WHY?

John at NO BS DAY TRADING - No BS deals with these issues

You must be mighty good, mighty mouse!

Stop losses will get gunned. Are you prepared for that?

LOL I really like that description Reaver!!! "Bottom line puke point hard stop".

Zero sum means for every person that gains in the futures markets on a contract another person/party has an equivalent loss. The net change in total wealth is "o". Just shifted from one party to the other.

Whatever you can do consistently on a live simulator then reduce that by 75% maybe 85% because of slippage...emotions...errors under stress...etc. and that will probally be what your method will pull out of the markets providing you are disciplined to follow entry/exit signals. If you pull 3 points on average using a sim look to pull .50 to .75 pts live trading. On average that is.

Jack be nimble. Jack be quick.Or Jack shall fall like butterstick (candle stick).

Hope, fear, and greed. All three must leave.

He will be back just wait and see.

Not sure if this was meant for me or johnnycake as you referenced my post not his last one????

reduce that 4,5 points by 75% when going live with real money. if you can make your methodolgy work consistently at the 75% reduced performance level then the money is simply a question of trading size and being disciplined. good luck

LOL you gotta be only computer age trading. Semantics.

I would suggest going to a live demo account. It definitley isn't the same as live trading ....the emotional factor is left almost entirely out (as it doesn't hurt to lose play money) and there is the slippage factor. However, that said, live demo accounts can be useful for preliminary testing of a system. Plus the demo gives you a feel for the platform. The final step is starting with real money. That is really the only real test because all the factors are in play. Back when I started we didn't have live demo around or if they were out there I didn't know anything about them so I basically started out of the gates with real money. Might have done a tad bit of papertrading first ..not sure. Once starting with real money live I would suggest trading small size until you really see if your strategies work in the real world. If you trade the night session at all do small size only. When NQ and Dow track together in same direction many times the S&P follows in the wake (day session). In general I don't trade news. I figure it is already discounted in the price action. I use classical tapereading and support/resistance in trading. Good luck

I sometimes trade the ES during the night session. I use an hourly chart and a combination of support/resistance zones along with tape reading. By tape reading I mean correlating price with volume. Trading the ES at night (after 5:00 p.m.) on an hourly chart 1.5 to 2 pt stops works pretty good. Profit target .50 to .75. Sometimes a point. General rule if 1 contract hands me 30.00 to 40.00 I like to grab it. This can be done sometimes several times in 1 hour...sometimes 1 time in 2 hours. But, I usually trade the NQ and YM at the same time as all three tend to track together. More money can be made by raising size but one has to be careful with large size in the night session as it is much slower.

Back to basics. Again the cycle exist.

Remember also in a bull market you can not only get 123...4...5 but also get a short-term correction in the bull market that actually unfolds as a 3 day cycle (as shorter term down trend) even creating a BV on the sell day! Again the cycle stays intact but because it is a bull market in a correction you play it as less than ideal cycles and must be very careful shorting these senarios as it remains a BULL market (it is only in a correction). Ideal cycles are found more in sideways markets. Does this make any sense??

