You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Why I won't trade patterns
- Thread starter ProfitTakgFool
- Start date
Granted, there are times when I do take a beating. This method does not come without risk. This year I have an 88% win rate so if I can generate consistent profits 88% of the time and take reasonable losses, let's say 10% of the time, and take a beating 2% of the time then I'm good. There are times during the year when I've just had to say, "Ok, that's enough. The market beat me."
Another important point....I'm only using a small portion of my account trading fut's. Because of the leverage of this market I don't have to use a lot of capital but I do have to have a lot of capital in reserve, also because of the leverage. I don't have a problem taking a 1% beating on any given day. Once I get to that point I'm pretty much ready to take my defeat and collect myself for the next day. It does happen.
I have a great deal of respect for the market, mostly because I've been humbled beyond belief so I'm very conscious about how I deploy my capital. If I have to lose I need to come out of the loss with enough capital to fight the next battle. I don't care about losing a battle if I get to win the war.
Another important point....I'm only using a small portion of my account trading fut's. Because of the leverage of this market I don't have to use a lot of capital but I do have to have a lot of capital in reserve, also because of the leverage. I don't have a problem taking a 1% beating on any given day. Once I get to that point I'm pretty much ready to take my defeat and collect myself for the next day. It does happen.
I have a great deal of respect for the market, mostly because I've been humbled beyond belief so I'm very conscious about how I deploy my capital. If I have to lose I need to come out of the loss with enough capital to fight the next battle. I don't care about losing a battle if I get to win the war.
Quote from traderNik:
Aha!!
Light bulb.
I have as many questions as anyone else about how one avoids getting hammered when prices continue to move against you as you average down. This is the biggest question I have about these methods. However, there is no doubt in my mind that the above quote represents a viable way to trade the markets.
Thanks PTF. And by the way... do you ever look at Market Profile Charts, because they seem to be a graphic representation of the distros you are talking about
Quote from fearless9:
TN,
Somewhere recently I addressed the method I use for entering on limits.
Might have even been this thread.
regards
f9
f9
Thanks, I appreciate the clairification. Just one more thing real quick?
You mentioned setting my filter for >99 on the ES. You also said 'don't worry about >500 as those might be institutional hedgeing activities, another game'.
You're gonna think this is a stupid question but here goes...
When you say 'set the filter to >99'... the word strike to me means strike prices, as in the options world. But I think you intend strikes to mean... number of contracts?
When you say set the filter to >99, do you mean filter out anything other than price points where there are less than 99 contracts being traded? Use a T & S filter to do that?
How I go about setting up that filter in i.e. Button Trader is another question, but I won't bug you about that.
I'll search the Steenbarger site and your posts for the relevant material.
Thanks again.
lol... here's why there's a hard limit to the amount of knowedge that can be gained by studying theory.
So I went the the Steenbarger site to check for that distro that f9 was talking about. What do you think is the first thing I see there?
http://www.brettsteenbarger.com/articles.htm
"Fade moves to new lows when volume dries up!!
Now, PTF didn't specifically say 'as price is falling to new lows', he just said 'as price is falling'.
And on we go...
Makes sense, sellers are getting washed out!Quote from ProfitTakgFool:
If you see a volume surge as the price is falling you know youâre near a bottom.
So I went the the Steenbarger site to check for that distro that f9 was talking about. What do you think is the first thing I see there?
http://www.brettsteenbarger.com/articles.htm
"Fade moves to new lows when volume dries up!!
Now, PTF didn't specifically say 'as price is falling to new lows', he just said 'as price is falling'.
And on we go...
Quote from traderNik:
f9
Thanks, I appreciate the clairification. Just one more thing real quick?
You mentioned setting my filter for >99 on the ES. You also said 'don't worry about >500 as those might be institutional hedgeing activities, another game'.
You're gonna think this is a stupid question but here goes...
When you say 'set the filter to >99'... the word strike to me means strike prices, as in the options world. But I think you intend strikes to mean... number of contracts?
When you say set the filter to >99, do you mean filter out anything other than price points where there are less than 99 contracts being traded? Use a T & S filter to do that?
How I go about setting up that filter in i.e. Button Trader is another question, but I won't bug you about that.
I'll search the Steenbarger site and your posts for the relevant material.
Thanks again.
TN,
"strikes" is just jargon for orders. ie If a trader places an buy order for ´n´ contracts it is one strike no matter how big or small it is.
Setting a filter of >99 on ES T&S means that any strike containing less than 99 contracts is filtered out. Just makes the T&S easier to read. Also colour the buy strikes a different colour to the sells ... again makes things easier to read when the market is in top gear.
regards
f9
Quote from fearless9:
TN,
"strikes" is just jargon for orders. ie If a trader places an buy order for ´n´ contracts it is one strike no matter how big or small it is.
Setting a filter of >99 on ES T&S means that any strike containing less than 99 contracts is filtered out. Just makes the T&S easier to read. Also colour the buy strikes a different colour to the sells ... again makes things easier to read when the market is in top gear.
regards
f9
Once again, thanks for taking the time. I went to the Steenbarger site, looks like there's a lot of good stuff there. I'm looking forward to checking some of it out.
