Taylor Trading Technique

[WHY? 16]

Having studied the posts on this thread and some taylor, I find the following very confusing: both you and richbois have mentioned that the book can be started by taking 10days data and marking the lowest low and go from there.

 

If 3 people started such a book in different days or months they are going to end up calling a particular day either as buy, sell or ssday, hence their strategies will be different for that day.

 

1. How is this going to work out as each has different scenarios to apply.

2. From posts here and in taylor, the market cycles are explained in terms of market manipulation by those who obviously have deep pockets to do that, with the above 3 differing days for each trader, it just doesn't make sense.

 

would be grateful if this can be explained.

Your confusion is understandable. I m quite sure Richbois has a different viewpoint on it than I do but what I have done is built into my software a calculating mechanism whereby I calculate the "count". I will not divulge just how I do this as that is my secret. I also have recycling mechanism built into the software to allow me to recycle the days under certain conditions (which I also won't reveal) to take advantage of aberrations in the market.

 

I am sure that if Taylor lived in the era of computers he also would have come up with a better mens of "starting" the count. Suffice it to say; it can be done. That is all I will say about it. Sorry I can't help more in this area but those are 2 of the secrets of my software. Hope you can understand my position. But I might add if one will take the time to think through it there are ways to better a starting point for the "count" than the way Taylor did it. He had to do the best he could with what he had to work with back then.

[Shamal 11]

WHY?

 

actually I was not looking for any info. on the software but if I understand it correctly anybody in this and age who does not have your kind of software and has created a book or if say 3 people have created their books at different times would all end up with a cycle which would not truly reflect what is going on in the market ie. manipulation., hence taylor method would be invalid. am I right.

 

I have reframed the question in the previous post,

 

""Having studied the posts on this thread and some taylor, I find the following very confusing: both you and richbois have mentioned that the book can be started by taking 10days data and marking the lowest low and go from there.

 

If 3 people started such a book on different days or months they are each going to end up calling a particular day either as buy, sell or ssday, hence their strategies will be different for that day. for example tomorrow each would have a different day.

 

1. How is this going to work out as each has different scenarios to apply.

2. From posts here and in taylor, the market cycles are explained in terms of market manipulation by those who obviously have deep pockets to do that, with the above 3 differing days for each trader, it just doesn't make sense. as the cycle that each of the trader who created the book at different times is understood to be different but the manipulators are not changing according to who created the book.

 

perhaps you can comment on this.

[richbois 10]

WHY?

 

actually I was not looking for any info. on the software but if I understand it correctly anybody in this and age who does not have your kind of software and has created a book or if say 3 people have created their books at different times would all end up with a cycle which would not truly reflect what is going on in the market ie. manipulation., hence taylor method would be invalid. am I right.

 

I have reframed the question in the previous post,

 

""Having studied the posts on this thread and some taylor, I find the following very confusing: both you and richbois have mentioned that the book can be started by taking 10days data and marking the lowest low and go from there.

 

If 3 people started such a book on different days or months they are each going to end up calling a particular day either as buy, sell or ssday, hence their strategies will be different for that day. for example tomorrow each would have a different day.

 

1. How is this going to work out as each has different scenarios to apply.

2. From posts here and in taylor, the market cycles are explained in terms of market manipulation by those who obviously have deep pockets to do that, with the above 3 differing days for each trader, it just doesn't make sense. as the cycle that each of the trader who created the book at different times is understood to be different but the manipulators are not changing according to who created the book.

 

perhaps you can comment on this.

 

Yes this is what Taylor explains in his book and you are correct that 3 different cycle could be in place based on when you start your book.

 

When I started my ES book I used the 10 day low principle. I then looked at the last 30 days and saw that it was the same low. Later in creating averages and studying the cycles I found that there is high odds for a Positive 3 Day Cycle. I then put my cycles to the test and found that the cycle created by the January low of 2008 was the same as the one that my highest Positive 3 day Rally Ratio would give.

 

Since then, when I create a new book for a different instrument, I use the HIGHEST ratio I get by cycling the data through the 3 permutations.

