The Trader on The Moon

I’ve a theory called “The Trader on The Moon”. According to this theory, lost in forex should be impossible. I know, it sounds funny but please share your comments.

Think that, there is a trader living on the moon. This trader has no charts, indicators, economic calendar, even clock. He has only two buttons, SELL and BUY. There is no CLOSE button also. This trader is working with a broker who provides a swap free account. When he push the button, system opens a position with 500 pips T/P and 500 pips S/L and adjust the position size to %2 according to total budget.

Perhaps, trader pushed the button just before the non-farm payroll or after a doji. He doesn’t know anything and can’t close the position manually. When price hit the T/P or S/L system reports the result to the trader and ask for another button again.

What is the win possibility rate of this trader? (I’m specially choose 500 pips/long term position so spread fee shouldn’t be important) It’s about %50 right? So, after years, his balance should stay same (May be a little decreased because of spreads).

Ok, get back to earth. We’re not living on the moon. We have many indicators (probably more then we need), economic calendars and senses. If we open our positions just like above, but this time according to main trend, may be with an indicator like moving average or Parabolic SAR(But not much). Shouldn’t it effect win ratio like +%10? It means %60 win - %40 loss, 2 win for each 10 positions.

If it effects the win ratio like -%10, no problem, just do opposite of your thought.

According to this theory, everyone should gain some money from forex but not lost, isn’t it? What do you think?

Your assumption relies on the fact that price follows a non-random walk model. However, all current evidence supports the random walk model - price movement is completely random and cannot be predicted, analogous to a coin flip. You will find many of the folks on this forum have a gambling addiction, and try to hide it in any way they can. By calling themselves “risk managers,” putting some shiny indicators on their charts, or claiming that they follow some hard and fast rules of a system.

It’s easy to theorize and say you can get a 60% win rate with 1:1 R:R and just be profitable. Try it for yourself and see that it isn’t that easy, and likely impossible. Playing the Forex market is almost completely a sucker’s game - just look how it exclusively attracts gamblers and poors.

Also, in your moon theory. Many will go broke over time due to the spread cost. A few (maybe one in every million) will make it big due to survivorship bias. They are a statistical outlier who got lucky. This is analogous to the real market. People always drop the same names of a handful of well-known traders who made it big. Funny how they all switched to investing before their luck ran out, huh?

Good stuff jadd, and I just wanted to add that there are successful short-term traders out there as well, but like you say, they are a statistical outlier who either got lucky and/or developed the right skills at the right time over many years. And by skills, I mean the ability to manage risk and create ideas according to the market conditions that they trade at the time.

Most newbies don’t realize that market direction and volatility levels aren’t constant, which makes framing a strategy into a tight execution and statistical model an illogical endeavor to achieve long-term profits. Not saying it’s impossible, but highly improbable in my opinion. The great traders that we all read about took many years to become good, which is why we should have the same expectations of our own development.

Do you trade forex?

Sure he does!

Check his track record:

Rubber Band System by jadd806 | Myfxbook

How much more honest can you get?

:slight_smile:

PS - Sorry Jadd for talking on your behalf :slight_smile:

Ok. I was in no way calling him out. His posts are some of my favorites, always first to pull the trigger on the gun of common sense. Love it. But with such a negative viewpoint on currency spec I was starting to wonder if he said screw it and moved to a different market altogether. Which I assume he could do, sounds like he’s bright. I really need to get a myfxbook…

Ok apparently you can’t crest a myfxbook to fxcm’s mobile app. I have to download some publisher file. wtf it’s 2014 I have an iphone and a ipad lol!

I’ve got to agree with Braden here. He seems to always have something negative to say about traders who make more than 5% profit a month because he thinks they are “lucky”. Frankly, when I started here, I thought him and another poster (who has now become a decent fx friend) were the forum trolls.

But let’s face it, a 1% increase on a 100 dollar account with 51 trades in 5 months is not a sign of someone who is serious about forex. And so, I still do not take his posts seriously.

Not anymore. As you can see, I made a whole dollar! I’m actually surprised my myfxbook still works, as I closed my trading account. Good thing I never put any actual amounts of money in there.

You can be as serious about Forex as you want. It doesn’t change the fact that the movement of price is for all intents and purposes completely random. I do believe Forex (or speculating any market for that matter) is 90% luck and 10% skill. I am of course open to being proven wrong. I don’t think a single example exists of a speculator with a 10+ year record of consistent profits who’s success cannot be attributed to insider information or a few lucky trades. Meanwhile there are hundreds of millions of long-term investors, both retail and professional who can claim such a track record.

I come across as negative because I say what you do not want to hear. My comments are rooted in reality, whereas 75% of the posters here are delusional gamblers or get-rich-quick dreamers.

So I was right. You are the forum troll who does not even trade forex.

I can’t help but laugh at the irony of your post. You came into a business where 95% of traders fail because of the lure of easy money. I am sure your mindset when you started was " if i make profit, then it is not a scam; but if i lose, then it must be a scam because i am too unique to be part of the 95% of traders that fail, so I would troll all the forums and impart my “wisdom” which includes stating generic truths, that are rooted in reality, like the sun is hot."

