What are the odds of this?

Something has been bugging me about all of these systems that use Parabolic SAR and MACD i.e. everyone seems to be making Pips using them but the amount that I have made out of them while testing them out has been minute and I have always entered the trades late and then either got whipsawed out, broken even, or landed in a loss situation (most of the time).

Then I got to thinking (always dangerous but nevertheless read on.

I opened a few more demo accounts (in my never ending search for REAL non-dealing desk brokers) and in testing opened up the charts on each of the demo systems for the actual trades that I have open on my live system at the moment (since yesterday) and put up the same indicators on these demo accounts i.e. Parabolic SAR and MACD.

This is where it gets interesting:

Using the identical settings for the charts and indicators on the demo systems - ALL the demo system charts and indicators were identical to each other and ALL of the demo system charts and indicators were TOTALLY DIFFERENT from the charts and indicators that I have been using on my live system to trade using the built in charts and indicators on my live trading platform.

In other words - let’s say you are using “James’ EUR/USD 45 Pips A Day System” - which is based solely on Parabolic SAR and MACD (both with default settings). Basing my entry and exit points on the charts and indicators on my live trading platform I have opened positions far too late and there have been several indications of entry and exit points over the past couple of hours but they have either resulted in break even or a loss (or a TINY profit) BUT looking at the charts and indicators of all of the demo systems I should not have even considered opening these positions.

Now - like I said before - I am not one for conspicary theories - but - what are the chances of a broker DELIBERATELY altering the operation of the indicators on their trading platform (charts they could not mess with because you would quickly pick this up) so as to ensure that you either entered trades too late, exited too early, or entered trades when there really was no valid signal and it was a losing trade before it even began?

You valuable input would be appreciated.

Regards,

Dale.

Hi Everyone

I am a new guy on this forum although i have been reading it for a while.Interesting post you wrote,fact is I had a same experience with my old broker but still think there is no conspiracy behind it.Actually it does no good to any brokerage firm if you lose your account quick.That is how I think,I mean its better money to have comm. and/or spread pay for them.I had some bad experiences in the past but not for the above written theory.I am with a good non dealing broker now I 'm satisfied with.As for Jame’s system ,I backtested it but many times experienced false signals mostly by parabolic sar.Many people wrote that they easily make 20 pips/day.I am trading forex for years but could not figure this out why this system does not work for me,anyways good trading to everyone.:slight_smile:

Hi,

My suggestion, use an independent charting package, metatrader is a good one.

You do get different time settings on some charting packages which do give you different signals … only slightly.

Onto my 2nd suggestion, dont just use charts to base your trading decision, be aware of some of the fundamentals around the pair you are trading.

N

Hi Steven,

Thanks for replying.

Just to be clear - it is not James’ System that is in question here - it was just the thing that made me think.

My problem is this:

Parabolic SAR and MACD with the SAME SETTINGS ON THE SAME TIME FRAME GIVEN THE SAME PRICES AND THE SAME CANDLESTICKS SHOULD LOOK IDENTICAL. THERE IS NO DIFFERENCE BETWEEN THE CHARTS THEMSELVES ONLY THE INDICATORS.

I mean to say - how can these two indicators appear the same and give the same signals on two other (demo) systems and appear totally different on another platform?

I am talking about same time frame, same pair, same indicator settings, same chart zoom factor etc. etc.

And your theory about it not paying a broker to do this? I would not stake my life on that statement.

I think I must post some snapshots of what I am talking about and you can comment from there (that is if I can - I don’t know what is wrong with this site but I am having a lot of trouble posting message and uploading images but this is very important so I will give it a bash).

Regards,

Dale.

OK well - here goes - I have attached my live chart and one of the demos (the other demo chart is EXACTLY the same).

OK - well - that step went OK.

Now have a look at the different charts.

They are the same pair, same time frame, and the indicators have the same parameters.

Now have a look at the number of false signals on the live chart. Can you pick them up?

Put it this way - again - using James’ System ONLY AS AN EXAMPLE - let’s say that you opened a short positon when the first Parabolic SAR Dot (I am going to abbreviate this to PSARD for now to save typing) was showing at the bottom of the big move up - and MACD had crossed signalling an uptrend. OK so far - same on both charts. BUT now have a look at the next series of PSARD on the live chart and notice how many false signals there are to go short or long. Then have a good look at the demo chart. Had you opened a position based on the PSARD and MACD of the demo chart you would hold onto that position until the reversal and just look at the difference in pips between the two i.e. the live system is giving signals to go short and long a number of times over the same period whereas the demo system has only given you one indicator to go short up until this point.

AND - like I said - why should two demo systems from two different brokers be identical (they are even continents apart) and yet my live system differs considerably.

And you can’t say “don’t base you trading decisions on the indicators and charts” - that is what they are there for and why I spend so much time trying to learn this stuff. The only thing that renders indicators useless are news events. I am not saying that they are right ALL of the time - but they are there to serve as a guide.

