Price Action Patterns Do Not Mean the Market Isn't Random

[1a2b3cppp 10]

1a, first of all, thank you for taking the time to answer all of the questions here about your strategy. It's become a very interesting discussion, indeed. I was going to try to write another post about how adding to winners is mathematically proven to be much more profitable than adding to losers,

 

I'd be interested in reading that. I'm always looking to improve the way I trade, and averaging into winners hasn't worked for me as it requires predicting price and knowing when price is going to reverse to prevent the winners from turning into losers, but I'm always open to learning more.

 

- The essence of this strategy is to scale into pullbacks in the current SPY uptrend (on the highest timeframes) with increasing size and then take profits when they become available;

 

It doesn't have to be an uptrend. Assuming you define an "uptrend" as a series of HHs and HLs, and a "downtrend" as a series of LLs and LHs, I would still scale into a downtrend, too. In fact, downtrends may go lower than uptrend pullbacks allowing you to get even more shares.

 

Assuming you define a trend by the slope of an MA, well then, I have no idea, because in that case the "trend" happens to depend on the length of MA you chose.

 

I think the concept of a "trend" is a bit undefinable, anyway, but uptrend OR downtrend, I'm still buying more as price goes down.

 

- no margin is used, only own funds;

 

Correct. Leveraged ETFs are ok, but using margin is not.

 

- positions are never exited while in loss and not a single loss is taken;

 

No loss from a long position is taken. Sometimes if I am trading the opposite direction at the same time I might exit that one for a loss but only if the main S&P position is exited for a net gain. You can see an example of this in my other thread.

 

- the scaling in is done at a predetermined step until the entire position turns profitable or at least breakeven;

 

Correct.

 

- the step for scaling in is a retracement of USD 10 in SPY price;

 

It can be whatever you want. Originally I used Fibonacci retracements just because I wanted to show that any levels can work while simultaneously making a point that Fibonacci numbers have nothing to do with trading. You can use whatever levels you want as long as they are spaced in such a way that you can still add more if price goes lower and you use appropriate position sizing.

 

- the size is increased each time from the previous partial position -- CAN YOU SPECIFY THE MULTIPLIER for increasing size? Is it the full Martingale "double up each time" or a smaller multiplier?

 

You know, it depends on where the S&P is when I begin. Sometimes I more than double with each add, sometimes I double. The general idea is to lower the average cost by a decent amount with each add. In the big trade I mentioned in the other thread, the adds were:

 

May 5, 2011: 200 @ $134.22

May 16, 2011: 600 @ $133.32

May 23, 2011: 1,000 @ $132

(please note these first 3 adds were Fibonacci retracements of a recent swing:chart. The reason I got filled at $132 and not $132.44 where the actual retracement was is because price gapped down below that price on the morning I got filled. Please also note I don't think there's anything special about Fibonacci retracements)

August 2, 2011: 1,400 @ $ 127

August 8, 2011: 2,500 shares @ $115

 

The at this point I was going to start buying SSO if SPY got to $105 or $100, but it never did, so I didn't buy any more after that last point.

 

During the time this trade was open I was also periodically buying SH (inverse SPY) and closing it out for profit to lock in some gains as price moved against me. It helps reduce drawdown and if price goes back and forth within a range I can close and reopen the position. You can see exactly when and how much SH I bought in my journal thread.

 

- The prerequisite for not having to worry about risk of ruin from a single loss is sufficient capital to sustain a full and sudden SPY trend reversal - e.g. if SPY tumbled from its current price back to 70, just like it did in 2008-2009, and you had started scaling in under this strategy from one contract at around 150, you would require the following amounts of money (I'm quoting two cases - one where you scale full Martingale and the other where you just add one extra contract with each scale in, like 1, 2, 3, 4 etc):

- Full Martingale (double up with each scale in): 511 contracts or around USD 5.621 million to get a good average price of 79.82 less than 10 dollars away from your last entry;

- Increase by one contract only with each scale-in: 45 contracts or around USD 495,000 to get an average price of 96.67, still 26 dollars away from your last entry, and no guarantee of a quick move to breakeven.

- even when such capital is present, there is a danger of having it all locked up for many months and possibly years and be unable to use it for trading without accepting a serious losses.

 

The last point is correct. As I've mentioned, sometimes you end up with either a small position as price goes up, or sometimes you end up waiting while price bounces around a range that is lower than your target profit but higher than your next add point. If you are using SPY you might be getting a decent dividend during this time (less so with SSO), and you can also hedge with SH and close it out on the down swings (while SPY stays open).

 

If that is really the case, then I guess the first thing to mention when presenting this strategy is the need for this kind of institutional-level capital in order to trade it profitably (well, it cannot be traded otherwise :doh:). Anyone with smaller capital and/or trading on margin would still be exsposed to a risk of a sudden and total ruin, if one applied this strategy. Would you agree?

