Useful things I've found on the Net.

This is a discussion on Useful things I've found on the Net. within the General Trading Chat forums, part of the Reception category; Originally Posted by nine The floor trader's method provides one basis for trading based on price pattern recognition. In some ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Mar 9, 2008, 3:42pm   #51
 
dbphoenix's Avatar
Joined Aug 2003
Quote:
Originally Posted by nine View Post
The floor trader's method provides one basis for trading based on price pattern recognition. In some markets observation of volume can improve your results.

Although it may seem dissimilar to what dbPhoenix discusses with S & R and Wyckoff they are not that far apart. In both cases you are looking for price action at anticipated support or resistance to generate signals for trading. With Wyckoff the S&R is "true" S&R based on areas of previous activity but in the FTM the S&R comes from moving averages. In both cases you largely ignore price action unless it takes place at valid S&R.

FTM does not provide you a "no-thought" packaged solution to trading the markets. What it does provide is a framework that can be used independently of or as a complement to Wyckoff style S&R trading. My own strategy combines elements of both under certain circumstances to improve my probabilities. Think about the progression of a move and what you a being told as price progresses or fails to progress.

One of the keys is finding the "right" mas for S&R. The ma is just a visual way of representing what players in the market will perceive as value. And, as a move progresses the perception will change so the FTM talks about different levels of penetration of the MAs depending on the nature and stage of the trend. Different markets (on different timeframes) gain support from different mas so picking the right ones by trial and error is an important component of success - think about what other participants are using. Are they using emas (intraday) or smas (daily)?

Potentially you could eliminate the emas and use trendlines or channels instead. A good friend of mine, perhaps poking fun at me, refers to my mas as a lazy man's trendlines.

This is, however, a sound strategy for trading especially in markets prone to good trends.
I was told I'm being talked about over here.

It appears that the system you've quoted above is just a variation on Dunnigan, i.e., Dunnigan with MAs. And your friend is right: MAs are a lazy man's TLs, i.e., MAs are simply moving TLs, and are not necessarily of consequence to this approach.

As for whether it's all consistent with Wyckoff, of course. Unfortunately, these template-style examples tend to overlook the real-time difficulties that go on with annoying frequency. That's where understanding the various hesitations and tests and timeouts and how all of that relates to all that went before (S/R) is key to knowing what to do next, or whether or not to do anything at all. If only all trends were stair-step, life would be simple indeed.

As for Teresa Lo, she gave me some of the best advice I've ever received, regarding what happens after one enters a trade: "if it doesn't go, you don't want to be there".

But in general, at some point the trader is likely to find himself faced with an obstruction to his continued advancement. He may be able to work his way past that obstruction by remembering two things: (1) price and volume do not move in bars (which carries certain implications with regard to counting them), (2) there is no such thing as "noise".

I'm attaching an extremely introductory pdf re trends which includes Dunnigan. If you're interested in trend, I urge you to read his explorations of it in his One-Way Formula book (don't pay an inflated price; get a used one).
Attached Files
File Type: pdf 3--Dunnigan02.pdf (68.6 KB, 579 views)
__________________

dbphoenix is offline   Reply With Quote
Thanks! The following members like this post: black bear
Old Mar 9, 2008, 3:43pm   #52
Joined Jan 2007
Smile Forget my own head if it was not attached....Rules

Some rules I found on the net are up to the job imho


Old Rules...but Very Good Rules.

If I've learned anything in my 17 years of trading, I've learned that the simple
methods work best. Those who need to rely upon complex stochastics, linear
weighted moving averages, smoothing techniques, fibonacci numbers etc.,
usually find that they have so many things rolling around in their heads that
they cannot make a rational decision. One technique says buy; another says
sell. Another says sit tight while another says add to the trade. It sounds like a
clich, but simple methods work best.

