steve46

I've had that conversation with Don....he makes money with his method and sees no reason to change...nothing wrong with that... As to your second comment, I think what matters is the psychological makeup of the trader. Unfortunately, many folks show up here hoping/believing that they are going to find something that allows them to trade without having to think, to work at it, to learn a skill (or a profession)...and that once they find that special something (or special somebody) they will be able to make unlimited money into the future ("and they lived happily ever after")....as you can tell from my comments, I think this is a "fairy tale"...and as such it is indicative of an infantile personality....and in fact if you read many of my previous posts, what you see is the reaction of "infantile" personalities to my comments....(I will leave that for another thread)... Look here is what matters....if you see a method that works for you....ask yourself if you are willing invest yourself in the hard work and effort that it takes to A) really learn a system and B.) to "extend yourself" to make it work....I use this language purposely....unless you invented a system yourself, what you will find is that any method you choose to pursue will require an adjustment, an accomodation on your part...sometimes that adjustment will be more than you are willing to make...and in that case...the sooner you find out, the better, so that you can point & click to the next option.....If on the other hand, as you move forward to investigate how a method "trades" and you see that it might "fit" your personality reasonably well, then you would do well to put forth the effort (to extend yourself)... I would love to teach struggling students, provided they were "adults" willing to work, possessed of the basic skills, motivated and focused on the goal of learning to become independent, profitable traders....the problem is that it is incredibly rare to find those people, in fact in my experience, those who I taught were almost always already successful in other pursuits, intelligent, patient and disciplined....My intuition is that those folks would have been successful using any number of methods (not just mine)... Based on my previous classes, I believe a motivated skilled adult could learn this system in about 3, to maybe 6 months max...and then be on their own...unfortunately the culture of cynicism here prevents it....so I stopped offering to do it...

Excellent idea...Don is a decent guy

Look my friend...on an intraday basis, a significant move after an economic report or some news event should be viewed as though price were a rubber band.....the report or news event is released and then the rubber band is stretched....if it stretches too much, it breaks and price will keep on going, but more often what happens is that price "stretches" and then at some point, reverses... There's also an element of common sense that you can employ....if the primary trend on a daily basis is up and the event "stretches" the market down....its pretty likely that you are going to see a reversal....especially in a market dominated by professionals....why? Because we have all "seen" this movie many times before.....in fact on the professional (institutional) side, we look at adverse events as buying opportunities...... The first thing you need to do is to observe this kind of behavior...there isn't any shortcut for this...it just takes time (or research) sometimes both... The next thing you can do is to watch someone who HAS this experience, and observe how they deal with it... and finally, if you do this for a while, one of the lessons you learn is that in order to make money trading these types of events, a person has to prepare ahead of time....you have to have a plan, you have to be able to recognize whether the event is unfolding in a way that fits your trading plan.....then if it does (match with what you expected) you have to be able to execute your trade in a disciplined manner...and if it doesn't (if something doesn't "look right") you have to be able to stand aside...(this is part of good risk management).... You can't just improvise...you see?

"Those who suffer from emotional problems will insist that one cannot trade without emotion. Emotion must be controlled. Emotion must be directed. Emotion must be managed". It seems to me sir, that you have the perfect solution to all this....simply delete any challenging, provacative or emotionally charged material from your view..... To the extent that you are able to control the world around you, everything should be perfectly calm..... Then all you have to do is to make sure you never get caught outside your climate controlled little neighborhood at night....or the big bad wolf may come and take your lunch money..... Oh look at that....its getting dark out....

I would take issue with the idea that nothing has changed But I notice that people are willing to put money at risk using everything from High Frequency methods to astological alignment of the planets....I'll stick with what I am doing.

