waveslider

Is anyone familiar with the wolfe wave? The YM and NQ are showing pretty classic examples. Here is a daily chart of YM, the up-trending blue line is the target line. This is a high probability pattern in a ranging market, which YM certainly is in after the expanding pattern over the past 2 months. If you are not familiar with the wolfe wave, google it - it is an effective pattern that happens frequently. Any comments?

US. I am looking at an ETF symbol SHV. I know there are fund types that trade end of day, but I would prefer intraday liquidity. thanks

Can anyone recommend a money market fund, or a resource for finding one, that allows daily entry/exit with low or no commission? I need a place to put money I am not trading for short periods of time.. Thanks!

I agree with you, James. Discretionary trading does win hands down - in the right hands! There are so many pitfalls out there though that the successful discretionary trader is less than 5% of the trading population. We all know the drop out stats. All mechanical trading does is try to emulate what a discretionary trader would do, but on a larger more diversified scale (one trader wouldn't be able to execute or watch the same number of signals as a computer). This advantage I see in mechanical trading -diversification. Humans simply cannot watch many markets at once with any hope of taking into account all of the data that a computer can. Another advantage is consistency. Humans are emotional and tend to be subjective. On the positive side they are also adaptive. The problem is, is the ability to adapt really helping or hurting? If a computer can identify a consistent edge, it will attack that edge consistently, every day. The markets may change, and in those cases the system may lose. But if the edge is proven over time, the edge will bring profitability. A good discretionary trader will be able to chose between a variety of methods (systems) that are appropriate for that particular time. Mechanical traders often take a shot-gun approach and apply all systems, or just train the system to stay out of the market when it is inappropriate. What you said in your second sentence is all important : But how many traders will ever go on to master the art of discretionary trading? Very few will ever trade consistently. I consider consistent profitability in trading as mastery. The reason the majority fail is not because of the lack of a good method, it is the fact that the method is not applied consistently. Human emotions just screw it up for most of us. So bottom line, if you are one of the few (don't kid yourself) who is able to see 100% objectively and know when emotion is affecting your judgement, then you are one of the few successful discretionary traders who will succeed. But think about it, if you are 100% objective and acting without emotion, you are pretty close to a machine yourself. These comments may disturb some of the discretionary traders on this board. If what you are doing works for you, great! I just think that those that may be interested in the mechanical route should not be dissuaded. Being able to act with the confidence of a statistical edge behind you is an amazing thing, for sure! ws

I have a system that accurately gives short term direction of the Russell 2000 index. I am trying to code it into paintbars and need some help. Anyone with easylanguage skills want to give it a crack?

Good point Jake about how your mindset changes once in a trade. If you are trading discretion it is very hard to see the market move your way without moving your stop up too aggressively. Even if you have a sound methodology, you trick yourself into getting out too early in order to hold onto profits. A successful fund manager once mentioned to me his idea of the best mechanical system: Take a room full of newbie traders and tell them they are trading real money, let them trade it however they want. Then fade their emotional decisions.

One other tip, keep your account small and let it blow out if you are failing. If it blows, then take some time to retreat and re-organize. To me this is like touching the fire, knowing where it is. If you are successful, gradually add another contract. The worst thing you can do is say "I need $5000 a month to live so.. I'll trade 5 contracts" when you are starting out. Expect to at best break even for a year at minimum. You need to let your account tell you if you are doing well. You can convince yourself of anything, and most people massively overestimate their potential.

My advice to a newbie would be to spend the money on a trading education rather than make your own mistakes. To be able to act with confidence you need to know that what you are doing works, and be able to do it consistently. The markets are always changing, but if you use the same approach consistently, and the approach works most of the time, you will profit. To put it in perspective, I have been trading 8 years. Self employed for 4 now. Trading futures for about 2. Still break even on futures. The only thing I am profitable on consistently is my mechanical systems which trade ETFs. I KNOW why I am not profitable on futures. It's because I lack discipline and I don't trade consistently. I have a mechanical system designed for trading the eminis and it works consistently. It does way better than me. My advice - for the majority of people out there - don't fool yourself into thinking you can overcome the FEAR-GREED impulses driving the market. Until you can come upon something that works consistently, and - most importantly - you have lots and lots of data to prove the idea works, AND you are able to execute the idea consistently, you will not be profitable. There are very very few individuals who are able to act (like machines) without emotion when it comes to money. If you are starting out and have worked hard for that money, you WILL feel emotional about trading. read this article, I can tell you it will describe the path of 99% of traders exactly: http://www.trading-naked.com/library/Chap2.pdf So, bottom line, invest in your education so you can act with confidence. Don't worry if it cost a lot of money. You would have lost that money on you r own making mistakes!

That's a good assessment notouch. However, the majority of the time price is not trending strongly, so it seems worth looking at.

I have been noticing that gaps between value areas are about as significant as VPOCs. They act as price magnets. As an example, there is a gap between Monday and Tuesday's value areas (7/23 and 7/24). We'll see if that acts as a magnet. The idea is similar to price filling in gaps on a chart. Anyone else watch this stuff? Maybe Pete Sted. mentioned this? ws

Tony- please post a chart, thanks

Brown, they are set to the highest open minus close (absolute value) of the past 3 bars, which occur within a window where there are more than 2 tick bars occurring per minute.

