or more)
once, I was into indicator that tell what happen next; now, I gave upon on that -- something that I learnt
OK, the 4387 level was hit over the weekend bagging some nice profits. The march to 4500 continues and i'm buying all major dips.
Well its taken some time but the EUR is just short of the 4500 level...Price touched 4474 still long 8 contracts..new targer is 4296
time and again ..
I have a better idea: IF your claim would be entirely true, sell your system for a Million or two. Any Bank has that kind of petty cash available for truly performing systems.
Trouble is, I have to agree with most other statements, that your system will work only under certain circumstances, whereas you don't know beforehand when this condition occurs and it will fail over time. You see, prices behave very much like the the rest of our universe - while in a constant state of flux, observing the subject already interferes (interacts, to be precise) with it's movements and it all goes back to Schroedinger's cat. Or so. And predictions that are only true some times - sorry, don't count.
However, with a slightly differnet approach (reality-based trading, for example using Displaced MA and some Fibo patterns) I agree on tipping the likeliness of success once any of the various condition comes true.
With the number of people looking at the same information, having similar expectations, emotions and reactions, the "anti-pattern" frequently succeeds. (doing the opposite). However, still in the realm of guessing;
Trading includes uncertainty. Acknowledge this fact and let go of predictions. Decisions are made by the pip at a time. Look at the GBPJPY Monthly 2 years ago - the prices kept dropping, BECAUSE people started buying (or kept holding, which has the same effect). 1.7 trillion loss in one day, simply reaching the x4 Fibo retracement down to the pip.
Understand cause and effect and discover, where the shadows of the candles are coming from - on all timeframes and you are a step closer to a successful strategy.
( 'later .. gotta go..)
Another example. Sell below the line, buy above. 3 months heads-up - ample time to think ..
Same goes for the 30, 5 or 1 minute trading. (red line showing DMA 3x3 from H4 .. plenty of room for error; can use the blue line to enter and exit)
for more infos - profile includes my website.
Really gotta go now, before the sun's down-
Target hit today!
The target level of 4500 on the EUR was hit today and some nice profits in the bank.
The next level is 4390 followed by 4296 on the short side. I'm not sure when these will hit and you can see my original level of 4500 was predicted on the 28th July. The system has not failed yet but the real problem is knowing when to get in else you suffer some serious drawdown.
Pipmaker - thanks for your input and i agree with most of what you say but i do need help in trading a system that allows me to get in without too much drawdown whilst waiting for these levels to hit.
better to put some picture with your prediction and put some TEXT date and GMT there, so we could FOLLOW your move
xx - I'm bust looking into currencies that correlate nicely with the EUR/USD to look for potential reversal points and clues on direction. Ive tried my system on other currencies but it only works on the EUR for some unknown reason, BUT the correlated currencies may provide some clues.
Now listen up, the 4390 level i published yesterday was hit this morning almost exactly. The predicted 4500 level was hit yesterday and the market immediately revered off that point, dropped down to 4390 hitting my TP for additional 110pips. The next level is 4296 rounded off to 4300.
OK guys, 4300 was just taken out bagging 200 pips from the 4500 level hit yesterday.
Next target short to 4243.
Long to 4400