# Trading Indicators Are Useless



## soultrader

As a professional futures trader, I have spent my early days of my career making every possible newbie mistake in trading. This involved relying on rookie indicators such as the stochastics and moving average crosses, from relying on candlestick patterns, and newbie chart patterns such as head-n-shoulders and triangles.

As a new trader I lost 2 trading accounts without cleary understanding the pure action of price. The day my trading career turned around was the day I took all my indicators off and relied soley on price action. I then studied market profile to understand price acceptance vs rejection; market balance vs market imbalance. 

Now, my core methodology is based on market profile, pivots, and tape reading. Indicators in my opinion are useless. A new trader who relies on indicators will never learn the true art of trading. Market conditions change everyday and indicators and systems must be tweaked constantly. Yet, newbies look for indicators as the holy grail.

Indicators indicate. They are lagging signals. Profitable trading requires understanding market concept and understanding the language of the markets. Every trader must be in sync/zone with the markets. Just listen to it carefully... and you will be able to hear what the markets are telling you.

I always recommend new traders to stare at price and tape until they are able to understand price action. Rely on proven strategies using market internals and support & resistance levels. Tape reading offers a significant edge in short term trading. Combine strategy, knowledge, and money management and you will be light years ahead of other traders.

Good luck


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## stevo

Each to their own 

Old Man: STOP! Who would cross the Bridge of Death _(trading)_ must answer me these questions three, ere the other side he see.
Sir Lancelot: Ask me the questions, bridgekeeper. I am not afraid.
Old Man: What... is your name?
Sir Lancelot: My name is Sir Lancelot of Camelot.
Old Man: What... is your quest?
Sir Lancelot: To seek the Holy Grail.
Old Man: What... is your favourite colour?
Sir Lancelot: Blue.
Old Man: Right. Off you go.
Sir Lancelot: Oh, thank you. Thank you very much.

http://en.wikiquote.org/wiki/Monty_Python_and_the_Holy_Grail#The__Bridge_of_Death

Stevo
drawdown.blogspot.com


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## ice

soultrader said:
			
		

> As a professional futures trader, I have spent my early days of my career making every possible newbie mistake in trading. This involved relying on rookie indicators such as the stochastics and moving average crosses, from relying on candlestick patterns, and newbie chart patterns such as head-n-shoulders and triangles.
> 
> As a new trader I lost 2 trading accounts without cleary understanding the pure action of price. The day my trading career turned around was the day I took all my indicators off and relied soley on price action. I then studied market profile to understand price acceptance vs rejection; market balance vs market imbalance.
> 
> Now, my core methodology is based on market profile, pivots, and tape reading. Indicators in my opinion are useless. A new trader who relies on indicators will never learn the true art of trading. Market conditions change everyday and indicators and systems must be tweaked constantly. Yet, newbies look for indicators as the holy grail.
> 
> Indicators indicate. They are lagging signals. Profitable trading requires understanding market concept and understanding the language of the markets. Every trader must be in sync/zone with the markets. Just listen to it carefully... and you will be able to hear what the markets are telling you.
> 
> I always recommend new traders to stare at price and tape until they are able to understand price action. Rely on proven strategies using market internals and support & resistance levels. Tape reading offers a significant edge in short term trading. Combine strategy, knowledge, and money management and you will be light years ahead of other traders.
> 
> Good luck




Oh dear soultrader, that's going to ruffle some feathers!  

So I am not alone then. 

Brilliant post. (Well I would think that, wouldn't I?)   

Thanks.


ice


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## Porper

soultrader said:
			
		

> As a professional futures trader, I have spent my early days of my career making every possible newbie mistake in trading. This involved relying on rookie indicators such as the stochastics and moving average crosses, from relying on candlestick patterns, and newbie chart patterns such as head-n-shoulders and triangles.
> 
> As a new trader I lost 2 trading accounts without cleary understanding the pure action of price. The day my trading career turned around was the day I took all my indicators off and relied soley on price action. I then studied market profile to understand price acceptance vs rejection; market balance vs market imbalance.
> 
> Now, my core methodology is based on market profile, pivots, and tape reading. Indicators in my opinion are useless. A new trader who relies on indicators will never learn the true art of trading. Market conditions change everyday and indicators and systems must be tweaked constantly. Yet, newbies look for indicators as the holy grail.
> 
> Indicators indicate. They are lagging signals. Profitable trading requires understanding market concept and understanding the language of the markets. Every trader must be in sync/zone with the markets. Just listen to it carefully... and you will be able to hear what the markets are telling you.
> 
> I always recommend new traders to stare at price and tape until they are able to understand price action. Rely on proven strategies using market internals and support & resistance levels. Tape reading offers a significant edge in short term trading. Combine strategy, knowledge, and money management and you will be light years ahead of other traders.
> 
> Good luck




