Baruch's Forex System Journal

Baruch · Mar 24, 2004

Quote from Scientist:

I never said that adding to "losers" is OK, and I don't trade without stops. You just don't get it, do you?

Hi again,

OK. Nice to hear.

manz66 · Mar 24, 2004

Quote from Scientist:

I told you that before. In fact, not only is it not easy, but it's actually silly to try. All you'll do is jeopardize your system, as you've just done again.

Have you backtested your system with news, or without news? If without news, then why do you look at news? I maintain it's a silly deviation from your trading rules / plan and will sooner or later be punished by the unforgiving dynamics of the market.

The fact that you didn't dare to answer my questions on the elaborate post I made on this subject only emphasizes the fact that you're uncomfortable with my notions.

To be quite honest, I think you're totally kidding yourself about your news interpretation. The only way YOU can really make (more) money out of news is by having a computer close to the news data center, an execution platform with 20ms ping to the exchange, a Bloomy, and an "evaluation-and-entry-bot" that reads out the eco# and reacts with instant automated execution based on the reaction parameters as pre-programmed, and fires an instant order to the exchange. The whole proces off computation and transmission might take 50ms, in which case you have a remote chance to be one of the first to get their order in. If you read out and react manually, it will take over 1,000ms no matter what you do. But at i.e. 8:30:01 EST, it's all over. You gotta get in at 8:30:00, or you're just dreaming. Exit may then be discretionary. That's how I think about it, anyway.

Trade the chart. Forget the news.

Most of the time it is difficult to catch the first big wave when news arrive, but if you wait, then get in after small retracement or pause, you can make nice sums of money. Btw. price moves in wave.

In this case news gives you confidence to enter trade. I shall give you my own experience. Around six months ago I was short euro against usd, market was my side I am up 15 pips, then 7 am central time suddenly euro jumped in seconds 90 pips against me, and blew away my stoploss of 30 pips. I checked the news, realized that euro was not going down for some time, so closed my short position entered long euro after the retracement and made nice profit after my loss.

Same with US stock market after everybody knew Iraq war going to end soon, and then I went long. The idea is to let other people take the risk in the beginning of the trend, then just ride the middle fat part of it, and get out when the whole market does 10% correction.

Baruch · Mar 24, 2004

Quote from Scientist:

You say 95% of all traders trade like me? R-O-F-L! More like the other way round for you Baruch.

You really haven't learnt as much as you think.

OK, but we had 2 or 3 traders in this thread who said that they traded like you. I suppose most traders only look at the charts - and don't try to combine this with a fundamental approach.

Scientist · Mar 24, 2004

Quote from Baruch:

Why so angry? We are here in this wonderful forum to learn from each other, share ideas - and have a good time with other trader-friends.

No, I can't becktest news trading - so why try to do it? Anyway, it's only price that makes my systems signals, so news are only important regarding to exit. And I have no rigid rules for exit.

AAAAAHHH! NOW WE'RE GETTING SOMEWHERE!!!

OK, so you CAN'T backtest news trading. But you've backtested your system before you traded it, right? And did it work well without news? I assume it did, otherwise you wouldn't be trading it. So why not trade it without news? Have you verified that reference to news improves your system performance? If so, how have you verified it?

Ah, now only price makes your system signals. Well that's good to know isn't it? How the heck do you use news as an exit signal?

Btw I'm never angry, I'm the sunniest spirit. The post of mine you quoted showed no anger whatsoever, perhaps I am undersensitive or you are paranoid - or both.

Baruch · Mar 24, 2004

Quote from Scientist:

Soros can't be compared to what we do. He is a fundamental trader, not a technical one. He holds positions a hundred or a thousand times longer than we do, so he has a very very different reference base. His style of trading borders on investing. Plus, he is a huge player, and has power to move the market with his buying power and opinion.

It's tough trying to copy Soros. Enough ppl have tried, and failed.

I agree. But why not try to learn a thing or two from him?

P.S. Soros also started as a little trader. In fact he was very poor when he was a young man.

