a free gift to total newbies from MajorDutch

[Shakone]

Sometimes I wonder if anyone actually looks at these things, or would rather just comment upon them with their own pre-judged view. Looking at this MajorDutch, I had some entries you didn't (different charting probably) and one of your pin bars was an inside bar for me. Still came out at 67% wins approx for 1:1 risk reward which is still good. Of course 7 (or 9 as I had) isn't really significant in terms of trades but it wasn't meant to be.

If you take a daily pin bar long, you're going in the direction of the price, you're going in the direction of the short term trend, there has been a reversal for whatever reason and you have your stop below a significant point. This on its own is ok, but not great. What you then need is a way to get out of the losing ones for smaller losses and stay in the winning ones for good gains.

Then you'd have a system. Talking about entry becomes tiring. If the 3 parts of trading are entry, exit and money management/risk, i'd say entry is the least important of those.

 

[Hotch]

I got the inside bar too, just wanted to avoid in inevitable **** storm.

 

[MajorDutch]

I got the inside bar too, just wanted to avoid in inevitable **** storm.

yeah the 30.7.2010 daily bar is an inside bar, the shape is a pin bar but the tail isn't sticking out anywhere, depends on your def of a pin bar. Doesn't really matter, it's certainly not a bar I would have traded and this isn't a strategy just a price observation.

Where's DT with his pa77ern cr7p.

 

[MoonRocket]

So.......when you see this "setup" again Dutch, will you be tempted to trade it?
I'll be the first to say, if I had discovered it..... I would.
OK.....I'll be the dumb ass....what's a DOM ladder?

 

[MajorDutch]

So.......when you see this "setup" again Dutch, will you be tempted to trade it?
I'll be the first to say, if I had discovered it..... I would.
OK.....I'll be the dumb ass....what's a DOM ladder?

sorry moonrocket dont quite follow. Are you asking if I saw an outside bar/pin bar on the EURUSD would I be tempted to trade it? not without looking at other factors. I watch about 40 currency pairs on the daily bars, sometimes pop down to the H4 if I have time. I look at a number of factors before taking a trade. Here are a few:

*Overall price action
*Strong Pivot areas
*S/R zone
*Future likely trouble areas
*Will risk be easy to manage
*Form of bar
*Size of bar compared to other bars
*gut instinct - does it look right

DOM ladder, Depth Of Market ladder - see pic attached.

 

[MoonRocket]

sorry moonrocket dont quite follow. Are you asking if I saw an outside bar/pin bar on the EURUSD would I be tempted to trade it?

Yes, I meant as you originally noted in your first post.

EUR/USD
3. Mark the 'big round numbers' that price has encountered during 2010 & 2011 with a horizontal line. (hint - these are 1.2, 1.3, 1.4 & 1.5)

4. Now mark on the chart each point during 2010 & 2011 that a pin bar or outside bar met the big round numbers. (hint - by my reckoning this happened 7 times)


DOM ladder, Depth Of Market ladder - see pic attached.

: punch face : I knew that...We live in a world whose language is slowly sinking into nothing but acronyms.

 

[squall321]

not patterns here mate you have got the wrong guy. maybe you should be picking on guys using dodgy Head & Shoulders, Wedges, Trend lines, Flags and indicators.

I dont trade patterns. I can only guess you are classing pin bars / outside bars as patterns. These are not patterns any more than watching a DOM ladder and looking for repeating 'patterns' of filled/pending orders are not patterns.

errr, a pin bar IS a head and shoulders pattern, represented as a pin bar on a higher timeframe chart. either that, or a v-reversal

pin bar = h+s
inside bar = triangle
outside bar = megaphone (or whatever its called)

 

[MajorDutch]

errr, a pin bar IS a head and shoulders pattern, represented as a pin bar on a higher timeframe chart. either that, or a v-reversal

pin bar = h+s
inside bar = triangle
outside bar = megaphone (or whatever its called)

I am genuinely worried for you.

 

[squall321]

this pin bar fad has gone on long enough. it's the same old 100 year old sh*t repackaged and taken on some creepy mild cultish overtones at the same time.

actually pin bars come off worse because of the arbitrary opening/closing times of the bars, so the exact same price movement could show as two different bar patterns if you set the clock ahead. this happens especially on 4 hr where different times zones will see a pinbar, and others will not. there's another one as well, i can't remember what the j16 cult calls it with two bars that have the same high, dhc bars or something, well duuh, can you say...DOUBLE TOP.