 

Yeah. Well my trading capital is less than $1M, but as I stated in the other thread it's probably not the right strategy for a $10,000 account. I mean you could do it, but commissions at the first levels would take a big chunk out of your profits, and your overall dollar amount of return probably wouldn't be much.

 

My goal is just to make consistent profits over time. Sometimes price doesn't retrace and I don't trade. Sometimes I have a small position that goes up. Sometimes I have a position that is sitting in drawdown for a period of time while price decides what it wants to do. These come with this type of trading and like I said, this isn't the holy grail, nor is it the way for everyone to trade, nor is it even the way for most people to trade. Most people want to chase trends and don't have the patience to sit on a position that is drawn down more than 2% of their account for weeks or months. Sometimes I make a good return. Sometimes I make a small return. I like big wavey markets but it doesn't always do that.

 

Let me know if you have any other questions.

[steve46 12]

Steve, on more than one occasion, you made the comment "volume leads price" . IMO It's a ridiculous comment and the more I think about it the more ridiculous it becomes.

 

If you don't have the price, the volume isn't going to help you.

 

Lets try a simple experiment. Take a timeframe, 1min, 5 min 20 min 1 hour whatever you want. Delete price from the chart and just have volume plotting, you don't even get to see the bid-ask. Do you actually believe you can trade that profitably with no price? Is this what you're suggesting?

 

Well according to your statement, you should be able to, because Volume leads price, so apparently tells you where it is going...

 

Is it just a sales pitch? Because it's nonsensical as a statement.

 

If on the other hand you mean that given a pre-existing context involving price, that certain patterns appear in the volume that often preclude a directional movement that is visible on the volume before it is directionally visible on the chart, then ok. Say that. Because the volume leads price comment is silly.

 

Clearly my patience is limited when it comes to ignorant comments like these...

 

First, most of my generation of traders learned to "read the tape"....what we were learning to do was to read a combination of time, volume & price.... shortly after I left the business, "footprint" software became available to retail traders and now it is the latest fad....once again the focus on volume....secondarily on time (for those who really understood what they were doing) and finally "value" (price as seen through the prism of Market Profile).

 

In the last few years, as HFT has become more intrusive in equity and index futures markets.....because human beings cannot compete (and frankly cannot see most of the execution process), once again volume becomes critical.....in other threads I have posted multiple examples of what I call algorithmic patterns that seem to indicate ramping up of volume prior to price movement...this isn't earth shaking or unusual, it used to be called volume divergence or painting the tape....for the "long" version, price moves sideways while aggregate volume turns up....for the short version, just to opposite....For the first several days of my class I did in fact show people how to A)identify and read volume "triggers" and B) to trade without reference to price....by reading a volume based display and referring only to volume and time...

 

With regard to your insipid comment about "sales pitches", my classes are closed (as I have already stated about 10 days ago), and since I required folks to apply (and I didn't take every person who did apply), your infantile attitude doesn't seem to make sense does it?

 

For those who prefer visual rather than verbal descriptions...the attached chart shows tonight's Globex open. On top, price, below a simplified version of my volume display

As can be plainly seen, there is a divergence between volume and price...as suggested previously "volume leads price"

 

and finally with all due respect I suggest you take your experiment and shove it.

 

I hope my position is perfectly clear....

Edited May 6, 2013 by steve46

[SunTrader 10]

Volume is not the only leader, sometimes:

[Seeker 11]

Clearly my patience is limited when it comes to ignorant comments like these...

 

First, most of my generation of traders learned to "read the tape"....what we were learning to do was to read a combination of time, volume & price.... shortly after I left the business, "footprint" software became available to retail traders and now it is the latest fad....once again the focus on volume....secondarily on time (for those who really understood what they were doing) and finally "value" (price as seen through the prism of Market Profile).

 

In the last few years, as HFT has become more intrusive in equity and index futures markets.....because human beings cannot compete (and frankly cannot see most of the execution process), once again volume becomes critical.....in other threads I have posted multiple examples of what I call algorithmic patterns that seem to indicate ramping up of volume prior to price movement...this isn't earth shaking or unusual, it used to be called volume divergence or painting the tape....for the "long" version, price moves sideways while aggregate volume turns up....for the short version, just to opposite....For the first several days of my class I did in fact show people how to A)identify and read volume "triggers" and B) to trade without reference to price....by reading a volume based display and referring only to volume and time...

 

With regard to your insipid comment about "sales pitches", my classes are closed (as I have already stated about 10 days ago), and since I required folks to apply (and I didn't take every person who did apply), your infantile attitude doesn't seem to make sense does it?