The only reason anything can be completely random to anyone is if the person knows nothing about it. So, for example, I think curling is completely random because I know nothing about it, but the avid curling fans would tell me of all the skills required to be a curling champion. Similarly, if you think fx is completely random, then it is because you were too obsessed about making money and not bothered to understand market behaviour. Four months ago, that was me before I decided to understand how the big game players think and that’s how I became profitable.

Of course to say anything is 90% luck is just dumb and the words of a sore loser.

Nonetheless, if you do not believe in forex, please quit the forum and stop imparting your “wisdom” to the newbies and motivated traders. Ultimately every trader would discover on their own whether or not forex is for them, but to be profitable, you have to be passionate about creating order from the chaos that is forex.

Yeah you caught me. What a troll I am. I traded Forex.

Citation for statistic?

I didn’t lose. Can’t you read? I made a dollar.

Yes, and if we are comparing competitive sports at the elite level to trading equity markets, let us not forget the equivalent boosters: steroids and insider information respectively, which make such top-level performance possible. Regardless, it is an apples and oranges comparison. A professional slot machine player is a more fitting comparison to a forex trader. What’s that - those don’t exist, you say?

Now I remember you. You’ve had a couple lucky months on the wild rollercoaster that is your equity curve, and suddenly you’re “profitable.” Screams consistency, does it not? Here’s your very own post from several weeks ago:


Why? Plenty of things are mostly luck. I know quite a few musicians and actors who are far more talented than many people on the radio and television. Unfortunately they weren’t lucky enough to be discovered or be in the right place at the right time, and now they’re working minimum wage jobs and barely getting by. I’m not a sore loser. I was playing around with a measly $100 which I didn’t particularly care about.

AFAIK one does not need to be actively trading Forex to use this forum. If anything, it needs more people like me and less people like you who get lucky for a couple months and suddenly they think they’re a trading guru. The inability to see past the Gambler’s Fallacy is the most telling sign of a potential gambling addiction - you may want to get that checked.

Clearly, you don’t know what Gambler’s Fallacy means.

Jadd I don’t expect you to believe I am profitable. Luckily for me it won’t affect my trades :). I’d agree that AT LEAST 75% of our members are dreamers (to put it nicely. They no not how un-intelligent they are). Price movement in forex being defined as random I won’t agree with however. There is a reason for every move. From institutions doing bissuness overseas down to scalpers “guessing” there are reasons. And an edge is an edge. For scalpers I wish them luck, but I consider their methods unsustainable. Position trading as I do it IS based on reality and fundamentals. So before you call it quits consider my methodology, I won’t post exact rules and money management but you won’t need them. Find dorsey wright’s book Point and Figure Charting second edition (published by Wiley) but I think it can be found free on the internet. Buy it if you have to, I’m not plugging here but it really opened my eyes to every market there is. Things like fibs or MA’s are such BS as you know but so is Support Resistance. All that matters is Supply and Demand. Support and resistance get broken but supply and demand don’t. They just take control, for real reasons based on reality. Study PnF charting and my personal favorite of noise canceling charts, Renko. You seem to have a firm grasp of economics as a few here do. I realize I don’t have a high post count here, or anywhere as I’m not active at any other forum than BP, but my reason is because I left and went my own way. I’m so lucky to have a dad who retired at 39 due to his own money management. He was taught by his friend who used to trade on the Chicago board of trade. We’re from michigan btw. I truly believe that this book, again not plugging bud I think it’s free online, can make sense to you, to guide your trading. As apt-minded as you are it’s probably the only thing you need to make a decision as far as trading forex or not. No indicators. No Elliot wave. No subjective anything. I’m sure you’ve heard of these charting methods, positive actually. But I’d hate to see someone as valuable to the forum as you disappear due to frustration. So from karate kid to mr miagy, you need to step back, use that brain and study a method that is tried and true. But no one will study it because it takes time and effort. No flashing lights here. Just reality and keeping tabs on your trades. Sorry if this came across as rude, I really am just here to help and learn. Cheers

Btw congrats on being profitable and earning 1 dollar by putting in 5 months of work. You can earn way more money by looking on the floor for loose change.

