Taylor Trading Technique

[WHY? 16]

LOL LOL LOL Patuca you are cracking me up!!! LOL LOL LOL LOL

[WHY? 16]

I'm still laughing..LOL LOL LOL LOL

[smoothdrive 10]

Hello WHY?

 

As you know, I use TC2000 for my eod data - and there is no "ES" symbol. I tried Google and it appears to be a future of some sort relative to the S&P 500 (is that right). I noted where you said the ES had a high of 1529.5 today. I also see the the SP-500 (spx) had a OHLC today of 1516.15 1523.24 1500.46 and 1514.40.

 

Regarding market overall market direction - and/or overall market risk; now that is an area I don't take a backseat to anyone on. I've been keeping point and figure charts by had since 1994, and I am not aware of any system that helps judge overall market risk better than bullish percent charts.

 

Summary: A P&F chart is either on a buy or sell signal. We add up all the buy signals and plot the results on a bullish percent chart. We do this for all the major indexes. These indexes give us a tool to be properly bearish at the tops and bullish at the bottoms. Again, I know of no system that is better at measuring overall risk than bullish percent charts. For those with an interest, I can direct you to various web threads, articles and books. While I do have a burning desire to learn to short term trade via Taylor - and perhaps VSA, nothing will replace guarding my REAL MONEY with point and figure charts. Nothing!

 

Bottom line: The NYSE, Naz, SP-500 etc index bullish percent charts have all recently reversed back into a column of O's. It takes 3 boxes, or 6% of the index stocks signaling new P&F chart sell signals, to reverse from a column of x's to a column of o's. There is a great deal of overall weakness in the market right now. I had previously moved much of my equity mutual funds to the money markets because of earlier weakness. I will be moving even more now. The bullish percent charts - and a few others - are just flat signaling weakness.

 

I know I'm dead right on this. As Tom Dorsey says - "What is -- is". You can't hide price, and price on p&f charts is falling and sell signals are dominating the market.

 

Gary Fox

 

 

Ravin,

 

What is your take on ES today. If you look at the last 3 or 4 daily bars how do we look for 10-26? Bullish, bearish, sideways? From a VSA standpoint.

[Patuca 13]

hello gary please send me some info on point and figure

[WHY? 16]

GE 10-25 was a buy day. It open, traded up and then down. Presented an opportunity to short and to go long. Tomm 10-26 is a sell day. Sell those longs aquired on 10-25 on any penetration of 40.40 or around 40.55 if possible but watch closley as it is a bit weak and may not make the selling day objective which is 40.55

 

GNTA for 10-26 - Sell day - Possible BV. Go long on any decline under 1.05. sell longs on any rally back to 1.05 or penetration there of.

 

 

POTP - 10-26 - buy day- Go long near .32 or .33 sell around .37 or more.

 

 

SNUS - 10-26 - sell day - Possible BV. Buy on on any declien early in the seeion under .51 once the decline stops. Sell the long same day near .51 or any pentration of .51

 

 

MZC - 10-26 SS day short if early in session makes high. Short at 1.18 to 1.20 cover same day 1.14 to 1.15

 

CNXT- 10-26 - sell day - possible BV early in the session look to buy long on any decline under 1.17 and sell longs same day on any rally to or thru 1.17-1.18.

 

See how it goes tomm.

[WHY? 16]

Hello WHY?

 

As you know, I use TC2000 for my eod data - and there is no "ES" symbol. I tried Google and it appears to be a future of some sort relative to the S&P 500 (is that right). I noted where you said the ES had a high of 1529.5 today. I also see the the SP-500 (spx) had a OHLC today of 1516.15 1523.24 1500.46 and 1514.40.

 

Regarding market overall market direction - and/or overall market risk; now that is an area I don't take a backseat to anyone on. I've been keeping point and figure charts by had since 1994, and I am not aware of any system that helps judge overall market risk better than bullish percent charts.

 

Summary: A P&F chart is either on a buy or sell signal. We add up all the buy signals and plot the results on a bullish percent chart. We do this for all the major indexes. These indexes give us a tool to be properly bearish at the tops and bullish at the bottoms. Again, I know of no system that is better at measuring overall risk than bullish percent charts. For those with an interest, I can direct you to various web threads, articles and books. While I do have a burning desire to learn to short term trade via Taylor - and perhaps VSA, nothing will replace guarding my REAL MONEY with point and figure charts. Nothing!

