[smoothdrive]

Hello WHY?

Thank you very much for the post. Man - you are the Man! I play music in an old fart weekend cover band so I haven't had much time to read the book since getting it on Friday, between playing and the wifes "Weekend honey do's". But, I've got some time now.

I'm excited about the prospect of reading your posts with a little more understanding. Right now it's sorta like reading a different language. I get a word or two but ...

Regarding "Predicting the market" (my quotes) - perhaps I'm missing something here in my newness, but that is exactly what I am attempting to do! I want to pay my dues learning some method of shorter term trading that outperforms short term buy and hold. I want a method that I believe has a much better than 50/50 shot at winning. For me - that is taking what the price is telling me at some point in time, and "Predicting" where I think it's going. Why else would I trade? (I am a self-admitted greenhorn trader and I've never actually entered a short term trade. I have purchased many stocks via my point and figure charts, but they have always been with the intent of a hold that could take some considerable time before they hit my price objectives.)

Anyway WHY?, without getting all mushy here - I'm danged indebted to you and thread starter "dogpile" for making me aware of Taylor. You are "Going the extra mile" to help people, and I for one really, really appreciate what you do.

Thanks man.

Gary

Originally Posted by WHY? »

I don't mind at all. It is not a charting method. My software that I developed is not a charting software. I do look at charts some as I am attempting to correlate VSA with Taylor. It may take a bit of getting used to but charts really aren't necessary to be a successful trader. I might get blasted over that one but charting is simply a visual representation of prices. Actually, charts are quite subjective also. One guy sees a triangle and lo and behold another sees something else. However, price is just... that, price. It isnt subjective. It can't be subject to interpretation as to what it is. It is what it is. It is THE price. I think it was Rascke who said "the best indicator of price is price itself. All else are derivatives of price". That comment is pure gold. Patterns on charts are derivatives of price. Most all TA is simply that... derivatives of price. I like things simple. What are prices doing? What are they likely to keep doing? Taylor measured price movement from many different angles. I like to say that he "clocked" price. He believed strongly in averaging. Stocks, for instance, have their manner of trading. Some trade in large daily ranges. Some in more narrow ranges. Some stay in periods of accumulation longer on average than others. You get the picture? Some will produce pretty chart formations. Others won't. But all move in price increments. That price can be measured and quantified and averaged and projected into the future. Oops, I better hush or I will get the "no way to predict" the market people hammering on me. So, I will back up a step and use the term "anticipate" since that doesn't seem to rub people wrong. So, if price is the best indicator of price, and price can be quantified, and price follows a cycle or pattern, or whatever you want to call it, and that pattern or cycle is repeatable, or repetitous then it stands to reason it might could be projected ahead and help one "anticipate" the market. You just have to visualize numbers instead of lines and candles and triangles and head and shoulders...etc. It is like a paradigm shift. We all do it anyway. We watch our speedomotor as numbers. Not a graph. Team score are shown in numbers not charts, usually. However, I will say this about charts. They could be useful to see the "bigger picture" in terms of knowing if the present Taylor 3 day cycle is in accumulation, mark up, distribution, or mark down phases. And they may be useful in correlating VSA with Taylor..something I am working on. Charts are right brain, price is left brain. I would say generally speaking it is good to use both sides of your head! Know what I mean?

Is it necessary to be watching the markets in the morning to determine entry? I would say that it is best. However, not absolutely necessary. The biggest problem you might run into is an aberration like a large gap down or up on the open. That could potentially get you in a bad position. I would prefer to at least see the open before I would place my trade. I do like to watch the tape live to determine actual entry points. But, I have, simply placed an order to buy at a price my software gives me once I see that the open is not something wild and woolly. I have left to go do errands..etc and come back to see the order filled. I do like to at least see the open before I place an order. I think Taylor would feel the same way about it. Also, if you use his trend trading method i.e. pick a good trending stock that is a bull and accumulate a line of stock say over several buy days. Then you sell that long stock over several high made first buy days, several sell days, several SS days. You can also do this in a bear market shorting but of course with some things changed up. Once you accumulate a line you may be waiting 3 to 6 months to sell it. It all depends on what price does. However, in trend trading using Taylor method the open wouldnt carry as much weight as when using it for day trading, or swing trading. In trend trading you would be averaging your costs and also you would want to know some fundamentals about the company. I gotta go to bed. It is late. I don't need much sleep but I gotta have some sleep!

[WHY?]

I'm danged indebted to you and thread starter "dogpile" for making me aware of Taylor. You are "Going the extra mile" to help people, and I for one really, really appreciate what you do.

Hey man you are welcome. I thank Dogpile for starting this thread. Not many folks can, or are willing to discuss Taylor. I've been trying to figure him out for years now. Finally, got enough under my belt to get my software up and running around year 2000 but I am still learning Taylor. Sometimes I wonder if the man didn't write like that on purpose. Sometimes, you can read a paragragh and just start laughing because it makes no cotton pickin sense. Sometimes, you feel like throwing the book in the garbage can. Sometimes you think - this guy is crazy! But, somehow I hung onto his book, and went back to reading his book. It is literally the most worn out, marked up book in my trading library. Finally, it started sinking in some. Then, I finally came to grips with the way he writes, and well, that made it alot easier for me. He has his own "language" of writing.

[stackm]

I would also like to thank Why and Dogpile for their contributions and hope that this thread continues to grow.

