Taylor Trading Technique

[Frank 10]

Frank,

 

... for your personally....

.... at what time did you know that a high had been made ?

.... and how did you come to make that determination ?

 

.... the reason i ask is that i think this is the main problem for traders using Taylor's ideas.....

.... due to any day holding the potential for a long or a short.... if reaction plays are included..... making the determination quickly ... as to whether a low or high has been made .....

.... seems to be the only obstacle to entering the trade.....

 

this is a very complex question so I will answer it this way.

 

The price pattern lined up with the statistical tendencies and this was confirmed by increased volume as price pushed away from the center of a coil at 911.50.

 

The price pattern was a 'balance' made during mondays very narrow, low volume consolidation day. Market profile dictates that a 'break from balance' that is accompanied by volume is a 'go-with' -- at least in the very short-run. So I began the day ready for that. I then saw price headed for the previous days low and it was occuring on better volume so I entered during first 30 minutes. There is a statistical tendency that if the first 30-min bar close is below the midpoint of the first 30-min range, then this has strong odds of going lower during the 2nd 30-mins. This is kind of similar to a taylor principle applied to intraday market as in, first 30-mins/high made first leads to a violation of the low on the next bar.

 

Also, there are pretty decent odds for the market to make its high or low for the DAY in the opening 30-mins, so you have somewhat of an advantage here if you can enter within 10-20 minutes of the high of day being made.

 

Note, I don't use any one thing -- so what I am really trying to do is cross-reference various tendencies and concepts. If volume is no good and you close under the midpoint, I probably won't go short in most situations --- but I might in this situation because of the specific condition that the previous day was very narrow range 'balance'.

 

So net net, I entered during first 30-mins and exited once it extended down into support and volume dried up. To me, this isn't a 'Taylor trade' --- but its somewhat consistent with Taylor principles -- that is, I am using 'highs and lows across time' to guide me, just as Taylor did at a conceptual level. In this case, the previous days low was the pivot --- short above that pivot and play directionally for that pivot. Once it takes it out (low violation), you have to be aware there might be 'low violation Taylor buyers' --- so you have to 'read the tape' and monitor the situation. In this case, lower prices attracted more selling (ever stronger volume), so I stayed with it until it reached a reasonable range objective (I have done a lot of statistical work with intraday range).

[monad 10]

......

.... and you would not be making asinine remarks about what kind of language to use on this forum....

 

..... would love to see your system .... or anything productive... which is based on Taylor's book..... knowing that you have not actually read his book at all.....

 

....

 

"Asinine Remarks" - talk about language,

You persist in being unnecessarily confrontational whilst all the time I am trying to be civil in keeping up with the ethics of this website.

Quite capable of responding robustly but it will be pointless for you have already assumed (or possess clairvoyant powers)

 

1. You are the Master here and in charge of this thead.(which you are not)

2. "I have not read the book" whereas in fact I have gone over it during my exchanges with WHY? so many times and have detailed notes with the relevant patterns for my reference on each day of trading.

3. Unfortunately you are laboring under the delusion that you have made a unique contribution here and any newcomer reading the aforementioned discussions with WHY? and Richbois and Hakuna etc would have nothing to gain..

 

Infact those very discussion which I had with these guys would motivate and enable a newcomer to gain more knowledge and clarification on the Taylor Methodology.

 

But as I said this is getting us nowhere, as it is, there are not many participants on this thread. I am perfectly happy with what I do, you keep posting what you like. I have nothing much to discuss with you anymore.

 

Finally refer to Taylor's Book, Chapter 2, p15 "We are not concerned with how the book started on the first day, whether it was a Buy, Sell or Short Sale.

The book is always kept in this order, never change the continuity and there are no lines left open for Sundays or Holidays, the market is considered as a series of continuous sessions without a break.

Edited May 13, 2009 by monad

[elovemer 10]

..... failed to take out yesterday low .... on the high made first.....10.35 am

 

 

......still have wednesday as a short day .....

[elovemer 10]

..... you haven't read the book.... you proved that already when you proposed that changing the cycle for up trend and down trend is not part of the method.....

... go read it ... go study it.....

..... offer something to the thread... once you know what the method entails....

