MightyMouse

I analyzed about 8 years of ES data ending in about 2009 comparing the RTH to the overnight to a buy and hold for the whole year. My crude findings seemed to show that the bulk of the move in ES occurred in the overnight session, regardless of whether it was a bull or bear market. The interesting observation was that in a bear market. where the buy and hold strategy would have produced an overall loss, the bulk of the move down occurred in the overnight. Also, when the buy and hold strategy would have produced a gain, the bulk of the move occurred during the overnight. There were periods, during the bear market, that would have netted a profit if you had bought the open of the RTH and sold the close of the RTH. Conversely, there were periods, during the bull markets, that would have netted a loss if you bought the open and sold the close of the RTH. Or, put another way, you would have been better off buying the open and selling the close of the overnight session during a bull market and doing the converse during a bear market. Yes, you need to know for sure if it is a bull or bear market, but the goal of the study was not to attempt to figure out a "set it and forget it" strategy for trading ES.

You can't learn how to trade the markets if you don't already know how to trade. If you know how to trade then trading the markets becomes doable and there is no need to pay someone to learn how to trade. I agree with a lot of the reasons mentioned by Steve above about why you wouldn't be able to find someone worth learning from if you were willing to pay. Trading is knowing how to buy low or sell high. It is understanding when, if, or where, there is going to be demand or when, if, or where there is going to be supply. Some people develop a knack for this beginning when they are toddlers, way before they ever know what a financial or commodities market is; others simply do not get it and are continuously fooled into paying to much or selling too low. If you know how to do this before you learn about markets, then transferring your mindset to the markets is not that hard. If you need to learn to trade and then learn to trade the markets at the same time, you are probably doomed. When you trade you are buying from sellers and selling to buyers in the same way that any other buyer or seller of goods and services operates. In the same way, you need to perceive that there will be buyers at higher prices if you wish to buy now or sellers at lower prices if you wish to sell now; otherwise, there is no point to buying or selling. If you are going to buy because the market is at "support", or because of a fib retracement or its proximity to a value node, there will be many times that a guy like me will pay for your lunch, but on balance, you will pay for my vacations, redo my bathroom, etc, and end up throwing up your lunch. I will trade you a few lunches or dinners for a vacation anytime. If you know how to trade, then shadowing someone who is taking money from the markets, would not be a bad idea. It might be a short cut to stripping away a lot of the myths about trading.

I know that when I have a few beers, thoughts of the market get crowded out and are replaced with the desire to see more of the rose and thorns tattoo on the lower back of someone half my age. I give you credit for remaining focused on the market.

Rande, I completely expect the your next post to explain how fears were injected into the earth's soil as a means of retaliating against the slaughter of alien forms who visited the earth millions of years ago, peacefully seeking refuge. So, fear is part of every carbon molecule that forms our being, MM

Not to nit pick, but if each cycle is different from the last, then it really doesn't have the nature of being cyclical.

Isn't it just gorgeous that way? seriously. In the longer timeframe the daily moves and trends really just blur into trends and ranges. A profile, like the one to the very right, is really just a trend move away from the lower balances. Conversely, the moves within the balance area are really just moves within the range or balance area even though they felt like trends during the day time frame. If you go back and look at day trades you might have taken, in hind sight, you will be able to see why some of the trades really had no chance of working out and on other days when you performed brilliantly, you can also see why. Learning to distinguish between the trend and balance periods is key. Thanks for the charts

Yes. A box for each distribution. and box for trends. trends will appear as, well, trends; no balance to them. The balance areas will show the migration of long term value. You already have it boxed. You get decent info from the different sized and shapes of the various balance areas that emerge, including time.

TN, Can you post the the same chart and separate the range/balance volume profile areas from the trend periods? You've outlined the areas. see the volume profiles for those areas separated is more pleasing to the mind. You'll see price leave return and reject or accept a lot cleaner in my opinion. I am sorry to see you abandoned the James and the Giant Peach theme. MM

Most people who go to bars are not responsible enough to a a cold one.

Trying to trade a range as if it is a trend will kill a trader and trying to trade a trend as if it is a range will also kill a trader. I will bet anything that every blown account can be narrowed to either the former or latter or both. I call A or D a range or bracket.

I am grateful that I manage to give enough thought to the color of the light. It helps get me home in one piece. I admit that I have never once thought of how much the light cost or if it's construction and implementation went out to competitive bidding. On the other hand, this is the period of the year when I detest everything at the federal and state level, so I suppose that would include you traffic light. Anarchy has a certain appeal to it.

