Forex Secret - Forex Literature As A 90-95% Of The Traders Loose Their Deposit
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Alan Perry
Mar 23, 2010, 10:43:08 PM3/23/10
to Forex Trading
This delusion globally entails identical aftermaths: 90-95% of traders
turn steady to loose their deposits having studied books by Bill
Williams, Alexander Elder, Thomas Demark, J. Schwager, et al.
Following the burn down of their first deposit trader's plunge
themselves again into scrutinizing Forex scholars, in this manner
suffering losses of the second, the third and subsequent deposit. I
will hereinafter try to elucidate where from the above regularity
grows, so that no trader repeats his forerunners' mistakes.
This statistics is common knowledge: 90% of traders constitute Forex
losers... But the figure has always been giving rise to a leviathan of
my doubts. It isn't because of somewhat different 95%-5% loser-to-
winner ratio quoted in the Van Tarp and Brian June "Intraday trading:
secrets of mastership". With 90% quoted universally, there naturally
emerges the question, as to whether there is someone capable to check,
to specify or to disprove the above figure. NO ONE IS, besides the
directors of largest Western banks providing streamline Forex quotes,
but having never raised the issue.
WHY? Because should this statistics be published, there will be sharp
and ultimate decline in number of those chasing easy profits from the
world Forex market. Otherwise banks would not keep mum in advertising
purposes. Neither would they be silent if losers constituted at least
by few points less than 90%. In any advertising, customer attraction
is ensured by quoting beneficial maxima and non-lucrative minima. This
has always been, is being and will always be a universal practice.
As a conclusion, 10% Forex winners is a maximum result among traders.
It's them, who have understood Forex market absolutely simple truisms
and who attained steady daily earnings in amounts being gained by
others within years or even the whole of life. Certainly, those are to
be recollected, who in late 80s were the first in the ex-USSR to grasp
laws of commerce and who began accumulating their initial stock. The
rules used to be so simple that presently any schoolboy or a first-
year student can show the way the capital might have been easily
scraped up and augmented on the USSR debris and in the course of
market relations being established in the post-Soviet space.
I do exactly allow for the fact that through the years a new
generation will be laughing at the way we are now incapable to
comprehend the laws, where under currency rates either spike up or
fall down, all of a sudden.
With this provision, those seeking fast money at Forex have a much
greater time limit than the ones engaged in capital building in the
post-Soviet space (Forex market is incommensurably greater than that
in the ex-USSR), but not to the extent thought by many.
By now trends are thoroughly less numerous than they used to be 10-20
years ago. By way of taking a glance the charts history You are in the
position to understand the way traders used to earn under 20- 40 pts
spread, commission and slippage. A trend was followed by a trend at
that epoch.
AND WHAT'S NOW? Nowadays many of traders are impotent to gain under 3
pts spread without commission and slippage.
Thus, this book is intended for those willing to perceive Forex market
laws. In order to get understanding of the way 5-10% of successful
traders obtain profits, let's at the outset analyze the reasons and
the way the outstanding 90% of traders suffer losses. The 90%-figure
looks scaring, to say nothing of 95% or 98%. It occurs despite the
amount of literature on the issue equals to hundreds of fundamental
books, written by authors, having gained capitals expressed by means
of more than 7-digit figures (G. Soros, B. Williams, A. Elder, T.
Demark).
Thus, the above minimum of 90% of smart, well-read, broad-knowledged
people:- scrutinize the really great traders' heritage;- open accounts
with Forex Broker's and banks, start trading and...- loose funds up to
complete rout!
AND WHERE'S THE LOGIC? The answer springs to mind by itself... There's
something wrong in the literature (by the way, recognized throughout
the world, where the deposit-killing statistics is as disappointing as
it is in our country) so long as its studying yields such oppressive
results.
STRANGE? No, rather natural, than strange on account of the following:
1. Being a great trader is not indicative of everyone being a great
teacher.
2. Multitude of rules elaborated by scholars 10-40 years ago, has
grown obsolete, since the Forex market is changing.
3. The scholars HAVE NOT revealed ALL the secrets even WITHIN THE
FRAMEWORK OF THE THEN
FOREX, therefore by now their advice and recommendation turn out
either obsolete or na?ve.
Thus, once one's advice and recommendations bring every 9 of 10 market
participants to loose their money in each country, where one's books
have used to be published and have enjoyed all sorts of hosanna in the
press, THEN ONE IS NONE OF A TEACHER.
Naturally, no trader will reveal his professional secrets to the full.
