NumberZ Day Trading Journal

[NumberZ]

So anyone knows where these percentages come from?

Watching the Brooks Trading Course I haven't seen any statistics such "99.85%" except in one video where Brooks says that if price is trading near the high of the day with one bar left to go (5 minutes for Brooks) then there's a "99.something" chance that the low of the day is in. He uses that as an example of "useless" information - not "useful".

Do you know what Brooks was claiming when he used that statistic you mention?

He speaks about 60%/40% odds a lot. At any time, the market is somewhere between a 40% and 60% chance of going up, or vice versa. Sometimes, that edge might go above that 60%. Sometimes it might go below the 40%. Those times I guess are what math people call "outliers".

Brooks uses these probabilities along with "risk" and "reward" to come up with "the trader's equation." If a trade has a positive "trader's equation" then take it.

If it has a negative "trader's equation", then don't.

I don't get the idea that these probabilities are the result of years of spreadsheets of data. I get the impression that the 60%/40% split is from experience.

I'm ok with that.

 

[NumberZ]

both use seemingly dubious statistics.

See my answer I wrote before I read this post. I've not watched the whole course yet. It's very long and I'm skipping around. In one video Brooks uses what he called "useless" statistic. I'd like to know the context of the video you saw him use the statistic you have a question about.

 

[NumberZ]

Correct.

Why spend time selling courses and books when you could scale your methodology across multiple markets and literally become filthy rich?

This assumes a method is scalable with no restriction. And this assumes Brooks would have the personality to allow such scaling.

I remember watching a webinar Brooks gave. It was an older one on youtube and not from his channel. I don't remember the specifics, but Brooks did talk about his trading size. It was far below what he considers "institutional." He said that was what he was comfortable with. Trading larger he said would make him nervous. He finds trading relaxing and enjoyable. More size would take that away from him. In his course, many times he tells you to trade the "I don't care size." Trade the size you can trade without the money getting in you head.

For me that is pretend micro contracts

This assumes too that the end all be all of life for Brooks is to become "filthy rich." Maybe that is your goal. Maybe it is not Brooks's goal.

Have you been to college? You seem not just smart but educated. Many people who are experts in their fields and could make much more money in private industry choose to share their knowledge with others instead. Some do both. A good friend of my dad's, the late Alan MacDiarmid, did both: Spent his life teaching at the University of Pennsylvania, became wealthy developing conductive polymers, ended up winning the Nobel prize for chemistry. This man chose as his last teaching class before retiring to teach a small seminar to new freshman about his research activities. Not all people are motivated by money as the highest good.

Just take a look at the most successful fund in history - Medallion. They're very secretive and want as little as possible to be known about their methodologies and do their best to guard it.

I never heard of Medallion. Good thing there is Google and Wikipedia. Jim Simon's was a mathematician? That would be a different type of trading than Brooks teaches which is based on charts, wouldn't it? I could see wanting to keep that secret. If you have a machine that spits out computerized trades with a profit making edge? I'd keep that quiet and to myself too!

 

[NumberZ]

Day Two: 11:00 AM

Here is what the day has been so far. Short on most recent signal. First parabolic wedge (possible early high of day), followed by an H2 bull flag. And that looks like a final flag and parabolic wedge double top, a type of major trend reversal per Brooks trading course.

I have to start doing my real work soon, so this is last for me today. Update later today.

I am trying @maxinger's suggestion to use the US and exclude the European hours. Brooks also uses the US hours in his course. I learned today how to get US hours only on my Ninjatrader chart,

 

[NumberZ]

Day Two 11:30 AM

I have to get working. Short entry noted above is open at 2269.1, stop loss is 2271.50, and profit target is a MM of the day's range 2241.8. That is also a point above yesterday's high. Overnight high and prior highs are targets for support and resistance per Brooks Trading Course.

Price dropped a little below the overnight high and it has been waffling back above and below there for seven candles now as I finish typing this.

Update later tonight.

 

[qlai]

I'd like to know the context of the video you saw him use the statistic you have a question about.

At 4:42 he gives 99.95%, why not just say high 90’s!? Why have second decimal point precision! Maybe he was trying to be funny, can’t read any emotions in his voice

 

[NumberZ]

At 4:42 he gives 99.95%, why not just say high 90’s!? Why have second decimal point precision! Maybe he was trying to be funny, can’t read any emotions in his voice

In that context it does not bother me at all. He says "I've been trading now for 35 years. I've never seen a day that opened above the removing average and went all day without touching the moving average. So 35 years, that's a long time. And the statistic I use is 99.99% chance we are going to touch the moving average. And, in fact, there is a 99.95% chance we will have at least three bars below the moving average."

Today is a good day to put it to the test as price on the ES emini contract opened above its moving average and he says 99.99% it will touch the moving average. 99.95% there will be three 5 minute bars below the moving average.

Here is the ES emini with the moving average Brooks uses. It still has time to either do what he says it will do, or today is the .01% of the time that the ES emini does not at least touch its moving average.

I don't know if those are actual and mathematically accurate statistics from Brooks, or if it is simply exaggerated statements used for emphasis but not to be taken "literally." I am not boithered by it whichever way it is meant by him.

 

[NumberZ]

Update later tonight.

I heard the nice lady who lives inside the Ninjatrader platform call to me that my stop order was filled.

Result for today is -$8.00.

Being SIM this does not account for commissions.

One thing I have noticed in my "live" trades and also in my "back-test" is that trades often go to a point where I would get +5 points before reversing. I think maybe trade two micros, take a 5 point profit on one contract, and then a small stop loss on the second?

Thinking.

 

[NumberZ]

Today is a good day to put it to the test as price on the ES emini contract opened above its moving average and he says 99.99% it will touch the moving average. 99.95% there will be three 5 minute bars below the moving average.

Was between calls and saw that the ES emini did get back to its 20 EMA per Brooks. Tow candles traded below it. The low of those was 4220. The third candle then traded above the moving average. I place a buy limit one tick above the 4220 low of the first two candles. If the statistics were to hold, then we would get one more candle to trade below the moving average. I was filled, and set a sell limit at 4225.50. Brooks says that high five minute candle closes are magnets and act as support and resistance. A Sim 5.25 points. Maybe a set up to test?

 

[NumberZ]

Today is a good day to put it to the test as price on the ES emini contract opened above its moving average and he says 99.99% it will touch the moving average. 99.95% there will be three 5 minute bars below the moving average.

It took 44 five minute bars to do it but not only ES touch its 20 ema, but 14 candles traded below it.