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Forex – A negative sum game for losers – Page 17 @ Forex Factory

I have to say that most of the presented facts and claims in this thread are 100% correct I know this not because I trust the research papers (some of them are wrong) but because I made my own research I studied the market extensively in the last few years

This includes thousands of simulations, data mining, demo testing, live testing I personally wrote several millions lines of code.

And I also used data mining tools like the Strategy Quant platform and others I even made my own data mining tools for MT4 and MT5 Over the last few years I basically tested any mechanical strategy you can imagine – I tested pretty much everything
And indeed it turns out that my worst “fears” and suspicions now are proven correct! Right from the start Forex was and still is a negative sum game and the vast the majority of traders, over 99% will never make profit in the long run In fact the real problem is not the lack of skill or resources/tools The real problem is that there is no consistent edge that can be exacted from Forex time series with mechanical system There are no stable and persistent inefficiencies in the price movements Nothing reliable
Long term, short term, intraday, scalping, trend following, breakouts, mean reversion, grids, martingales, averaging, pyramiding news trading, fundamental trends

anything you can think of – it’s all the same random result.

Also there are no consistent correlations between fundamental events and price action Because as traders we have information disadvantage in regards to news, from our perspective the market is random and unpredictable You don’t know what the intentions of the large players are, you don’t know what their positions are, you know nothing basically And you always trade the news after the fact
You see, in the end of the day trading is a simple chance operation with built in negative expectation Now this part for some reason is extremely hard for most people to understand Even very intelligent people have a hard time grasping the concepts of probability theory, game theory, randomness and statistics

I guess our minds are not good at all when it comes to calculating these things naturally.

But thankfully, today we have computers and amazing software And now everything can be revealed All cards are down, all “secrets” are out in the open
But people continue to ignore the facts (Very strange and irrational behavior) They want to believe! The want to believe that it’s possible to make a living and consistent income from trading But why to blame them? After all, the whole idea of trading for a living with all of the potential benefits and freedom this is very very attractive dream

.

so attractive (or should I say effective) that people lose their minds just thinking about it But we know how it goes and we know how it ends

So let me explain a few things.

Pay attention because it’s important!
1 I don’t care how smart you are I don’t care how successful you are I’m here to tell that you will get fooled by randomness, period! Your brain simply CANNOT comprehend the concepts of randomness by default In order to understand the nature and the different nuances of randomness, you will have to study the math problems in the context of markets for a long, long time Years
2 Pointing at “successful” traders as a proof that it’s possible to extract consistent profits is completely meaningless The very fact that someone points to some other traders as a proof shows that the person does not understand randomness in the context of markets
A rising equity curve is not a valid proof! Someone made money for a while so what? Who cares
Let me ask you something – how many rising curves you can expect to see in 100 000 unbiased random simulations??? The answer is – 50% (50 000)!
If you add some bias to the simulation the curves will tilt to one side, but you still get thousand of positive and negative curves
The most important thing to understand is that systems with negative expectation also can produce positive curves
And this is how people get fooled by randomness
You win some money for a while and you think – this is great, now I have a winning system But then you lose money and you think – damn, my system is not working anymore I have to research more I have to make new system
In the meantime you see some other traders making money, gathering attention, showing off their accounts, and you think – at least we have a proof There are successful traders It’s possible to win The funny thing is, after awhile these rock-stars super traders always disappear somewhere And then you are thinking, well they must be too busy, spending all these millions While in reality they all go bankrupt and are too ashamed to admit it!
You see, it’s human nature If someone was really successful in the long run and making millions – he will not stop bragging about it You will see millionaire traders all over the forums and social media posting their accounts And showing their luxury lifestyle But we don’t see this And there is very good reason for this
RANDOMNESS! Randomness will give you money, and randomness will take it back from you + interest!
But if you analyze the problem deeper, you see it’s not randomness, but your lack of understanding that is casing you to ride this emotional and financial roller coaster You play the game because you don’t understand it Just like the people who play in casinos

Or like the people who spend money emotionally with their credit cards and pay 20% interest.

OK enough “BS” for now

You have your daily dose.

I will write more on the topic soon, and I will show you what they don’t want you to know 1.

.

Forex – A negative sum game for losers – Page 17 @ Forex Factory

I have to say that most of the presented facts and claims in this thread are 100% correct I know this not because I trust the research papers (some of them are wrong) but because I made my own research I studied the market extensively in the last few years This includes thousands of simulations, data mining, demo testing, live testing I personally wrote several millions lines of code And I also used data mining tools like the Strategy Quant platform and others

I even made my own data mining tools for MT4 and MT5.

Over the last few years I basically tested any mechanical strategy you can imagine – I tested pretty much everything
And indeed it turns out that my worst “fears” and suspicions now are proven correct! Right from the start Forex was and still is a negative sum game and the vast the majority of traders, over 99% will never make profit in the long run In fact the real problem is not the lack of skill or resources/tools The real problem is that there is no consistent edge that can be exacted from Forex time series with mechanical system There are no stable and persistent inefficiencies in the price movements Nothing reliable
Long term, short term, intraday, scalping, trend following, breakouts, mean reversion, grids, martingales, averaging, pyramiding news trading, fundamental trends

.

anything you can think of – it’s all the same random result Also there are no consistent correlations between fundamental events and price action Because as traders we have information disadvantage in regards to news, from our perspective the market is random and unpredictable You don’t know what the intentions of the large players are, you don’t know what their positions are, you know nothing basically And you always trade the news after the fact

You see, in the end of the day trading is a simple chance operation with built in negative expectation.

