Finding Liquidity

[BlueHorseshoe 10]

I agree with you. All you have to do is say you bought at the about low tick and say you sold at almost at the high tick. Don't say you got the exact low and high. People might think you are bullshitting.

 

Yes, you need to seperate 'buying the low tick and selling the high' from 'successfully trading reversals'. The former would be the ideal scenario. Although it seldom resembles the ideal scenario, the latter can still be a profitable reality, and is not just a delusion of vendors. Anyhow, there are plenty of vendors around selling other ideas (One of today's highlighted threads starts with a quote from a Covel book on trend following for example).

[joshdance 10]

Profitable heh?

 

First you say "impossible", then you say 1 out of a 100. Which one is it?

 

Chill a little. Trading doesn't have to be that difficult. Its not impossible.

 

Let's state the obvious: of course some people buy the low tick and sell the high tick; somebody has to right? So, it's not only possible, but necessary by definition.

 

However, many others try in vain, and fail. And, the ones who happen to do it do not consistently do it. 1 out of 100 do it, but no one does it consistently (with a 65% accuracy rate, as you claim).

 

Now, if the market is in one-timeframe mode it can be quite clear within a tick or two when a retracement will either succeed or fail. You said earlier that you're talking about intraday scalping. Perhaps you could show a chart or just give an example of a trade you took this past week; I don't know what instrument you trade, or what your target is per trade, or anything; maybe you're shooting for 3 ticks, and saying you'll take no heat, in which case it would very much change my perspective on what you're talking about.

 

Nothing to chill here I'm afraid; I'm just pointing out that the path to failure in trading, if one does not have extremely high capital to actually hold the market, is guessing tops and bottoms. Once in a while it will work, but a much more sound strategy is to follow those who make the tops and bottoms.

 

I don't know what "profitable heh?" means, but I assume you mean that I'm not profitable because I'm saying it can't be done consistently. I don't think there's a correlation there, but all I can say is, post the tick where the market will make its move at least one minute in advance, 3 times out of 5, and you'll be proven correct. Otherwise, you're yet another forum guy who has said he can predict the future, but can strangely not prove it. There are enough of those already here.

[BlueHorseshoe 10]

Once in a while it will work, but a much more sound strategy is to follow those who make the tops and bottoms.

 

What about if you tried for tops and bottoms, but you were willing to give the market plenty of room to move when you didn't get it quite right? In other words, if you entered positions when you anticpated a reversal, but didn't expect to buy or sell the low or high tick?

[joshdance 10]

What about if you tried for tops and bottoms, but you were willing to give the market plenty of room to move when you didn't get it quite right? In other words, if you entered positions when you anticpated a reversal, but didn't expect to buy or sell the low or high tick?

 

Certainly a viable strategy BH, and no doubt what many people do. I did it on Friday, but it was because I had to leave the house, and it missed my stop by one tick and turned out to be a good one, but quite lucky really.

 

The big risk here is of course, that if you're way wrong, and you wind up getting totally run over by fading what turns out to be a strong move.

 

Using simple metrics, I think it's possible to have a reasonable guess as to the range and behavior for the day, before the open, or very early into the session. Nothing fancy, just basic stuff that's out there available. I usually have a pretty decent idea of what is likely; in other words, given the criteria I look at, it's pretty probable that the market will stay within a certain range, or will trend throughout the rest of the day, or whatever else. Should I expect 10 handles on this trade, or should I get out with 3 and run?, for example.

 

The danger with what you mention above is that if I'm wrong, it could be a monstrous loss. That's the problem with these kinds of things: the market will once in a while do the very unexpected, go further than anyone thinks it can, and the like, so that no one is allowed to ever have a risk free guess. For example, people who have kept thinking that the rally since early October is way overextended and have been shorting into it... the market must go on improbable runs every so often so that no one can ever reliably do Martingale, for example.

 

I have found that when I have a good idea about the low or high, that in most cases I will get about the same price, or even price improvement, when I wait for others to set the pace and then follow, versus when I just put the order in and choose to take the role of an early adopter. Sometimes by being an early adopter (read: top and bottom picker) I will gain an entry price which is never touched again and the market just goes. But the amount I make doing that is probably less than the amount I have lost by doing the same thing.

[michal89 10]

traders laboratory forum are amazing here. And trade a goods for in future boost...!