And by the way - I have tried other indicators on these same charts e.g. Stochastics, ADX, etc. etc. and guess what - they are identical on the two demo systems - but way out on my live system.

My point is this: everything being equal on the three systems - PSAR and MACD (ONCE AGAIN JUST FOR EXAMPLE) were defined by one or another expert analyst and given the exact same set of data they should give the same results NO MATTER WHAT. 1 + 1 = 2 NO MATTER WHAT OR WHERE YOU DO THE SUM. 1 + 1 DOES NOT EQUAL 1.2 IN THE US AND SOMETHING DIFFERENT OVER HERE.

Now let’s look at the implications of this:

Had I acted on the signals given to me on my live system (which of course I did) I probably made about four trades each of which paid the broker commission and the positions opened on the live chart based on the indicators (the PSARD indicators at the top of the live chart after the big move) did not even break even because of the spread.

And before anyone tells me that MACD is displayed differently on the demo - yes - I know that - it is presented in a different way BUT a MACD cross on my live system is a physical cross of two lines and the equivalent of a MACD cross on the demo chart is when the oscillator is at the zero line BUT this makes no difference actually - as long as you know that they are being displayed differently BUT the information being given is the same.

Whew - that was quite and explanation.

Anyway - thoughts please. I smell a rat here and if I’m right - I’m going b**lls to the wall with this.

Oh - and please note - yes - there is a SLIGHT difference between the quoted prices BUT NOT ENOUGH TO CHANGE THE SIGNALS BEING SENT.

Regards,

Dale.



This isnt exactly to do with what you are talking about but on similar lines, i believe there are some dicrepencies between the banks and us retail traders.

When i first started out I tried to trade the NFP report when it came out and failed miserably the majority of the time, partly because i was an ultimate newbie but also i noticed this -

The big move from the release happened about 60 secs before we (retail traders) got the info through the platforn of the data figures, this happened to often for it not to be some sort of pattern.

Then what happens is you miss out catching the best part of the market reaction which seems to know what has happened a few minutes before we do.

I even tried staring at briefing.com hoping that may get an edge on the release but still it seemed to be behind the market reaction.

My theory - dealing banks and big central banks get their major data before us and can act accordingly before we can get in on it ourselves

Hi northerntrader,

Thanks for that.

Yes - I have noticed that too - so I don’t trade the news.

But I want to tell you that if I am right - I will open live accounts at the two dealers where I am getting these graphs from and just trade using their graphs and I won’t stop until I have taken every single last $ back and then some.

I mean - (and everyone says that James’ System is not as good as it is made out to be) - if you had been following Jame’s System to the letter FOR EXAMPLE using the demo graphs that I have in front of me you would have easily have made about 100+ pips on USDCHF last night - i.e. buying when the Parabolic SAR Dot appeared below the candle and MACD crossed up. However - if you acted on my live indicators you can see what happened.

Anyway - I’m getting sick of this now. I mean - I just kept thinking to myself - with the amount of time that I spend with this and with the amount of money I have thrown at it surely I should be doing better than I am at this stage. I mean to say - I’m not a stupid person - and I have started following the rules and taking my time and thinking and still - tiny little profits.

It is time to take the plunge and move to a REAL BROKER. I found one that asks $25K to give you a direct feed to the banks with a $20 fee per round trip and their graphs and indicators DO WORK properly. I just need to post on the ‘Rate my broker’ forum to see if anything bad or worth worrying about comes along (you can’t rely on forexbastards.com because EVERY broker listed there is a scam according to the site - everyone except that Swiss crowd that want $50K to open an account).

Anyway - I’m still interested on everyone’s input on my theory. Put it this way - even if my suspicions are unfounded - I think that it would be possible for the broker to ‘tweak’ the performance of their indicators so that signals were sent that if acted upon would benefit the broker either by means of less profit being made, more trades being done which of course in turn would mean more commission on the spread, or just plain signalling a to enter a trade that is inevitably going to be a loss from the start.

Regards,

Dale.

Hi Dpaterso

I totally understand what you saying,now i dont know what broker you using or how long you trading or learning forex.Yes you right about some brokers do act against you I know that,its very important to have non dealing desk (good one also)As for the indicators its possible that the demo gives different signals I red a lot about it to get new customers ,newbies mainly think forex is so easy but it can not be a case everywhere.If it was than nobody could make money possibly.I am making a living trading forex full time and so are many people I know,my point is change broker ( if need a serious non dealing desk pm me) after that,do not pay so much attention to indicators.They are tools only that is it.Espacially PAR SAR ,I 'm not a big fan of it.I like pivots ,S&R, good old chart techniks.As for your original question I am interested to see other people opinins also cause nobody ever mentioned this before.I will be on this subject off forum.:confused:

Well - here is just an update.

Using one of the demo charts (as posted above) but live trading on my platform and following Jame’s EUR/USD System to the letter I am now almost at break even on the positions that I opened based on my own live charts yesterday and have even managed to open some more positions based on indicators from the demo system that are currently sitting at a profit - no false alarms - just plain sailing - and - according to my demo chart and demo indicators - there is still a heck of a long way to go before even thinking about closing the positions which I would have done already based on the indicators being given to me by my live system. So - I don’t know - but this sure feels better - at least I feel like I am accomplishing something for once - and I have a sneaky suspicion that I may have just stumbled across something.

