reading a few comments in some forex forums , i did find out that some people keep changing their strategy cuz they think it doesn’t work anymore! this ever happened to any of you? i mean technical analysis is technical analysis it shouldn’t change or get expired! if a strategy worked in 2015 it has to work now as well right?
Not necessarily. Many strategies rely upon certain market conditions, and may perform very well sometimes and utterly fail in other circumstances. Look at carry trades as an example.
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A strategy might work only in certain market conditions. But it will always work again when those conditions are found again. Real strategies do not simply stop working.
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Exactly some are consolidating strategies some are trending strategies and whereas one strategy may work for a while in a particular market when market conditions change you must to
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Take a listen to “Better System Trader” podcast. specifically Dr Howard Bandy episodes.
He refers to your Algo or System being in “Sync” with the market conditions.
You need to have mode than one system, and you have to find a way to know when to measure if it’s in “sync” or not, and work out how to reduce risk or sit periods out of the market.
Using more than one system, and putting the best one for the conditions into play is called “Rotational” trading.
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There is one strat that i first came across maybe 10 years back - the original was very slightly different maybe a further 10 years before that - a 50 ma instead of a 60 if i remember correctly - anyways it was a loose strategy but nonetheless it worked likely because it used the theory of momentum etc.
That was '07 - then maybe get to the more recent posts.
( For clarity - this post aimed at learners and not Tom)
Every strategy or EA have some expiry date i think.
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Not sure I’d say “every”. If you keep it simple and effective enough, base it on price movements that occur in many market conditions, and filter out conditions you want to avoid, you can build something that works in the long term. Not easy, but not impossible.
Sure mate. There`s nothing impossible.
But for example, strategies based on price action, and sr levels will always work
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Conditions change for whatever reasons (think Covid) so a strategy that worked 2 years ago may not work today in 2021. However there are some strategies that will work no matter what. I could be wrong but I think price action is one such.
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I think this is a great question and something I have always wondered about. As long as market conditions are met, I would think a strategy would work, I would think.
I’ve always heard to backtest your strategy on every currency you are going to trade. I only trade pullbacks, one of the most basic strategies. I would think as long as the market conditions are met and all of my criteria are met, that it would work on all currencies. Am I right with that assumption or wrong?
any strategy that has many followers and is being copied by robots constantly and is making the smart money lose money is a strategy that is doomed to be killed
Explain please. How would the “smart money” possibly coordinate the manipulation of this decentralized, multi-trillion dollar ocean to shake out a threatening retail trading strategy?
business is about making money
and when the herd lose money
the smart money makes money
simple as that
and this has been going since people were trading with shark teeth
I don’t want to be too terse here, but I feel like you’re stating the obvious to little effect. Of course business is about making money. I think we can all agree on that.
What I’m quite interested in is this comment:
any strategy that has many followers and is being copied by robots constantly and is making the smart money lose money is a strategy that is doomed to be killed
You believe that some consortium of “smart money” is able to identify a popular trading strategy that is disadvantageous to them and thusly manipulate the entire global forex market to defeat said strategy? Do I have that right?
not the global forex market but the strategy to make it more profitable for them
I think here it is coming down to broker. Do they have a reputation for advantageous re-quotes and other shady practices? Are they regulated, etc.? In many cases retail traders are not working with brokers that take their orders directly to market makers, but rather serve as a counter-party to each trade. It’s obvious why brokers do this, most retail Forex traders fail and get it wrong. Why not build a business model betting against that?
Herein lies the difference. On one hand you’ve got the occasional shady broker that screws their customer dishonestly , and somehow that becomes the standard by which the entire mechanism is judged; as if every counter-party arrangement is somehow suspect. On the other, proper, regulated brokers are simply betting that you’re going to get it wrong and banking.
brokers are only the little guy in the gang
they provide info to banks who do the killing
A well-defined strategy will work in certain market conditions but not always as the forex market can take any turn at any point of time.
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