Baruch's Forex System Journal

[Baruch]

Quote from Trend Fader:

Personally I only add to winners when there is a news catalyst on my side.

If i go long Euro on some type of break and I am up 20 pips and then all of the suden some bad US news comes out.. I will immediately buy more Euro.. because I know that I have the trend and momo on my side.

Hi Trend Fader,

OK, it sounds good.

 

[manz66]

Quote from Scientist:

"You're doing all the wrong things..." - LOL!

Baruch, how long have you been trading for? You seem to think you know what's "right" and what's "wrong" in the markets. Watch out!

Don't forget that while your foolproof trend-following approach works beautifully today, it might just make you give back everything tomorrow, if a ranging mode occurs. Think you're a hero yet? Think again. You will find over time that the markets usually follow what I call the "Pawlow's Dog Pattern". The Pawlow's Dog Pattern is my interpretation of the way "the market" likes to "train" people to certain behaviours, by making them frequently reoccur, until a simple stimulus, such as a chart pattern, or an MA crossover, can trigger you to take action. This "Pawlow's Reflex" will soon manifest as a behaviour pattern amongst the larger crowd, and become a beautifully exploitable pattern for a minority. To our further convenience, the guinea pigs / dogs - once trained - tend to remain with their old methodologies for quite some time longer, giving their money away in the meantime. Eventually, the reflex will fade as a consequence of the pain triggered by large losses, and that's when people change to adapt new patterns, and the whole thing blows up and starts over again...

I am sure you are familiar with Pawlow's reflex experiments and theories. If not so, I recommend you read up on it, because it has fundamental implications for market behaviour. I was familiarized with the Pawlow concepts already in highschool.

So, the conclusions are:

- Don't take things for granted, never judge anything as "right" or "wrong", since in the market, this depends 100% on a minority / majority factor, not logic or anything else. If you think otherwise, you're kidding yourself. There is no academically justifyable set of reasons for any market action. There is only a mathematically quantifyable equation which constantly shifts - to the favor of the most flexible.

- Always stay humble. Use the best times to prepare yourself for disasters. The more success, the more humility is required.


I hope this gets you thinking a bit. And if it doesn't, then the upcoming losses you will face as a consequence of this inflexibility / bias surely will.

Regards
Scientist

Another thing you lecture too much for a young man. Next do you have the guts to call the trade before hand like Baruch, and make as much pips? I am asking you.

Baruch told Random Trader his way is risky, he has every right to say that stoploss is very important. Trend is your friend, all the biggest CTA are trend followers, so, Baruch is with the right team.

 

[Scientist]

Quote from Baruch:

Hi Sci,

Bernard Baruch died as a rich man. He wrote a very good book: "My own story". James Grant has also written af very good book about him. He was a great trader and speculator.
George Soros left-wing? Well, I don't think so. He's a liberal and a disciple of Karl Popper (The Open Society and its enemies).

Ah, good to hear about Baruch.

Soros not left-wing? Well, he's a million miles more left than Bush for starters (just about anybody is, that dude is essentially a national-socialist rather than an actual Republican, anyway).

Here is something about Soros' attempts to get Bush out:

George Soros, the billionaire financier who is MoveOn's most generous benefactor (in November, he gave the site $2.5 million) has compared the Bush administration to the Third Reich. Soros, who was born in Hungary and grew up under both Nazi and Soviet domination, told the Washington Post last November, ''When I hear Bush say, 'You're either with us or against us,' it reminds me of the Germans.'' He added, ''My experiences under Nazi and Soviet rule have sensitized me.'' Soros repeated his accusations in his new book, ''The Bubble of American Supremacy.''

He donated $2.5M to www.moveon.org - MoveOn is about as right-wing as Counterpunch or the typical Greenpeace activist - LOL!

Apart from that, Soros spread another $10M all over the place in a huge campaign to get Bush out, and is encouraging others to do so, too, "in the best interest of saving America". "Getting rid of Bush has become the central focus of my life", so Soros.

In America, there's a big bunch of Republicans that don't agree with Bush. Here in Australia, there is equally a big bunch of "Liberals" who don't like Howard, they have even founded a new party, "Liberals against Howard" over here.

Think about it man. Every anglo-western head of government has made a huge leap to the right. Bush went literally nazi with his accusations, references and actions, and so did Howard (we pride ourselves with concentration camps in the Australian desert, for the purpose of immediate detention of illegal immigrants, they stay in there for years under terrible conditions, perhaps never get out again), Tony Blair, who's supposed to be left-wing, got drawn in by Bush's lure of power and greed and also moved way right...