I recently read a book by Tom Williams "master the markets".I found it to be excellent and basically suggested what you are saying soultrader.

The more I use lagging indicators the more I dislike them, I tend to use divergence more than anything.

Could you expand on what you mean by "staring at a chart until able to understand price action", also what is a "tape".


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## soultrader

"I've known hundreds of professional traders throughout my career. I don't want to disappoint you, but I know of only two who were able to make a steady living for themselves with a mechanical system.”

- Linda Raschke -

I honestly do not know a single trader who has consistent profitability using a mechanical system. I believe there is no secret in trading. I can reveal my entire methodology but if it doesnt fit the traders personality and style of trading, he will not profit from it.

You either get it or you don't. Trading is simple. But yet traders choose to complicate it with 10 indicators on their charts. But in order for trading to be simple, one must spend the thousands of hours and work to reach that stage.


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## SevenFX

As a New Trader, I would like to hear more.....

So far I've been using Volumes, depth, Chart patterns, Support & Resistance like most first timers...but always will to hear more.

Fairly new here, so will be watching out for your posts...

Cheers
Thanks
SevenFX


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## soultrader

Porper said:
			
		

> I recently read a book by Tom Williams "master the markets".I found it to be excellent and basically suggested what you are saying soultrader.
> 
> The more I use lagging indicators the more I dislike them, I tend to use divergence more than anything.
> 
> Could you expand on what you mean by "staring at a chart until able to understand price action", also what is a "tape".





Tape is time of sales. This is probably the hardest skill to learn in trading but once you master it... it gives you a tremendous edge in short-term trading. I can just stare at a time of sale (tape) and read the flow of the markets.

Price action is looking for market balance vs imbalance or acceptance vs rejection. Take all your indicators off and plot a simple bar or candlestick chart. Can you understand the language of the markets?

If no, you are uable to read price action. Price action is pure. You can use support & resistance levels to trade against a price level. But new traders do not even know how to come up with proper S&R levels.

Why does price move?

Simple: SUPPLY VS DEMAND

Do you see where there is buying pressure and selling pressure? Are you aware of other time frame buyers or sellers?

Price moves in zones. (what I like to call them) If you are familiar with market profile, the term used is value area placement. When there is balance price will rotate back and forth within value. An imbalance causes a shift in supply and demand and price will travel until it finds equilibrium or value. Hence we get a consolidated market. 

The market is an auction. Without understanding this concept, it is hard to trade profitably.


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## tech/a

> I honestly do not know a single trader who has consistent profitability using a mechanical system.




Well today is a lucky day now you have met one.Actually you have met 2, I know Stevo has been consistantly profitable for the 4 yrs this has been public.

Techtrader has been public for 4 yrs I trade it and 2 other mechanical methods all with similar results to the public exercise. Stock not futures.
Yeh yeh I know bullmarket---blah blah blah.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=forum;f=74

*Completely agree with your initial post.
Have a great deal of respect for Steidlmayer.*


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## soultrader

tech/a said:
			
		

> Well today is a lucky day now you have met one.Actually you have met 2, I know Stevo has been consistantly profitable for the 4 yrs this has been public.
> 
> Techtrader has been public for 4 yrs I trade it and 2 other mechanical methods all with similar results to the public exercise. Stock not futures.
> Yeh yeh I know bullmarket---blah blah blah.
> 
> http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=forum;f=74
> 
> *Completely agree with your initial post.
> Have a great deal of respect for Steidlmayer.*





 Honestly.. you will be the first. You are the rare breed. 