 

Bottom line: The NYSE, Naz, SP-500 etc index bullish percent charts have all recently reversed back into a column of O's. It takes 3 boxes, or 6% of the index stocks signaling new P&F chart sell signals, to reverse from a column of x's to a column of o's. There is a great deal of overall weakness in the market right now. I had previously moved much of my equity mutual funds to the money markets because of earlier weakness. I will be moving even more now. The bullish percent charts - and a few others - are just flat signaling weakness.

 

I know I'm dead right on this. As Tom Dorsey says - "What is -- is". You can't hide price, and price on p&f charts is falling and sell signals are dominating the market.

 

Gary Fox

Me thinks the market is weak also. However, we must be heads up for when it turns. The ES is the futures contract (december contract) on S&P. Just google futures charts and you will find some place that will let you see the charts for it. Like you say Tc2000 doesn't have it.

[RAVIN 10]

I do see great potential in correlating VSA wiuth Taylor. I am working on that. Yes, 10-26 will be an SS day.

 

You just can't take what the days action was for each day and then try to fit that into the cycle. The cycle is first. The actions are last. Almost everyone trys to make it a buy day or a sale day after the fact. . It won't work. I am telling you it won't work. You will finally throw your hand up in despair. People try to construct the ideal cycle by looking at each day after the close and seeing what day of the cycle it BEST expressed. I guess their thinking is you gotta make the ideal day. The problem: . Determine the cycle and follow it. You will be pleasantly surprised how easy it becomes..

 

Greatly appreciate your detailed explanation. You are so right, in the beginning we all have this tendency to look for ideal buy, sell days.

Prior to my VSA days, I was into index trading, stocks etc , EOD and intraday charts, multiple monitors, the desktop look very impressive, with all the calculations from Linda Raschke's ROC, Pinball buy, etc, umpteen horizontal lines on the multiple charts, ended up with information overload and analysis paralysis.

Now I have learnt to keep it simple, one can make a good living by focussing on a few setups , trade a few hours during times of liquidity and increase size. I only trade Dow and Dax and no longer have EOD charts, however 120min or 240min charts provide the necessary support and resistance levels to work from and observe the price action/vol at those relevant prices.

 

I have read about Taylors method in Linda's book and also in Angell but your posts on this thread are the first which highlighted the play of Smart Money and it was that which drew my attention , as you know market manipulation is at the core of VSA.

 

So coming back to that, you have emphasized the need to determine the cycle. As I have not slogged through Taylor's book, I would have to request you to elaborate on that, how do I do that. 10-24 was a buy day, 10-25 was a sell day, so 10-26 is a SS day, I will try to follow up from Monday with this line of analysis, hope you will take out time to guide for a week or so, at least that way it would be possible to get some insights and as you say be pleasantly surprised:)

it was very much the same way with VSA, in the beginning it can mess you up as we are so much used to the traditional way of thinking and looking for buy and sell signals via price based indicators.

 

will reply to your query on Fridays take via VSA separately

[OAC 10]

You know you may be right. The best we can do is try to anticipate. I would like to know why you think it is strong at this moment, if you would care to divulge that. I would be happy to divulge and tell you why I think it is weak.

Why?

I posted my views recently in the folowing two threads, you can get a glimpse of my method there:

http://www.traderslaboratory.com/forums/f2/are-low-volume-rallies-here-to-2514.html

http://www.traderslaboratory.com/forums/f6/es-trading-for-10-15-thru-2641.html

 

There has been a total lack of participation from members in this forum in those two threads. Even in my Low Volume thread, not a single VSA guy stepped forward. Is there a problem with my eyesight ? VSA thread has 30,000+ views ???

[RAVIN 10]

Ravin,

 

What is your take on ES today. If you look at the last 3 or 4 daily bars how do we look for 10-26? Bullish, bearish, sideways? From a VSA standpoint.