 

..... if you want to post here on a personal basis.... which is what your original post was.... a personal post.....

.... then send me a pm ....

..... otherwise.... offer something of value... which has nothing to do with individual traders... but rather with method.....best would be something of your own ....

 

.... your quotes from Taylor don't change the fact that you are not familiar with his work .....

..... your last quote has nothing to do with your proposition that Taylor does not change his cycle when the trend changes up/down

..... and especially ... it has nothing to do with your proposition .... that by changing my cycle.... that i am putting my own spin on Taylor's methods.....

 

.... if you want to post on a personal basis... go post on ET ... TL is not the place for it.... or contact me privately....

.... i wonder what your handle is over there.... you have probably littered that site with the same kind of personal posting which you are doing here....

 

... if you have actually read the work .... then it should be no problem for you to determine that the work describes very clearly that changing the cycle depending on whether the trend is up or down ... and depending on the time frame the trader is working with ..... is very much a part of the method....

 

.... if you want to keep this idiotic exchange going.... then send me private message.... don't pollute this thread......

 

But as I said this is getting us nowhere,

[/b][/color]

Edited May 13, 2009 by elovemer

[elovemer 10]

..... there is nothing in this post.... which comes from you as a trader.....

..... just you quoting others.... while trying to correct other's methods.... without having read Taylor's work....

.... offer something of your own.... and this thread might benefit from it.....

..... this is not my thread..... Dogpile.... please dogpile this joker.....

 

...by the way ... i never claimed to offer anything of value to this thread.....and i still don't...

..... but i sure won't take any SH** from someone who has not even read Taylor's work.....(your quotes only prove this out)

As WHY? and Richbois have explained,

 

QUOTE FROM WHY? "

/COLOR]

 

and again as Eiger has posted on VSA thread

Edited May 13, 2009 by elovemer

[elovemer 10]

..... I have no idea who this writer is or what this writer could possibly mean by this passage....

....it is so .....unclear.....

 

.... changing the cycle in uptrend/downtrend changes.... would be sacrilege..... !!!!!

 

-----------------------

It is a fact and the records show it, for many years back that the market has a definite 123 rhythm, varied at times with an extra beat of 1231 and at times 5, these figures represent days. The market goes up 123 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.

Edited May 14, 2009 by elovemer

[richbois 10]

Chapter 1 page 10

 

 

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.

 

Therefore the cycle does not change but only the way to trade it.

[elovemer 10]

".....and REVERSED for a downtrend "

 

.... therefore.... in an uptrend B/M/S/B for a 3 day cycle

... and in a downtrend S/M/B/S for a 3 day cycle....

 

... ******** you say the cycle does not change..... i say it does

.... just a difference of language....which is not important

 

------------------------------

 

" the market goes up 1-2-3 days and reacts"

 

... obviously ********... in a down trend... the market will not go UP 123 days and then react

... in an up trend ... the market will not go DOWN 123 days and then react upwards....

 

----------------------------------

 

"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"

 

... obviously ******** .....

 

..... it runs that extra day or two on the way up ( in bull trend)

.... it runs that extra day or two on the way down ( bear trend)

 

 

..... THERE IS NOTHING CONFUSING ABOUT THE WAY THIS IS WRITTEN....

... again... you say the cycle does not change .... i say it does....

.... but we are saying the same thing in different ways.... which is not important....

 

----------------------------------------

 

... so as far as the 3 day method is concerned..... ********.....

 

... i think you are not disagreeing with what i have already clearly stated in previous posts.....

... i.e. .... that for an up trend... the majority of days in the cycle will be up days.... the reaction days will be down days....

..... and that for a down trend .... the majority of days in the cycle will be down days... the reaction days will be up days....

 

.... there is nothing confusing about this.... and nothing confusing about Taylor's writing concerning this point....

--------------------------------

 

... in my original post.... i said that if the trend changed to a down trend.... i would change my cycle to S/M/B/S where it was originally B/M/S/B

 

.... ******** ... you can say that the cycle does not change all you want to.....

 

... but the above is very clear and simple to understand.....

 

....********

.... up trend ... the market will go up most days....and then react

.... down trend... the market will go down most days... and then react...

 

... if anyone believes this not to be true....... i would love to see any evidence of it.....

