Kiwi

Just because something using the name guru_trader (you have to be kidding right) has posted elsewhere doesn't mean that you are that thing. You could be TRO for all we know. And registering early for a late scam just shows that we have a well prepared Nigerian. Tams is right though --- this is a sucker thread just seeking another sucker to fund TROs business. James is soft on the weirdos and wannabe gurus which is why TRO is still here.

It depends what you want to do. Metatrader has the big benefit of being free - but only for metatrader supporting brokers (read, mainly bucketshops). I don't know how their "free" model works but I guess its like free forex trading - supported by spread or kickbacks from participating brokers or some such so it quite possibly isn't actually free. For a real broker like Interactive Brokers (IB) you need to use something like NinjaTrader or Sierra Chart. If you don't go down the "free" route you should look at SC. Also, SC (and probably NT) are IMO probably more suited to a pro trader than MT.

I will disagree with most. The cause of this disagreement is the work I've been doing on systems for short term trading. And considerations of longer term holds. Neither entry nor exit is more important; in general. Both depend on what you are trying to capture and thus, for best results, must compliment each other. Example1: You want to capture the big trend. So your entry should be designed to get you in at a point where your stops have a high probability of keeping you in the trend. Your exits will have the same in mind. Your entry, if you'd used a PT/Stop of 1:1 might give a poor profit factor but you don't care if it gets you into the move at a point where trailing stops can work for a long hold even with a 25%-35% win rate. Example2: The classic high probability scalp where you want to win 80% of the time but are prepared to accept a sub 1:1 reward/risk perhaps. Here you don't care if you are in a place in the larger move that is indefensible with trailing stop - what you care about in an entry is that it has a very high probability that PT will be reached before S is reached. In an exit you might just have a target and stop. Or you might aggressively pull the stop to BE+. But in each case it is the combination that delivers the desired outcome - not the entry or exit alone.

I see that you guys are letting down the Consumer Society and typing instead of spending at Boxing Day Sales. Good choice. My 2c. 1. Bias is bad when unconscious (although the dictionary version seems bad always). But I also had used it in the form "Price is above X so the bias for the day is UP" which I don't think is bad. 2. Paper trading is good because it lets you work on the mechanics, prove the strategy, find out what does or doesn't work with no cost except time. It enables you to deal with a bunch of things. What it can't do is confirm that you will get fills at those prices (if close) and it can't let you experience winning and losing real money. BUT, the difference between the two can give you something very solid to work on. so 3. Paper trading excites fewer biases than Trading, lets you prove a large number of elements of your strategy, and gives you something to work with when your actual and paper trading results diverge.

If you want something more like dax then have a look at HSI and its little brother the arblinked MHI.

Just a note on the Inside Bar definition. It is very common to define it as "the price range must be entirely within the prior bars range" and thus the either: ( H<H[-1] and L>=L[-1] ) OR ( H<=H[-1] and L>L[-1] ) Some even allow an equal bar but most support the view that the bar must be smaller because the true value of the inside bar isn't that its got the name inside bar but that a bar within the range of the prior bar that has a lower range suggests the probability of indecision on the part of market participants. A second view of the value of an IB is that it offers an opportunity to enter with a small risk if you stop the other side of the bar.

Agreed Thales, John's book is one I come back to over and over - my delay seems lower than yours on this one. It's a book I have recommended but see on few recommended lists so I guess it didn't sell all that well. I came across John when I was researching end of day futures systems and discovered Futures Truth. I exchanged a number of emails with him and even though I ignored his advice on a couple of things was strongly influenced by him. For the record I would have been financially better off to have taken all of his advice! Merry Xmas and Happy Holidays everyone.

Merry Xmas Guys (when you finally get here). Have a great year and don't trade till January.

I'm not sure if you have run across this or not in the past. One solution to this problem is to attempt to take the other side. If looking for a short attempt to build the case for a long. Because your mind is designed with a bias to confirm your current idea this is a useful step.

With 2 n's Blowfish Thanks for the reference; its time I looked at it again.

