Forex Difficulty

Quote from elomich:

Thanks for the good response. I agree that JPY is quite noisy on the daily chart but I do trade quite a bit in it.

I'd say EUR/JPY also has a lot of noise, and out of the rest of the markets I trade, those 2 take that title.
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noise is what people call it when the misunderstand what is occuring... seemingly markets move randomly and yet non-randomly... some people say you are fooled by randomness if you think you are actually seeing a pattern or occurrence in the market... but down to the second its all occurrence in the probability of movement. Price moves through the path of least resistance, meaning whatever probability of movement accumulated across all time frames.. is the greatest is usually the path that price takes. So noise is the illusion that probabilities do not exist through every tick in the market.. but since probabilities change down to the second. for example a trade may be forming 7 candles down on the daily and 7 candles up on the hourly.. the price action at that second means that price should fall from the 140 to stabilize before the next burst causing price to stabilize on the daily. AKA a whipsaw.... if it has noise then why do many traders scalp the e/j and remain profitable? because noise is an illusion.

so my perception is that because price is always creating new probabilities of where price will move and people react to those probabilities there is no noise... noise would represent people are not following the probabilities.. which generally does not happen... they are aligned correctly most of the time but not when all at directionally in line.

so is fx harder to trade than any other market? no.. its the same.. but there are advantages to trading the FX that do make it superior based on your style.

all currencies move differently and for you to trade fx you need to understand how they move and charact... of each one.. just like all stocks move differently... just like if you mixed the recipe for rc cola every day and just rc cola you would make the best rc cola that could be made... but if you mixed all the rc sodas all like 12 of them you wouldnt be particularly good at all of them.. but have a general understanding of how to mix.

so fx seems hard to people that roll over an are not use to it.
-done rambling
 
osrt of going this way for a week +

EUR/USD Sell
USD/JPY Buy
USD/CHF Buy
GBP/USD Sell
USD/CAD Buy
EUR/GBP Sell
EUR/JPY Sell
EUR/CHF
AUD/USD Sell
GBP/JPY
CHF/JPY Sell
GBP/CHF Buy
gl
 
Quote from nukethewhales31:

noise is what people call it when the misunderstand what is occuring... seemingly markets move randomly and yet non-randomly... some people say you are fooled by randomness if you think you are actually seeing a pattern or occurrence in the market... but down to the second its all occurrence in the probability of movement. Price moves through the path of least resistance, meaning whatever probability of movement accumulated across all time frames.. is the greatest is usually the path that price takes. So noise is the illusion that probabilities do not exist through every tick in the market.. but since probabilities change down to the second. for example a trade may be forming 7 candles down on the daily and 7 candles up on the hourly.. the price action at that second means that price should fall from the 140 to stabilize before the next burst causing price to stabilize on the daily. AKA a whipsaw.... if it has noise then why do many traders scalp the e/j and remain profitable? because noise is an illusion.

so my perception is that because price is always creating new probabilities of where price will move and people react to those probabilities there is no noise... noise would represent people are not following the probabilities.. which generally does not happen... they are aligned correctly most of the time but not when all at directionally in line.

so is fx harder to trade than any other market? no.. its the same.. but there are advantages to trading the FX that do make it superior based on your style.

all currencies move differently and for you to trade fx you need to understand how they move and charact... of each one.. just like all stocks move differently... just like if you mixed the recipe for rc cola every day and just rc cola you would make the best rc cola that could be made... but if you mixed all the rc sodas all like 12 of them you wouldnt be particularly good at all of them.. but have a general understanding of how to mix.

so fx seems hard to people that roll over an are not use to it.
-done rambling
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Let me see if I am understanding what you are saying about "noise." There is no noise because every move in the market causes traders' perceptions to change and that is information, not noise. Am I on the right path?

If so, that means that people always follow the probabilities, even though I think that is a bit ambiguous. I would also say that a lot of people, namely non-professional traders, do not or can not trade from a probabilistic standpoint. Thoughts?

Thanks for the post.
 
Quote from elomich:

Let me see if I am understanding what you are saying about "noise." There is no noise because every move in the market causes traders' perceptions to change and that is information, not noise. Am I on the right path?
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that is correct, and what I believe the sum of all things happening in the market and the sum of all the probabilities in the market make up its movement... probability can be looked at as well as perception.. if someone says i perceive that the market will go up they are saying " i perceive the probabilities of the action of the market's movement is more geared towards upward movement at the moment." even tho its perception and they dont know the probability they perceive the chance or probability of it going up non numerically. im gonna get laughed at for this... but here it goes anyways... example ...I believe that value investors perceive the probability of movement to be less risky because the river or main stream of the market moves in their favor because they by value they perceive the price to be low in worth meaning the probabilities of price increasing is higher than the probabilities of price decreasing is greater. -- this seems like im trying to be a guru by stating this but there is a point... the point is.. is that you perceive probability whether you know it or not. in this line of thought even by and hold counts as trading... even tho most people would say its investing... whats the real difference beside you dont have a real risk threshold... but by applying the though that probabilities are in the favor of the move to be up on this frame and up on this frame with the main flow or rivers movement... then price should not drop to this level but should rise this level... so the rebalance that is occurring at multiple levels creates the whipsaw but if you know that it shouldnt drop to this level or it completely changes the perception you are safe to place a stop the same with target... the probability of reaching the goal... the intersection of all the probabilities results in the movement... this maybe why people think random walk exists but price does not walk randomly only travels through a path of changing probabilities.

If so, that means that people always follow the probabilities, even though I think that is a bit ambiguous. I would also say that a lot of people, namely non-professional traders, do not or can not trade from a probabilistic standpoint. Thoughts?

