Patuca

i don't think you can patent a mathematical formula but you can a visual representation (such as a chart..etc.) that may have that formula in its' number crunching. The visual representation would be a creation.

I would suspect he means a micro trend within the larger range. The sideways range for 40 or so bars before the reversal bar he indicates had several micro trends. Buy when the candle is red? That is true if trading the range and the red candle is near the bottom of the range. . Obviousley the reversal bar was at the bottom of the range. I would have place a limit buy order at the bottom of this range before the reversal bar showed up. So as mr horseshoes says I would be catchng a falling knife. However markets tend to keep doing what they have been doing. We have at least 40 bars of sideways. Since most breakouts fail the odds of a few more bars of sideways movement especially that late in the day were good. If the knife kept falling and a breakout south from the range took place i would be out on a stoploss. However by taking the risks and buying near the bottom of the range I would be in the money while others are still waiting for confirmation. If price were at the top of the range I would be shorting a green bar before I get a reversal bar.

Try steve46 of post #32 simplified reversion regression system to the mean. You can find his system in another TL thread. It was, of course, designed by superior intelligence. Everybody else is a dimwit and at best a comedy show. I would suggest you gather up your books and throw them in the garbage. Then get on your motorcycle and race down to Barnes and Nobles or Books a Million and buy the simple glowlight NOOK ereader. This way you get read at night and not bother your mate. Then with credit card in hand go online to Barnes and Nobles and set up an account for the nook. Buy three ebooks by a Mr Brooks. 1) Trading Price Action Reversals 2) Trading Price Action Trends 3) Trading Price Action Ranges Then go to Traderspress and buy the ebook The Taylor Trading Technique Take one year and study these four books well. Study them and highlight and make notes in your Nook. Read them multiple times. Study them and re-study them. Study them until you can't stand it any more. Then takes a month break and study them again. AFTER all this studying open an account with your 5000. Pick one market ...like say... the ES. Watch it day in and day out for 3 months. Try to discern price action and the price action setups Brooks discusses. Trade with a sim for 3 more months. Then Sim trade both Taylor and Brooks methods another 2 months. You will need no other books. Do not trade with live money until you can be profitable with a sim. Live trading is harder. If you can't be successful on a sim you won't be live. IF you can make money on a sim you MIGHT make money going live. If you can't trade successfully on a sim then the Ebay option would be best as you will simply blow your account. I know you probally won't take heed to this post. Too much work. Too much trouble. Authors too hard to understand. A few years down the road you ....just might...revert...regress...and buy the books. At least save this post. good trading

To make something simple is very difficult to do. It is a complicated thing to design something simple. Especially, in the trading world where there are so many variables. Every event you can conceive of has probabilities. Even events you have not yet thought of or conceived. Just a few years ago how many of us would have conceived the role algos would play and in fact do play now in trading? It seems to me one has to go back to basics and answer questions such as "why do people or algos buy and sell?" Other than to make money, that is. Designs system around the basic questions for whatever time frame you looking at trading. Reduce things as much as possible to a lowest common denominator. Simple systems are easily reproduced. Easily duplicated. Easily understood. They can be implemented easier. They can be multiplied and repeated easier and faster. To make things simple and keep them simple can be complicated but the end result is that they are usually more profitable. At least for me. And I am one who likes to jump on my motorcyle and feel the wind in my face and smell the freshly cut grass....

It is hard to say. Especially when the market can be so mean and revert right back after taking out your stop loss

if paper said it closes at 1460 on said day then 20 seconds before the close I would short 2000 contracts if it is above the close and make my target profit 2 ticks above 1460. If it is trading below the 1460 when at 20 seconds before the close I would go long 2000 contracts with target profit 2 ticks below 1460. i would use no stop loss.

Wouldn't verify then trust be smarter?

