A trading secret only some will understand...

MoneyWalks · Apr 30, 2012

After reading your post one of Jesse Livermore quotes popped up in my mind

"Whenever the market does not act right or in the way it should - that is reason enough for you to change your opinion and change it immediately." jesse livermore

I would say time is as important as price

all the best

Quote from RangeTrader:

There are a zillion people chasing around indicators looking for the best signals and this and that... You can look at every price cyclic indicator in existence, and MACD and etc... Trade off RSI divergences, etc... And still lose.

There is one little missing key which a lot of good traders understand instinctively, but can also be put in number!

Time is the missing key. A lot of people see the same trade setups, and jump into the same divergences off of lows/highs, etc... But, they don't have a time stop.

Each trade setup has an expiration date. If price isn't moving in your favor within a certain amount of time the odds are price will do the opposite of what the technical setup was. Think about it... A bunch of people see a long setup. They all start diving in... Then they sit around waiting for it to start rising... If it doesn't start rising, only a matter of time before they start getting scared. If I take a trade setup that is bad time rules generally get me out without a loss before it moves against me.

To summarize everything... If price isn't rising off a divergence within the amount of time it should be rising, and in the amount it should be rising... Fear will build in the longs and price will likely drop again.

Or vice versa.

Some dizzying logic huh? If price isn't rising when it's supposed to be rising, and when it's supposed to be rising by, it's likely going to fall! Traders need continual emotional reinforcement via price movement in their favor to keep pushing in a direction.

Attached is a chart of bernanke's recent speech after FOMC. Notice that each bottom and top is occurring in relatively the same same number of bars or ticks. Each move is taking about the exact same "relative" amount of time to bottom or top. I was talking to a banker who trades currency recently and was surprised he understood time rules perfectly and used them in his trading...

Whatever timeframe I'm using... 25 bars/ticks/minutes is the most ill hold a trade for unless the trade is moving heavily in my favor. That is the far upper end though. You should start seeing a move go in your favor in around 10 candles from a good setup. If you let it go past 40 candles and it still isn't moving in your favor your a gambler... Not a trader! If your counter trending you honestly need to be in and out within fifteen candles... Tricky stuff! If I miss the long setup, I sometimes take the short setup... Only if the trend is really slow though.

The bottom indicator I have here post-marks each exact high on the next downward cycle, and each exact low on the next upward cycle. The locations of the highs and lows generally keep occurring in the same relative location in time for upto hours at a time.

JaiSreeram · May 4, 2012

Quote from MoneyWalks:
........
"Whenever the market does not act right or in the way it should - that is reason enough for you to change your opinion and change it immediately." jesse livermore

How true, it seems some trading rules remain valid over the years.

Besides, it also reconfirms the importance of backtesting in trading world.

Satan's Helper · May 4, 2012

Quote from RangeTrader:

There are a zillion people chasing around indicators looking for the best signals and this and that... You can look at every price cyclic indicator in existence, and MACD and etc... Trade off RSI divergences, etc... And still lose.

Not to sound negative...... Here comes the BUT! Every free indicator I have back tested has proven to be worthless. Some will work for a short time then they always start losing. This includes testing different time frames, indicator lengths and even combinations. You can even flip the buys to sells and no matter what the systems keep on losing.

Indicators for the most part seem to be an illusion of safety. When you look at a bar forming the illusion quickly diapers and then returns after the bar is formed and there was a clear signal.... Oops to late now...

The only indicator I have got to work in the long term is one I wrote myself... Here comes that BUT again... But it does not make enough to cover the commission.

No matter how you look at the TIME the issue is always going to be using old data that has been manipulated and changed that causes the unpredictability of indicators that also creates a illusion of a profitable system after the fact.

That is my useful input for the day..

masterm1ne · May 4, 2012

Quote from FreakofNature:

I really hate these posts in ET where you claim superiority because of this secret you can't explain because it cannot be put into words.

Arghhhhh

? Superiority... ? Secret ? ??

He is talking about time. Most of us learned what time was in 1st grade. I like how OP states several times how the logic is 'tricky....' or 'dizzying' it made me laugh...

Time and timing are critical to trading success, but it's not all that complex. You just need to be aware when price is telling you when you are wrong. Price (and time for that matter) can do anything after you enter. You have no control over the ultimate outcome of a single trade. Therefore, you can bail on a trade after a certain amount of time, but it might still be a winner ultimately, it should be price action and your plan which confirms your exit.

Quote from tradin4profits:

Trader/Gambler ...same thing no matter if you like it or not!

