Starting to build a position in AUD/USD with the 15 min timeframe. The current spread is about 50+ pips so we have some pretty good margin to work with. Theta is roughly -1/2 pip and is accelerating. It could accelerate all the way to 1 pip. In ...

A Simple Mean Reversion Strategy

That’s a great question, however, I want to note, there is no singular “ideal” spread. It’s a dynamic position that you are adjusting/building into. there are “non-ideal” spreads as mentioned earlier though, and it’s when spreads are small. We need ...

A Simple Mean Reversion Strategy

Sounds like some seasoning I and I can imagine others wouldn’t mind hearing. Please just keep it in the context of the thread.

A Simple Mean Reversion Strategy

case 2 is the definition of Theta. The rate at which our potential for profit dies. It’s usually working against us (90%+ of the time). This why the size of the spread is important. The more margin you have, the longer it takes the theta to eat your ...

A Simple Mean Reversion Strategy

Oh guys... You are missing the entire point of the strategy by focusing on specific entries and waiting for some specific indicator that will give you them... And you wonder why most people lose at this game... They have no idea how the long-term ...

A Simple Mean Reversion Strategy

Wanna bet on it?

A Simple Mean Reversion Strategy

These will be coming soon! I will also be posting charts with my actual entries this week as the market unfolds to show a better picture of how it's traded in action.

A Simple Mean Reversion Strategy

This is a great question Dave! And I'll explain below. I was also asked some similar questions by another trader that provide context around this answer so will share that below as well. His questions were in the quotes below. I use the 200 because ...

A Simple Mean Reversion Strategy

As I dive deeper into the strategy, and post about trades I am taking, you will start to see some terms that it’s important you understand. The most fundamental ones are: Fair Value: This is what is considered the fair or true price of the ...

A Simple Mean Reversion Strategy

Price is not efficient, it's easy to see on every asset class. If prices were efficient, all of these lines/distributions would match the red ones perfectly. image image Also if markets were efficient, how could Goldman's trading desk ...

If the market price is efficient - how can retail profit

1 Binary shops are typically scam brokers. 2. Any shop that is offering real contract contracts has to be able to synthetically replicate the contracts they offer with the underlying in order to eliminate directional risk and profit from the spread.

Why Binary Forex Options are better than Spot Forex

I think the most obvious way is optimizing betting size based on it. imagine you have a distribution, and when you look at it was a whole, it’s completely normal. 50% of outcomes are wins, 50% of outcomes are losses and the average size of each is ...

Using the Kelly Criterion in actual trading

There is something to be said here in that, trading a skew in a distribution is entirely different than trading tail moves of a distribution. One is a directional bet, and one is a volatility bet.

Trend following system is dead

Data is almost certainly going to the be the same on all timeframes. Smaller timeframes will have larger outliers from large liquidity events, but overall, the ratios will likely stay the same for each timeframe, they will just increase in size as ...

Trading made simple with added BS

Fantastic post, especially this part. What is your green zero? I think it's easy to understand what an edge is in the abstract and purely mathematical sense but it can be hard to understand what it may look like in the real world for a lot of ...

Where's The Edge?

Great work as usual AntiCre. This is really interesting. The approximate advantage is 1:3 for each direction using the roughly 50% cutoff. Candles will either be red or green 50%, then of those, roughly 1/2 will produce the 1:3 advantage so only 25% ...

Trading made simple with added BS

Seeing a lot of interesting ideas of RR. Some good some bad. Many people saying things like, even just a 50% win rate with a 1:2 rr will suffice very casually. As if having a 25% edge is just “okay” and will suffice. this would be better than a ...

1:1 Risk/Reward Frowned Upon?

No worries, If you had the code and just needed to tweak some inputs, would have cool but not worth re-rolling the script. Like you said, it’s pretty intuitive what the result would be, more over lap between candles around the mean with longer ...

Questions for real pros: How to trade with reference points only?

will be interested to see the result. I’d also look at plotting the outcome (final value)of each 10000 step candle as a histrogram. I imagine the kurtosis is 3 and the distribution is normal so the kurtosis is there. another note on this. Gaussian ...

Questions for real pros: How to trade with reference points only?