OK lets take a step back First....these are "buzzwords".....we all use math..most everyone begins using charts and indicators even though they don't really know much about the tools and how they are constructed.....it is only when a person takes the time to obtain some background that they have a chance of moving past, the half truths and urban myth that flies about here (and on most public sites for that matter)... Now as mentioned we all use math....but if you happen to have a signficant background in math, you can use it to your advantage....that "advantage" which some call an edge....depends on the kind of background information you have at your command and whether or not you have the skill and experience to apply it to the markets... If you have a background....if you have knowledge...the best thing to do is to bring it to bear on the problem....if you don't well, as mentioned....your options are fewer....and you have to realize that in a market place where significant money is at stake...there are a lot of very well educated folks who are competing with you... If you can obtain an edge (meaning you have a way of consistently making money) by drawing lines and boxes....God bless you...go for it....but if that doesn't work for you...you may want to at least give a thought to learning something that might help...the way I figure it....the time is going to go by anyway isn't it.....I think the real question is how are you going to invest in yourself...and are you giving yourself the best tools for success...? The method I used to trade relied on math...along the way I tried to simplify it for use by retail traders with a limited knowledge of that subject...what I found was unexpected...and although it still requires math, I think it is a nice compromise...you don't have to have a significant math education, but you are a step up from drawing lines and boxes.... Hope this helps Steve

Unfortunately, things have changed significantly since Mr. Wyckoff was pontificating from his Jaccuzzi so many years ago.... Clearly if a person has limited skills and is short on education, their options are few...perhaps drawing lines pointing at and away from boxes is the best they can hope for..ultimately if you can make it work, that is what counts.... I notice that the gentleman suggests that if a trader finds his/her emotions are getting in the way of their success, they should simply "stop doing that"..... I find it all very entertaining...

Yes thanks for that very important clarification Blue Horseshoe...its called a visual representation....my distribution and the logic arrows are the tools that provide the trader with the info they need to trade it... Goodoboy, I use all three charts....as I have mentioned previously each one provides a different look at the data...the 10 is less noisy, shows less detail and provides a look at trend, the three shows a bit more detail and I use it to determine the initial signal that I use to enter and the 1 min is use when volume is low OR at the market open when I like to see as much detail as possible.. Isn't it interesting that people go from heckling to suddenly being VERY damn interested in how this all works... Steve

I guess the best answer to your comment is to suggest that my distribution puts a "floor" under price at 1432.25...and from there what you want to do is see how price reacts as it tests that price.....we saw in the pre-market how it works....price went down to test and then reversed right there....I expected the same at the open.... I realize it takes a bit of courage to do this but thats what we are paid to do....I try to make it a bit easier by putting that distribution (and the logic arrows) in place to help me....but there is always going to be risk and I am going to be wrong at times....thats how this profession works...the only thing I can do about it is to try to make good decisions and manage risk so that my losses are less than my wins.... From my point of view it is a simple choice, you either learn to operate this way, or find another way that makes you a dollar, or you keep pecking away at it and bleed your account down to nothing....which is what most retail traders end up doing. I hope this helps Good luck

and here is the open... As you can see we retested 1432.25 twice..so you had two shots at getting long If you saw it, recognized the opportunity and took action, you got filled somewhere around 1432.50 or 1432.75....the move up was good for about 3+ points...and then we saw a reversal pattern (algo based reversal pattern) This is expected to be a range day, but again news trumps everything Good luck folks

always the 1 min chart for this kind of trade...you can see that in the post just above yours (look at the top of the chart and you can see it is a 1 min chart) Seeing this in hindsight shows you the logic and the result when it is done right....I think the best way to really do this and provide something of value is to have folks watch me do it in real time....I'll give it some thought...

and here is the Employment Report Trade.....the red arrow is the moment the report is made public...and of course the data is negative so we have the initial move down....on this move we see price test 1432.25 on our distribution, take it out....and then reverse ACTIVATING OUR PRE-SET LOGIC...which tells us...if price takes out that price, then reverses, on a close above 1432.25, look for a long entry.... The green arrow shows the entry point as price does in fact "take out" that price....then reverses, and you have a few seconds to recognize and act as the next bar opens....that is your entry. The stop loss on this trade is a close back below the line... This by the way is called "event trading" and is something that I try to do as much as possible. The volatility that moves the market makes it fairly straightforward, IF you have a plan....and the ability to recognize the opportunity and execute....