I have been keeping a spreadsheet for a couple of months now using the methods outlined in George Angell's "Winning in the Futures Markets". So far it's been somewhat hit or miss. He talks about "rephasing the cycle" when the price momentum indicator changes direction, and pushing the cycle forward a day when the unexpected happens. Unfortunately in September there were many days when the cycle got of out sync. He also advises stepping aside for a few days when this happens until the cycle resumes.

I plan to review the concepts in this thread again and also study the Raschke material.

I tried to review the Taylor book, but I soon got a migraine so I'll need to revisit that at a later date.

[WHY?]

Originally Posted by stackm »

I would also like to thank Why and Dogpile for their contributions and hope that this thread continues to grow.

I have been keeping a spreadsheet for a couple of months now using the methods outlined in George Angell's "Winning in the Futures Markets". So far it's been somewhat hit or miss. He talks about "rephasing the cycle" when the price momentum indicator changes direction, and pushing the cycle forward a day when the unexpected happens. Unfortunately in September there were many days when the cycle got of out sync. He also advises stepping aside for a few days when this happens until the cycle resumes.

I plan to review the concepts in this thread again and also study the Raschke material.

I tried to review the Taylor book, but I soon got a migraine so I'll need to revisit that at a later date.

Nice to have you on the thread! Maybe we can keep it going. Angell did make some contributions to understanding Taylor. But, we have to realize he modified Taylor so you could go long or short on any of the days. Could that be a contributing factor to the "hit and miss"? Or, perhaps you are not combining live tape reading with Taylor? Are you doing this as EOD or trying to capture slices of intraday cross currents? My software allows me to rephase. I wanted the option to do so, thus giving me the opportunity to play around with adjusting the cycle. I don't know for sure that I have seen any real reason to be rephasing except, for perhaps, maybe one. Here is what happens when one advances the day forward or backward one. You rephase and get another day but a few days (maybe the very next day) down the line you rephase and your back to the original setup. It "might" give an edge for the moment on that particular day and allow you to say, go long, when you were looking to short but over the long haul it doesn't seem to make that much difference, at least, that is my current thinking. The market makes aberrations but usually comes back in line again. You could have probably just as well stuck with Taylors plan and used his rules that would deal with the aberrations??? Sooner or later you will be rephasing right back into Taylor again anyway! To sum it up rephasing might help for the moment, and give you an extra trade or two, but sometimes it will also "take" a trade or two from you! For instance, you have a buy day with the opportunity to go long or short. The market makes an aberration, you bump the day forward one and it it seems to get you back into better sync with what is happening but alas now you find you are in sell day and have lost a shorting opportunity of the buy and also perhaps a long opportunity UNLESS a BV is made! On the other hand, it could add a possible trade to your opportunities for the day if say it was a sell day and you bumped back one day to a buy day. Another problem with rephasing is that it also can mess with your thinking and get you confused. You are looking ahead trying to anticipate what the price will do over the next few days and all of a sudden you now got a different three days in front of you. For instance, what was once a HB (higher bottom) on a buy day 2 days ago (and that would have forecast bullish sentiment) now becomes a sell day that doesnt have the same significance, in terms of anticipating the future. So, rephasing not only can take trading opportunities from you it can cloud the past that helps you anticipate the future. So, what am I saying? By all means play around with bumping the days around with whatever calculations you wish to use and perhaps you might discover something that works better than Taylor or Angell or Raschke, but also keep in mind that apparently, Taylor saw no need for rephasing. Correlating volume with rephasing might be a promising area to look at???? Does this make any sense? Again, I would always encourage people to STUDY Taylor over and over. I know it is hard but remember he is the one that came up with the system. Sometimes, I think the dude made it hard to understand, on purpose. Try reading a fairly long paragraph outloud to a friend and tell them beforehand to listen carefully and then tell you the gist of what you have just read! You both will get a laugh out of that!

[WHY?]

Remember this: Taylor clocked the "normal" price action or what he would call, "on average". He also clocked the aberrations and averaged them too!

[Dogpile]

WHY, if you were to just look at the S&Ps from scratch right now, pretending you haven't looked at them in last month -- can you tell me where you would start and why? and then correlate this back to why 10/11 was a 'buy day' ? or why 10/10 was a sell short day? doing something like this might help me get something that right now, looks pretty much indecipherable.

[stackm]

"But, we have to realize he modified Taylor so you could go long or short on any of the days. Could that be a contributing factor to the "hit and miss"? Or, perhaps you are not combining live tape reading with Taylor? Are you doing this as EOD or trying to capture slices of intraday cross currents?"

--> When I say hit or miss, I mean that a day I expected to see be a sell short day actually resulted in a buy day, or a buy day dropped the entire day. So far I haven't done intraday changes of day or tape reading. This has just been a research exercise for me so far.

So if anyone wants to test their Taylor skills a good exercise may be to map out all of the September days as a buy, sell, or sell short. Perhaps much of the uncertainty about the Fed meeting that month made the cycle harder to predict in advance.

[WHY?]

Originally Posted by Dogpile »

WHY, if you were to just look at the S&Ps from scratch right now, pretending you haven't looked at them in last month -- can you tell me where you would start and why? and then correlate this back to why 10/11 was a 'buy day' ? or why 10/10 was a sell short day? doing something like this might help me get something that right now, looks pretty much indecipherable.

May I ask you where you would start and why?