Let's now finally get serious about why price moves - page 2

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You don't want to know?? Well I'm sorry, but I'D like to know... the only way you're going to master something is if you know as much as you possibly can about it. Galileo was highly knowledgeable in astronomy just by using his crude telescope. You don't just go arguing that the sun doesn't revolve around the earth and defy the world scientific community and the church in doing so if you don't know what you're talking about... lest you be loony.

I want to know it all... getting to that 1-10% of the winner's circle means that you need distinctive background knowledge about how all variables operate at every level you can find. Indicators aren't going to do that for you... we're told, "you need to know how to use the indicator". Sure... but what do you need to know first? Not just price action, but whatever's going on behind the curtain as well.

You gotta remember that this is a zero-sum market... no goods or services are involved - just money in one set of hands equalling money out of someone else's. If you have a raffle ticket contest and 100 people buy a raffle ticket for $1, one of those 100 people will win the $100 prize. The name is drawn from the 100 tickets in the hat and John Q Public is the winner. He spent $1 and made $100 - so his net profit is $99. The other 99 people, however, are now all out $1. That's essentially what's going on with the markets... it has to keep being that 90-99% set of losers to keep putting money in the pockets of the 1-10%... it can't be 50-50, otherwise I just handed you a $20 bill and then you handed me back the same $20 bill again. Where are the profits? You're not going to be in the 1-10% unless you know it all or almost all of it, or at least have data coming from someone else who does.

Now, (ahem).... with that said, what can we learn from what makes PIPs go up or down, why support/resistance levels get to be exactly where they are and how wide the spread is, etc.

 

zero-sum theory-- it is called (end up with zero balance)

maybe people betting very long term, those people might win something (even small consolation prize)

patriotstef:
Hello,

I've been on forex sites for almost four years now... downloaded thousands of indicators, hundreds of strategies, numerous EAs, countless interpretations as to what "price action" means, dozens of webinars, various articles from professionals as to how to trade from an indefinite number of websites, etc. etc. etc.

Guess what? I can't make money on forex... all the money I win, I end up losing and my net profit is ALWAYS $0. Risk to reward ratios are useless because the amount of times I lose still outweighs the few times won and again the net profit is $0 (10 losses, three wins - RTRR is 1:3.... I'm at -10). The indicators that everyone swears by: MAs, MACDs, Stochastics, RSI, indicators that end up repainting the past, CCI, etc. all go nowhere in the long run, no matter what combination you use of these and various others used with them. Combinations of indicators do not increase your chances... if the best indicator you have gives you a 20% chance of making profit, then your chances are 20% - regardless of how many other inferior indicators are joining in with the superior one.

As far as price action goes... I'm still not even fully clear as to what this phrase even means. If it's the patterns such as dojis, dark cloud covers, etc. then price action proves nothing as to what's getting ready to happen next. If I had a nickel for ever time an instructor on these websites stated, "You can rest assured the price won't go the opposite way or the same trending way when XYZ pattern happens" where I then look for this pattern on a chart and see their assurance disproven, that would be enough money for me to not even bother with playing the market. Price can do ANYTHING it wants... whenever it wants, wherever it wants. Case closed... it is not a game of random chance or mathematics, humanity is fully controlling what is going on which means they can do what they choose anywhere they choose to.

Please do not recommend that I read someone's book on how to win at the markets. If someone is bold enough to write such a book, then you can rest assured that the banks, market operators, governments, etc. are all reading that book also and now know when to whiplash us all and stop us out.

With all that said, I am looking for what would technically be similar to a holy grail but not in essence the holy grail per se... what causes price to go up and down in the first place. No why don't we, for starters, take a look at the main factors - the country's economy, what news reports came out, what the governments playing forex also are going to do, etc. Now I know you may consider what I'm asking for to be what's called fundamental analysis... but what I'm requesting here goes a little bit beyond that. This price index point just went up at this tick on the chart... why? It just went back down..... why? I see a trend going back this far on the chart, but then I see it ranging after the trend, even though there was another trend right before this trend... why? This other currency pair has been ranging for the last two weeks on the hourly chart... why?

Why ask why, you say? Because if we have an answer, then now we know what's going on and what is obviously going to happen next when we have all that data at our disposal.