 

This issue of having 3 possible cycles for the same instrument as been a bone of contention for ages. That is probably why Raschke, Angell, Why? and myself came up with ways to deal with it. Some prefer to adjust the cycle as needed, I prefer to leave mine as is once it is started.

 

Since I strongly beleive in the Positive 3 Day cycle, as this confirms what Taylor was preaching, that the markets are manipulated. My results prove that most instruments have a 80%+ Positive 3 day rally since January 2008.

Most markets have dropped 50% during that period and I still get Positive 3 day Rally, I think that is a good proof.

 

Also I have numerous other averages to confirm the cycles. Obviously I may have to keep some private not to destroy the business I am in.

 

I hope that helped.

 

More info maybe found at http://www.taylortradingtechnique.net

[richbois 10]

Today was the confusing Sell day. Every one made the projected average rally and tried to make new highs and failed. However they refused to go lower also.

 

Tomorrow is SS day. Taylor would not be looking to long on SS day and would wait for a test of the Sell day highs to short. The FOMC meeting may be the catalyst that may take us out of this tight range we have been trading in.

[WHY? 16]

WHY?

 

actually I was not looking for any info. on the software but if I understand it correctly anybody in this and age who does not have your kind of software and has created a book or if say 3 people have created their books at different times would all end up with a cycle which would not truly reflect what is going on in the market ie. manipulation., hence taylor method would be invalid. am I right.

 

I have reframed the question in the previous post,

 

""Having studied the posts on this thread and some taylor, I find the following very confusing: both you and richbois have mentioned that the book can be started by taking 10days data and marking the lowest low and go from there.

 

If 3 people started such a book on different days or months they are each going to end up calling a particular day either as buy, sell or ssday, hence their strategies will be different for that day. for example tomorrow each would have a different day.

 

1. How is this going to work out as each has different scenarios to apply.

2. From posts here and in taylor, the market cycles are explained in terms of market manipulation by those who obviously have deep pockets to do that, with the above 3 differing days for each trader, it just doesn't make sense. as the cycle that each of the trader who created the book at different times is understood to be different but the manipulators are not changing according to who created the book.

 

perhaps you can comment on this.

 

While you are technically correct on your assumptions I am not sure that it would matter that much. Taylor "clocked the market" by measuring rallies declines...etc high lows, lower lows, higher lows, lower highs, higher highs, penetrations and failures to penetrate..averages of such numbers..etc. Regardless of whether you call the days... buy day, sell day, SS day or day 1, day 2, day 3, or any other name what is really important is the rules that govern each day. And the fact of a tendency for the market to have these 3 days cycles sometimes stretched out to 4 and 5 days.

 

I would say two different people could take different "counts" on the same instruments and as long as they followed the entry and exit rules and looked at all the declines..rallies..averages...etc that they could still both make money using Taylor.

 

Even though my software makes ajustments in the count from say a strict Taylor count I find that within one to 3 days, or so, it tends to recycles me back to Taylors count anyway. And I could probally have made money by not recycling the days, anyway. However, the advantage of recycling is that it may give me more than one way of making money on that day. If recycling changes say a sell day to a buy day then I could potentially have 1 shorting opportunity and 2 long opportunites on the buy day but if kept as a sell day only potentially have 1 long opportunity. So, recycling gives me an advantage for the immediate moment. It is really just tweaking Taylor.

 

Taylor taking the low of 10 days as a starting point made sense to him because it was the low of (3) 3 day cycles and theoretically that would be a good starting point for a buy day or a long possibility.

 

I would suggest since you don't have software to make any adjustments just take the count as Taylor did. It will work, I think you will find out. Apparently, it did for him! Or do it as Richbois says which I think is a reasonable and probally a better approach to the problem. He has been quite generous with his info considering he runs a subscription service.

 

Again, while I don't know Richbois nor do I subscribe to his services (I have my own software for Taylor) I would still recommend that if a person doesn't want to try and figure Taylor out subscribe to Richbois services. He has done the hard work. I can see from his posts he understands Taylor well. And his subscription fees are reasonable in my opinion. I did take a look at his web site. That would be the easiest way to get started with Taylor.

