List of Trading Rules!

...how true all that is. I came to regard TA with the same distaste as the pattern of capillaries on a fat old drunk's nose (came from too much looking in the mirror). Ain't nothin' on my charts but entry tripwires, reverses, and profit targets.

Re limiting the issues you trade, unless you are a genius, you will never develop the intuition you need to know when to override your system unless you stick to a few issues. I say one is almost too many. NQ gets my vote because it makes more per margin dollar invested than ES.
 
Quote from vegasoul:

the most important rule is to go against the trading rules of the majority
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I know how it may be possible for you to feel when you get a response like you did.

You have settle for the thought that the person needs to inject some superficial humor into the thread for his reasons and not at your expense.

I agree with your comment. That is why I always let the T&S ride on my screen and I take seriosly the BBid and BAsk and their numerical ratio. I know at all times the majority is at the mercey of the minority who CONTROL the market at all times.

What ever the majority thinks, they are screwed simply because they do not have control and at that very moment they persist in having a pending intention that will take them into the wrong side of the market.

Hooray for you for making a super and brief hard hitting true rule to always abide by.
 
Quote from Grob109:

I agree with your comment. That is why I always let the T&S ride on my screen and I take seriosly the BBid and BAsk and their numerical ratio. I know at all times the majority is at the mercey of the minority who CONTROL the market at all times.

What ever the majority thinks, they are screwed simply because they do not have control and at that very moment they persist in having a pending intention that will take them into the wrong side of the market.
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Nice point! I fundamentally agree with this. Most people don't even get this point, although is so logical.

I read tape on the ES&NQ all day long, it's like in my blood by now. And I know as one of my most iron rules that the minority is in almost complete control of the majority on the futs, almost all the time. That's just logical, with the high loser:winner ratio.

Basically, my most summarized way of saying what the tape size is about is: The larger the order size, the higher the significance - And vice versa. While 100+ and particularly 250-lots are very conclusive as to the right commitment, in fact all the smaller lot sizes become less and less significant and eventually contrarian!

What I mean is: 1-and-2-lots are generally contrarian straight away. Those people who deal 1-2 cars are quite frankly generally wrong.
If I have plenty of these (punters), I will fade them. Counts for anything up to 5 cars (ES & NQ). After 5 cars, contrarian starts turning into significant. Basically, 10+ car-people have rudimentary clues and 20+ car-people are starting to get serious.

Caveat here: Not every 1-or-2-car dude is a punter, this is just general tape reading. But while all this sounds pretty cruel - This is the reality of the market, folks. Let's face it: With a win rate of 3% of people in the futs, there's 3% of people taking the cash off a hell of a lot of others. They must be contrarian to the very vast majority of the crowd in order to do the big cash!

And last but not least: There's a reason why the 100-car people are dealing 100 cars... :)

That's the way it is. Know who you're shadowing on the tape!!!

I agree with the rule to "never abide by the rules everyone else uses", as well. 100% agree. They're all edge traders with fancy indicators and systematic setups and gawdknowswhat - As the markets become more efficient, they'll die sooner or later anyway. Just a matter of time now - LOL

Compliments,
Scientist
 
Quote from hypostomus:

...how true all that is. I came to regard TA with the same distaste as the pattern of capillaries on a fat old drunk's nose (came from too much looking in the mirror). Ain't nothin' on my charts but entry tripwires, reverses, and profit targets.

Re limiting the issues you trade, unless you are a genius, you will never develop the intuition you need to know when to override your system unless you stick to a few issues. I say one is almost too many. NQ gets my vote because it makes more per margin dollar invested than ES.
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LOL! The capillaries analogy... :D

But honestly - I'm glad we agree here. Price and volume is all that counts. Forget lagging MA's and mathematical indi's. It's BS.
I mean - honestly - many of the best traders to have ever lived were pit traders - who uses TA in the pit? :confused:

This is one point that really convinced me. And trust me - It was NOT easy to convince me in the first place!

Regarding NQ - I totally agree. My favorite is NQ, but my 2nd is ES, and I trade both all day - parallel - picking the better setup in each one at all times... Great selection method...

Currently still doing ~15-20 futs trades per day, though.

Best,
Scientist.
 
..now that is interesting. If my brain had another half maybe I could put it to work on ES. Do you typically have trades on in both simultaneously? Even if so, I am surprised (easily, unfortunately) that you put on so many trades a day. I only trade the AM (sadly, hafta work to feed the habit), but looking at post-morning follies I would have thought that maybe three trades on average would handle the rest of the day, unless it starts limit cycling. If you don't mind my asking what kinds of trades are you putting on to trade so often? Not asking for anything proprietary, of course. Best regards. - Mike
 
Quote from hypostomus:

..now that is interesting. If my brain had another half maybe I could put it to work on ES. Do you typically have trades on in both simultaneously? Even if so, I am surprised (easily, unfortunately) that you put on so many trades a day. I only trade the AM (sadly, hafta work to feed the habit), but looking at post-morning follies I would have thought that maybe three trades on average would handle the rest of the day, unless it starts limit cycling. If you don't mind my asking what kinds of trades are you putting on to trade so often? Not asking for anything proprietary, of course. Best regards. - Mike
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Hi hypostomus,

Nothing proprietary, not to mention secret, really. Just trading!

