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horace

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Posts posted by horace

  1. Posted

    @SIUYA I generally agree with what you say. The thing is there are almost an infinite number os ways of looking at perofrmance comparison. That is NOT the purpose of this thread. I have merely been trying to give very simple and obvious examples of real world situiations where it is shown conclusively that the markets are not random. Problem is people want to argue and fight and try and prove me wrong. Perhaps they are academics who can'rt handle reality of the real world. I do not know. Nor do I really care. I know with 99.9% certainty of what I am talking about because it is based on 30 years of observation, reading, personal study and research and testing.

     

    I suggest people who are still undecidfed if markets are random or not, to start working harder and create a simple trading model that worked in the past, then do a walk forward test and see if it works in the future. A trading model that is well designed, and NOT curve fitted (as distinct from optimised) will perform similarly into the futre as it did in the past (assuming similar market conditions). The more it underperforms the more you have curve fitted your model. It is basically as simple as that.

     

    Here's another though that just came to mind of a report I read recently. Sell in May and go away. I'm sure you have all heard of that before. Are you aware that virtually all of the S&P500 returns over the past 100 years has come in the Nov-May period. Not most of, but virtually ALL the returns. That is truly an astonishing and powerful piece of information. If the markets were random, surely the money returns would all be roughly similar over the long run? Let's see how long it takes for someone to attack this piece of fact as well LOL.

     

    Do you think that it is possible to drill down through the time frames in a line of non random data.

    Nov-May is the big TF and the unequal distribution of daily High/Low is an intraday example

    In other words do you think it is possible to 'line all the planets up'

  2. Posted

    Large liquidity commercial participants constantly track order flow and open interest, so I do too. Unfortunately, price action alone will never tell me when a market is completely out of balance from an open interest stand point (Major Inventory Grab - one of my best position trade set ups). Price action alone will also never tell me when accumulation is taking place at realtime tracked price levels (Delta Divergence). Price action alone never lets me see trapped over committed inventory in a localized area of price (Hidden Divergence). Price action alone will never tell me when commercials are just moving price down 2 points quick, so they can buy more at that very temporary lower price level (Commercials are always moving price around to their advantage). There are many things I would never be able to see if I was stuck with price action only trading - no thanks.

     

     

    excellent post FT.

    Can you expand this out into what you are looking at and how you are tracking it to help bring us all into the loop.

    You are one guy we can rely on to deliver the goods and not just wimp off with the excuse of "secrets or proprietary systems"

  7. Posted

    Horace,

    So the constant volume bars helped you see those levels? Did you take that ride up? If you did, how did you make that decision other than knowing that level was yesterday's close and a trendline? I imagine volume signals can be easily manipulated at the opening from bigger players to mislead.. How helpful do you consider those volume bars with your morning decision? I imagine the strength of the S/R levels along with morning sentiments that will determine most of the decision of the morning trade.

    Tradezilla

     

    The best thing you can do is try these things for yourself.

     

    When looking at S&R you might try the CLOSE rather than the H/L to set your levels.

    Also take a look at the reliability of price Turning Points in the glbx as compared to RTH

    and see whether you think the glbx is more directional or less directional or just about the same.

  8. Posted

    Yes, perhaps but I wouldn't stand in the way of the opening bell volumes though. I've placed trades in the pre-market before the opening bell if I think it clues me in to the opening and so far it has worked but I was biting my nails.. but I don't think today is one of those days.. I think you would just have to know the S/R levels and just take your shot at those levels and know your stops.. That's the only way I know how to do it, but that method seems to have good R/R, and more often than not, worthwhile trades..

     

    Well this morning kicked off around 06:30, run into the 29.75 line and reversed and then reversed again at the 27.75 which was built into a very strong line.

     

    It is a common enough pattern where the price struggles through the first line [27.75], turns at the second line [29.75] which then rolls the first 27.75 line from Resistance into Support.

     

    basically it is a"shake-out" play followed by a big RR play

  9. Posted

    Phantom,

    You're absolutely right.. That move began much earlier than the open with a nice set up in the pre-market. If you missed that move in the pre-market, how would anyone know to take that trade at the opening bell? since the pre market has low volumes and the opening bell has much higher volumes.. The only thing I see is the trend line that extended from pre-market but that would still be a gutsy move. I don't see how a trader would see a confirmation in time to see that trade, though spectacular...

     

    Hi Trade,

     

    Have you tried CVB [constant volume bars] They build the changing rate of volume levels into the bars enabling you to see the action much more clearly.

     

    Couple this with major S&R lines and you will see the pullbacks around the RTH Open that are Suckers Bait for the unaware.

     

    Finally, put the notion that trading the Open is difficult.

    It is not, it just requires a different approach in that one day it is pure momentum and the next day it is linear.

     

    Using CVBs and major S&R lines plus paying attention to the buildup in the pre-market will enable you to pull good money from the Open.

  10. Posted

    I have recently switched the T & S window back on after a long period [years] without it.

     

    The thing that I have noticed is that the trades tend to scroll through in blocks, of trades at ASK and then the block will switch to trades at BID.

     

    Seldom [almost never] do I see the BID and ASK trades scrambled up together.

    I am using a filter set to 20 contracts for convenience.

     

    Can anyone explain this to me please.

  11. Posted

    Okay mate, I just don't think this is a productive discussion any more. What you might think and what is fact are not necessarily the same thing. I am not going to debate a statement like the above because clearly it's just a crude assumption you are making. If you are comfortable with it, fine. The way in which you choose to heuristically approach trading and anything else is just not my business. I think it's important to get back to the actual topic up for debate. Although the former may be quite apt in this case.