if one wants to be a day trader then pick one or two markets. watch them live for three or four months every day just to get a feel how they move. watch in different time frame..30 min..15..5min..1 min..etc. better yet record each days session and watch in different time frames as you are able. just make sure you get at least 3 months watching time...no trading..no sim.. just watching and observing how that particular market moves in different time frames. just getting a general feel for the market. during this time try to determine what time period you would be more comfortable trading. much of trading is about "discovery". from observing the charts in different time frame over 4 months or so you should have probally seen that prices trend up or down. they also trade in ranges where they basically track sideways. most ranges will also have micro trends within them. my idea of trading (simplistic as it may seem) is too take advantage of what happens over and over in the markets..i.e. trends and ranges. in trends i have discovered that trading pullbacks in trends is a good strategy. not just any trend trading methodolgy but trading "with" trend strategies that enter on pullbacks. simple but effective. you just need to make sure you are doing this in a trend and not a micro trend. markets tend to trend probally 30% of the time or so. of course that varies some but i am speaking in general terms. next develop or find range trading strategies. since markets track sideways about 70% of the time in general, this too is an effective strategy. basically you would develop or find techniques that give entry for shorting near top of the range and entries for going long near the bottom. focus on one or two markets..learn them well...then sim them for a few months..then and only then look at going live. keep things simple..use candles..focus on PA learn a few things well..practice them alot..then look at trading...follow the obvious in the markets..

knight-mare. hope they can wake up and shake it off..this is bad bad news when professionals blow it like this...

really? ALL trends will have pullbacks. most pullbacks are small trading ranges. then either the trend will resume in the original same direction (this happens most of the time in strong trends) or there will be a larger trading range that will begin to form. Or price will break out of the small trading range (i.e. the pullback) in the opposite direction. One of three things. How do we know an old man from a young one? color of hair?..no teeth? bent over? shuffling feet?...crackling of voice? ...wrinkled face?...shaking hands?...passing gas while in line?...combination? Point is we look and observe and interpret and come to a conclusion. I always say observe the obvious and have the will to go with it. but just in case you interpreted wrong or the old man was faking all of the above then you have stop losses.

statistics...software glitches...whatever was the problem we may never really know but either way these best and brightest at Knight apparently screwed up big time. maybe they ain't so bright after all to put at risk the existence of their entire company in 45minutes? electronic trading with algos..HFT...then all the dark pools...etc ..well we have created a monster. i am sure that in time they will sort thru it all. at least one hopes so. but things will first heat up even more. there will be more meltdowns and bigger meltdowns. Artificial Intelligence slavishly obeys the rules it has been given. this will lead to more meltdowns. then you get more and more algos that feed off other algo's and discover loopholes which they exploit. each one adds more complexity...which adds more problems...by the time the problems are solved the algos are irrelevant so new ones have to be designed and employed. I could be wrong but in my thinking the individual trader cannot compete on the same footing as these HFT's. however, algo's... HFT..dark pools...but....whatever else comes along if one sticks with the basics they should be able to make money. the structure and DNA of the market is the same as 50 years ago. to make money the market has to move. It can move up or down or sideways. there has to be trends and ranges. always has been that way and always will be...at least in the forseeable future. "how" each of those are made will change as time goes by and technology changes. its a matter of adapting tactically to the way in which these moves are made. but the moves will be there. some think the moves may in fact become more precise because it is supposed that Artifical Intelligence handles statistics better and more efficient than humans. if that is the case then the human mind can also learn to read the moves (without seeing the statistics)...just as one used to outsmart a MM or the specialist...because all things have to have some sort of structure. Algos which are designed by humans will create a structure and in fact have already done so, since much of the trading done now is done this way. where there is structure there will be patterns. where there is patterns they can be exploited. I suppose that in a way backs up your argument. however, since most of us cannot compete on the micro level in this nano second world of statistics it sees to me we will be forced to observe and learn (and much of that visually) "how" the patterns are formed that lead into trends and ranges..etc. then adapt tactically. i am always amazed how computers make people more stupid when it comes to common sense. Just try to buy something in a store when the computers are down. Do we really want a world that computers and machines dictate to us what we can and can't do and when we can do it? I know that is already here but do we really want to relinquish ALL of our endeavors and the control of our lives over to artificial intelligence. I think the human spirit will rise about all this BS. but it may be the next generation that does this. in the meantime we have to quit leaning on the shovel handle and start digging the ditch, if we ever hope to get anywhere. there are different ways to dig but the ditch has to get dug. So...lets lift our glasses to Knight and cheer them on. perhaps their best and brightest will figure a way out of this mess they may have created. in the meantime i am sure a few heads will roll and I am quite confident we will really never know exactly what happened. Knight themselves may never really know...maybe another algo ate their algo? at any rate their breakfast..lunch..and supper was eaten. they are left with a midnight snack. time for a motorcycle ride with the wind blowing in my face and the smell of freshly cut green grass filling my nostrils.....good day

trading is as much an art as a science. actually, probally more art than science. Statistics can be useful but they aren't the holy grail of trading. algos fail and it is supposed they are better at handling statistics than humans. for a more recent example just talk to Knight. back to art ...there are many ways to paint the same scene.