And no, I generally don't tend to have trades in both - I pick either one (the better one).

I read the tape a lot and tend to want to enter a trend, exit for a breather, ride that breather, then re-enter the trend and so on. Basically slalom through rather than "sitting through". But I'm currently trying to do larger and less frequent trades in larger fractals as well, so yeah. Basically SCT is my ultimate goal here.

Try that all day long and you can easily do 15 trades.

What kinds of goals I go for? Generally 6-12 Ticks on NQ or 4-10 on ES. Sometimes I let partials run on, though. I want to have a hitrate of 70-90%, though. If you read tape and trade immediate market action, this is indeed very possible. I'm currently aiming to consistently average ~50% of daily range, but there are people around who apparently can do a lot lot more than that. I think Jack Hershey once mentioned 300% of daily range as quite realistic once you get the hang of understanding flow in and out. However, he's been in this business about 1500% longer than me... LOL
But in another 30 years or so... Well see how we go.

If you have a really good look at the market and the opportunities particularly tape-reading can bring, you'll realize that the potential is only limited by your own proficiency and imagination... There are many ways of extracting money from the markets. If they all work, why not take the best from all of them?

Hershey's SCT deals with that, via being aware of the common stops of all the other traders using their various approaches and then just taking the best from them... Study it and you'll see. I don't use much at all from the ways Hershey trades (i.e. none of his indicators etc), but I do understand the most valuable concepts and particularly that of fractality and SCT. Its worth a read, just to add to your arsenal. Another great tool in the box.

Regards,
Scientist.


P.S: There are actually scalpers out there, particularly exchange members, who do over 100 trades per day... :cool:
 
...thanks for the explication. Very enlightening. Have you automated your tape reading? Is the next step beyond TA no chart at all? - Mike
 
Open what you see, not what you feel; manage with what you know, not what you see; close with what you see, not what you feel or know, open again with what you see
 
the most important rule is to go against the trading rules of the majority
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Okay, more specifically to trading rules, the majority - which I will presume means the 70% of the money that actually drives the market - wants to be long when a stock breaks above the 200 day sma, and out or short below it.

The quote above would have you believe that the right thing to do would be to go short above the 200 and long below it. How many charts would you need to look at , or how much money would you need to lose to realize the fallacy of the quote?
 
Quote from inandlong:

Okay, more specifically to trading rules, the majority - which I will presume means the 70% of the money that actually drives the market - wants to be long when a stock breaks above the 200 day sma, and out or short below it.
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Sorry, but this is inaccurate.

a) The majority is NOT driving the market. Period.
b) 70% of the money does NOT drive the market, either. See a)
c) Going long or short, whatever on a break above any MA is NOT a trading rule. It's a trading methodology / approach or part of it.
d) How can you judge what is the "right" thing to do at the break of a 200 day SMA?
I could trade the 1-min and you trade the 15-min and we'd have 2 completely different views, 2 different positions, and both make money.

The quote above would have you believe that the right thing to do would be to go short above the 200 and long below it. How many charts would you need to look at , or how much money would you need to lose to realize the fallacy of the quote?
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Refer c) and d)

Although I know about the 200SMA cross (and I have studied your swing / pos methodology by the way, inandlong), I rarely bother looking at it. Does that mean I'm breaking your 200SMA rule by ignoring it? Am I now ignorant / going to lose money?

By the way - Regarding the "common crowd thing" - I just checked on the 200SMA on the NQ. Of the last 6 times the NQ crossed the 200SMA, you would have lost money in 5 cases upon opening position (long) in the direction of the cross. So that's an 87% failure rate for your SMA "rule" - sorry if I got something wrong here, but in this case the "fade the common rules" theory would have made me lots of money, most of the time.

You're probably going to say that only applies for stocks, but I checked on a couple of stocks, and the same thing applies.

Either way, the more common a "rule" in this sense is, the more happy I will be to fade it. As discussed before - There's actually a reason why <5% of people make >95% of the money. And their secret is not crowd-following. It's crowd-fading.

This is the most puerile and simple logic of trading, gambling etc, isn't it? How could anybody deny it?

I don't know but I constantly and persistently violate (that is = exploit) the most common "trading rules", and make money doing it.
Maybe I'm a freak then and got it all wrong?

Maybe I should buy one of those Pristine books and start learning from scratch, so I get it right this time.

Correct me if I'm wrong anywhere here. I'm always open and willing to learn.


Regards,
Scientist.
 
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