DbPhoenix

I suggest that you and Neg review your comments regarding KISS and "YAFS" and how those relate to those, like me, who believe that trading is far simpler than the two of you insist that it is. If the prompt for my remarks remains a mystery to you, then that's that. Unless you continue to pursue it, we are. Db

Not necessarily, if one knows how to tell up from down. None of which is particularly pertinent. The fact that many people cannot do something simple does not make it not simple unless one equates "simple" with "easy". And if someone spends 10 years trying before he is able to make a little money, perhaps the problem lies within the individual rather than "complexity" of the task. They may or may not be successful, just as you may or may not be successful. But none of that has anything to do with whether or not trading, or "learning to trade", is simple. Db

"Bar" is unfortunately a necessity since that's all that anybody knows. If I insisted that everyone use line charts, I'd be talking to myself. If I insisted that everyone use tic charts, their heads would explode. If and when you become comfortable with the notion of price movement as a movie (a continuous line) and not a slideshow (bars, candles, etc), you will be able to see the line and the waves in a bar chart. The bars will, in effect, disappear. You will have swallowed the red pill. If price bounces off the "low" of a bar and "closes" in the middle, you will see the wave that that bar represents. Or you won't. But when trying to learn how to interpret price movement, or talk about it with others, one needs a common frame of reference, and bars are about as common as it gets, especially if one is looking at pre-1990 charts. Therefore, even though there is no open or close (each wave does have a high and a low, or a peak and a trough), using bars to locate points on the chart can be helpful. But one must remember that the bar is not price; the bar is only a representation of price, and at that it is only a snapshot of a particular time in price. Price does not open or close anymore than time does. As for W, the OHLC for each day was all traders and investors had back in the day, so that was the common frame of reference. As for intraday, there were only notations, usually in the form of P&F, often on scratch paper, or the back of envelopes (how else to keep track). Nothing elaborate, just some means of locating oneself in the stream: price was here, now it's there, now it's back here again and whoops there it goes up there, and now it's back here again -- Support! And so on. Traders back then had no difficulty understanding the continuity of price because that's all there was. It takes a while to get used to this, but it will take even longer -- sometimes much longer -- if you concern yourself with entries and exits. Once you start thinking about trades, you monitor price in a different way, most often in relation to where you entered. But the market doesn't know where you entered and wouldn't care if it did. Your task is to follow and observe price movement, not to worry about how it all relates to some trade you are in. If you are unable to observe and evaluate price movement in and of itself, you won't know what to do when it threatens some trade that you will take in the future, and you'll be back where you started. Bloc offers a good example of how to approach this. Study his charts and his notes. If you find yourself wondering where he entered, you're on the wrong track. Bang your head against the wall and relocate your objective. Db

Well, not weeks The process of defining and the process of backtesting are synergistic. But I'll wait till you've gone over my posted chart before I say more. Db

Don't let it bother you, John. Anybody else looking to be insulted? Db

That is your opinion. It is not demonstrable fact. I am neither. This may be time-consuming, but it is not complicated. Nor is it particularly difficult A layman may have no clue as to what you were saying, but so what? None of this is necessary. Simple is not simple-minded. Repeating something many times does not make it so. If you want to believe that trading is complicated because that has been your experience, great. But that does not make it true for everyone. Db

This thread doesn't get used enough, and it should be. If one missed something (and one always misses something), it's very important to try and figure out WHY he missed it AND what he can do to keep himself from missing again in the future. So, while today is still fresh in everyone's mind, let's look at what CWS been done. First, 36 is/was R. Take my word for it or look at the charts that everybody posted this morning. One could just jump onto this and ride the wave or he could wait for a RET. If one is using 1m charts, he'd have to watch the C "notch" in order to find it in a fast-moving market. Here, the arrow points to what would be a more obvious RET with a 30s or 15s interval. Second, if one did take this, he might be tempted to exit at the break of the SL (the circle). However, someone with a stronger stomach might wait to see just what buyers can accomplish here. As it turned out, not much. The best they could do could hardly get past the previous bar, much less the opening bar of the RET. And that effort closed rather poorly, closing in the middle of the bar (the weakness is more obvious on a smaller interval). Third, when a LL is made, a new SL can be drawn. When this is broken and a rally attempt is made, one can see that the peak of this rally coincides with the first stall on the way down. This suggests -- but does not guarantee -- that the rally may be running out of steam. Fourth, once another SL is drawn, one can be tempted to exit the break, but if he wasn't fast enough, he might notice that the RET can't get past the LSH and decide to stay in after all. Or, if he did exit, he might decide to re-enter on the RET and an anticipated continuation of the downmove, particularly since this rally attempt is choked off so rapidly. Unfortunately, all this takes place off a higher low, and shorting off a higher low can be problematic, particularly if one is anticipating a hinge. Price can, after all, just drift sideways, or there can be fakeouts from either or both sides. Even if one ignores -- or never thinks about -- the hinge, the fact that price is able to move slightly more than 50% back into the downswing is not encouraging. But, as mentioned, the attempt is choked off rapidly (on the one hand, on the other hand, on the third hand, etc.). So the risks involved here must be assessed very quickly. Fifth, after that, it's just TLs. Db

