TheRumpledOne

You are correct, BLACK SWANS are unpredictable and that one reason to only be exposed in one direction. No, the price can blow right past your stop loss in a BLACK SWAN situation.

With 3 posts at the time of this posting, I see the game you are playing. Newbies and hopefuls are ADULTS. They can think for themselves. They don't need you or the liberal democrats looking out for them. If you can't stay ON TOPIC, please don't post in this thread.

Yes, you are missing the simplicity of THE RAT. If you trade both ways, you are exposing yourself to BLACK SWANS in both directions. Let's say you are unlucky and you get caught by a LONG BLACK SWAN and then get caught by a SHORT BLACK SWAN. You are down big 2 times. But if you only traded one way, you would have caught a BLACK SWAN in your direction. Does that help?

PRICE TURN Price "turns" when the candle color of the current candle is not the same as the previous candle's color. In the above chart the candles that indicate a price turn up are marked in green and candles indicating the price turned down are marked in red. You look for price to cross over the previous candle's open to confirm the turn has been made. The DOTS on the candles mark the previous open price level. You can see where price crossed the previous open and then reversed. These are entry points. If the previous candle has a red line then when price is at/near the previous open (red dot) and moving down, you enter the trade short. If the previous candle has a greenline then when price is at/near the previous open (green dot) and moving down, you enter the trade long. But you are only looking at one time frame and that's where the multimeter comes in handy... Some trend traders like to enter on "PULLBACKS". The multimeter makes it easy to see when price is pulling back to the next higher time frame or continuing the "trend". The light blue color means price is going up and price went up on the previous bar. Think "light blue sky". The dark blue color means price is going down and price went down on the previous bar. Think "deep blue sea". Look at the M15 chart and you can see price is now turning up and back to the "trend" on M30. H1 is turning up AGAINST the "trend" on H4 and D1. While price is turning down on W1 and going WITH the "trend" on MN1. Please post any questions you have in this forum. PLEASE DO NOT PM ME WITH TRADING/INDICATOR QUESTIONS.

I have posted the rules of entry and the setup. Anyone can use them if they so desire. The method hasn't changed much for years. I don't use a smart phone nor do I have satellite. So I post when I can. I am not going to play your game... I AM PLAYING MY GAME. If you don't like it, you don't have to read my posts.

2012.07.09 DAILY RAT REPORT AUDUSD triggered a RED RAD REVERSAL at/near the weekly open. The previous week's low, was a potential target or area to move the stop once penetrated. PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.

Those who don't like to get dirty, who want to work in a climate controlled atmosphere and who don't like heavy lifting.

The biggest weaknesses are: * Thinking the reason you enter a trade has a bearing on the outcome * Thinking after you a trade, you can make it a winner. * Taking losses personally * Impatience / over trading * Believing in concepts rather than reality

Interesting exchange so far! You can train someone how to trade in less than a day just like you can teach them how to play chess in less than a day. It just takes a lifetime to master. I have been posting on trading forums for a decade or so. I have shared many of my systems, methods and indicators that I have developed. I have been called just about every nasty name in the book. But that doesn't deter me. One driving force behind my posting and sharing was because my degree was in computer science and I could not believe the crappy code that was being sold for hundreds or thousands of dollars to traders. I wanted to put those guys out of business. Instead, I was attacked and kicked off of the TradeStation and eSignal forums. For telling the truth that there is NO FIXED SPREAD in Forex, I was kicked off of Forex Factory. But that doesn't deter me. Even on this forum, I have been attacked. But that doesn't deter me. There are those that like what I do. Those are the people for whom I am posting. Many people would have given up posting after a couple of weeks, months or years. I'm not a quitter. The other driving force is a few people helped me for free when I got started trading back in the 1970s and again when I started trading online back in the 1990s. I am PAYING IT FORWARD.

If you only trade in one direction, you can't always be on the unprofitable side of the trade... sooner or later, you'll be on the profitable side.

TREND EXISTS ONLY IN THE MIND OF THE TRADER. One trader looks at a weekly chart and sees trend going up while another on a 5 minute chart sees trend going down - THEY BOTH ARE "RIGHT".

If you are LONG and something UNEXPECTED happens to cause price to rise by hundreds of pips then you just benefited from a BLACK SWAN event. If you are SHORT and something UNEXPECTED happens to cause price to drop by hundreds of pips then you just benefited from a BLACK SWAN event. If you only chose to trade in one direction then only one of the above can go against you.

2012.07.05 DAILY RAT REPORT USDCHF had the RAT REVERSAL setup. Once price broke through the ATR ZONE, it was time to move the stop up and protect profit. PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.

2012.07.04 DAILY RAT REPORT The AUDUSD had the RAT REVERSAL setup today but took back the profits if you didn't take them first. Price bounced up off of the weekly open only to return. It's the 4th of July but why is America celebrating? INDEPENDENT FROM WHAT?

Q) Is there a scientific reason why you can only trade in one direction? A) Yes. If you only trade in ONE DIRECTION then you can't be wrong ALL THE TIME. Most traders seem to ALWAYS be on the wrong side of the trade. By only trading in one direction sooner or later you'll be right. The second reason is to protect against BLACK SWANS. By only trading in one direction, there is a chance a BLACK SWAN event can work in your favor. Q) How did you decide on the grey lines every 25 pips/ points? A) I am not sure exactly what you are asking. Prices that end in 00, 25, 50 and 75 are PSYCHOLOGICAL. There is usually a lot of action around these areas.

