daedalus

I'm pretty bearish on the market right now... How many of us watched the paul tudor jones documentary? I got chills when I saw this. 91% correlation... MRCI Dow Jones Industrial Avg(Apr 1937-Oct 1938 vs Current) Chart Page (In the documentary the correlations they were running in 1987 was 91-92% prior to black monday) It may not be monday, but i'm certainly expecting implosion at some point in the near future. But I agree with Brownsfan... for my trading I could give a crap which way its going as long as its going somewhere!

As far as I can tell this 2.5 rule is bullshit. I just did my own analysis, average bars per day on different tick charts prior to the 5th, and post 5th... and if you do a standard (your tick timeframe) X 2.5 = (your new tick timeframe) you won't be trading the same "timeframe" as before if you get my meaning. By their standards, a 233T should be a 582T. (233X2.5). What I found was that a 233T prior to the 5th is closest to a 400T afterwards. Which means the actual conversion is closer to 1.5X's to 1.75X's as much data, but certainly not 2.5x's as much. I've attached a barcounter.eld for tradestation users to do their own conversions. Cheers! BARCOUNTER.ELD

Is it only on the ES? I'm not noticing the same stuff on the NQ... *edit*... now i maybe am.... I just took a look at the 10000 tick bar on the nq and there is a noticeable wider day starting on the 5th...

The TTM guys were recommending that you take your time frame you would normally trade and multiply it time 2.5, and the result should be the new timeframe you need to trade. I've yet to make this switch and was wondering if any of you had?

Anyone else seeing big differences on their charts? Apparently the CME just changed how they report ticks on the stock index futures. I haven't changed any of my charts yet (as I think they all look about how they should)? Anyone else changed their charts? Apparently they are reporting about 2.5X's as much tick data, thus, a 233 tick chart is now equal to a 583 tick chart (or 2.5x's as much). Thoughts, ideas?

Keep up the posting. I'm very interested to see your results and hear more about neural networks and "new age" automated trading. There is very little on the subject and I know of very few people who use systems like that and I think its fascinating. Thanks for sharing! Congrats on the good day!

See well thats where I disagree with a lot of the analysis thats been posted in here... A valid H2/L2 in my can't happen UNTIL A NEW HIGH OR LOW IS MADE... Isn't the entire idea of al's H2/L2 to catch the second wave of a move - that the second wave of the pullback is the wave that is the real move. Thus, in the first trade, when it made an L1, yes there was a second bar that made a lower low, but until price goes back up and puts in a new high i'm not going to start putting in sell stop orders to get short. Is that how everyone else is interpreting this? And I just wanted to repost this image - the first time I left out the second trade results...

As an extension of my last post.... Todays EOD thoughts... Entries were spotted in real time... again, all i'm focusing on is H2/L2 entries either as trend pullbacks near the EMA or at prior Support/Resistance. Par at 200%, Take Profit at 300% extensions of entry candle. Comments? Thoughts? Suggestions? Am I off my rocker? I just figure, rather than trying to exploit every wiggle and jiggle in the market i'd just stick to the basics of one kind of setup (L2/H2) at the simple points of the market.

Some of the wisest words ever spoken. While I still trade most of the day, what I have to agree 110% is this: Trade that one reliable setup in your arsenal and just exploit it on as many markets as you can. Its a hell of a lot easier than trying to trade every setup known to man on one market. It keeps things simple, it allows you to truly spot those exceptional setups, and doesn't force you to force your trades on one market/timeframe because you are monitoring so many that you almost always catch something worth having!

Hey gents... been a huge fan of al's work for awhile. Just bought the book yesterday so its still in the mail, but based off the I-Trade Show webinar and this thread i've started mock trading this method just looking for basic H2/L2 patterns around the EMA's. This was today's trade thus far (the only one i've had): What I liked: - Strong Downtrend - Clearly defined L1 - Pivot Low visible - Relatively Low Risk entry candle. What I didn't like: - Price trading above 21ema. How I manage all the entries, are using a quick fib retracement of the entry candle. 200% represents a 1:1 move, get to par, 300% represents my 2:1 target profit level. Cheers!

Interesting stuff. I never could seem to get any kind of consistency in the results. The P/L's always seemed to be up and down and up and down with marginal (if any) profit left at the end. But that was just my experience. In disclosure, I was using the Universal Replica that was available for download for free by another company.