 

For those who prefer visual rather than verbal descriptions...the attached chart shows tonight's Globex open. On top, price, below a simplified version of my volume display

As can be plainly seen, there is a divergence between volume and price...as suggested previously "volume leads price"

 

and finally with all due respect I suggest you take your experiment and shove it.

 

I hope my position is perfectly clear....

 

Hit a nerve did I?

 

I think it a ridiculous comment, and nonsensical. But I attacked the comment and not you, and I explained why. In response you attack me, and accuse me of being infantile, etc. Why do you need to do that?

 

In response to me suggesting it doesn't make sense to trade using volume without any price context, you post a picture with volume and price and some context. It seems then you're agreeing with me. You then make clear that you agree with me because you talk about divergence between volume and price. Divergence is a difference between two things that are happening at the same time, not one leading the other. There's no divergence without price there. Also in your chart it seems you are claiming what happened subsequently is due to the volume. Well you don't know that. What about the fact there's a double top in there. What about the fact it's rejected that price and then moved down? You think that had no effect?

 

As I see it, the most important things are price and time and context. If volume helps you, then ok, but I still think you need to address the statement that volume 'leads' price. The two are interconnected. At times perhaps there is something occurring with volume before a significant price move, other times perhaps something occurs with price before any significant change in volume. I have seen people trade solely on price. I have seen people trade using price and volume. But I've never seen anyone just trade on volume alone, with no context - but that should be doable if volume did really indeed lead price.

 

If you disagree, argue the case, but don't personally attack me again.

[steve46 12]

Hit a nerve did I?

 

I think it a ridiculous comment, and nonsensical. But I attacked the comment and not you, and I explained why. In response you attack me, and accuse me of being infantile, etc. Why do you need to do that?

 

In response to me suggesting it doesn't make sense to trade using volume without any price context, you post a picture with volume and price and some context. It seems then you're agreeing with me. You then make clear that you agree with me because you talk about divergence between volume and price. Divergence is a difference between two things that are happening at the same time, not one leading the other. There's no divergence without price there. Also in your chart it seems you are claiming what happened subsequently is due to the volume. Well you don't know that. What about the fact there's a double top in there. What about the fact it's rejected that price and then moved down? You think that had no effect?

 

As I see it, the most important things are price and time and context. If volume helps you, then ok, but I still think you need to address the statement that volume 'leads' price. The two are interconnected. At times perhaps there is something occurring with volume before a significant price move, other times perhaps something occurs with price before any significant change in volume. I have seen people trade solely on price. I have seen people trade using price and volume. But I've never seen anyone just trade on volume alone, with no context - but that should be doable if volume did really indeed lead price.

 

If you disagree, argue the case, but don't personally attack me again.

 

Yes, infantile behavior is mildly irritating in the same way that a small child having a temper tantrum in public is irritating...you suggested that my words were a "sales pitch"....THATS called a personal attack....as people before you have found out its not smart to attack me....your assumptions were incorrect as shown in the attached chart example, the result was that you took a well deserved verbal whipping for it...

 

Next time act like an adult instead of small child...If you can't take responsibility for your words maybe you should ask your mother instead of a stranger when you have a question...I'm sure she'll be more indulgent...

 

and at the conclusion of my comment today...I will simply turn your words back upon you

 

If you disagree, argue the case without suggesting that my comments are a "sales pitch", but don't personally attack me again.....

 

NOW we are done...

Edited May 6, 2013 by steve46

[arvo 10]

Yeah. Well my trading capital is less than $1M, but as I stated in the other thread it's probably not the right strategy for a $10,000 account. I mean you could do it, but commissions at the first levels would take a big chunk out of your profits, and your overall dollar amount of return probably wouldn't be much.

 

Based on my calculations, you could not do it with 10K or even 100K - you would not be able to ride this strategy risk-free and fear-free. If you hedge, as you do, the requirement for locking up capital is even greater. I suppose, if you really play random and pay no attention to price action technicals for higher probability, anything less than 300K and you still run the risk of having to close out with a big loss or get completely locked out. The fact that SPY did not go below 100 recently does not mean it cannot do that - it's been there as recently as 2009.

 

I'd be interested in reading that. I'm always looking to improve the way I trade, and averaging into winners hasn't worked for me as it requires predicting price and knowing when price is going to reverse to prevent the winners from turning into losers, but I'm always open to learning more.

 

A simple thing: under your strategy you don't look to predict price movements when you are in profit to determine how long to hold, do you? You just take profits when they become available, on the bar-trail basis or some other simple method, right? You don't need to do anything more to take profits when you are riding a big winner from the outset.

 

If you check a few posts back by me and SIUYA, you'll see how adding to winners (without increasing size) increases the profitability of positions added to winners vs losers - giving you more profits faster.