Scientist · Mar 24, 2004

Quote from manz66:

Most of the time it is difficult to catch the first big wave when news arrive, but if you wait, then get in after small retracement or pause, you can make nice sums of money. Btw. price moves in wave.

In this case news gives you confidence to enter trade. I shall give you my own experience. Around six months ago I was short euro against usd, market was my side I am up 15 pips, then 7 am central time suddenly euro jumped in seconds 90 pips against me, and blew away my stoploss of 30 pips. I checked the news, realized that euro was not going down for some time, so closed my short position entered long euro after the retracement and made nice profit after my loss.

Same with US stock market after everybody knew Iraq war going to end soon, and then I went long. The idea is to let other people take the risk in the beginning of the trend, then just ride the middle fat part of it, and get out when the whole market does 10% correction.

Yes, that's a very valid argument. In the case of entering retracements (particularly the first) I totally agree on that. It's a lot less risky than trying to pick bottoms / tops, and it's got a very high R:R. I think I've posted something similar somewhere on this thread already.

Excellent comment!

Baruch · Mar 24, 2004

Quote from Scientist:

Hey Kev, thanks for the comments and recommendation, I might look into it.

Yes, I commend Baruch for bringing his system forward, but he isn't trading it. He gets tangled up in trying to play news-wizard.

It's good that he is successful right now. But please don't forget that with the current trends, even a 9-year-old can trade forex, as has already been pointed out. It sounds mean, but it's true. If Baruch continues his inflexibility into a period of chop, he will run right into the gunfire.

I'm not gonna use rubber tipped spears here ... Baruch is consistently evading the objective and truthful evaluation of my valid arguments on system parameter violations.

P.S: Yes, I meant Pavlov's... Wow, did I say Pawlow? Far out, must be one of those eye-bugs...

A news-wizard!? LOL. A new word for me.
I am ready for the gunfire. Bring it on, as Kerry says. But I am no hero like Kerry, so I suppose I don't will trade the system in a period of chop.

Baruch · Mar 24, 2004

Quote from manz66:

Most of the time it is difficult to catch the first big wave when news arrive, but if you wait, then get in after small retracement or pause, you can make nice sums of money. Btw. price moves in wave.

In this case news gives you confidence to enter trade. I shall give you my own experience. Around six months ago I was short euro against usd, market was my side I am up 15 pips, then 7 am central time suddenly euro jumped in seconds 90 pips against me, and blew away my stoploss of 30 pips. I checked the news, realized that euro was not going down for some time, so closed my short position entered long euro after the retracement and made nice profit after my loss.

Same with US stock market after everybody knew Iraq war going to end soon, and then I went long. The idea is to let other people take the risk in the beginning of the trend, then just ride the middle fat part of it, and get out when the whole market does 10% correction.

Hi manz66,

Thank you for your comment. Very good.

Scientist · Mar 24, 2004

Quote from Baruch:

OK, but we had 2 or 3 traders in this thread who said that they traded like you. I suppose most traders only look at the charts - and don't try to combine this with a fundamental approach.

LOL! Just because they look at charts doesn't mean they trade like me! Give me a break man! That's like saying I am under the sea when scuba diving, so I'm automatically related to the hammerhead shark, jellyfish, and deep sea angler fish.

You try to combine your technical plays with a fundamental approach? Well, let's just re-iterate this: You're a day trader, right? Your trades on Forex can essentially be construed as scalps or at least short-term trades.

And you want to involve fundamental analysis into day trading?

Good Luck.

Baruch · Mar 24, 2004

Quote from Scientist:

LOL! Just because they look at charts doesn't mean they trade like me! Give me a break man! That's like saying I am under the sea when scuba diving, so I'm automatically related to the hammerhead shark, jellyfish, and deep sea angler fish.

You try to combine your technical plays with a fundamental approach? Well, let's just re-iterate this: You're a day trader, right? Your trades on Forex can essentially be construed as scalps or at least short-term trades.

And you want to involve fundamental analysis into day trading?

Good Luck.

Hi again,

Thank you.
Well, both Jay and keving1 compared their trading style with yours.
Yes, I try to involve fundamental analysis into day trading. The news like economic reports are fundamental, I suppose?