This is very good input, thank you! I agree very much with everything said here, especially that WRBs are not entries or exits with out proper context. Mark said: "WRB's tells you something will soon happen and anything beyond that requires many years of experience with WRBs. Thus, they are a warning sign (precursors) that you should start looking for pattern signals. " My interpretation and the reason for my comment was to point out exactly this: What is happening (by definition) with a WRB is that: 1. Volatility is higher on this bar than the previous bars, and... 2. The volatility lasted throughout the bar (time frame or tick). So, as I see it (particularly in the futures market), when volatility is introduced into a market and seen in the form of a WRB, the market will either run, or retest the WRB. What we are presented with is an important point of reference to analyze the situation with, and gauge the conviction of the market. I have been using a little method that tick chart users may be interested in trying. I have an 89 tick screen of YM. When more than (x) bars pass during the period of one minute, I get a signal. This is indicating to me that there is enough action in the market to create more than (x) bars per minute - it's another gauge of volatility. In a moving market tick bars will sometimes be created every few seconds. I use this method as a filter for a WRB. Here's a chart. Don't mind the yellow lines, they are static reversal times. The color of the WRB at the bottom is not material either. The blue lines illustrate how many bars per minute were passing. Pivot - this seems to fall in line with you thinking when you said "The more activity on the WRB the more significant is may be." There are a lot of WRBs on this chart, this is just one way to highlight those which occurred during an active market. The premise is that WRBs in an active market should be more important because of mass participation. The way the market responds to volatility is how we as traders make (or lose) money.... I am still watching and learning the nuances of WRBs, but I believe they are valuable and worth watching. I have enjoyed this thread for the most part, thanks to those contributing! ws

What do you use for your MP charts, and why? If you have a preference, tell the pro's and con's of your preference. I prefer tick. Pro: emphasizes where greatest number of trades went off, not excluding where small time players were active. Not skewed by large volume blocks. Not skewed by low volume time bars which meander away from balance. Con: Does not emphasize where large volume movements occurred. Low volume, high volatility range days appear as important as high volume days.

Hey dogpile, I remember reading this somewhere - I think "Zen in the Markets" : "Approach trading as a competition between you and yourself. Can you follow your own rules which constitute an edge? That is the competition." If you are worried about the money you need from trading, this worry will be the biggest obstacle in your success. If you can't separate mortgage-money from trading, you are either truly under-capitalized, or unconvinced of your ability to follow your own rules. In either case you are ruled by your fears. Believe me man - I know where you are coming from. I just bought my first house and have a pregnant wife. Trading is my only profession. I haven't had a losing month in a year. The first winning month of this streak was the first month I got over my fears and "followed my rules". Try meditation, try positive affirmation, try NLP. Convince yourself of your ability, then start your day out on the right foot - without fear. "On the other side of terror is illumination" - Robert Anton Wilson hope it helps - - I'm sure I'm not the only one here who knows what you are going through. You can do it, your passion will make it happen.

I have been watching WRBs for over a month now. In my analysis, the majority of the time they are not a good entry or exit point. Before getting anyone worked up I'll just point out the value I do think they have, and why. My research is concluding that most WRBs will result in at least a short term range. The only case when this is not true is when an inversion is occurring in the market and a powerful move is underway (rare). So a WRB will occur, and the market will travel (or attempt to travel) out of the range of that WRB. What happens next in a majority of cases is that price returns to test the WRB bar. This testing would be the point of entry or exit if you are using this methodology. 2 cents.

Irish Whiskey - smooth! : Jameson or JD Powers Rum - no coke needed, Nicaraguan award winner: Flor de Cana Beer: Belgian : Belhaven! Canadians say their beer is so much better than elsewhere, not a fact in my opinion. Best microbrew comes from Norcal and Oregon..

Hi Jerry, as an example of what you are doing, why not do a day by day analysis based on your methods. That way we can also learn the weaknesses and nuances required to understand your approach. Thanks in advance! ws

Hey Darth, have fun - enjoy! It's great to have a program present the market to you the way you want to see it. My only point was that you shouldn't expect to find the key to the markets through data mining. I agree 100% with Torero, there are some valid methods to be found using the daily time frame. I manage a fund that I trade only on daily signals, the system I developed to trade the fund is 90% mechanical. Also, as he mentioned, you have to be very critical of any results you may come up with. Testing them on virgin data, un-correlated markets, etc. ws

Jerry - I see, it was my error regarding the close. I should have put a chart up. This 13492 area seems to be carrying quite a bit of weight.

This might be a new thread altogether. According to the market profile chart I am using, price on YM closed the day just about at the point of control. Seeing that this point is also in the middle of about a total of 6 trading days this month, could this be considered some type of balance area? What do the experts say?

Here is a chart of YM at dogpile's request. Circle highlights entry, fading upward channel where larger downward channel meets. Green and red lines are today's value areas marked after the close.. There's some other stuff on there, I just wanted to note the potential entry. ws

I'll start a new thread..

Hi Darth, Data mining is generally a waste of time. It is the same as curve fitting, and for most circumstances un-useable. The reason is that that market is dynamic and irrational, just like the human mind. I have been around easy language for years, almost everything I have developed I have tossed. The reason most tools are not helpful is because nothing competes with the human eye. If you are trading stocks it can be helpful to program in logic to call attention to certain conditions with easylanguage. My opinion is that easylanguage is useful to test very general ideas, but at all times runs the risk of distraction. You can be sure that just about every worthwhile idea you could come up with is begin exploited - especially candles. I think there are very few tools that you need - everything is really just an extraction of price and volume. Tools like market profile are a good way of organizing information, but the same information is available there to the naked eye. The probability map seems to be garbage also. I think I can speak for a large number of people who can look back and say they have spent way too much time programming, time that could better be used refining and practicing one approach. hope that helps! ws

I'd love to hear more about how you use VWAP to bias trades Jerry