1. The first and most important rule is - in bull markets, one is supposed to
be long. This may sound obvious, but how many of us have sold the first
rally in every bull market, saying that the market has moved too far, too
fast. I have before, and I suspect I'll do it again at some point in the
future. Thus, we've not enjoyed the profits that should have accrued to
us for our initial bullish outlook, but have actually lost money while being
short. In a bull market, one can only be long or on the sidelines.
Remember, not having a position is a position.

2. Buy that which is showing strength - sell that which is showing
weakness. The public continues to buy when prices have fallen. The
professional buys because prices have rallied. This difference may not
sound logical, but buying strength works. The rule of survival is not to
"buy low, sell high", but to "buy higher and sell higher". Furthermore,
when comparing various stocks within a group, buy only the strongest
and sell the weakest.

3.When putting on a trade, enter it as if it has the potential to be the
biggest trade of the year. Don't enter a trade until it has been well
thought out, a campaign has been devised for adding to the trade, and
contingency plans set for exiting the trade.

4.On minor corrections against the major trend, add to trades. In bull
markets, add to the trade on minor corrections back into support levels.
In bear markets, add on corrections into resistance. Use the 33-50%
corrections level of the previous movement or the proper moving average
as a first point in which to add.

5.Be patient. If a trade is missed, wait for a correction to occur before
putting the trade on.

6.Be patient. Once a trade is put on, allow it time to develop and give it
time to create the profits you expected.

7.Be patient. The old adage that "you never go broke taking a profit" is
maybe the most worthless piece of advice ever given. Taking small profits
is the surest way to ultimate loss I can think of, for small profits are
never allowed to develop into enormous profits. The real money in
trading is made from the one, two or three large trades that develop
each year. You must develop the ability to patiently stay with winning
trades to allow them to develop into that sort of trade.

8.Be patient. Once a trade is put on, give it time to work; give it time to
insulate itself from random noise; give it time for others to see the merit
of what you saw earlier than they.

9.Be impatient. As always, small losses and quick losses are the best losses.
It is not the loss of money that is important. Rather, it is the mental
capital that is used up when you sit with a losing trade that is important.

10.Never, ever under any condition, add to a losing trade, or "average" into
a position. If you are buying, then each new buy price must be higher
than the previous buy price. If you are selling, then each new selling
price must be lower. This rule is to be adhered to without question.

11.Do more of what is working for you, and less of what's not. Each day,
look at the various positions you are holding, and try to add to the trade
that has the most profit while subtracting from that trade that is either
unprofitable or is showing the smallest profit. This is the basis of the old
adage, "let your profits run."

12.Don't trade until the technicals and the fundamentals both agree. This
rule makes pure technicians cringe. I don't care! I will not trade until I am
sure that the simple technical rules I follow, and my fundamental
analyses, are running in tandem. Then I can act with authority, and with
certainty, and patiently sit tight.

13.When sharp losses in equity are experienced, take time off. Close all
trades and stop trading for several days. The mind can play games with
itself following sharp, quick losses. The urge "to get the money back" is
extreme, and should not be given in to.

14.When trading well, trade somewhat larger. We all experience those
incredible periods of time when all of our trades are profitable. When that
happens, trade aggressively and trade larger. We must make our
proverbial "hay" when the sun does shine.

15.When adding to a trade, add only 1/4 to 1/2 as much as currently held.
That is, if you are holding 400 shares of a stock, at the next point at
which to add, add no more than 100 or 200 shares. That moves the
average price of your holdings less than half of the distance moved, thus
allowing you to sit through 50% corrections without touching your
average price.

16.Think like a guerrilla warrior. We wish to fight on the side of the market
that is winning, not wasting our time and capital on futile efforts to gain
fame by buying the lows or selling the highs of some market movement.
Our duty is to earn profits by fighting alongside the winning forces. If
neither side is winning, then we don't need to fight at all.

17.Stock Markets form their tops in violence; Stock markets form their lows in quiet
conditions.

18.The final 10% of the time of a bull run will usually encompass 50% or
more of the price movement. Thus, the first 50% of the price movement
will take 90% of the time and will require the most backing and filling and
will be far more difficult to trade than the last 50%.

