Unholy Grail to Success

Status
Not open for further replies.
Quote from MandelbrotSet:

Great thread.

Nice, clear trading concepts that are easily transferrable to many different styles of trading ...

... and your description of how momentum plays out in the markets is one for the books. :cool:

The counter-momentum techniques are actually more advanced though, and where the really good traders break the bank. :)
More...
Thank you sir! :)

Although it's planned as a 5-course meal, I suppose it can be served as à la carte, especially for those who have enough experience under their belt. Moreover, I don't expect everyone to draw the same conclusion as I have and I don't mind others making improvements to the system if they so choose. Just don't forget to spread the wealth! :D
 
Time (aka Duration, Not Timing)

We often hear that time is of essence in the market. Correct entries and exits are of utmost importance to one's bottomline. However, there's another aspect of time no traders should overlook. Here, we're not so much concerned with timing but with the duration of a given trade.

According to Merriam-Webster dictionary, duration is defined as the time during which something exists or lasts. Applying the same definition to trading, we could redefine duration as "the time during which a trend exists or lasts." Hence, duration is a metric used to measure how long it took to establish a trend.

A trend can be divided into 3 stages: beginning, middle, and end. Each stage has its own unique characteristics. For instance, the beginning stage usually displays a price behavior that shows a retest of the low before reversing, whereas the middle stage often involves a pattern of one or two pullbacks and the end stage a classic "head fake" reversals.

Despite their particularities, duration plays an unequivocal role in all three stages. This is particularly true at points of reversal, namely stages 1 and 3. Let's consider stage 1 as an example. Here, we have declining prices beginning to show a sign of reversal. If it's successful, it will advance to stage 2. Suppose, then, the low was made at 965. It subsequently turns up to 975 within the next 10 minutes. However, it stalls and trades within a narrow range for the next 30 minutes. At this point, you must ask yourself what the hell is taking so long.

Remember this logic? If the stock ain't going up, then it must come down. This same premise applies to duration as well: If it's taking too damn long, it probably ain't working! Although there's no way of knowing exactly how long it should take to cross the threshold from stage 1 to stage 2, it should never take too long. The reason is simple. The longer it takes, the greater the threat of another reversal to the downside. Hence, all failed reversals turn out to be the continuation of the previous trend.

es-jpg.78038
 

Attachments

Last edited by a moderator:
Charts and ideas and educational concepts are nice. But when it is bereft of concrete proof, it is little use to someone who is not a paper trader or newbie.

I watched several advisory sites that focused on support and resistance. They talked well, explained things carefully, were nice people, but still lost money. Careful doctoring of their track record is the only thing that made it look respectable. One even got miffed when I several times pointed out instances where he left large losing trades off the track record. Eventually people left the sites.

S/R isn't interesting because it is logical or can be demonstrated or charts used to explain it. Or that it makes more sense or that people believe it must be more useful than indicators.

S/R is only useful if someone shows a 18-24+ month track record that was strongly positive over a broad range of instruments and a broad range of time (through different market geometries).

Futures magazine, Active Trader, and Tech An of S&C constantly publish articles like this thread, usually from futures guru wannabes. But they demonstrate it with either cherry picked examples, or cherry picked equities that matched what they were trying to prove.

Without proof, this is just noise.
 
You need to read this thread in its entirety before jumping to any premature conclusion because my system ain't just about S/R. However, if you want "proof", you can find me in the ES Journal thread throughout much of the day.






[edit]
Important note: Allow me to be blunt. I don't like to bitch anymore than I have to but there's a good reason why this thread was written in a chronological order. If you're new to this thread, start from page 1 and don't skimp on details!
 
Thanks for the compliment. Be that as it may, I'm also open to constructive criticism that will aid me in enhancing the system. :)
 
Quote from TraderZones:

Charts and ideas and educational concepts are nice. But when it is bereft of concrete proof, it is little use to someone who is not a paper trader or newbie.

I watched several advisory sites that focused on support and resistance. They talked well, explained things carefully, were nice people, but still lost money. Careful doctoring of their track record is the only thing that made it look respectable. One even got miffed when I several times pointed out instances where he left large losing trades off the track record. Eventually people left the sites.

S/R isn't interesting because it is logical or can be demonstrated or charts used to explain it. Or that it makes more sense or that people believe it must be more useful than indicators.

S/R is only useful if someone shows a 18-24+ month track record that was strongly positive over a broad range of instruments and a broad range of time (through different market geometries).

Futures magazine, Active Trader, and Tech An of S&C constantly publish articles like this thread, usually from futures guru wannabes. But they demonstrate it with either cherry picked examples, or cherry picked equities that matched what they were trying to prove.

Without proof, this is just noise.
More...
You are just noise. Shut the fuck up.
 
Status
Not open for further replies.
Back
Top