 

The same principle applies to scaling in with different size. Since you are scaling in with increasing size against the move, the opposite and more profitable way is to scale in with the current move BUT FROM A LARGER POSITION, adding decreasing sizes as it goes in your favour -- just the mirror version of what you do, only it will give you a huge advantage in that you don't have wait for your position to "work off" the open loss - just close the profit when you feel like it. This would produce much faster gains.

 

Of course, starting with max size may not be an option (well, you never get profits on your max size in trading countertrend either), but since you do hedging anyway, as you say you do, a viable option might be entering with, say, moderate or medium size with the current momentum and scale in with decreasing size. If you're not lucky and the price moves against you, you can hedge any such moves against you right away, possibly with larger size, and scale into the hedge with decreasing size while it's moving, and then you can close all together when profit is available and look for another entry with trend. This should make money much faster. Of course, I suppose some thorough mathematical calculations and testing would be needed to determine the right position sizes and hedging tactics to make sure the system stays risk-free and you can still ride the entire range without taking a loss.

 

My here, not trying to teach anything, but just trying to think in sound mathematical terms.

 

One more thing I see is that your current success if largely helped by the fact that you are still actually trading WITH TREND (on the higher weekly and monthly timeframes). You are still actually buying only pullbacks followed by new uptrend extremes - the momentum is working for you. Are you sure this will work when the trend really reverses, e.g. like in 2008-2009, when all you get is one spike down after another - have you tried this system trading a REAL strong long-term downtrend on a weekly or monthly chart? You may not get any moves up to even make it to break even in such selloffs. That's why it helps to have at least some respect for trends and try trade with rather than against them, well at least the highest timeframe trends.

 

br

 

arvo

[Seeker 11]

Yes, infantile behavior is mildly irritating in the same way that a small child having a temper tantrum in public is irritating...you suggested that my words were a "sales pitch"....THATS called a personal attack....as people before you have found out its not smart to attack me....your assumptions were incorrect as shown in the attached chart example, the result was that you took a well deserved verbal whipping for it...

 

Next time act like an adult instead of small child...If you can't take responsibility for your words maybe you should ask your mother instead of a stranger when you have a question...I'm sure she'll be more indulgent...

 

and at the conclusion of my comment today...I will simply turn your words back upon you

 

If you disagree, argue the case without suggesting that my comments are a "sales pitch", but don't personally attack me again.....

 

NOW we are done...

 

I didn't suggest your words were a sales pitch. I asked if they were a sales pitch. That's called a question Steve. Do you understand what a question is? A question is not an attack except when interpreted by the most insecure and nervous of people who can't understand that a question is being asked and not a statement. It's a question. Perhaps other people have attacked you before and so you may be defensive to questions, I can understand that, but that's not my fault, I am not other people.

 

I haven't made any assumptions, so they can't, by definition, be incorrect, since they don't exist. However, what you call a 'verbal whipping' I interpret as you revealing your hand (or lack of) and you surrendering to my point, which is to say you needed price for your volume to have meaning, You cannot trade on volume alone can you? You need price to give it meaning, as I said, ergo volume does not lead price.

 

You are wrong, and you need to attack those that point out that you are wrong. I haven't personally attacked you, and the burden of proof is on you, after all, you have made the claim that volume leads price. Prove it.

[DbPhoenix 42]

I didn't suggest your words were a sales pitch. I asked if they were a sales pitch. That's called a question Steve. Do you understand what a question is? A question is not an attack except when interpreted by the most insecure and nervous of people who can't understand that a question is being asked and not a statement. It's a question. Perhaps other people have attacked you before and so you may be defensive to questions, I can understand that, but that's not my fault, I am not other people.

 

I haven't made any assumptions, so they can't, by definition, be incorrect, since they don't exist. However, what you call a 'verbal whipping' I interpret as you revealing your hand (or lack of) and you surrendering to my point, which is to say you needed price for your volume to have meaning, You cannot trade on volume alone can you? You need price to give it meaning, as I said, ergo volume does not lead price.

 

You are wrong, and you need to attack those that point out that you are wrong. I haven't personally attacked you, and the burden of proof is on you, after all, you have made the claim that volume leads price. Prove it.

 

Seeker, you're carrying disingenuity to an extreme. Asking whether or not something is a sales pitch is little different from implying that it is. Otherwise, there would be no point in asking the question. Perhaps if you had been less aggressive in your original question, Steve would not have responded in kind.

 

FWIW, I don't agree with Steve either, but since I've gone into this many times over the years to little effect, I can understand his impatience with questions like this. If you believe that volume does not lead price, then state your opinion and provide your evidence. If you have no evidence, then don't expect others to provide what you won't. Or can't.