 

I really wouldn't worry about others having a different count from you. Just jump in and try Taylor. Remember, the manipulation exist regardless of whether it is a buy day..sell day...ss day. While it is true that you employ different tactics for each day and are looking for certain manipulations for each day it is also true that Taylor developed a complex sort of way of making adjustments when days are less than ideal and his rules cover those less than ideal days. Hence two different people could be on say the ES and one have a "buy day" for tomm and the other a "sell day" because of having started the count on different times. However, because of the complex rules Taylor developed IF the buy day count person played by the rules for that day he would come out ok and if the sell day played by the rules he would also come out ok. I know this sounds as if it invalidates the concept of the 3 different days but the rules for each day handle ideal...less than ideal days..etc. A less than ideal buy day "could" theoretically look like an ideal sell day as the market unwinds. So, the person playing it as a buy day would follow the rules of a less than ideal buy day. And the person playing it a sell day would play by the rules of an ideal sale day. Both would come out in the end. Why? Simply because Taylor "clocked price" around certain objective points and declines...rallies..and averages of such.

 

The important thing to remember is that a 3 day (and sometimes 4 or 5 day) cycle exists and if one uses certain tactics and rules he can take advantage of the days.

 

Don't worry about what count others have. Just follow Taylor. You will soon "see" the cycle.

 

Hope I haven't only muddied the water more with this post.

 

Why?

Edited January 28, 2009 by WHY?

[Shamal 11]

Many thanks to you both WHY? and Richbois for taking the trouble to expand, has cleared away lot of my confusion on this method.

will try it out and see for myself how it works in realtime.

[HAKUNA 10]

great explanation richbois and WHY? had a similar problem with taylor initially myself as well ,took a while , lots of effort, to get my head around it.

 

Best to start your own book and proceed from there, If somebody is really bent on tweaking or rephasing perhaps it can be done after a few inside bars, the breakout bar may be considered as day 1, violation of high of that day, day 2 and so on.

However if the rules for each day are employed suppose it really does not matter as WhY? explained.

[richbois 10]

Today was a perfect Buy day. Since we didn't get our Decline yesterday on the SS day, we did it today. TVGR took effect and carried the markets down to the projected lows.

[richbois 10]

A new product has been added to the list.

 

TTT Asia Futures is now available for the HSI and NI225 and soon to be added Topix

 

Check the website or email me for more info

 

Rich@taylortradingtechnique.net

 

http://www.taylortradingtechnique.net

[elovemer 10]

3 days.. 3days

... 3 days

[Shamal 11]

elovemer,

there are so many lines on this chart, I have no idea what all this means, perhaps you could outline in simple English.

[elovemer 10]

.....sorry... the lines don't matter...

... i just wanted to show my buy,mid,sell cycle......

elovemer,

there are so many lines on this chart, I have no idea what all this means, perhaps you could outline in simple English.

[richbois 10]

Today was SS Day. As mentioned in Friday's report we had good odds of making it back to the Buy day lows. Although NQ made it and TF came close, today was ok to take longs when we had a chance. Matter of fact both opportunity were nice trades.

[elovemer 10]

.... on my cycle... not anyone else's...

... it will be interesting to see if wednesday sell day high can break the 876 swing high or not... (using buy/mid/sell/buy cycle)

... one possibility is to look for possible failure to break 845 channel center line which is also my break price on daily chart 3 price break

3 days.. 3days

... 3 days

[WHY? 16]

Tape says it is unlikley it will break that swing high on wed. In your count what you label a Sell day is really a SS right??? Or is that incorrect?

[elovemer 10]

.... yes it is WHY ....

... Taylor's terminology is confusing to me so i changed it....

... his "sale day" is my MID .... his "short sell" is my SELL....

.... without comparing my cycle to anyone else's... i will be looking for a high penetration on wednesday for a short early in the session....

.... on wed... if high is not made first.... then i will be looking for a high made first on thurs which is my next buy day..... to short a reaction down....

... i agree that 876 looks unlikely to be broken on this 3 day cycle.....

.... hopefully we can at least get a 61% at 849.5

 

.... thanks again to all posters.... i am learning a lot from this thread....

Tape says it is unlikley it will break that swing high on wed. In your count what you label a Sell day is really a SS right??? Or is that incorrect?