[QUOTE=“aceofpips;651041”] So I was right. You are the forum troll who does not even trade forex. I can’t help but laugh at the irony of your post. You came into a business where 95% of traders fail because of the lure of easy money. I am sure your mindset when you started was " if i make profit, then it is not a scam; but if i lose, then it must be a scam because i am too unique to be part of the 95% of traders that fail, so I would troll all the forums and impart my “wisdom” which includes stating generic truths, that are rooted in reality, like the sun is hot." The only reason anything can be completely random to anyone is if the person knows nothing about it. So, for example, I think curling is completely random because I know nothing about it, but the avid curling fans would tell me of all the skills required to be a curling champion. Similarly, if you think fx is completely random, then it is because you were too obsessed about making money and not bothered to understand market behaviour. Four months ago, that was me before I decided to understand how the big game players think and that’s how I became profitable. Of course to say anything is 90% luck is just dumb and the words of a sore loser. Nonetheless, if you do not believe in forex, please quit the forum and stop imparting your “wisdom” to the newbies and motivated traders. Ultimately every trader would discover on their own whether or not forex is for them, but to be profitable, you have to be passionate about creating order from the chaos that is forex.[/QUOTE]

He’s not worth your time you are right he’s one of the biggest trolls on here who claims he knows all and anybody who’s making money , or trading in way he is unfamiliar with he claims it’s bogus and lying , he’s only traded forex for maybe a month-year maybe he has a $100 account balance so you can’t take him seriously , he claims his a millionaire lmao he sent me a screen shot of bank account he is just not worth it ,

IMO one of the biggest trolls on here
Dosent take forex seriously , and criticizes anybody who dose , don t waste your time with this guy .

[QUOTE=“aceofpips;651041”] So I was right. You are the forum troll who does not even trade forex. I can’t help but laugh at the irony of your post. You came into a business where 95% of traders fail because of the lure of easy money. I am sure your mindset when you started was " if i make profit, then it is not a scam; but if i lose, then it must be a scam because i am too unique to be part of the 95% of traders that fail, so I would troll all the forums and impart my “wisdom” which includes stating generic truths, that are rooted in reality, like the sun is hot." The only reason anything can be completely random to anyone is if the person knows nothing about it. So, for example, I think curling is completely random because I know nothing about it, but the avid curling fans would tell me of all the skills required to be a curling champion. Similarly, if you think fx is completely random, then it is because you were too obsessed about making money and not bothered to understand market behaviour. Four months ago, that was me before I decided to understand how the big game players think and that’s how I became profitable. Of course to say anything is 90% luck is just dumb and the words of a sore loser. Nonetheless, if you do not believe in forex, please quit the forum and stop imparting your “wisdom” to the newbies and motivated traders. Ultimately every trader would discover on their own whether or not forex is for them, but to be profitable, you have to be passionate about creating order from the chaos that is forex.[/QUOTE]

@jadd

Look @ your self seriously lol , your on babypips trying to prove that forex is a joke , making your self look more stupid clearly you have nothing better to do that just troll around on the computer
Your not going to be successful in this business I’m sure you know that , stop being a sore loser and trying to bring everybody down with you , grow the ** up stop being a kid a move the ** on with your life buddy seriously 70% of your posts are pure trolling and bs, you have nothing to prove other than the fact that you can’t trade stop being a wannabe .

Thanks for your kind comments and advice. But I have no intention to return to trading Forex. Even though every transaction has a reason behind it, there are far too many variables to consider. All of these traders here are trying to view the market with a low-dimensional stochastic model, when reality follows an incredibly high-dimensional stochastic model.

I’ve looked at Renko, and although I’ve never heard of P&F charting I have seen those patterns. My conclusions were that they look good in hindsight and that’s about it. If any of these easily accessible things actually presented an edge, why would that edge not be arbitraged to death within mere seconds of the signal being presented? Since the money necessary to do so exists, by applying Occam’s Razor we can conclude that either:

  1. No edge is presented.
  2. An edge is presented, but arbitraged to death before retail traders have a shot at it.

People much smarter than myself (Ivy League economists) have searched high and low for evidence that price movement is not random. They’ve come up empty handed.

I far prefer the wonderful world of dividend growth stocks. I’ve built myself a solid base of a few dozen low beta dividend growth companies which I am adding to every month. I am on track to have my passive income from distributions exceed my annual expenses by the time I turn 35. I see no point in squandering this opportunity for early retirement by playing around with my egg in the Forex market. I’d much rather own a portion of a tangible company than some transient currency derivative.

My reason for leaving is not so much frustration as an educated decision made after weighing all of the evidence I was able to collect. I am first and foremost a scientist. I searched far and wide but was unable to find any evidence of a trader who has been profitable for at least a decade since the turn of the century and the advent of computerized trading whose success couldn’t be attributed to insider information or a few lucky trades. I am not so arrogant as to believe I can succeed where all others have failed.

Well I had you on my ignore list, so I’m not sure why I can still see your rubbish.

Feel free to not read my posts, and then not comment on them. Clearly I have struck a nerve, which is likely your own inability to get-rich-quick in the Forex market. Whatever happened to that thread where you were going to turn $50 into a small fortune? Clearly you can’t trade either, and that $50 account you blew up several times would have been far better put to use on grammar lessons.

I don’t particularly care if I’m not going to be successful in the Forex market. I will find success in other ways. I am graduating at the top of my class with one of the highest paying Bachelor’s degrees available. I have the option of attending one of the most prestigious medical schools in the country next year. Forex was mainly a way for me to pass the time at a boring internship for required assistantship hours. If I figured it out great; if not then oh well.

So tell me, what are you doing with your life? Or is your only exit plan a pipe dream about using the Forex market as a get-rich-quick scheme?