MP -- THOUGHTS AND EXPERIENCE WITH FOREX - Page 2

permanentjaun · Sun, 11-26-2006, 01:27 PM

MP,

This is what always makes me wonder why trading is so difficult. On paper things seem so simple, but then the real world smacks you in the head.

I have thought about it before and even a system that is only 50% correct can be successful. What if we played a weekly chart and had a TP of 200 and SL of 100. At only 50% correct we would expect out of 100 trades to be up 5000 pips. 100(.5)(200)+100(.5)(-100)=5000.

How hard is it to be 50% correct? Flip a coin. The next obvious question is, "how do I give myself an edge of greater than 50%?" Learn how to read candles. If you can identify patterns then you should be able to give yourself better than 50% unless your reading is terrible. EDUCATE YOURSELF FIRST.

Right now I'm in a discussion on another forum about how to mechanically place ourselves on the winning side of the trade more than 50% of the time without human interaction. One idea we're working with is filtering the candles such that we only enter a trade after it has moved more then 50 pips or 100 pips from open. The idea is that the counter trend shadow on a candle is usually only a small amount of the candle. Money management is still obviously key.

But it still makes me wonder, how successful do we really need to be to make money? Using a 200 TP with 100 SL we could essentially only be correct 33% of the time and still break even. Getting 200 pips movement out of a weekly candle isn't unheard of and is actually quite common.

Averaging 2500 pips a year or 200 a month would be considered fairly successful among forex traders. The above method simply revolves around the money management. I can't say taking 1 minute a week to look at the candles and make a more educated guess of it's direction is really a system. The problem is in what we read. Looking at a weekly chart of gbp/usd shows tremendous ranging that would have been difficult to pick up from the get go. So then I suggest perhaps adjusting the system to a daily candle. 100 TP and 50 SL. Would it take more then that to make a successful system? Matt

mp6140 · Sun, 11-26-2006, 11:30 PM

[quote=Homestudy;45840]This is a chart I found on another forum charting correlations between currency pairs and is very usefull in hedging. I am finding that rather then placing a stop I will place a buy of a different pair to protect my account. The strongest correlation is between the USD-CHF and the EUR-USD. QUOTE]
====================================

certainly agree with that chart and thnx for it, but i also have a lot of fun with the dollar/yen and the pound/dollar as well and they work with the above pairs also ! When one is going up, the other is going down recipricals are fun !

mp

mp6140 · Sun, 11-26-2006, 11:59 PM

Quote:

Originally Posted by permanentjaun

MP,

This is what always makes me wonder why trading is so difficult. On paper things seem so simple, but then the real world smacks you in the head.

I have thought about it before and even a system that is only 50% correct can be successful.

===============================================
SYSTEMS ?, SYSTEMS ? ---- we dont need no stinkin systems !!

To be truthful,i simply dont understand "systems", but that prob has to do with my being a long time penny "momo" trader, and just cant give it up !

what i like is to play the opens of the foreign markets and hop on what can be an 80 pip move each way, be it long or short -- this week, for example, the pound/dollar has been making 100 pip moves per day and there are many others that make an 80 pip up move, and then theres the short after !

Or simply pick a bottom or top, go long or short as a core position and play the flips off the 15 minute chartas another trade -- i also play the one minute and 5 minute moves, but depending on how nasty the broker is, they are not usually worth the effort considering how loose some spreads can be.

SO, whats with the "systems" ??

mp

permanentjaun · Mon, 11-27-2006, 12:20 AM

I say system in a manner to mean strategy. Even what you described right there is a system to me. It's the system of how you trade.

How do you tell which way to go on the open of the foreign market?

mp6140 · Mon, 11-27-2006, 04:01 PM

Quote:

Originally Posted by permanentjaun

I say system in a manner to mean strategy. Even what you described right there is a system to me. It's the system of how you trade.

what i do is a technical swing trade with cyclic flips --- going long or short as needed ! Nothing i do can be backtested, analyzed or worthy of any longer term thought !

How do you tell which way to go on the open of the foreign market?

=================================================

Not to belabor (at least not for too long) what i wrote about was a "method" of trading, not a system (LOL) A system has built in protection, usually getting you out of a trade slightly early to very early, so as to protect principal while still providing profit. The best can achieve remarkably high rates of success over a period of time, can be backtested and analyzed and are generally used by "investor" minded individuals (not necessarily investors) as opposed to traders (although that statement could be debated forever !)

as far as entries, do you not read what i write ??????

