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Dogpile

Taylor Trading Technique

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Why? and Dogpile,

 

This is the best discussion of Taylor I have seen anywhere. I have the book, I have read it - got confused, read it again - some clarity, read it again - more clarity ... cycle continues - I really appreciate your postings please keep it up.

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have the book, I have read it - got confused, read it again - some clarity, read it again - more clarity ...

 

you know, the book is virtually unreadable until you have thought a lot about it and then go back to it the 2nd or 3rd time -- then you get used to how he writes and can decipher his terminology and thus what he is REALLY trying to say. until you start to understand his terminology, which is a very weird way to write, you really don't know what he is talking about.

 

I think he would have been better off not calling a buy day a buy day or a sell day a sell day. Should have been something like 'Day 1', 'Day 2', 'Day 3'. It gets too confusing to talk about shorting on a buy day at objectives and violations -- you get confused about which day he is referencing, the previous day or the current day.

 

I think its a little like all other trading concepts -- you have a general 'roadmap' but then you have 'alternate routes' lined up in your back pocket if the first roadmap doesn't seem to be right. This is not unlike something like Elliott Wave where you have alternating simple and complex corrections and 'alternate wave counts.' Some of the time, you simply won't be able to figure out the pattern in real-time and don't have to trade. Other times, it follows one of the scripts you have laid out and you make good money.

 

Linda Rashke has a 'pattern recognition' type of system that uses swing trading rules and oscillators. Draw any random lines on a page and she can form a 'trading structure' for that path. Every pattern has a failure point, which triggers a new 'read'. The same pattern may be bullish or it may be bearish, the trick is getting the higher timeframe to be bullish and the lower timeframe to just be switching from bearish to bullish. That way, you are getting reward that is based on a higher timeframe (bigger reward) for the lower timeframe risk (pattern failure on the lower timeframe). This is your 'edge' as a nimble trader that can enter and exit with virtually no slippage, 24 hours a day.

 

This is similar to how I am thinking about Taylor. Wait for something recognizable on the higher timeframe and let the lower timeframe flip from bearish to bullish or vice versa.

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Every pattern has a failure point, which triggers a new 'read'. The same pattern may be bullish or it may be bearish, the trick is getting the higher timeframe to be bullish and the lower timeframe to just be switching from bearish to bullish. That way, you are getting reward that is based on a higher timeframe (bigger reward) for the lower timeframe risk (pattern failure on the lower timeframe). This is your 'edge' as a nimble trader that can enter and exit with virtually no slippage, 24 hours a day.

 

 

This is the best piece of trading advice I have seen on this site. You mean it came from Linda Raschke ? Damn, I better stop my chauvenistic ways.:crap:

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This is really neither, here nor there, and perhaps not really worth commenting on but just thought I would say that Taylor language would call it a penetration or failure to penetrate on the high and a violation on the low side.

 

Find your explanations on TTT very informative, have read Linda Raschke's book and noticed her modifications of the original version you describe on this thread.

Would appreciate your comments on the Dow for today in the light of previous days, I am like you trying to blend TTT , which I admit I do not read it well at all, with VSA.

 

Attached YM 60min, what are the possible scenarios?

5aa70e151bd05_YM60MINBARCHART.GIF.cf27325dba3690bf562e182ab0aa4bff.GIF

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Find your explanations on TTT very informative, have read Linda Raschke's book and noticed her modifications of the original version you describe on this thread.

Would appreciate your comments on the Dow for today in the light of previous days, I am like you trying to blend TTT , which I admit I do not read it well at all, with VSA.

 

Attached YM 60min, what are the possible scenarios?

Taylor is an EOD system. First, I at the moment I only correlate VSA with Taylor in EOD time frame to confirm, or help anticipate, the price action of the Taylor cycle. That is, penetrations, failures to penetrate, possible BV, BU...etc However, another way VSA could be useful is perhaps using it as an intraday tool to help in tape reading for more exact entry points. The tape in the end determines the entry/exit points, even in Taylors system. Taylor helps decipher the direction of the main trend of the day.To be honest I do not yet know enough about VSA to use it on an intraday basis. But I see great potential in correlating VSA with Taylor. I am learning.

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Taylor is an EOD system. First, I at the moment I only correlate VSA with Taylor in EOD time frame to confirm, or help anticipate, the price action of the Taylor cycle. That is, penetrations, failures to penetrate, possible BV, BU...etc However, another way VSA could be useful is perhaps using it as an intraday tool to help in tape reading for more exact entry points. The tape in the end determines the entry/exit points, even in Taylors system. Taylor helps decipher the direction of the main trend of the day.To be honest I do not yet know enough about VSA to use it on an intraday basis. But I see great potential in correlating VSA with Taylor. I am learning.

