TheBramble

Keymoo, I am not disagreeing with you or TinGull or anyone else who has any view on this matter. As I said, I have a completely open mind on it. In fact, it’s possibly worth me mentioning that I have a frighteningly wide education in a number of the occult arts and actively practise what some might consider rather far out esoteric rituals as part of my 'normal' (?) daily routine. So I am definitely not attempting to demean any consideration of the possibility of thought as a vibratory force being able to manifest material events. I’m as flaky as the next guru…. What I was suggesting was that it is worth acknowledging the possibility of a more prosaic explanation to some of these ‘events’ in helping to gain some useful balance for the debate and to further understand and develop any mechanism for its utilisation. You’ll note that critics of The Secret (2006 NOT the 2007 version!!! LOL) and of “What the Bleep†as with critics on pretty much any ‘out there’ topic pick up on the fact that most adherents to any on-the-edge issue-under-threat are totally evangelical about whatever their thing is and put everything that happens down to whatever mystical force they’re currently championing. I remember for a short period after doing my NLP prac course that I was a total NLP wally (is that word used in the U.S.? If not, read the word ‘dork’) and everything was the subject or result of some damned NLP technique or another. What I’m saying in short is that while there may be a basis for manifestation of material events through the power of thought, there is also the need to acknowledge that there are other factors which could lead to the same result. Some purely to do with our perceptions and awareness and focus and intent. Others purely coincidental. If you want to pick up a famous volume on this subject, check out The Master Key System ; Charles Haanel.

Keymoo, interesting comments. If the "car park" exercise involves ‘magically’ manifesting a parking space by some manner of voodoo, there is a rational explanation for the improved probability of you finding a space. It’s all to do with your old brain and the reticular formation, that which arouses and motivates us. The thing is, the parking space is either going to be there or it’s not (no schroedingers cats here). But if you are ACTIVELY engaged in looking for one, guess what, you’re more likely to find it than if your just cranking up the volume on Snow Patrol or thinking about what you’re going to do once you’ve parked. It’s all about ACTIVE AWARENESS. You can do it with anything you choose. Just pick a colour, any colour. Make it unusual. When you’re next out and about look for someone wearing that colour, or a car of that colour, anything of that colour. I can guarantee you WILL find it. It’s all always there, but you’re not normally ACTIVELY tuned into be aware of it. There is a great deal to discuss about Awareness. The other point you make keymoo is about ACTION. I disagree slightly with you in that all the preparation and analysis and all those other good things you mention, although useful and even vital to your skills as a trader do not in and of themselves lead you to becoming a trader. You need to take ACTION independently of all those other things, you need to pull the trigger. It is just possible that all those other things you mention could end up robbing you of the power to actually take physical action if you believe you are doing so by doing those other things. I keep an open mind on the power of thought and the ‘laws’ of attraction so don’t put me into one camp or the other.

Franky, I think you're asking at least three questions: How to calculate profit targets; how/whether to scale in/out; how to trade sideways markets. If I've missed any, let me know. Calculation of profit targets is more of an art than a science. I trade basic patterns and once I get what I consider to be a high probability move, I calculate my R:R on where I’m going to place my initial stop and project my target to the most likely first level of S (or R) for the move. I’ll also overlay Fib retracements as well. If they match with the S (or R), so much the better. I also calculate a 2nd and 3rd target area, but these rarely get hit as they’re major moves out. Nice when they do though! I also use time-based criteria to get me out – if the price doesn’t work my time-price slope within 25% of the number of periods I’ve allocated for the move, I’ll exit. If I steam on through my levels I’ll hold the trade, or if there’s a pause with volume indicating it is just likely a pause, I’ll hold. Otherwise I’m out. I rarely scale in or out. If I have a conviction for a trade, I’ll go in with my full position size. When it’s time to come out, I come out. I have used both methods and while putting on a partial position does reduce your losses on losers, if your W:L is high enough and your risk is sufficiently low, what’s the point, a scale in just robs you of greater profits. Same with a scale out. Sure it’s good to lock in a profit, but again, if you have a W:L that indicates most of your trades are going to be outright winners anyway, and your trade is being traded to your plan and your method, why limit the profit? I suspect it all comes down to your performance ratios and your confidence in what you’re doing – if indeed there’s any difference between those two. Sideways markets. If you’ve identified a sideways market with sufficient range to make it worthwhile (strokes for folks) then trade it. As you’re a scalper I guess that’s precisely the sort of market you’re aiming for. I don’t scalp (not intentionally anyway LOL), but if I did, I definitely wouldn’t be looking to scale in or out, there just isn’t the time to pick off 5 ticks in tranches and certainly if you’re trading size (which you must be to be making any money at scalping). 200-300 trades a day and scaling in and out? Keeping track of your tranches would be a nightmare. Would be for me anyway.

Most indices use 'Available Float' in their weighting calculations, especially within the S&P family of indices. Available Float is generally considered to be that amount of stock which is available to 'the public'. Stock held by government agencies, public companies and control groups is NOT included within the 'available float' data. I'd appreciate it if anyone could point me to where or how I could determine for any specific stock, how much the 'Available Float' represents at any given time as a percentage (or any other measure) of the total market capitalisation for that stock. Apart form considering this a potentially useful piece of data in the area of Momentum (volume / float) analysis, it strikes me that in times of deep woe, the Available Float could potentially substantially increase - up to total market cap value in theory.

