TheBramble

A recent research paper showed the majority of profits come from flow trading and trading (making) the spread. Less than 5% came form speculative activity. While most pro traders will be aware of the levels, the use of charts and TA diminishes as you move out into the longer timeframes (daily and wider) where fundamental and macro-economic factors take precedence.

Save yourselves a lot of wasted time, money, effort and aggravation - avoid NLP for trading related 'issues'. NLP is not something you use 'just' for this or that - it is, totally, not just specifically. Software soundtracks and ooh-ahh visuals and all the other hyped up crap based on soemebody's wet dream of a great idea that it can be pressed into service to focus on your weak points and made to return a dividend immediately, with little to no effort on your part is a complete canard and an insult to your intelligence. If you fall for it, you deserve it. Don't be duped. There is no substitute for trading knowledge and experience and no airy-fairy flakey-fairy BS is going to make up for what you don't know - about you - or about the markets. You have time spare? You have money spare? Invest in your education in the markets - not some one-size-fits-all new-age uber-panacea that will only delay your development.

From an academic perspective, yes, you can objectively consider both side of any argumant. But in trading, you can't make any profits taking both views. Untrue. Trading (volume) does move prices. But so too do Market-Makers and Specialists - without 'active' (volume-based) trading. Immaterial. Who cares about sentiment and representation? It's what IS happening and what is most likely to happen that's important. Not a subjective or even roughly objective view of why what is, is. One step ahead of the leaders? How can you be one step ahead of the leaders? They are, by definition, ahead of everyone else - hence, leaders. Following the leaders is absolutely the name of the game. Not cynical at all - just plain smart. It of course makes you a follower, but don't deride that status. So few are really followers. They are miles behind and are affectionately knows as stragglers or 'The Public'. There are enough of them to make it worthwhile for us Traders.

I mean that scalping is no longer a long term viable trading strategy in the current market structure. Nobody who scalps as a primary mode of market operation will remain profitable over the long term.

Nope. The markets not only would and could move without traders. The markets DO move without traders. That's what Market Makers do for a living - they entice traders to trade by moving the market.

Traders trade because markets move. The more a market moves, the more traders trade. And markets most definitely ARE either in a state of bullishness, bearishness or consolidation. There are strategies to use to piggy-back the current mode and to fade the current mode. You can't not look at a chart if you're a TA bod and NOT see which mode your instrument is in. That's the whole point of TA. Which ties in perfectly with your quote of the famous 'trade what you see' mantra. But to suggest markets do not have a mode and traders move markets is erroneous. Market-Makers move markets too and they're not necessarily in trader-mode when they do that.

maildigger, when it comes to trend on virtually any timeframe, you can't really go with anything other than the primary trend as your guide. But scalping is about as far away from main or primary trends as you can get so I'd intuit you'd stand a better chance by being totally counter-primary trend in order to catch the secondary pullbacks/rallies. Actually, it makes even more sense to be counter whatever the 1 min trend is if you're scalping. Trouble is, there aren't any scalpers around who have any money left anymore so it's tough to get decent advice....

thunder, I'm with waveslider on this. Practise - absolutely. Small stakes - no, not for 6 months. If you have absolutely no FA or TA and you're picking FX which has no Volume you're going to be stretching - big time. Work on a couple of setups and perfect them in demo mode. If you can do that without resorting to 'needing' to use real money for 6 months you're probably made of real trader stuff rathen than just dumb gambler material. Then, start real small using the same setups and the same execution patterns. Do not deviate. Stay at that same level of staking for another 6 months using just the two or so setups you have perfected. If after a year you're in consistent profit and sticking to your rules - THEN and only then do you go for your max stake, which in my book would be no more than 1% of max cap per trade at risk. The biggest problem will not be finding the setups that match you style and trading capability (3 hours/day) - it'll be not putting real money on the line for 6 months. And not uping the ante when you do. You think you can do it, but most can't. Good luck.

It sometimes helps, helps a lot actually, to pretend you don't know when you think you do. When you think you know something, you're not in the best state to learn anything new about that 'thing'. So assuming you don't know everything about anything is a pretty useful MO in my view. It also builds real humility rather than false humility. You never get to stop starting to learn.

Interesting insights Soul. Especially so given my current areas of research. I'm using a derivation of MP where instead of just 'time at value' I'm using 'volume at value'. Time is a function of habit, even for traders, is somewhat less fluid than is the 'commitment to trade'. For instance, it costs nobody anything not to trade and a value can be maintained with no buying or selling, simply through inaction. What constitutes commitment is the proactive/reactive pressures which lead to actual trading, and the extent of that pressure as mirrored in the volume traded. It's looking like abetter match for my trading style than does vanilla MP. As for your trader’s ability to ‘see’ MP just by looking at candlesticks, that’s what first alerted me to the volume angle for MP. Looking at the 5 min volume-candles and the equivalent MP in a second window – I could ‘see’ what it was that was missing informationally from the standard MP. Sector analysis is pretty much a part of standard Dow theory. What stays weak in a strong market or strong in a weak market. I’m less into the sectors than into different markets right now. How currencies and commodities relate to bonds and stocks for instance. Murphy’s work in that area is still the best and serves as my template. This isn’t the first time we hear of pro traders being far more (totally?) discretionary then us TA types imagine. But then, the stats on pro traders success rates needs to be more fully qualified before we all head off down that path. Commissions and other related trading services still, AFAIAA count more to their bottom line than do their pure trading activities.