Euro stuck a toe beneath 1.3 and is currently breaking my heart. Let profligacy prevail!

We were well on our way to the 60's, or so it seemed, before there was renewed middle east tension. The unknowns related to Iran probably have to play out first. Unknowns = bombings

Tom, There is a lot to be learned from this thread if the OP is honest about his trades even though it may not benefit a veteran trader. If he is honest about his trades, then viewers will see the true nature of what trading is. It will be a record of both good and bad calls, lucky breaks and bad luck, winning months and losing months, etc. A viewer will see that there is no secret sauce to the method since the method will work and not work over time. In short, it will be a mirror of the life of a trader with a trading caliber of the OP and that can be very valuable for some to view. I do agree that the wrong message for traders would be to try to duplicate the OP's method. As in, If I can do what he does, then I can make money too. His trades will be a result of his risk tolerance, his interpretation of events, the size of his account, if he fought with his wife this morning, and etc. Most of which will not be the same for each trader, leading to very different results no matter how hard one tries. If he is dishonest about his trades and shows entries that occur when the market is 5 pts away from his entry which was a tick of so from the turn, or he posts after-the-fact-exits that were within a tick of the high or low, depending on if he was long or short, then we will all know that he is just another charlatan with ulterior motives like so many that came before him. Many observers of the thread, will call him on it and spend an inordinate amount of time exposing him for what he is. MM

It may be helpful over time to view price as the resulting actions of traders. When you view it that way, then think about who the traders are. Who meaning short term, long term, well capitalized, poorly capitalized, experienced, inexperienced, etc. Then think about where or when each of the traders may enter. So, do you expect long term highly capitalized traders to react on a pull back you see on a 15 minute chart that is really no where in the middle of a daily range? Do you expect a pull back, that you see on anything < daily, to hold when the market you are watching is at the top of a multi month range because of who also may be deciding to take a trade? There aren't simple answers to these questions, and you will get it wrong a lot but you can get them right if you are very familiar with the market you are trading. If you practice, you will be viewing the market as the action of traders instead of the movement of price, and you won't be wondering about mathematical formulas that will reveal secrets. When you do nail what is going on, you will be in the market benefiting from what is going on and more than compensating for the times you were completely wrong. Never forget that we are trading traders. If it were math, then 2 + 2 would always = 4 and that just doesn't happen in the market.

The only potential instinct that a human has is an infant's sucking instinct when placed near a breast. I have been in trades that have left my mouth in a sucking motion so instinct may in fact be a part of trading.

I am confused. I thought that no one works or has to pay income tax in Canada. Your best bet is to contact an accountant.

Your equity curve sucks. I would definitely keep playing with the stops and, generally, keep tweaking it until you can get the curve to have an undefined slope. Why deal with reality when fantasy is so much more fun? Go for it! Settle for nothing less than vertical.

I completely agree. And will add that most times, especially starting out, the plan is flawed which then means that you have a better chance of succeeding if you do not follow the plan than if you do.

Hmm. Not sure how you can tell if there is supply or not without a decent measure of volume which is not available in currencies. As far as the original question, there is accumulation here and will be accumulation down to 1.3 which is widely seen as support. Because of the lack of a decent volume measure, it is difficult to tell if the accumulation is weak buying or strong buying. If there are weak buyers, they will sell against themselves and will provide a great deal of the supply needed to scare away the buyers, pushing the market through the 1.3 level. If they are not weak, then those who attempt to probe the market lower will not find sellers to buy from and will be forced to buy from sellers at higher prices. I don't think the shape of the bars will help out too much and could lead to faulty conclusions. I do hope your analysis is correct since I am short biased the euro.

No one, not even the ghost of Wyckoff, can look at an area and say that it is accumulation of distribution before the fact. "Smart Money" or "Composite Man", if you will, adjusts quickly to his mistaken direction, if he is mistaken, but that is only after the fact. I certainly understand your need to sell; hopefully, you can understand my need to sift out the BS.

Great argument in "freakonomics" on why Guilliani shouldn't be credited for cleaning up NYC.

Ha ha. Star wasn't it?

Really nice volatility. You guys should get some nice mileage out of this if you get the direction right. Don't sweat the small losers. A lot of the knife catchers are going to have to square up.

I have a short bias. I can't guess where the euro will be at the end of 2012, but I can guess that it will have moved about $.25 So we might hit a low of about 1.06 and close somewhere between 1.06 and 1.3.