you are trading pullbacks in trends. this is your edge. 1) intermediate trend for the day is up. there is a pullback. then trend continues up breaking out of the pullback. it does so with gusto. fairly fast paced...got some zip and swoosh to it. 2) now intermediate trend is up another pullback. looks almost identical in terms of points and the look of the candles. however, it was made in a different way...lazy...no punch..drifting...lazy walk on a summer day..just ain't got the move so.....since you are trading pullbacks in a defined intermediate trend do you trade EVERY pullback that has a breakout regardless of how that pullback was made? or do you cherry pick your pullbacks? all or none? none or all? if you know from experience that that the second kind of price action usually doesn't go far then do you still take the trade to be statistically correct and not cherry pick or do you in fact make judgement on each and every pullback? i walked in a store yesterday. they had a sign up at the register on their policy for selling tobacco: "All must present an ID without exception" i quizzed the cashier..."if an 80 year old, bent over man, walking with a cane came in here and bought a pack of cigs would you ask to see his ID?" she promptly responded YES. I said "that defies common sense" She said "I know". i left the store and went to another store. they had basically the same sign at the register but for alcohol. i asked this cashier the same question.....80 year old bent over" man walking with cane...da...da..She promptly responded: Yes I would ID him. I said that defies common sense. She then said "we don't make the laws we just obey them". That says something about the dipsticks that made the laws. I don't know about you guys but I ain't taking no BS trade when my common sense and experiece tells me that this pullback will probally not work. Just because my rules tell me to trade breakouts from pullback doesn't mean I have to take every stinking trade. i have been know to adjust my SL if i think the situation warrants it.. now I may have to get on motorcyle and ride out of here. I am not going to be no slave to no rules. rules are made to be kept. they are also made to be broken... circumstances tell which one....they can fire my ass or throw me in jail but i ain't gonna ask no 80 year old man bent over and leaning on a cane for his ID. that is STUPID STUPID STUPID bye

in the markets the goal is "to make money" (some may also have as part of their goal...enjoy the ride) IMO Rules are (or should be) derived from principles. for instance: show kindness is a principle. i may have the following rules that will help me implement that principle: 1) speak to people when i enter a room 2) open a door for the ladies and elderly 3) let a driver in my lane where traffic is backed up 4) don't cuss out the neighbor because his dog came over in my yard and took a crap. etc...etc...etc in trading an example of a principle, at least to me, is something like "only trade with the larger trend" rules would be "entry" "exits" SL, Profit targets, etc ......etc i.e. I would design rules that help me accomplish trading with the trend so that i can make money with that principle. it is much like strategies and tactics. there is always strategical and tactical elements to any endeavor. that is, "what" are we going to do or accomplish and "how" are we going to do it. now we can be wrong strategically or tactically. We have to be able to determine in which area the error was in and make adjustment. there is logic to the markets but they are also chaotic. that really complicates matters because on one day a tactic based upon a principle works just fine and a nice profit is made. on another the day the same almost exact situation presents itself..the same tactic is employed... based on the same principle... but one loses money instead of making money. that is why stop losses are employed. because of the chaotic nature of the markets. if the markets were entirely logical all we would have to do is figure out that logic and presto.... however, in general, IMO.... good, sound principles..coupled with logical rules..in the long run will probally work out...depending on the trader. because we have the markets and they are logical and chaotic and we have the trader who is also logical and also chaotic. so bottom line we are dealing with logic and we are dealing with chaos...some would even say there is indeed a logic to what appears to be chaotic. and there is chaos to what appears to be logical.. we do the best we can with what we have to work with. in general my philosophy is simply to try and observe the ebb and flows of the market and attempt to go with what the market appears to be doing because the market generally continues doing what it is doing until there is a reversal or reason for change.... i know that sounds simplistic..probally is...i observe what it is doing and try to anticipate what it may do...if it doesn't in fact to what i thought it may do then that is what my stop losses are for. the old saying.."the trend is your friend...until the trend ends".

