fxhunter98
New Member
Good afternoon Ladies and Gentlemen,
Below I will share some unique insight regarding the Markets.
First off for those of you wondering where I was these past 2 months I was tied up with system development and research, however I am back to make a contribution. This is a long over due thread, I appreciate the information that the Users of FF have provided over the past few years.
Whether information is gold, or fool's gold: information of any kind gives the participant the opportunity to improve him/herself. Golden information points us in the right direction, useless information allows us to reflect and examine the logic of unsuccessful Traders, ultimately benefiting oneself by learning from the mistakes of others.
Typical Trading Logic
When we look at the "average trader" or unsuccessful trader their logic typically involves examining past price, developing a method, then calculating the accuracy of the method using past data, example:
if the method had a 60% accuracy over the past 20 years than... "surely it will have approximately 60% accuracy in the future" <- this flow of logic always leads to failure, so why not use something that can adapt on the fly as new information streams in... the human mind!
Market Constants
It goes without saying that the Markets are complex, so complex that prediction is futile for the average man/woman.
So instead of trying to predict the Markets lets try to understand them better, why don't we define it, learn, and find out what the "Market" is? TYhrough greater understanding of the Markets we will have greater likelihood of success.
Today I would like to present a bit of Information regarding Market Constants. My definition of a Market Constant is just as it sounds:
"A Characteristic which has existed in the past, does exist, and will continue to exist as long as there is a Market to trade."
Below I have listed out a few Constants, do note that some of them are obvious, other's not so much. By creating a similar list, and adding to it as you develop, you may find that this information will influence your Trading for the better.
- There are 24 Hours in a Day one of those Hours will contain the High of the Day another Hour will most probably contain the low (this concept can be applied to any period(s) of time)
- Markets are Recurrent X% of the Time (using Price not Bars)
- Fat Tailed Distribution exists on all TimeFrames, the effect or "fat-ness" if you will
is more pronounced on lower periods of time
- Due to the Markets not have a Standard Distribution there is absolutely no way the Markets can be called "Random" (contrary to popular belief, mind you popular belief time and time again leads to failure in the Trading World)
- Past price does not influence current Market Moves regardless of what happened in the past: Example, If countless massive Sell Orders suddenly execute... does it matter if the price they executed at had one hundred previous Support Bounces?? The simple answer: No
- New Information flowing into the market causes speculation, which in turn creates Order execution and finally the movement of Price. A line Drawn on your chart, or oversold indication of the RSI will never ever cause Price to move.
- The Markets are Static, we as humans trick ourselves and sometimes others into believing differently... The markets are, and always have been, and probably will continue to be made up of Numerous Orders.
However, we often look at a Chart and Visualize that it's moving, comparing it to some Natural physical occurrence such as: throwing a ball and expecting the ball to continue in the direction it was thrown.... unless there is an unlikely large gust of wind that pushes it away...
There is the Constant of Fat Tailed Distribution, but it does not change the fact that the Markets are made up of Single Orders not a "Flow of Orders"
(This next statement is not a constant but something I find valuable. It was inspired by a user here at FF named CrucialPoint, credit goes to him)
If no Orders are executed for 10 minutes, price will not move; if no Orders are executed for 1 year, price will not move.
So how relevant is "time" when it comes to trading, we as Traders make profit from the movement that occurs on the Y axis of our trading charts not the X axis.
(re-read the underlined statement above, there is a relationship that exists between the movement of price and orders, it's as simple as that.. however not simple enough to trade, BUT this concept is often overlooked when individuals are developing trading methods and by doing so it inhibits progress)
There is no "get rich quick scheme" when it comes to trading, there is however a "get poor quick scheme" if one does not try to separate themselves from the crowd of unsuccessful traders. I have said this many times, the majority fails constantly, if one uses the same methods as the majority they too will most likely fail.
So instead develop unique methods of examining the Markets, and trading the Markets BUT first develop a unique method of thinking; your thoughts influence your actions so of course they will influence the way you examine and trade the Markets.
Develop a unique perspective.
Developing traders need to be mature enough to recognize that the True Nature of the Markets is complex, however there is and always will be Market Constants, by identifying these Constants one has greater likely hood of success since the individual will know a bit more about the "true" nature of the market.
Godbless and Best of luck to you Brothers and Sisters,
Rparm
(The list outlined above, contains bits of information that has positively influenced my trading since the day I first started. This list is based off of my experiences, I do respect the opinions of other Traders especially those of you that may disagree with what I've written. I look forward to discussing any criticism or concepts that arise from this post, thanks all.)
