[POLL] Are Bullish and Bearish Day Trading patterns Unique OR Similar ?

[java]

The thing about trading stocks long is if it doesn't work out you own a stock just like everybody else. You can hold it until you die. Nobody wants to leave their heirs a portfolio of shorted stocks. When short there is always the nagging feeling that someday you are going to need to cover.
otherwise, the old saying, Stairs up Elevator down.
For most non stock futures traders we make no distinction between long or short. Outside money from funds on behalf of high net worth clients almost always comes in on the long side expecting (and sometimes starting) a larger trend up. But they don't last long. We will still be buying and selling after they have taken their profit or abandoned the idea.
Unlike stocks, physical commodities do have some intrinsic value. So they can only go so low and there is no panic selling but often they can get scarce and there is panic buying.

 

[volpri]

Markets go up. Markets go down. Markets go sideways. For Day Trading you need to determine if price is in a trend or range.

Trend are of two sorts. 1) Breakout..spike..(both are samething ..denotes strong trend) or 2) channel (large but tight ..strong, broad and weak..and subset of small tight channels with no p.b.'s).

Ranges are small or big. If small trade long or short in direction of larger day trend. If broad buy low sell high. Sell high buy low.

For daytrading one should be aware of support and resistance zones and how price acts as it gets close or in these zones.

A trader need strategies and tactics to employ to trade within each of the phases of the market. PA yesterday or a week ago mean little for day trading today except in terms of resistance and support points. What is more important is "what" is the market doing today and "How" or in what manner is it doing it.

Patterns take place in trends. They take place in Ranges. They take place in and outside of support and resistance zones. By patterns i mean wedges..flags..triangles...channels..mini channels...mini trends..reversal...gaps...etc..PA a month ago means very little for daytrading.

Each day unfolds differently. No patterns are exactly alike. Each has bullish and bearish pressures. One needs to constantly evaluate which is stronger. There are Institutions that are bearish and bullish all at the same time and on every single bar. Eventually one side wins.

 

[Mtrader]

Not all people trade this way, there are many other ways. I see this clearly as I don't use all these things. I use purely mathematical models. I understand that most people don't trade the way I trade.
I will show you how different it can be from what you do.

Markets go up. Markets go down. Markets go sideways. For Day Trading you need to determine if price is in a trend or range.

I don’t see trend or range, I always have a trend. But trend has different strenghts that I can mesure ( like 1,2,3,4,…). Weak trend will correspond with what you call range probably.

Trend are of two sorts. 1) Breakout..spike..(both are samething ..denotes strong trend) or 2) channel (large but tight ..strong, broad and weak..and subset of small tight channels with no p.b.'s).

I have no break outs, no spikes, no support, no resistance, no channels…

Ranges are small or big. If small trade long or short in direction of larger day trend. If broad buy low sell high. Sell high buy low.

I have dozens of scenario’s (mathematical models) that are used for trading. Each strenght, or weakness of strenght has it own scenario for entering or exiting. Each scenario is built for a specific situation.

For daytrading one should be aware of support and resistance zones and how price acts as it gets close or in these zones.

I don’t have support, resistance and don’t watch how prices act.

A trader need strategies and tactics to employ to trade within each of the phases of the market. PA yesterday or a week ago mean little for day trading today except in terms of resistance and support points. What is more important is "what" is the market doing today and "How" or in what manner is it doing it.

I only have to follow the scenario, the mathematical model, all the rest is irrelevant as everything is automatically incorporated in the math models.

Patterns take place in trends. They take place in Ranges. They take place in and outside of support and resistance zones. By patterns i mean wedges..flags..triangles...channels..mini channels...mini trends..reversal...gaps...etc..PA a month ago means very little for daytrading.

I have something similar as patterns; my different scenario’s. But each scenario will repeat over and over again in the corresponding mesured strength. So these scenario’s are always identical for as far as they have importance for entering or exiting trades. Only the lenght can vary. Sometimes the scenario can completely develop in 15 minutes, but sometimes it can also take 60 minutes or even 5 hours. This is because the scenario’s are self adapting and try to take the maximum of the move. My PC is calculating non stop from opening till close.

Each day unfolds differently. No patterns are exactly alike. Each has bullish and bearish pressures. One needs to constantly evaluate which is stronger. There are Institutions that are bearish and bullish all at the same time and on every single bar. Eventually one side wins.

Each day unfolds in the same way. Strenght defines which scenario to take and switches to another scenario if the strenght changes. Automatically and self adapting.

 

[trdes]

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[trdes]

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Very nice. I understand if you can't answer and also understand I am speaking in relative terms here. But did you find this out prior to having money? or did you already have money, than found this out?

Not that it particularly matters, I've just noticed a lot of the best traders had money prior to making it big in trading. Have not heard of many success stories of people that have little capital and end up making there money trading from ground up.

 

[Mtrader]

Very nice. I understand if you can't answer and also understand I am speaking in relative terms here. But did you find this out prior to having money? or did you already have money, than found this out?

Not that it particularly matters, I've just noticed a lot of the best traders had money prior to making it big in trading. Have not heard of many success stories of people that have little capital and end up making there money trading from ground up.

I started with a 50K account. And wiped out before being consistently profitable. In 10 years time the total cost was around $300,000. This included renting computers ($22,000 a year), buying software, renting satellite dish connection in real time… I could afford it as I had 2 good running companies.