If a symbol opens "green" --- ABOVE ITS PRIOR CLOSE, its a go gettum tiger !

why do i bother ?

LOL

MP

capt_nemo · Mon, 11-27-2006, 10:01 PM

Dollar woes carry over into new week
At 20-month low vs. euro, which sets record against yen
PrintE-mailDisable live quotesRSSDigg itDel.icio.usRelated Blog Posts & ArticlesBy Wanfeng Zhou, MarketWatch
Last Update: 6:26 PM ET Nov 27, 2006

NEW YORK (MarketWatch) -- The dollar fell to a 20-month low against the euro but steadied against the yen Monday, as traders awaited economic data and Federal Reserve officials' comments later this week for clues about the outlook for U.S. interest rates.
The dollar came under heavy pressure last week on worries that the interest-rate differential between the U.S. and other parts of the world will soon narrow soon, with the Fed pushed to cut rates to spur growth even as the European Central Bank continues to lift rates to curb inflation.
"The market remains wary of a further dollar fall after last week's momentum-driven selloff," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "The market has prepared for soft data, though there is room for dollar bears to be disappointed."
Late in New York, the dollar was quoted at 116.05 yen, compared with 115.81 yen late Friday. The euro changed hands at $1.3134, up from $1.3094, after touching the highest level since March 22, 2005, at $1.3177.
The British pound traded at $1.9374, compared with $1.9316. The dollar changed hands at 1.2061 Swiss francs, compared with 1.2089 francs.
The euro fetched 152.43 yen, compared with 151.65 yen, after touching 152.49 yen, a fresh record high. See live foreign-exchange rates.
David Jones, chief market analyst at CMC Markets, said that in the near term, the currency market is expected to consolidate.
Given the recent selloff in the dollar, "there can be little question that we're going to see some dollar buyers emerge in the near term -- especially at what could arguably be seen as oversold levels," he said.
Key economic data ahead
The government will report durable goods orders for October on Tuesday at 8:30 a.m. Eastern. Economists polled by MarketWatch expect orders to decline by 4.5% after posting an unusually strong 8.3% gain in September.
Figures about consumer confidence for November and existing home sales for October are also scheduled to be released on Tuesday.
Traders will also be keenly watching for comments from Federal Reserve Chairman Ben Bernanke, who's slated to discuss the economic outlook on Tuesday at 12:30 p.m. Eastern.
Up until now, the Fed Chairman has generally "viewed upside inflation risks as greater than downside risks to growth," Chandler said. "If however the pendulum were to swing towards greater comfort on inflation and an increasing focus on growth risks, the dollar drop could have further to go."
Euro/dollar targets 1.35
"While I don't think euro/dollar will be heading higher in a hurry, 1.35 is a very legitimate target in the coming months," said Stephen Jen, an analyst for Morgan Stanley.
He said the dollar has broken through trading ranges that have persisted in the currency market since May. It's important to keep in mind, Jen added, that "this has been a quite justified dollar move" and that "it has been biased in favor of the euro."
Mitul Kotecha, head of global foreign exchange research at Calyon, agreed, saying that while the dollar's recent sharp fall occurred in thin market conditions, there're "fundamental reasons for the dollar's slide, which we believe will maintain the downward pressure on the dollar into the first half of 2007."
Furthermore, "an issue that is likely to increasingly weigh on the dollar over the coming months...is reserves diversification," he said. And "the biggest focus...is what China does with its $1 trillion in foreign-exchange reserves." Read more.
Euro-zone rates keep rising
Meanwhile, the euro extended its recent gains, striking a new record high versus the yen, on expectations the European Central Bank will lift its key interest rates by a quarter of a percentage point, to 3.5% next month.
French Finance Minister Thierry Breton said that the recent depreciation of the U.S. dollar "requires our great collective vigilance."
Boris Schlossberg, senior currency strategist at FXCM, said that it's unlikely that European Union fiscal authorities will be able to intercede and force the ECB to hold off on any rate hike in December.
However, "at the very least the region's politicians will demand that the central bank cease and desist from any further tightening until the impact of the higher euro on euro-zone economic data is better understood," he said, in a note.
Yen under pressure
Elsewhere, the yen came under some pressure after Bank of Japan Governor Toshihiko Fukui reiterated overnight his cautious stance on the timing of interest-rate increases, dashing hopes the central bank will lift its interest rates next month.
Also on Monday, the Chinese yuan strengthened to a new high against the greenback, touching 7.8402 before finishing at 7.8436. The yuan has showed cumulative appreciation of 3.4% versus the dollar since Beijing revalued the mainland's currency July 2005. See more global markets coverage.
Wanfeng Zhou is a markets reporter in New York.

