Taylor Trading Technique

[richbois 10]

TTT and MTP did it again as TTT nailed the lows on TF with a DP signal on 3 minute chart and a TS3 on the 15 min with wave A = wave C. We also had lots of divergence on the 15 min chart

 

Nice reward with low risk even if you only got part of it.

 

I hope one and all had a great Christmas and wish you a very Happy Healthy an Prosperous New Year 2009

[monad 10]

WHY?

 

Have been going over this thread from the first page to see if I can understand TT. From you posts it appears you have knowledge on this subject. However your analysis of certain days has created a lot of confusion for me.

 

Allow me to put up quotes from your posts:

 

Post 28: 10-16 was short-sell action all the way except it was short-sell with a failure to penetrate, According to Taylor tomm 10-17 is a buy day. Dogpile not sure how you determine the days. I come up with different calculations than you do. My software would have indicated to me……………………….

The opportunity was there to short today early in the session just under 1562, Typical Taylor BUY day. High made first that gives a shorting opportunity

 

Post 36: Taylor called yesterday 10-18 a SS day and today 10-19 would be a buy day

 

Post 37: I might say that the price action today 10-19 (buy day) is what Taylor would term a BU (or buying under the low of the previous day 10-18 which was a short sell day). Notice that 10-17 was a sell day and 10-16 a buy day. What is interesting is a BV (buying day violation-a lower low than the precious day which was a buy day) took place on the 17th.

 

Post 51: We see that 10-11-07 was a BUY day according to my software. On a buy day, per Taylor rules, if the high is made first I am allowed to short it. However, I can detail the action of 10-11-07 for you. I would need no chart to trade the action on 10-11-07. My proprietary software doesn't even use charts. Lets look at the action on and near 10-11-07

 

Post 58: No, 10-11-07 was a BUY day. Go back and read my post #51

So, 10 - 12 = Sell Day

10 - 15 = SS day

10 - 16 = Buy day

10 - 17 = Sell day

 

 

1. In post 28, you said your software came up with 10-17 as a Buy Day

2. In Post 37, it showed 10-17 as a Sell Day

3. In Post 58, it showed 10-17 as a Sell Day.

 

I understand that initially due to many exchanges with others who had different take on the subject, a mistake could have been made, however since you are using your software it is difficult to see how it could have got the sequence wrong.

Would greatly appreciate if you could resolve this as I am not sure which is the correct sequence.

[HAKUNA 10]

Happy New Year

 

Would be great if more traders with TT experience would participate on this thread, obviously the methodology has merits

[HAKUNA 10]

Monad,

 

as per the Post 51 you pasted: We see that 10-11-07 was a BUY day according to my software. On a buy day, per Taylor rules, if the high is made first I am allowed to short it. However, I can detail the action of 10-11-07 for you. I would need no chart to trade the action on 10-11-07. My proprietary software doesn't even use charts. Lets look at the action on and near 10-11-07

 

According to the 2007 calender , that would lead to 10-17 as a SELL DAY.

But you are right WHY? has provided hindsight analysis of that day according to the trading levels thrown up by his software both as Buy Day and then later on following days with 10-17 being a Sell Day.

 

Puzzling as to how software could lead to contradictory outcome- which in turn throws the rest of analysis of subsequent days in question. as there is much emphasis on not scuttling days which would go against the market manipulation aspect at the core of Taylor Trading. Am sure there is an explanation , as WHY? has appears to have knowledge on the subject should be able to shed more light.

[richbois 10]

Today was a Sell day and as such we did get the usual see-saw day. TF made the first objective just to pull back and then nailed the second one.