 

o.k, so today 10-25 is a sell day, does that suggest that tomorrow 10-26, Friday would be a SS day, if so, what would the anticipated price action be. and what would negate that.

Intraday VSA is a great tool to pinpoint entry and exits at relevant S/R and Pivot levels. After 3-4yrs of VSA , I feel I am finding it easier to observe the market manipulation.

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o.k, so today 10-25 is a sell day, does that suggest that tomorrow 10-26, Friday would be a SS day, if so, what would the anticipated price action be. and what would negate that.

Intraday VSA is a great tool to pinpoint entry and exits at relevant S/R and Pivot levels. After 3-4yrs of VSA , I feel I am finding it easier to observe the market manipulation.

I do see great potential in correlating VSA wiuth Taylor. I am working on that. Yes, 10-26 will be an SS day. The close today 10-25 will give you some kind of idea as to what kind of SS day 10-26 will probably be. You anticipate that and prepare to act, or not TO act, on it. NOTHING will negate it. Regardless, of what happens tomm, 10-26 is a SS day day. It may end of being a less than ideal ss day but nevertheless, it is a SS day. Taylors rules are many so in one little paragrah I can't give you the total sum of possible price senarios on the SS day 10-26 but in general the ideal pattern would be for it to close near the high today 10-25 and open up on 10-26 trade up to, or through, the high of 10-25, or the high my software picks, and then one would short it and cover on the same day. It must have this kind of action early in the session, like within first 1.5 hours, to qualify as an ideal SS day.

 

Suppose it closes low today 10-25? That would indicate that a low open on 10-26 and a possible trading UNDER the low of 10-25 (previous day). At this point you recheck the action on 10-25. Did it violate the low of 10-24? If so, then the low open and trading down indicates that when it begins to rally it probably will not make nor penetrate the high of 10-25 which would be your shorting target on the SS day 10-26. Also, the low close on 10-25 indicates a high will probably be made last on 10-26 and that blows your shorting opportunity on 10-26. So you have to stand aside and wait for the close on 10-26. IF it closes high, and probably will, then you look to short on the next day of the cycle which is the buy day 10-29. Today is a sell day NO MATTER WHAT HAPPENS. It can be ideal, or less than ideal, but it IS a sell day. So far, at this point of the day it has been ideal. We will watch the close for final determination.

 

You just can't take what the days action was for each day and then try to fit that into the cycle. The cycle is first. The actions are last. You have the ideal cycle and the not so ideal cycles. But Taylor teaches how to deal with them all. Almost everyone trys to make it a buy day or a sale day after the fact. That is they try to determine if today 10-25 was the ideal buy day or a sell day after the market closes and then after that determination they try to anticipate the next days action 10-26. That is all wrong and you will be forever trying to figure out each individual day and and fit it into an ideal cycle day and then try to anticipate. It won't work. I am telling you it won't work. You will finally throw your hand up in despair. People try to construct the ideal cycle by looking at each day after the close and seeing what day of the cycle it BEST expressed. I guess their thinking is you gotta make the ideal day. The problem: You will be forever rephasing and probably 90% of the time never make a complete cycle that is B, S, SS. Example: your Buy day after rephasing becomes a Sell day. You get to your new rephased sell day and at the end of it, after rephasing, it calls the sell day a buy day. Thus making your original buy day a ss day. Next time you rephase it has become a SS day. Endless confusion. Forget all that. Determine the cycle and follow it. Adjust the days as ideal, or less than ideal. but keep the cycle the same. Otherwise, on a buy day that rephases to a SS day that is less than an ideal SS day you WILL NOT be able to flip back to the previous day (which should have been a sell day but rephasing changed that) and see if a BV was made which would indicate weakness on the now rephased ss day. See what I mean. A confused mess. I keep trying to tell people but it seems most everybody wants to make every day an ideal day and label it thus. They do this after the market close and thus they try to anticipate the next day based upon any rephasing. IT WILL NOT WORK. BELIEVE ME IT WILL NOT WORK.

 

I hope I haven't made matters worse by this explanation. It is easy to muddy the waters when explaining Taylor. In short, first determine the cycle. Then adjust each days action as ideal or less than ideal and follow the rules Taylor puts out on both. You will be pleasantly surprised how easy it becomes..

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Ravin, WHY? where you guys from? i am from the USA. have yu been trading long like this taylor dude? is his sytem pretty good? sound complicated to me by the posts????????????????

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Since we have 3 straight low to highs, the trend is up -- 1 'high to low' day would set up a long for friday (Pinball Buy).
dogpile what in the dickens is a pinball buy???????

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Ravin, WHY? where you guys from? i am from the USA. have yu been trading long like this taylor dude? is his sytem pretty good? sound complicated to me by the posts????????????????
Hello Patuca. Welcome. I live in Honduras....but born in the USA. Taylor was a trader back in the 50's and developed his own way of trading the markets. His book the Taylor Trading Technique explains his method. It is a hard read but if you keep at it you will begin to understand. Also read the posts here in this thread.