[Seeker 11]

Seeker, you're carrying disingenuity to an extreme. Asking whether or not something is a sales pitch is little different from implying that it is. Otherwise, there would be no point in asking the question. Perhaps if you had been less aggressive in your original question, Steve would not have responded in kind.

 

FWIW, I don't agree with Steve either, but since I've gone into this many times over the years to little effect, I can understand his impatience with questions like this. If you believe that volume does not lead price, then state your opinion and provide your evidence. If you have no evidence, then don't expect others to provide what you won't. Or can't.

 

DB, I understand your point, and understand how it could be interpreted. However, I am one of those rare people who if they ask a question MEAN a question. I mean what I say, nothing more, nothing less, otherwise I wouldn't say it. If I meant something else, I would write somethign else, I would say more or say less. If you interpret something that isn't written, I think you need to look at yourself. Personally I don't really understand why others seems to say more or less than they mean...it seems slightly crazy to me, but the majority seem to do so. I am not following the majority or the standard rules of others. I take you at face value, and I must say, I deeply respect your posts DBPhoenix, and have found them very insightful. I also found many of Steve's posts interesting. If I didn't and thought he was a complete fraud, I wouldn't have even asked him anything. I'm disappointed in his reaction, but there you go.

 

Is it a sales pitch? The line "volume leads price" comes across as something that sounds slightly witty and insightful, but on closer inspection, doesn't hold water. Therefore I asked if it was a sales pitch, and argued that it didn't make sense, and asked for clarification on what was meant. I even gave what I thought was meant at the end of the initial post (you can look). In response I get attacked and someone suggesting that I am childish. That is a playschool attack. Surely we're above such things.

 

As for evidence, I stated an experiment, and I think a valid one. If volume leads price, trade only with volume. I was told to shove my experiment.

[Seeker 11]

I think it's best I cut this short. Steve, I disagree with you on your statement, and am disappointed in your reaction to questions, but it is not worth getting into an argument about or getting into personal attacks. So I'll leave it there.

[DbPhoenix 42]

So why bring up "sales pitch" at all? It's so far out in left field it's in the parking lot. I don't have to "look at myself" to see that.

[SunTrader 10]

The onus is on someone who makes a definitive statement.

 

Not those who say, prove it.

 

But definitive answers are scarce these days.

[1a2b3cppp 10]

Based on my calculations, you could not do it with 10K or even 100K - you would not be able to ride this strategy risk-free and fear-free. If you hedge, as you do, the requirement for locking up capital is even greater. I suppose, if you really play random and pay no attention to price action technicals for higher probability, anything less than 300K and you still run the risk of having to close out with a big loss or get completely locked out. The fact that SPY did not go below 100 recently does not mean it cannot do that - it's been there as recently as 2009.

 

I think it's doable with $100k. The initial sizing is going to be small and some people might not like that. Everyone wants to make a ton of money on every trade and so they won't like using small position sizes. The one trade I mentioned ended with a net of over $41k and was open for a few months. My most recent trade involved QLD, which I just closed out on Friday (posted in real time in my journal thread and on Twitter) for less than $3,000 gain in 5-6 months. Why? Because the Nasdaq didn't move very much since I bought it. So people are going to say "you made less than $3,000 in 6 months, that's like less than 1% of your account, you suck and your system is stupid." But I'm sure none of those people post real time trades, and I'm sure none of them are consistently profitable.

 

People love to criticize other people's trading. Do well and it's "you got lucky, but your method sucks." Do alright and it's "you suck, just buying and holding the S&P500 would've gotten you higher returns." Lose money and it's "you suck, your system sucks and/or you don't follow the rules."

 

I'm ok with only making a little bit or nothing when the market goes up without retracing, because the alternative for me is buying a big position and losing.

 

When the market goes up and down, I do pretty well.

 

A simple thing: under your strategy you don't look to predict price movements when you are in profit to determine how long to hold, do you? You just take profits when they become available, on the bar-trail basis or some other simple method, right? You don't need to do anything more to take profits when you are riding a big winner from the outset.

 

The initial target is the previous high before the pullback. Depending on how low it goes, the target can change. For example, if SPY drops from $150 to $50, I probably wouldn't keep $150 as the target.

 

If you check a few posts back by me and SIUYA, you'll see how adding to winners (without increasing size) increases the profitability of positions added to winners vs losers - giving you more profits faster.

 

The same principle applies to scaling in with different size. Since you are scaling in with increasing size against the move, the opposite and more profitable way is to scale in with the current move BUT FROM A LARGER POSITION, adding decreasing sizes as it goes in your favour -- just the mirror version of what you do, only it will give you a huge advantage in that you don't have wait for your position to "work off" the open loss - just close the profit when you feel like it.