http://www.marketwatch.com/news/stor...CF1774F61ED%7D

mp6140 · Tue, 11-28-2006, 07:02 AM

[quote=capt_nemo;46003]Dollar woes carry over into new week
At 20-month low vs. euro, which sets record against yen
PrintE-mailDisable live quotesRSSDigg itDel.icio.usRelated Blog Posts & ArticlesBy Wanfeng Zhou, MarketWatch
Last Update: 6:26 PM ET Nov 27, 2006
NEW YORK (MarketWatch) -- The dollar fell to a 20-month low against the euro but steadied against the yen Monday, as traders awaited economic data and Federal Reserve officials' comments later this week for clues about the outlook for U.S. interest rates.
================================================== ====

Yeah, what wonderful trading days !

certainly not the time to be long the dollar, but like everything else, this too shall pass.

steady progress into the overbought world keeps one careful but sure makes the trading fun -- as long as one is mindful that things go down as well as up(but hey, thats what shorting is all about, isnt it ?)

I'm not a long range trader (WHO can figure what to do as December approaches) but forex goes up and it goes down and this modest trader simply follows the direction of the LRC and goes with the flow !

May the trend be with you (or at least, you with the trend !)

enjoy and trade well

mp

mp6140 · Sat, 12-02-2006, 06:59 PM

well boys and girls -- for two days ive heard nothing on cnbc but FOREX and DOLLAR !

now CNBC has proven to be in the same league as when your grandmother calls you up to tell you to buy microsoft --- by the time SHE hears it, the smart money is already selling !

CNBC has been talking about the dollar and the FOREX markets (which they NEVER talk about) for days, which means to me that we are topping !

so save your confederate money people, cause the south will rise again, or in this case anything with a USD attached should begin dropping

be careful, cause the bulls will fight the bears on this on, and not let go so easily, but overall I think the run is danged close to its end !

may the force be with you !

mp

capt_nemo · Sat, 12-02-2006, 07:29 PM

My chiro said he did very well with it the last few days, I am going to seriously look into this, and you might get swamped with ?????????????????? from ol Nemo hehe.. Hope dats OK!!

mp6140 · Sat, 12-02-2006, 07:40 PM

Quote:

Originally Posted by capt_nemo

My chiro said he did very well with it the last few days, !!

======================================

I REST MY CASE !!!!!!!!!!!!!!!!!!!!!!!!

if CNBC and your chiro both talk about it then your sainted grandmother is not far behind --- when she calls, SHORT !