'Issue' was a bad choice of word, my apologies. You mentioned lower profits per trade when adding the WRB as an exit criteria and I obviously saw a connection between the two events. Nothing at all wrong with fewer losing trades. Gets my vote every time. But if fewer losing trades do not compensate for the lower profits on winning trades (i.e if your W:L improves but your P:L decreases) then there would have been no point adding in the exit criteria. From what you're saying this isn't the case at all and your overall profitability on this system has increased. Which is great. I think that was the point I managed so badly not to make the first time, And probably this time as well... You're certainly keeping very tight stops which is absolutely one of my never-break rules. It's tough to go out of business when you're keeping costs low. Good Trading.

One of those things that's going to be different strokes for different folks, but where the Open-Close range is no less than say 95% of the High-Low range. That would do it for me. ({[(H-L) - ABS(O-C)] / (H-L)}*100) <= (100-95) {or whatever your preferred percentage is}.

Apologies if I’m stumbling into an area that’s been discussed in greater detail in other threads, but personally I’d be really wary of attempting to interpret a single candlestick. Effective candlestick analysis requires the context in which it has developed for any reasonable assessment to be made. There’s also the vital issue of volume. Candles or bars, volume is key to unlocking the probabilities of development. In relation to this specific WRB being discussed, all we are looking at is price action over one period in which the balance of commitment has shifted from one end of the spectrum to the other – for that period. If the move is in favour of your existing trade, I presume you wouldn’t be still using it as an exit indicator? And if the bar is moving against you, providing it hasn’t hit your protective/trailing/initial stop, why would you want to take it as a valid exit criteria? You will often get corrections against your prevailing trade direction that will move 50-63% against the previous high/low. Whether this occurs as one WRB or over a number of consecutive periods is largely irrelevant all other things considered (volume pattern etc.). WRB as more likely to take the steam out of the subsequent few periods price action than it is to herald a reversal. You comment that you’re getting smaller profits using this method which is understandable, you’re not letting them run. If by using this method you’re also getting fewer losing trades then I suspect it may be an issue with the underlying system itself rather than this bolt-on exit criteria.

Hi, bobajob. Thanks for the kudos and for remembering some of the good stuff. I was apparently 'struck off the register' some time after I bid everyone a fond farewell. Seems they don't appreciate folk leaving of their own free will. Still, being banned from t2w has a solid foundation here - almost a prerequisite I'd say. Looking forward to particpating in this site as there are some quality topics and posters with which to work.

Ant, I'm sure that statement is true of any set of traders following any specific style or method. It's nothing to do with the style or method or the quality of training. I guess that's one thing that a book or a course can't ever teach although it's often referred to. If the SMI Wyckoff course takes a whole year to do then I have a feeling they've over-complicated it. Wyckoff doesn't need a year to explain. Takes years to accomplish expertise mind, but not learn the basics.

I found the Amazon link, but nothing about Wyckoff. It would certainly be an unusual combination as Wyckoff is very much a nuts & bolts type approach to the basic mechanics of trading; volume and price action. I've not seen too much bracketing his work with the psychological aspects of trading. Certainly the last of the three 'skills' seem to relate to that and possibly the first two as well. Still, would like to get a more detailed review of the contents. Although I have most of the mandatory 'psychology of trading' type titles (Douglas et al), I don't now believe it has anything like the weight that is sometimes ascribed to it. You see some people suggesting trading is 80% psychological. Well, it certainly is when you're on a losing streak...the trick is to concentrate on reading the market right, working with basic setups and keeping it simple. Avoid the long or large losing streaks. And that's not a Catch-22. Always an issue to recommend anything - as what might be a great book for me could well leave you bored beyond belief. But I've yet to find a book that hasn't given me something. So, those that have helped me shape my strats and help me form better concepts than I had, and on a strictly caveat emptor basis, here goes. Options as a Strategic Investment Lawrence McMillan There's an awful lot of market savvy in this book that goes much deeper and far beyond mere options strats. The Profit Magic of Stock Transaction Timing J.M. Hurst I'm a bit of a cycles man and this really hits the spot. For those less inclined to what might be considered the more esoteric aspects of trading, there is also a good deal of basic insight into the mechanical structure of the markets. Such as the days of the week that favour Longs and Shorts - and standing on the sidelines. And even the best hours of those days. Geometry of Stock Market Profits Michael Jenkins Falls into the same category as the previous title. Possibly a little more 'out on the edge'! All About Technical Analysis Constance Brown Mind blowingly cool book. Almost didn't buy it as the title indicated it might be 'a bit basic'. It was, but in incredibly unexpected and useful ways. You sometimes need to go back a step to realise just how much you've never thought of thinking about when trading the markets. Definitely a concepts book primarily, but as with all major learnings at basic concepts level, it can't help but make you review your strats. Seriously, if you have to die at your screens clutching one book...Actually, I don't want anyone else to have this information. Rubbish book. Waste of time and money. Don't buy it. The NASDAQ Trader's Toolkit M. Rogan LaBier Pretty specific and pre-decimal, but good stuff on plays and spoofing. The Market Maker's Edge Josh Lukeman This is the book you want to be clutching in your other hand as the grim reaper comes for you at your screens. Absolutely priceless for micro-timing and enhancing existing strats. Technical Analysis of the Financial Markets John J Murphy Sorry, I know it's a 'standard' text, but so few who claim to have read it actually have. Even those that have it in their library. It's NOT a reference guide. It provides a solid basis in the underpinning of any trader's strategies and methods. Even if you want to go one step further and trade the traders' motives and intent, you still need to know what THEY are thinking to do that. This book tells you what the majority are thinking in any specific situation and you can then work your strat on the back of that. James, it’s strange to go through my hardcopy and e-libraries and find so few that meet your very requirements of being strategy and concept specific. Maybe others can add?