There is no "genius" in these rules. They are common sense and nothing else,
but as Voltaire said, "Common sense is uncommon." Trading is a common-sense
business. When we trade contrary to common sense, we will lose. Perhaps not
always, but enormously and eventually. Trade simply. Avoid complex
methodologies concerning obscure technical systems and trade according to
the major trends only


Time for take off...........
Attached Images
     
black bear is offline   Reply With Quote
Thanks! The following members like this post: new_trader , Paul71 , fibonelli
Old Mar 9, 2008, 3:54pm   #53
Joined Jan 2007
Time Stop

Quote:
Originally Posted by dbphoenix View Post
I was told I'm being talked about over here.

It appears that the system you've quoted above is just a variation on Dunnigan, i.e., Dunnigan with MAs. And your friend is right: MAs are a lazy man's TLs, i.e., MAs are simply moving TLs, and are not necessarily of consequence to this approach.

As for whether it's all consistent with Wyckoff, of course. Unfortunately, these template-style examples tend to overlook the real-time difficulties that go on with annoying frequency. That's where understanding the various hesitations and tests and timeouts and how all of that relates to all that went before (S/R) is key to knowing what to do next, or whether or not to do anything at all. If only all trends were stair-step, life would be simple indeed.

As for Teresa Lo, she gave me some of the best advice I've ever received, regarding what happens after one enters a trade: "if it doesn't go, you don't want to be there".

But in general, at some point the trader is likely to find himself faced with an obstruction to his continued advancement. He may be able to work his way past that obstruction by remembering two things: (1) price and volume do not move in bars (which carries certain implications with regard to counting them), (2) there is no such thing as "noise".

I'm attaching an extremely introductory pdf re trends which includes Dunnigan. If you're interested in trend, I urge you to read his explorations of it in his One-Way Formula book (don't pay an inflated price; get a used one).

Hi db

Just off for another week of adventure


good post as per

"As for Teresa Lo, she gave me some of the best advice I've ever received, regarding what happens after one enters a trade: "if it doesn't go, you don't want to be there"."

good point imo, I use a bit of a time stop regards this one and have found it very effective. You could use bar count in your time frame of just a watch.(time piece/clock :-)

I use my tummy get a funny feeling a bit like sickness after a set period of time if its not moved in intended direction, other signs to look out for

watching intently =

GONE ASAP

Later...........
Attached Images
 

Last edited by black bear; Mar 9, 2008 at 5:39pm. Reason: time piece :-)
black bear is offline   Reply With Quote
Old Mar 11, 2008, 8:46am   #54
 
ceydababy's Avatar
Joined Apr 2007
Quote:
Originally Posted by grantx View Post
Nine,

Re your post 21, from FTS8 onwards.

This is the method I’m trying to perfect at the moment (although I ‘discovered’ the method independently as a modification of another method) . I reckon it’s the best approach for scalping. However, I don’t refer to volume - holding a position for seconds, if possible, I don’t think it strictly relevant (however, if someone can convince me otherwise I’ll certainly listen); and I have no need for technical indicators - their lagging nature would undermine the immediacy of the method.

There is one point of yours with which I would disagree regarding this method: “warning against going to too short a timeframe”. To illustrate why, please refer to the attachment in the second pot - tyhe one haere is incorrect.

The charts are for Friday’s CBOT 10-year future. The upper is a 1-minute time-frame, the lower a 10-tick time-frame. 1, 2, 3 and 4 show high/low points (I’ll use only these – it’s sufficient).

Here are the times of the highs/lows. The first figures are for the 1-minute chart, followed by the times for the 10-tick chart. The figures in brackets are from a 5-minute chart simply to provide a broader perspective.

1. 18:31, 18:30 (18:35)
2. 18:45, 18:44 (18:45)
3. 18:48, 18:48 (same time on the 5-min but the bar is a down-bar compared to an up-bar for 1-min and tick)
4. 19:05, 19:04 (19:05).

Is 1-minute significant? Of course it is (5-minutes is an infinity).