 

.... so... ********..... in your post above.... YOU HAVE SAID NOTHING WHICH HAS NOT ALREADY BEEN SAID.....

 

.... and frankly... i am tired of saying the same thing over and over again....

.... especially since no one disagrees with it....

.... and since it is not coming from me... but from Taylor....

Edited May 16, 2009 by elovemer

[elovemer 10]

.... what i have been trying to do with my posts.... is to use the 3 day method ..... on a day to day basis....

.... as no one else has attempted to do so....

.... by posting my expectation for market action BEFORE it happens....

... and by posting according to the rules Taylor laid out....

 

... i have not tried to sell any system to anyone....

.... and i have not tried to fit market action into any statistical category... THE DAY AFTER market action unfolded....

 

.... anyone can make anything seem reasonable.... THE DAY AFTER .... in retrospect....

.... that is not the point

... the point is to show the system at work.... before the market opens....not after

 

-------------------------------------------------

 

.....********.... your system is something that you developed....i suppose

.... and as far as i can tell....

.... in order to use it... one would have to purchase it from you....

 

.... so unless everyone had already purchased your system.... there is no point in you demonstrating how the market fit into your statistical expectations....

 

.... unless you are willing to provide everyone on this thread a copy of your system FREE OF CHARGE.....in order to evaluate its merit...

..... if so ..... i will let you know where my copy can be sent in a private message.....

 

 

.... if not.... you should at least provide ***** with a free copy ... as you have gotten at least that much free advertising from him on this forum.... ha ha ho ho..... ... just a little humour..... but not really..... ha ha hee hee

Edited May 16, 2009 by elovemer

[elovemer 10]

... i have friday as buy day on a B/M/S/B cycle....

[WHY? 16]

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.

Edited May 19, 2009 by WHY?

[elovemer 10]

....why does everyone keep saying the same thing over and over again....

?????

... has anyone missed their turn at interpreting this quote ?

 

 

... up trend has more up days than down.... down trend has more down days than up ....

.... nobody can disagree with that....

....that's what i call a cycle.... B/M/S/B ... OR ... S/M/B/S ....

.... or else ... B/M/M/S/B .... S/M/M/B/S

 

... on a 3 day cycle... in an uptrend... there is one down day ..... and two up days...

... on a 3 day cycle in a down trend... there is one up day .... and two down days....

.... this is a very simple concept....

 

.... your interpretation of Taylor's book.... IS YOUR OWN SPIN....

.... unless you are .... Taylor himself...

 

..... let's dig up Taylor himself... and we can find out who is spinning what around here....

....until then.... let's keep reinterpreting the same quote to suit our own... egos...

 

Quote from Taylors book chap 1

"It is a fact and the records show it.

Edited May 19, 2009 by elovemer

[WHY? 16]

....why does everyone keep saying the same thing over and over again....

??????????

 

Maybe you should ask yourself that question??????

 

 

 

 

... on a 3 day cycle... in an uptrend... there is one down day ..... and two up days...

... on a 3 day cycle in a down trend... there is one up day .... and two down days....

.... this is a very simple concept....?????

 

Where does Taylor ever say that??

Edited May 19, 2009 by WHY?

[elovemer 10]

... yep... you are right WHY ... there are more down than up days in an up trend...

.... and more up days than down days in a down trend....

... now that we have established that the market goes up in a down trend and down in an up trend...

...next topic... who can piss the farthest ? i vote for Taylor...

 

.... i just spoke with Taylor himself... and he informed me ... that your take on his method is baloney....

.... i'll let you know if he calls me again....

.... you want to turn TL into ET... go ahead....

 

...WHY if you want to discuss how your interpretation of Taylor's writing with differs with mine... you should PM me....

... this forum is not the place for a pissing match...

....otherwise... focus on your own methods....

 

Maybe you should ask yourself that question??????

Where does Taylor ever say that??

Edited May 19, 2009 by elovemer

[elovemer 10]

... today... tuesday... was short day by my count....

.... and wednesday will be buy day ....

 

 

... i have friday as buy day on a B/M/S/B cycle....

[WHY? 16]

... yep... you are right WHY ... there are more down than up days in an up trend...

.... and more up days than down days in a down trend....