LOL

MP

Mon, 11-27-2006, 10:01 PM	#16 (permalink)
capt_nemo Realist,/Moderator!!! Join Date: Dec 2005 Location: My feet!!! Posts: 2,738	Dollar woes carry over into new week At 20-month low vs. euro, which sets record agai Dollar woes carry over into new week At 20-month low vs. euro, which sets record against yen PrintE-mailDisable live quotesRSSDigg itDel.icio.usRelated Blog Posts & ArticlesBy Wanfeng Zhou, MarketWatch Last Update: 6:26 PM ET Nov 27, 2006 NEW YORK (MarketWatch) -- The dollar fell to a 20-month low against the euro but steadied against the yen Monday, as traders awaited economic data and Federal Reserve officials' comments later this week for clues about the outlook for U.S. interest rates. The dollar came under heavy pressure last week on worries that the interest-rate differential between the U.S. and other parts of the world will soon narrow soon, with the Fed pushed to cut rates to spur growth even as the European Central Bank continues to lift rates to curb inflation. "The market remains wary of a further dollar fall after last week's momentum-driven selloff," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "The market has prepared for soft data, though there is room for dollar bears to be disappointed." Late in New York, the dollar was quoted at 116.05 yen, compared with 115.81 yen late Friday. The euro changed hands at $1.3134, up from $1.3094, after touching the highest level since March 22, 2005, at $1.3177. The British pound traded at $1.9374, compared with $1.9316. The dollar changed hands at 1.2061 Swiss francs, compared with 1.2089 francs. The euro fetched 152.43 yen, compared with 151.65 yen, after touching 152.49 yen, a fresh record high. See live foreign-exchange rates. David Jones, chief market analyst at CMC Markets, said that in the near term, the currency market is expected to consolidate. Given the recent selloff in the dollar, "there can be little question that we're going to see some dollar buyers emerge in the near term -- especially at what could arguably be seen as oversold levels," he said. Key economic data ahead The government will report durable goods orders for October on Tuesday at 8:30 a.m. Eastern. Economists polled by MarketWatch expect orders to decline by 4.5% after posting an unusually strong 8.3% gain in September. Figures about consumer confidence for November and existing home sales for October are also scheduled to be released on Tuesday. Traders will also be keenly watching for comments from Federal Reserve Chairman Ben Bernanke, who's slated to discuss the economic outlook on Tuesday at 12:30 p.m. Eastern. Up until now, the Fed Chairman has generally "viewed upside inflation risks as greater than downside risks to growth," Chandler said. "If however the pendulum were to swing towards greater comfort on inflation and an increasing focus on growth risks, the dollar drop could have further to go." Euro/dollar targets 1.35 "While I don't think euro/dollar will be heading higher in a hurry, 1.35 is a very legitimate target in the coming months," said Stephen Jen, an analyst for Morgan Stanley. He said the dollar has broken through trading ranges that have persisted in the currency market since May. It's important to keep in mind, Jen added, that "this has been a quite justified dollar move" and that "it has been biased in favor of the euro." Mitul Kotecha, head of global foreign exchange research at Calyon, agreed, saying that while the dollar's recent sharp fall occurred in thin market conditions, there're "fundamental reasons for the dollar's slide, which we believe will maintain the downward pressure on the dollar into the first half of 2007." Furthermore, "an issue that is likely to increasingly weigh on the dollar over the coming months...is reserves diversification," he said. And "the biggest focus...is what China does with its $1 trillion in foreign-exchange reserves." Read more. Euro-zone rates keep rising Meanwhile, the euro extended its recent gains, striking a new record high versus the yen, on expectations the European Central Bank will lift its key interest rates by a quarter of a percentage point, to 3.5% next month. French Finance Minister Thierry Breton said that the recent depreciation of the U.S. dollar "requires our great collective vigilance." Boris Schlossberg, senior currency strategist at FXCM, said that it's unlikely that European Union fiscal authorities will be able to intercede and force the ECB to hold off on any rate hike in December. However, "at the very least the region's politicians will demand that the central bank cease and desist from any further tightening until the impact of the higher euro on euro-zone economic data is better understood," he said, in a note. Yen under pressure Elsewhere, the yen came under some pressure after Bank of Japan Governor Toshihiko Fukui reiterated overnight his cautious stance on the timing of interest-rate increases, dashing hopes the central bank will lift its interest rates next month. Also on Monday, the Chinese yuan strengthened to a new high against the greenback, touching 7.8402 before finishing at 7.8436. The yuan has showed cumulative appreciation of 3.4% versus the dollar since Beijing revalued the mainland's currency July 2005. See more global markets coverage. Wanfeng Zhou is a markets reporter in New York. http://www.marketwatch.com/news/stor...CF1774F61ED%7D __________________ All ambitions are lawful except those which climb upward on the miseries or credulities of mankind. Joseph Conrad, Use your own mind on what to buy and sell!!

Tue, 11-28-2006, 07:02 AM	#17 (permalink)
mp6140 CRUSTY ON THE OUTSIDE ! Join Date: Mar 2005 Posts: 799	MP -- EUR/USD/JPY [quote=capt_nemo;46003]Dollar woes carry over into new week At 20-month low vs. euro, which sets record against yen PrintE-mailDisable live quotesRSSDigg itDel.icio.usRelated Blog Posts & ArticlesBy Wanfeng Zhou, MarketWatch Last Update: 6:26 PM ET Nov 27, 2006 NEW YORK (MarketWatch) -- The dollar fell to a 20-month low against the euro but steadied against the yen Monday, as traders awaited economic data and Federal Reserve officials' comments later this week for clues about the outlook for U.S. interest rates. ================================================== ==== Yeah, what wonderful trading days ! certainly not the time to be long the dollar, but like everything else, this too shall pass. steady progress into the overbought world keeps one careful but sure makes the trading fun -- as long as one is mindful that things go down as well as up(but hey, thats what shorting is all about, isnt it ?) I'm not a long range trader (WHO can figure what to do as December approaches) but forex goes up and it goes down and this modest trader simply follows the direction of the LRC and goes with the flow ! May the trend be with you (or at least, you with the trend !) enjoy and trade well mp