No, I did not miss your point. I understood your point. I disagree with your point. But that does not make me or anyone who agrees with me stupid. Your "you are fucking stupid" remark was indeed excessive. Whether or not it was said with tongue in cheek is irrelevant. As for thales' daughter, since your emini thread referenced his in the first post, I had assumed you had read it. If you haven't, I suggest you do so and learn something about what can be accomplished via simplicity. And please note once and for all that "simple" and "easy" are not the same thing. Db

Aren't you two carrying things a bit far? You're exhibiting the same hindsight bias that the emotion people do, that however you did/do it is the best/only way to do it, and anyone who doesn't see it that way is "fucking stupid". I'm not impressed by arguments that complicated analyses are necessary when the analyses are so often wrong. And while I'm not trying to pick a fight, I do want to point out to beginners who might read this stuff that none of it is necessarily true. If one has been persuaded that trading absolutely must be complicated, talk to thalestrader's daughter. Fucking Stupid

Play with it however you choose. The playing is a large component of the learning. Db

True, which is why I've said that a backtest ought to cover at least a year. But a journey of a thousand miles etc etc Actually, it's very easy, though, as you point out, tons of screen time is necessary. As for defining the BO, that's the purpose of backtesting. Not a good idea. The two aren't related, and most people have enough to unlearn as it is. Db

This is the sort of question best answered by testing rather than through logic since so many variables are involved. But that's the nature of discretionary trading. Tell you what. You were asking about bloc's entry on the following chart. There are many possible entries. How might one evaluate each of them? Which ones are worth taking and which not? And why?

I wanted to make it as simple as I could. 1m OHLC bars on a plain, white background, freely available online to anyone who's interested. If a beginner requires an assortment of crutches to determine whether price is going up or down, then this isn't for him. As I said at the beginning of the TBP thread, TBP demands a conceptual and perceptual adjustment that many/most traders can't make, and of those who can make it, many/most choose not to, for whatever reason, which is none of my business. By presenting the material this way, a type of "training-wheels" trading, I can better help the beginner to determine (a) whether or not this is for him and (b) if he can do it. Compared to this, what I was providing four years ago, while pertinent and useful and so on, was considerably more scattered. By presenting the material more simply and in a more straightforward manner, beginners appear to be better able to determine for themselves if this is the way they want to go. The danger is that this can and often does play into the desire of nearly all beginners to rush headlong into trading without adequate preparation, planning, and testing. This is an almost certain route to failure. But since so many beginners are kids, waddaya gonna do? As to the tools one uses, those are trader's choice. The TQ is not something to be tracked moment to moment, but at extremes, such as the first climax high in the NQ yesterday, it can be very informative. What is key is the trader's ability to understand that price is continuous and that it is determined by transactions. If one truly understands that, it doesn't make any difference what the trader uses to display the price movement, or even if he doesn't display it at all. If he doesn't understand it, and hasn't done the testing, and hasn't put together a plan (or, worse, is attempting to put together a plan in real time, which will take a minimum of two years), then he will waste his time looking for double bottoms and double tops and climaxes and higher/lower highs/low and hinges and reversals and support and resistance blah blah blah and never be able to make it work, at least not to the extent of being able to make a living at this. The big difference now as opposed to four years ago, is that I needn't feel obligated to work with anybody who has no plan, nor do I feel the need to nag anybody about it. Their own failures will either convince them that the work has to be done or they won't. If they don't (if, instead, the beginners blame their failures on something outside themselves), there's not a whole lot that I can do about that. Hard cheese, but there it is. Didn't know what you were getting into when you asked the question, did you? Db

To Bern and eminiman414: Do the two of you have trading plans? If so, what are they? Thx Db