But when studying Forex literature one gets astonished by a negligible
extent the above secrets are "confided" at all, with a book on Forex
containing 99% of common truth and 1% only of useful novelties. But
should one train up even several thousands perspective traders, one
will in no way burden oneself with competitors, due to the Forex
market huge sale nature. Beyond a shadow of a doubt the above traders
are really great. You may agree or not, but anyone, having earned USD1
bn or more, deserves being named "great". So, one's books should be
published as memoirs. I am not attaching any irony hereto, since these
persons have acquired gains by virtue of their minds and labor, as
opposite to Rockfellers, who inherited their fortunes or to Russian
oligarchs, who either stole or got their capitals dirt-cheap from
state authorities.
Hopefully, understandable is the difference between such editions and
manuals for beginners.
G. Kasparov, say, is far from writing manuals for chess beginners,
since the job can be better completed by others with this fact not at
all undermining Kasparov's being a great chess player. And his advice
and recommendation is sure to be of interest rather to a close circle
of grand masters, than to those having touched the chess for the first
time.
Actually Kasparov is but to be respected for not being tempted by the
lust for fast money, by virtue of his name in the chess world and by
way of cooking up manuals for beginners.
At Forex, by contrast, and for some reason, everyone deems oneself a
teacher, which fact results in millions educated people worldwide
leaving stock market being disappointed, angry with an inferiority
complex life-time pursuit.
And hence, the unanswered question for them: is that all a fraud or
not, since gains are midget, whereas losses are titanic?
I am recalling the book titled "The Alchemy of Finance" by G. Soros
(the one I've read in early 90-s). I admit, it's interesting,
instructive..., but it is all narrated in so an inarticulate and
tangled manner. As indicated in the foreword by an American investor,
the theory has hardly been understood by few only.
So what's the use of writing in such a manner? A theory may generally
be complicated to any extent, BUT IT MUST BE wrapped in a simple,
clear and understandable wording. You are welcome to attempt to read
the above book once You have time to. Shortly, the Soros reflexivity
theory of the countries' cyclic development may easily bear a couple-
sentence confinement:
1. Following liberation from totalitarian yoke, a country is granted
credits, then, there is a rapid growth and flourish of economy.
2. As soon as the above credits are to be paid back, a country's
economy faces a natural recession.
Is it as difficult? The question may be addressed to a schoolboy (to
say nothing of an American investor): when should those countries'
companies' shares be purchased and when they are to be advantageously
sold in order to acquire maximum profit? What's going to happen in
case one is too late to sell the shares, shortly exhibiting an
impetuous growth in price?
Propounded long before, the Soros theory has been entirely
corroborated in August, 98 by the dismal practice established in Asian
and Pacific countries and later in Russia.
There still is another question: how inarticulate should Soros have
been to enable his theory to be grasped by few only?
The second part of the book is not worth retelling. Reading its
original is sure to be much more instructive with my annotation
leaving no conundrums therein.
The theory is permeated by Soros's strategy: enter long on what's
shortly going to enjoy price growth with a 100% probability and "pull
out" Your money along with profits before the companies enter crisis,
thus facilitating bankruptcies thereof. This is the way I clearly
lecture my students on Forex-related complexities, thus conveying my
logics to them. Despite its own complexities (news, TA, corrective
actions, etc.), Forex is essentially reduced to a very simple truth:
at a certain moment one should not be late with going long or short on
a currency with "tertium non datum".
And when asked if the Williams Alligator needs something to be added
thereto, the majority of my students reply "Yes!", indicating what
exactly is to be added. I'll present a detailed vivisection of the
issue in a separate chapter by way of proving that the Williams
Alligator is but 50% effective.
Fig. 4. H1 EUR chart as of April 12, 2005. (See Note below)
The Alligator's jaws display upward opening with a fractal formed at
1.3006. According to Williams, one should enter long one point higher,
i.e. at 1.3007. Upward motion continues extra 11 points. Then the rate
sharply swivels to fall down by 170 pts. Another example.
Fig. 5. H1 EUR chart as of April 22, 2005. (See Note below)
Please, figure out 1.3094, 16 pts above the previous fractal,
following the Alligator upward opening. Thereafter, a sharp down
swivel covering 140 pts. Hundreds of similar examples may be drawn.
But what are the implications?
With the Alligator's mouth opened, 50% of entries should be pro-
Williams while the outstanding 50% - counter-Williams (i.e. vectored
opposite to the Alligator mouth opening). When embarking on Forex, You
must possess clear knowledge of the difference between either of the
above 50%-portions. Otherwise..., You are doomed to loose even if You
follow Williams's technique, let alone other ones.
Even my students are in the position to advise what is to be added to
Alligator in order to realize proper entry vectoring. Least of all
would I want this example to be taken as a personal criticism of Bill
Williams, whose contribution to the Forex theory is a significant one.