Sat, 12-02-2006, 06:59 PM	#18 (permalink)
mp6140 CRUSTY ON THE OUTSIDE ! Join Date: Mar 2005 Posts: 799	MP -- CNBC AND FOREX well boys and girls -- for two days ive heard nothing on cnbc but FOREX and DOLLAR ! now CNBC has proven to be in the same league as when your grandmother calls you up to tell you to buy microsoft --- by the time SHE hears it, the smart money is already selling ! CNBC has been talking about the dollar and the FOREX markets (which they NEVER talk about) for days, which means to me that we are topping ! so save your confederate money people, cause the south will rise again, or in this case anything with a USD attached should begin dropping be careful, cause the bulls will fight the bears on this on, and not let go so easily, but overall I think the run is danged close to its end ! may the force be with you ! mp __________________ Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages ! As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence -- BUT I KNOW WHERE THEY HID THE KEY !!

Sat, 12-02-2006, 07:29 PM	#19 (permalink)
capt_nemo Realist,/Moderator!!! Join Date: Dec 2005 Location: My feet!!! Posts: 2,738	I hope you played the pound last couple days Mike!!! My chiro said he did very well with it the last few days, I am going to seriously look into this, and you might get swamped with ?????????????????? from ol Nemo hehe.. Hope dats OK!! __________________ All ambitions are lawful except those which climb upward on the miseries or credulities of mankind. Joseph Conrad, Use your own mind on what to buy and sell!!

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Sun, 11-26-2006, 01:27 PM	#11 (permalink)
permanentjaun Member Join Date: Dec 2005 Posts: 87	MP, This is what always makes me wonder why trading is so difficult. On paper things seem so simple, but then the real world smacks you in the head. I have thought about it before and even a system that is only 50% correct can be successful. What if we played a weekly chart and had a TP of 200 and SL of 100. At only 50% correct we would expect out of 100 trades to be up 5000 pips. 100(.5)(200)+100(.5)(-100)=5000. How hard is it to be 50% correct? Flip a coin. The next obvious question is, "how do I give myself an edge of greater than 50%?" Learn how to read candles. If you can identify patterns then you should be able to give yourself better than 50% unless your reading is terrible. EDUCATE YOURSELF FIRST. Right now I'm in a discussion on another forum about how to mechanically place ourselves on the winning side of the trade more than 50% of the time without human interaction. One idea we're working with is filtering the candles such that we only enter a trade after it has moved more then 50 pips or 100 pips from open. The idea is that the counter trend shadow on a candle is usually only a small amount of the candle. Money management is still obviously key. But it still makes me wonder, how successful do we really need to be to make money? Using a 200 TP with 100 SL we could essentially only be correct 33% of the time and still break even. Getting 200 pips movement out of a weekly candle isn't unheard of and is actually quite common. Averaging 2500 pips a year or 200 a month would be considered fairly successful among forex traders. The above method simply revolves around the money management. I can't say taking 1 minute a week to look at the candles and make a more educated guess of it's direction is really a system. The problem is in what we read. Looking at a weekly chart of gbp/usd shows tremendous ranging that would have been difficult to pick up from the get go. So then I suggest perhaps adjusting the system to a daily candle. 100 TP and 50 SL. Would it take more then that to make a successful system? Matt

Sun, 11-26-2006, 11:30 PM	#12 (permalink)
mp6140 CRUSTY ON THE OUTSIDE ! Join Date: Mar 2005 Posts: 799	[quote=Homestudy;45840]This is a chart I found on another forum charting correlations between currency pairs and is very usefull in hedging. I am finding that rather then placing a stop I will place a buy of a different pair to protect my account. The strongest correlation is between the USD-CHF and the EUR-USD. QUOTE] ==================================== certainly agree with that chart and thnx for it, but i also have a lot of fun with the dollar/yen and the pound/dollar as well and they work with the above pairs also ! When one is going up, the other is going down recipricals are fun ! mp

Mon, 11-27-2006, 12:20 AM	#14 (permalink)
permanentjaun Member Join Date: Dec 2005 Posts: 87	I say system in a manner to mean strategy. Even what you described right there is a system to me. It's the system of how you trade. How do you tell which way to go on the open of the foreign market?