[elovemer 10]

.... if the same day decline off of the 849.5 short is large.... then close out the short to lock in the gain......

.... if it works out.... then next play is to buy a low made first on thursday.....

...

.... hopefully we can at least get a 61% at 849.5

.... thanks again to all posters.... i am learning a lot from this thread....

[Shamal 11]

WHY?

what is the day as per your software today. and how would you read todays price behavior in relation to yesterday's and based on that what can be said about possible outcome for tomorrow. Not asking for recommendations or anything like that, merely looking to understand taylor method.

[WHY? 16]

I don't have the info entered into my software as I have to enter futures data by keyboard. I have the software automated for stock data but not for futures. May I make a sugggestion? Why don't we all agree to track for a few days the Mini S&P March contract and I will enter the data into my program that way we will all be on the same page.

[richbois 10]

An other nice example to show reversals at 3 differents fib extention and a TS4, right at the TTT projection number to the tick

 

That decline took us down to the next DP at 826 not a bad trade

[elovemer 10]

... as others have stated here.... even if your count differs .... as long as you follow Taylor's rules.... you will be ok.....

 

... nice job everyone.... still learning here....

[WHY? 16]

Richbois labeled monday as an SS day....tuesday a Buy day and Wed and today (2-4-09) a Sell day. However, for Elovemor monday was a buy day....tuesday Sell day (mid in his terminology) and wed today (2-4-09) an SS day (or Sell day in his terminology).

 

 

It opened made high first and traded down. The play by Elovemor data would have been to short it and cover same day after the decline or even wait and cover tomm 2-5-09. The play by Rich's data would have been to sell any longs from previous day. Since no shorting is allowed on the second day of the cycle (per Taylor) one would not have shorted if using Rich's data. Neither could one have went long on today 2-4-09 on Rich's data as the rules don't allow taking a long position on the second day of the cycle unless a BV (buying day violation ) is made and made early in the session. That is, it would have had to make a lower low than yesterdays low and it would have had to do that early in the session to be able to take a long position today. Since that didnt happen, IF one was trading by Taylor rules and using Rich's "count" all one could have done today is sell longs from tuesday (if held overnight from tuesday).

 

This all is providing I understand the sequence of their counts.

Edited February 4, 2009 by WHY?

[WHY? 16]

If I have Rich's count correct 2-5-09 will be a SSday. The strategy for that would be to short on a high made early in the session that penetrates or comes close to penetrating the hiogh of 2-4. However, it closed a bit weak so the odds are for more decline first on 2-5. Thus in Rich's count we will probally have a failure to penetrate the high of 2-4 on 2-5. The only option is a shorting option per Taylors rules on 2-5 IF using Rich's count. But that has to be made first to be a valid option. IT still could be but the odds favor it won't.

 

If trading by Elovemors count 2-5 will be a Buy day. The play is long on a low,made first. This is a likely senario for tomm. 2-5-09. However, if it were to open and trade up fast then one would look to short early in the session once it tanks. The potential exists to go long first and if still early in the session on could even short it but the second trade would be a riskier trade. On a buy day you generally only short when the high is made first and go long when the low is made first.

[Shamal 11]

I don't have the info entered into my software as I have to enter futures data by keyboard. I have the software automated for stock data but not for futures. May I make a sugggestion? Why don't we all agree to track for a few days the Mini S&P March contract and I will enter the data into my program that way we will all be on the same page.

 

Good idea, think instead of mixing up days, why not stick to today as a SELL day (strictly Taylor) and go from there.

[richbois 10]

Although I agree with what WHY? posted as his knowledge of Taylor is excellent, I am a day trader and as such I use Taylor as 1 more tool in my box.

 

If Taylor dictates not to short (or long) on a certain day, I have found the the areas of support or resistance that is produced by my system more often then not produce nice trades. Like today I knew that I had all the possible highs for the day and they came to within a few points of each other. I had average Rally and average Penetration al at the 849-850 area.

 

Then when I had all the fibs on my charts and get the same area, for me that is a good low risk trade to take.

 

Even in the email to subscribers last night, I pointed out that these numbers were so close, because that dont happen very often.

 

I hope that explains my reasoning for the trade using Taylor