[WHY? 16]

I don't post much lately nor look at the this thread very often. However, I see that Monad and Hakuna have brought up some legitmate questions concerning my posts. The posts under question took place in 2007, I believe. For futures the data has to be manually typed into my software at the EOD. So, it would be time consuming for me to go back and find the days under question in that instrument and re-enter them into my software and take a look to try and determine what happened in my posting back in 2007. For stocks EOD data can be downloaded from a major vendor and plugged into my software so stocks are much easier in terms of getting the data into my software. So, without going back and finding the data for that instrument and going thru all the trouble of re-entering manually it into my software (as it takes several days of data for the software to make the calculations for the next day) I will attempt here to give some explanation about what "could" have happened in my posts:

 

My software has a built in feature that allows for re-cycling the days IF certain anomalies or conditions appear in the market. The software alerts me to these conditions and ask me to re-cycle. Sometimes the re-cycling changes the sequence of the days and sometime it doesn't. But anytime the software ask me to do it, then it is probally best at least try re-cycling. This re-cycling serves as a mechanism that allows me to take a VERY temporary advantage of certain market conditions and this advantage applies ONLY for the next day of trading. I know Taylor didn't have this built into his system. Most of the time in 1 to 3 days (many times the very next day at the end of the day when latest data is plugged in) the cycle reverts back to what it would have been if no change had been made. Basically, what this does is that it allows me to call, for example, a buy day a sell day but only for the next trading day. And because of some anomaly or temporary condition the sequence is changed temporarily but it applies ONLY to the next day of trading. The temproray condition triggers the software. I know the sequence of the days are important and of course "when" one begins the "count" is of great importance. But one must remember Taylor didn't have computers and the calculations by hand would have been overwhelming to make changes in the "count". So,while I stress conserving the the Taylor "count" I also understand that preserving it doesn't mean it can't be tweaked any at all in this age of computers. What I am NOT for is taking the market action at the end of the day and trying to see what day of the cycle the action more nearly appears to mirror and thus labeling it as such and such day because of that particular action that day. One will end up with constant confusion and never know what the day of the cycle really is. Again, once a sequence is started it can be kept as Taylor kept it and it can be tweaked as I do it but it doesn't HAVE to be be tweaked. In other words, you trade it as the day of the cycle Taylor would have called it without any tweaking. My reason for tweaking it is that at times I will get an opportunity to go long and short (such as on a taylor buy day..his rules allow that) that I otherwise would not have gotton IF I had stuck strictly with Taylor on the sequence. For instance, if Taylor sequence says tomm is going to be a sell day then I can (according to the rules) only take a long position on a sell day if a BV occurs. That is, if it trades under the previous days low and does so early in the session. On the other hand, lets say my software says tomm is a sell day but authorizes me to re-cycle. When I re-cycle it may or may not change the sequence. However, lets say it does change it to a buy day. So, now because of something my software picked up in the markets I am allowed to trade tomm as IF it were a buy day. But, ONLY tomm. This re-cycling does not necessarily mean that the new sequence now stays in place for future days. It is ONLY good for Tomm. But, that re-cycling now gives me two potential trades. A short on a high made first and then reverse and long on a low made early in the session (say by noon). I have in effect upped my potential trading opportunities by temporarily trading tomm as if it was a buy day when by Taylor is would be a sell day with only one opportunity to go long and none to short. It is simply a mechanism to facilitate Taylor for day trading. Generally, the cycle reverts back to the original sequence many times the very next day at the end of the day. So what does this have to do with answering the questions Monad and Hakuna presented.

 

Well...it happened back in 2007 and my memory barely goes back to yesterday...at times!! However, a possible explanation for the discrepancy in the sequence in my posts could very well be that when I wrote one post I failed to re-cycle the software. Remember my software doesn't automatically re-cycle for me. It just alerts me by a little yellow light that I may need to try re-cycling and see IF it changes the sequence of the days. I have to manually push the re-cycle button. Thus..I might have missed the light in one post...saw it in another later post and hit it and it did indeed change to another day. When I typed the latter post I may have been looking at a recycled day. I am not sure that this is an adequate, or even fair explanation. for Monad or Hakuna but it is an attempt to give a possible explanation for a discrepancy they discovered in my posts back in 2007.

 

Of course, the key in Taylor is how do you start the count and do you allow re-cycling and if so, how do you determine when to re-cycle and how long does the re-cycling last. Of course, these are keys that I won't be revealing. However, I might say this; if my explanation confuses you then simply learn Taylor well...follow his rules...keep his sequence...and I think you will be pleased with the results providing you are disciplined and can trade on facts and on what the market is doing and not on emotions. Taylor, I like to say, devised a system to "clock" price movement in the markets and it is a pretty good system in my books with a high win rate (at least for me) if one can understand it and follow it...especially the rules. Read the book and study it 50 or more times over the course of a couple of years. I have many trading books. If I were forced to keep one it would be Taylor, no if, ands, or buts about it!!