Hello? What planet are we on here?

 

[Scientist]

Quote from Baruch:

Hi again,

I don't understand: You always says that you have very tight stop - you only take small losses. But you also says that adding to losers is OK? And trading without stops is also OK?

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

 

[Scientist]

Quote from Baruch:

Well, we all have our own trading style - and life. But it's much more easy to ride your winners when you know why they are moving.

Well, I've written you a decent and thought-out compilation of questions regarding backtesting etc. Apparently you're still in complete denial of it, you haven't answered (obviously because you know I'm right on it).

You can't effectively backtest news trading, so you're violating your own mechanical system, period.

 

[Scientist]

Quote from Baruch:

Well, Soros follows the news/information flow (as he writes in his books), and he has done it OK, I suppose? (And I don't think he look at charts...).
But let's stop this debate, Scientist, because we will never agree. You have your way of trading - and I have mine. That's the way it is.

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.

 

[Scientist]

Quote from Baruch:

I like the debates with Scientist very much. I hope all readers also do. I learn a lot reading his comments (but don't tell it to our friend..).

I suppose 95 % of all traders trades like you and Scientist? Maybe that's a problem that you all trades the same way?

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.

 

[Baruch]

Quote from Scientist:

Well, I've written you a decent and thought-out compilation of questions regarding backtesting etc. Apparently you're still in complete denial of it, you haven't answered (obviously because you know I'm right on it).

You can't effectively backtest news trading, so you're violating your own mechanical system, period.

Hi Scientist,

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.

 

[Baruch]

Quote from Scientist:

Ah, good to hear about Baruch.

Soros not left-wing? Well, he's a million miles more left than Bush for starters (just about anybody is, that dude is essentially a national-socialist rather than an actual Republican, anyway).

Here is something about Soros' attempts to get Bush out:

George Soros, the billionaire financier who is MoveOn's most generous benefactor (in November, he gave the site $2.5 million) has compared the Bush administration to the Third Reich. Soros, who was born in Hungary and grew up under both Nazi and Soviet domination, told the Washington Post last November, ''When I hear Bush say, 'You're either with us or against us,' it reminds me of the Germans.'' He added, ''My experiences under Nazi and Soviet rule have sensitized me.'' Soros repeated his accusations in his new book, ''The Bubble of American Supremacy.''

He donated $2.5M to www.moveon.org - MoveOn is about as right-wing as Counterpunch or the typical Greenpeace activist - LOL!

Apart from that, Soros spread another $10M all over the place in a huge campaign to get Bush out, and is encouraging others to do so, too, "in the best interest of saving America". "Getting rid of Bush has become the central focus of my life", so Soros.

In America, there's a big bunch of Republicans that don't agree with Bush. Here in Australia, there is equally a big bunch of "Liberals" who don't like Howard, they have even founded a new party, "Liberals against Howard" over here.

Think about it man. Every anglo-western head of government has made a huge leap to the right. Bush went literally nazi with his accusations, references and actions, and so did Howard (we pride ourselves with concentration camps in the Australian desert, for the purpose of immediate detention of illegal immigrants, they stay in there for years under terrible conditions, perhaps never get out again), Tony Blair, who's supposed to be left-wing, got drawn in by Bush's lure of power and greed and also moved way right...

Hello? What planet are we on here?

OK, compared to Bush Soros is left-wing. We all are, I suppose?

I have read all Soros' books, and I think alle traders should do that. But he's not a good writer. But I like his fundamental approach. Does he use charts? I don't know, but he does'nt make his trading decisions based on charts. That's for sure.

 

[Scientist]

Quote from keving1:

Scientist:

I have enjoyed reading your posts. Based on your comments, I would say you and I share many of the same battle scars, hence, our perspective and positions are very similar.

I would add one book you left out, (excellent recommendations, btw) - Technical Analysis of the Financial Markets, Murphy. A great reference as well.

Now, to Baruch's new system; I commend him for bringing his system forward and trading it. He has done a very good job and I wish him continued success. IMHO, we should not spend too much time "whacking" him for not doing it our way. In time, he will come to his own conclusions or edit ones he already has -just as we have.

What is important at this point is that he is successful. Your advice has been very good, however, at some point it becomes a pain in the tail, primarily due to its method of delivery. Perhaps you have some rubber tipped spears in your arsenal?

keving.

P.S. Did you mean Pavlov's dogs? Or did you just rename them "Pawlaw's"?

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...