[Dogpile]

let's go back to recent action.

WHY, so 10/11 was clearly a 'Sell Short' Day.
Thus
10/12 = Buy Day
10/15 = Sell Day
10/16 = Sell Short Day
10/17 = Buy Day

So we come into 10/17 on a 'buy day'. Taylor would look for a test of the 10/16 low to go long (a violation of previous day low or a higher bottom). Instead we gap up big, setting up possibility of 'high made first'. This is what happens as the violation of previous day low doesn't occur until the afternoon. In this case, what is Taylor looking for in his next trade? Is he waiting for the sell day price action to test the 'buying day low' in the morning session for a trade back up? Or is he waiting for a sell short day (10/19) to short on a test of a recent high? If waiting for the SS Day, which high (10/17, the buy day high or 10/18, the previous day high)?

I am confused on this past weeks action on what Taylor was looking for as his 'objectives' were just not met ('objective' is what Taylor uses to describe the zone in which he would like to initiate a trade).

I would think that when you go into 10/17 on a clear 'buy day' -- and it then trades 'high to low' -- then that is a sign of a downtrend. But you also mentioned that a violation of the buying day low can be a buy. It never violated the buying day low on Thursday 10/18 so it doesn't matter so much in this example -- so this is just a general question and is why I ask what Taylor does on the 'day after' -- when a buy day ends up trading High first --- or the day after a sell short day when the sell short day trades low first, high last.

here is chart of the action. I just can't see any trades that set-up per Taylor recently. Hence, my question.

http://bp2.blogger.com/_5h-SWVGx6Ms/...ScreenShot.png

thx in advance

[WHY?]

WHY, so 10/11 was clearly a 'Sell Short' Day.
Thus
10/12 = Buy Day
10/15 = Sell Day
10/16 = Sell Short Day
10/17 = Buy Day

No, 10-11-07 was a BUY day. Go back and read my post #51

So, 10 - 12 = Sell Day
10 - 15 = SS day
10 - 16 = Buy day
10 - 17 = Sell day

Taylor can be confusing that I agree on. Just reading his book is confusing.

What you thought happened:
Lets say for conversation that 10-17 WAS a BUY. It wasn't, but to answer your question, lets say it was. Taylor would have made a short play and possibly a long play. The gap up would have been the opportunity for shorting, once the tape indicated a slowing down. Taylor allowed shorting on a buy day. He also would allow going long on a buy day. By 12:30 it had dropped enough that had 10-17 been a buy day I would have probably looked at going long after covering my short. I know that is pressing the rules, but with the rather fast steep decline and it still a few hours from the close, I would have taken my chances. I prefer, and Taylor would also to see the long play within the 1 to 2 hours of the open. It is best to never push the rules past 1:00. The odds are greatly against you after this hour.

What really happened:
Like I said in my post #51 10-17 was a sell day. You can't go long on a sell day UNLESS a BV is made. You also don't short on a sell day. So, it would have been pushing the outer limits of rules to take the long BV play but a BV did take place by 12:30. One could have entered a long position at around 1538 with a stop loss at 1532 or so (tightest stoploss you would use). It traded lower after that but not enough to take you out of your position. Then it headed back up. On a BV the idea is to sell your long position the SAME day on any penetration of the PREVIOUS day's (10-16) low which was 1545.20. So, on this sell day 10-17 one would have taken the long BV opportunity and shortly been out of the market the same day capturing 7 to 16 pts depending on when you took your exit.


Hope this explanation helps.

[WHY?]

Originally Posted by OAC »

Don't talk like that, Newbies here would think you have the Holy Grail.

LOL most all newbies and a few of us older traders still hunt for the grail. Each generation produces another set of grail hunters. Has yet to be found...must keep searching.

[WHY?]

Look guys and any gals that come along on this thread (ever notice you don't see many women traders on trading forums) I do alot of my posting in the wee hours of the morning. Sometimes I am sleepy. I only need 4 to 6 hours sleep a night but I need that much or I am not any good. Anyway, I try to post dates like 10-11-07 ..etc so as to make sure we are looking at the same day. When talking of Taylor one is discussing a buy day, a sell day, and a short sell day. It can get confusing so I try to pin it to a date. But, my software also allows me to rephase or recalculate the cycle if certain aberrations appear in price action. When I run a recalculation it may, or may not, change the cycle. Taylor says to never change it. However, I built this into my software to play around with it. I am saying all this to say: If I make a mistake give me a chance to correct it. I, many times, am posting while sleepy and may have accidently been in the rephased cycle price in my software instead of the pure Taylor cycle price. Plus, I ain't so young anymore and can't think as fast as I used to. But I think BETTER!