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Well today 10-25 was an ideal sell day. ES traded up to 1529.50 (I forecasted I thought it would make 1529). Then she slide south reversed, traded up and closed high....a perfect setup for an SS day. You may be wondering why Taylor won't short on a sell day nor go long unless it makes a BV early in the session. Well it is a 3 day cycle system. You could have gotton away with it today but on days where there are strong abberations in the market you can get whipsawed, hard. Anyway, we have a nice setup for the SS day tomm 10-26. This is what we like to see.

 

So, 10-26 is an SS day. I say it will probablly trade up in premarket session or after the open and could go to 1533 before declining. So, I would look at shorting around that point however, as usual you have to read the intraday tape to get exact entry points. Adjust accordingly. Cover same day on any good decline. Not that complicated.

 

BTY my software predicted a daily range today in ES of 24.21 points. We had 24 pts. Doesn't always get that close but did this time!

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I would be very cautious doing any kind of short selling above 1530.
Care to elaborate why OAC? If you are thinking of it breaking thru resistance well... that possibility does indeed exist however, it is still a weak market anyway you look at it. That could change tommorrow. It may not. I would be concerned with "how" it breaks thru 1530 area. If it does so with "gusto" then sure no shorting at 1533 area until the tape slows. But if it drags itself up there with the market being overall weak, ...well, I would take the chance if the tape got dull at the 1533 area. Like I said the final entries and exits are determined by the intraday tape.

 

What are you looking at that would concern you shorting at 1530 or above?

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Hey Patuca, way to introduce yourself with some intelligent questions.

 

I have been lurking this thread for a while. I got into Taylor via. George Angell, who had some interesting ideas. But I just sort of forgot about the 3 day cycle thing.

 

The idea has become more valid to me now that I am scaling into positions for a slightly longer term (3-5 days).

 

I am re-reading it now, and catching up on posts. I have a range indicator I developed for tradestation a while back, the idea by Angell. It involves projecting a range for the day based on the days open. Did either of you read Angell's stuff?

 

Also, maybe as a project Dogpile and WHY? could try to agree on the stage of the cycle as we go, day by day. It would be great to learn this stuff real time.

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Care to elaborate why OAC? If you are thinking of it breaking thru resistance well... that possibility does indeed exist however, it is still a weak market anyway you look at it. That could change tommorrow. It may not. I would be concerned with "how" it breaks thru 1530 area. If it does so with "gusto" then sure no shorting at 1533 area until the tape slows. But if it drags itself up there with the market being overall weak, ...well, I would take the chance if the tape got dull at the 1533 area. Like I said the final entries and exits are determined by the intraday tape.

 

What are you looking at that would concern you shorting at 1530 or above?

 

I seriously doubt the tape will get dull around 1533. As the matter of fact, I expect the opposite. Also I don't think market is weak at the moment. We will see.

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I seriously doubt the tape will get dull around 1533. As the matter of fact, I expect the opposite. Also I don't think market is weak at the moment. We will see.
You know you may be right. The best we can do is try to anticipate. I would like to know why you think it is strong at this moment, if you would care to divulge that. I would be happy to divulge and tell you why I think it is weak.

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Also, maybe as a project Dogpile and WHY? could try to agree on the stage of the cycle as we go, day by day. It would be great to learn this stuff real time.
I think we calculate the day differently. I don't understand how he does it and I can't tell him how I do it.:\

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Where is dogpile. I would sure like to hear what he says about it. Stackm you got anything to say about? Or anyone else care to comment?

 

Nothing new to add at the moment. Keeping track of the cycle this week has kept me on the right side of the market without falling into any traps. I do appreciate your posts this week. There have been several gems :cool:

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Ravin,

 

What is your take on ES today. If you look at the last 3 or 4 daily bars how do we look for 10-26? Bullish, bearish, sideways? From a VSA standpoint.

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Nothing new to add at the moment. Keeping track of the cycle this week has kept me on the right side of the market without falling into any traps. I do appreciate your posts this week. There have been several gems :cool:
Thank you for your comments. Glad you have been helped some this week.

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Hello Patuca. Welcome. I live in Honduras....but born in the USA. Taylor was a trader back in the 50's and developed his own way of trading the markets. His book the Taylor Trading Technique explains his method. It is a hard read but if you keep at it you will begin to understand. Also read the posts here in this thread.
the guy must be dead for crying outloud. besides he must have traded when there were no computers. how could that apply in todays world?

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Whats that trader IQ stuff about? how comes i get stuck with 5% and others have high numbers??? is there a moderator around here that can change that? maybe i'll just leave this site..

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