BlowFish

Hi darth weightings (and the maths for that matter) where discussed in one of the earlier threads....a quick review might be worthwhile

I have to say I'm pretty sloppy on nomenclature. The sentiment behind the pattern is what's important (as I am sure we'd all agree). EDIT: Having said that common terms of reference are important for discussion purpases. Actually I have a 'rigid' definition but frequently use a lose definition. The second marked candle would be the one most likely to fail my more rigid definition. Reason being a test has to test something. Its when price moves into an area of previous strong supply/deamand and gets rejected preferably with much lighter volume i.e. that supply/demand no longer exists at that level. Looking closely at the second candle it is quite interesting it appears to be testing the gap from a couple of days before. Another random thought - actually programming a set of VSA indicators forces the mind to make rigid (and arbitrary decisions) I think with tests I went close top 1/3 of the bar...too lazy to look. It may have been open and close above 1/2. Last random thought (for now) At is most general it boils down to trying to track supply & demand using volume (or lack of it) and price movement (or lack of it). Effort vs Result. Cheers.

I used to use pitchforks a year or two back they are a phenomenal tool. In the end I went back to using plain old hand drawn lines - channels in particular. They just 'speak to me' more i think. Vae I wont comment on Wolfe as all I know is what I have read that is freely available. The thing is once you start to see geometry its everywhere, Then the tools don't matter so much its just a question of using them consistently. You mention balance points Wave, ....ever come across a guy called Michael Parsons?

oops file got left off

Just for fun I drew a couple of lines from what to my eye where more obvious potential one points. (bear in mind I am a chanell man at heart) Both 'work' but give an overshoot on 5. Am I right in thinking overshooting 5 is allowable and actually quite desirable? Any comments on the other potential 1's? Cheers.

I think I have had a mini :lightbulb: moment. (Where's the bulb emoticon when you need it). Just kind of ties in with a couple of things that I had observed for myself and had even started to trade. I love market geometry its just so cool (when it works). Wouldn't mind seeing the odd failure too, lots to be leant from them. Cheers. EDIT: Yes the 1 point is kind of tricky

Thank you!

That was exactly the bar I was talking about - a long on the close would not be wrong following plain old VSA. (a picture is worth a thousand words guess I should not have been so lazy). I noticed your post with a similar chart on another thread (albeit a far less 'deep' test). I know a couple of VSA vets that give this particular setup as one of there favourites. Its something well worth recognising. Didn't realise it was fed day that might explain the current lethargy on the index futures. Cheers.

Always worth having an hard 'emergency' stop well outside the market. Protection against things like equipment failure or, god forbid, some sort of personal catastrophe. Thats a different matter of course.

Is a way to go....and a pretty good unambiguous way. I'd not go as far as saying its the way Let me introduce another (particularly fine imo) possibility is market geometry - for example if you are buying an up sloping trend channel you would stop on a close below the the main up sloping trend line(1-3 line). The beauty of this is that it provides a handy target too (2-4 line). This is still market generated (as it uses two successive swing lows) and projected (as its a sloping line drawn through these). As an aside I would highly recommend Tim Morges (no affliation) commentaries on his stop placement and movement (hes over at medianline.com) I find them absolutely fascinating I'm not sure if the archives are still available but worth seeking out. I have them all printed out and use to read and re-read them. They just seemed very accessible to me, it was like reading a good novel as he would talk a trade through from start to finish. I'm a little loath to make recommendations but its quality stuff. He uses market swings for initial stops and trailing, lines for targets (on the whole). It is the trailing that is particularly interesting as he talks through his thought process' as the trade develops. When to move a stop to a newly formed swing high swing low, comments on price action that he's noticing etc. Trade management is certainly one of the keys to this whole game and personally I can buy in to the exits (stops and targets) are more important than entries point of view. Cheers.

If my understanding is correct point 5 can be outside the 1-3 line (even preferable). If that is the case do you wait for some trigger (reversal bar or something) to confirm point 5 and enter? Cheers.

Yeah its quite uncanny geometry everywhere. If it makes you money well that is really the most important thing I guess. I have a broad idea how to draw the lines and even trade them but would like to learn a bit more of the subtleties. I figure if his brother charges $3k he has something else to say - maybe not. I'll look forward to the odd chart now and then when you have the time and inclination.

Thanks for the repost Brown. I used to think it a bit of a cop out when market commentators said things like "I would be short if we break 1500". I'd think well of course you would as the market would be clearly going down! As a trader it is not necessary to predict the market if we react appropriately to what it is actually doing. I have to say the volume is not at all what I guessed it would be - if the volume was high on the red WRB and then eased off on the last few bars it would have been quite a different picture (to me). As it is that first hammer clearly shows buyers stepping in to support that 1500 level. The red hammer a couple of bars later is telling too (its almost a doji/long legged doji). It tests the area again but on reduced volume. Guess we'll see shortly

One thing with stops based on market structure is you often get a 'poke' above or below the swing high/swing low as the market tests or backs and fills. Seems to me waiting for a close above a market high/low to take you out would keep you in a lot more trades. I wonder if anyone uses that particular approach?

Interesting charts brown I'd quite like to see volume too (too lazy to fire up charts on my other laptop and havent really watched the markets the last month). I suspect it (volume) is low and possibly declining if so I'd risk a short from a trend line drawn through the high of the last 4 or 5 days. Of course it could go either way but I'd certainly be a bit wary of the long side. Guess I need to try and get up to speed quick on Monday, after 5 days that look lethargic good chance of a decent move one way or the other before too long. Having said that there is a case for support at 1500 (previous resistance). Guess that is looks key (and indeed so far that price has been rejected). Anyway all ways refreshing to see current thinking rather than historic analysis. I'm looking forward to jumping in next week. Cheers.