notouch does touch (arf!) on the statistical basis for discounting any bias toward a specific line of action based on a day of the week, week of the year etc. However... In a bull trend, a Monday 'normally' opens strong carries on into into Tuesday morning with a weakening and/or decline setting in Tuesday afternoon through Wednesday. By Thursday we're back into an advance with a close at the high of the week on Friday. 'Normally' being the operative word, not every week in every bull market. Reverse all of the above for a bear trend. There are also monthly shenanigans on the Monday after the week of the options expiration. But that's a little more detailed and quite another topic. Does anyone else use Jenkins' stuff here?

Option 1, but without the "...and wait for a new entry". If you're wrong, you're wrong. Get on with frying other fish. By the same token, just because you called it wrong last time, doesn't mean you stay shy of that stock. It has no memory of you.

Yellowcake is at an all time high (adjusted for inflation) and I've seen estimates of $250 mentioned.

Just finished reviewing the system so I'll jump in if that's OK. You work with the close on the the hourly of the Advancing Issues (NYSE) data with a 7 period (7 trading hours) ROC. It's an 'always on' system in that you're always in the market (which disqualifies it immediately from my toolkit). According to the published details, you review and potentially take a position every hour, which indicates potential pyramiding, but elsewhere it refer to a 'constant number of conteracts' so I guess I'm reading that part incorrectly. Where the RoC on the Advancing issues is greater than a 3 percent increase, you close any short and take a long. Where the RoC on the Advancing Issues is less than a 1 percent increase, you close any open longs and take a short. It is suggested you use the S&P futures to allow the NYSE close Advancing Issues data to be utilized on that day in the futures. It has performed well and it has perfomred badly on my back-test review. Pretty much the same as my randon coin toss system has. YMMV

Absolutely spot on torero. AND...I also take price movements from other sectors and other markets into account when assessing my technical position. So, where is the money flow:Gold, Oil, Stocks, Bonds? And what does that mean short, medium and long term? That's the thing. Where does good old TA finish and FA start? If I'm looking at the flow of money out of Bonds caused by changes in the interest rate or protective moves into oil and I use that price/yield data to make an assessment of my short term bias in stocks in the enrrgy sector for instance - is that TA or FA?

januson, throwing a textbook definition at the topic doesn't really help. The A/D you relate is flawed, it's validity is based upon either a trending instrument or on a divergence with price. Neither work. I was talking about the deeper market forces, strong hands, big money actions to quiety acquire large blocks of stocks without impacting th eprice and the same divesting themselves of these stocks to their advantage. Accumulation of this nature does not appear as big volume (the major weighting factor of the A/D). The divestment occurs generally in the public participation part of the bull run (the blowoff) and required somewhat less finesse to operate or identify. For our purposes, looking at this from a more professional manner rather than the textbook manner that most newbies, including myself when I was going through the learning curve, will require slightly different thinking. My initial question was: What do we need to know about a stock's price and volume profile to assess whether it is simply being ignored or is being quiety accumulated. Your suggestion of 'growth rate greater than 3%' is possibly going to find those stocks which are in or starting a trend. Possibly. And that's fine, but I didn't think we were discussing the process at that level. I'll bow out if I've misunderstood what it was I thought you were attempting to discuss.

Then I stand corrected. You are a trader and a system developer that makes consistent profits (more than 5 years) using an automated trading system they have devised and written themselves, but you are the only one, maybe just the first of that breed I have never before encountered. I came from a technical programming background (many years ago) and initially thought there was a direct link between sexy code and great trading. The thing is, even when you finally get to consistent trading results, you realize (sorry, I realized) that the process I used was (a) too simple to require automating and (b) too complex to automate because of all the little discretionary aspects of it which I hadn't realized existed before I tried to codify what it is precisely that I do. The effort to produce and mantain any system for me was WAY too expensive in time and effort and it also diminished that aspect of trading that I enjoyed the most - actually trading! I am pleased to have found someone though who seems to have successfully combined the two disciplines and I can update my world model accordingly. I'll check out Oddball as you give it a recommendaton.

Well actually, you can do this even with the most basic of scanners. What constitutes accumulation? What factors lead YOU to belive a stock is being accumulated? And it's not OK to simply say 'a stock which doesn't appear on anyone else's scanner' as that is a very circular argument. What tells you a stock is being accumulated as opposed to simply being ignored? How do you know? I'll give you a cluse - it's CONTEXT. I'll see if I can figure a way to put this in non-trading terms as it sometimes helps to get a fix from non-trading bearings when we discuss the deeper apsects of what goes on in reality.

