Have you used dbphoenix's teachings to become a successful trader?
- Thread starter FeetFirst
- Start date
Exactly. He was no more claiming authority when he was explaining parts of his own method in 2011 (facing very aggressive detractors, like some of those we saw here). I'm surprised at the amount of energy he devotes to price action traders given his own experience on the receiving end.
The one thing I take home from my cursory read is that he doesn't make a compelling case for the "price is unrelated to its probable path" camp. Price Drivers™ requires analysis of, and I quote him: "almost every possible market influence outside of price action to get a [...] percentage chance of a particular outcome." Holy infinite resources Batman! A retail trader can't discover enough of those variables, and quantify each of their relative influence, to the point of having a significant edge. Maybe in an obscure penny stock or for a 1000-employee firm, but even then things like insider trading, though illegal, still occur unpredictably, making price itself sometimes factor in news ahead of time. Regardless, for sure I wouldn't have spare time for forums if I had to manage an analysis system of this massive scale! :eek: I'd need a damned tiny market or to stumble upon a hugely influential single source of information to think of attempting this. Insider access to dark pool books, for example.
Wyckoff's model is more practical: "It is not necessary for you to consider any of these factors because the effect of all of them is boiled down for you on the tape."
But I really like that @marketsurfer agrees with Wyckoff part-way: "If you just study price, you are simply looking at the outcome of a certain mixture of variables." How to profit from that observation, that's where there's a T on the road: we see it as an opportunity to look for clues about changes in market behavior (whale tracks, etc.), whereas he prefers to identify the individual variables (out of near-infinite complexity) at the source to calculate each of their influence. The two aren't mutually-exclusive.
At least my fascination with your most vocal detractors has now run its course.
Folks, here is a bit of wisdom--and a great way to filter the BS
http://www.economist.com/news/finan...s-are-not-tested-rigorously-enough-false-hope
http://www.economist.com/news/finan...s-are-not-tested-rigorously-enough-false-hope
that was a bit of hyperbole on my part. what it should read is nearly every accessible and known market influence-- surfExactly. He was no more claiming authority when he was explaining parts of his own method in 2011 (facing very aggressive detractors, like some of those we saw here). I'm surprised at the amount of energy he devotes to price action traders given his own experience on the receiving end.
The one thing I take home from my cursory read is that he doesn't make a compelling case for the "price is unrelated to its probable path" camp. Price Drivers™ requires analysis of, and I quote him: "almost every possible market influence outside of price action to get a [...] percentage chance of a particular outcome." Holy infinite resources Batman! A retail trader can't discover enough of those variables, and quantify each of their relative influence, to the point of having a significant edge. Maybe in an obscure penny stock or for a 1000-employee firm, but even then things like insider trading, though illegal, still occur unpredictably, making price itself sometimes factor in news ahead of time. Regardless, for sure I wouldn't have spare time for forums if I had to manage an analysis system of this massive scale! :eek: I'd need a damned tiny market or to stumble upon a hugely influential single source of information to think of attempting this. Insider access to dark pool books, for example.
Wyckoff's model is more practical: "It is not necessary for you to consider any of these factors because the effect of all of them is boiled down for you on the tape."
But I really like that @marketsurfer agrees with Wyckoff part-way: "If you just study price, you are simply looking at the outcome of a certain mixture of variables." How to profit from that observation, that's where there's a T on the road: we see it as an opportunity to look for clues about changes in market behavior (whale tracks, etc.), whereas he prefers to identify the individual variables (out of near-infinite complexity) at the source to calculate each of their influence. The two aren't mutually-exclusive.
At least my fascination with your most vocal detractors has now run its course.
Vphantom- a fellow seeker of truth-- thanks for the like-- this is for you, the paper from the article--- . https://faculty.fuqua.duke.edu/~cha...Papers/P116_Evaluating_trading_strategies.pdf
Certainly, in automated systems out of sample testing is a basic requirement, and so is forward testing before even thinking of going live. And even live, conditions change, systems need maintenance to stay up to date. On that front, I enjoy Adam Grimes' methodical musings, and I wouldn't trust a third party with my money without knowing a heck of a lot about what they do.
Unfortunately, reading market behavior can't really be automated it seems, so it's up to each practitioner to go through their own personal back and forward testing, after they have what they think is a good grasp of it and a decent plan. Heck, scratch Wyckoff, that's the basic path for any trader.
Let me qualify that: for any trader willing to develop their own plan. Shopping for shortcuts or money management on the other hand, seems like a minefield.
Thanks! Fits nicely in my "quant" folder.
If by "trade what you see" you mean "trade what you see, not what you think", then yes, if you're seeing what you've been looking for as a result of your testing which yielded consistent profits over a series of trades. It is not touchy-feely by any means. One of the essentials is the precis of the scientific method I posted four up.
Does it give you an edge? Maybe not as much as being married to Lloyd Blankfein's daughter.
Since the interest in this thread continues and it is in ER, I'm going to repost something I posted to TL yesterday. It may be of benefit to somebody.
Today was an excellent example of the "challenges" facing those who want to trade AMT intraday. While yesterday was as easy as falling off a log, today one was more likely to be rolled over. The day illustrated the principles of AMT just fine. The problem was trading it.
Trading the SLA is about as straightforward as it gets. One knows where to enter, where to exit, when to stop. The AMT, however, requires a sensitivity to price movement -- i.e., trader behavioir -- that is much greater than that required by the SLA. One can overcome this, however, by being stringent about the rules he follows to engage the market.
For example, if one is going to trade only the extremes, which is a sound approach, what is his entry trigger going to be? What are going to be his criteria for determining whether or not the trade is successful? Where is he going to exit if those criteria aren't met?