Here's the trick for discretionary trading. My trading style is discretionary but with a mechanical approach. Does that make any sense? Each trading setup has its own set of rules regarding entry/exit and risk parameters.

tech/a: Im a big fan of Dalton's work. His new book is coming out next year. Should be a good one.


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## lesm

Soultrader,

Just as a matter of interest are you also soultrader on the elitetrader forum?

There are no tricks in your approach to discretionary trading, neither is there anything new in it.

Cheers.


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## soultrader

lesm said:
			
		

> Soultrader,
> 
> Just as a matter of interest are you also soultrader on the elitetrader forum?
> 
> There are no tricks in your approach to discretionary trading, neither is there anything new in it.
> 
> Cheers.




No I am not. I am soultrader from Traders Laboratory. I actually have not registered with elite trader. Gets off topic sometimes in there.

I agree there are no secrets in trading. Ive taken many styles and methodologies and have adapted it to fit my own trading style. I believe every trader needs to find their style. 

All methodologies are old and influenced by many past traders. Its what a trader can do with it that makes the difference. 

Best of trading.


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## Sean K

This all looks like a simple add for someone's own forum. 

Fundamental and technical analysis in various forms work. Each person has their own method and many make them work. There are many traders on this forum using various methods and they are making money, not out of pure luck. 

Soultrader, were you JC in a previous life? All sounds very preachy to me.


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## soultrader

kennas said:
			
		

> This all looks like a simple add for someone's own forum.
> 
> Fundamental and technical analysis in various forms work. Each person has their own method and many make them work. There are many traders on this forum using various methods and they are making money, not out of pure luck.
> 
> Soultrader, were you JC in a previous life? All sounds very preachy to me.





Wasnt try to preach kennas. I apologize if it sounded like it. Just looking to participate in a great forum here.


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## lesm

soultrader said:
			
		

> No I am not. I am soultrader from Traders Laboratory. I actually have not registered with elite trader. Gets off topic sometimes in there.
> 
> I agree there are no secrets in trading. Ive taken many styles and methodologies and have adapted it to fit my own trading style. I believe every trader needs to find their style.
> 
> All methodologies are old and influenced by many past traders. Its what a trader can do with it that makes the difference.
> 
> Best of trading.



Hi James,

Thanks for your response.

Elitetrader can be very noisy and go off on many tangets, but there is some good information there for those prepared to look for it.

Good to see you drop in and you have already noted that one of your articles has been posted in the forum

Agree with your comment that every trader needs to find their own style. A lot of people appear to try and copy others approaches and fail to put it all together. Eventually failing in tota or do not achieve their real potential and end up wandering aimlessly in the wilderness of trading or leave the market.

Yes, there are very few new or novel approaches, just a variation on a theme. It's up to the individual trader to put the method(s) together in a manner that works for them.

Cheers.


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## It's Snake Pliskin

Hi James,

Good stuff with the posting.


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## Sean K

soultrader said:
			
		

> Wasnt try to preach kennas. I apologize if it sounded like it. Just looking to participate in a great forum here.




Yeah, sorry James. I went off the deep end myself there. 

So exactly which trading indicators should I ignore? MACD, simple moving averages, stochastics, BBs? I actually think they are quite valuable when combined with chart analysis, ie support/resistance/trend lines. They shouldn't be used on their own but when combined with other factors they add to the decision making process. These then combined with Gann or EW give more ammunition to make decisions. 

Perhaps what you are saying is that you can see these indicators in the chart after much experience and you don't need them?


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## stevo

> I believe every trader needs to find their style.




Very true. I know that what works for me may not work for others. 

Mechanical trading systems don't have to be complex and don't have to use the usual canned indicators. Certainly the "engine" for the systems that I use would consist of half a dozen lines of code at most. But many people jsut don't get mechanical trading - I am talking a foriegn language that they will never understand.

Tech/a trades mechanical systems successfully and I personally know 1/2 dozen others that use mechanical systems on stocks very successfully. But I know nothing about futures - I stick to one market, one time-frame, one broker and what I know works.

We all tend to push the barrow that works for us. If staring at charts works for you then that's great. I don't see patterns, I am a hopeless discretionary trader and I enjoy building simple mechanical systems. I have found the holy grail - but it's something different for each person.