 

Hope this helps but it may only add to the confusion??? Hope you all have a good year trading in 2009. There should be plenty of shorting opportunities. But, remember with Taylor one can also go long in downtrends. Cycles exist, and they must exist, or nobody would trade a market that one day shoots to the sky and the next day crashed to the ground. Think about it! Cycles exist, and if they exist, they are engineered to exist. By whom? Well... I won't get into all that but it is enough to say that Taylor called it manipulation. These cycles existed in his day and cycles exist in our day. It is the way the markets work. They can be taken advantage of!!

Edited January 10, 2009 by WHY?

[monad 10]

WHY?

Greatly appreciate the detailed explanation, the rephasing does answer the discrepancies in the post. Interesting take on changes that can be made into Taylor on a temporary basis.

 

Hope you keep posting as I think your posts shows you certainly have a grasp of Taylor's method.

 

A question: say if I wanted to start counting via Taylor for ESmini as of 12th Jan 2009, Monday. How would I go about doing that and what would be the starting point.

[WHY? 16]

Monad,

 

While I will not indicate to you exactly how I calculate the days nor how or why (in terms of specifics) I re-cycle (obviousley those are secrets I guard) I will be happy to refer you to the exact Taylor way of calculating the days. However, remember he did it by hand. In his day he had to work with what he had to work with. I am quite confident that IF he had worked his system in our time that we would see some changes in the way he does things. The heart of his system would be left intact but I am quite sure he would have done some tweaking in the computer age.

 

Taylors way of starting the count can be found on page 15 of the book. Some people may think Taylor to be archaic and doubt that anything devised in the 50's could possibly be useful for todays markets. However, it must be realized that there are basic things about the market that never change. They are the same as they were in 1940. Just like there are many ways of making first and ten on the football field there are a few things that don't change; the field, the yardlines, the chains, the goal posts, the touchdown zone. While there are a number of ways to achieve the goal of first down or even touchdown these ways (whether they be the many ways of running or passing) all have to "happen" within the context of the immutable. Taylor simply "saw" the immutable in the markets and devised a strategy supported by tactics and rules to take advantage of the playing field.

 

I might add that Taylor is a comprehensive system. However, as with any system one has to be very mechanical. Emotions are our worst enemy when it comes to trading. That said, in trading there is a "gut" feeling or 6th sense or whatever you want to call it, that can hit the nail on the head so to speak. That is the only emotion I would trust in trading. And it only happens on occasions. And it is generally developed only after much experience in the markets. I really think it is the brains way of processing info unconciousley and somehow indicating to your conciousness that prices will move in a certain direction. But trading on hope..fear..greed..joy...enthusiam in no way moves or alters the markets in the direction you want it to go. So, IF one can't be mechanical when trading (along with an occasional 6th sense event) then Taylor nor any other system will work. Price is king. Volume is queen. Discipline is IMPERATIVE. You must be ruthless. Nothing works in the market without discipline. When I speak of discipline I mean having rules and following them.

Edited January 10, 2009 by WHY?

[monad 10]

WHY?

Thanks once again. o.k lets say I go according to the instructions to make the book and 12th Jan Monday turns out to be a buy day, hence we will end the week on16th Jan, Friday as Sell day.

Now 17th and 18th are weekend days and so will be Monday 19th Jan "Martin Luther King" Birthday.

 

How would we read 20th Jan, Tuesday. As per Taylor I would treat Monday 19th as SS day and 20th Jan, Tuesday as Buy day.

 

Am I right?

 

1. if there were 2 weekday holidays rather than just one, how would I proceed then.

2. Also do I continue the count on sat, sun (weekend) or go straight from Friday to Monday.

[WHY? 16]

Any day that is NOT a trading day in the markets (that is, weekends..holidays) does not enter into the "count" at all.