I think the greater the time-frame, the greater the risk. Assume you have a buy (sell) signal and you open a position; your entry price should be as close to the high (low) of the high(low) bar as possible, but not at the high (low) as this level would invalidate the high (low) bar as a buy (sell) signal (you won’t know if a bar is a high or low until the following bar).

Your stop is above (below) the high (low) bar. Therefore, the further away from the high (low) where the position is opened, the greater the potential loss to the stop point. And as price can rise/fall over, eg 1-minute (bar), then logically it can rise/fall by a greater degree over 5-minutes (bar)and the further away your stop.

Each instrument has a unique optimal time for generating signals. As shown, the 10-year note is 10 ticks which is also (strangely) the optimum for the 5- and 2-year notes. For comparison, Eurex’s Bund (10-year) is 25 ticks, Bobl (5-year) is 10-15 ticks, and Schatz (2-year) is 25 ticks. However, I think it’s important to occasionally adjust (check daily) these periods to reflect any change in underlying volatility (the same also applies to moving averages, for example – a 5- and 15-minute ma may work fine one day but if the underlying becomes more volatile 3- and 13-minute may be more suitable).

Are there any weakness? Only my own – not closing some losing positions quick enough (but I’m improving).

Any comments welcome.

Grant.
Hi Grant,

Inclined to agree with you. Like Brutus Dog I use the 5 min and the 1 min trying to trade in the direction of the 5 minute from the 1 minute t/f using a similar method to the one Nine describes. I find that by moving up the t/frames it can cost you a lot more to find out you're wrong. However, there are fewer signals so you are going to get thrown far fewer dodgy ones.

Using divergance as a filter I am finding the signals even stronger. As BD says using divergance with an indicator is actually pre emptive as opposed to lagging.

The key in my opinion to using a setup like this is NO THINKING ALLOWED, literally see the signal and click the button.

Just my $0.02 worth !!

CB
__________________
Stops are IN ! Emotions are OUT !
ceydababy is offline   Reply With Quote
Thanks! The following members like this post: timsk
Old Mar 11, 2008, 11:20am   #55
Joined Jun 2006
CB,

"I find that by moving up the t/frames it can cost you a lot more to find out you're wrong."

This is a good point. I have a similar attitude which I apply to any time frame: how far does the price need to go to prove you are wrong?

In my post above I refer to stops being around the high/low (of the previous bar). For me, this is only relevant if I can open near that point. In practise, this is rarely the case. So I will close immediately if I sense a change in direction as shown by the rapidity of order flows (on the DOM)in the opposite direction. Of course, on occasions you will close prematurely but I justify this approach in the knowledge that I can always re-enter at the original opening point (sometimes better).

I have a quote written on a scrap of paper (forgot the origin):"Get to the point where you don't lose money then profit will take care of itself". For me this also implies maintaining your trading capital.

As regards fewer signals I think this depends on the instrument and volatility, eg equities, index or bond futures. In my experience there is indeed sufficient volatility to scalp over very short periods, eg on a one-minute time frame. Perhaps an immediate reaction would be, 'not enough points to be made in one-minute'. But this misses the point (no pun intended) - the signals generated provide you with early entries (and exits) which could put in a long and sustained movement.

"NO THINKING ALLOWED". Absolutely, but difficult (I'm still fighting this)

Good Trading,

Grant.
grantx is offline   Reply With Quote
Thanks! The following members like this post: black bear
Old Mar 11, 2008, 12:16pm   #56
The Staff are paid members that perform various roles such as editorial, advertising, support or technical work.
 
