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  1. A problem of averages is a problem of the past. Averages suggest what is likely to happen but not what has to happen. Today, therefore, could be an exception from that average or "map" or trend. But if that is the case, there should be signs of "today" being an exception. And that exception is a different pattern. There should be signs, in other words, of a different pattern in formation. The averages, therefore, suggest a pattern in conflict with the exception pattern developing and a trader has a choice of which set of signs to work with. But if signs of an exception or a different pattern emerge, the problem is determining if that suggests a possible reversal of the trend because the "average" presumably suggests a trend in motion. Taylor explained this conflict in terms of buyers and sellers. On the BUY DAY, at some point, the buyers are likely to show up. On the SS DAY, the short sellers are likely to show up. The BUY DAY and the SS DAY register the two points of an extreme according to Taylor. BUT, it could be possible in a trend with strength, that on the next SS DAY, buyers CONTINUE TO SHOW UP. The short sellers decide not to show up on the next SS DAY because a new positive catalyst could emerge on that next SS DAY. The short selling has been postponed. This postponement is an exception to the average. But ironically, in a trend with strength, this 4 day cycle could be the "average" vs. an exception. Context is more significant than the overall Taylor theory based on a three day cycle.
  2. Over time, I have pondered the problem of the Taylor Trading cycle as a determinant of the price action. My conclusion is that the Taylor Trading cycle is not a determinant but simply a map of what could happen and this concept of a map underlies my explanation. If a person is utilizing a map, the person is not "beholden" to the map because the map is simply a guide and not something more than that. Hence the person could deviate from the map at any time, if something interesting or if something problematic shows up. These things of "interest" or "problematic" ARE THE CATALYSTS OR THE LATEST ECONOMIC DATA, for example. Furthermore, if we consider what a map is, we can better understand the limitations of a map. A map is simply an abstract composite of the geographical experiences of people over time. In a sense, it is like an "average." In trading, there is something similar to a map: an almanac. An almanac is simply an abstract composite of "averages" over time, like a map. A person can depend upon a map or an almanac and it could be useful or informative. But, a map or an almanac cannot be a determinant of what a person does because a map or an almanac is an ABSTRACTION AND an abstraction FROM THE PAST. A person or a trader can encounter something not shown by the map or the almanac in current time and the person or trader could be affected by that. For example, a map shows a road but a car accident just happened. A continuation on that road could be problematic because of that. In trading, this could be a new negative catalyst of some sort. Hence, my conclusion is that the Taylor Trading cycle is not a determinant of the price action but simply a map of what could happen and not that different from an almanac or set of averages to consult but not to depend on beyond the actual function of an average. It seems that many traders utilizing the Taylor Trading cycle err in endowing the Taylor Trading cycle with more utility than what it is designed for. That error, I believe, is the primary basis for the mystical vs. the pragmatic approach to the understanding and utilization of the Taylor Trading concept.
  3. It seems to me that Taylor did fundamentally two things: 1. Taylor identified the perennial 3 day cycle (at its essence) 2. Taylor created rules for discretionary trading based upon the 3 day cycle together with logic BUT, the Taylor rules were constructed out of a commodities and equities swing trade logic. Other instruments and time frames could work with a different logic. This implies that it is likely that a trader has to construct a different set of rules dependent upon the particular instrument and type of trading (essentially a reference to the time frame or duration for a trade) of interest to the trader, if the instruments or type of trading or both differ from that of Taylor. Furthermore, the identification of logic behind the Taylor methodology displaces the notion that mysticism played a role in the Taylor Trading theory. It seems to me that if the application of a Taylor rule doesn't seem to make sense based upon other "extrinsic" methods utilized by a trader, Taylor would not simply apply that rule and enter or exit a position mechanically.
  4. I have just re studied the Taylor text and it seems to me that continuity, re cycling, etc. of the Taylor count could be fundamentally non consequential for intra day trading and even for swing trading if the Taylor rules are worked with "sensibly" and "conceptually." That is, in theory, at this point in my understanding. The Taylor rules--as "concepts"--are the "main dish" and the Taylor count is the "dessert." Hence, Mitsubishi's admonishment against the "continuous count" or even a count at all as "non essential" could have some basis in the Taylor theory: a meal can be had without dessert but not without the main dish.
  5. An interesting concept of trading is that no matter what method a trader utilizes for trading, whether the Taylor Trading cycle, the Elliott waves, the Fibonacci numbers, etc."anything can happen." This suggests position sizing, trade management (i.e, STOPS, etc.), etc. could be more important for the viability of a trading account than any particular method for the identification of demand and supply for entries and targets.
  6. A person could add to the above intersection + amplitude hypothesis. The "amplitude" could be understood as representing more of a likelihood on a certain type day for the price to behave in a certain way more than the other type days. Taylor, for example, mentions that a BUY DAY should behave differently than a SELL DAY and a SELL DAY differently than a SHORT SELL DAY and a SHORT SELL DAY differently than a BUY DAY. If that difference in behavior happens, the amplitude in the moves should show up. But, there are times when the BUY DAY, the SELL DAY and the SHORT SELL DAY behave identically. If that happens, the intersection among the days is what shows up vs. the amplitude for a move and the application of the Taylor rules does not show a difference among the different types of days in that case. But on the days that the amplitude shows up, the severity of the amplitude could matter deeply to a trader.