2012.07.03 DAILY RAT REPORT GBPUSD showed a RED RAT REVERSAL setup with the daily open at/near the weekly open. The BUY ZONE entry is used at/near the daily and/or weekly open. I am also working on the DYNAMIC HIGHEST GREEN OPEN/LOWEST RED OPEN indicator. Long for short opportunities at the HIGHEST GREEN OPEN and long opportunities at the LOWEST RED OPEN.

2012.06.27 DAILY RAT REPORT AUDUSD showed a GREEN RAT REVERSAL at/near the weekly open. GREEN RAT REVERSAL - LONG ENTRY CRITERIA: 1) RED CANDLE CLOSES 2) GREEN CANDLE CLOSES 3) PRICE TOUCHES HIGH OF PREVIOUS GREEN CANDLE - ENTER LONG. STOP LOSS IS ALWAYS 10 PIPS. DRAIN THE BANKS - LIKE A RAT 1) price within 20 pips of the daily low - that is OPPORTUNITY 2) red candle closes 3) green candle closes - note the high price of the green candle. 4) enter long at the green candle's high price 5) STOP LOSS IS 10 PIPS 6) Take whatever profit you can. 7) If the rules do not mention it, then it is of no concern. ================================================================ Let's clear things up: 1) To trade like a RAT is to ALWAYS trade in ONE DIRECTION - either LONG or SHORT. Once you pick a "team", you can't switch. 2) The "within 20 pips of the daily high/low" is the BEST possible entry to get the maximum run BUT the RAT REVERSAL entry works ANYWHERE on the chart. 3) The TRAINING WHEELS only signals LONG trades ABOVE the weekly open and SHORT trades BELOW the weekly above. This bias keeps beginning traders, as well as experienced traders, out of trouble. Trading is GUESSING. If it wasn't, you wouldn't need a STOP LOSS. THINK ABOUT IT!!

I have posted FREQUENCY DISTRIBUTIONS showing the validity of THE RAT REVERSAL.

No. I don't backtest. I trade in the moment.

As many of you may know, I have moved back to my ranch. At the moment, I don't have 24/7 internet access due to the rural location. This will change my trading style. I will use the DAILY RAT and look for entry opportunities at/near the weekly open price and at/near the weekly ATR zones. I can set and forget these trades. There are videos of the ranch on my YouTube channel. I'll be making a video on my new trading style soon. In the chart above, the EURJPY had a RAT REVERSAL setup on the daily chart AND the entry was near the weekly open price. This is an example of the trades I will be doing. IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

ALL YOU NEED TO KNOW ABOUT TRADING * Price either goes up or down. * No one knows what will happen next. * Keep losses small and let winners run. * POSITION SIZE = RISK / STOP LOSS. * The reason you entered has no bearing on the outcome of your trade. * You can control the size of your loss (skill) but you can't control the size of your win (luck). * You need to know when to pick up your chips and cash them in. Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss) You cannot control the probabilities of wining or losing. You cannot control your average win size. The only part of the equation that you can control is your average loss size. PRICE ACTION “Now, 2 patterns of market behavior happen on a regular basis: 1) the price breaks to new high's (or low's) 2) the price reverses from new high's (or low's) They happen regardless of time frame . They are phenomena that can be exploited without the fear if found out by others, that they might cease to exist.” - H. Rearden 1) Price will either breakout of the high, low or both of the previous bar 2) Price will not breakout of the previous bar. You cannot reduce it any further. Anything else complicates the issue. ENTERING A TRADE You either decide to: 1) Wait and do not enter a trade 2) Trade a breakout 3) Trade a reversal. Those are your ONLY 3 options. That is all you need to know about trading.

ALL YOU NEED TO KNOW ABOUT TRADING * Price either goes up or down. * No one knows what will happen next. * Keep losses small and let winners run. * POSITION SIZE = RISK / STOP LOSS. * The reason you entered has no bearing on the outcome of your trade. * You can control the size of your loss (skill) but you can't control the size of your win (luck). * You need to know when to pick up your chips and cash them in. Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss) You cannot control the probabilities of wining or losing. You cannot control your average win size. The only part of the equation of the equation that you can control is your average loss size. PRICE ACTION “Now, 2 patterns of market behavior happen on a regular basis: 1) the price breaks to new high's (or low's) 2) the price reverses from new high's (or low's) They happen regardless of time frame (with the obvious limitations explained above) They are phenomena that can be exploited without the fear if found out by others, that they might cease to exist.” - H. Rearden 1) Price will either breakout of the high, low or both of the previous bar 2) Price will not breakout of the previous bar. You cannot reduce it any further. Anything else complicates the issue. ENTERING A TRADE You either decide to: 1) Wait and do not enter a trade 2) Trade a breakout 3) Trade a reversal. Those are your ONLY 3 options. That is all you need to know about trading.

Let's clear things up: 1) To trade like a RAT is to ALWAYS trade in ONE DIRECTION - either LONG or SHORT. Once you pick a "team", you can't switch. 2) The "within 20 pips of the CURRENT daily high/low" is the BEST possible entry to get the maximum run BUT the RAT REVERSAL entry works ANYWHERE on the chart. Trading is GUESSING. If it wasn't, you wouldn't need a STOP LOSS. THINK ABOUT IT!! The important part is to enter WITHIN 20 pips of the CURRENT daily low. The RAT REVERSAL is only one entry method. <--------------------------------------------------------------------> PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.

Notice where the Daily Open was. -------------------------------------------------------- The important part is to enter WITHIN 20 pips of the daily low. The RAT REVERSAL is only one entry method. <--------------------------------------------------------------------> PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.

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