Taylor is all about "anticipation". You anticipate the ideal cycles and you also anticipate the less than ideal cycles. He has rules that govern both. Actual market action gives you a cue on the the most probable cycle that is unfolding. In the senario # 1 above you have a less than ideal cycle. Do you play it? Sure. This sort of senario tells you that with the high close on the SS day you are likely to have a shorting opportunity on the next day i.e. the Buy day. However, one can't forget we are in a strong up trend. This being the case you would "anticipate" a shallow decline on that buy day so get ready to cover any short taken very quickly and most likely very early in the session. You also anticipate to go long later in the day (afternoon) on an HB (higher bottom). On buy days a stock that has held a higher bottom all day and it is say within and hour or two off the close (30 minutes even better) then an HB is likely to occur. An HB simply means that the stock held a higher low than the previous days low. HB's only count on the buy day. They are not to be used on other days. Taylor says most HB's made on a buy day are profitable. Of course, they must be held overnight generally speaking. You would look to sell the long HB taken the next day of the cycle i.e. the sell day. One could even wait for the next SS day to sell it but usually it is best to sell the HB the very next day. In summary, the cycle has continued intact. The way you played it was different that playing the ideal cycle. You anticipated a less than ideal cycle cycle coming up because of 1) the strong uptrend 2) the high close on the previous SS day. Usually, when the market has that extra beat or two on the way up you get these HB's more often. It has that extra beat because of the strong uptrend. Again, many 3 day cycles take place in uptrends or downtrends. Some are ideal and some are less than ideal cycles. Rules govern both. You are always anticpating the cycle. While observing actual market action you must always be asking yourself is it an ideal cycle unfolding here or is it a less than ideal cycle? Your tactic for the day depends on the actual cycle that unfolds. This business of flipping the cycle to try and make it fit an ideal cycle only confuses and wrecks havoc with Taylors rules. I have for years toyed around with tweaking Taylor. I have found very few circumstances where it is even a possibility to rephase the cycle and still play by the rules or reap much benefit from doing so. Senario # 2 above is what you want to see for an ideal cycle setup if not in a strong downtrend. If it is a strong downtrend then the low close on the SS Day gives more weight to the next day (buy day) making a lower low than the SS day. However, that is NOT a BV. BV's ONLY occurr on sell days. The flat close on the buy day is a very strong implication of a BV taking place the next day i.e. the sell day. BV's are for taking long positions and are counter trend trading. You are actually trading against the longer term trend using Taylors rules. So, how do you play senario 2 above? Well, the weak close on the SS day and the longer term downtrend indicates, of course, weakness. So, you are anticipating a failure on the buy day for the high to penetrate the high of the precious day (the SS day). One could short a weaker high on the buy IF and ONLY if it is made early in the session. If it then closes weak on the buy day one could look at holding the short over night (the longer term downtrend puts the probabilities in your favor the decline will continue down on the next day). So does the weak close on the buy day. So, I would look at holding the short overnight and covering on the next day (sell day) then reversing on a BV (a buying day violation...this occurs when the price very early in the session of the sell day trades under the low of the precvious buy day). So I would be long on the BV (i.e. I am taking a counter trend trade). What is my selling objective? I would try and sell my long the SAME buy day at or just under the low of the previous day (i.e. the buy day). One can't afford to follow the long position up very far because the general trend is down. In summary, the weak close the SS day and the weak close the buy day helped me to anticipate a weak high on the buy day and a possible shorting opportunity to be held over night which is confirmed by the weak close on the buy day. Together the weak close on the SS day and the weak close on the buy day and the longer term downtrend, all three added together, helps me to anticipate a possible BV being made on the next day (sell day) and thus gives me an opportunity of reversing from my short position and taking a long position counter trend trade. You will find several BV opportunities in strong longer term downtrends. The cycle stay intact. How you trade it is what changes. I think Rich Bois has already told us that in a previous post. The longer term downtrend creates those extra beats in the rhythm that Taylor talks about.

The cycles exist because there must be market stability. Manipulators cannot ALL the time drive markets straight up and straight down or no one would want to trade, as it would be too risky. So, many times markets are taken up in slower bull trends that have many 3 day cycles in it. These cycles stabilize the markets and allow a manipulator to make money many times over on the up and downs of the market as the three day cycles take place within the bull market. Same thing for a bear market. Much more money can be made in many up and down smaller trends as the larger bull trend unfolds than if one took a position at the bottom of the bull trend and sold at the top. The book "The Profit Magic of Stock Transaction Timing " by J.M. Hurst Clearly shows that point. It is much more profitable to trade the short term trends over and over than buy at the bottom of a bull market and sell at the top.

Bull market/bear market are BOTH full of many 3 day cycles. One must understand that the 3 day cycle IS NOT in itself the bear or bull market. Any prolonged bear or bull market will have any number of the three day cycles in it and per Taylor the continuity of the cycles stays the same. The rules that govern each day of the cycle take into account the market manipulation when in a bull or bear market. No where does taylor ever advocate changing the 3 day cycle simply because a bear market has made the turn into a bull market. As a matter of fact one cannot even know if a bear market has actually turned into a bull market until sufficient trading sessions take place to determine that. So there is no reason to flip the cycle just because it "appears" there may be a change from a bear to a bull. One could easily be wrong in assuming the market is going bull on two or three days of a minor uptrend. It could still end up being a bear market after 3 or 4 days. That is easily seen over and over on any daily chart.

You are confused about taylor's methods and unless you can be more open minded you probally won't ever learn his methodology. On top of that you are distorting taylors methodology for other traders on this thread by presenting concepts taylor never presented yet you are trying to label them as taylor. So...as far as I am concerned just go ahead and stew in your own errors if that is what you wish to do. By the way; you never answered the question "Where did Taylor ever say that???" You didn't because you can't. I dont have the time to argue so look at it however, you want to. Others viewing this thread and trying to learn taylor may need to see that what you are doing isn't the Taylor Trading Technique....which is what I thought this thread was about! Happy trading.

Maybe you should ask yourself that question?????? Where does Taylor ever say that??