By the way - I also do this full time now - and I must just tell you that Parabolic SAR I think is short sold. The reason I say this is because (if it is working properly) it aggressively protects your profits if you use it correctly - that’s just one of its ‘features’.

And before I get reminded again - I’m sure James’ EUR/USD System is not the ‘Holy Grail’ of systems but - if I can get 20 pips a day x 20 lots using that system or VanessaFX or some of the other ‘free’ systems that I have found on various sites then that is enough for me right now.

And yes - I will try and PM you - if you don’t get a message from me then please send the details to <[email protected]> (that’s me) - sometime I can PM from this site and sometimes I can’t.

Have a look at the message that I posted in the ‘Rate my broker’ forum - maybe you can comment (I don’t want to retype the whole thing here).

Anyway - we are now both waiting for some more input on this issue.

Put it this way - who would question what your live system is showing you in the first place?

And - I thought of another way of explaining it:

If you were drawing these charts manually on paper then it should not matter WHO drew the charts and the indicators just so long as they knew what they were doing and were working with the same figures (quotes). Therefore - how can one system give such different information from the others???

Regards,

Dale.

Hi steven,

No - sorry - PM not working today!

Please email me those details.

By the way - I have ALSO found a ‘tweak’ for MACD that when used with James’ EUR/USD System - get’s you into the trade much earlier (assuming of course that your charting system and indicators actually work properly).

Take a look at this thread:

4 Hour Strategy (300+ Pips per Month) @ Forex Factory

I have not gone through this in its entirety but used the MACD settings and instructions combined with Parabolic SAR and I can tell you that this thing works man.

Anyway - stay in touch chaps.

Regards,

Dale.

Hi Dale

I just sent you the link,check your email.I am going through this 4 hour system right now,I let you know what I think.keep in touch;)

Hey,
Very interesting point here, I have noticed (In the past two months, so limited experience) that i have gotten different figures for technical indicators from different systems using them at the same time (both with live feed and same chart settings) and I also am curious about why that would be, the best thing about numbers is that they should all be (pretty much) the same when you calculate out MACD and RSI values…

I will definitely be looking out at this thread to see if anything else comes of this…

Thanks for replying.

It does not look like much is going to come of this thread because for some reason or the other people seem to be non commital.

I have had a closer look at this and I can tell you - whether it is by design or not - I have had this problem all along.

It is of particular importance when you need to rely on actual figures not just the graphical respresentations themselves - especially when it come to calculating things like ATR etc. etc.

Anyway - since I have been using the graphs of two other demo systems and then trading on my live system I have made consistent pips in the past two days - and nothing else has changed - not my trading style - not my rules - nothing - so there has to be SOME merit in my finding.

Regards,

Dale.

This reply is for steven:

steven: Did you have a look at that 4 hour system? I have been testing it with historical data and I from what I can see you get many entry signals and where the signal was correct there seem to be major pips and when wrong the loss is not so great (if you calculate the correct stop loss).

What do you think?

I have been looking at it and testing it with Gold on the 1 Hour, 4 Hour, and Daily charts and I can tell you it can result in major pips by the looks of things (especially on the Daily’s).

Input?

Regards,

Dale.

Been having a look at this system on USD/JPY - also seems to give some good signals. It is worthy to note that getting used to the MACD patterns and when and how they are likely to form obviously requires some working with the system but I can tell you that if you have a good look at this system it gets you into the trade much much earlier that when Parabolic SAR sort of ‘confirms’ and entry BUT combine this with Parabolic SAR i.e. use this system to open your positions and Parabolic SAR to protect you profit (or limit your loss) and you have a winner. I have started using this with RELIABLE charts and indicators and so far so good.

I use MT4 at home to do my trading, though it’s still demo atm. I set up stops and take profit points so when I am at work, if my currency pair hits a certain point, I can cash out.

When at work, I pull up the stream charts at fxstreet.com. I noticed over the last week that the live streaming charts are different by a few points. It just so happens that I’ve picked some “take profit” points which were very close to highs for a certain time. The fxstreet charts last week said I just missed my take profit point, but when I got hom, it had hit the point on MT4. This morning, MT4 said I missed my take profit point by 2 pips before USDCHF began to drop again. When I got to work and opened up the USDCHF chart on fxstreet, it said the pair has gone over the point by a few pips (2 to be exact).

Why the difference?

Hi stevemcg,

All I can tell you is that the different dealers / brokers will quote different prices so that is probably why the difference.

My thread goes more toward the behaviour of the same indicators using the same parameters but giving different results i.e. different signals.

By the way - I have proved this beyond a doubt (at least so far in the past two days). Following the graphs and acting on the indicators from the two demo systems no problem - consistent profits on every trade. Go figure???

Regards,

Dale.