Used to deny this but it is true

Quote from Rol:

WellNekeâs journalâs are a great example of once apparent skill now coming into question. Many of us have had a hot hand at one time in our trading career. Could it really just be a lucky streak?

Neke had an edge, clearly. Several years of return at the rate he did is not luck by any stretch of the word! They key is he isn't adapting. I'm pretty sure he's still trying to use the same old methods. Think, if you made so much money doing 1 thing for multiple years, how hard would it be to change? Yet another great paradox inbedded in trading. I guess "you can't teach an old dog new tricks."

Quote from Satan's Helper:

Every free indicator I have back tested has proven to be worthless.... That is my useful input for the day..

Thank you Satan for your "useful" input.

murray t turtle · May 4, 2012

Quote from RangeTrader:[/i

To summarize everything...

Some dizzying logic huh? If price isn't rising when it's supposed to be rising, and when it's supposed to be rising by, it's likely going to fall! Traders need continual emotional reinforcement via price movement in their favor to keep pushing in a direction.

The bottom indicator I have here post-marks each exact high on the next downward cycle, and each exact low on the next upward cycle. The locations of the highs and lows generally keep occurring in the same relative location in time for upto hours at a time. [/B]

===========
Range/Trend
Oh! You gave a way one of my ''secrets'' on your chart;
the ''secret ''Donchian channel.Well it pays to have more than 1 ''secret'' Ever noticed indicators may stop working after exposed; then resume working later??.LOL

Price fall is more likely in a bear market[below secret 200 dma];
bull markets [above 200dma]are full of sideways trends, then up again.

RangeTrader · May 9, 2012

I prefer the 116 SMA. I have a modified version though.

stock777 · May 9, 2012

interesting that they post 1000's of words, but cant manage a simple trade call here.

like buy XYZ, target X, stop Y

interesting

failed_trad3r · May 9, 2012

Quote from KastyG:

so true. how do you tell the difference?

Well, if you trade mechanicly you will notice that an edge disappears. if you trade discretionary i.e. 10 different systems through eachother you won't be able to discern what factor caused your edge to fail, it is seen as one edge.

oilfxpro · May 9, 2012

Quote from RangeTrader:

I prefer the 116 SMA. I have a modified version though.

nutcase!

116!It is a lagging number on a roulette wheel

oilfxpro · May 9, 2012

Quote from RangeTrader:

There are a zillion people chasing around indicators looking for the best signals and this and that... You can look at every price cyclic indicator in existence, and MACD and etc... Trade off RSI divergences, etc... And still lose.

There is one little missing key which a lot of good traders understand instinctively, but can also be put in number!

Time is the missing key. A lot of people see the same trade setups, and jump into the same divergences off of lows/highs, etc... But, they don't have a time stop.

Each trade setup has an expiration date. If price isn't moving in your favor within a certain amount of time the odds are price will do the opposite of what the technical setup was. Think about it... A bunch of people see a long setup. They all start diving in... Then they sit around waiting for it to start rising... If it doesn't start rising, only a matter of time before they start getting scared. If I take a trade setup that is bad time rules generally get me out without a loss before it moves against me.

To summarize everything... If price isn't rising off a divergence within the amount of time it should be rising, and in the amount it should be rising... Fear will build in the longs and price will likely drop again.

Or vice versa.

Some dizzying logic huh? If price isn't rising when it's supposed to be rising, and when it's supposed to be rising by, it's likely going to fall! Traders need continual emotional reinforcement via price movement in their favor to keep pushing in a direction.

Attached is a chart of bernanke's recent speech after FOMC. Notice that each bottom and top is occurring in relatively the same same number of bars or ticks. Each move is taking about the exact same "relative" amount of time to bottom or top. I was talking to a banker who trades currency recently and was surprised he understood time rules perfectly and used them in his trading...

Whatever timeframe I'm using... 25 bars/ticks/minutes is the most ill hold a trade for unless the trade is moving heavily in my favor. That is the far upper end though. You should start seeing a move go in your favor in around 10 candles from a good setup. If you let it go past 40 candles and it still isn't moving in your favor your a gambler... Not a trader! If your counter trending you honestly need to be in and out within fifteen candles... Tricky stuff! If I miss the long setup, I sometimes take the short setup... Only if the trend is really slow though.

The bottom indicator I have here post-marks each exact high on the next downward cycle, and each exact low on the next upward cycle. The locations of the highs and lows generally keep occurring in the same relative location in time for upto hours at a time.

Looks like why Dr Baron Rothschild gave up trading, and started selling courses on trend trading.Selling trading education is guaranteed income , trading is not guaranteed income , only losing is guaranteed.