And the majority of traders, like me, used to begin earning after
studying HIS books. But not to go astray..., even without any addenda
Williams managed to make a tremendous fortune, since a skilled trader
(moreover being the Alligator's father) is capable to differentiate
between a steady travel and a pullback, or, say, a flat, or, visa
versa, a trend low for the entry to be vectored oppositely. It is all
fairly understandable for an experienced trader. But what about
beginners as regards their interpretation of a flat, a recovery or a
trend change?
These folks are sure to require assistance, especially, in information
not presented in literature on Forex.
Without this knowledge a trader will never perceive the ABCs of stable
daily earnings. But why the Forex scholars do not clear out the issue?
This query is to be addressed to them, not to me. While reading these
opuses, I am getting horrified at the fact that we are being foisted
expensive high-sounding titled books, which are not going to ever
teach a trader how to attain profits at the market.
Let's open one of them (E. Nayman's "Trader's Minor Encyclopedia" and
"Master-trading: Secret Files") to get the understanding of the way
almost all the books on Forex are written and supposed to have the
price of USD20-100.
You may agree or not, but the name looks very beautiful and
pretentious: "Master-trading: Secret Files", 320 pages of sheer
secrets...
HOWEVER, I HAVEN'T FOUND ANY SECRETS THERE! You are welcome to discuss
an argue Yourself:
1. "The interrelation between fundamental factors and exchange rate
dynamics" being a detailed story of how a country's macroeconomic
growing, benign rumors trading and political stability promote the
exchange rate growth.
A "valuable" secret to be practically encountered in any Forex
edition. But below is a real FA secret (not paid any attention to by
Nayman): why does currency use to reverse against its country's
economic news? A whole chapter here will be dedicated to the issue.
2. "Construction of two moving averages on a single chart and twin
combinations thereof". The author furnishes a "wise" recommendation:
entries should be made in the direction the MAs diverge (adding
secretly that the most effective MA combination is 21, 55, 89, etc.,
as per Fibonacci).
The pseudo-secret nature of the above recommendation underlies the
fact that any MA combination (should it be 21+55, as the author's;
10+20 as in many Western trading systems; 5+8+13 as per B. Williams or
1+21 as used by numerous traders) yields the same results.
Ok. It all looks great. However, E. Nayman et al., seem to have
circumvented the MA intersection chief secret, through which traders
suffer constant losses: a "lighter" MA has crossed a "heavier" one,
say, upwards, but... thereafter there is sharp downturn resulting in
the MAs intersection again.
Fig. 6. GBPUSD H1 chart as of April, 21-26, 2005. (See Note below)
A fivefold reciprocating crossing of MA 21 and 55. You are welcome to
calculate traders' losses.
Now, let's call it a day with examples. The MA intersection technique
operates perfectly in certain circumstances, while turning out
impotent in others, thus inflicting losses upon traders. No criteria
have ever been stipulated by Forex scholars as to entries to be
effected pro- or counter-divergence of moving averages.
3. MACD construction and analysis. What sort of secret may one expect
from the following statement of Nayman's: "a subsequent high being
lower than the preceding one suggests a bullish trend depletion or
even its changing with the same being visa versa under minimum MACD
values". Much of a secret, isn't it? I thought it were the MACD
operation principle, familiar to any Forex novice. The secret-fancier
B. Williams hasn't even taken effort to advise to perform inputs
change from 9, 12, 26 into 5, 34, 5 to provide for a lag killer.
Assuming the above, authentic MACD secrets are not paid any attention
to by scholar, which fact inflicts losses upon traders. The situation
comes into effect, when upon a divergence formation, no trend change
is observed with another same-trend wave taking place instead.
Fig. 7. GBPUSD H1 chart as of April, 2005, where MA21 crosses MA55
with slight rise and sharp downturn. (See Note below)
Another example:
Fig. 8. GBPUSD H1 chart as of May, 2005: a divergence with MA10 upward
crossing MA21; a brief nudge up to 1.8916 and a sharp downturn. (See
Note below)
As different from Nayman and other Forex scholars, we'll touch in
detail upon the ways to detect when MACD is trustworthy as a trend
reversal attribute and when it is not.
4. TA classical patterns. One can not help smiling at the author
sharing a secret of "head'n'shoulders" and "double bottom" patterns,
being studied by beginners at the earliest lectures on Forex.