Thanks for the post.
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well when you see a trade setup occurring you gauge what has a higher chance of happening for you to lose or win with that setup... and you perceive profitability with that probability over time so you enter that trade based on those probabilities... the trade moves slightly in your favor then moves quickly against you... you look and on the higher time frame you saw the setup in the opposite direction.. so the larger frame that had more power kicked in and whipsawed or chopped your trade... I dont believe that people follow probabilities is ambiguous everyday people see the setup apply a probability to the setup so they are taking the path of least resistance or trade in favor of the timeframe they assess which then setups up against them afterwards... the trade was a success that turned against them because they didnt gauge correctly. THOUGHTs on non-professionals trading from a probablistic standpoint.... I think that all perceptions in trading are based on the feeling or association of the chance or odds being higher in the favor of the move when they pull the trigger... Its just they didnt see that the chance of the sum of all the probabilities... for example positive % means movement upward -% mean movement downward..

on a FX pair... heres how the sum of odds stack

D+80% 4H -54% H+75% 30M -54% 15M +80%

lets say you want to trade the hourly chart...

nows the time to enter long or buy. why the odds are high the movement will start to move long on the 15M move through the neutral 30M and move higher on the Hourly so you expect the slight whipsaw on the 30M but for the hourly to pull up but you know the 4H is neutral so your profit target isnt large.
 
Quote from nukethewhales31:

that is correct, and what I believe the sum of all things happening in the market and the sum of all the probabilities in the market make up its movement... probability can be looked at as well as perception.. if someone says i perceive that the market will go up they are saying " i perceive the probabilities of the action of the market's movement is more geared towards upward movement at the moment." even tho its perception and they dont know the probability they perceive the chance or probability of it going up non numerically. im gonna get laughed at for this... but here it goes anyways... example ...I believe that value investors perceive the probability of movement to be less risky because the river or main stream of the market moves in their favor because they by value they perceive the price to be low in worth meaning the probabilities of price increasing is higher than the probabilities of price decreasing is greater. -- this seems like im trying to be a guru by stating this but there is a point... the point is.. is that you perceive probability whether you know it or not. in this line of thought even by and hold counts as trading... even tho most people would say its investing... whats the real difference beside you dont have a real risk threshold... but by applying the though that probabilities are in the favor of the move to be up on this frame and up on this frame with the main flow or rivers movement... then price should not drop to this level but should rise this level... so the rebalance that is occurring at multiple levels creates the whipsaw but if you know that it shouldnt drop to this level or it completely changes the perception you are safe to place a stop the same with target... the probability of reaching the goal... the intersection of all the probabilities results in the movement... this maybe why people think random walk exists but price does not walk randomly only travels through a path of changing probabilities.



well when you see a trade setup occurring you gauge what has a higher chance of happening for you to lose or win with that setup... and you perceive profitability with that probability over time so you enter that trade based on those probabilities... the trade moves slightly in your favor then moves quickly against you... you look and on the higher time frame you saw the setup in the opposite direction.. so the larger frame that had more power kicked in and whipsawed or chopped your trade... I dont believe that people follow probabilities is ambiguous everyday people see the setup apply a probability to the setup so they are taking the path of least resistance or trade in favor of the timeframe they assess which then setups up against them afterwards... the trade was a success that turned against them because they didnt gauge correctly. THOUGHTs on non-professionals trading from a probablistic standpoint.... I think that all perceptions in trading are based on the feeling or association of the chance or odds being higher in the favor of the move when they pull the trigger... Its just they didnt see that the chance of the sum of all the probabilities... for example positive % means movement upward -% mean movement downward..

on a FX pair... heres how the sum of odds stack

D+80% 4H -54% H+75% 30M -54% 15M +80%

lets say you want to trade the hourly chart...

nows the time to enter long or buy. why the odds are high the movement will start to move long on the 15M move through the neutral 30M and move higher on the Hourly so you expect the slight whipsaw on the 30M but for the hourly to pull up but you know the 4H is neutral so your profit target isnt large.
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OK I understand and/or agree with what you're saying, except for the last part, which I'm not sure I understand completely. What do you mean by the sum of odds? Does that just mean the importance that each time frame holds for yourself?
 
Quote from elomich:

OK I understand and/or agree with what you're saying, except for the last part, which I'm not sure I understand completely. What do you mean by the sum of odds? Does that just mean the importance that each time frame holds for yourself?
More...

I mean the sum off the odds of movement at the current moment in time... What that means is that people try to trade one time frame when you need understand the setups occurring on higher and lower time frames at least 2 up and down.. if your 140% broken out over the previous movement leg on the hourly you shouldnt look to go long trades on the 15Min... but if you understand how each one should move usually you can anticipate the whipsaw... and use the data to your advantage... if I have a H-80% 30M-90% 15M 50% 5M 70% im not going to be taking that trade long.... so what im saying is there is multiple time frames yes... and you should evaluate several time frames above and below the one you are trading..so by sum I mean in the trade example above even if the setup on 5min looks perfect its not... because of the other frames and the sum of all the frames will control the movement and how it will find its path.
 
Quote from elomich:

What kind of stuff are you talking about?
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I believe hes talking about brokers countering general traders.... but they really need to someone has to buy when someone sells... and being a broker its there job. The structure of the market in FX is much different than equities. FX coils and uncoils because of the high leverages used and there is different levels of buying or selling interactions.. I would advise understanding the structure before trading.. but if someone were to write in a thread everything about it it would be like 75 pages.
 
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