 

Therefore, if monday the 12th is a buy day then Friday 16th would be a sell as you say. Sat and Sunday and Monday 19th (holiday) do not even enter into the "count" at all. The next trading day would be tuesday 20th so it is an SS day. Ignore all weekends and all holidays in the count.

 

As regards the two holiday senario you simply ignore them. They are not trading days so they don't enter in the count. If the markets were say closed for week you would ignore that week in the count and pick right back up on the next trading day with where you left off a week ago. That should answer any questions regarding a disaster such as the 9/11 disaster.

 

Your second question of going from monday to friday...etc. is already answered by the above info. You ignore all weekends as if they never existed.

 

Hope this helps to clarify things.

Edited January 10, 2009 by WHY?

[richbois 10]

In regards to Holiday I personally have a different view.

 

In today's global trading and having a Globex session the US Index Futures gets traded on Holidays at least for part of the 24 hour session. Therefore these days are part of my count and the 19th will be counted.

 

I tried not counting them in the past and every time I did that my cycles were out of wack until I put them back in. So if they are traded for a portion of a day I include them in my count.

 

As far as starting your own book we could have 3 different persons starting a book at 3 different time and all 3 would have a different cycle. So for me that is not as important as knowing how to trade any given Buy/Sell/SS day, based on the price action of the previous day.

 

Taylor traded differently than most of us do. He kept positions for 2-3 days and most of us are day traders and dont keep positions overnight. Therefore we use Taylor's principles and adjust them to day trading. As WHY? said we could be short on Buy days and long on SS days it just depends on how that particular cycle is progressing.

 

Like we said Taylor didnt have the luxury of a computer, I found that if you put statistics and averages, on all the calculations that Taylor did and included in his Trading Book, you will notice that it will help you in trading with the right bias for that particular day of the cycle.

 

For instance if you know that on a Buy day, according to your cycle, you have over 90% chance of getting a Decline from the SS day high, and that SS day closed on the highs for the day, why not short until the Buy day low comes in.

 

This example is just one of many that can be derived from a good statistical Taylor Trading Book.

 

Anyway that is my 2 cents.

 

Rich

http://www.taylortradingtechnique.net

[WHY? 16]

Any day where any trading takes place should be entered into the count. Even if it is just 1/2 day of trading. Any instrument that trades when other don't ...a separate book should be kept for that instrument. So, you are correct in your observation. The ONLY days that do not enter in are days NO TRADING takes place. It makes no sense to enter a "no trading day" into the count when no new data has presented itself.

 

As concerns Taylor. He did daytrade also. He also was a swing trader 2 to 3 to 4 days. In addition, he also trend traded and used his method for this longer term trading.

Edited January 10, 2009 by WHY?

[monad 10]

WHY?, richbois, thanks for the clarification

 

Had in mind the question regarding different folks starting the book at different times, guess richbois has addressed that issue.

 

Boils down to how to trade any particular day based on highs/lows made previous day.

 

Allow me to pick your brains further.

 

Will enumerate ways of playing as I see it, please feel free to correct/add/modify/criticise:)

 

1. BUY DAY : Both long and shorts can be taken.

 

a) if High is made last on SS day, Look for Shorting opportunity

b) if Low is made last on SS day, wait for retest of low to go long.

c) if close is flat i.e open/close of SS day approx same, wait for a dip in price to test low of SS day prior to considering longs.

 

2. SELL DAY: Again both long and short trading possible.

 

a) High made last on Buy day: Look to short on penetration of this high or failure to penetrate.

b) Low made last on Buy day: look for long opportunity at open , however if prices drop below the low then that is B.V and hence the long should not he held too long, target would be around the low of buy day. Next level would be the High of Buy Day if uptrend continues. Many times the prices rise even further and a High is put in last on Sell day.

c) If flat close on Buy Day, again, wait for tests of the low of the buy day before considering long.

 

3. SS DAY: According to Taylor strictly no longs on this trade, however if I understand you guys correctly, both longs and shorts can be considered depending on previous days action.

 

a) High made Last on Sell Day: Look to short on penetration or failure to penetrate.

b) Low made Last on Sell Day: Note if B.V has occurred, then longs can be taken with similar target as that on sell day.

c) Flat close on Sell Day: both longs and shorts possible on open??????