 

As I mentioned previously I used to engage in all this next day forecasting via EOD charts, even had a couple of subscriptions for ES trading, proved counterproductive for me , as it formed a bias in my mind and found difficult to detach from that. I do not use those anymore, however 45/60/120min charts provide previous 10-12 days of action in view from which I am able to gather enough info. for intraday trading i.e support/resitance, fib numbers, high/low of previous 2days, daily pivots etc and then it remains for the market to show its hand.

The market is always right and the price/vol provide the necessary info. during intraday on lower time frames i.e 15/5min at these relevant levels on which action to take.

 

As for today, I have attached 45min YM charts , as this is a TTT thread, don't want to get into VSA in depth, however you have highlighted the market manipulation component in TTT methodology, and in that sense there is a synergy with VSA analysis.

 

1. Have to learn to combine vol, with price patterns (red arrows on chart 1)

 

2. Red arrows point to resistance levels on chart 2. There is a confluence of resistance levels. i.e Fib retracements of the fall from 11th oct - 22nd Oct of nearly 600pts. plus the resistance offerred by upper trend line of the trend channel (blue) and the high of Yesterday. Tom Williams emphasizes the need to employ previous levels of support and resistance in reading via VSA.

 

3. Hence there is a lot of supply to work through, above there is the gap of 19th and then massive supply at higher levels.

 

4. So obviously there is weakness there. However the pros. are not all going to decide to go short because these lines are there on Ravin's Computer charts:) There might be syndicates on sidelines with different agenda who have yet to show their hand, hence I remain totally flexible.

 

5. The 15min chart shows the interplay between price patterns and vol with greater clarity.

 

However this is no way diminishes the value of TTT method as it also takes in account market manipulation and would provide added confidence if the right setup exhibits itself and is consistent with the EOD analysis, one can then enter with size.

 

Anyway this is my personal way of trading, each has to find an edge which they can exploit, there is no right or wrong way.

[Dogpile 10]

hi all,

 

I am not really 'counting' Taylor days so much as watching tests of highs and lows. I have a few oscillators I watch and I keep my trades in line with those keeping mindful of good price zones to execute longs and shorts in terms of support/resistance.

 

Here is how I see it for now:

 

Last Thursday 10/18, we closed with a narrow bar that indicated 'balance' -- you look for a potential strong directional move with this type of set-up. Friday we got that day. But note the location. We gapped down and trended down & away from 1547.00. This indicates strong conviction by 'Big Money'. Lower prices encouraged MORE selling, indicating that the market needed to unload shares as its 'inventory' was 'too long'...

 

The important thing about last Friday now is that a 'high volume zone' occured with the largest volume occuring at 1530.00. Since that time, a lot of volume has built up down at 1503-1505, indicating strong buyers down there. We tested 1530.00 yesterday. As I mentioned, we did this yesterday morning after we had already had 3 consecutive days of 'low to high' trading (where the lowest 'bar' of the day occus BEFORE the highest bar of the day). After 3 in one direction and facing stiff resistance at 1530.00, guess what happened: We went and tested 1530.00 and price stopped at 1529.75 and reversed hard. This formed a 'high to low' trading day (highest bar of day occurs BEFORE lowest bar of day).

 

Thus, the 'expectation' was for yesterdays test of 1530 to fail. And it did. It didn't HAVE to, but that seemed to be the odds-play.

 

Since that test, the market attempted down and this move was rejected as the S&P futures bottomed in the same price zone (1505) that saw buying interest on Mon 10/22 and Wed 10/24. There has been a lot of buying 1503 - 1505. Thus, on Thursday we formed a 'Higher Low'. This is the most important data point of any, I think.

 

Linda Rashke thinks the essence of Taylor is to watch and analyze price action at previous highs and lows. Violations/failures of highs and lows are very important. Higher lows and lower highs are also very important. To me, yesterdays 'Higher Low' vs Wednesday is the very important data point that Rashke would highlight.

 

We built up a lot of volume at 1503 and 1505 earlier in the week (buyers) and then formed a higher low vs that level yesterday.

