[patryknextdoor]

Dear Ahmad,

As mentioned on facebook you did suggest to teach ,so let me keep it simple in those questions below:

1. Can you to teach me how to successfully trade & make money trading forex ?(scalping, daytrading and swing trading)

2. How to create ''home made'' trading system and which tools to use to improve my decision making in trading and gaining some edge? 

3.Can you teach me to analyse order flow and limit order book behaviour with python in real time?

4. How to understand market behaviour/dynamics and data generation process in the fx market?

I am very motivated and ambitious to learn no matter what you will direct me to learn i will go and i will learn it. 

Thank You in advance!
Best regards,

Patryk

[Hassam]

Let me try to answer your questions.

1. Teaching forex trading is just like any other skill. The teacher can try to teach but it depends on the student also. Just like a football team has got a coach, forex trading also needs coaching. Professional tennis players also have coaches. Coaching in forex trading can bring success I think.

2. Developing a trading system needs a lot of hard work. Patterns in the market keep on changing over the years. What worked 10 years ago, may not work now. But the basic principles of price action have not changed. Why? Price action is the result of human crowd behavior and will never change as human behavior does not change.

3. I have never used order flow in my trading. But I like your idea and I think we can work on the order flow and limit order book. We can use python. I have checked MQL5 Reference and it provides python commands to access the Depth of Market Order Flow in MT5.

4. Data generation in which sense? Market Microstructure perhaps? Can you clarify?

What we need to do is catch the big waves with a small stop loss like 100 pip with a 10 pip stop loss. If our win rate is just 50%, in 10 trades on average we make 500 pips and lose 50 pips. So we make net 450 pips. Watch the video below where I explain the concept in detail:

So we don't need a high winrate. We can make good money even with a winrate of 50% if the Reward/Risk of our trading strategy is high something like 10:1.

Regarding your question on Limit Order Book can you explain how you want to use it in trading. Right now I have no idea how we can use Limit Order Book in my trading strategy to make it more accurate. I know this fact that MT5 allows us to use python to access the Limit Order Book. I have done a little research but I haven't learned how to use it in my trading strategy. Maybe you have some ideas. Can you share your ideas on Limit Order Book?

[patryknextdoor]

1. As you mentioned : - Coaching in forex trading can bring success I think.
So my question is - Can you teach/coach me?

2. Developing a trading system needs a lot of hard work and i am willing to sacrifice myself to try to create one. I just need a coaching on that matter.

3. Reference material to order flow and Limit Order Book analysis i gathered from my research as an example in the videos below. I didn't find a specific framework but rather this concept that can be worked on i believe as i also found similar topics in various books.

Leda Braga: Data science and its role in investment strategy:
Short Part from (minute 20:00 to 21:00)
https://www.youtube.com/watch?v=9WDO8sqiy_Y&t=1271s

Analysing the Limit Order Book - A Deep Learning Approach:
https://www.youtube.com/watch?v=qxSh2VFmRGw&t=1s

4. My question regarding the data generation/creation process refers to material from my research i gathered over a last months and i hoped you can help me to answer this mystery puzzle : ( especially the last sentence )

''Patterns doesn’t necessarily mean the very well known visual chart formations (e.g. Butterfly etc.) only… but rather it can be comprised of various features that are often times ‘embedded’ in the time-series data.
These patterns and features can certainly , and effectively be discerned by means of machine learning methods.So to successfully attempt to extract capital from the financial markets is to become well versed in how time-series data typically price series, but not exclusively is created by the dynamics of how market participants behave and act upon the market trading-vehicles of interest.''

[Hassam]

I agree with you pattern does not mean the well known chart patterns. Patterns means time series patterns that have some statistical property that can be measured. I have watched the two videos but I couldn't find them useful. We need to work on Limit Order Book. I agree with you. MT5 allows us to use python to access the Limit Order Book. This Limit Order Book is only for that broker. But still we can get some useful information. I am not sure what right now. We need to work on it. Another problem that we have with Limit Order Book is of spoofing. You can place a big limit order to fool the market and then delete it.