LOL S46 won't be back........for a while. He tends to get mad at what he thinks is inferior intelligence and then tramps off for a while...but he will eventually come back....always does. Scalping of course can be done 2 ticks to 1 pt is about what I consider a scalp. This can be done in spite of bots..algo..hft...etc. There is no way to figure out all the bots....even if one could, there is no way to effectively use the info for trading purpose. a new bot would come along. then 100...then 1000...then 10,000. My ideas for scalping is scalp with trend using pullbacks. Scalp with trend in strong trends. Scalp with good reversals. Scalp trading ranges by shorting at top and long at the bottom. Bots or no bots there will always be trends..pullbacks...trading ranges. Always have existed and always will. It is the nature or DNA of the markets. Regardless of who makes the trends...pullbacks..ranges..bots..hft.. or people. So my theory is take what always happens and trade it. If ones timing is wrong and their stops keep getting hit then they could be right strategically but using wrong tactics and will need adjustment to their implementation of the strategy. Even the much vaunted reward to risk calculation may need some modification for scalping purposes in the world of bots...hft..etc.

Look at a chart in precomputers times. Say from the 50's. Compare it with a chart in the present time where algo and HFT take place. Basically you will still see trends, pullbacks, and trading ranges. They were tradeable then and they still are. Strategically, they can all be traded. Tactically, entries..exits..stop losses may have to be adjusted.

so no adaptation have to be made for HFT and algo trading?

I would see the strategy level as things like countertrend trading or trading with trend. Tactics would be "how" one actually implements countertrend trades or trades with trend. Tactics are the techniques. The entry and the exits..etc..

with lowtrades and just2trade you can trade penny stocks under 1.00 share up to 100,000 shares I believe it is for the same comm fee. You are allowed to for instance to buy 10,000 shares of XXX company in the morning and sell it the same day and the next day your funds will be available to you again for trading (in a margin account under 25,000). What you cannot do is make multiple buy and sell of the same company, the same day, unless you maintain over 25,000 in your account. both brokerage have nasdaq and NYSE stocks. If you have a cash account then you cannot have the funds av ailable for trading the next day as mentioned above. You have to wait the entire time until settlement date. I have found no other broker that allows you to trade the amount of penny stocks for the fees Just2trade/lowtrades charges. if trading pennies is what you wish to do then I would suggest considering either of them.

Check out Lowtrades.com and Just2Trade.com. The former charges $4.95 comm and the latter $2.50. There is no min amount to open a cash account for Lowtrades. For a margin account you will need 2000.00. For Just2trade I think you need a min of 2000.00 or 2500 to open a margin account but comm are 5.00 roundtrip. I trade futures and stocks and have maintained my stock accounts with both Lowtrades and Just2trade for years. Both are branches or depts of Successtrade.com. So here you got 3 choices: Lowtrades, Just2trade, or Successtrade.

captain bob there is no way that is mitsubishi. he would never be sleeping while he has a position. he would be out polishing his emini cooper or gardening while his long position is headed south. he specializes in the north end of a chicken heading south. That is, when he is not gambling by playing the modern day bucket shops. that picture could actually be insulting to him as he fancies himself as the modern day LIVERMORE you know...per his avatar. Of course, my avatar doesn't say much for me and and i quite confident mitsubishi will drum up something to say about my avatar but lo que sera sera.

now now now mitsubishi for someone who understood george douglass taylor on first read and hates experts i am quite surprised at your latest trading tactic. but there may be some justification for such a tactic. i am trying to help you here mitsubishi. perhaps the pic will give a possible explanation for using such a tactic. btw what happened to our friend mr felton? i dared him with the mitsubishi black box trading challenge and he is not answering back?? captain bob good to see you again. whats it like over there? well it may be getting time to ride off in the sunset...or visit some other country. the high and mighty USA is getting boring. been here a few months. too many egotistical people here... i may have to write a book on "Humility and How I Obtained It"

don't you think that is a little overkill? thats it. i am not giving out anymore of my trading secrets such as go long when my motorcycle shifts from 1st to second gear and get out of your position when i hit the final gear. Or go short when I begin gearing down and cover when i am in first gear. you on your own mitsubishi you little snail..go back to polishing your emini cooper.

LOL that is a great post mitsubishi. I can't help but like you! Good sense of humor.:applaud:

i failed to answer your question about using the dom as a sort of confirmation to going long on a pullback in an uptrend. in my experience the dom would not be too helpful in this as usually the dom is good for reading 1 to 2 maybe a max of 4 ticks profit. that is, the dom is useful for scalping, not so useful for trading pullbacks. i think the heikin ashi e mini naz would be much more useful than the dom for your purposes. you may have to play around to see how to use it in conjunction with a 15 min es chart but it is useful using it with a 5 min.