Ignoring the question of whether the market (the sum of all humans and computers interacting on current price) has emotions. That one is too big and distracts from the OPs question. The goal of discipline is not to get rid or emotions or even to limit emotions. The goal of discipline is to trade ones process/plan/method/system etc etc as one would wish notwithstanding ones emotions. The process of trading well despite emotions will probably reduce some of them over time (see documentation on OCD which is remarkably similar to how emotional impacted trading works - OCD, emotions, and the brain) but limiting them is a probable side effect not a necessary goal.

Marko, the Stockcharts info is misleading you. Typical price is not smoothed. In fact the way it works (doubling the effective move at bar extremes) is almost the opposite of smoothing. Most of it (SMA and normalizing factor) is smoothed but that is just the background position vs SMA and normalization to the 200 to -200 range. It's smoothing is a "good" thing because it stops the average value (average price) and the current normalization from interfering with the output calculation - they become very near to constants for the calculation. But the key output, Typical Price (H+L+C) isn't smoothed. It has a near constant subtracted from it (the current sma) and is divided by another near constant (the normalizing factor) but it isn't significantly smoothed by them. If it was the ma of TP then it would be smoothed (as happens with most indicators). But as it is the impact is that if the close is not at the extreme then if it moves X% it moves CCI by X% over 3 and if its at the extreme it moves CCI by 2*X%/3. So at bar extremes CCI pushes twice as hard as it does "within" the bar. There is some small distortion of this because the normalization and average will "catch up" towards it but that effect is very small. The lack of smoothing of TP and the multiplying factor at bar extremes is why CCI is jerky while stochs etc with the output price component smoothed are not. That's also why you see people putting up smoothed CCIs - they prefer the smoothed (summarized) version. Note: despite debating the construction of an indicator I stand by my original recommendation for new traders in this post. FWIW ... anyone who wants to use an indicator should do the work required to really, deeply, understand how they work. The work will probably put you back to PASR with horizontal lines only.

Two subjects for Sunday morning: scaling out and indicators. Scaling Out. Virtually always done by discretionary traders and almost never by auto or semi-auto traders. Why? Because it makes you feel better and thus makes it easier to trade your strategy which is why Mark Douglas recommended 3 parts. But when you do the expectancies you rarely find it satisfactory. My own approach is to treat each part as a separate setup (trades 1, 2, and 3) and evaluate it W%, winloss ratio, Pf and expectancy. If you find that first resistance is reached 80% of the time and has a 0.8 to 1 winloss ratio then the pf will be excellent at .64/.2 = 3.2 and the expectancy pretty nice at 1+(.64-.1)/1 = 1.44 so its worth taking 1 off at first resistance. If the win ratio was much lower or the trade returned a lot less then it wouldn't be worth doing. So, 1. Know why you're doing it; and 2: get a positive expectancy. Indicators Lag price action if they summarize and smooth. But so what. And they don't if they don't smooth. So the CCI where the value is determined by the close of price doesn't lag at all! Can be damnably useful if you're trying to make complex price action clear to your dumb computer. And I suspect that.s one of the reasons they're so popular with newbies and newbie trainers --- they clarify something important to (currently dumb) newbies. However, I increasingly come to the view that the one advantage a person has over the computer and thus over the "big boys" is that they can train themselves to get the gestalt of the markets' price action. You can see support and resistance. You can see patterns of price action at support and resistance. This is damned hard to do with a computer and thus I suspect most computer types go another route to making money. Which leaves a niche for Thales, Brownsfan etc. So I am a strong advocate that newbies should learn to read price action. They should learn to read it with nothing but horizontal lines on the chart. No diagonal lines ... because these, like mas, distract you from PA SR. When one is trying to develop auto systems though, things are different. Hell I have never liked bollinger bands and I might just have fallen in love with them yesterday! But for the newbie. The quickest way to really getting market action is PA SR.

If they are getting your stops then they are not the bums. They are simply smarter than you and the money is flowing from you to them.

Just consider the possibility of the tail being used to wag the dog ... and what that might do to volume in futures vs real volume in forex vs sum total volume while any such game was played. I think this tends to be a micro effect rather than longer term though.

