a strategy that works!!! - page 2
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. Go build yourself a rocket.
Forex is not for everybody. Heck no, why do you think people are into real estates and other big businesses?
If Forex was that great and profitable, there would be no such thing as big businesses out there.
Think about it. Simply put, Forex is not for everybody.
Thats what I like to see :)
me 2.(FEAR of losing a small profit made you take profit earlier, GREED to make a quick profit force you enter the market earlier, and the RECKLESSNESS force you to hang on to the hopelessly losing trade much longer, than your own system requires.)
Once you automated the system all these bad emotions are gone and you just watch your favorite EA making or losing money for you objectively. With some LUCK on your side, at the end you will even make money regularly and go live in the Bahamas.
In stock trading, you are purely in it for the profit making opportunities.
In forex, a lot of currencies are traded simply because you wanted those foreign currencies for a reason, which can be anything from doing international trade to the humble tourist visiting a foreign country. In those cases, they bought the currency because they have to, or want to - and not because an indicator is telling them the currency is going up.
The 95% vs 5% is not the whole picture in forex, unlike stocks, etc.
In stock trading, you are purely in it for the profit making opportunities.
In forex, a lot of currencies are traded simply because you wanted those foreign currencies for a reason, which can be anything from doing international trade to the humble tourist visiting a foreign country. In those cases, they bought the currency because they have to, or want to - and not because an indicator is telling them the currency is going up.
yes, but that's 0,00001% of the volume
yes, but that's 0,00001% of the volume
I don't have the figures but I can assure you non-speculative currency exchanges like International Trade accounts for a heck of a lot more than that.
You keep hearing the old saying over and over again that over 95% of forex traders lose money but yet a great deal of people join in day in day out in hopes of being one of the 5%. Everyone thinks they have something special about them that no one else knows about. You learn all about technical and fundamental analysis, you learn how to control your emotions, manage your money and limit your risk but somehow, someway after all these years spent dreaming and trying, you end up one of those 95%. then something hits you, maybe you read about it somewhere, maybe someone tells you but you start thinking to yourself, if I can develop a strategy that proves to be successful I can pick myself up to be among the winning 5%. Maybe I can even write a program that would do exactly whatever the strategy entails and therefore there will be no emotions involved and I will make really good money. You start learning about writing EAs and MQL and etc. and the process of strategy testing begins. No strategy seems to be working well at all the years of backtesting. it seems as if the results are quite random, as if all the books you read about technical analysis were pure BS. You start working with one indicator after another...maybe if I use this indicator with that one with these parameters that would be the answer. No? what about this one? all this hard work gone in vain. friends keep telling you there is a way and their "logic" is that "history repeats itself". Well OK but how is this going to make me any money??? it seems that history is repeating itself less often than I need to grow my account balance! They keep saying that history repeats itself but have they found an instance of history in forex that repeats itself so often that makes it beyond random??? I guess not because I've read their books and there is no such thing. makes you really wonder if there is such a thing as a strategy that works, if there really is a winning 5% other than brokers. I haven't seen one who is by definition a winner in forex. maybe forex is just a phase that will pass eventually.Maybe.... Maybe....
not quite the post you expected hah?well life is full of surprises.
Would it be more accurate to quote 'a strategy that works some of the time'?
This is based on the idea that the forex market is random on long-term, amplified by fundamentals, and has 'mood' or 'trend' in the short-term which can be captured by a strategy?.
In the end, EAs must be re-evaluated regularly (includes optimization, revision or shredding entirely of the strategy).
1. A trading plan with positive expectation
2. Managing your emotions.
3. Managing your money.
It is my belief that the vast majority of this hypothetical failed 95% do so because they fail at points 2 and 3. I have come here to learn to code because, for me at least, an EA is the best way to prevent failure in areas 2 and 3. I also refuse to believe that solving part 1 is impossible; that every technical indicator out there is no better than a coin flip. (Maybe I just haven't been at it long enough!)
So for you rocket scientists, are my fundamentals flawed? Are most failures due to the fact solving 1 is actually next to impossible?
Following the analogy, I'm no trail blaser, I don't need to go to Mars. But we have already been to the moon.... give me the book on the principles of rocket propulsion and I will build a rocket. Even if I just reach orbit, I made into space :)
V
Viffer the challenge with #1 is knowing what exactly a "positve expectation" means, and no, strategy tester does not tell you what the positive expectation is for your strategy. Strategy tester will give you many false positives (seemingly good strategies that are destined to fail) in your filtering process.
Strategy tester lets you know what is a waste of time (bad results are bad) but you get to spend your time figuring out which of all the seemingly good result are actually good results.
IMO too many new traders place too much confidence (and emphasis) on seemingly good backtesting results from strategy tester, let alone the fact they only backtest maybe 3 months or a year's worth of data, and then they throw money at it in a live account thinking they've developed their own money tree.
#2 and #3 are simply the easiest to deal with by way of using algorithmic trading so they garner the focus and attention, but being falsely convinced that they have #1 (that their trading plan does have a postive expectation) is why people lose money in algorithmic trading.