PS 1) How come you don't see many women traders on these type of forums? (looks like they would make for the best traders since they can multitask head over hills over most men and can run back and forth simultaneouly on both sides of the head i.e right brain/left brain stuff is natural to them. 2) Why do you think Taylor wrote his book the way he did? Did the man actually talk like that?

[WHY?]

so this is just a general question and is why I ask what Taylor does on the 'day after' -- when a buy day ends up trading High first

I answered that already in a previous post but you short it and hope to also go long all before noon.

or the day after a sell short day when the sell short day trades low first, high last

You do absolutely nothing. You pass. Why, you wait for the next day (buy day) for a good shorting opportunity. Never go long a short sell day. Why? you might get caught in the wrong trend. You might get lucky and get away with it there there will be a day you get hammered. It could trade down on the SS day, close weak or near the low, and never trade back up. That would indicate a weak market and an upcoming BU on the next day (a buying day) and you are better to go long on that buying day instead of taking the chance on the previous SS day. Maybe a quote from Mr taylor will help clarify. I am putting () in the quote to clarify what he is saying; "Now, we go back to the close of the Short sell day and we find that is was a flat closing, then from this indication we expect a lower opening on the buying day and so far this would cause the low to be made FIRST (on the next day i.e. the buying day) and is a stronger indication when made early in the session (on the buying day) that a rally would start from this low (on the buying day) and hold the gains for a strong closing, which in turn indicates an up opening (on the sell day) and a penetration of the selling day objective- the buy day high" p30. There you have it! Mr Taylors reasons for not going long on a SS day. It could close weak. His reason for not going shorting on an SS day high made last is because it is best to short it on a buy day high made first (next day since the trend is up).

Taylor said and I quote "one of the fundamentals of speculation-to be able to protect your capitol and be in a position to act on a more favorable opportunity when it comes along" p63 He also said "Never make a trade unless it favors your play" p11 Another one... "he must not and cannot ignore the prices printed on the tape"... here is a good one..... "you can believe the tape at all times, learn to read it and believe in nothing else for short term trading"...and ..."the real heart reading the tape is to be able to detect concentrated buying and selling and to the determine the trend of the prices"p12 (Dogpile you will like that one). Here is a Taylor quote that cracks me up "The intent has been to keep the method as simple as possible". Now that is funny! On the other hand, it is hard to make something simple. Ask any teacher.

How many of you actually have Taylors book and have studied it or are studing it? It is ok to hear what someone else says about Taylor but nothing like going back to the original source. If you have any questions about what he is saying on any particular page I will will happy to give my input. You have to understand his style of talking to be able to catch his "drift". Know what I mean?

[WHY?]

I might say this: Taylors system is a comprehensive system that "clocks" price movement itself (without use of indicators) and then determines probable future price (or anticipates...i gotta remember to use this word) based upon those calculations. However, it is my belief that knowing how to read the tape greatly enhances Taylors method. Tape reading is the final thing that determines entry and exit prices. I would recommend reading any books on tape reading. I have long ceased to look at chart patterns. (they make work for some but I can't get it right...I hate candlesticks). Some of the old timers stuff on tape reading such as Gann's The Truth of the Stock Market Tape (hint you can get your public library to probably get it for you), Rollo Tape, Oneils other stuff, Livermores book, Wycoff stuff, and Tom Williams VSA and Clif Drokes Tape reading for the 21st Century. Good ideas on tape reading can be gleaned from these books. Those ideas will enhance Taylor. However, Taylor can be used without such enhancements. I have trained semi-literate people to use Taylor in about 3 weeks using my software. The basics, that is. Enough to get them up and trading. I am talking here about people that have never bought or sold stock and didn't even really know what stocks were. I had to use examples with them like going to the market to buy oranges or tomatoes. And supply/demand in the markets where vegetables are bought and sold daily. Trying to explain shorting to them was fun! I say this to say that you don't have to be highly educated to trade like Taylor. Granted the average person would struggle with his book but his concepts really aren't that complicated. He just words things, in hard to understand ways. It took me quite a while to get my dad to understand how you make money when something goes down in price! Anyway, maybe I ain't supposed to mention peoples books??? I don't know. Forums are different. If I ain't well I guess the mod can delete the post.

[Dogpile]

You can't go long on a sell day UNLESS a BV is made. You also don't short on a sell day.

On a BV the idea is to sell your long position the SAME day on any penetration of the PREVIOUS day's (10-16) low which was 1545.20. So, on this sell day 10-17 one would have taken the long BV opportunity and shortly been out of the market the same day

excellent, thanks.