*I have always considered the price to be just another indicator. *The open / high / low / close price is already history by the time I look at it - I know where it has gone but I can only guess at where it is going. Rate of change and variations of it tells me more - how much it has moved over a longer period of time than just a week / day / hour / minute.

stevo

Note: If you are going to use indicators then make sure that they aren't useless by doing substantial testing in the timeframe and markets that you trade. Many don't work well at all - stochastics is one that is relatively useless in the scenarios that I have looked at.


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## swingstar

I think indicators are OK so long as you know how they're calculated and what the position of one might mean (which for most, you can usually tell by looking at price).


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## It's Snake Pliskin

A mathematically calculated line only tells you where you are at - in the past due to their lagging ability. Over time they distort the real picture, which price doesn't. Price, price, price without the need of superfluous sight stimulation.


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## swingstar

It's Snake Pliskin said:
			
		

> A mathematically calculated line only tells you where you are at - in the past due to their lagging ability.




True, but that line may provide a quick visual representation of what might not be as discernable in price and volume. An indicator should probably never override price though.


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## Wysiwyg

Does anyone know of software systems that computer project the probable future direction of share price?

Reason being a computer derived future indicator would remove the analytically derived future belief.

Thanks...bye.


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## tech/a

Wysiwyg said:
			
		

> Does anyone know of software systems that computer project the probable future direction of share price?
> 
> Reason being a computer derived future indicator would remove the analytically derived future belief.
> 
> Thanks...bye.





Funny you should ask.

*YES its been done*.

Thanks to Jose Silva.

Youll find all the Metastock code here.
The holy grail.

http://www.metastocktools.com/MetaStock/HolyGMkIV.txt

Anyone with Tradesim stick that in your systems test and run a report---see you in Barbados!


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## lesm

Wysiwyg said:
			
		

> Reason being a computer derived future indicator would remove the analytically derived future belief.



What would make you think you think that a computer derived indicator would not be based on some form of analytical approach?

It would still be providing a form of derived future belief at a level of probability within specific level of confidence. It will not be absolute, but it will be emotionless.

It would still be based on some form of probabalistic approach, even if it was using a combination of fuzzy logic and pattern matching. It would be capable of doing it faster than a human, as it could run through more comparative combinations, providing a ranking of probabilities and selecting the most likely candidate(s).

This, in reality, is no different to how the engine under Fritz 8/9 works, or other similar engines. The techniques under the covers may be diffferent in terms of the trading, but how succesful it would be would depend on its developers.

For those not familiar with Fritz. This is the computer chess game that beat Karpov. From memory, Karpov beat Big Blue.


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## Wysiwyg

Yes  lesm ...you are right in saying the program would only be as good as the developers with there experience, belief and maybe even a little emotional reaction programmed in too. If it is around and successful we probably would not hear about it.

Anyway...I play online chess at the site below.It is free and fun and if you want to get into the pro`s then one can join to.Thanks for your input lesm.  and tech/a.


http://www.chessanytime.com/


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## Dutchy3

This is a post very close to my heart. Totally agree with souls original thoughts on page one. I do like to see volume increase though too. I take positions based on a weekly chart of stocks breaking out of big bottoms. Sounds gross and yes in a bear market I'm sitting on piles of cash. However I am at the stage where 4 -5 decent trades present themselves in a 12 -18 month period and satisfy my plan targets 

Why we collectively try and complication what is a most basic of situations with all these indicators eleudes me too


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## lesm

Wysiwyg said:
			
		

> If it is around and successful we probably would not hear about it.



Too true. If it is around and successful, why advertise the fact.



> Anyway...I play online chess at the site below.It is free and fun and if you want to get into the pro`s then one can join to.



Thanks for the chess site link. Noticed that Fritz 10 is scheduled for release in mid-November.

I used to play a lot of chess and came second in a tournament once. After we finished they lined the winner and myself up against eight opponents each. Playing muliple opponents at the same time is interesting.

Nowadays, I tend to play computer chess more, as a lot of human opponents are too easy to beat. Some computer chess games are a bit of a joke, as they are too easy to beat. Throw these away very quickly, as they are a waste of time and no challenge.