 

I agree that pyramiding in (adding smaller position sizes as price goes in your favor) is a bit safer because it doesn't raise the average cost so much, but that requires starting with a big initial position. What happens if you're wrong?

 

This would produce much faster gains.

 

Disagree.

 

Of course, starting with max size may not be an option (well, you never get profits on your max size in trading countertrend either), but since you do hedging anyway, as you say you do, a viable option might be entering with, say, moderate or medium size with the current momentum and scale in with decreasing size. If you're not lucky and the price moves against you, you can hedge any such moves against you right away, possibly with larger size, and scale into the hedge with decreasing size while it's moving, and then you can close all together when profit is available and look for another entry with trend. This should make money much faster. Of course, I suppose some thorough mathematical calculations and testing would be needed to determine the right position sizes and hedging tactics to make sure the system stays risk-free and you can still ride the entire range without taking a loss.

 

My here, not trying to teach anything, but just trying to think in sound mathematical terms.

 

One more thing I see is that your current success if largely helped by the fact that you are still actually trading WITH TREND (on the higher weekly and monthly timeframes). You are still actually buying only pullbacks followed by new uptrend extremes - the momentum is working for you. Are you sure this will work when the trend really reverses, e.g. like in 2008-2009, when all you get is one spike down after another - have you tried this system trading a REAL strong long-term downtrend on a weekly or monthly chart? You may not get any moves up to even make it to break even in such selloffs. That's why it helps to have at least some respect for trends and try trade with rather than against them, well at least the highest timeframe trends.

 

br

 

arvo

 

Well I guess I'm trading with the long term trend since SPY is higher than it was when it started, technically we're in an uptrend. I don't look at it that way, though.

[TheDude 10]

 

FWIW, I don't agree with Steve either, but since I've gone into this many times over the years to little effect, I can understand his impatience with questions like this. If you believe that volume does not lead price, then state your opinion and provide your evidence. If you have no evidence, then don't expect others to provide what you won't. Or can't.

 

This comment strikes at the heart of the foolishness of TA and those who follow it.

 

The real answer is really quite simple: sometimes volume will lead price, sometimes price will lead volume. It really is that simple.

 

Your suggestion of some kind of formulation of a rule or heuristic is really very daft. It is exactly this kind of behaviour, or suggestion that any such heuristic will be of value that steals from you the credibility you yearn for. It's why your following never gets passed newbies - who dont last long because of your flawed thinking.

 

Heuristics can be formed based on market relationships, and traded profitably, but not in the field of TA.

[DbPhoenix 42]

 

Your suggestion of some kind of formulation of a rule or heuristic is really very daft. It is exactly this kind of behaviour, or suggestion that any such heuristic will be of value that steals from you the credibility you yearn for. It's why your following never gets passed newbies - who dont last long because of your flawed thinking.

 

Heuristics can be formed based on market relationships, and traded profitably, but not in the field of TA.

 

No suggestion of a rule. Just a suggestion that people define their terms before going on the attack. Like learning what TA is. And how to read charts.

 

As for the rest of the blah blah, perhaps you could illustrate with one of the many trades you've posted over the years. Where are they again? And hindsight doesn't count.

[TheDude 10]

No suggestion of a rule. Just a suggestion that people define their terms before going on the attack. Like learning what TA is. And how to read charts.

 

As for the rest of the blah blah, perhaps you could illustrate with one of the many trades you've posted over the years. Where are they again? And hindsight doesn't count.

 

You need a refresh. Here is what you stated:

 

" If you believe that volume does not lead price, then state your opinion and provide your evidence."

 

Evidence of what? Evidence that cause p leads to effect q with probability of x? That is what you imply with the word 'evidence'.

 

Such a finding would constitute a rule would it not?

 

As you well know, I do know what TA is, which is why I can happily state it's a fools errand when it comes to decision making.

 

And further more, I have no need to post my trades. For what purpose? To convince myself that I know what I am talking about? To convince a bunch of anonymous people? My ego is not that fragile. My P&L lets me know how good I am. I dont need feedback or admiration from people I am never likely to meet.

 

Im just here to help those who come here for help. The first step in that process is putting right what is wrong. You and your new buddy Steve (safety in numbers?) represent what is fundamentally wrong - namely a reliance on TA and ego.

Edited May 7, 2013 by TheDude

[DbPhoenix 42]

You need a refresh. Here is what you stated:

 

" If you believe that volume does not lead price, then state your opinion and provide your evidence.

 

That's a rule?

 

And those trades are where?

[TheDude 10]

That's a rule?

 

And those trades are where?

 

more pots & kettles (your words not mine)

 

you have been called out several times across several boards, and failed on a scale only Jack Hershey can match.