Now this part for some reason is extremely hard for most people to understand.

Even very intelligent people have a hard time grasping the concepts of probability theory, game theory, randomness and statistics I guess our minds are not good at all when it comes to calculating these things naturally But thankfully, today we have computers and amazing software

And now everything can be revealed.

All cards are down, all “secrets” are out in the open.

But people continue to ignore the facts (Very strange and irrational behavior) They want to believe! The want to believe that it’s possible to make a living and consistent income from trading But why to blame them? After all, the whole idea of trading for a living with all of the potential benefits and freedom this is very very attractive dream

.

so attractive (or should I say effective) that people lose their minds just thinking about it But we know how it goes and we know how it ends
So let me explain a few things Pay attention because it’s important!
1

I don’t care how smart you are.

I don’t care how successful you are I’m here to tell that you will get fooled by randomness, period! Your brain simply CANNOT comprehend the concepts of randomness by default In order to understand the nature and the different nuances of randomness, you will have to study the math problems in the context of markets for a long, long time Years
2 Pointing at “successful” traders as a proof that it’s possible to extract consistent profits is completely meaningless The very fact that someone points to some other traders as a proof shows that the person does not understand randomness in the context of markets
A rising equity curve is not a valid proof! Someone made money for a while so what? Who cares
Let me ask you something – how many rising curves you can expect to see in 100 000 unbiased random simulations??? The answer is – 50% (50 000)!
If you add some bias to the simulation the curves will tilt to one side, but you still get thousand of positive and negative curves
The most important thing to understand is that systems with negative expectation also can produce positive curves
And this is how people get fooled by randomness
You win some money for a while and you think – this is great, now I have a winning system But then you lose money and you think – damn, my system is not working anymore I have to research more I have to make new system
In the meantime you see some other traders making money, gathering attention, showing off their accounts, and you think – at least we have a proof There are successful traders

It’s possible to win.

The funny thing is, after awhile these rock-stars super traders always disappear somewhere And then you are thinking, well they must be too busy, spending all these millions While in reality they all go bankrupt and are too ashamed to admit it!
You see, it’s human nature If someone was really successful in the long run and making millions – he will not stop bragging about it You will see millionaire traders all over the forums and social media posting their accounts And showing their luxury lifestyle But we don’t see this And there is very good reason for this
RANDOMNESS! Randomness will give you money, and randomness will take it back from you + interest!
But if you analyze the problem deeper, you see it’s not randomness, but your lack of understanding that is casing you to ride this emotional and financial roller coaster You play the game because you don’t understand it Just like the people who play in casinos Or like the people who spend money emotionally with their credit cards and pay 20% interest
OK enough “BS” for now You have your daily dose I will write more on the topic soon, and I will show you what they don’t want you to know 3

Forex – A negative sum game for losers – Page 18 @ Forex Factory

Quoting Mingary Disliked {Quote: } You are not staying on topic Here it is again: Therefore it’s always a question of probability, it can never be a sure thing, unless of course you are a fan of those late night forex infomercials They seem to have all the answers on how to become a retail forex millionaire

Ignored The game is about anticipating what others will do, what do you think people do when prices rises? What do you think they do when prices fall? I think the market is not random but it is always biased in one direction or the other.

Forex can be a great source of earning money

Really, Forex trading can be a great source of earning if a trader can follow the right trading guideline in his trading career Because for earning good amount of money a Forex trader needs proper guideline from where he or she can get proper services

With full checking I select FXdirects that is one of the credible, stable and reliable brokers in this industry.

By trading with them I get necessary trading facilities including – the expert trading guideline and assistance, wide range of trading bonus, 40 plus currency pairs, flexible leverage that is 1:100, lowest trading spread from 00 pips, various trading accounts, no restriction for pending orders and many other facilities which always help me to trade profitably in my trading

Forex – A negative sum game for losers – Page 17 @ Forex Factory

Quoting alphaomega Disliked I have to say that most of the presented facts and claims in this thread are 100% correct I know this not because I trust the research papers (some of them are wrong) but because I made my own research I studied the market extensively in the last few years This includes thousands of simulations, data mining, demo testing, live testing I personally wrote several millions lines of code And I also used data mining tools like the Strategy Quant platform and others I even made my own data mining tools for MT4 and MT5 Over the last few years Ignored if you are testing only technical strategies without any consideration for factors behind market moves then yes, randomness is a problem this is why traders look at things in probability terms

I am not referring to predicting anything but rather reactionary.

so here is a current example this weekend drone attacks took out 57 million barrels of oil production in Saudi Arabia by itself it isn’t a trade but should CAD begin to strengthen at open tonight or tomorrow, you have a tangible reason to buy CAD this isn’t a random event it is something you can trade almost every day of every week which is how I make a living

ECB last week I made 4.

75 percent on the initial release, a reactionary trade that is not random
so if you are just testing technical strategies without any input into those amazing and profitable events then you will be rather depressed at the results 1


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