 

[MajorDutch]

this pin bar fad has gone on long enough. it's the same old 100 year old sh*t repackaged and taken on some creepy mild cultish overtones at the same time.

actually pin bars come off worse because of the arbitrary opening/closing times of the bars, so the exact same price movement could show as two different bar patterns if you set the clock ahead. this happens especially on 4 hr where different times zones will see a pinbar, and others will not. there's another one as well, i can't remember what the j16 cult calls it with two bars that have the same high, dhc bars or something, well duuh, can you say...DOUBLE TOP.

please stop my sides are hurting.

 

[squall321]

are you serious, you're still going to keep pushing this pin bar, really. it was already repackaged once as candlestick patterns in the 1980s when pin bars were called dojis/hammers, so this turd is now on its second life. whatever, your money i guess.

 

[DionysusToast]

you are stretching out the definition. I am sure when you are watching your DOM ladder you are looking for certain 'qualities' or 'tendencies' which give certain characteristic patterns. Therefore you are probably trading 'patterns' too. correct me if I am wrong.

Not really stretching the definition. Anything that repeats itself is a pattern. It doesn't need to be visual.

What I am talking about are not patterns in a traditional sense but a set of circumstance.

Anyway what we are really talking about here imo is whether someone believes that certain market characteristics can and do repeat. I am in the camp which believes that every moment in the market is unique however certain characteristics repeat over and over again and an edge can be derived from this.

This is just the same as watching a DOM ladder and looking for repeating things that happen then watching the market live for these things to happen again.

Whether you class big round numbers with pinbars/outside bars as patterns is really irrelevant. Personally I don't consider them patterns in the traditional sense i.e. trendlines, flags, wedges, indicators etc.

So DT, do you believe that certain market characteristics or patterns do repeat and that it is possible to derive an edge from this? I am guessing you would say no however I am sure you look for patterns in your DOM ladder all day long and this amounts to the same thing.

I think the key here is in the use of objective analysis vs subjective analysis. What you describe above all comes from the world of objective/rules based/mechanical analysis. The world of "if a = x and b = y then go long".

I do use a chart when I trade the ES, I use the tape and DOM too. I use them subjectively though. I use them to get a read on the market and try to make an educated guess on where price will head in the short term. I do not look for a checklist of repeated behaviour on the DOM or the chart. I have rules but they are more like guidelines. If I see a lot of people piling into the market on one day, I have guidelines that tell me how it might behave differently. If it doesn't behave differently, then I'll revert back to how I usually trade. It's a much easier way to approach the markets.

It is my belief that looking back at charts, finding a set of 'rules' to apply to the future is a fools errand. The number of potential rules is infinite. The search could therefore also be infinite. Finding something that 'worked' last year or last 10 years does not guarantee it will not fail immediately when you trade it live. Patterns will appear in totally random data.

On the other hand, if you don't look for that. If you tell yourself it's all shades of grey, then success relies on you becoming better on interpreting the action and NOT on finding a magic combination of factors that can be applied mechanically forever. Instead of a search for a magic bullet, you have a skill that you can develop over time. Huge difference.

The mechanical/objective route to trading is where people look for a solution. The reason of course being that applying a mechanical solution would be a very easy way to trade. On the other hand FINDING that solution is where people (e.g. Travis) spend literally years with no joy.

If people realised how futile this search was and actually embraced subjective analysis (remember Socrates?), then they would find that trading is not rocket science after all.

 

[DionysusToast]

Outside bar trade -not a pattern therefore I agree with Dutch above

Neil.

No offence here - but you have been a member of this site for 11 years and you are using an Oanda SIM account.

Do you now think that looking outside of mechanical methods is worth considering after over a decade?

DT

 

[MajorDutch]

are you serious, you're still going to keep pushing this pin bar, really. it was already repackaged once as candlestick patterns in the 1980s when pin bars were called dojis/hammers, so this turd is now on its second life. whatever, your money i guess.

not pushing anything dude. someone's obviously pulled your chain a little hard in the past. I totally understand that changing the timescales and periods on a price chart will change the candles. you are getting too hung up thinking pin bars are patterns. A pin bar or any other bar on it's own means NOTHING, it's just a trigger.

if this is all such guff why don't you enlighten us on how you trade your shi77y demo account? after your ropey H&S effort I don't hold out much hope but I am always willing to keep an open mind, do educate us on the how you tarde.

 

[MajorDutch]

Not really stretching the definition. Anything that repeats itself is a pattern. It doesn't need to be visual.



I think the key here is in the use of objective analysis vs subjective analysis. What you describe above all comes from the world of objective/rules based/mechanical analysis. The world of "if a = x and b = y then go long".

I do use a chart when I trade the ES, I use the tape and DOM too. I use them subjectively though. I use them to get a read on the market and try to make an educated guess on where price will head in the short term. I do not look for a checklist of repeated behaviour on the DOM or the chart. I have rules but they are more like guidelines. If I see a lot of people piling into the market on one day, I have guidelines that tell me how it might behave differently. If it doesn't behave differently, then I'll revert back to how I usually trade. It's a much easier way to approach the markets.

It is my belief that looking back at charts, finding a set of 'rules' to apply to the future is a fools errand. The number of potential rules is infinite. The search could therefore also be infinite. Finding something that 'worked' last year or last 10 years does not guarantee it will not fail immediately when you trade it live. Patterns will appear in totally random data.

On the other hand, if you don't look for that. If you tell yourself it's all shades of grey, then success relies on you becoming better on interpreting the action and NOT on finding a magic combination of factors that can be applied mechanically forever. Instead of a search for a magic bullet, you have a skill that you can develop over time. Huge difference.

The mechanical/objective route to trading is where people look for a solution. The reason of course being that applying a mechanical solution would be a very easy way to trade. On the other hand FINDING that solution is where people (e.g. Travis) spend literally years with no joy.

If people realised how futile this search was and actually embraced subjective analysis (remember Socrates?), then they would find that trading is not rocket science after all.

I agree with you. Personally I don't trade in a mechanical way with set rules. I am a discretionary trader but I think in a systematic way about what I have observed about price in the past.

 

[MajorDutch]

Neil.

No offence here - but you have been a member of this site for 11 years and you are using an Oanda SIM account.

Do you now think that looking outside of mechanical methods is worth considering after over a decade?

DT

this isn't a trading method and it's not mechanical.

 

[Splitlink]

this pin bar fad has gone on long enough. it's the same old 100 year old sh*t repackaged and taken on some creepy mild cultish overtones at the same time.

actually pin bars come off worse because of the arbitrary opening/closing times of the bars, so the exact same price movement could show as two different bar patterns if you set the clock ahead. this happens especially on 4 hr where different times zones will see a pinbar, and others will not. there's another one as well, i can't remember what the j16 cult calls it with two bars that have the same high, dhc bars or something, well duuh, can you say...DOUBLE TOP.

That's true. The fact is that each person sees a bar, especially a candle bar, in his own way and I, sometimes go from a 30 min TF to a higher one (don't like lower than 30M with pins, but that's personal) to see if I can see a pin there.

Dutch said, himself, earlier in a reply to DT. Nothing "works". You make a decision and it goes up or down. How much pain you are prepared to take before you close, is your problem but the probabilities of a continuance of a trend is what would induce me into a pin, probably when it is near an average. I don't like trying to spot a turn, which is where pins look good, in hindsight, they need to be "in" a trend for me to take them.

 

[Martinghoul]

This all is just a function of the mkt being short gamma at round numbers (due to barriers which are often struck there). Technical analysis and all these bars are just one of the symptoms. You can easily conduct a proper investigation of this strategy using viable statistical methods, rather than technical analysis mumbo-jumbo. The real problem with these strategies is that there's no way to tell that the regime we're in at the moment is persistent. Moreover, even within this regime, unless you're properly involved in the mkt, it's hard to estimate the dealers' exposures. So, while there's definitely smth there (and there's actually some well-known behavioural biases that explain it), you need to do a lot of work to harness it properly. And if you don't do it properly, it's not worth doing at all.

 

[MajorDutch]

This will really upset the anti 'pattern' mob. See attached line chart of EURUSD. Now check out what price does at the big round numbers. no bars, nothing just price and round numbers marked off. Is it coincidence that price sometimes rejects these levels? some people on here clearly think that. look at the chart and make your own mind up.

I wish Pazienza was here to back me up, maybe one of his multi-nics is here to beat some sense into you.

 

[Martinghoul]

This will really upset the anti 'pattern' mob. See attached line chart of EURUSD. Now check out what price does at the big round numbers. no bars, nothing just price and round numbers marked off. Is it coincidence that price sometimes rejects these levels? some people on here clearly think that. look at the chart and make your own mind up.

I wish Pazienza was here to back me up, maybe one of his multi-nics is here to beat some sense into you.

Of course it's not a coincidence... That's the sort of thing that happens when there are concentrated short gamma positions at certain strikes and the mkt knows about them. No easy way to exploit it, though, IMHO. Well, not that I know of, anyways.