Yes often, and I did subscribe to that piece of advice myself for a long time. But I am now convinced it simply isn't useful. Even if you just allow for being in a Bull or Bear phase for whatever instrument you're trading and adjust your upper and lower levels for indicating overbought/oversold this will find this yields a higher number of successful trade entries. And fewer trade entries too. You can then take this one step further and positively optimise for the recent history of the instrument under analysis. All instruments go through cycles of expansion and contraction and the periodicity of those cycles WILL change over time. You need (IMHO) to let the instrument tell you what beat it's marching too rather than take a position that all instruments will bend to the might of your POWER setups! :) Having said that, I use few indicators and the work involved in tailoring even those few to my traded instruments requires significantly more time and more effort. And it makes it doubly intensive when you have a scanner running on indicator-based formula and parameters too. But, in my view, the payoff is well worth the additional energy and time.

An interesting dilemma, not just in FX either. I am a very cautious trader and I also used to wait for a re-test and confirmation of new S or R before taking the trade. These days, although I still class myself as ultra-cautious, there is an added factor I take on-board. And that it momentum. Momentum is a tough one on FX where you don't get Volume to play with and though I have played with using tick pressure as a proxy for Volume, it does not in my view come close to 'real' Volume. And that's discounting the argument over just how reliable any data vendor's tick data is going to be on FX anyhow. So, in my increasingly tough battle to get things simpler rather than more complex I decided to use (for FX only) an additional criteria for these potential re-test areas. You'll need to test this in your own timeframe to see if it makes sense for you, but I work from a daily down through an hourly, 15 min and then finally 5 min execution level chart. If the bar through the potential re-test level is 'strong' i.e. has a H-L range at least three times the 5 period MA of H-L then I don't wait for a re-test. Sure, it still catches me out, but less than it doesn't. Stop is always for me 5 pips away from the S/R level I'm trading. Very, very tight. If the bar through the potential re-test level is 'weak'i.e. has a H-L range no greater then the 5 period MA of H-L then I do wait for a re-test. Again, stop at 5 pips away from the S/R level I'm trading. Again, this isn't always going to break for me, but it does more than it doesn't. By factoring in this additional interpretation (and that's all it is) of momentum, I get into far more FX trades than I would by simply waiting for a re-test regardless of current market action. Where I refer to S & R levels of course you can imply I am talking about any basic charting break (triangles, rectangles, triples, doubles - whatever).

The correlation between Volume and Volatility obviously needs a context within which to test the correlation. The real trick is deciding how much of a timeslice you're going to use to set that context. Soul, you're asking two questions: Is current Volume 'the norm'? Yes, it is for now. Does it have historical similarities? Yes it does. Will it continue uninterrupted and unchanged? Unlikely. So regardless of recent (relative) Volume, the technical basis for assessing Volume's likely interpretation with regard to its recent history and to price movement and Volatility (which I take as Low to High, not Close to Close) remains the same. Your second question regarding how to view the specific instance of YM activity leads to a number of possible answers. The first being a question itself that when you get an uncharacteristicly vibrant price move on relatively low volume what can that indicate? And that this move occured on relatively low volume (within the last 5 days view), but within the context of the last 5 days Volume being much higher volume than previously leads to an obvious conclusion. I'm posting this a few days after the event so I obviously don't need to explain further or imply any foreknowledge of that conclusion. The issue of Volatility and Volume is one I have spent quite some time researching and I did publish intermediate results from this on another site, but in essence, and very specifically in relation to this quoted post, you have to consider what is it that causes the daily range in any instrument to behave the way it does? And what does it 'mean' if this larger/smaller than usual range occurs on higher/lower than normal volume? And how do these clusters of higher/lower Volatility and higher/lower Volume relate to each other? Basically it's a game of Who has been 'convinced' by Whom of What? People take action based on their understanding of what's going on. It's their understanding that's key to subsequent market action and generally quite unrelated to what is really going on. I think I've only scratched the surface and probably not added too much to the initial query, but maybe it's a start. btw - only just joined today and after a gentle stroll through the site there appears to be some really high quality posts and posters around. Good work.