I wont test that one thales ... too busy tilting at other windmills. On the subject of paper trading. In my opinion the "paper trading is useless because your balls are not on the line" arguments are complete and utter ... It is very important to paper trade. If one can't make something work for oneself in paper trading (forward testing) then one won't make it with money and real broker/user issues. Most people seem to put money on the line without testing an idea first and then frustrate themselves by adding their money/psych issues on top of interpretation and execution issues. It just doesn't make sense however I guess I should thank them for the donations they make in their haste to waste. First year med students don't do operations. They inject oranges not people (I know, there are a few dead oranges and a lot of different syringes around my house at present). Invest in the time required to do your testing and training! One of the things to do in the later stage of paper trading is to make it feel as real as possible. Say to yourself ... this is xx real dollars and try to imagine it. Similarly when you win or lose.

Sounds good. You can always change later when you're bigger.

Don't assume that a bucket shop won't - have different demo and live spreads in this situation - won't shade the bias - won't be different if you have a position on or not - won't introduce a few milliseconds delay from the rest of the market and control its prices to its advantage. Because a bucket shop can control what you see any of the above could apply. It might not but I wouldn't bet on it.

Interactive Brokers but they are really only suited to competent traders. Zero hand holding.

That is interesting Thales. That impulse is the Thales MA. Now before you get all offended (:haha:) let me explain. I've been looking at various strategies as my automation efforts progress and there are some common factors to the entry for the type of trade I'd call "trend, flow or momentum" non-breakout trade. Basically in this trade you enter with what you hope to be the (pick your timeframe) trend/flow and then either take profits or trails stops. There are a number of ways to get the "Get ready" signal. Then there are a number of ways to get the "Go" now signal. Because its the non-breakout variant you don't take a simple break unless you already have the trend. Get Ready Signals: - RSI reaches a certain level (impulse measure) - Stoch reaches a certain level (highs vs prior highs, like a donchian channel break) . Donchian break (which is actually just like the stoch) - S&R break (the channel length is decided by prior price action) - Keltner or Bollinger reached - Price crosses mas and/or mas turn and/or cross - Price moves xx points or xx ATRs away from some starting point (volatility breakout) Go Signals: - some strategies go on the get ready ... which means that you catch every move but at the expense of larger stops, more failures. - pullback to a fib number or 50% or something that you take as support - pullback and break of pullback bar to signal go - your style of 123break All the go signals provide continuation. And each trades some element of certainty that the continuation will happen with some cost in terms of stops. After that you have to manage the trade of course My little bit of thinking for anyone who's trying to understand what might or might not work for them.

I agree with you brownfan and recall some wise trader saying something like: "If you don't believe discipline, your self-knowledge and your psychology are important then you are not betting big enough." There is a size were almost everyone starts to need more than "just" an edge and money management. It combines dollars, your immediate need, and your conditioning. I'm not saying you don't need an edge but you'd be surprised how weak an edge some of the big pros consider acceptable. I generally seek a profit factor of 2 to 3 (sum of wins over sum of losses) but when you read the truthful writings of some of the current big players you discover that a 1.5 pf is all they're looking for in their edge. They seem to swap return for robustness - at least that is my current assumption.

I must read Loeb then

I wonder who Darvas didn't give credit to though Thales. When I read the book I: - enjoyed it immensely, - noted the simplicity of style, - note the pure luck that overcame his lack of discipline, and now, wonder where his source was because he really didn't seem to be the sort of guy who created strategy - more flowed with it. I think O'Neil might be closer to Wyckoff than Darvas but I'd have to go back and read all 3 again to test that thought.

If you send him money he will explain some more. I see that nothing has improved ... or ever improves in TRO land. Good luck to any Newbie who follows Avery's ego.

. Focusing on the outcome of a single trade as if its outcome mattered, and evaluating each as good or bad, demonstrates lack of faith in your trading plan. Indulging yourself in such trivial judgments is at best a distraction from your ultimate goal as a trader - and that is to get your trading into the long run. TrendDynamics