A Positive Mind, and Positive Spirit lead to True Happiness
Below I will share some unique insight regarding the Markets.
First off for those of you wondering where I was these past 2 months I was tied up with system development and research, however I am back to make a contribution. This is a long over due thread, I appreciate the information that the Users of FF have provided over the past few years.
Whether information is gold, or fool's gold: information of any kind gives the participant the opportunity to improve him/herself. Golden information points us in the right direction, useless information allows us to reflect and examine the logic of unsuccessful Traders, ultimately benefiting oneself by learning from the mistakes of others.
Typical Trading Logic
When we look at the "average trader" or unsuccessful trader their logic typically involves examining past price, developing a method, then calculating the accuracy of the method using past data, example:
if the method had a 60% accuracy over the past 20 years than... "surely it will have approximately 60% accuracy in the future" <- this flow of logic always leads to failure, so why not use something that can adapt on the fly as new information streams in... the human mind!
Market Constants
It goes without saying that the Markets are complex, so complex that prediction is futile for the average man/woman.
So instead of trying to predict the Markets lets try to understand them better, why don't we define it, learn, and find out what the "Market" is? TYhrough greater understanding of the Markets we will have greater likelihood of success.
Today I would like to present a bit of Information regarding Market Constants. My definition of a Market Constant is just as it sounds:
"A Characteristic which has existed in the past, does exist, and will continue to exist as long as there is a Market to trade."
Below I have listed out a few Constants, do note that some of them are obvious, other's not so much. By creating a similar list, and adding to it as you develop, you may find that this information will influence your Trading for the better.
- There are 24 Hours in a Day one of those Hours will contain the High of the Day another Hour will most probably contain the low (this concept can be applied to any period(s) of time)
- Markets are Recurrent X% of the Time (using Price not Bars)
- Fat Tailed Distribution exists on all TimeFrames, the effect or "fat-ness" if you will
- Due to the Markets not have a Standard Distribution there is absolutely no way the Markets can be called "Random" (contrary to popular belief, mind you popular belief time and time again leads to failure in the Trading World)
- Past price does not influence current Market Moves regardless of what happened in the past: Example, If countless massive Sell Orders suddenly execute... does it matter if the price they executed at had one hundred previous Support Bounces?? The simple answer: No
- New Information flowing into the market causes speculation, which in turn creates Order execution and finally the movement of Price. A line Drawn on your chart, or oversold indication of the RSI will never ever cause Price to move.
- The Markets are Static, we as humans trick ourselves and sometimes others into believing differently... The markets are, and always have been, and probably will continue to be made up of Numerous Orders.
However, we often look at a Chart and Visualize that it's moving, comparing it to some Natural physical occurrence such as: throwing a ball and expecting the ball to continue in the direction it was thrown.... unless there is an unlikely large gust of wind that pushes it away...
There is the Constant of Fat Tailed Distribution, but it does not change the fact that the Markets are made up of Single Orders not a "Flow of Orders"
(This next statement is not a constant but something I find valuable. It was inspired by a user here at FF named CrucialPoint, credit goes to him)
If no Orders are executed for 10 minutes, price will not move; if no Orders are executed for 1 year, price will not move.
So how relevant is "time" when it comes to trading, we as Traders make profit from the movement that occurs on the Y axis of our trading charts not the X axis.
(re-read the underlined statement above, there is a relationship that exists between the movement of price and orders, it's as simple as that.. however not simple enough to trade, BUT this concept is often overlooked when individuals are developing trading methods and by doing so it inhibits progress)
There is no "get rich quick scheme" when it comes to trading, there is however a "get poor quick scheme" if one does not try to separate themselves from the crowd of unsuccessful traders. I have said this many times, the majority fails constantly, if one uses the same methods as the majority they too will most likely fail.
So instead develop unique methods of examining the Markets, and trading the Markets BUT first develop a unique method of thinking; your thoughts influence your actions so of course they will influence the way you examine and trade the Markets.
Develop a unique perspective.
Developing traders need to be mature enough to recognize that the True Nature of the Markets is complex, however there is and always will be Market Constants, by identifying these Constants one has greater likely hood of success since the individual will know a bit more about the "true" nature of the market.
Godbless and Best of luck to you Brothers and Sisters,
Rparm
(The list outlined above, contains bits of information that has positively influenced my trading since the day I first started. This list is based off of my experiences, I do respect the opinions of other Traders especially those of you that may disagree with what I've written. I look forward to discussing any criticism or concepts that arise from this post, thanks all.)
A Positive Mind, and Positive Spirit lead to True Happiness