     

    Good luck.

     

    Well, that is a black and white reaction

  12. Posted

    Yes Horace, I do understand what you were suggesting. However, the result of a trade without context is meaningless for understanding the efficacy of your system and your ability as a trader.

     

    Hi Neg,

     

    You are not required to understand my system or my ability as a Trader.

    In fact the opposite applies as you are in no way a factor in the End Result of my

    account.

     

    I cannot be any more Black and White than this.

  13. Posted

    Perhaps you'd like to elaborate then on what you mean by making money. Unless you are specifically referring to individual trade outcomes, how is it black or white?

     

     

    Hi Neg,

     

    Read Siuya's post copied below, as he has exactly nailed it.

    We all need to view trading in it's greater context in order to make the maximum progress.

     

     

    the thing that is black and white is the END RESULT.

    the thing that has many shades of grey is the EXPECTED RESULT

     

    often fear stops us from achieving the desired end result and the ego has us believing we can still get the expected result......or worse that we deserve the expected result.

  14. Posted

    Good point zdo! I'd say though maybe they are the same thing entirely though. Self delusion to cope with realities which diverge from what we want or need to be true. Just that they are applied given different circumstances of perceived pattern repetition.

     

     

     

    Making money or not making money is not always black or white. You trade with a particular strategy and you aren't guaranteed a specific percentage of winners and losers. You might think you are. Perception can be a very misleading thing. Even the most reliable science is either 'best guess' or even variable based on circumstance.

     

    Anyway, being that it is more than possible fear and ego are one and the same, I will go for an equal weighting of importance. Like so many things in trading and life, the universe and everything, balance is such an elegant thing.

     

    Black and white and expecting a guaranteed outcome are not the same thing in my book.

    The difference requires a more thoughtful approach

  16. Posted

    Making money and losing money is rather fuzzy in the markets, actually. Fx, today I placed a limit to short and market moved very hard to my limit: I pulled my limit. Market went down very hard. I shorted it at a worse price. Market retraced and went hard against me. Looked like I might lose. A few moments later my target was hit.

     

    There were several times today when I thought I could be wrong. Several times when the outcome was uncertain. Actually, the desire for certainty in the markets is probably one of the greatest reasons for failure.

     

    Last week, I had a day trading position that was up a huge amount. I took half of it off at the highs for the day. It looked very certain I'd make money. The market reversed hard against me and even with a half position: the net result was my barely eek out a gain. It looked very certain I'd make a huge amount that day. It wasn't.

     

    I can't think of anything more uncertain then the market, actually.

     

    Have you considered avoiding the desire to out-guess the market and just focus on making money by following the market.

  18. Posted · Edited by horace

    "On the surface" the NYSE internals, $TICK, $advancers, $Decliners, UpVolume, DownVolume often do NOT sync perfectly with the ES. So there is a seeming disconnect between those internals and the ES. But, all the internals tell exactly why the ES does what it does if you learn how to "read the tea leaves". There is a complexity to reading the signals, and you have to know how all 3 sets of internals interact with each other. For example, sometimes the $TICK and the ES go out of sync with the $Advancers/$Decliners. But they will sync back up very soon, and the $Advancers/$Decliners usually win the battle.

     

    Yes I agree with you TW, however your use of the word "complexity" sends a cold shiver down my spine as simultaneously a voice alarm goes off in my head "PULL UP, PULL UP, PULL UP"

     

    I rather feel that these complex mental gymnastics must be left to far more gladiatorial minds than mine when trading.

     

    In fact my trading mind now is very much like a dog on a leash, in that it is allowed to probe slightly to the left, or right, or it may adventure ever so slightly ahead but it's days of glory, roaming through hoards of information with all the thrill and excitement of a Free Range Chicken have come to an end.

     

    And so it is not that The Internals lie ahead of me offering all the academic thrill of a new crossword or game of Solitaire ... no not at all ... they in fact lie fondly remembered and used, but discarded like an empty water bottle in a Marathon.

    I know where they are should I ever need to return.

  19. Posted

    Hi Horace,

     

    I have an interest in your comment about the Q's being disconnected from the underlying stocks. Could you elaborate? I agree with the comment, I have noticed that the Qs lead the movement, they moved before the stocks that make it up. Is that what you are seeing. Of course some times they do not all the time

     

    cheers

     

    Yes If you dig into the internals of The Indexes and compare it to Stocks, the disconnect becomes evident.

    That is why I only follow the Indexes on the assumption that sometimes they connect and sometimes they don't, but they stand alone 100% of the time.

     

    Also, I try to follow the least information possible.

  21. Posted

    That's interesting I have not tried that. I'll play with the idea a bit. Thanks.

     

    You are welcome.

     

    The reason I mention it, is because a disconnect has taken place between The Indices and the underlying stocks.

    I imagine the QE's are to blame, and so while I agree with your comments in this thread, I have come to accept this disconnect and now trade The Indices as stand-alone Instruments.

  23. Posted

    Sorry Horace, missed your post earlier. But a full nights sleep has done wonders :)

     

    Very good question and point there. Larger bar sizes do not necessarily mean bigger stops. With the method I am highlighting here and my initial stops, of course, it would mean bigger stops for me if I was trading on say a 50R chart. But, initial stops can be set wherever one wants, and trail as their risk appetite allow. It is all up to the trader.

     

    M

     

    Bar size and type is perhaps the least understood part to trading, as well as being the most important, since it forms the foundation of all visual interpretation of price action.

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