Look, unless you're a Quant doing it for salary, and don't need to show consistently profitable results in all market conditions - forget it. There's little point. Read "Trading Systems"; Joe Krutsinger and find out how those who are supposed to be guru system developers for trading systems do it. There are hundreds of systems they use and have used. What does this tell you? There isn't one system they've automated or codified which does the job. OK? Most of the systems they use are based on MAs and BOs. Really simple, basic stuff. Which work real well. Manually. You don't need a system. If you're too lazy to do your research and run your analyses yourself then you deserve all the success you're unlikely to get. Trading is not a get rich quick and stay rich endeavour. You get what you put in. If you want a plug-n-play approach to trading, use a mutual fund. If you think you can program a better solution to your current trading than your current trading - you can't. Trust me. If you were than good you'd be inventing the next Microsoft. You're either a Trader or a Programmer. If you're a Trader, take the time and make the effort to Trade!!! And do it perfectly. If you're a Programer, take the time and make the effort to Program!!! And do it perfectly. Both endeavours are equally gifted and equally appreciated. But confusing the two leads to not much at all really.

Becuase they are skilled in reading the markets and not necessarly skilled in codifying what it is they're doing when they analyze the markets. Most would not even know what they are doing on a conscious level. To break down and model what somebody else does is tough enough. To do it for yourself on yourself, while you're doing it is almost impossible. There seem to be two distinct camps: Those than can trade and those that can write great code that doesn't trade well. The two cannot communicate effectively.

But that's the thing. The major charting software vendors do exactly that. They sell their product with default settings for all the indicators and they pretty much all set them at the same levels. Guess what, most traders will take these packages on-board and will rarely think to examine the defaults or change them. It's a potential problem all right, but only for those that don't think outside the shrink-wrap. If you posted a piece of code I guarantee most would use it 'as is' without thinking to modify or test modifications of it. And you could then work out a pretty useful fade to what you'd supplied.

I know exactly what you mean PP and I respect your view. But look at ET and t2w. 50-70,000 members and how many regularly post sensibly at any point in time? It has to be less than a few dozen. Seriously. The point is, those who post on boards such as this do so for what THEY get out of it. Not what they expect to get out of it. Me included. I realised some time back the effort to compose and post something useful was for me to give back something to a 'community' that had given me something. Note, not specific people , but 'the community'. I don't need a quid pro quo. I don't need all/any of those who may benefit from what little I have to offer to specifically, each or any of them, to have to feel then are then compelled personally to give me back in kind. Karma doesn't work that way. You put out it comes back in some possibly very indirect way to you - ten-fold. A hundred-fold. Stop me, I'm getting misty....

As a new kid on the block I don't feel it's appropriate to get too involved with site politics and admininstration, but I have to ask PivotProfile what his reasons are for suggesting this particular idea? If this were to be implemented there are always the questions of 'what information exactly is considered 'not ready for prime time' and 'who will be considered unworthy to receive such information' and 'who is it that will be making that decision and based upon what'. It is somewhat elitist and counter to the spirit of any bulltein board in the first place. I'm really not into divisive attitudes or the withholding of the free flow of ideas and discussion. If there's felt to be a need to 'restrict' and be 'covert' in discussion of ideas with only a select few there is always PM or email. No need to rub peoples' noses in the fact that they're 2nd class citizens. I've seen this implemented on another board and was myself a member of the 'private forum', but felt the existence of the 'them and us' mentality did no favours to anyone. If it's purely a question of not being inundated with stupid questions on serious topic threads or abuse /flame etc then that all comes down to moderation. And if James would like suggestions on that score one simple solution to moderator overload would be to give the thread starter edit/delete privs for that thread. Abusers of thread would soon get the message as would abusers of that priv itself.

BrownsFan, I'm not too sure what your exit strategy is so it's difficult for me to understand how you're applying it. Could you codify it in a little more detail? My problem is understanding why if you're using WRB as a proxy for allowing the market to 'tell you' when it's time to come out, why the relative recency of your entry has anything to do with it. Either it's an exit or its not, surely? I guess what I'm saying is whatever your decision process is to place the trade in the first place, it has nothing to do with the immediate or subsequent market action. You could (in fact will over a large number of trades), enter right on the place you'd rather be getting out, so ignoring your exit setup just becasue you've only just gone in seems like it could lead to counterproductive results on occasion. And I'm sure I'm misunderstanding you when you say about not being willing to let go until you've reached a minimum price objective (albeit only 5 ticks). You mention previously that you use very tight stops (as do I), so how far would you allow the trade to go against you before acknowledging you're not even going to get your minimum 5?

I have never been able to understand why anybody wants to work with daily profit targets. Always seems like unnecessary additonal pressure with no positive benefit. Maybe I'm missing something. If you're below target and coming to close of trading, might that not put additional pressure on you to take a trade you might otherwise have not? Or to slack off and miss a few good ones when you've already hit your target earlier on? I take what the market offers and that does occasionally mean a day where I'll take no trades at all and some days where I'll be down on the day. Being happy with the average works for me.