What he is talking about is a double bottom trigger where the first bottom occurs on aggressive selling and the second bottom occurs on light selling. That is a great setup!!
Quote from traderNik:
lol... here's why there's a hard limit to the amount of knowedge that can be gained by studying theory.
Makes sense, sellers are getting washed out!
So I went the the Steenbarger site to check for that distro that f9 was talking about. What do you think is the first thing I see there?
http://www.brettsteenbarger.com/articles.htm
"Fade moves to new lows when volume dries up!!
Now, PTF didn't specifically say 'as price is falling to new lows', he just said 'as price is falling'.
And on we go...
Quote from ProfitTakgFool:
What he is talking about is a double bottom trigger where the first bottom occurs on aggressive selling and the second bottom occurs on light selling. That is a great setup!!
Really? Hmmm... He says 'Fade moves to new lows', right? That wouldn't be a double bottom would it?
Thanks PTF et al for the detailed posts.
Application of stats and probability to non stationary data is exemplified here in specific ways. Not too swift.
As we see there are many ways to quantify "patterns". Most likely anyone studing them and leraning about them would use the more conventionally defined (geometric on screens and in coded detection) multitude of patterns.
For anyway a person does it, there is always a larger context because patterns are subordinant to other market general characterisitcs as defined by market variables.
Speaking from the vantage point of always being in the markets and conducting extraction, all patterns have utility. That is true from their inception to their demise.
By the consideration of seven different and enveloping fractals, it may be seen how the general market characterisitcs act as containers for the subordinant patterns contained there in.
A double bottom was mentioned and referenced to a popular source. For making money, a double bottom is the site of four profit taking segments. Different successful methods use these opportunities more or less. As non stationary occurrences each and everyone can be handled manually, mechanically and automatically.
If one where to organize by links and nodes the relationships of the patterns, it becomes rather simple to apply Alexander's method to show the spectrum of strengths of group and individual linkages.
In this way, the front running methodology set in place and, in use, is accomplished. Furthermore, the crucial aspect of making money, which lies with taking profits appropriately, can be handled by fine differentiations of adjacencies in the multitiered heirarchy.
We can all admire "guts" in trading. and it is recognizable that their application is not often a requirement when organizational tools and trading tools can be made available.
A brief speculation. What would it be like if PTF were to recognize the two main groups into which any kind of diferentiated patterns fell? If A and B were recognizable and sets of tools were made available for each, what would be the trading consequences of no longer using "guts" as the common approach.
There is always one consequence of improved trading: more time in the market. 5.5 becomes 11.0 for example. From a use of market time viewpopint, the roughout of time in the market to total time available, is often a small decimal fraction compared to 1.0. How many doublings are available is a good question to consider at least once in a while.
Crayola 201 was designed to deal with patterns. It is the opposite of Darvas' box trading. What fraction of each day is made not available because of patterns (if a person decides to sideline during patterns)?
Have many people here as yet recognized the relationship of HV trading to patterns?
Application of stats and probability to non stationary data is exemplified here in specific ways. Not too swift.
As we see there are many ways to quantify "patterns". Most likely anyone studing them and leraning about them would use the more conventionally defined (geometric on screens and in coded detection) multitude of patterns.
For anyway a person does it, there is always a larger context because patterns are subordinant to other market general characterisitcs as defined by market variables.
Speaking from the vantage point of always being in the markets and conducting extraction, all patterns have utility. That is true from their inception to their demise.
By the consideration of seven different and enveloping fractals, it may be seen how the general market characterisitcs act as containers for the subordinant patterns contained there in.
A double bottom was mentioned and referenced to a popular source. For making money, a double bottom is the site of four profit taking segments. Different successful methods use these opportunities more or less. As non stationary occurrences each and everyone can be handled manually, mechanically and automatically.
If one where to organize by links and nodes the relationships of the patterns, it becomes rather simple to apply Alexander's method to show the spectrum of strengths of group and individual linkages.
In this way, the front running methodology set in place and, in use, is accomplished. Furthermore, the crucial aspect of making money, which lies with taking profits appropriately, can be handled by fine differentiations of adjacencies in the multitiered heirarchy.
We can all admire "guts" in trading. and it is recognizable that their application is not often a requirement when organizational tools and trading tools can be made available.
A brief speculation. What would it be like if PTF were to recognize the two main groups into which any kind of diferentiated patterns fell? If A and B were recognizable and sets of tools were made available for each, what would be the trading consequences of no longer using "guts" as the common approach.
There is always one consequence of improved trading: more time in the market. 5.5 becomes 11.0 for example. From a use of market time viewpopint, the roughout of time in the market to total time available, is often a small decimal fraction compared to 1.0. How many doublings are available is a good question to consider at least once in a while.
Crayola 201 was designed to deal with patterns. It is the opposite of Darvas' box trading. What fraction of each day is made not available because of patterns (if a person decides to sideline during patterns)?
Have many people here as yet recognized the relationship of HV trading to patterns?