Leecifer

Hello, daytrade999, sergso & estate1997, Estate, thank you for the Like. I agree stop hunting is a fact of trading life. It was mentioned elsewhere in this thread that big players stop hunt each other as well as retail traders. It was also mentioned that active markets are so large and that the huge number of diverse players operate in their own interest. Maybe that is why anything can happen at any time and the returns appear to very closely match a normal probability distribution function as Harris suggested? It is interesting because simple market returns also resemble, but do not exactly match, a normal PDF (reference the fat tails everybody knows). However, the "simple returns" are NOT based on an arbitrary strategy as Harris imposed. Therefore I disagree with Harris' conclusion about the expectation of success for a "random" strategy. I think his assumptions are wrong because they require a set of parameters in his strategy that are very unrealistic and rarely if ever used in real trading. First, a normal PDF requires discrete outcomes. It is true that trends and cycles also appear in random populations of discrete event/outcomes. However, the trends and cycles seen in market action are not discrete. They are the result of human behavior. Second, his strategy is SAR (stop & reverse), with a large account, trading the minimum possy size, without leverage. That means the intra and closed trade draw downs could be huge. Even to the point of being one cent greater than the account balance that would trigger a margin call. Of course, that is an extreme but a 50% or greater draw down is commonly seen in a strategy like Harris used. There is more to say but I'm already running long and just these items demonstrate that Harris' trading rules are not realistic. ****Sergso, I'm not accusing, but requesting that you do not copy/paste my comments onto Harris' blog. I have no interest in defending or debating my statements. I know what I know and life is too short for that crap. Gurus have the bully pulpit and always the last word.**** The exception is that I am happy to discuss anything with the great folks on your thread. I'm eager to learn new stuff that can be profitable. Thanks dt999. I HONESTLY hope some of this will be helpful. Yes, my primary method is to trade retraces that are counter to the larger trend. Therefore, my entry is in agreement with the larger trend. Some reminders: Retraces occur after very small moves up to the huge moves. The market is fractal so this most common of all patterns is seen everywhere. I choose move sizes that give continuances of the larger trend with enough profit potential to justify the risk. It is unrealistic to expect a market to hit a retrace level to the penny. Therefor I use zones (ex. +/- 10 pips depending on the market) around the expected retrace price. The fib levels are not mystical or exact. Remember, they are discretionary. You choose the high and low to use. However, I believe the huge mix of players, and their account sizes, and therefore their stop placements, may be related to the ancient golden ratio & fibs. We evolved to find that ratio pleasing in nature and in all aspects of life. Wow! Another marathon post. But this time it is your fault! Ha! Remember, please google and learn any of the words or concepts here you do not understand. Finally, honesty is not my policy but I will do my best here. Good luck in the new week!

WOW!!!! Thank you Blue, Wiz & Karo!!! I just noticed the Notification & Likes functions. I'm still learning this site. I am flattered and I appreciate it very much.

Thank you all for your kind words. Having just left my rock for the sunshine I appreciate it. More apologies to dt999. The last point (11) came out more harsh than I intended. I certainly don't want to thwart anyone's pursuit of profits. Also, very all good comments from everyone. I was gonna quote & reply but realized that would be another War & Peace. I think the short version is that everything we mentioned is probably correct in various degrees at various times. I have done some research and the retrace is the most frequent and predictable pattern of all, and by far. I really believe stop hunting is SOP for brokers and other entry counter parties. Maybe they can do it because most of them play the same game and most of us retail folks follow the herd? It takes balls, money, and discipline to do the other correct things, to catch a falling knife or step in front of a bus. Squiggly, lagging lines and channel breakouts are what most noobs do. They are always late, buy tops and sell bottoms. One can be profitable with lines and channels if the other ducks are in a row. My studies indicate that range breakouts win about 33% of the time but still can make a ton of money. Not many can handle that ratio emotionally. The emotions, chop and over leverage are a perfect storm to break their hearts and their accounts. I hate to see it. The "profit taking" rationale used to be the primary explanation for retraces. And that is still valid. Yup, I am that old. Then those pesky brokers and banks have every advantage. Their back rooms have their books and they lay off risk in a nano second for a fraction of the spread. They also track the A list traders and B list traders. I've known a few of those "bucketeers" over the years. I overlay cme volume on my fx charts to help mitigate the "no fx volume data" dilemma. The mass of volume, or lack thereof, at certain prices and often at the end of a retrace is one of my magic beans. It keeps me from jumping in mid stream and buying tops and selling bottoms. The biggest sin I still struggle with is entering too early. Fading the dip/rally is such a strong method I can't help myself. I quit dying a thousand deaths when I came to expect the adverse move and initiated the trade with a tiny. Well, you didn't get War & Peace. Instead you got The Satanic Verses. I guess I'm just lonely. The level of discourse in this thread is outstanding. One can learn a lot here. Hereafter I resolve to ramble less. Bye for now.