Ok, I know what I'm going to be told now.... "That's ridiculous, you can't possibly analyze so much data. It's impossible!" Ok then, let me put it to you another way... why don't we just, throughout this thread (with permission from the moderators here if they find nothing objectionable to my first post), at least discuss WHAT THE FACTORS ALL ARE to begin with... ALL of them. What we can do afterwards is look for ways on how we can combine that data either through a website, an indicator, etc. so there isn't as much data to have to look at all at once. How's that? This idea is only for future posts, we're not concerned with doing that part yet.

We need to discuss not just new reports, but what TYPES of new reports are we looking for and for what currencies they directly affect. Obviously the Bank of England's report affects the British pound, but what about all other pertinent data involved? Does the European Union's reports do anything to the British pound as well as the euro? Do the Asian reports do anything not just to the Japanese yen, but also to the British pound since the GBP/JPY is a highly popular currency pair for its high volatility?

Why does the USD/CHF do the exact opposite of the EUR/USD 99% of the time? Does oil, the Dow Jones, NASDAQ, etc. all have anything to do with currency pairs going up or down since the markets seem to all be interconnected (positive correlation with the EUR/USD and the Dow Jones, etc.)? Why do all these big time market big shots making millions every year have 7 or 8 computer screens in front of them - what data are they looking at and what do they conclude from it? Why don't they just level it down to only 3 or 4 computer screens where they have all the data combined through some form of software - or does it have to be arranged only they way they have it arranged?

Now I know volume spread analysis has been given credulity by a number of people - it has its supporters as well as detractors, the reasons being that one argues that there is no actual volume in forex due to there being no centralization. However the supporters argue that tick volume suffices and one can draw accurate predictions when supply/demand/accumulation/distribution is about to take place. Perhaps volume spread analysis may be a factor that we could consider, but if one suggests it should, we need to see everything involved from start to finish and that involves, once again, what causes the price to go up or down from the get go. VSA would thus compliment prediction... second only, however, to the aforementioned data needed regarding what just made the price index point move in the direction it did on any given bar or candle.

Hopefully this will give some insight as to what I'm visualizing... a completely different approach where we go to the very heart and soul of why markets move even so much as one point, in spite of however many variables are involved. Let's just discuss what all of them are... and I do mean all of them, not just a summary of the most relevant. The more data we have, the better the results - quite obviously. As far as I'm concerned, this becomes my "trading style" that I prefer above all others. The question is, what all do we need to know? Let this thread be a collection of everyone's knowledge as to what all has to be taken into consideration for even the slightest movement to occur on a market chart. We'll worry about what to do with all of it later.

Thank you much

PS
 

Now for capital and trade flow….

Hi guys, sorry I've been away for a few weeks....

http://storage.saxosoft.net/en/fx-pdf/3-1-capital-and-trade-flow-drive-currency-values.pdf

Take a look at the link I posted above. What can we learn from capital and trade flow when it comes to supply and demand… thus also, support and resistance on the charts?

By the way, I'd like to keep this thread discussing as much forex skepticism as we can to finally, at long last, weed out all this meaningless "indicator combination" and "trade price action" baloney since after 4 years of my trading experience, none of this has worked in the long run where you end up losing all if not more of what you started with profit-wise. We need to know what's going to happen BEFORE the move takes place and we can only do that by looking at every bit of data we can to see where the economies, employment, natural disaters, etc. happen to be - and no, news reports alone such as the non-farm payroll report and such like are not enough since they don't necessarily tell you which direction the market is going to go... that on top of the fact that forex brokers will skyrocket the bid-ask spread just so you don't legitamately ride the big moves when the news reports come out, so it's basically catch-22.

What all can we learn from those people with 8-10 computer screens in front of them who make cash from the markets every day? What are they looking at? What data is available for us to know what can show us what will most obviously take place next? That's the only way you're going to consistently make money on any zero-sum market - do you know what will happen next? If you don't have that data, or at least some of that data that can give you valid-enough predictions in the same way as predicting the weather, then you're not going to make any money trading... case closed. Of course, not all all moves can be made with 100% accuracy, but the weather can be predicted enough for us to rely on watching the 6:00pm news.

No one so far has disproved this premise I'm making here with what has to happen to make substantial pips per month, so if anyone can debunk my position, let him/her speak.

Thanks

PS

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