Futures I Trade Show & Brooks Book

[Futures I Trade Show & Brooks Book]

crakeshm,

Looks like patuca has stepped out to lunch

(forever? Hope not)

- so I will take a very general swipe at it.

 

Brooks and those successfully applying his methods are applying unmentioned ‘rules’ in their utilization of the ma.

Brooks uses the MA as a central tendency to ‘ground’ the wet ware.

But - to be blunt - instead of trying to develop or stick to ‘mono-rules’, the ‘meaning’ on these approaches to ma's must be taken statistically... even noobs should be attempting this from the beginning!

Because ... similar/analog (or exact) price pattern approaches to the central tendency will not have exact (or similar/analog) results or ‘meanings’.

 

It takes some time observing and using a central tendency to ‘ground’ the wet ware before you develop reliable, multiple ways to project probable outcomes... instead of relying on ‘mono-rules’ ...

 

Another way of expressing this - at a system (or method) level, trading rules and simple moving averages don’t mix. Statistically, it’s a fkn wash at best. This backtest to nowhere prematurely ends the careers of many otherwise bright traders (... sometimes it’s best to believe those who have gone before you... but if you must - find out for yourself... )

 

(almost )

... Also, for what it’s worth, standard ma’s need to be displaced ( .5 the length of the ma) bars back and a projected regression used to fill in the missing gap / to catch it up to current bar.

 

(more almost )

...Another technique for increasing ma’s efficacy is to start them again after each significant pivot instead of dragging a bunch of unuseful data into the calculation. For a while, displaced 2 period ma’s were popular because they were, in effect, accomplishing something closer to starting the ma again after each significant pivot... unbeknownst to most using them...

 

Many wet wares do not find them necessary at all (... some of those peeps will even preach that YOU should never dare even glance at them ... not realizing they are (unconsciously) ’calculating’/projecting at least one (if not more) central tendency in their head all the damp time  )

 

As your screen time accumulates, don’t be surprised if you may wake up one morning or midsession suddenly holding ma’s in a negative light and drop them... btw, if that happens, it’s better not to ‘judge’ them. Simply realize your wetware no longer needs them visually represented on your charts because they are interfering with your more accurate and preferable ‘non math’ wetware calculations and 'contexting' that will allow you to do better than .6 with working out “ How far is far enough and how close is risky”. etc. etc ...

 

But also don’t be surprised if after significant screen time with them, they suddenly fall into place for you... and become really useful...

 

And ... If you’re one of those who dropped them or never found them useful. also don’t be surprised if one day you wake up needing and attempting to manually draw your wetware version of a central tendency back on your charts...

 

ie “Find your own way” !!!!!!!!!! zdo

 

 

hth

 

 

zdo

 

Thanks a lot ZDO for such an elaborate explanation. I agree with what you said. I will try to experiment with the MA techniques you have mentioned.

[Futures I Trade Show & Brooks Book]

.

While this too is near the moving average it is a bit more risky but since then trend is fairly strong I would take the risk and take a position on bar 49. A second opportunity is bar 50.

 

Hi Patuca,

 

How do we take into account the MA wrt the candle formed in Al's scheme. How far is far enough and how close is risky?

 

Thanks