 

Any info. would be highly appreciated.

[WHY? 16]

Monad,

 

Not sure how you came up with the tactics for each day but it is not Taylor (at least some it). On the other hand, it shows you are seriousley engaged in learning Taylor, which is good. Remember, the mission is to capture a goodly portion of the days move (when day trading), or a goodly portion of the swing move (when swing trading 2 to 3 to 4 days), or a goodly portion of the trend move (when trend trading..several days to several weeks). That is the mission. The strategy is to accomplish this by recognizing the cyclical nature of the market and the manipulation (by insiders..etc) and and employing mechanisms to recognize and take advantage of those cycles. The tactical side is what you do for each day of the cycle. That is; the techniques you use to accomplish the strategy. I will summarize the days tactics according to Taylors rules. I am very busy at the moment but will give you the tactics you employ for the BUY day. In other posts, as I get time, I will give you the tactics for the Sell day and the SS (short-sell) day. I am also giving you an example or two.

 

Buy Day

 

1) You look to short if the high is made early in the session (preferably within the first hour or two of trading). You want to capture the move down towards the low. You don't want it to make the high first then trade to the low then back to the high for you to short it. No, you want to capture the FIRST move down. That is generally the best move. Not always, but generally.

 

2) IF it trades down to the low early in the session (must be before noon break) then you go long or reverse and go long (when you have previousely shorted) and wait for any decent rally towards the projected high...that could be an afternoon rally.

 

3) If the stock bounces around all day and holds a higher low ( a low that is higher than the previous days low...i.e. the previous SS day low) and it is late in the session (with last 2 hours ....preferably last hour) I am allowed to take a long position and hold it until the next day (sell day). Taylor called this buying a higher bottom and it is usually profitable according to him.

 

Note: While these are the tactics you use when daytrading on a buy day you must be able do some intraday tape reading to determine IF it is advisable to follow the tactics for that day. Again exact entry points are discretionary. Second, you must have some means of calculating probable highs and lows...etc (that is what Taylors measurments were all about) and employ some tape reading at those points to detect IF the market is likely stoping at those points or will most likely continue breaking thru those points. This, of course, determines whether you will employ the tactics for the day or whether you will "pass by" trading for that session. It also affects your decision as to your exact entry point.

 

Example 1 - For instance, lets say that on a given stock the projected and calculated/probable high is 43.00. The market opens. I am watching the action closely. It immediately trades up to 43.00 within 30 minutes of trading and it is a buy day. I am therefore poised to implement tactic 1 above. However, I must watch the "tape" and determine if prices are tanking at 43.00. I may watch it go up touch 43 trade down a little..trade back up to 43.25 trade down to 41.75 trade back up to 43 and just sit there. Not much movement for several minutes. There is a lull in the move. Suddenly, it starts down. That is when I employ tactic 1. It is early in the session (1 hour) and the projected high has been made..it appears to have tanked..and the FIRST real move down has started. I am on board and looking to exit close to the projected low but again I do some tape reading for the exact exit point. If it trades down real fast..hits the projected/calculated low I might want to wait a bit and see if it trades on down more before exiting. Once the tape indicates to me that it has probally stopped going down I exit and reverse and take a long position (it is still early in the session on 1.5 to 2 hours have passed). So, I am out of my long and now short waiting for any decent rally. If it makes the rally in the afternoon FAST I exit the long on any decent profit. If is grudgingly heads back up I may want to wait and exit the long the next day (sell day) if the tape indicates to me that there is still demand.