timsk's Avatar
Joined Mar 2002
Quote:
Originally Posted by grantx View Post
"NO THINKING ALLOWED". Absolutely, but difficult (I'm still fighting this)
A reasonable day overall for me yesterday, but it would have been a whole lot better had I stuck to this golden rule. I had two losing trades because my brilliant mind decided (along with a dash of ego) to ignore the blindingly obvious evidence before my eyes, because I thought I was one step ahead of the market. Someone please give me a massive poster to put on the wall with NO THINKING ALLOWED in bold red letters! It'll save me a ton of money. 'NO THINKING ALLOWED' is a more concise, harder hitting variation on Joe Ross's 'trade what you see and not what you think'. I like it.
Tim.
__________________
I'm New To T2W - Where Do I Start? - a must read for anyone new to T2W
I'm New To TRADING Where Do I Start? - a must read for anyone new to TRADING
The Trading Plan Template - a must read for anyone without a proper TRADING PLAN
timsk is offline   Reply With Quote
Old Mar 11, 2008, 12:17pm   #57
Joined Jan 2007
Thumbs up good advice

Quote:
Originally Posted by grantx View Post
CB,

"I find that by moving up the t/frames it can cost you a lot more to find out you're wrong."

This is a good point. I have a similar attitude which I apply to any time frame: how far does the price need to go to prove you are wrong?

In my post above I refer to stops being around the high/low (of the previous bar). For me, this is only relevant if I can open near that point. In practise, this is rarely the case. So I will close immediately if I sense a change in direction as shown by the rapidity of order flows (on the DOM)in the opposite direction. Of course, on occasions you will close prematurely but I justify this approach in the knowledge that I can always re-enter at the original opening point (sometimes better).

I have a quote written on a scrap of paper (forgot the origin):"Get to the point where you don't lose money then profit will take care of itself". For me this also implies maintaining your trading capital.

As regards fewer signals I think this depends on the instrument and volatility, eg equities, index or bond futures. In my experience there is indeed sufficient volatility to scalp over very short periods, eg on a one-minute time frame. Perhaps an immediate reaction would be, 'not enough points to be made in one-minute'. But this misses the point (no pun intended) - the signals generated provide you with early entries (and exits) which could put in a long and sustained movement.

"NO THINKING ALLOWED". Absolutely, but difficult (I'm still fighting this)

Good Trading,

Grant.
Hi Grant

"I have a quote written on a scrap of paper (forgot the origin):"Get to the point where you don't lose money then profit will take care of itself". For me this also implies maintaining your trading capital."

Good advice/quote Grant 1st responsibility always imho is the protection of your account/trading capital, one good trade counts for a lot if you have churned for a couple of weeks at or around BE

old advice that used to be given to an apprentice body repairer (vehicles/cars) when experiencing difficulties repairing a dent ....................

look after the edges and the middle will look after its self
Attached Images
 
black bear is offline   Reply With Quote
Old Mar 11, 2008, 12:27pm   #58
Joined Jan 2007
lol

Quote:
Originally Posted by timsk View Post
A reasonable day overall for me yesterday, but it would have been a whole lot better had I stuck to this golden rule. I had two losing trades because my brilliant mind decided (along with a dash of ego) to ignore the blindingly obvious evidence before my eyes, because I thought I was one step ahead of the market. Someone please give me a massive poster to put on the wall with NO THINKING ALLOWED in bold red letters! It'll save me a ton of money. 'NO THINKING ALLOWED' is a more concise, harder hitting variation on Joe Ross's 'trade what you see and not what you think'. I like it.
Tim.
Hi tim

arrrrrrr thinking = dangerous, well always as been for me in the past

I deal with it with a rule.............

thinking is allowed

I write down my thoughts the night before or post some rubbish on T2W/whatever, do not consider it rubbish at the time I might add.

Next trading session I take my trades as per method

BUT ! if market looks to be agreeing with my earlier thoughts / rubbish I am inclined to hold a touch longer or close a touch earlier, seems to work ok and do not have to worry regards having thoughts anymore
black bear is offline   Reply With Quote
Old Mar 11, 2008, 2:01pm   #59
Joined Jun 2006
Timsk,

I already do something similar. Stuck to my screen is a page of A4, highlighted by fluorescent pens of suitably gaudy colours is various notes:

“if all losses were kept to a maximum of -20 (2 points), the profits would be substantial.

These big losses are your major problem; they will be your ruin/downfall. You have got to earn a living.