This space reserved. Db ---------------------------------------------------------------------------------------------- I set aside this second spot because message board people so often won't read more than the first two or three posts; hence the same questions being asked over and over again. Here I'll post links and copy stuff from the past that pertains to the subject of entries. It may or may not be helpful, but at least it will be in one place. 1. ...the best trades are found at the extremes. Therefore, you wait for the extremes. I read somewhere recently -- and can't remember where -- having to do with MP, I believe, that most experienced traders will avoid trying to catch the tops and bottoms and focus on "the middle", waiting for confirmations to enter and confirmations to exit. This is likely what they were taught to do. However, since "the middle" is by definition where most of the trading is going on and is largely non-directional, there is also a lot of whipsawing in the middle, and that generates a lot of losing trades. One can sometimes avoid this by widening the stops, but, since the market always teaches us to do what will lose the most money, this will turn out to be an unproductive tactic. W used a combination of events to tell him when a wave was reaching its natural crest or trough: the selling/buying climaxes, the tests, higher lows/lower highs, and so on, all confirmed by what the volume was doing and by the effect the volume had on price (effort and result). What auction market theory provides is the WHERE these events are taking place, providing an important clue as to whether they are culminating or merely preliminary. Since W was big on extremes (climaxes), support and resistance, stride, momentum, midpoints, etc., I do not view any of this as being off-topic at all. If anything, it's just a natural extension. Dunnigan had this same issue, and it may have been for him the missing piece. TLo also had problems with this since she was (and I suppose still is) a Dunnigan fan. One can try to hit what appear at the time to be the important swings again and again and be stopped out again and again, hoping all the while that once one hits the true turning point, all the effort will turn out to have been worthwhile, and the P&L will change from red to black. But by waiting for the extremes, one avoids most or all of those losing trades, and even more important avoids trading counter-trend. These boxes -- which are simply a graphic variation of the MP distribution curve, whether skewed or not, or of the VAP pattern -- are nothing more than a means of locating those extremes. What I've found more useful about them is that they are encapsulated by time, i.e., the price and volume ranges have a beginning and an end. This enables me to see at a glance where the important S&R are, or at least are likely to be. Without them, one ends up with line after line after line until the S/R plots become a parody of themselves. ---------------------------------------------------------------------------------------------- http://www.traderslaboratory.com/forums/wyckoff-forum/3739-riding-wyckoff-wave-20.html#post34758 --------------------------------------------------------------------------------------------- Teresa Lo said way back when that there were three types of strategies: breakouts, retracements, and reversals. Her credo was simplicity, and this was about as simple as it gets. Wyckoff, on the other hand, didn't like breakouts. He liked to enter inside the crest or the trough after testing support or resistance. His preferred entry -- though the most aggressive -- was to enter inside the crest or trough of the climax. Second favorite was to wait for the test and enter the same way. The least favorite was to enter on the break beyond the swing point inbetween. But there's nothing particularly intuitive about it. And it's a matter of preference only if the preference yields a profit. That is, one may "prefer" breakouts, but if he hasn't thought through the general strategy and the specific tactics, his preference is irrelevant. So breakouts are more or less off the table. The retracement after the breakout is preferred, partly because one avoids getting trapped by a fade (in case the breakout was nothing more than a thrust) and partly because the retracement gives the trader the opportunity to gauge genuine interest (if there isn't any, the "retracement" becomes a failed breakout). The problem here is that one must often work his way down to a pretty small interval in order to find a good retracement. Otherwise, price may seem to take off without ever giving him an opportunity to jump on board (this is yet another reason why I like the 1-tick chart). As for reversals, the best are most likely to take place at S or R, but we've been through that ad nauseum. One isn't always dead on when it comes to plotting S/R, but that's just a matter of practice and experience. Entry, on the other hand, is very flexible depending on how much risk the trader is willing to assume, and he needs to think about the three types of risk (information, price, and opportunity) very early on. If he doesn't, his stops are going to be in the wrong place and he's going to end up either with big losses or a lot of little stopouts that precede continuations that he'll miss because he got stopped out. --------------------------------------------------------------------------------------------- http://www.traderslaboratory.com/forums/wyckoff-forum/3879-ask-any-wyckoff-related-question-31.html#post77644 --------------------------------------------------------------------------------------------- http://www.traderslaboratory.com/forums/wyckoff-forum/6459-then-there-were-three-breakouts-retracements-7.html#post76325 ---------------------------------------------------------------------------------------------

What he said...... Db

Yes and no. There are actually three. The first starts with 2840, breezes past 2785 and 2745, then is broken at 2740. When price makes a new low, this can be rotated out to use 2740 as a TL point. When that's broken at 2745 and price makes a new low thereafter, a third one can be drawn that uses 2745 and 2730 as TL points. But the TL would not be rotated out as far as this one is. The break is at the same price, but several days earlier. Db