 

As we both know, anyone can select past winners, photoshop, yada yada yada. (in your defence) which is why you refuse such requests in the past - and I dont blame you - so I find it odd that you now do the same. Frustration perhaps?

 

Besides, the trading that I engage in you wouldnt understand becaue the methods have a defined edge which I will not give up to someone of your calibre. They typically involve looking beyond a bar chart. They involve one price against another price of a different asset. A chart really would do little justice, and thats all you seem to understand.

 

You dont understand edge as you seem to only undersatnd the guess work of a chart. To me thats like a craps shoot. TA provides ZERO edge as it cant ever be objectively quantified.

 

The fact you dont get the concept of an edge, or what a real edge is (clue - it aint a guess), shows the world you dont understand the basics of trading.

 

ho hum.

 

Red or black? Up or down? Trend up bars with volume means we should get another one eh Wyckoff jnr? Or is that gamblers fallacy?

[DbPhoenix 42]

more pots & kettles (your words not mine)

 

you have been called out several times across several boards, and failed on a scale only Jack Hershey can match.

 

As we both know, anyone can select past winners, photoshop, yada yada yada. (in your defence) which is why you refuse such requests in the past - and I dont blame you - so I find it odd that you now do the same. Frustration perhaps?

 

Besides, the trading that I engage in you wouldnt understand becaue the methods have a defined edge which I will not give up to someone of your calibre. They typically involve looking beyond a bar chart. They involve one price against another price of a different asset. A chart really would do little justice, and thats all you seem to understand.

 

You dont understand edge as you seem to only undersatnd the guess work of a chart. To me thats like a craps shoot. TA provides ZERO edge as it cant ever be objectively quantified.

 

The fact you dont get the concept of an edge, or what a real edge is (clue - it aint a guess), shows the world you dont understand the basics of trading.

 

ho hum.

 

Red or black? Up or down? Trend up bars with volume means we should get another one eh Wyckoff jnr? Or is that gamblers fallacy?

 

So you don't know what a rule is, you don't know what volume is (I guess you haven't reached those chapters yet), and you can't provide a link to a single foresight trade for as long as you've been a TL member (3 years). I, on the other hand, have an entire thread devoted to foresight trading, and I'm currently in an NQ trade that was called the Friday before it broke out to the upside. And still going. One trade.

 

What was it you got those 160 thanks for?

Edited May 7, 2013 by DbPhoenix

[TheDude 10]

So you don't know what a rule is, you don't know what volume is (I guess you haven't reached those chapters yet), and you can't provide a link to a single foresight trade for as long as you've been a TL member (3 years). I, on the other hand, have an entire thread devoted to foresight trading, and I'm currently in an NQ trade that was called the Friday before it broke out to the upside. And still going. One trade.

 

What was it you got those 160 thanks for?

 

LOL. Whats this? Who has more likes/thanks/posts/time to waste? Battle of the forum guru? No thanks - not a mantle I wish for. As stated previously - do pay attention - I get my reward from my P&L, not postings on an internet forum.

 

OK, I hand it to you - you're a successful paper trader. I take my hat off to you. That must be really hard. I dont have time or inclination to read all 3000+ posts of yours, but I take your word for it.

 

Why not try and make it as a 1 lot warrior next? Maybe 2 lots if you feel brave!

 

Given all your screenshots are of free charts off the internet, my guess is you dont even have a trading account.

 

Besides, trading is about probabilities, not prediction. You say you get this, but clearly you dont as all your calls are based on prediction. i.e. one position in one direction. Thats fine in itself, but you demonstrate zero edge. You mistake edge for 'educated guess'.

Edited May 7, 2013 by TheDude

[DbPhoenix 42]

LOL. Whats this? Who has more likes/thanks/posts/time to waste? Battle of the forum guru? No thanks - not a mantle I wish for. As stated previously - do pay attention - I get my reward from my P&L, not postings on an internet forum.

 

OK, I hand it to you - you're a successful paper trader. I take my hat off to you. That must be really hard. I dont have time or inclination to read all 3000+ posts of yours, but I take your word for it.

 

Why not try and make it as a 1 lot warrior next? Maybe 2 lots if you feel brave!

 

Given all your screenshots are of free charts off the internet, my guess is you dont even have a trading account.

 

Besides, trading is about probabilities, not prediction. You say you get this, but clearly you dont as all your calls are based on prediction. i.e. one position in one direction. Thats fine in itself, but you demonstrate zero edge. You mistake edge for 'educated guess'.

 

Okay, I'll make this so simple that even you can understand it.

