Taylor Trading Technique

[Dogpile]

This thread is to discuss the 'count' of the Taylor Trading Technique. For those unfamiliar, you can read about it in George Taylors book or in Linda Rashkes 'Street Smarts' book - Chapter 7 & 8.

Rather than discus the technique broadly, which is somewhat complex -- let's just dive into present-day conditions and decide what day we are on and why we think so...

[Reaver]

You'll have to bear with me as I don't really use the count specifically, but rather the concept of general fluctuation...but I will add input as I am able. I would very much like to see what some of y'all have to say about it, I am always open to different interpretations.....

This could end up being a really good thread I believe...

[WHY?]

It is difficult to just dive in. You either have to make a book up somewhat like Taylor or have some software that determines what day of the 3 day cycle we are in.

[Dogpile]

In my view, Linda Rashke wrote a book about Taylors book that is much more useful than the original book. Thus, I will try to intertwine the two.

Taylor’s method implies that markets move with a natural rhythm that is made up of a buy day, sell day and sell short day.

Rashke pg 51:
“One of the most confusing aspects of Taylors trading technique is knowing whether it’s a buy day or a sell short day.” --- Taylor would often short on a buy day or buy on a sell short day due to a laundry list of complex rules. Thus Rashke came up with some explicit indicators.

concept 1 is the 2-ROC buy day.

"On the Buying Day Objective we expect support and we watch the tape to confirm this buying for support and for a rally to start" TTT, pg 9.

Here is an idealized version of this 2-ROC buy day concept.

[Dogpile]

see thumbnails

[Dogpile]

Here are some more examples to get this thread going. Feel free to chime in anyone.

First attachment shows common variation to the 2-ROC buy day -- which is actually a sell short day -- Taylor does a lot of this kind of double-speak in the book --- this is where it gets trickier -- but you can go back to the same concepts:

The 'Pinball Buy' is the second major set-up Rashke presents. Taylor writes (pg 10): "usually in a strong uptrend the decline low will be made in one session, the low will be made on the Shorts Sales Day, however, another decline will generally take place from this low and the testing of this low will come on the next day, on the Buying Day"

The writing only gets worse just after that -- better to stop and just use Rashkes simple 'pinball' indicator -- which is the 3-period RSI of the 1-day change in price. Essentially, you want a nice run of up days and one down day -- you should then look for price action that tests the low and then go long. The test can be a higher low or a lower low.

[WHY?]

What is the name of Raschkes book?

[Reaver]

Street Smarts. Good book, though I wouldn't really use it to learn set ups...but then again I never tested them out...

I like the anti, it is similar to the way Chick Goslin teaches.

[WHY?]

Originally Posted by Dogpile In my view, Linda Rashke wrote a book about Taylors book that is much more useful than the original book. Thus, I will try to intertwine the two. Taylor’s method implies that markets move with a natural rhythm that is made up of a buy day, sell day and sell short day. Rashke pg 51: “One of the most confusing aspects of Taylors trading technique is knowing whether it’s a buy day or a sell short day.” --- Taylor would often short on a buy day or buy on a sell short day due to a laundry list of complex rules. Thus Rashke came up with some explicit indicators. concept 1 is the 2-ROC buy day. "On the Buying Day Objective we expect support and we watch the tape to confirm this buying for support and for a rally to start" TTT, pg 9. Here is an idealized version of this 2-ROC buy day concept.

What book are you talking about where she writes of Taylor strategies? I have Street Smarts and do not recall much of Taylor in there.

[Reaver]

Hmm maybe I am wrong, I know in the TTT book I have, she has a section she wrote in the book regarding her opinions of the technique...