And here goes a real key secret: in what cases the patterns are indeed
indicative of a reversal but in what cases brokers trap TA pattern-
fanciers? Is there someone doubting the fact that patterns are known
not only to traders, but as well to brokers with their mouths watering
to make a rod for the backs of lovers and connoisseurs of the above
patterns, just like on the sample chart below:
Fig. 9. GBPUSD H1 chart as of May, 09-11, 2005, a classical "inverted
H&S" (See Note below)
At 1.8871 there's an impetuous upward breakthrough, the Alligator
rotating upwards, MACD above zero, MA8 having intersected MA21
upwards, the Williams vaunted Awesome Oscillator signaling long entry,
the Accelerator Oscillator pointing up... nevertheless, the rate
reaches as far as 1.8916 and slips down to 1.8481 by 450 pts.
To be noted: much worth scrutinizing is the phenomenon of Nayman's
"Trader's Minor Encyclopedia" and "Master-trading: secret files"
purported at understanding why over 90% of traders turn losers after
reading the books.
The solution, to my mind, is that the above opuses are but good "ABCs
OF FOREX" thus giving birth to all Nayman's merits and demerits.
The guy is primarily awardable for having spared beginners' paying
USD50-200 to various Forex training courses or academies. Instead, one
can download and study Nayman's books, whose extracts are, by the way,
quoted to trainees during their studies. Nayman is generally to be
expressed gratitude to, because of his having laid out the Forex basic
course in a competent, popular and accessible way.
This is the point, I elucidate to every beginner, being introduced to
me: first one should scrutinize Nayman's books, then only it's worth
discussing hooks and crooks of earning at Forex instead of loosing.
Nevertheless, there is a chief Nayman's self-delusion about his folios
really being in no way secret files with no one being able to find
anything new to enable oneself to improve one's Forex earnings. These
books containing neither unique techniques nor non-standard solutions
are famous for the generalization and systematization of what has been
the Forex knowledge prior to Nayman.
But this fact is not realized by majority gripped by the "Master-
trading: Secret Files" fascination, who open live accounts and turn
losers inevitably.
Shortly upon their pre-mature success on demo accounts these folks
hastened to open live accounts and faced losses. But since the
Dealers' staff managed to convince them in the incidental nature of
the above losses, the folks ventured to go live again and did again
turn to be deposit killers.
With these facts being proclaimed, I don't hold it appropriate to call
any statistics science for help. Any sensible man is to get the
understanding of the above losses as not being of an incidental
nature.
There could be NO OTHER WAY about it.
The next trader training level comprises books by B. Williams:
"Trading Chaos" and "New aspects of exchange trading", where the
author propounds his own Forex trading methods along with advertising
the other ones', viz. Elliott's.
My book, "Secrets Of Craftsmanship Narrated By Professional Trader Or
What B. Williams and E. Nayman Have Concealed From Traders" is
purported at developing of THAT particular school of training traders
to practical operation at Forex.
Hardly will anyone object to the fact that B. Williams will disclose
his Forex intimacies free of charge. Neither will he furnish their
100% disclosure after being paid to.
In all his splendor, Williams possessed sufficient knowledge to;- to
share A PORTION of his secrets in his "Trading Chaos";- to share A
PORTION of his secrets as a paid training;- not to share A PORTION of
his secrets in the least.
My book, "Secrets Of Craftsmanship Narrated By Professional Trader Or
What B. Williams and E. Nayman Have Concealed From Traders" is also
dedicated to teaching how the Williams secret methods are to be
decoded properly to ensure successful Forex trading capabilities. Each
of my book's 20 chapters is permeated with a common logic aimed at
finding relevant discrepancies in literature on Forex and at
presenting my personal technique of Forex trading.
B. Williams declares being capable of analyzing tens of currency pairs
(of 140-bar history each) that within tens of minutes, but in no way
does he explain how to, whereas, I explain, that it's feasible for any
wide-screen trader, provided my computer monitor being 3-currency
capable only (see: "Ally and adversary currencies").
B. Williams sings about his magic Alligator, while I disclose and
eliminate its pitfalls by, say, adding a MA233 thereto. This
arrangement visualizes the whole of the 4 potential currency travel
options: up/down above MA233; up/down under MA233.
B. Williams lists a stop-loss to be a "safety cushion", whereas I
disclose and eliminate its shortcomings by way of alternatively using
my own pending orders.
B. Williams hold trades volume to be authentic resistance breakthrough
criterion, while I quote reasons by which trades volume turns to be
deceptive on Metatrader platforms (thanks to the banks Consortium) and
I introduce my own levels true/false breach criteria. Now, regarding
trading on news, I demonstrate the way one can turn a loser if trade
like all the others and I offer my own on-news trading style.