 

Example 2 - The same stock opens at 42 and immediatley trades down to the projected low of 41. Prices hold there. There is a lull and little action. We are 1.5 hours into the session and prices are lingering near the projected low however, everytime in breaks a little below 41 immediatley the stock is bought. Large blocks are bought at the ASK price. It pops back up to the projected low. I decide to get on board and go long. Now I am poised for any decent rally towards the projected high. The rally starts.... gets halfway there and it is lunch and things just kind of sit there. Not much movement. About 2 p.m. things start to hop again. It trades up within one hour to the projected high. It hangs around there and doesn't seem to want to go up any more. Lets say this action continues and now it is 30 minutes before market close. I can do one of two things. I can exit my long or hold it and exit it early on the the next day (sell day). Why would I wait to exit. Well from all appearances it looks like it will close out near the high price. This puts the probabilities favorable for and even higher price early on the next days session (sell day). So, I might decide to hold overnight and capture a little more of the rally. But, if I wish to be flat at the end of each day and am satisfied with capturing a good slice of the days move, then I can go ahead and sell out. But, it since it is late in the session and the high of the day was made last and the next day is a Sell day in the cycle I do not even think of shorting it. Per Taylors rules I only short on a BUY day if the high is made early in the session. I never short a high made last. Why? Well Taylor gives the reasons in his book for this rule but in a nutshell the very fact that it closed high puts the odds against me shorting as the odds are the move will continue up some more the next day (sell day). So, if I short at the close of the buy day on a high made last then I may very well get stopped out early in the next session. Then I would be giving back some of the profits I made on the long.

 

Example 3 - The same stock has been trading between 42 and 44 all day long. It is the last hour of trading. It is hoovering near 42 and the tape seems to indicate no further decline. The projected low was 41. It is late in the session it has made a higher high than projected and is holding a higher bottom. The odds favor a rally the next day off of 42. Thus I go long as close to 42 as I can and hold overnight probally exiting early the next day (sell day) on any decent rally towards 44. The fact that it broke thru the projected high and is holding a higher bottom favors a continuation of some sort of rally the next day. That is why I can take a long position late in the session. This is much different than taking a long position late in the day when it is at the projected low or even lower (Taylor's rules do not allow you to take such a long position). The latter is much more risky. Again, it is about keeping the odds in your favor.

 

Taylors rules were all about keeping the odds in your favor and being ruthless to get out immediately when you are wrong or the system fails in its calculations. Being ruthless and disciplined protects your capitol. Again, Taylor WILL not work for an undisciplined trader. Actually, no system will.

 

In summary, on any BUY day I have a potential opportunity to short or to go long ( 2 possible long senarios) or do both (a long and a short) but it depends on the actual market action. As the trading unfolds if affects the decision as to what tactic/tactics I will employ. I may do both - a long and a short. I may do only a short (for example if the low was made late in the session I DO NOT want to go long. Why? Again the odds favor more price decline the next day (sell day) thus it would behoove me to wait and take my long position on the next day on a BV (buying day low violation). I may do only a long when the low was made first as no shorting is allowed on a buy day when the high is made last. The exception to this is the "higher bottom senario" mentioned in # 3 above.

 

There are many more examples I could give you but just follow Taylors rules when employing the daily tactics. Be ruthless in this. Sure, following the rules will inevitably cause you to miss out on some moves but you will also save your hide when things go wrong and you lessen your chances of being caught with your pants down. It is all about having system that puts the odds in your favor and FOLLOWING that system. It takes a heart of steel and a disciplined mind.

Edited January 11, 2009 by WHY?

[monad 10]

Monad,

 

Not sure how you came up with the tactics for each day but it is not Taylor (at least some it). On the other hand, it shows you are seriousley engaged in learning Taylor, which is good.

 

 

Example 1 - For instance, lets say that on a given stock the projected and calculated/probable high is 43.00. The market opens. I am watching the action closely. It immediately trades up to 43.00 within 30 minutes of trading and it is a buy day. I am therefore poised to implement tactic 1 above. However, I must watch the "tape" and determine if prices are tanking at 43.00. I may watch it go up touch 43 trade down a little..trade back up to 43.25 trade down to 41.75 trade back up to 43 and just sit there. Not much movement for several minutes. There is a lull in the move. Suddenly, it starts down. That is when I employ tactic 1. It is early in the session (1 hour) and the projected high has been made..it appears to have tanked..and the FIRST real move down has started. I am on board and looking to exit close to the projected low but again I do some tape reading for the exact exit point. If it trades down real fast..hits the projected/calculated low I might want to wait a bit and see if it trades on down more before exiting. Once the tape indicates to me that it has probally stopped going down I exit and reverse and take a long position (it is still early in the session on 1.5 to 2 hours have passed). So, I am out of my long and now short waiting for any decent rally. If it makes the rally in the afternoon FAST I exit the long on any decent profit. If is grudgingly heads back up I may want to wait and exit the long the next day (sell day) if the tape indicates to me that there is still demand.

