Have you used dbphoenix's teachings to become a successful trader?

marketsurfer · Feb 22, 2015

fortydraws said:
"When the quantity brought to market exceeds the effectual demand, it cannot be all sold to those who are willing to pay the whole value of the rent, wages, and profit, which must be paid in order to bring it thither. Some part must be sold to those who are willing to pay less, and the low price which they give for it must reduce the price of the whole. The market price will sink more or less below the natural price, according as the greatness of the excess increases more or less the competition of the sellers, or according as it happens to be more or less important to them to get immediately rid of the commodity. The same excess in the importation of perishable, will occasion a much greater competition than in that of durable commodities; in the importation of oranges, for example, than in that of old iron."

[and here we have the first description in modern finance of what is known as a 'hinge,' i.e. price equilibrium - fortydraws]

"When the quantity brought to market is just sufficient to supply the effectual demand, and no more, the market price naturally comes to be either exactly, or as nearly as can be judged of, the same with the natural price. The whole quantity upon hand can be disposed of for this price, and can not be disposed of for more." Adam Smith, The Wealth of Nations, (well known Guru of Trading)

I'd say something clever here, but the intelligent will understand the point of my post.

100% correct BUT how does that help you make money in the financial markets--- truth is, it doesnt. Peace my brother. surf

justrading · Feb 22, 2015

In broad terms I quite agree that AMT explains the movement of the market. In the short timeframe, one has to accept that whales move price because they can and want to. That movement has nothing to do with fair value or even the value that the market ascribes to it.

I've traded ES during European market hours and twice had stops that were close to 3 points from the market taken out by a spike that lasted all of 5 seconds. To say I was pissed off would be an understatement, and yes, I stopped trading that outside RTH.

dbphoenix · Feb 22, 2015

dbphoenix · Feb 22, 2015

justrading said:
In broad terms I quite agree that AMT explains the movement of the market. In the short timeframe, one has to accept that whales move price because they can and want to. That movement has nothing to do with fair value or even the value that the market ascribes to it.

I've traded ES during European market hours and twice had stops that were close to 3 points from the market taken out by a spike that lasted all of 5 seconds. To say I was pissed off would be an understatement, and yes, I stopped trading that outside RTH.

If your post is in reference to the ES, you're correct. The short-term movements have little to do with fair value per se because of all that goes on in the ES/SPX. This is not the case with the NQ, which is why I trade that instead.

However, over the longer-term, the ES is just as subject to AMT as any mean-reverting instrument, as I showed in my chart.

VPhantom · Feb 22, 2015

fortydraws said:
I am neither jealous nor distrustful of those who approach this activity differently from me. The fact that I do not understand how to use market profile to make a consistently profitable trading plan is no reason for me to doubt that there are traders who can and do use it for just that purpose. [...] I have no need to learn more than one, and have no desire to spend my days criticizing practitioners of a method different from my own.

Very well put. I'll add that I learned a new word today:

Bigotry is a state of mind where a person obstinately, irrationally, unfairly or intolerantly dislikes other people, ideas, etc.

fortydraws · Feb 22, 2015

marketsurfer said:
100% correct BUT how does that help you make money in the financial markets--- truth is, it doesnt. Peace my brother. surf

The only truth is it does not help you. You need not jump to the erroneous conclusion that it therefore helps no one. You speak of the financial markets as though they are somehow different from any other market that has ever existed. They are not. It is as though you cannot possibly demean yourself to be bothered with something that could possibly be governed by something as archaic and prosaic and as simple as the Law of Supply and Demand, so you postulate an entire mythology of the complex mystic market to elevate your own understanding of what it is you think you do. It really does strike me as an ego thing. I wish you peace as well. I wish you also to enjoy at some point a more open mind about these matters.

fortydraws · Feb 22, 2015

This all really boils down to this: You either believe the premise conveyed in the picture below or you don't. If you do, then there is a good chance you might find DbPhoenix's materials and trading method useful to you. If you do not accept that premise, then there is little likelihood you will find DbPhoenix's method useful to you, and you should look for something else to help you. To continue this discussion is a colossal waste of time, because the discussion has been and continues to be framed around what people seems to think about DbPhoenix, rather than around the premise at the foundation of what he teaches which is the shockingly controverisial assertion that the financial markets are governed by The Basic Law of Supply and Demand.

justrading · Feb 22, 2015

dbphoenix said:
If your post is in reference to the ES, you're correct. The short-term movements have little to do with fair value per se because of all that goes on in the ES/SPX. This is not the case with the NQ, which is why I trade that instead.

However, over the longer-term, the ES is just as subject to AMT as any mean-reverting instrument, as I showed in my chart.

I mentioned the ES but in reality short term apparently irrational price movement can be seen elsewhere. I've tracked CL following the EIA report and as a single example, inventory build much in excess of what was expected was followed by a steady rise in price for much of the day. I had an open option position and this was one time I said I'm not going along with this BS. Price went down sharply into the close and continued that trend into the next day.

My point is that over the long term, price will reflect what the market deems to be fair. It doesn't take a straight line getting there so that is where we observe the ebbs and flows of buyers and sellers trading. We shouldn't think that AMT explains any and all price movement. Sometimes there is, for want of a better word that comes to mind, manipulation by traders large enough to move price for no other reason than they want to. It is of course interaction between buyers and sellers, but describing that as AMT at work is like describing rape as one form of relationship between a man and a woman.

dbphoenix · Feb 22, 2015

justrading said:
I mentioned the ES but in reality short term apparently irrational price movement can be seen elsewhere. I've tracked CL following the EIA report and as a single example, inventory build much in excess of what was expected was followed by a steady rise in price for much of the day. I had an open option position and this was one time I said I'm not going along with this BS. Price went down sharply into the close and continued that trend into the next day.

My point is that over the long term, price will reflect what the market deems to be fair. It doesn't take a straight line getting there so that is where we observe the ebbs and flows of buyers and sellers trading. We shouldn't think that AMT explains any and all price movement. Sometimes there is, for want of a better word that comes to mind, manipulation by traders large enough to move price for no other reason than they want to. It is of course interaction between buyers and sellers, but describing that as AMT at work is like describing rape as one form of relationship between a man and a woman.

Given that a trade represents an agreement between a buyer and a seller and each is free to enter into the trade or not, AMT does in fact "explain" any and all price movement. Sellers cannot move price without willing buyers. Buyers cannot move price without willing sellers. What is "fair" is what represents value to either one party or the other, perhaps both. This changes from one price print to the next.

justrading · Feb 22, 2015

Jeez DB, let's not get pedantic here. I thought my rape analogy addressed your point. A run on stops hardly reflects willing buyer willing seller. Some do say that rape happens because women invite it, I don't accept that. You don't need to feel any obligation to defend AMT, it is perfectly logical. It just does not explain every movement of price in the market in the context of seeking a generally accepted value. Some price movements have nothing to do with finding accepted value. Perhaps you don't see that in NQ, but I track instruments in FX, futures and stocks and I see that all the time.