[patryknextdoor]

'' You can place a big limit order to fool the market and then delete it. ''

Exactly right thats what i am thinking, why this book could be useful https://www.amazon.com/Market-Microstruc...0631207619
...Because it describes the characteristics of all participants for example 'bluffers' that might wanna fool market but i think it could be possible to detect with machine learning speed when such things happen in order not to get fooled.Analysing order flow for short term like few hours prediction could be potentially useful i think.

But i guess maybe game theory could help ? The sad thing is i only have the ideas but my skills dont allow me yet to practically work on them yet hahaha..

Also there is some thing called VPIN - probability of informed traders by Marco Lopez de Prado : https://quantresearch.org/VPIN.pdf

Do you think you can coach me on forex algorithmic trading? Are you still about to prepare the course and signal chat in the future that you said some time ago?

best regards

[Hassam]

I am coaching you on algorithmic trading with these replies. So your coaching is already taking place. You can post all your questions here and I will try to answer them if I know the answer. If I don't know the answer we can together try to find the answer. Did you read the books Market Wizard, New Market Wizard and the Unknown Market Wizards. All those market wizards traded based on their instincts increasing position size when they won and decreasing position size when they lost. Randy McKay started with $1000 and after a few years was opening $10-15 million trades. I believe in these market wizards and their instincts. If machine learning can give us the edge we should use it. But building a good machine learning model is not easy. Even Medallion Fund has a manager who is their to override trades if he thinks that the signal is wrong.

[patryknextdoor]

Thank You!
1.
I recognise that you really push me for the market wizards.. Do you have favourite chapters from the Market Wizards books all the editions that you could me to point out to?
I did read the Market Wizards the first oldest edition i think , as we discussed it some time ago on facebook. Unfortunately a lot of chapters are not about forex trading and it seems like the interview is in the 90's which is maybe old view on the topic(but can be still useful)
and they are chit chatting a lot of not forex relevant stuff but i am open to read it just let me know if there are some special chapters that are relevant.Otherwise i will read other editions fully

2.
Regarding machine learning i never wanted to automate my stuff but to learn relevant skills and get edge from ML to support the decision making or insight form the financial data / live data.

Is it a good idea to create currency strength meter based on RSI and then apply and fit a linear model (as indicator) around this single currency strength and use it in actual trading to predict price/path from individual currency strength?

[Hassam]

All the Market Wizard books are worth reading. Like you I ignored them for a number of years. But then somehow thought of reading them again. I have found many things in these interviews that have helped me become more confident as a trader and improve my risk management especially when you lose, it is important how to cope with the loss as it is painful and disorienting. Most of the traders trade futures in these books. I think currency trading was not yet You should read the first chapters of Market Wizard on Michael Marcus and Bruce Kovner. In the New Market Wizards you should read about Randy McKay.

Today I missed a 200 pip USDJPY trade. USDJPY is in a strong uptrend. On Sunday I had this idea that the first thing on Monday I will do it open the USDJPY long trade. But I slept late and when I checked the charts it has already climbed 200 pips. I think forex trading, playing professional golf, tennis or football all have something common. You need practice and training to hone your skills and this is the only way to win.

[patryknextdoor]

Hi Sir I read the story about Randy Mc kay
from the new market wizard

My key take away notes are:

He was Interested in market mechanics
Price can move according to markets psychology
Fear greed anxiety can be Observable on charts
Broker Customers moods translating into orders and the into market movements
Banks trading forward currency markets equivalent to futures
Maximum daily price changed is restricted by specified limit … limit up refers to price raise of this magnitude
Using price respond on fundamentals for forecasting
Not trying to catch tops or bottoms but Waiting for move to get on the way and then Enter
Determinning why winner trades are winners and why looser trades are loosers and trying to minimize losses maximize winners
Personal trading style adjustment is important