Tribute to Brooks

speedo said:
Jim Simons and his 800 pound gorilla of funds with his team of scientists and mathematicians analyzed many thousands of data points and found that there were repeatable patterns found on, guess what....5 minute increments and based their models on those expectancies. I deleted The Man Who Solved The Markets, the account of Simons and his Renaissance Medallion Fund
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Thank you! I'm going to read that!
 
longandshort said:
Lmao, because if you actually tested this, you would find that there are no excess subsequent returns on a "bear bar" or "bull bar".

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if you cannot recognise broadening prices you will be lost forever


also to recognise a bullish or bearish consolidation which is violently fluctuating in a wide range THEN trading will become a beautiful and thrilling experience.

but you have recognise some things....NO need to TEST because these have been tested for over a hundred years.....by some greats like Bulkowski and others
 
longandshort said:
no offense padu, but you've been reading brooks (along with many other folks) and they've all been consistently losing money. Brooks himself doesn't add any value in live trading, because he literally does not know what will happen next. That's because his analysis is made up. He has never done a study to see if there is any significance of a "bull bar" or "bear bar" or whatever term he throws. And the fact that he has found people like you who are willing to spend real money on his products has reduced his incentives to actually try. The folks that understand that prices are generally efficient (semi strong form EMH) and generally follow brownian motion between informational events are the guys at renaissance, citadel, millenium, etc., who are eating your lunch. but this is your thread so feel free to continue to believe in fantasy.
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You may stay in your fantasy world of EMH, random walk, Brownian random jiggles, chasing those random molecule movements from the atoms colliding with them..LOL OR YOU CAN CHANGE. I, for one will stick with real world trading ideas that Mr. B and others espouse, observed, set forth, and which can be forward tested to one’s delight, as long as a body cares to test them. I have no need to bust trading up into theories that are based upon and that involve involve atoms and molecules (with their jiggles) LOL to extract some profits. In case you don’t know it, backtesting only means that at some time something worked. It is CERTAINLY no guarantee it will work today. Then there is the problem of over optimization and over fitting in backtesting. I prefer eyeball and observation theory of past prices plus WFA. Look, any dipsticks with two eyes (unless he has birdsh$t in his eyes) can, with a cursory glance, at any chart, back in the 1940’s or even today 2021, can easily SEE there have always been:

1) trends
2) Spikes
3) channels
4) PB’s
5) Trading Ranges
6) Price patterns such as wedges..triangles…DT’s….DB’s……trend lines….flags….etc

These elements are on every chart, pre-computer days, and post computer days. They have always been there, and will always be there. They are much better concepts to work with, for the average trader, than some damn theoretical models that take a room full of PHD’s to figure out and apply.

BTW in case you didn’t know it both Buffet and Simmons doubted the EMH. Buffet doubted the random walk theory too.

It is much better to see the markets as an auction of a product wherein human behavior influences the outcome. Until we change our genetics or our DNA gets modified by some means our behavior in the markets will always leave such footprints as listed above. The key is learning how to capitalize on those things. For your information Mr B sets forth ways of doing just that from his many years of experience of trading live in the markets. A traders time is better spent learning or devising setups based upon easily observed repeated actions, as human nature interacts with prices.

Those in love with computer trading such as algos and HFT’s may be underestimating two things IMO:

1) The power of the human brain when contrasted and compared with the power of computers.

2) Human nature in price movement and buying/selling.

Theories on random walks…EMH….brownian motion….etc are not needed and are generally distracting. I will dismiss them with a cursory wave of the hand and stick with tried and true basics of price action based on human behavior and instead of jumping on board with every new fangled theory some white coat has dreamed up. I will use what works for me in WFA.

PS I am sorry you could not get PA to work for you. Instead of “skimming” (as you stated you did) over a little bit of Brooks works and arriving at some twisted and erroneous conclusion about the concepts he postulates you might want to consider SERIOUSLY studying what he teaches and REALLY practicing it to see “if it be so.” You can do this on a SIM. You don’t have to lose any money doing it! You may need some psychological help when it comes to trading with real money. There are good sources out there. Remember, “human behavior” thus the psychological component. You need to dedicate a min of 5 years (3 to 6 hours per day) of study AND practice. In 10 years if you have done the work of (studying, practicing, and applying) you will likely have all you need under your belt to extract profits from the markets.

PPS Look up ….. be encouraged….human nature is not gonna change in 10 years. And there will still be the elements on a chart listed above.

Happy trading. I don’t need to keep writing such things in this journal as it is padutraders journal.
 
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Here is an example of trading a broad bull (i.e. on 5m 24 hr chart ES/MES) channel taken this morning live. Right at the open we get two consecutive bull bars going to the top 1/4 of the slightly sloped bull channel drawn in the overnight session. A novice is gonna go long ...thinking BO. Two bars later he is ditching his entry with a loss. An experienced trader will wait and see what price does from that top 1/4. When he sees it trade down he will wait until it gets into the bottom 1/4 and fade the down move. Why? Because of two things.

1) the previous opening bull moves shows buying pressure and the move down shows selling pressure. The previous opening move is bullish. Bears are going to try and make it fail and bulls are going to push back.

2) The container or context of price is the channel and it is slightly bullish (think more odds for longs) . The jiggle is the atoms (institutions think powerful..atomic bomb..ad nauseam) bumping against the single molecule..i.e. price. It (price) can only travel in one direction at a time and has enough inertia that the jiggle can be captured. Brownian motion and inertia CORRECTLY applied to trading. ROFLMAO.

Now look as price jiggles down because of a bearish atom. A novice will then short at that precise place (bottom 1/4) thinking BO. An experienced trader knows that the odds favor a move back up (when the bullish atoms explode) into the channel from that bottom 1/4 so he will fade those two consecutive bear bars and go long fading the edge of the channel. I did so, and quickly captured 4 points. Thank goodness for those bullish atoms!

BTW this is the kind of stuff taught in Brooks works if anyone is interested. Not the Brownian BS. That was added for humor.

In addition, one must understand fading the edges at some point in time WILL fail and we will get a BO of the channel. A big atomic explosion of price so, an experienced trader is cognizant of that, and has a tactic in place for what he will do when he is caught on the wrong side on a successful BO.

example ch trading.jpg
 
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Now see, because of all my typing, I failed to see or fade the move to the top (bar 9:25 and 9:30) and short for another few points on bar 9:30 and 9:35.

Atoms jiggling THE molecule. LOL

example ch trading 2.jpg
 
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