Quote from Taylors book chap 1 "It is a fact and the records show it, for many years back that the market has a definite 1-2-3 rhythm, varied at times with an extra beat of 1-2-3-1 and at times 5, these figures represent days. The market goes up 1-2-3 days and reacts, the 4th and 5th figure is the variation when it runs that extra day or two on the way up and on the way down in both Bull and Bear trends. This beat of the market subject to these occasional variations occur with surprising regularity, so it seems that the same methods of manipulation used in the past are still used today, that is of buying and then selling every third or fourth day in an uptrend and reversed for a downtrend and this action the book records very faithfully. We consider 3 days as a trading cycle—the 4th and 5th days are the (1st) and (2nd) days of a new cycle. We use the 1st day for buying and the 2nd and 3rd days for selling." End Quote The topic under discusion here by Taylor is the rhythm of the market which is caused by the "same methods of manipulation" used in the past. This rhythm is to be seen in the larger "trend" i.e. bear or bull trend. He is saying that those methods of manipulation that cause to market to tend to go up or down 123 and sometimes 4 and 5 days takes place in BOTH bull and bear trends. That is; in a bull market it can go up 123, or 4 and 5 and then react or it can go down in a bull market 123 4 or 5 and then react off that. Ditto for bear trends. He is not dealing with the subject of changing the cycle or reversing the cycle. He is simply saying that this rhythm seen in the market (in both bear and bull trends) is caused by the METHODS of manipulation used in the past and still in use today. The 3 day cycle is a mechanism to take advantage of this rhythm. The rules employed by Taylor in the use of his 3 day cycle mechanism are designed to keep you on the right side of the market in bull and bear trends wherein many 3 day cycles occur. The continuity of the cycle, per Taylor, does not change. He is NOT advocating a reversing of the cycle. He is dealing with the rhythm of the market caused by manipulation and showing how a 3 day cycle mechanism gives one an edge. This is the only explanation to his statement above that will logically concur with other statments in his book indicating clearly that the continuity of the cycle is not to be changed. You cannot take a Taylor statement in a paragraph or two out of the larger context of the book and make it say something he is not trying to say or make it say something to support ones own "spin" on the cycle. One must remember Taylor is dealing with manipulation, larger trends, and how 3 day cycles fit into this. One can tweak Taylor anyway they wish..maybe for the good maybe for the bad..but it is a bad interpretation of his system if one cherry picks a statement or two in his book to build a straw man to support ones own particular spin. Taylors system is one thing. Our own spins to his method are another thing. Not that our spins are necessarily bad or even better but it seems to me we must be careful to separate our particular version from his and perhaps give our reasoning but we certainly can't call it "Taylors method". At best we can call it a modification of Taylor. However, one must remember that any modification has the potential to affects the rules he designed around the 3 day cycle and how to play it. That must be taken into consideration when we tweak or toy with his method. You see, the larger market trend (bull or bear), the beat (123 or 4 and 5), tend to create things he calls "failures to penetrate" and BV's..etc. The cycle is still there and intact but the rules he employed deal with senarios such as these two and other senarios.

Thanks Monad. I ask because when I look at those free chart sites on the net they show 9:30 near the low of that first drop. Again I have not traded the emini for years so i have no reliable charting system. If your chart is correct then yes shorting a buy day or shorting a SS day was there at the open however the charts I have access to seem to differ from your chart. Also, going long was there later in the session per my buy day count. That long could have been sold same day as I mentioned or held overnight and sold today per taylors rules. However, most of you guys seem to be strict daytraders trying to adapt taylor to multiple entry/exits during the day so you probably wouldn't have held overnight. For Taylor daytrading could be held overnight. I suppose he was technically wrong on that description. About the discrepancies in the free net charts and your chart well i don't know why they differ but they seem to differ. On your chart you are showing the open at 9:30 a.m. ET correct?

I need to look at a chart to respond to what you are saying here. I dont trade the emini. I am just posting stuff here for the benefit of those here who trade it since this is the instrument posters here seem interested in. Therefore, I don't have any good charting software for futures...etc as I trade stocks and don't need it. Can you post a 5 min chart for the emini between 9:30 a.m Eastern time and 11:30 a.m? IF I were trading the emini per taylor I would be interested in the price action from 9:30 a.m. onward. If you can post a chart that would help. thanks

By the count you guys are taking today 2/18 it would be a SS day. The Taylor play today would have been the shorting shortly after 11 a.m. and covering this afternoon. By my count today 2-18 was a buy day and the Taylor play would have been going long around 10.a.m and exiting around 11 a.m.