Just close [losing positions] for Christ’s sake. Get a grip. What’s wrong with you?

Stop taking flyers.

Only add when in profit.

Need to look for better set-ups.”

Pink,

“one good trade counts for a lot”. Dead right. I’ve found while some/most trades may be losers, as long as you cut them soon enough the really good trades (anything up to three times a day) will more than make up.

“Measure twice, cut once”

Grant.
grantx is offline   Reply With Quote
Old Mar 11, 2008, 2:12pm   #60
 
nine's Avatar
Joined Sep 2003
nine started this thread It seems that not following the plan is a frequent problem. I've always said that day trading is harder than swing trading because the time to make decisions is shorter ... but I wonder if I'm wrong. It could be impulse control fatigue.

When you trade eod you have a 20 minute period when you think about your trades and make your decisions. If you get the impulse to try something "off plan" you usually reject it and then act according to plan. Then you go about your normal business, dinner, tv, kick the cat.

When you day trade, even for only 3 hours as I do, you get multiple opportunities to make an impulsive off plan move. You get one, and you reject it. Then you get another, and you reject it. And you get another, and fxxk it, you do it ... and maybe you even repeat it.

So how do you fix this? One way is a bunch of psychological tricks and some procedural ones as suggested here. Another way is: have a chocolate bar (or just a bit every 15-20 minutes during the trading session.




Resisting temptation is energy intensive:

Cognitive Daily has just published a great write-up and demonstration of a study that illustrates how self-control is an energy intensive process that puts a big drain on the body's glucose levels.

The article tackles a recent study [pdf] led by psychologist Matthew Gailliot that found that exercising self-control in either conversations or in lab tasks reduces blood glucose levels.

The researchers also found that initial glucose levels can predict how well people do on these tasks and that self-control can be temporarily boosted by giving people a sugary drink.

Cognitive Daily's have recreated one of the lab tasks. Go and check it out, it's an excellent demonstration. It makes the task wonderfully clear but also illustrates how even such simple self-control tasks are so difficult.

This sort of 'self-control' is heavily linked to attention - in part, the ability to focus yourself on one particular thing and not get drawn into perceptual or emotional distractions.

This study doesn't tackle brain function, but another recent paper by Gailliot [pdf] does link these findings to what we know about the neuropsychology of 'self-control'.

This ability is particularly associated with the frontal lobes, which are known to play a key role in inhibiting inappropriate responses.

You can see control break down in interesting ways after frontal lobe damage, which can often lead to a range of impulsive behaviours.

For example, patients with damage to this area might display utilisation behaviour, where they are unable to resist carrying out actions presented by their environment.

The affected person might be unable to walk past a door without trying to open it or sit in front of a coffee cup without sipping it, even when they know it's too hot to drink.

What's interesting, is that as the CogDaily article illustrates, we seem to have a mild form of this when we are low on energy or fatigued.

It's interesting to speculate that the reason we get 'snappy' when tired is because we're less able to control the emotions sparked by small annoyances.


from Mind Hacks
nine is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
All things FTSE smccreedy Indices 213 Jun 21, 2007 12:46pm
Things Will Get Better But First ...... wisestguy Commodities & Money Markets 28 Jun 17, 2005 3:04am
Things said by Clever Buggers. zigglewigler General Trading Chat 10 May 21, 2005 11:16am
What makes things move? strewthmate First Steps 32 Mar 2, 2004 8:11pm
books and things....... titus-uk Educational Resources 7 Dec 11, 2000 3:09pm

LinkBacks (?)
LinkBack to this Thread: http://www.trade2win.com/boards/general-trading-chat/29598-useful-things-ive-found-net.html
Posted By For Type Date
Box-trader This thread Refback Sep 28, 2008 1:36am
Recent things Bookmarks on Delicious This thread Refback Sep 23, 2008 11:20pm
Rollover adjustments - Sierra Chart This thread Refback Jun 4, 2008 10:43am
Rollover adjustments - Sierra Chart This thread Refback Mar 13, 2008 10:39am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)