  7. The mechanical vs. the discretionary approach to Taylor trading reflects it seems to me something interesting about the Taylor Trading cycle: the Taylor Trading cycle can be viewed as an application or an interpretation of a synthesized set of concepts by Taylor. It represents a somewhat concretized or formulaic "approximation" by Taylor of what could work as a trading method based upon a synthesis of concepts or principles BEHIND the "rules." But these concepts are themselves generalizations and, because there are numerous exceptions to these general concepts, the Taylor Trading cycle cannot be a precise instrument for trading unless the discretionary trader is familiar with the numerous concepts behind the Taylor rules and the different ways in which those concepts are applied in varying empirical circumstances to create a higher level of precision and, therefore, consistency in the utilization of the Taylor Trading rules and cycle.
  8. It seems that Taylor identified an enduring or perennial cycle of 3 days and created a theory out of that. My understanding had been that this is simply an "empirical" "pattern" identified by Taylor and is "universal" or "fundamental" in that sense. But, WHY? lodges the explanation within human psychology: i.e., human nature.
  9. It seems that WHY? could have perceptively addressed the relevance of the Taylor count earlier in this Taylor thread: the count could be relevant only if the "amplitude of the moves" mattered to an intra day trader. My understanding of WHY?'s point is that the basic Taylor rules apply meaningfully to each Taylor day, whether a BUY DAY, a SELL DAY or a SHORT SELL DAY, at a core level for an intra day trade. This is because, presumably, the basic Taylor rules account for the core moves equivalently for each day: the core move, therefore, could represent 100% of one Taylor type day but, for example, 80% of a different Taylor type day. This is because that 80% day could be constituted by an 80% of the total day's core move + 20% amplitude lodged within a particular count. But capturing 100% of the core move, which equals 80% of the total day's move, could be sufficient for an intra day trader, even if 20% of the amplitude is not captured for that day.
  10. "On any day the market closes up almost always the low is made first.On any day the market is down the high is most often made first...I would prefer to buy a potential higher low if the first move is down but still above the prev low rather than buy a dip later on in a strong up trending day-That would be a reasonable ploy to buy that dip BUT that dip will not be the daily low,the low would have been the open (in the case of a gap up and go day) or early in the session where the market made an early low but reversed up for the remainder of the day...if the market has made a strong run over several days attempting to buy a higher low early at this point carries more risk if the prev low is far away in time and price. Buying a higher low carries less risk if you are doing that after what you perceive as a selling/shorting cycle has ended and a new rally is starting..." by Mitsubish This "first move down" or "early in the session where the market made an early low" seems to be accounted for by some as STOP HUNTING by the institutional traders.
  11. "A. the closing price is higher or non higher than the opening price B. the closing price is higher or non higher than the close of the previous day or period C. the closing price is above or non above the 50% level for the range of that particular intra day--for example, if the close is in proximity to the high of that intra day or the non high of that intra day" ST has a point. It seems that things are more complicated than that. First of all, some more contemplation of "A" and "B" suggests that the distinction between "A" and "B" might not be significant vis a vis the Taylor theory. Secondly, "C" could be more complicated than what it seems, because, for example, it seems that the broader context or trend could be involved.
  12. If there are multiple theories to explain something, empirical results could be suggestive to overcome that impasse. A complication in working with "empirical results," however, is the tension between theory and application that is alluded to by Mitsubishi's comment: whether the results stem from "a" theory per se or whether the results stem from "an" application.
  13. The concept of a close is interesting to consider. It seems to me that there are three methods of evaluating a close as being positive or negative: A. the closing price is higher or non higher than the opening price B. the closing price is higher or non higher than the close of the previous day or period C. the closing price is above or non above the 50% level for the range of that particular intra day--for example, if the close is in proximity to the high of that intra day or the non high of that intra day As I understand it, Taylor worked with "C" for the determination of the type of close that happened for that day. I don't know if Taylor had pondered "A" and "B" as methods for evaluating the daily close and to what extent "A" or "B" could be relevant to the Taylor Trading theory vs. "C" and, if Taylor had done that, what the reasoning might be for selecting "C" over the other two close determination methods.
  14. Today, 10.4.13, was a BUY DAY by my continuous count of the Complete Session of the ES. Yesterday had been a SHORT SELL DAY. The bullish price action today reflected the emphasis on the buying by the institutional traders. And the deep collapse yesterday reflected the emphasis on the short selling by the institutional traders. By Patuca's continuous count, however, today represented a SHORT SELL DAY.
  15. A basic premise of the Taylor theory is that the price action works within the Taylor Trading cycle and a particular type of Taylor day. But within and external to each Taylor day, there are other "patterns" from other theories operating at all times. Some of these patterns work within the "frame" set up by the Taylor theory. But other patterns--the broader context elements--control or significantly influence the "frame" utilized by the Taylor theory. It seems that a Taylor trader has to learn how to work with both sets of "extrinsic" "patterns" vis a vis the Taylor Trading day or the broader Taylor Trading cycle to be more effective and in control of the discretionary trading process.
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