 

Seperately, note that we have 3 closes very close to each other over the last 3 days:

1525.00

1522.00

1524.50

 

We do have a fed meeting next week so we might need to get beyond that to breakout but my expectation would be for a close 'away' from 1524.00 today-- implying we could get a good, driectional move. Confirming this is the fact we have low 15-min ADX and a potential catalyst in Countrywide (CFC) earnings due out this morning. Be aware of potential for a directional move today -- but be careful of entering in the high-volume zones if trying to 'go-with' momentum -- as it is easy to get 'chopped up' if you are not careful on your location. Best set-up would be a strong momentum move and a pullback that does NOT require entering right in the heart of a chop-chop zone.

[waveslider 10]

Quote:

 

 

Also, maybe as a project Dogpile and WHY? could try to agree on the stage of the cycle as we go, day by day. It would be great to learn this stuff real time.

 

 

"I think we calculate the day differently. I don't understand how he does it and I can't tell him how I do it."

 

WHY? - - I don't understand why you can't tell him how you do it. What is the point of this thread? I am inclined to agree with Dogpile's comments about just watching the high and low tests - but who needs Taylor for this?

 

I suggest that this thread needs some direction and someone to take the initiative. WHY? seems to have some software that outlines the Taylor method, assuming you understand it, how about taking the lead on this thread and adding some value instead of "I don't understand how he does it and I can't tell him how I do it."

 

We are here to learn a method of establishing a point of reference in the market, Taylor seems to offer this. The idea of a 3 day cycle does have merit, when it is valid, what we are all looking for is an objective method of determining:

 

where we are in the cycle, or is there actually a cycle intact?

 

Maybe WHY? you could change your name to WHYNOT?

[WHY? 16]

WHY? - - I don't understand why you can't tell him how you do it. What is the point of this thread? I am inclined to agree with Dogpile's comments about just watching the high and low tests - but who needs Taylor for this?

To answer that I refer you to my post #115

 

I suggest that this thread needs some direction and someone to take the initiative. WHY? seems to have some software that outlines the Taylor method, assuming you understand it, how about taking the lead on this thread and adding some value instead of "I don't understand how he does it and I can't tell him how I do it."

I thought I had added some value. I have made several detailed posts on Taylor. Show me any other forum that has such detailed explanations of taylor?? Sorry you feel differently. Taylor is a simple but complicated method. Sounds like a paradox...I know. I have attempted to explain ALOT of Taylor that would take many of you months and perhaps years to dig out of his book because of his writing style. Why would I just come up and say openly "this is the way my software calculates the days of the cycle". I am not stupid. I know where the key point is in the whole scheme of the taylor trading method. I am not the brightest around, that is for sure, but it has taken me years to get this down (my software was first written in 2000) and has been adapted as necessary since then. Why should I just say ...ok guys my software calculates the days this way______________? I am contemplating possibly selling my software. I do not know if I will sell it yet but am thinking of doing it. If not, I may just give it away. But even then I won't be won't be telling anybody..."this is the exact way it calculates the cycle" and I won't be just handing out my code. Why should I just give away what has taken me years to develop and somebody else just program it up and sell it themselves?

 

We are here to learn a method of establishing a point of reference in the market, Taylor seems to offer this. The idea of a 3 day cycle does have merit, when it is valid, what we are all looking for is an objective method of determining:

There again I repeat in different words. It is ALWAYS valid. There are variations but all larger declines and rallies have many cycles in them. A simple glance at any daily chart will reveal that. There are variations to how that those cycles are made but all is covered in taylors book. Don't fit the day into the cycle. Find the cycle and the days will fit in with all their variations.

 

 

Maybe WHY? you could change your name to WHYNOT?

Won't because I'm not a dummy!:helloooo:

 

Guys I think it is time I slide off this thread. Hope someone has been helped by some of my posts. It was interesting to see how others adapt Taylor. Can't say I agree with all of it but each has to "float his own boat". I have enjoyed it alot. Read the book. You will find most all your answers there in the book.

 

I may post some thinking on todays market action later in the evening.

[RAVIN 10]

To answer that I refer you to my post #115

 

I thought I had added some value. I have made several detailed posts on Taylor. Show me any other forum that has such detailed explanations of taylor?? Sorry you feel differently.

Guys I think it is time I slide off this thread.