Hi daytrade999 & everyone that has been helping, I am a very infrequent visitor and noticed this thread only becuz it was at the top of the recent list. But that won't (and never does) stop me from blabbing. 1. The other folks have already given excellent advice. I will probably repeat many of their suggestions. Apologies dt999 if you've already begun their/my suggestions. 2. You MUST make the suggested ideas and methods your own. That is, if you think they have enough merit to pursue based on a respected source or your own common sense. That means doing your own homework and research to prove or disprove. It is essential practice and discipline if nothing else. Make it your habit to be objective, rational and eager to confirm/deny/teach yourself. If your favorite idea is a flop, dump it! 3. Stop trading real money if you are losing real money. Demo is fine to practice, learn, and gain confidence in a method you believe in. 4. Losses are a fact of life. Learn to lose or learn to fail. Learn "market mechanics" and you will understand why most trades will initially go against you. Consider this: Everyone knows what the trend is relative to their time horizon. Your counter-party (broker, market maker, bank) also knows but they fill your order to do their job and make the spread or commish. HOWEVER, they also trade their own account because it is even better than spreads & commish. So they punish you for making them sell when the trend is up (and vice versa). They also trade much larger, a huge advantage. 5. Number 4 means "smart money beats dumb money" and "big fish eat little fish". Remember, every buyer needs a seller (and vice versa). Therefore, a big fish that wants to buy 1,000 lots first needs 1,000 folks to sell 1,000 lots. They know where dumb, little fish place their stop losses. They will sell 500 lots to dip a market so they can take 1,000+ positions away from guys like us before the market continues up. You are stopped out only to see the market go in the direction you traded. 6. Numbers 4 & 5 explain why retraces exist. There is nothing mystical about fib levels, gan levels, elliot waves and the rest of the mumbo jumbo. Maybe fibo spotted that the human eye evolved to favor certain ratios just as nature does. Regardless, retraces occur until the big fish have exhausted all of the "too close" stops that little fish set. Maybe .3, .5, .6, or .7. You won't know "the golden ratio" for sure until it's done. 7. That is why it is essential to TRADE SMALL & NOT ABUSE LEVERAGE!!!! If you can't ride out the inevitable, adverse moves, you are screwed, blued and tattooed! Big fish count on it and so must you! 8. You can use these "market mechanics" to your advantage. Buy dips in an up trend and sell rallies in a down trend just like the smart money does. It happens in every time horizon (holding period). 9. Trade small so you can hang in if the market goes to the next s or r level. If the market proves you right, then ramp up. If it continues against you, GET OUT. There is always another market and another trade. If you have the discipline and skill you can SAR (stop and reverse). 10. DO YOUR HOMEWORK!!!! Everything you need to know is on your charts. Train your mind and your eye to see what happens over and over. It is all about significant price levels, failures or breaks at those levels, and retraces, because the smart money makes it so. 11. I appreciate your passion but asking more questions is lazy. There is no such thing as a stupid question ONLY AFTER you have done your homework. GOOD LUCK!

Thanks James. And thanks for making TL possible!

Appears one needs 5 posts in order to have full functionality. Sorry to waste time, attention, bandwidth, but rules are rules. Thanks for the excellent forums.

Just finished reading all the threads and viewing the vids in this Trading w/Stats series by jperl. Thank you very much Jerry for the threads & vids, for fielding the questions & comments, for being generous and patient to create an excellent opportunity to learn. You are a mensch! Thanks to all of the other folks that participated w/ questions, comments, opinions, suggestions, and creating replicas of Jerry's indicators for other apps. Regards to all, Lee

Thank you Tin. I also appreciate your participation and helpful comments in many of the threads I've browsed. I've had a difficult time with stock index futures, CME fx futures, and standard fx-spot lots. I am just now beginning to study Jerry's Trading w/Mrkt Stats threads and vids. My hope is that will help me get on the right side more often. So far, my experience has been, "Should I buy and make the market go down, or sell and make it go up?" My strategy at this point is to learn about Jerry's concepts and then trade fx-spot mini lots @ $1.00 per pip/point. I will use CME fx data to do the volume distribution analysis in TradeStation but execute the trades with spot mini at the much smaller risk. I cannot allow myself to become just one more corpse on The Trader's Boulevard of Broken Dreams! Thanks for checking in with me, Lee

Thank you Tin. I also appreciate your participation and helpful comments in many of the threads I've browsed. I've had a difficult time with stock index futures, CME fx futures, and standard fx-spot lots. I am just now beginning to study Jerry's Trading w/Mrkt Stats threads and vids. My hope is that will help me get on the right side more often. So far, my experience has been, "Should I buy and make the market go down, or sell and make it go up?" My strategy at this point is to learn about Jerry's concepts and then trade fx-spot mini lots @ $1.00 per pip/point. I will use CME fx data to do the volume distribution analysis in TradeStation but execute the trades with spot mini at the much smaller risk. I cannot allow myself to become just one more corpse on The Trader's Boulevard of Broken Dreams! Thanks for checking in with me, Lee

Just spotted this blurb while reading through Jerry's Trading W/Market Statistics threads: "It appears that you have not posted anything yet on the boards. Please note that we periodically delete zero-posters in order to keep our member base active." I was lurking only cuz I have nothing helpful to contribute. Thanks for making this forum available. Thanks for the terrific threads and excellent comments/contributions from many of you members. Warm regards to all, Leecifer