What are his expectations for the trade? Does he expect price to reach the opposite extreme? What is he going to look for to tell him that it might not? What if he's wrong? What are his criteria for re-entry?
Today the initial long was rather straightforward, though taking it took a bit more confidence than the trader who is new to this might have. And given the speed of the market, getting filled might have been an issue. Even so, let's say that trader got in and wanted to ride the trade all the way to the opposite extreme. But the opposite extreme was at 60 and price turned at 59. Was this enough? What could have told you to exit the long and look for a short? Was there a fail? Was there a lower high? Where, again, would your entry trigger have to be? How much room would you have to give it? Could you tolerate the room required?
Then there was the drop to the halfway level. Yesterday, price slid right through, no problem. Today it reversed. What to do? You can't go long unless you exit the short. What criteria are you going to use to exit the short? What then are the criteria you're going to use to go long instead? And what about the exit criteria? Can you be satisfied with setting a stop at breakeven, then sitting around for two or three hours waiting for your trade to go in the desired direction only to have it reverse on you unexpectedly and stop you out at breakeven?
Above all, remember that the market does whatever it has to do to teach you those lessons which will lose you the most money (the market, of course, is not sentient; the games that are played and the "lessons" that are learned are games that the trader plays with himself, and the lessons are those that he convinces himself are being taught by something outside himself).
No one can tell you what you should want. You may find that the easiest trades are the first one or two and that, over the long haul, it's best if you just quit (in all honesty, I would not have been here yesterday afternoon if it had not been for you guys). Or you may find that trading ranges at all is just not your cup of tea, and that you trade better by waiting for trend days (they don't take long to show themselves, after all).
But whatever you decide, remember that there is a structure to this upon which you can rely. It may not accommodate your every whim, but neither is it random. Traders are looking for trades just like you are. That what you're looking for does not at the moment jibe with what they're looking for is to be expected. You do, however, have to decide just what it is you want and what you're willing to settle for. When someone starts talking about "feelings", freeze your intake valve. This isn't about feelings. It's about ranges, the medians of those ranges, and the limits of those ranges. The principles may not play out according to the book on any given day, particularly if other traders are just as confused as you are. On days like today, learn what you can from it, apply what you learn to what you already know, and to hell with the rest. If you need to tweak something here or adjust something there, try it. But don't junk your whole tactical set into the dumpster and start all over again for the sake of a day that may not reoccur for weeks. Or months. Or ever. Rather shrug your shoulders and start fresh tomorrow.
Today was an excellent example of the "challenges" facing those who want to trade AMT intraday. While yesterday was as easy as falling off a log, today one was more likely to be rolled over. The day illustrated the principles of AMT just fine. The problem was trading it.
Trading the SLA is about as straightforward as it gets. One knows where to enter, where to exit, when to stop. The AMT, however, requires a sensitivity to price movement -- i.e., trader behavioir -- that is much greater than that required by the SLA. One can overcome this, however, by being stringent about the rules he follows to engage the market.
For example, if one is going to trade only the extremes, which is a sound approach, what is his entry trigger going to be? What are going to be his criteria for determining whether or not the trade is successful? Where is he going to exit if those criteria aren't met?
What are his expectations for the trade? Does he expect price to reach the opposite extreme? What is he going to look for to tell him that it might not? What if he's wrong? What are his criteria for re-entry?
Today the initial long was rather straightforward, though taking it took a bit more confidence than the trader who is new to this might have. And given the speed of the market, getting filled might have been an issue. Even so, let's say that trader got in and wanted to ride the trade all the way to the opposite extreme. But the opposite extreme was at 60 and price turned at 59. Was this enough? What could have told you to exit the long and look for a short? Was there a fail? Was there a lower high? Where, again, would your entry trigger have to be? How much room would you have to give it? Could you tolerate the room required?
Then there was the drop to the halfway level. Yesterday, price slid right through, no problem. Today it reversed. What to do? You can't go long unless you exit the short. What criteria are you going to use to exit the short? What then are the criteria you're going to use to go long instead? And what about the exit criteria? Can you be satisfied with setting a stop at breakeven, then sitting around for two or three hours waiting for your trade to go in the desired direction only to have it reverse on you unexpectedly and stop you out at breakeven?
Above all, remember that the market does whatever it has to do to teach you those lessons which will lose you the most money (the market, of course, is not sentient; the games that are played and the "lessons" that are learned are games that the trader plays with himself, and the lessons are those that he convinces himself are being taught by something outside himself).
No one can tell you what you should want. You may find that the easiest trades are the first one or two and that, over the long haul, it's best if you just quit (in all honesty, I would not have been here yesterday afternoon if it had not been for you guys). Or you may find that trading ranges at all is just not your cup of tea, and that you trade better by waiting for trend days (they don't take long to show themselves, after all).
But whatever you decide, remember that there is a structure to this upon which you can rely. It may not accommodate your every whim, but neither is it random. Traders are looking for trades just like you are. That what you're looking for does not at the moment jibe with what they're looking for is to be expected. You do, however, have to decide just what it is you want and what you're willing to settle for. When someone starts talking about "feelings", freeze your intake valve. This isn't about feelings. It's about ranges, the medians of those ranges, and the limits of those ranges. The principles may not play out according to the book on any given day, particularly if other traders are just as confused as you are. On days like today, learn what you can from it, apply what you learn to what you already know, and to hell with the rest. If you need to tweak something here or adjust something there, try it. But don't junk your whole tactical set into the dumpster and start all over again for the sake of a day that may not reoccur for weeks. Or months. Or ever. Rather shrug your shoulders and start fresh tomorrow.