 

I have the trades. You don't. You’ve surrounded yourself in a fog of pseudo-intellectual babble regarding what you think you know or what you’ve heard about trading and you do provide convincing patter, but you have yet to provide any evidence that you trade. Or can. You may know someone who trades. You may even have a job in a trading office. But that job may be limited to emptying wastebaskets and making coffee. If you’re such a knowledgeable and talented and skilled trader, where are the trades? Or are you limited to making profound statements that you read somewhere?

[TheDude 10]

Okay, I'll make this so simple that even you can understand it.

 

I have the trades. You don't. You’ve surrounded yourself in a fog of pseudo-intellectual babble regarding what you think you know or what you’ve heard about trading and you do provide convincing patter, but you have yet to provide any evidence that you trade. Or can. You may know someone who trades. You may even have a job in a trading office. But that job may be limited to emptying wastebaskets and making coffee. If you’re such a knowledgeable and talented and skilled trader, where are the trades? Or are you limited to making profound statements that you read somewhere?

 

Aww damn - you found me out.

 

ok I admit it, I used to get coffee for some guy who was a clerk for a broker who knew a junior trader. Thats it.

 

I spend all my time on the internet like a ghost between forum sites, wasting my life away wishing one day I could hit the big time and be like my hero - the clerk who got a job for a broker.

 

Fact is, I dont need to post trades. Why? What do I gain? What do you gain? Admiration from a bunch of newbies who know f'k all anyway and think youre a hot shot - because they dont know any different and no one else in the REAL world does?

 

Ho hum.

 

This is going nowhere and Ive better things to do than back and forth with a internet 'legend' who cant make it in the REAL world.

 

Enjoy your crown. After 3000+ posts, you sure deserve it! I'm in the real world though....

 

 

...back to the markets (the real ones - not your paper ones)

 

Ciao!

 

[DbPhoenix 42]

Aww damn - you found me out.

 

ok I admit it, I used to get coffee for some guy who was a clerk for a broker who knew a junior trader. Thats it.

 

I spend all my time on the internet like a ghost between forum sites, wasting my life away wishing one day I could hit the big time and be like my hero - the clerk who got a job for a broker.

 

Fact is, I dont need to post trades. Why? What do I gain? What do you gain? Admiration from a bunch of newbies who know f'k all anyway and think youre a hot shot - because they dont know any different and no one else in the REAL world does?

 

Ho hum.

 

This is going nowhere and Ive better things to do than back and forth with a internet 'legend' who cant make it in the REAL world.

 

Enjoy your crown. After 3000+ posts, you sure deserve it! I'm in the real world though....

 

 

...back to the markets (the real ones - not your paper ones)

 

Ciao!

 

 

So no trades, huh? None at all. Not one. In all these years.

 

Oh, well.

 

A copy of our home game for the kid here, Alex. And thank you so much for playing. Tell your mom you've earned an extra hour playing WOW.

[zdo 20]

is this a

Thinking, Fast and Slow

thread or what ?

:missy:

 

 

 

 

 

 

 

 

 

 

 

 

:spam:

Final two days to claim your $750.00 Discount on

Just One Trade subscription...

[SIUYA 11]

My most recent trade involved QLD, which I just closed out on Friday (posted in real time in my journal thread and on Twitter) for less than $3,000 gain in 5-6 months. Why? Because the Nasdaq didn't move very much since I bought it. So people are going to say "you made less than $3,000 in 6 months, that's like less than 1% of your account, you suck and your system is stupid." But I'm sure none of those people post real time trades, and I'm sure none of them are consistently profitable.

 

People love to criticize other people's trading. Do well and it's "you got lucky, but your method sucks." Do alright and it's "you suck, just buying and holding the S&P500 would've gotten you higher returns." Lose money and it's "you suck, your system sucks and/or you don't follow the rules."

 

 

1a2b3cppp - i read your non TL thread, or some of it, - i dont think it is in your best interests to critisize others for not posting trades etc - there are lot of "what if", "i am thinking", "but", and a few discrepancies/holes regards when hedges were applied that quickly stood out.....additionally if your trades are really random its all irrelevant right?

 

As to comparing this to being consistently profitable immediately after an example that has zero to do with consistency seems odd.

 

Criticisms around systems are designed to point out the flaws, pitfalls and downsides to a system - and to determine if a system is worth while doing, not just because it makes some money, but because it makes more money that just investing and then going off and doing another job, or sitting on the beach.

Plus dont underestimate the effect of luck on a system - recognizing that is very important for long term profitability. (Luck is not necessarily about random behavior unless you choose it to be so)

 

There are plenty of ways to trade and view the markets - yours does have some attributes that I dont think you are adequately recognising and giving credit to whilst at the same time you might be overselling (for want of a better word) other aspects of it.

 

(Otherwise qudos for ignoring the off thread topics in your thread, posting a system that might be full of pitfalls and is open for discussion is all good)