 

I think you have made an invaluable contribution on a subject that most find it difficult and frustrating to come to terms with including me. Some may lose patience and then the inevitable confrontation. It would be a great shame if you decided to depart, I was hoping we could work over a week or two and take each day to develop some synergy between TT and VSA.

Hope you would be gracious enough to overlook some adverse remarks against your efforts.

 

Back to YM:

Despite the apparent bullish fundamentals, positive advance/decline, and Trin aroud 0.7-0.8, market ran into resistances outlined before. and that coupled with a SS day on TT (Hats off to you WHY?) The short was on YM 5min chart and pivot resistance which lined up with others, with a 50pt move in favour of the trade.

[WHY? 16]

I might just say that from the open ..shorting ES at around 1534 would give you a profit of say 7 or 8 pts already as the low has been 1526.00. However, this decline has been for the most part grudgingly. Perhaps it is best not to follow it too far. While the bottom could fall out, it may retrace.

 

Here we are on an SS day after a nice setup on the previous day (sell day 10-25 for a SS day) with a decent profit, by capturing the main trend of the day. Again, Taylor was about getting a goodly slice of that main trend.

[WHY? 16]

Just a word on GE and the other picks I made:

 

GE - I said in my previous post that 10-26 was sell day. The idea was to sell the longs purchased on the previous day (10-25 - buy day). It opened, traded up, jerked down, but not enough to take out your stopless (depending on where you set it) and then right away traded up to 40.50 just shy of the target 40.55. I indicated it might not reach the target. Came close though. A little after 10:00 and you would be out of the market. Anyway, that was the time to dump your longs unless you decided to do it sooner right after the opening when it went to 40.43. So one is now out with a nice profit.

 

GNTA- It did the unexpected. Open high, not low, and didn't make any BV early in the session. When that happens you can do one of two things. Enter the new data in for a new intraday forecast or just or pass on the play. With penny stocks it is imperative they do as expected or forget it. No play unless you get a new forecast.

 

POTP - Buy day -long at .31 out at .34 just too slow of a rally to hang on for more.

 

SNUS - Sell day - Made a BV but it wasnt enough to bother with - no play

 

MCZ - SS day - Gapped up on the open. No play. This is why with pennies you always want to see the open first. Usualy best to pas but if so inclined one can enter the new data in and get an intraday forecast.

 

CNXT - sell day - Came close to making a BV right after the open but didn't - no play.

 

So, in the pennies only one play materialized today using Taylor. And GE gave a potentially profitable play almost as well as an ideal sell day.

 

I might say this, when trading the pennies using Taylor, generally you want about 20 or more pennies you are watching live on a streamer when the market opens. Before the open you should have already done the taylor analysis and know what you are looking for. Those that have price action that allows using taylor strategy (aren't too far away from the ideal pattern for that day) are those that you look at when considering taking a position. Out of the 20 if you end up with 5 to 8 to trade on and can manage 10,000 shares in each and capture .02 to .04 each share..well you get the idea some fairly good money can be made using Taylor to daytrade the pennies.

[WHY? 16]

I think you have made an invaluable contribution on a subject that most find it difficult and frustrating to come to terms with including me. Some may lose patience and then the inevitable confrontation. It would be a great shame if you decided to depart, I was hoping we could work over a week or two and take each day to develop some synergy between TT and VSA.

Thanks for your comments. I would like to work together with you on TT and VSA. I'll get back with you. It will be a few days.

[RAVIN 10]

Thanks for your comments. I would like to work together with you on TT and VSA. I'll get back with you. It will be a few days.

 

LOOK FORWARD TO THAT

 

As you so aptly put it aim to capture the meat of the move.

However it is not necessary to get wedded to the initial bias, afterall the market is always right.

 

attached, YM 45min , shows the initial fall and then support at the 38.2% level which previously was a resistance.

The YM 5min flags up the setup (down move followed by a test on low vol) to go long if you so wish, others players have stepped in to buy, there is nothing right or wrong about it. Just go with the flow.

 

YM 3min exhibits this aspect even better with the classic heavy vol on a down bar with similar vol on a dragonfly indicating entry of demand offering a low risk, high probability trading opportunity especially around the lunch period where we often observe reversals.