I am really enjoying trading this system Here is the DAX open this evening....I realize we have unusual circumstances here with the news of unlimited bond buying coming out from the Euro Zone, however the distribution is really helping to frame the action and it seems to be quite accurate This evening at the DAX open we saw price move through the upper limit (blue line) and our logic arrows tell us to wait for a close above that price point..as can be seen in the attached chart as price closes above that point we have our choice of entries...the first entry (the green arrow above the line) is the first open after price "takes out" the line....The second occurs when price retests (the right most green arrow)...that re-test occurs at the London open and up we go...... For those interested in the numbers the logic is that a close above the previous high at 1432.25 warrants a long entry...and that is exactly what happened....to the tick....I am not saying this will happen all the time, but it is nice to see it here this evening...

Here are Friday's ES & DAX distributions It will be interesting to see how price acts when we are starting near the top instead of at the lower extreme or midpoint... Based on what we are seeing, there is something going on with this method that I like (certainly makes it easier to make money), but do not have a complete understanding of as of yet.... A final note, I think this is the 7th (6 ES and 1 NQ) distribution that I have published, all in the evening prior to the open...and each time price has respected the "logic lines"...more to the point, on my worksheet where I have the lines sorted by short time frame and long time frame participants, I see now that by observing how price acts at each test point, I can confirm which side is in control...the advantage to this is that I can anticipate whether we are going to have a range day, or a trend day...(on the trend day for example I can stay with a position longer thus taking more profit)...

Yes GOB, this is the pivot quarter...and if they want to maximize their profits the easiest way to do so is to keep the market above that line in the sand (July's open) AND to do a lot of volume....remember this (summer) and most of the year for that matter, we have seen pretty low volume....volume and price are the ways that institutional participants get paid.....on commission and profits off trading (when they can make them).....you see?

A couple of closing thoughts for those who might be interested I believe I have mentioned this before....the folks who have the capital and the motivation to move markets do not have an interest in technical analysis per se....that is to say, most do not "care about" moving averages, channels, market profile, volume profile...etc....what they DO care about is profits...and time What this means is that these folks are very much interested in making money at specific times of the year....that is the basis for my "time based pivots".....so "goodoboy" if you want to know where we are headed simply go to my blog and look at the yearly, quarterly and monthly numbers.... With today's news (about the Euro and bond buying)...institutional players know that there is a nice wind at their backs...and they know that they have a limited amount of time in which to make as much profit as they can....in fact....in the business we call this time period (from July to end of Sept) our "Pivot Quarter"....what this means is that we have only three month left in which to book profits for the year...so the goal for these folks is as follows 1. Stay above (keep the markets above) the quarterly open (July-Sept) 2. Try to get as far above 1424.75 as possible 3. Try to move as much inventory (trading volume) as possible before Christmas Given that, what you have is a natural "long" bias...and the only obstacles in the way are either adverse domestic news, or adverse Euro news.....either one could cause a problem.... I continue to "look both ways" AND I keep a general long bias as I approach each trading day.

Here is today's "breakout" trade....if you go back to post # 114 you will see my distribution for this morning...and at the top of the ES (right hand chart), you see the "up arrow" at 1418 (at the top of the distribution).... That "logic arrow" tells the trader that on a close above that price he/she would look for a long (or simply take a long right there). The idea is simple and effective...at that point, long time frame participants are likely to come in to buy...in fact they are main "motivators" moving the market up...and they are the ones with the capital to continue to move this market up...rather than just take profits.... As you can see, today if you would have simply bought the next open above 1418 and held, you would have had a very nice day...if you didn't, well you are probably drumming your fingers on the table wondering why........ For those who are struggling or who have not figured it out, you have to trade from a core concept that works....and that gets you on the same side as the folks who have the capital and the motivation to move the market....the rest of it is about learning to recognize the signals, to size your position and hold it long enough to obtain a sizable profit, while managing risk..... Best of luck to everyone

First, the more you know, the better.....in all things...the problem is that you have to invest quite a bit of time to get enough knowledge to make a significant difference...I would estimate that taking the first year of probability & statistics is a minimum for most serious professionals...You also need to know how to use an Excel Spreadsheet, how to import data and to analyze it using the available menu options... Sherry's book is an excellent example of what I was saying...He goes through many difference aspects of statistical analysis...if you have some background you can follow what he is doing and make sense of it...if on the other hand you don't have an adequate background it will probably not make much sense to you...You probably won't like this but it is just like learning math after not having done it for a while...if for example you took beggining algebra in high school or college and then did nothing with it for a while, you cannot expect to simply move ahead to intermediate algebra without doing some review...do you see what I mean...? Sorry but in this case there aren't many "shortcuts".... If you know someone with a good solid background it may speed up your learning process if you can ask them questions. This is why the Khan Academy is a good idea for many students. You can go at your own pace and learn quite a bit.....