(See continuation of this article under name Forex Secret. Forex
Literature As A 90-95% Of The Traders Loose Their Deposit. (Part II)
Note:Full text of this article and pictures of examples http://www.masterforex-v.su/
If you wish to be trained on Trading System Masterforex-V - one of new
and most effective techniques of trade on Forex in the world visit
http://www.masterforex-v.su/
turn steady to loose their deposits having studied books by Bill
Williams, Alexander Elder, Thomas Demark, J. Schwager, et al.
Following the burn down of their first deposit trader's plunge
themselves again into scrutinizing Forex scholars, in this manner
suffering losses of the second, the third and subsequent deposit. I
will hereinafter try to elucidate where from the above regularity
grows, so that no trader repeats his forerunners' mistakes.
This statistics is common knowledge: 90% of traders constitute Forex
losers... But the figure has always been giving rise to a leviathan of
my doubts. It isn't because of somewhat different 95%-5% loser-to-
winner ratio quoted in the Van Tarp and Brian June "Intraday trading:
secrets of mastership". With 90% quoted universally, there naturally
emerges the question, as to whether there is someone capable to check,
to specify or to disprove the above figure. NO ONE IS, besides the
directors of largest Western banks providing streamline Forex quotes,
but having never raised the issue.
WHY? Because should this statistics be published, there will be sharp
and ultimate decline in number of those chasing easy profits from the
world Forex market. Otherwise banks would not keep mum in advertising
purposes. Neither would they be silent if losers constituted at least
by few points less than 90%. In any advertising, customer attraction
is ensured by quoting beneficial maxima and non-lucrative minima. This
has always been, is being and will always be a universal practice.
As a conclusion, 10% Forex winners is a maximum result among traders.
It's them, who have understood Forex market absolutely simple truisms
and who attained steady daily earnings in amounts being gained by
others within years or even the whole of life. Certainly, those are to
be recollected, who in late 80s were the first in the ex-USSR to grasp
laws of commerce and who began accumulating their initial stock. The
rules used to be so simple that presently any schoolboy or a first-
year student can show the way the capital might have been easily
scraped up and augmented on the USSR debris and in the course of
market relations being established in the post-Soviet space.
I do exactly allow for the fact that through the years a new
generation will be laughing at the way we are now incapable to
comprehend the laws, where under currency rates either spike up or
fall down, all of a sudden.
With this provision, those seeking fast money at Forex have a much
greater time limit than the ones engaged in capital building in the
post-Soviet space (Forex market is incommensurably greater than that
in the ex-USSR), but not to the extent thought by many.
By now trends are thoroughly less numerous than they used to be 10-20
years ago. By way of taking a glance the charts history You are in the
position to understand the way traders used to earn under 20- 40 pts
spread, commission and slippage. A trend was followed by a trend at
that epoch.
AND WHAT'S NOW? Nowadays many of traders are impotent to gain under 3
pts spread without commission and slippage.
Thus, this book is intended for those willing to perceive Forex market
laws. In order to get understanding of the way 5-10% of successful
traders obtain profits, let's at the outset analyze the reasons and
the way the outstanding 90% of traders suffer losses. The 90%-figure
looks scaring, to say nothing of 95% or 98%. It occurs despite the
amount of literature on the issue equals to hundreds of fundamental
books, written by authors, having gained capitals expressed by means
of more than 7-digit figures (G. Soros, B. Williams, A. Elder, T.
Demark).
Thus, the above minimum of 90% of smart, well-read, broad-knowledged
people:- scrutinize the really great traders' heritage;- open accounts
with Forex Broker's and banks, start trading and...- loose funds up to
complete rout!
AND WHERE'S THE LOGIC? The answer springs to mind by itself... There's
something wrong in the literature (by the way, recognized throughout
the world, where the deposit-killing statistics is as disappointing as
it is in our country) so long as its studying yields such oppressive
results.
STRANGE? No, rather natural, than strange on account of the following:
1. Being a great trader is not indicative of everyone being a great
teacher.
2. Multitude of rules elaborated by scholars 10-40 years ago, has
grown obsolete, since the Forex market is changing.
3. The scholars HAVE NOT revealed ALL the secrets even WITHIN THE
FRAMEWORK OF THE THEN
FOREX, therefore by now their advice and recommendation turn out
either obsolete or na?ve.
Thus, once one's advice and recommendations bring every 9 of 10 market
participants to loose their money in each country, where one's books
have used to be published and have enjoyed all sorts of hosanna in the
press, THEN ONE IS NONE OF A TEACHER.
Naturally, no trader will reveal his professional secrets to the full.
But when studying Forex literature one gets astonished by a negligible
extent the above secrets are "confided" at all, with a book on Forex
containing 99% of common truth and 1% only of useful novelties. But
should one train up even several thousands perspective traders, one
will in no way burden oneself with competitors, due to the Forex
market huge sale nature. Beyond a shadow of a doubt the above traders
are really great. You may agree or not, but anyone, having earned USD1
bn or more, deserves being named "great". So, one's books should be
published as memoirs. I am not attaching any irony hereto, since these
persons have acquired gains by virtue of their minds and labor, as
opposite to Rockfellers, who inherited their fortunes or to Russian
oligarchs, who either stole or got their capitals dirt-cheap from
state authorities.
Hopefully, understandable is the difference between such editions and
manuals for beginners.
G. Kasparov, say, is far from writing manuals for chess beginners,
since the job can be better completed by others with this fact not at
all undermining Kasparov's being a great chess player. And his advice
and recommendation is sure to be of interest rather to a close circle
of grand masters, than to those having touched the chess for the first
time.
Actually Kasparov is but to be respected for not being tempted by the
lust for fast money, by virtue of his name in the chess world and by
way of cooking up manuals for beginners.
At Forex, by contrast, and for some reason, everyone deems oneself a
teacher, which fact results in millions educated people worldwide
leaving stock market being disappointed, angry with an inferiority
complex life-time pursuit.
And hence, the unanswered question for them: is that all a fraud or
not, since gains are midget, whereas losses are titanic?
I am recalling the book titled "The Alchemy of Finance" by G. Soros
(the one I've read in early 90-s). I admit, it's interesting,
instructive..., but it is all narrated in so an inarticulate and
tangled manner. As indicated in the foreword by an American investor,
the theory has hardly been understood by few only.
So what's the use of writing in such a manner? A theory may generally
be complicated to any extent, BUT IT MUST BE wrapped in a simple,
clear and understandable wording. You are welcome to attempt to read
the above book once You have time to. Shortly, the Soros reflexivity
theory of the countries' cyclic development may easily bear a couple-
sentence confinement:
1. Following liberation from totalitarian yoke, a country is granted
credits, then, there is a rapid growth and flourish of economy.
2. As soon as the above credits are to be paid back, a country's
economy faces a natural recession.
Is it as difficult? The question may be addressed to a schoolboy (to
say nothing of an American investor): when should those countries'
companies' shares be purchased and when they are to be advantageously
sold in order to acquire maximum profit? What's going to happen in
case one is too late to sell the shares, shortly exhibiting an
impetuous growth in price?
Propounded long before, the Soros theory has been entirely
corroborated in August, 98 by the dismal practice established in Asian
and Pacific countries and later in Russia.
There still is another question: how inarticulate should Soros have
been to enable his theory to be grasped by few only?
The second part of the book is not worth retelling. Reading its
original is sure to be much more instructive with my annotation
leaving no conundrums therein.
The theory is permeated by Soros's strategy: enter long on what's
shortly going to enjoy price growth with a 100% probability and "pull
out" Your money along with profits before the companies enter crisis,
thus facilitating bankruptcies thereof. This is the way I clearly
lecture my students on Forex-related complexities, thus conveying my
logics to them. Despite its own complexities (news, TA, corrective
actions, etc.), Forex is essentially reduced to a very simple truth:
at a certain moment one should not be late with going long or short on
a currency with "tertium non datum".
And when asked if the Williams Alligator needs something to be added
thereto, the majority of my students reply "Yes!", indicating what
exactly is to be added. I'll present a detailed vivisection of the
issue in a separate chapter by way of proving that the Williams
Alligator is but 50% effective.
Fig. 4. H1 EUR chart as of April 12, 2005. (See Note below)
The Alligator's jaws display upward opening with a fractal formed at
1.3006. According to Williams, one should enter long one point higher,
i.e. at 1.3007. Upward motion continues extra 11 points. Then the rate
sharply swivels to fall down by 170 pts. Another example.
Fig. 5. H1 EUR chart as of April 22, 2005. (See Note below)
Please, figure out 1.3094, 16 pts above the previous fractal,
following the Alligator upward opening. Thereafter, a sharp down
swivel covering 140 pts. Hundreds of similar examples may be drawn.
But what are the implications?
With the Alligator's mouth opened, 50% of entries should be pro-
Williams while the outstanding 50% - counter-Williams (i.e. vectored
opposite to the Alligator mouth opening). When embarking on Forex, You
must possess clear knowledge of the difference between either of the
above 50%-portions. Otherwise..., You are doomed to loose even if You
follow Williams's technique, let alone other ones.
Even my students are in the position to advise what is to be added to
Alligator in order to realize proper entry vectoring. Least of all
would I want this example to be taken as a personal criticism of Bill
Williams, whose contribution to the Forex theory is a significant one.
And the majority of traders, like me, used to begin earning after
studying HIS books. But not to go astray..., even without any addenda
Williams managed to make a tremendous fortune, since a skilled trader
(moreover being the Alligator's father) is capable to differentiate
between a steady travel and a pullback, or, say, a flat, or, visa
versa, a trend low for the entry to be vectored oppositely. It is all
fairly understandable for an experienced trader. But what about
beginners as regards their interpretation of a flat, a recovery or a
trend change?
These folks are sure to require assistance, especially, in information
not presented in literature on Forex.
Without this knowledge a trader will never perceive the ABCs of stable
daily earnings. But why the Forex scholars do not clear out the issue?
This query is to be addressed to them, not to me. While reading these
opuses, I am getting horrified at the fact that we are being foisted
expensive high-sounding titled books, which are not going to ever
teach a trader how to attain profits at the market.
Let's open one of them (E. Nayman's "Trader's Minor Encyclopedia" and
"Master-trading: Secret Files") to get the understanding of the way
almost all the books on Forex are written and supposed to have the
price of USD20-100.
You may agree or not, but the name looks very beautiful and
pretentious: "Master-trading: Secret Files", 320 pages of sheer
secrets...
HOWEVER, I HAVEN'T FOUND ANY SECRETS THERE! You are welcome to discuss
an argue Yourself:
1. "The interrelation between fundamental factors and exchange rate
dynamics" being a detailed story of how a country's macroeconomic
growing, benign rumors trading and political stability promote the
exchange rate growth.
A "valuable" secret to be practically encountered in any Forex
edition. But below is a real FA secret (not paid any attention to by
Nayman): why does currency use to reverse against its country's
economic news? A whole chapter here will be dedicated to the issue.
2. "Construction of two moving averages on a single chart and twin
combinations thereof". The author furnishes a "wise" recommendation:
entries should be made in the direction the MAs diverge (adding
secretly that the most effective MA combination is 21, 55, 89, etc.,
as per Fibonacci).
The pseudo-secret nature of the above recommendation underlies the
fact that any MA combination (should it be 21+55, as the author's;
10+20 as in many Western trading systems; 5+8+13 as per B. Williams or
1+21 as used by numerous traders) yields the same results.
Ok. It all looks great. However, E. Nayman et al., seem to have
circumvented the MA intersection chief secret, through which traders
suffer constant losses: a "lighter" MA has crossed a "heavier" one,
say, upwards, but... thereafter there is sharp downturn resulting in
the MAs intersection again.
Fig. 6. GBPUSD H1 chart as of April, 21-26, 2005. (See Note below)
A fivefold reciprocating crossing of MA 21 and 55. You are welcome to
calculate traders' losses.
Now, let's call it a day with examples. The MA intersection technique
operates perfectly in certain circumstances, while turning out
impotent in others, thus inflicting losses upon traders. No criteria
have ever been stipulated by Forex scholars as to entries to be
effected pro- or counter-divergence of moving averages.
3. MACD construction and analysis. What sort of secret may one expect
from the following statement of Nayman's: "a subsequent high being
lower than the preceding one suggests a bullish trend depletion or
even its changing with the same being visa versa under minimum MACD
values". Much of a secret, isn't it? I thought it were the MACD
operation principle, familiar to any Forex novice. The secret-fancier
B. Williams hasn't even taken effort to advise to perform inputs
change from 9, 12, 26 into 5, 34, 5 to provide for a lag killer.
Assuming the above, authentic MACD secrets are not paid any attention
to by scholar, which fact inflicts losses upon traders. The situation
comes into effect, when upon a divergence formation, no trend change
is observed with another same-trend wave taking place instead.
Fig. 7. GBPUSD H1 chart as of April, 2005, where MA21 crosses MA55
with slight rise and sharp downturn. (See Note below)
Another example:
Fig. 8. GBPUSD H1 chart as of May, 2005: a divergence with MA10 upward
crossing MA21; a brief nudge up to 1.8916 and a sharp downturn. (See
Note below)
As different from Nayman and other Forex scholars, we'll touch in
detail upon the ways to detect when MACD is trustworthy as a trend
reversal attribute and when it is not.
4. TA classical patterns. One can not help smiling at the author
sharing a secret of "head'n'shoulders" and "double bottom" patterns,
being studied by beginners at the earliest lectures on Forex.
And here goes a real key secret: in what cases the patterns are indeed
indicative of a reversal but in what cases brokers trap TA pattern-
fanciers? Is there someone doubting the fact that patterns are known
not only to traders, but as well to brokers with their mouths watering
to make a rod for the backs of lovers and connoisseurs of the above
patterns, just like on the sample chart below:
Fig. 9. GBPUSD H1 chart as of May, 09-11, 2005, a classical "inverted
H&S" (See Note below)
At 1.8871 there's an impetuous upward breakthrough, the Alligator
rotating upwards, MACD above zero, MA8 having intersected MA21
upwards, the Williams vaunted Awesome Oscillator signaling long entry,
the Accelerator Oscillator pointing up... nevertheless, the rate
reaches as far as 1.8916 and slips down to 1.8481 by 450 pts.