[OAC 10]

OK, I am the Mod here. Any of you guys want to delete any of the posts here ?

[WHY? 16]

Looks like we were both right OAC for today. IT was weak early in the session giving the ss day a profit. Then rallied back and finished strong.

 

Have a good weekend!

[Dogpile 10]

in my pre-open post this morning, I mentioned:

1) the importance of Thursdays 'Higher Low'

2) the potential for a directional move today given 3 closes that were close to each other and low 15-min ADX

3) the importance of the 1530.00 pivot

4) the important buying that had occured in the 1503-1505 zone

 

In retrospect, this analysis was pretty good. You might ask, 'well how much money did you make today Dog?".... Well, I didn't make much.

 

It is really amazing how the market can obey many of the core principles you believe in and still be so complex. The fact is that I was actually up a lot of money today but decided to play for a bigger win by scalping out of partials and trailing stops with breakeven sell-stop orders.

 

The complexity today arose out of the size of the opening gap. It was massive. We built value at 1518.50 on Thursday and opened nearly 20 pts above that. I decided that I wanted to go long on a test of 1530.00 as that would provide support. Well it did and the market bounced up -- and looked like it was set for lift-off. But it wasn't ready yet - for whatever reason. I stopped on my remaining position during the 10:45am EST 15-min bar (for breakeven). Price continued down for another 90 minutes and went BELOW 1530 to flush out any remaining stop-loss orders before rejecting that in a 'bear trap' --- by printing a 'buying tail' that stretched below 1530 -- and then grinding up the rest of the day. The day ended up making its highest bar for the day AFTER the lowest bar was made for what was a 'low to high' day.

 

Thus, I was bullish coming into the day. I was looking for a close far away from the last 3 closes near 1524.00 -- and we closed +18pts vs that level. All of that yet I made what amounted to a few small scalps.

 

Linda Rashke talks about trading in her book like one is fishing. Most of the time, you catch small ones. Occassionally, things line up and you catch a big one. Today was a 'small one' day. I was dead right on the 'structure' but it still managed to be tricky enough to not allow the 'big one' to be caught. Those S&Ps are tricky, man. Time for a drink. Let's get em next week.

[OAC 10]

Looks like we were both right OAC for today. IT was weak early in the session giving the ss day a profit. Then rallied back and finished strong.

 

Have a good weekend!

 

Hehe, Why?

You don't take a backseat to no one.

[WHY? 16]

Have a good weekend people. I am sliding off this thread. May your days be filled with profitible trades and may you enjoy life and find success in what you do. Hasta la vista.

[OAC 10]

Those S&Ps are tricky, man. Time for a drink. Let's get em next week.

 

Didn't you pay attention to Thursday's VAH ?

[Dogpile 10]

<<Didn't you pay attention to Thursday's VAH ?>>

 

yes but going long there was under the 1530 resistance zone. playing long there would be in expectation of a trap -- not something I generally do. I am a 'go with' the short-term momentum type and my oscillators made momentum lows there. Clearly, not a great spot to short since the oscillators were quite depressed at that point -- but also a difficult long entry -- I just skipped it altogether. This type of price action is consistent with low-ADX environment -- which is not really my sweet spot in terms of trading strengths. I prefer less 'bar overlap' tradign environment (expanding ADX). You are right though in that it would have been good entry from pure price perspective -- just didn't line up with my kind of trading. hope you caught it.

 

I have found those multi-hour type of bull-flag formations like we had pre-lunch today to be a bit difficult. I went long later on when it opened up a bit, getting away from 1530 and showed bullish action after testing VWAP. But even there I did the wrong contract -- making a small amount on long-NQ when I should have been in ES or RUS, which moved a lot. NQ was the only one NOT to trade low to high today -- so that was a bit frustrating to only make a little by choosing the wrong contract. ah well, just one of those days where can't seem to quite nail it. I had a mega-day on Wednesday.

[Dogpile 10]

I did a video on a few Taylor type of concepts. the quality didn't come out so good but I think its understandable.

 

The chart is a 15-min Chart of S&P Futures (ES)... comments welcome: