Where do I start?

[PollyM]

Take a daily chart draw classic support and resistance lines extending to the right taking the high and low of both respective candles drawing another 2 lines extending to the right then you have both the price ranges that have been unviolated call these rprice extremities the candles in control I trade reversals so when the price retraces to this area I consider taking a trade PROVODED THAT THE PRICE DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES< DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<Iput my trade plan into operation and take that trade considering all the factors within my predetermined trade plan:smart::smart::smart::smart::smart::whistling

When do you use a close price in your decision making?

 

[Bint_Crusher]

When do you use a close price in your decision making?

Take a daily chart draw classic support and resistance lines extending to the right taking the high and low of both respective candles drawing another 2 lines extending to the right then you have both the price ranges that have been unviolated call these rprice extremities the candles in control I trade reversals so when the price retraces to this area I consider taking a trade PROVODED THAT THE PRICE DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES< DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<Iput my trade plan into operation and take that trade considering all the factors within my predetermined trade plan:sl y:
THEN After you have done the above
Take a daily chart draw classic support and resistance lines extending to the right taking the high and low of both respective candles drawing another 2 lines extending to the right then you have both the price ranges that have been unviolated call these rprice extremities the candles in control I trade reversals so when the price retraces to this area I consider taking a trade PROVODED THAT THE PRICE DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES< DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<Iput my trade plan into operation and take that trade considering all the factors within my predetermined trade plan:sl y:
THEN After you have done the above consider below, (and I don't mean your scrotum)
Take a daily chart draw classic support and resistance lines extending to the right taking the high and low of both respective candles drawing another 2 lines extending to the right then you have both the price ranges that have been unviolated call these rprice extremities the candles in control I trade reversals so when the price retraces to this area I consider taking a trade PROVODED THAT THE PRICE DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES< DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<Iput my trade plan into operation and take that trade considering all the factors within my predetermined trade plan:sl y:

 

[PollyM]

Take a daily chart draw classic support and resistance lines extending to the right taking the high and low of both respective candles drawing another 2 lines extending to the right then you have both the price ranges that have been unviolated call these rprice extremities the candles in control I trade reversals so when the price retraces to this area I consider taking a trade PROVODED THAT THE PRICE DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES< DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<Iput my trade plan into operation and take that trade considering all the factors within my predetermined trade plan:sl y:
THEN After you have done the above
Take a daily chart draw classic support and resistance lines extending to the right taking the high and low of both respective candles drawing another 2 lines extending to the right then you have both the price ranges that have been unviolated call these rprice extremities the candles in control I trade reversals so when the price retraces to this area I consider taking a trade PROVODED THAT THE PRICE DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES< DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<Iput my trade plan into operation and take that trade considering all the factors within my predetermined trade plan:sl y:
THEN After you have done the above consider below, (and I don't mean your scrotum)
Take a daily chart draw classic support and resistance lines extending to the right taking the high and low of both respective candles drawing another 2 lines extending to the right then you have both the price ranges that have been unviolated call these rprice extremities the candles in control I trade reversals so when the price retraces to this area I consider taking a trade PROVODED THAT THE PRICE DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES< DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<DOES NOT CLOSE OUTSIDE THESE SUPPLY AND DEMAND CONTROL ZONES<Iput my trade plan into operation and take that trade considering all the factors within my predetermined trade plan:sl y:

At which close price do you enter the trade?

 

[Bint_Crusher]

At which close price do you enter the trade?

Consider the US market daily close price has not sexually violated the controlling price range by that I mean deep penetration CIM close read my previous posts to see my trading methodologeeesse.:smart::smart::smart::smart::smart::smart:

 

[PollyM]

Consider the US market daily close price has not sexually violated the controlling price range by that I mean deep penetration CIM close read my previous posts to see my trading methodologeeesse.:smart::smart::smart::smart::smart::smart:

And this works everytime?

 

[PollyM]

Just a quick note for new traders reading this thread.

It is helpful to see trading as a sport, rather than a fight as some myths portray. Approach it as a sport and you will find yourself in a football game (or cricket match, or any other game you can most relate to). Approach it as a fight and you will find yourself in the middle of a war. It is up to the individual to make their own choice.

Focus on establishing a sound method first, and the returns will follow. Doing it the other way around is not wrong, it is just a much longer path.

I will post later today with some 3d images of the spiral formation I've mentioned in earlier posts. I will also resume giving session numbers for each post on this 'harmony' method of trading so that we can see them more easily amongst other dialogues.

 

[PollyM]

SESSION 11

Attached are some 3d AutoCAD images of a spiral model, using the helix function as the relatively larger or ‘base’ spiral, and then ‘wrapping’ a spline around this helix (in a similar way as molecular models are constructed). Different angles are shown, including end-on (helix5).

As mentioned earlier, beyond two wavelengths, the co-ordinate calculations become very difficult to ascertain through simple drawing, and the AutoCAD version I was using at the time did not have the facility to wrap a helix around a helix.

If anyone knows if AutoCAD now supports such a wrap-around function for helices, or if any other software packages are able to do this, then it would be good to hear from you.

I’ll post again this afternoon …

 

[PollyM]

My system works 100% of the time.....

















It's called LOSING.

That brought a smile. Thanks for lightening the mood Kitchen Sink.

 

[PollyM]

SESSION 12

A word on discipline.

When you are enjoying what you are doing then the word ‘discipline’ does not enter into your personal vocabulary. You will always do it to your best. The enjoyment alone brings about a natural alignment in your actions.

Having said that, if you are feeling very down over a string of losses (and there will be a notable proportion of losses whatever current system you use, as highlighted by Bint_Crusher above), it is very difficult to see how you can immediately jump from that emotion to one of enjoyment. Emotions simply do not seem to work like that, and it can be annoying to say the least when you are down and someone comes along and goes on about what I’ve said in the last paragraph.

You can begin to feel that time cannot pass by quick enough before you make your next trade, even if it’s just to break-even on a losing streak. This thought then brings you down even further. You can begin to care less about the ‘quality’ of your decisions. You may begin to ‘modify’ your trading method, not keeping to the guidelines you set yourself earlier, leading eventually to everything going out the window and you taking a flyer.

One way of avoiding the big downward spiral of emotions is to know what you are doing (again, an obvious statement I know, but it will explain itself as we keep moving on). One way of knowing what you’re doing is to find a method which can be robustly* backtested. If, through backtesting, any particular method does not show a net profit over time then discard it, and repeat this process until you find a profitable method. Once you find a profitable method, adopt this as your benchmark and trade it. In the mean time, you can then keep backtesting further combinations in the background, and if you see improvement in your backtesting results then bring your new method into the proceedings. Keep ratcheting up the effectiveness of your trading method until you feel content in its performance (which will vary from person to person).

*I will discuss what ‘robustly’ means when we come to backtesting in the trading methods section, which should not be long now.

I am currently preparing some screen recordings for the trading methods section, so may be away from the forum for a short while, but will keep looking in if anyone has any queries on what has been discussed so far.

Hasta luego …

 

[dcarvalho]

In response to sj capital gains can be offset against group relief

Very good due diligence and highly professional

 

[Bint_Crusher]

Without wishing to cause any offense to the moderaters:

CIC Candle in Control

I trade reversals, here is a pair I do not trade but this is for illustration purposes.
If the price retraces into the CIC Zone I will consider that trade long.
I will enter that trade according to my trading rules and planning.
I will keep that trade until there is a candle CLOSURE below the lowest limit of the CIC.
This is why Candle CLOSE prices are so VALIDwhistling

 

[PollyM]

Without wishing to cause any offense to the moderaters:

CIC Candle in Control

I trade reversals, here is a pair I do not trade but this is for illustration purposes.
If the price retraces into the CIC Zone I will consider that trade long.
I will enter that trade according to my trading rules and planning.
I will keep that trade until there is a candle CLOSURE below the lowest limit of the CIC.
This is why Candle CLOSE prices are so VALIDwhistling

Thanks Bint_Crusher, I can see that close prices are valid for your particular method.

For the method I will be moving onto, the close prices are valid for the backtesting stage, but not with the decision on whether to be long, short or out. This is why I was saying that the high and low prices can be given a primary status, with the closing prices in a secondary role (still having value). I should have better qualified that statement by saying that this was specific to the trading method I am moving onto, rather than make it seem to be a sweeping remark across all trading styles.

Thank you for highlighting this.

 

[PollyM]

Just to help keep things simmering, I will be posting on Monday with the first instalment on trading methods. I will also be setting a challenge for this project, keeping track of the results as we move along.

 

[PollyM]

SESSION 13

Moving onto section two on trading methods.

Imagine you are wanting to learn how to play golf. You've seen it on tv, and the 'feel' of it inspires you to get into the game.

You have a decent amount of money to do this, so you decide to go for it, pay membership to a local golf course, and even possibly take lessons from some experienced golfers. Hopes are high.

On your first visit you decide to start in the driving range. You're amazed. The first few shots go exactly where you thought. You think to yourself how difficult can this be? But as you swing more and more, you gradually start to find that it's not as easy as you first thought. Something's changed, and somehow you begin to involuntarily find yourself in some sort of chaotic situation, trying your utmost to get back to the knack of your first few strokes. What's happening, aarrgghh!!!???!!!

Now, let's rewind for a second and approach this from a different angle. You can call this an alternative or probable future that we are now going to create ...

On your way to the golf shop, ready to get a good bit of kit, you bump into a friend you haven't seen for many years. Lo and behold he's carrying a single wood and a few balls. As you've recently been inspired to learn golf you ask how he is and if he's off golfing.

He replies saying that he's very well, has found a spot of free-time, and so is popping down to the park to swing the club about a bit. You are now in two minds, having noticed an opportunity, a 'fork in the road' so to speak. Because of his casual nature, you find it difficult to gauge how serious he is about golf, how 'good' he is at it … will he even want you go along with him to the park, given that this is his free-time? All sorts of questions are going through your mind, what to do? For whatever reason, you decide to take the plunge and ask if you could go along with him to the park and take turns having a go. After all, you can always go to the sports shop and join the golf course afterwards.

You're now at the park. As more time passes, you begin to realise that your friend seems to be fairly consistent in his hitting of the ball, and can see that most of his strokes lead to the ball ending up in the target areas. Most times he seems to find the sweetspot of the wood, and his movement seems to flow with little effort. You mention this to him, asking about his secret. He replies that there is no secret, it just takes practice and, for him, because he has so many other interests in life, he decided to keep it simple from the beginning by just travelling light with a quality wood and a few balls. After all, he said, you could give a single wood to any one of the elite golfers you know of, and he or she would still find the hole on an average golf course near par, even if he or she had to putt the ball with the wood!

We shall start by keeping it simple. One market, one indicator, one timeframe.

We shall also set ourselves the challenge of seeing if we can do this without even spending a penny.

We will backtest our method first, ensure as far as possible in a pure mathematical sense that it works, and then, once this stage is done, we can venture into the live market (which will be section three in this series of posts).

This is section two on trading methods. Section one dealt with taking time doing groundwork. Section two will now lay a foundation.

I will post again this afternoon. We are going to start with the Relative Strength Index, for the purposes inter alia of introducing the work of J Welles Wilder Jr.

Till then ...

 

[PollyM]

SESSION 14

In its presentation alone, the book New Concepts In Technical Trading Systems by J Welles Wilder Jr is a beauty to behold. You can simply see that it has been born out of minds full of love for the work being done.

I shall therefore refer to this publication as a basis for this section on trading methods and, as mentioned in Session 13, will first look at the Relative Strength Index (RSI), one of the most well known indicators in the trading world.

For any reader just beginning out in trading, an indicator is most usually seen as a process or formula which seeks to isolate a particular frequency or wavelength of price movement, so to help highlight the ups and downs of that particular frequency or wavelength, and so, in turn, give guidance on trading decisions. Google around if you need to find out more at this stage; the Wikipedia entries are usually a good place to start, although there are many other sources if you look around. Once you zero in on certain books, you may then wish to buy some for your bookshelf, although it is not absolutely necessary for this stage.

The purpose of this subsection on the RSI is to introduce the software that we will be using throughout for our charting purposes. This will be a spreadsheet, Microsoft Excel if you have that on your system, or OpenOffice if you need to download some new software. I still have Excel 2000, so that or any version after that will most definitely suffice, and possibly even earlier versions will do the job in hand. I was toying with the idea of trying my Acorn Electron (if I still had it), although I can't remember how much programming language the spreadsheet entertained (now most commonly known as source code), and turning all the numbers into charts might just be an ask too far, especially with 32k. Anyway, I digress.

In the beginning, to allow a sensible pace and a moderate degree of volatility (or calmness, depending on how you look at it), we shall choose the daily timeframe. The Daily Work Sheet in New Concepts In Technical Trading Systems (NCITTS) is a basis for this exercise but, to respect copyright, I will choose some different numbers and presentation. Fundamentally, the purpose of this exercise is more to get to grips with using a spreadsheet, rather than focussing on the exact mechanics of the RSI.

For next time, I will start the process of inputting, and provide some attachments to help this along.

Will post again soon …


[Running total of set-up cost = £0.00. See SESSION 13 re spending a penny.]

 

[PollyM]

SESSION 15

Attached to this post is an Excel version of the Relative Strength Index indicator, calculated over 14 periods, based on the table set out in NCITTS. As mentioned, to respect copyright, I have varied the numbers and presentation. The essence of the calculation is however maintained.

I've found that I'm not able to post in OpenOffice format here, so have set up a basic wordpress site where I've posted both the Excel and OpenOffice formats for the RSI(14), and have also listed the Wave Generator files which I posted earlier on this thread.

I will need to give the trading style we're moving onto a name so have set up the site HarmonyTrading.info, to highlight that we're looking to develop a trading method which harmonises with the fractals of market movement.

There are some slight differences when inputting data into Excel and OpenOffice. For now, the two main differences I've noted is the use of semi-colons in OpenOffice where Excel uses commas, and the need to enter a zero in the Excel IF function to allow the calculation to be resolved; OpenOffice in this case is comfortable with two inverted commas, ie an empty cell, albeit containing a formula.

I should also highlight that spreadsheet software will usually calculate slightly different figures to the actual table in NCITTS, not just because of the slightly varied close prices that I've inputted, but principally because the table in NCITTS is handwritten and at each stage rounded to two decimal places, to help aid the presentation and more labour intensive manual calculations involved (remembering it was published in 1978). I could have achieved the same effect on the spreadsheet using the ROUND function, but have left the decimal places unspecified so the 'full' numbers are carried through in calculation. Whilst the spreadsheet does look as though the figures are rounded to two decimal places, the 'full' numbers are still being carried through in calculation.

I've also posted a video on YouTube showing the spreadsheet inputs, this is the link:


RSI(14).avi - YouTube


A few notes on the video. The screen recorder software I'm using does give a very good resolution (choose 720p in YouTube), but to achieve this I need to specify a widescreen 'region'. I'm currently using a 4:3 or 'square' monitor so the bottom of the screen is consequently cropped by the software. The only time this affects the image is when I'm near the bottom of the spreadsheet and right clicking the mouse. Where this happens and you cannot see the cursor, I'm pressing the 'paste' command on the right-click menu.

I know the spreadsheet appears very simple but it does highlight some useful points:
1. It is simple (I like that bit).
2. A spreadsheet is a powerful calculator (with so much more under the bonnet/hood than is usually realised).
3. Once a few formulae are inputted, the copy/paste function helps to reduce inputting time for each tranche of new data.

If at any time you have any comments or queries on the attachments then please let me know.

That's it for the moment. I should be able to fit in another post today in which I'll give further commentary on this introduction to indicators.

Bye for now ...


[Running total of set-up cost = £0.00. See SESSION 13 re spending a penny.]

 

[PollyM]

I should also mention there is no audio on the video. I need a bit more practice on that front!

 

[PollyM]

SESSION 16

As mentioned in an earlier post, the RSI is one of the most well known indicators, and one of a good handful developed by J Welles Wilder Jr in the 1970s. One of the features of his approach to calculation is the accumulation method of arriving at averages. In other words, whilst he would start off with a simple average, eg the sum of 14 pieces of data divided by 14 periods, his approach would then immediately switch to an accumulation method. The formula for this accumulation method in the case of the RSI is contained in the spreadsheet.

This is a very important point to note, and well worth further analysis if you have the time. Put simply, the accumulation effect has a smoothing effect on the data, yet at the same time keeping it as ‘fresh’ as possible. If you have ever experimented with moving averages and smoothing techniques you will know that the more the data is processed with formulas upon formulas you begin to build in a lag which essentially gets further and further away from the movement of the raw price data. Taking a food analogy, you could say that the more you process the data (the food), the more it loses its nutrients and flavour, until eventually it becomes unrecognisable.

I will discuss moving averages in more detail in a later post. For the moment, if you choose to use moving averages, be sure to learn the basic mechanics of how they are calculated and then plotted onto charts. See also how they compare to the accumulation technique.

Tomorrow we will be moving onto charting the RSI data, seeing how the numbers can be translated into pictures.

Until then …


[Running total of set-up cost = £0.00. See SESSION 13 re spending a penny.]

 

[PollyM]

SESSION 17

Attached in Excel format is the original RSI(14) spreadsheet with charts added, showing the close prices and RSI indicator respectively. I have posted a YouTube video showing the actions in OpenOffice, and this is the link:


RSI(14)_Charts - YouTube


I will post the OpenOffice file on harmonytrading.info tomorrow, as I'm not able to upload today because of the internet blackout.

With both Excel and OpenOffice I have generally kept the default settings for chart presentation, with any modifications done for the purpose of presenting a clearer chart.

This time I have recorded 'visual' mouse clicks and in theory a Left-click is (Lime) green and a Right-click is Red, although I notice that some have not come through, possibly due to the frame rate. I will look into this and adjust for next time if possible. To help in the mean time, most of the mouse clicks are left, with the odd axis change requiring a right-click to bring up the menu.

I will post this for now and provide further commentary in my next post this afternoon.

See you soon ...


[Running total of set-up cost = £0.00. See SESSION 13 re spending a penny.]

 

[PollyM]

SESSION 18

Dark chocolate hobnobs, fantastic!

I've just been browsing around a few posts on other threads, and thought that I should take a few moments to explain something very important to anyone starting out in trading. I will come back to the charts in my next post later this afternoon.

It is important to know the difference between trading and investing because it can otherwise cause confusion in the way you think and make decisions about the matters in hand. Trading IS NOT the same as investing. I do not say this as a disclaimer, I say it to help you distinguish between the two quite different approaches to dealing in the markets. A trader knows you can be long, short or out, and the facilities are there if you so wish to trade in any direction, depending on the prevailing conditions; no one way is seen as 'better' or 'healthier' than the others. An investor will only look to be long or out, and sometimes the thought of being short may even bring into the mix a moral dilemma, depending on his or her belief systems.

There is a greater mobility involved in trading because you are not attaching yourself to any particular market, or any position up down or out, or any timeframe, or any past present or future, or any other variable in the equation. You are there for the ride, in that moment, each one never to be repeated. Just like being on a rollercoaster or simply being a passenger in a car, your body is always looking to anticipate the next moment, and in the process using all of your senses appropriately.

In the case of trading, particularly the harmony trading method, you are looking to always narrow the gap, or reduce the lag, between the market movement and your 'reaction', so to know how to position yourself and enjoy the ride as much as possible with your eyes wide open. In a way, you could compare a market to the driver, and you are the passenger.

Now, I have put the word reaction in inverted commas because what you will be looking to do, if you choose this route of harmony trading (and there will be other equally valid trading methods out there), is objectively calculating what reactions or probable futures could be facing you ahead of time as you keep moving through it. In this sense then, you are not 'predicting' or 'forecasting' one particular route, you are anticipating, developing all possible reactions ahead of time. There is simply no need to attach yourself to a single prediction, as there are other, more effective, ways to approach market movement. I will come onto the exact ins and outs of how to do this near the end of this section two (still a little while off), and as we move into section three on live trading.

I'll post again this afternoon, returning to a commentary on the charts ...


[Running total of set-up cost = £0.00. See SESSION 13 re spending a penny.]