 

It is all about having system that puts the odds in your favor and FOLLOWING that system. It takes a heart of steel and a disciplined mind.

 

Many many thanks for taking the trouble

I realise that despite multiple read of the book, I am most likely to get the concept wrong(can't quite get around to Taylors style of writing:(

You are right about the mental aspects of trading ie. Discipline.

 

in the above example, did you mean to say "So I am out of my short and now long waiting for any decent rally" .

 

Look forward to your take on Sell Day and SS day.

[WHY? 16]

Many many thanks for taking the trouble

I realise that despite multiple read of the book, I am most likely to get the concept wrong(can't quite get around to Taylors style of writing:(

You are right about the mental aspects of trading ie. Discipline.

 

in the above example, did you mean to say "So I am out of my short and now long waiting for any decent rally" .

 

Look forward to your take on Sell Day and SS day.

Yes that is correct. That was a error on my part. It should read as you have typed it. Just blame Taylor for messing my mind up!!!

 

As concerns Taylors writing style. It is very difficult to understand. It takes many reads to finally enter into the way he thinks and expresses himself. I do not know if he did this on purpose (as a disguise so that only those that really took the time would understand his concepts or if that was really his style of communicating). I admit, he is extremely hard to understand and I think that is why most people give up on reading his work or trying to figure out his trading system. A person who cannot take the time to ferret out his concepts would in short order chunk the book in the garbage or sell it, to get rid of it, thinking it was a bit of gibberish from some sort of derranged mind. However, to the contrary, it is full of nuggets and trading concepts that I know work in the real world of trading. At least, in my experience they work. They have to be dug out over a process of a couple of years and perhaps 50 reads but they are there waiting to be dug out. Unfortunately, most folks don't have the patience nor the time for such an exercise.

Edited January 11, 2009 by WHY?

[monad 10]

Yes have noticed that some of his style of writing has rubbed on to you:), no offence meant.

Very much doubt if Taylor did that deliberately. Like Wyckoff, he got the insight into the workings of the market and it was "Eureka", was just glad to announce to the world.

 

Wyckoff ofcourse was quite adept at writing.

Do you reckon Taylor was fully conversant with Wyckoff's work.

 

You are right about having persistence to go through Taylors work, the various reviews on amazon.com reflect this, most consider it obsolete and tend to follow Linda Raschke or G. Angell's versions. But from what I understand of Taylor so far, both are way off the original messsage.

[WHY? 16]

I have tried to investigate Taylor and learn more about him but there is little to learn. I am quite sure he would have been "up" on the systems of his time or at least been aware of them.

 

Angell and Linda Bradford Raschke both adapted Taylor in their own way. I would not say that their way is wrong but I would say it is not pure Taylor by any means. However, neither is my adaptation of Taylor 100% pure Taylor. But, there are certain things in Taylors method that in my view are imperative to the functioning of system and must be adhered to for best results. I suppose they felt or thought otherwise???

[WHY? 16]

Just for clarification...the three examples given in post #314 correlate respectively with the 3 tactics listed under the BUY day explanation that is found in post #314 above the examples given. Just wanted to make sure that was understood.

[WHY? 16]

As far as starting your own book we could have 3 different persons starting a book at 3 different time and all 3 would have a different cycle. So for me that is not as important as knowing how to trade any given Buy/Sell/SS day, based on the price action of the previous day.

 

This of course is one of the big sticky points in understanding and applying Taylor. I maintain the cycle IS quite important as the strategic element of Taylors system. Therefore, I think it beneficial that one have a means whereby the cycle is, or can be adjusted, when needed. I won't reveal exactly "how" I do it but suffice it to say that there are ways it can be done. Just think thru it. Edited January 12, 2009 by WHY?

[monad 10]

Just for clarification...the three examples given in post #314 correlate respectively with the 3 tactics listed under the BUY day explanation that is found in post #314 above the examples given. Just wanted to make sure that was understood.