To be noted: much worth scrutinizing is the phenomenon of Nayman's
"Trader's Minor Encyclopedia" and "Master-trading: secret files"
purported at understanding why over 90% of traders turn losers after
reading the books.
The solution, to my mind, is that the above opuses are but good "ABCs
OF FOREX" thus giving birth to all Nayman's merits and demerits.
The guy is primarily awardable for having spared beginners' paying
USD50-200 to various Forex training courses or academies. Instead, one
can download and study Nayman's books, whose extracts are, by the way,
quoted to trainees during their studies. Nayman is generally to be
expressed gratitude to, because of his having laid out the Forex basic
course in a competent, popular and accessible way.
This is the point, I elucidate to every beginner, being introduced to
me: first one should scrutinize Nayman's books, then only it's worth
discussing hooks and crooks of earning at Forex instead of loosing.
Nevertheless, there is a chief Nayman's self-delusion about his folios
really being in no way secret files with no one being able to find
anything new to enable oneself to improve one's Forex earnings. These
books containing neither unique techniques nor non-standard solutions
are famous for the generalization and systematization of what has been
the Forex knowledge prior to Nayman.
But this fact is not realized by majority gripped by the "Master-
trading: Secret Files" fascination, who open live accounts and turn
losers inevitably.
Shortly upon their pre-mature success on demo accounts these folks
hastened to open live accounts and faced losses. But since the
Dealers' staff managed to convince them in the incidental nature of
the above losses, the folks ventured to go live again and did again
turn to be deposit killers.
With these facts being proclaimed, I don't hold it appropriate to call
any statistics science for help. Any sensible man is to get the
understanding of the above losses as not being of an incidental
nature.
There could be NO OTHER WAY about it.
The next trader training level comprises books by B. Williams:
"Trading Chaos" and "New aspects of exchange trading", where the
author propounds his own Forex trading methods along with advertising
the other ones', viz. Elliott's.
My book, "Secrets Of Craftsmanship Narrated By Professional Trader Or
What B. Williams and E. Nayman Have Concealed From Traders" is
purported at developing of THAT particular school of training traders
to practical operation at Forex.
Hardly will anyone object to the fact that B. Williams will disclose
his Forex intimacies free of charge. Neither will he furnish their
100% disclosure after being paid to.
In all his splendor, Williams possessed sufficient knowledge to;- to
share A PORTION of his secrets in his "Trading Chaos";- to share A
PORTION of his secrets as a paid training;- not to share A PORTION of
his secrets in the least.
My book, "Secrets Of Craftsmanship Narrated By Professional Trader Or
What B. Williams and E. Nayman Have Concealed From Traders" is also
dedicated to teaching how the Williams secret methods are to be
decoded properly to ensure successful Forex trading capabilities. Each
of my book's 20 chapters is permeated with a common logic aimed at
finding relevant discrepancies in literature on Forex and at
presenting my personal technique of Forex trading.
B. Williams declares being capable of analyzing tens of currency pairs
(of 140-bar history each) that within tens of minutes, but in no way
does he explain how to, whereas, I explain, that it's feasible for any
wide-screen trader, provided my computer monitor being 3-currency
capable only (see: "Ally and adversary currencies").
B. Williams sings about his magic Alligator, while I disclose and
eliminate its pitfalls by, say, adding a MA233 thereto. This
arrangement visualizes the whole of the 4 potential currency travel
options: up/down above MA233; up/down under MA233.
B. Williams lists a stop-loss to be a "safety cushion", whereas I
disclose and eliminate its shortcomings by way of alternatively using
my own pending orders.
B. Williams hold trades volume to be authentic resistance breakthrough
criterion, while I quote reasons by which trades volume turns to be
deceptive on Metatrader platforms (thanks to the banks Consortium) and
I introduce my own levels true/false breach criteria. Now, regarding
trading on news, I demonstrate the way one can turn a loser if trade
like all the others and I offer my own on-news trading style.
(See continuation of this article under name Forex Secret. Forex
Literature As A 90-95% Of The Traders Loose Their Deposit. (Part II)
Note:Full text of this article and pictures of examples http://www.masterforex-v.su/
If you wish to be trained on Trading System Masterforex-V - one of new
and most effective techniques of trade on Forex in the world visit
http://www.masterforex-v.su/
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