Given yesterday's action and discussion, I don't want anyone to get the idea that midpoints are the keys to the kingdom. Trading them mechanically will not provide consistently satisfactory results. Think of them rather as a Fear-O-Meter. Holders will take a retracement of reasonable depth in stride, but when that retracement reaches 50%, their hands will be on the exit door bar. Therefore, attend not so much to the depth of the retracement per se but to the fear. If activity increases and buyers can't pull price up out of its dive, dial up the concern a bit. Db

Excellent. Re your first chart, tho, the task is not to not get shaken out if and when a shakeout occurs but (a) to be aware of the possibility of it and (b) to remain disinterested if and when it occurs, i.e., not to have one's head explode just because one is being tested. I also want to point out -- in case it needs pointing out -- how simple trading can be if only one is patient and waits for the right opportunity. This can be particularly difficult after a day -- or string of days -- in which nothing ever sets up, and one even begins trading junk just for the sake of something to do. This is not only unprofessional, it's stupid. But if one waits for what is undeniably the right setup, there's really nothing to what, yesterday, was a potentially a 40pt gain. So avoid marginal trades simply because you feel you're owed something for having endured the inaction for so long. If you just can't keep your finger off the transmit button, take a walk. Db

With no intention of being discouraging, this particular topic has been done to death, yet little to no impression is made. The current three-part Pristine series provides a nice summary (simplicity, focus, planning and discipline), but because P is a vendor, anything said is automatically suspect, and the series is largely ignored, which is a shame. Why so few beginners survive is not a mystery and hasn't been for many years. The real mystery is why none of them will lift a finger to save themselves. But whatever answers are arrived at could be applied just as appropriately to any form of addiction. As to this particular thread and other threads like it, I understand the reason for their existence, but they all skirt the real issue before inevitability arriving back at it: all the discipline and persistence in the world will not enable a beginner to succeed when he's trying to apply a poorly-thought-out, poorly executed trading plan (if he has one at all) that is only marginally -- if that -- profitable. It is unlikely that a failing freshman entrepreneur -- trader or otherwise -- will be able to rectify his own ignorance, laziness, and stupidity all by himself. Unfortunately, most of those who claim to be willing and able to help him will only make things worse. Yesterday in chat that quote about winning traders was brought up, the one about winning traders winning because they do what winning traders do, i.e., what it takes to win, whereas losing traders don't. That seems to be it, in a nutshell. Db

http://www.romneytaxplan.com/

Few beginners understand how boring this can be once one has a trusted and profitable plan in place. Most of them are in it for the adrenaline rush, not to make money, which may be the primary reason why they avoid developing a plan -- including the requisite testing -- like the plague. On the other hand, you're working for a couple of hours a day, those days you wish to work. So a little boredom is a small price to pay. Incidentally, that airpocket above 46 may be of interest today. Db

There is an inbetween the SL break and the LSH for exiting: the last "swing" low, or the bottom of the last step. You'll notice that the bottom of each step (it will look like a swing with a smaller bar interval) provides R to the "rally" attempts at each succeeding step. Rather than exit as soon as the SL is broken or wait nervously to see if price is going to exceed the LSH, back off for a bit and see if price can decisively penetrate that last step bottom, or "swing low". If you're nowhere near anticipated S, there's no objective reason to be excessively jumpy. Db

This is where testing comes in. Practically any setup will work if it's applied correctly to the right market. But there's no way of knowing whether or not you've got the right market to begin with if you don't test the setup (all of which is covered in the TBP thread). Support and resistance, for example, apply everywhere since they are functions of demand and supply. However, a given trader might find that the zones in a particular market or instrument are way too soft, that the stops required are much too wide, that the incursions into the previous swing high or low are much too deep. The individual trader has to determine for himself what he's willing to deal with. So I'm afraid you're going to have to find all of this out for yourself since no one but you knows what your risk tolerance is, what your objectives are, what you're willing to put up with. As for gaps, besides the fact that they can blow S/R levels all to hell, we found in '99 that stocks that gapped overnite tended to drift sideways during the day. This made daytrading particularly frustrating. The B&Hers -- or at least those who traded off daily charts -- were the winners during the '98-'99 period, though they got completely screwed thereafter. Trading futures avoids all of that. Of course, lots of people love trading gaps, and it's not my place to rain on anybody's parade, but given a choice between easy trading and difficult trading, I'll take the easy. Who needs the grief? Db

Back when I was into indicators, I tried all sorts of things to address this issue, but nothing was satisfactory. The end solution was to limit my universe to, say, 100 stocks and flip thru them nightly one by one. If you have a tested setup that you like and rely on, you can flip thru 100 charts in five minutes. Db