Thursday's DAX & ES Distributions

What you need GOB, is to learn to be a little bit more selective about your trade entries. This (intraday trading) is one of the most challenging things you can do....the reason most folks blow out their accounts is that they don't understand how important it is to take the time to really watch the action, before you put money at risk....and I am guessing the local crazies will say something about this, but in my opinion what you really need is to watch someone who knows how to do this and can tell you what he/she is looking at while they trade...you can do it on your own...but its going to take its own good time... As I said before you have good instinct but it seems to me that you get impatient or bored...and then you make mistakes....you cant let that happen...at least not very often.. In answer to your other question....this market is pretty simple...it tests up to find buyers and to activate automated order action...or down to find sellers (and to activate automated order action)...these tests are called "probes"....and if they don't get the response they are looking for in one direction, it is a signal of sorts, to go the other way...you see? A while back I pointed out that the markets display one of two conditions...either "balance" or "imbalance"....if a market displays balance, that means that buyers and sellers are pretty much even in terms of committment and number of orders to buy & sell....when that happens price moves sideways and the range up and down is limited...in contrast, when the market displays imbalance...it means that one side has more "horsepower" and that usually results in a sustained trend (vertical move up or down)....what you need to do is to become a better observer of what the market is telling you... Hope some of this helps Steve

"Controlling your emotions should not be an issue because there shouldn't be any emotions to control. If there are, then change whatever behavior is eliciting the emotions in the first place"... Why of course, why didn't he think of that before.....should be no problem at all, to turn off the emotional responses we humans have developed over the course of the past 200,000 years.....consider it done!!!!

and to put a little icing on the cake before I close out...I would like to direct the reader's attention back to post #104 where I posted today's distribution prior to the market open If you look at the distribution on the right (for the ES contract) notice that just under the blue rectangle, you will see a line and a green up arrow....that line is at 1402....and the arrow represents our predetermined "logic" telling us that on a close at or above we would want to go long if/when we saw a valid opportunity (as we did several times today)....

This type of day is always frustrating for retail traders....The chop and lack of vol are difficult to deal with to be sure The job of the professional is to find a way to get it done regardless.... First the obvious, price opened within the midpoint of our distribution and during the opening half hour could not establish any significant range...we look at the conditions, summer, low volume and markets waiting for substantial news regarding the Euro and we should I believe be ready for a range bound day. On the charts previously posted we indicated that we had found what I like to call a "tell"...simply put we observe that as the market tests a particular price point, automated execution kicks in to mark it up....and even if it is only a few points each time...that is all we need PROVIDED that a reasonably accurate entry can be determined and used several times during the session... We have posted this on other threads.....our training is specific when it comes to this situation. Once we determine that this entry is viable we simply continue to take the trade "until they make us pay" (until we are wrong)....why? Think about it....if it is automated execution that is largely responsible for the move, and we have a repetitive range bound day, what would cause this situation to change?.......nothing....it is likely to continue for an undetermined length of time....so the strategy (developed long ago by others) is to continue to jump on board, managing risk appropriately...booking a small win each time.... Once again our distribution provides the framework we needed to see this opportunity.... Good luck in the markets folks

and here is the same opportunity yet again (see the right most arrow up) Price closes above 1402 and up we go....

I have pointed this out at least once previously This is how you confirm "levels"..if we start with the left most arrow, you see price test and close at 1402...at that point buyers come in to mark it up...a significant move on an otherwise choppy crappy day. Now go to the next arrow and you see a slightly different version of the same script...this time price comes down to test that same "line in the sand" looking for sellers...they don't find sellers and price reverses...closes above 1402, then comes back to retest....and again buyers come, moving it up signficantly And the last arrow....again price comes back down to look for sellers and finding none, once again the market reverses at the same price.... To the extent that a trader can observe and then act, he or she might be able to adapt fast enough to profit from the information....it takes patience and willingness to watch first, and then trade, when you see a viable opportunity. Good luck folks