exactly!!! known to everyone and there is no edge if it is known to everyone. you do not need edges you need everybody participating. this is theory it will not help anybody make money but just pointing out something purely theoretical and perhaps not understood by everyone.
I agree, but I think we are tackling two different things, so let's try and make this a bit clearer. You're speaking of information and, if it's not public, it won't have a major effect on the market until it's available for all (or at least most) market participants. For instance, even though a bank might know in advance that the the U.S. PMI dropped by a larger than expected amount, the actual effect of that information will only take place after hitting the markets. That's precisely how insider trading works -- you have an information in advance and you're able to act on it before everyone else. If the information is never made public, it simply won't have an impact on the markets, as you just said. However, what I'm talking about when it comes to trading systems (a set of variables which you analyze in order to have a statistical edge on any X number of trades) is that you're not looking to produce or achieve any particular piece of "information" but rather evaluate a specific aspect of market behavior at the present moment. In other words, you're looking for a characteristic rather than a piece of information that will be acted upon. Like I said, when selling an overbought RSI works, it is not because a lot of people were staring at the same indicator and collectively decided to sell. It most likely worked because it was able to detect an independent aspect of market behavior at that time: for whatever reason the majority of relevant market agents decided not to pay any higher prices and selling overcame buying. In that sense, you can have a unique trading system (i.e. one that only you will be looking at) and still use it successfully IF it helps you see a specific aspect of market behavior that tends to play out in one way over the other regardless of other people paying attention to it OR if it allows you to reach a conclusion that will be similar to that of enough relevant market agents, which are collectively capable of moving the market in that way. That's also why canonical uses of tools like the RSI are often not enough, because most of the time major players either don't care about it or will only use it to take advantage of naïve masses who will accumulate buy/sell orders in obvious areas (a.k.a. stop hunting). I'm sorry if I can't quite clearly explain my point, but this is a very foggy notion and I don't quite understand it myself as well. What I'm sure is that any given system should lead you to a more or less accurate evaluation of market behavior in a given moment, and it is that evaluation is what is capable of giving you an edge. Moreover, that should always relate to weakness or strength in price movement, simply because these are the factors that make it more or less likely that price will continue to move in one way or not. Relating back to the example of the ADX/BB system: if price is showing weakness, as determined by the calculations made by the ADX, and it also closes beyond 2 standard deviations from a 20 period simple moving average of price, it doesn't matter if other people are looking into the same stuff because if price is indeed weak in this situation, which repeats itself over time, in one or more markets, we have a statistically higher chance of prive moving back - and, therefore, a specific edge. Once again, sorry if I sound confusing/circular, like I said I'm still figuring a lot of stuff as I continue trading ahahahaha
Here, here!!! This notion does not come across as foggy to me at all. In fact, I think it is quite clear. And that a key characteristic of a winning system is that its focus is on an accurate evaluation of market behavior at a given moment was paramount for me, though I'm not as convinced that the system must necessarily relate to weakness or strength, so long as it is based on other factors that make it more likely price will continue to move in a given direction, as you stipulated.
I think you got some very nice results in there, how long is the testing period? When you feel confident enough, just go for it, man. Separate a small amount you're willing to lose and slowly start to get a feel of the live markets, one step at a time until you're able to operate without being affected by anxiety or other emotional/psychological factors.
Thank you Andre, I have been forward trading daily since July 2019, testing a few exit strategies along with study some price action theories. Study and practice is key. I like the one small step at a time approach. I am with TopStepTrader now as it holds me accountable and discipline at a small cost as I aim for funded status.
Nice! If you manage to keep these stats up, you should have no trouble getting funded soon enough. Best of luck!
The response to important information in the form of a change in supply or demand is not instant and stretched in time and the speed of response is proportional to the pace of "spreading" of the information, i.e. effect you are talking about is stretched in time. There is no market "majority" (most players as you said) cuz it is not an experiment where you pick two weights and put them on scales and with instant scale's reaction say that "majority" is on the left or on the right. Regarding your example bank possessing some insight will create first changes in supply/demand balance and for the next forces it will be easier to move price in this direction. Just my two cents.