 

Have just read that again, did not see the 3rd example yesterday,

 

can't remember reading that part, beginning to doubt my mind own mind now, or is it just with everything you read on Taylor where you keep going back and forth on a single sentence to understand the meaning:)

 

Anyway great examples, greatly appreciated once again,

Look forward to those on Sell Day and SS day. could you also reference mine and point to which are correct and which are wrong

[WHY? 16]

 

1. BUY DAY : Both long and shorts can be taken.

 

a) if High is made last on SS day, Look for Shorting opportunity

b) if Low is made last on SS day, wait for retest of low to go long.

c) if close is flat i.e open/close of SS day approx same, wait for a dip in price to test low of SS day prior to considering longs.

 

 

1) True statement provided that the Taylor rules are met to go long or short on the buy day

 

a) That is correct. If the high is made last on the previous day (SS day) and today is a buy day then when the markets open today look for an early opportunity to short.

 

b) Correct and I also would be on the alert for a lower low to be made on the buy day. It takes tape reading skills to determine just when to enter long on a buy day when the previous day (SS day) has made the low last. Therefore, some tape reading skills need to come into play.

 

c) That is true however, when the low of the previous day (SS day) is higher than the low of the day before the SS day (which would be the previous Sell day) then the price may not make it down to the low that was made on the SS day (i.e. the previous day). One needs to be at least alert to that possibility.

 

Monad, I need to clarify something. I did not take note of your statements above as being pegged to the buy day when I first looked at it so that is why I said that was not Taylor. Some how I related your statements as being statements about what you would do on a SS day. I missed the fact that this statement were under your description of what to do on a buy day. I don't know how I missed that. It was in plain view! In summary then, you ARE basically correct in your observation of what to do on the buy considering the action that took place on the previous day i.e. the SS day. Sorry about that. I will reference your other days later.

[monad 10]

 

c) That is true however, when the low of the previous day (SS day) is higher than the low of the day before the SS day (which would be the previous Sell day) then the price may not make it down to the low that was made on the SS day (i.e. the previous day). One needs to be at least alert to that possibility.

 

Sorry about that. I will reference your other days later.

 

No problems at all, am grateful for your input and insights, does shed considerable light on what at first glance appears to many as obsolete.

 

Besides referencing and correcting, for the Sell Day and SS day, please also include your own comments and examples as you did for the Buy Day, that has been of great help indeed.

 

BTW © above , the stringing of the sentence very much looks like as if you have been reading Taylor over and over again:)

 

I guess what this indicates is that if the Low of the SS day is higher than the low of Sell day, one would expect a shallow retracement on the Buy day which would be the most likely scenario in an uptrend.

[WHY? 16]

All traders out there need to check their fingers.

 

http://news.yahoo.com/s/ap/20090113/ap_on_sc/sci_financial_finger

[WHY? 16]

 

I guess what this indicates is that if the Low of the SS day is higher than the low of Sell day, one would expect a shallow retracement on the Buy day which would be the most likely scenario in an uptrend.

 

Yes, it can happen more often in an uptrend. However, not always. It can be at the start of the uptrend. In up trends as you trade Taylors system you will get more pentrations of the buy day's high on the sell day and the Sell day's high on the SS day. In uptrends you may also find that you will be buying higher bottoms on the buy days.

 

In downtrends, you will see more BV's as the long opportunity. I know this is bucking the trend but it is generally fairly easy to make money on a BV in a downtrend by going long on the BV's. You just can't get greedy and must exit same day (if in a downtrend) as you took your long position and your exit point should be at or just thru the previous days' low (i.e. the buy days low). However, this BV play must come very early in the session. That is, the entry should be early and the exit the same day however, you can wait and exit in the afternoon. I would exit on ANY rally back up towards the buy days' low that give me a good profit, even it it takes place 5 minutes after my entry. It is generally dangerous to hold a BV overnight in a downtrend so it is best to be flat at the end of the day. However, a BV can be held overnight if price is tracking sideways or in an uptrend when the BV takes place. But generally speaking I think it best to exit all BV before the day ends. When daytrading the system.