Yea, I understand your version is, but because of your custom DLL's its not possible for us to re-create it in TS. Tooker apparently mimicked the programming in another program platform, however the platform in his screen capture isn't familiar to me and I wanted to know what he was using. But Urma - huge thanks for all the insight you've given us with this idea. I have been very impressed with the amount of information you have on the subject and your willingness to share your ideas with the forum. For that - THANKS!!! I just wish I could code it up in TS. Is it even worth attempting to get some sort of proxy to what you see or is the limitation of the data really so severe it really can't be attempted without first addressing the data granularity issues?

Can I ask what software that was programmed in? Obviously we can't replicate this in TS due to datafeed restrictions. Just curious what you were using to code it up in?

Just curious how many of you trade or don't trade FOMC day. I personally avoid it and take the day off. Seems like the only good times (ie normal price action times) to trade are the first half hour and the last 45 minutes and I'd just rather not mess with it. What about you guys?

+1. I can never rationalize the total Risk : Reward variance in scaling out positions vs. a full stop out... but thats just my personal preference. All in all out forces me to hold trades and stay accountable to my proper exits.

Agreed - I think the psychology behind them is one of the biggest reasons I choose to use them. I love the logic behind them and being able to see the shift between buyers and sellers and a lot of times seeing exactly where that war is being waged and who is winning.

Just curious what a lot of you hardcore candlestick guys find yourself entering the market on most of the time? Personally I tend not to use so many true "candlestick patterns" like the dark cloud, spinning whatever, etc. as I am just using single bars candles like hammers/pinbars. They are probably my favorite setup which I use at prior S/R. What about you all? Whats your favorite setup?

Just ideas... Maybe use a Keltner Channel and if your move makes a break outside of it give it room to run, else take a pre-specified target? Personally what I do (because I have struggled with this EXACT question for so long) was to just target 2X my initial risk and be done with it. I just found that it was more consistent with me getting out with profit (and usually more of it) than waiting for some lagging indicator to tell me that price was exhausted. Did I miss out on some huge runners? Sure... But I felt that I made up for it by hitting more "singles" if you will than 1 home run. Great discussion though. I'm excited to see what other ideas spark up.

+1 I love checking in and seeing you all doing well and continually posting. I'll get back to posting my results daily as well! Cheers!

They suck the dumb money in as the walk out the back door with their money... classic wall street.

Awesome thread swansjr!!! Very rarely do we see anyone "show their cards" in so much detail and back it up with proof in videos/pictures, etc. Keep it up!!!

Those two post by Tams are probably the most helpful "tick reading" posts i've ever come across. No one has ever quantified the "how" or "what it means" before. Kudos to you sir!!!

How liquid are these markets gents? I'm interested in trading a smaller lot size than a normal futures size (for position sizing, etc) but I don't want to go back to the spot market because I typically enter the market on buy/sell stops. Much easier to do this with a DOM in the futures market and a constant spread. Are they tradeable and smooth or illiquid like some of the other new "emini" contracts (mini gold, silver, etc). I can't pull up their data in my feed yet or i'd check it out myself!!!

I have used MTPredictor 4.5 RT for TS and frankly was left unimpressed. Initially I thought it was fantastic and I had found the holy grail but as I started to dig deeper the lack of winning trades really started to annoy me. HOWEVER. 1. I don't think of the software or the company to be a scam. The openly state expected win rates and reinforce the need to trade higher timeframes (to avoid chop) and the idea of risk:reward. 2. If you want to use this actually "day trading" its not the best. I think the smallest timeframe they advocate trading is a 15 minute, but ideally it should be a 30minute chart or higher. Personally i'm looking at 2min-233 tick charts and I need something that holds up on the smaller stuff, and honestly it just didn't. 3. If you can trade with a low win rate and want a more "swing" based system then it might be something to look for. Personally I find it much easier to trade and "pull the trigger" with a higher win rate system than something that might achieve 40%. The software is very cool and has a lot of nice features but is pricey. They are almost always doing a 20% off deal on some website so do a google search before buying.

You have made spectacular progress since I first started tracking your progress 61 pages ago. Keep at it man!!! You use very simple analysis, but very logical analysis and I think it contributes a lot ot your success. You didn't get caught up in the indicator rabbit hole and stuck with the most important things in the market. Keep at it!