Thanks for the link. It just sounds as if things are more regulated in the USA. I may be mistaken about bookies being able to set there prices freely here of course. Pari Mutuel by definition uses starting prices I see. Never been much of a gambler. I'll have a few quid on each race if I have a day at the races or might go to a casino for the odd night out but both of those are rare events, probably 500:1 against! Cheers.

There is only one answer to your dilemma. That is don't use stops! I know that is absolute heresy to some but it doesn't mean you don't stop out loosing positions. Actually a useful paradigm shift can come out of this. You use your tools to tell you whether things are playing out as anticipated and if they are not you close or reverse. People seem to put all their effort and levels of sophistication into there entries and use really crude tools and concepts for exits. What might be a bit less radical and so more use to you is use a volatility based stop (ATR or chandelier springs to mind). Finally you could look at winning setups and maximum adverse excursions you usually get a sweet spot (or two) where to increase your winners a small amount you have to widen your stops considerably. Final thought, if you do use fixed stops (either based on market structure, a point amount or some sort of technical like ATR) they will take you out of good positions as well as bad ones. Thats the price you pay for having protection. Seems to me its far from a newbie question! Cheers.

Ahh OK that's pretty different - things make more sense now. In the UK the bookmakers will take a bet on just about anything and I guess for some things just have to make up a price on the spot with little chance of finding a counter party. Snow at Xmas is a popular one. And every now and then you read about a wierd one in the papers. How does betting on horses work in the US? Obviously no spread there? Horses are probably the most popular for sport betting in the UK. There are still bookies on most high streets. I guess if they use starting prices (final odds given at race start) its easier to set 'fair' prices to a prescribed (and legislated) formula.

I'd love to see more charts with 'proper' Wolfe. I use a whole variety of geometry but would like to learn more about Wolfe's take on things. Always ejoyed the charts you posted here http://www.traderslaboratory.com/forums/f2/wolfe-2229.html but would love to see more. Cheers.

Im glad someone mentioned HUP's again before I did! I have a broad idea what they are but do wonder how Jerry uses them in trade decisions. Last I recall he was not quite sure how to present this. I hope that he comes up with something as I have enjoyed this series immensely and miss my Market Stats fix! Cheers.

The more important thing is the range of movement over the time frame your interested in. Volatility if you like. In an ideal world you would want small tick size (granularity) large range and volatility within that range. Its easy to see why the ER was popular. Oh and or course you want thick volume traded so can you can get in or out easily (S&P certainly has that in spades). A higher $ value per tick can be good in so far as it helps keep commissions down (compared to amount traded). However if there is no volatility its tough making money. Still imo its better to have large $ swings with a lot of small ticks rather than large $ swings with a few big ticks. Worse is small $ swings with large tick size. It's probably worth considering margin requirements too though personally that's seldom an issue for me as I tend to trade small compared to my account size. (Actually it needed considering if I required overnight DAX margin sometimes and foolishly IB used to count after 4.15 GMT overnight) Looking at any of these parameters without consideration to how they all interrelate is not likely to yield wise decisions. Also dynamics change sometimes quite frequently and radically. The S&P for example is quite a different animal last I looked to when I traded it. In those days 20 or even 30 point runs where not unusual last I looked (some months back) 8 point daily ranges wherent uncommon. I would guess its enjoying a bit more volatility again now. It's all important stuff (along with time frame you focus on) to get something that suits your own personality and risk tolerance.

Things appear to be quite different to the UK (hence my comment in the other thread about betting being far from zero sum, well at least here). Is this all legislated in th US (how much a bookie can charge and how they set odds)? Lets say your taking bets on a match where the outcome can only be A wins or B wins if you only get $1 on A and $100 on B you would offer odds of 100 to 1 (or maybe a bit less to make your 'vig') In the UK the bookies can set their rate without restriction (as far as I know). What if a bookie can't unload all their risk as bets get taken? They are now in a vulnerable position no longer being win win? Seems reasonable for them to get paid to take this risk. A side question are most bets in the USA settled at 'starting prices' thats the case in the UK though a punter has the option of taking the current price which I guess gives bookies further headaches. Cheers.

Interesting you should mention the turtles - the qualities that where sought out there where simply the ability to follow a set of simple rules without question or second guessing. Nothing intellectual at all. Those that did made money those that didn't lost. Simple really. If you look at the Market Wizards - a whole bunch of background and personalties only a couple I would consider as intellectual heavyweights (Sekoyta springs to mind for example) It is my experience that 'smart' people and 'professionals' have a particularly hard time trading mainly because the things that work in business and other walks of life just don't cut it in the markets. Its easier to learn from scratch than to have to 'unlearn' a whole bunch of behaviours that served you well in life but are quite damaging in the markets. If certain mindsets have allowed you to enjoy bountiful success in other endeavours its gonna be damn hard to let go if those things (speaking from bitter experience here). Coming back to the thread title does being a sports bettor provide a foundation? I dunno I'm waiting to be persuaded. Does being a mathematician, lawyer, Doctor, CEO of a large corp, Academic, Entrepreneur etc. I'd have to say no.

Actually my overall point which I probably didn't make well is that its not 'things' that are distracting - its the mind allowing (or wanting) to be distracted. Remarkable how in the past I'd find myself checking email or off pouring a coffee just as price is approaching a level where I need to take action.

Not sure how your customers where made up Brown (investor trader whatever) but I think the widely quoted figure (which seems to vary from 80% to 95%) comes from brokerages who find that xx% of there actively accounts get run dry/ closed/ go dormant whatever. 80%+ of small business' fail in there first year is that relevant?