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Originally Posted by vishalshan
Here is my 6 cents !!
1. Market is made out of millions of traders and these are the traders who move the rates. The rates move in the direction where majority of traders are biased. This includes you and me also.
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Hi vishalshan,
Then why doesn't it behave like that crowd of people it is made off (especilly during times of crisis)? For example during surprise 9/11 tragedy/attack and few days later the stock market was closed because financial powers were afraid of a stock market crash. Forex worked well and it looked almost the same as any other day. For example Euro only changed by 2 cents, Swiss by 5. On the other hand Hryvna (currency that isn't traded by forex and no one cares about it) rose from 5.25 to a US dollar to 2.5-3 to a dollar (at unofficial exchanges). A change of ~50% percent. Later national banks intervened and forbade these free floating rates.
(not in english)
http://www.dinform.ru/archive/docs/f...s22118345.html
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2. There are so many indicators available all derived from the same source OHLC as you mentioned. But each one of them throw a slightly different picture or flavour (not day and night difference though..) of the market's current position.
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Some of them are 99% exact. Some of them are 100% exact (roc and momentum or WLR and Stochastics). Also If one indicator shows the signal earlier this time, next time it will be another one, so at the end they are similiar. For example an SMA may react quicker in some situations, and sometimes it may be right, sometimes EMA may be right....
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Even though there are millions of traders in the world, all can not think alike.
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When everybody is taught to look at the same indicators and the same patterns I wonder how true it is. When you are offered 100,200,400:1 leverage that means that your brokers have to find a way to fund that...
What does 100:1 means? It means that for every 1,000$ you commit, a broker has to add 99,000!!! Brokers are not altruists so how do they find that much money? They probably bucket your orders with orders of 99 other people who have entered on the identical position.... Maybe this is why everybody is taught the same....
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3. Simple and linear math used in the indicators are never developed to predict the future rates. These indicators measure the mass psychology of the traders at any point of time and help traders to decide which way is better to go.
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a. How do you know that the rates are mass psychology of the traders
b. Where would you go? Against the trend (moved by these massess of people) or with the trend (and the sheep that has too loose).
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Successful traders always take chances by going with the mass.
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Trading is made so that most lose. If everyone is the winner, who will pay those winners? Didn't Dr.Elder say not to play with the massess?
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TREND IS YOUR FRIEND. Successful traders never win always. They too lose. Since most of time they are able to read the mind of the mass and go with the trend, their winners are more than the losers.
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Trend is your friend until it ends. How do you know when and where is the trend and at what stage is it? I have seen many situations where there was strong trend (from monthly level to intraday), the price broke some minor level and turned around 100-200 points in a matter of hours. I bet many people have jumped in on all the perfect greenlights and got hooked like a fish.
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4. Everyone is equal in this world and that is why everyone is taught the same !! ;-)
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The brokers don't view you as equal. The floor traders don't view you as equal... Equality is not found in the material world...
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Some winners decide to take things easy after a while by diverting their energy somewhere else (writing books, seminars, classes etc.,).
Shan
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If a trader is a PRO, s/he will enjoy the work and in trading you could earn much more money much quicker than by lecturing people. Remember that doing seminars costs a lot of money, travel takes time, problems with organizing, etc....
Thank you for your replies!