... now that we have established that the market goes up in a down trend and down in an up trend...

...next topic... who can piss the farthest ? i vote for Taylor...

 

.... i just spoke with Taylor himself... and he informed me ... that your take on his method is baloney....

.... i'll let you know if he calls me again....

.... you want to turn TL into ET... go ahead....

 

...WHY if you want to discuss how your interpretation of Taylor's writing with differs with mine... you should PM me....

... this forum is not the place for a pissing match...

....otherwise... focus on your own methods....

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. Edited May 19, 2009 by WHY?

[WHY? 16]

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.

[WHY? 16]

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.

[monad 10]

"POST 703... i have friday as buy day on a B/M/S/B cycle...

 

POST 708: ... today... tuesday... was short day by my count....

.... and wednesday will be buy day "

 

There is glaring contradiction here, if Friday is a Buy Day, then as per Post 703, Tuesday should be a Buy Day and Wednesday should be a M Day.

 

OR if wednesday is a buy day, then Friday following M day(Thursday) has to a sell day.

 

Not that it matters one iota to another trader who has proven/tested strategies in place for intraday trading for each day of the cycle

 

Think for meaningful discussion here, it is imperative to refrain from person attacks and insults not only on the forum but via unwelcomed Private Messages as well. Name calling via PM like "Joker, Jackass, without balls" etc is not very productive, perhaps Soultrader should look into this otherewise this thread is coming to a grinding halt for it looks like anybody who posts here is considered as wrong, faces unnecessary hostility and instructed to migrate to ET.

Edited May 20, 2009 by monad

[monad 10]

WHY?

Back to your excellent Post 704 and some meaningful and mature discussion, hopefully to continue this thead before folks just walk away in disgust at the pissing contests going on in the last dozen posts.

Would appreciate if you could clarify the following:

 

"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.

 

1. I have observed that in strong uptrends, there is indeed the first cycle 123 where the SS closes on its High Last. Following this Day4 , Buy Day, there would be a shallow decline or zero decline and off to races which continue on the Day5, Sell day. Then it reacts on the SS day with an ideal short. Is that what you meant when you said in a bull market it can go up 123, or 4 and 5

 

2. Similar scenario occurs in downtrend or a sell off from congestion, SS ending flat or low Last with BV, followed by Day 4 Buy day which ends flat and further downside on Day 5 Sell day, than on the SS day we have the rally.

[rigel 10]

Agreed, these useless exchanges regarding whose method is right or wrong is not doing anybody any favours. If somebody wants to modify Taylors method, and is making profit from it, fine,

Discuss in a matured way, no need to force the issue onto somebody else and tell them to go away or throw insults. This thread has been very instructive so far due to input from knowledgeable folks like WHY?, Richbois, Hakuna, Frank who have contributed without asking anything in return and I for one am indeed grateful to them.

And there are many who are trying to learn the methodology as the book is pretty diffcult read and WHY? has gone to a great deal of trouble in countless posts to clarify and it would be a great shame if the thread came to a grinding halt.

 

URGE SOULTRADER TO SAVE THIS THREAD FROM DISAPPEARING INTO OBLIVION

Edited May 20, 2009 by rigel

[WHY? 16]

1. I have observed that in strong uptrends, there is indeed the first cycle 123 where the SS closes on its High Last. Following this Day4 , Buy Day, there would be a shallow decline or zero decline and off to races which continue on the Day5, Sell day. Then it reacts on the SS day with an ideal short. Is that what you meant when you said in a bull market it can go up 123, or 4 and 5

 

2. Similar scenario occurs in downtrend or a sell off from congestion, SS ending flat or low Last with BV, followed by Day 4 Buy day which ends flat and further downside on Day 5 Sell day, than on the SS day we have the rally.

 

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.

Edited May 20, 2009 by WHY?

[WHY? 16]

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??

[elovemer 10]

... a buy day today ... has not taken out last low made first.... yet

... others may have different counts...

 

... and others surely have different "CYCLES" ;0)

[monad 10]

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??

 

Great elaboration on the essence of Taylor Methodology and clarification of ideal and not-ideal cycles., highly appreciated.

 

Today continuing with our count is Buy day, perhaps you can view ES and make some comments.