Could I make it without all this money? Today ,yes but at that time, no.

No because at that time the setup for trading was very expensive. There was no internet, so real time data was very expensive, decent computers and software was expensive.

Yes because today you have free software if you want (Ninjatrader). A PC is very cheap. Real time connection is very cheap because of internet. Commissions are much lower now.

I made 1 huge mistake. When I was around 25 I started a few companies. I was very successful , so I invested in a very aggressive way (lots of money even for startups) in every new idea I had. So I did the same when I started to trade and that was wrong. I invested during 10 years lots of money in something that was for 10 year only losing money. So, I overestimated my qualifications at that time. I thought that what I did in business was for me a piece of cake in trading too. That was a huge and very expensive mistake. I was studying at least 8 hours every day for 10 years and became humble again.I understood thru experience that I was not a genius.

What you should do to avoid the mistakes I made:

• Download Ninjatrader. $0.
• Take a real time datafeed. $1,250 a year (or start first with historical data)
• Study till you are on paper consistently profitable.
• Start to trade with a small account.

So with a very limited budget you can do this nowadays. When I started it was impossible, but now it can be done.

So you don’t need a lot of money to start. You need the qualifications to become a successful trader. That’s the real problem, not the money. I do realize that I am rather an exception. Not the consistency, but the return that I can achieve.

 

[ironchef]

Not all people trade this way, there are many other ways. I see this clearly as I don't use all these things. I use purely mathematical models. I understand that most people don't trade the way I trade.
I will show you how different it can be from what you do.



I don’t see trend or range, I always have a trend. But trend has different strenghts that I can mesure ( like 1,2,3,4,…). Weak trend will correspond with what you call range probably.



I have no break outs, no spikes, no support, no resistance, no channels…



I have dozens of scenario’s (mathematical models) that are used for trading. Each strenght, or weakness of strenght has it own scenario for entering or exiting. Each scenario is built for a specific situation.



I don’t have support, resistance and don’t watch how prices act.



I only have to follow the scenario, the mathematical model, all the rest is irrelevant as everything is automatically incorporated in the math models.



I have something similar as patterns; my different scenario’s. But each scenario will repeat over and over again in the corresponding mesured strength. So these scenario’s are always identical for as far as they have importance for entering or exiting trades. Only the lenght can vary. Sometimes the scenario can completely develop in 15 minutes, but sometimes it can also take 60 minutes or even 5 hours. This is because the scenario’s are self adapting and try to take the maximum of the move. My PC is calculating non stop from opening till close.




Each day unfolds in the same way. Strenght defines which scenario to take and switches to another scenario if the strenght changes. Automatically and self adapting.

You post is very helpful even though you did not mention any specificities, the concepts are useful for me to develop my own mathematical model. I do have a question: How long did it take for you to develop a mathematical model that worked and how often you had to make adjustments to your model?

Best wishes.

 

[ironchef]

• Download Ninjatrader. $0.
• Take a real time datafeed. $1,250 a year (or start first with historical data)
• Study till you are on paper consistently profitable.
• Start to trade with a small account.

Are the real time data feed from brokerage house like IB, TD, Schwab... sufficiently real time for trading?

 

[Mtrader]

You post is very helpful even though you did not mention any specificities, the concepts are useful for me to develop my own mathematical model. I do have a question: How long did it take for you to develop a mathematical model that worked and how often you had to make adjustments to your model?

Best wishes.

It took me around 10 years for becoming consistently profitable. And then a few years to increase returns exponentially.

I had to work in 2 steps:

• first become consistently profitable, which was a huge challenge with lots of ups and downs.
  
• improve the system for bigger returns. Less stressful because at that moment the system was at least making some money.

After that second step I never changed the models anymore.
The secret is the numerous scenario's that are each separately functioning (in relation to the strength of the trend) without impacting the results of other scenario's. I could built optimal scenario's and if ever I would change 1 scenario it would only impact the trades that fulfill the requirements for that specific scenario. So maybe 90% of my trades would not be impacted by the change. I can make changes with surgical accuracy.
If I would built only one scenario, each change would impact ALL my trades, resulting in improvement for some and worse results for others.
I did not change anything for many years now and things continue to work as before. Changes in market behavior are neutralized by the self adapting abilities of each scenario.

Don't take my answer as reference. For each person the story is different, can be better or can be worse. Chances to be a winner are very small, but if you only try things that are guaranteed to work out, you will not have to try many things. Most important is to limit the financial risk. Paper trade till the system has proven to be a winning one.

I always used professional datafeeds like Esignal, Iqfeed ... so I don't know about the quality of broker feeds.

 

[volpri]

Mtrader it must be nice! There are many ways to trade. Yours seems to be less work as you are allowing the computer to trade for you. I am not smart enough to trade via automation. I am probally too old to get the necessary educational skills and programming skills to design mathematical models that run on their own. So, i have to trade the way i know how. And i admit it is work and requires intense focus and constant decision making. I do agree a trader doesn't need alot of money to start. If a trader can't make it on a sim then said trader wont make it live. If a trader can't make it on a small account the trader won't make it on a large account. No skills equals large account with large amounts of money blown. I also think trading only the 1% to 2% of account size is hogwash. Controlling losses are more important for me (for the way I trade) along with a high win rate.