I am clearly having trouble figuring out which day is a buy or sell or sell short day according to Taylor. (This was what Rashke said in her section of the book too). I thought 10/11 was a sure sell short day but you are calling it a 'buy day' -- and it is permissible to short a buy day if you suspect 'high made first'. So I was shorting that day thinking it was a 'sell short day' and you were shorting that day because it was a 'buy day - high made first'. What you name that day really doesn't matter in this case --- we are both shorting on the expectation that the high will be made first.

The problem arises on the other days; 'sell day' and 'sell short day' -- since you never go long on a sell short day but I might go long on a sell short day because I actually think the the sell short day is a buy day.

at the end of the day, your software is doing something that I am fundamentally missing. Can you outline the most basic rule for what sets up a 'sell short day'? ie, you know for sure it is a 'sell short day' if __________. The only thing that truly matters is which is the sell short day -- because you cannot go long a sell short day, per Taylor. It also matters which is a 'sell day' because you are only to go long on a Violation of the 'Buy Day Low' -- if it is a 'sell day.' It just doesn't matter if its a buy day so much because you can go long or short, per Taylor, depending on if you think the high is going to be made first or not. Thus, the rules for a buy day are not important -- except to the extent that locating the buy day might help you figure out which is the sell day and which is the sell-short day. Thus, this is an open question that I hope you are understanding -- how do you figure out the 'sell short day' -- from high-low calculations? or from counting over from a buy-day + 2 days? or some other way? same question for a 'sell day' -- how do you know for sure that the day that the next trading session is a 'sell day'?

This was long-winded but probably more than crystal clear if you interpreted Taylor already (and have therefore proven you can understand some poorly worded material).

[WHY?]

Originally Posted by Dogpile »

excellent, thanks.

I am clearly having trouble figuring out which day is a buy or sell or sell short day according to Taylor. (This was what Rashke said in her section of the book too). I thought 10/11 was a sure sell short day but you are calling it a 'buy day' -- and it is permissible to short a buy day if you suspect 'high made first'. So I was shorting that day thinking it was a 'sell short day' and you were shorting that day because it was a 'buy day - high made first'. What you name that day really doesn't matter in this case --- we are both shorting on the expectation that the high will be made first.

The problem arises on the other days; 'sell day' and 'sell short day' -- since you never go long on a sell short day but I might go long on a sell short day because I actually think the the sell short day is a buy day.

at the end of the day, your software is doing something that I am fundamentally missing. Can you outline the most basic rule for what sets up a 'sell short day'? ie, you know for sure it is a 'sell short day' if __________. The only thing that truly matters is which is the sell short day -- because you cannot go long a sell short day, per Taylor. It also matters which is a 'sell day' because you are only to go long on a Violation of the 'Buy Day Low' -- if it is a 'sell day.' It just doesn't matter if its a buy day so much because you can go long or short, per Taylor, depending on if you think the high is going to be made first or not. Thus, the rules for a buy day are not important -- except to the extent that locating the buy day might help you figure out which is the sell day and which is the sell-short day. Thus, this is an open question that I hope you are understanding -- how do you figure out the 'sell short day' -- from high-low calculations? or from counting over from a buy-day + 2 days? or some other way? same question for a 'sell day' -- how do you know for sure that the day that the next trading session is a 'sell day'?

This was long-winded but probably more than crystal clear if you interpreted Taylor already (and have therefore proven you can understand some poorly worded material).

Good perception and some orginal thinking on your part here! However, the rules do matter on the buy day also because "how" it does whatever it does, is important and the rules can help you there. Also, the rules for each day, in themselves, help to anticipate the next day. For instance, never buy a low close on a SS day helps you to anticipate a BU on the next day. Also, buying a BH on a buying day helps you to anticipate bullish prices as being most likely ahead for the next few days because an HB is usually profitable. Buying on a BV helps one to see that the market is weak and may continue that weakness and it may take two ro three sessions before it is back to making penetrations of the buy day high on the sell days and of the sell day highs on the SS days, so you would think in terms of adjusting your strategies to reflect or anticipate the next day. Maybe this makes sense?? Anyway, it all works together. The rules are important for each day. It is not "just" that the price was made first or last but it is also "how" the price was made that helps you to anticipate and what that tells you about the next sessions or next few sessions. Page 15, and page 89 in the book should answer your question. Taylors method was his manner of tracking the markets and staying on the right side of the trend. He developed the rules to help him do this. There may be ways to modify his system without hurting the underlying integrity of it. That is, playing around with the days and seeing what happens. All I know is that Taylors way is as good, if not better, than the other modifications I have seen of his method and as good as my messing around with the days. So, I would say the inventor of the system probably had/has a reason or reasons why he set it up the way he did. We may never know the reason because I guess, or hope, Taylor has gone to the happy trading grounds if he no longer lives. I don't know but I have tried to see if he is still living but have never had any success finding out. If he is he must be laying low or too old to care???