I am a person

[Proximus]

I would agree thats a lot of the macro reasons as to why the market makes significant moves. There is a good book I read recently about this called trading in 3 dimensions that goes in to this in detail. My opinion to why the waves happen is that everyone has limited inventory. The market can only, sell or buy for so long before it needs to take profit. So the patterns on different time frames are just the different types of players with different accounts getting maxed out. This is the same for algos or people.

I believe the market is moved only by fundamental factors, but yet the analysis of the market fundamentally would not give you an edge because that information is already built into the market while the news are released.

Oh a Eurozone GDP increase of 0.1%, who cares that stuff is already built into the market,by the time you hear that in the news.You could trade that exact candle when the news appear on live TV, but thats it, after that candle passes, it has no more impact on the market, it’s information is already smoothened out.

So fundamental analysis doesnt work, only news trading, but you have to be quick there, 1-2 seconds and the opportunity is gone.Only technical analysis works.
The one way the fundamentals could work is to predict the GDP increase,inflation and other stuff, but that again is very uncertain, so unless you are a very certified financial analyst with the posession of high quality data, you cannot do that propertly

[pipwhip]

For example the head & shoulders is said to have around 60% win rate, ok that’s good, then why dont you trade only that? Why you mix it with patterns which have under 50% win rate ? I never understand why some guys do such moronic things?
(i`m not talking about you ,just in general)

I can see both sides of your arguments. I think the assumption that the market is random and there is any sort of luck involved is neive. However I do agree with your point that a chart pattern such as head and shoulders has a x% chance of winning. The issue normally is when you know the pattern is the pattern the market has moved so much that you cant get a decent RR to make it worth it.

This is related to my point about poker. This is a massive simplification but a Full House has a x% chance of winning. So the question is, how do you get a good RR knowing this fact. That is the game. That is all the game is. Poker and the markets.

[ClarkFX]

Laugh as much as you want we shall see who will laugh at the end.

With that kind of confidence, you will have a fun time transitioning from play money to live.

[pipwhip]

Hey, I was wondering something about backtesting in meta trader EAs. How do they factor in spreads and commissions to the backtests? Have you had a change to run in live yet?

Proximus i would urge you to trade your strategy finished or not in very small size and look at the difference between your backtests and live. I can say from experience you will find it very enlightening and it will help your trading immensly. When you do it if you would like to ask me any questions then i would be happy to chat with you about the results.

[leebelisar]

I’m an intraday forex scalper. My background is statistics and computing and have worked in a mixture of IB and HFT firms. I scalp using PA, pivots and EMAs. There seems to be some good people on here and I have been looking for a decent community of people to discuss and share ideas with.

Nice to meet you my friend. Newbie trader here wanting to learn more. I am excited to read more of your post and the ideas that you are going to share with us.

[angiladsouza]

Oh wow that’s great normally all here person

[pipwhip]

Oh wow that’s great normally all here person

Its something i feel very strongly about. I would even go as far to say that i am also both a mammal and a number one fan of air.