Recently, introduced a colleague to a good quality computer chess game and he's now hooked and threatening to challenge me to a game. Will pass the link onto him. He still needs a lot more practise and game skill development time.

Cheers.


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## bunyip

soultrader said:
			
		

> As a professional futures trader, I have spent my early days of my career making every possible newbie mistake in trading. This involved relying on rookie indicators such as the stochastics and moving average crosses, from relying on candlestick patterns, and newbie chart patterns such as head-n-shoulders and triangles.
> 
> As a new trader I lost 2 trading accounts without cleary understanding the pure action of price. The day my trading career turned around was the day I took all my indicators off and relied soley on price action. I then studied market profile to understand price acceptance vs rejection; market balance vs market imbalance.
> 
> Now, my core methodology is based on market profile, pivots, and tape reading. Indicators in my opinion are useless. A new trader who relies on indicators will never learn the true art of trading. Market conditions change everyday and indicators and systems must be tweaked constantly. Yet, newbies look for indicators as the holy grail.
> 
> Indicators indicate. They are lagging signals. Profitable trading requires understanding market concept and understanding the language of the markets. Every trader must be in sync/zone with the markets. Just listen to it carefully... and you will be able to hear what the markets are telling you.
> 
> I always recommend new traders to stare at price and tape until they are able to understand price action. Rely on proven strategies using market internals and support & resistance levels. Tape reading offers a significant edge in short term trading. Combine strategy, knowledge, and money management and you will be light years ahead of other traders.
> 
> Good luck




Soultrader

As a trader of some twelve years experience I agree with you on some points and disagree with you on others.

Indicators are useless? 
Yes and no. If you trade a particular setup when it shows up in strongly trending stocks, then including one or two trend strength indicators as part of your scan criteria can be very useful, even if you don't display those indicators on your chart.
However, there's absolutely no point in putting half a dozen indicators on the chart, many of which more or less duplicate each other because they do pretty much the same thing, i.e. measure momentum.
I'm amused when I see people post a chart on a forum, and they include RSI, ROC, Stochastic, W%R, MACD, and maybe a couple of other indicators as well. In fact they sometimes have so many indicators below the chart that the chart itself is scrunched up too small to see clearly.
The price action itself is the best indicator of all. But when it comes to performing scans, some software can scan for patterns in indicators but not patterns in price action. Choosing an indicator that closely tracks price action, then including this indicator in your scan criteria, can be a way of getting around this problem.
As a futures trader you're probably following a watchlist of no more than 20 markets.....a small enough number to eyeball each chart without using up much time.
Different story for a stock trader who might follow a watchlist of a couple of hundred stocks......the ability to run a scan can be very useful and time-saving for this trader.

Understanding price action is most important? 
DEFINITELY, agree 100%. Too many people allow indicators to blind them to what the price action is doing. Example.....they'll bail out of a strongly trending trade because an indicator hits an overbought reading. If they took notice of the strongly trending price action rather than looking at the indicator, they would have stuck with the trade as long as it kept trending well.

Markets change every day and systems must be tweaked constantly?
Don't think I can agree with you on this one. I can put decades of past futures charts and stock charts on my screen, and I can tell you with absolute certainty that the same patterns, trends, support/resistance levels etc that were evident on charts 10 or 40 or 50 or 70 years ago are still showing up on today's charts.
Robust systems that traded in the past from price pattern setups, support and resistance etc, can still be used to successfully trade todays markets - no tweaking necessary. 

Just listen to the market carefully... and you will be able to hear what the markets are telling you?
Definitely......studying price action, support/resistance, trends, and retracements, is the way to hearing and understanding the message of the market.

Bunyip


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## soultrader

bunyip said:
			
		

> Markets change every day and systems must be tweaked constantly?
> Don't think I can agree with you on this one. I can put decades of past futures charts and stock charts on my screen, and I can tell you with absolute certainty that the same patterns, trends, support/resistance levels etc that were evident on charts 10 or 40 or 50 or 70 years ago are still showing up on today's charts.
> Robust systems that traded in the past from price pattern setups, support and resistance etc, can still be used to successfully trade todays markets - no tweaking necessary.




S&R and price patterns is not considered mechanical trading. You are not relying on a indicator signal. Perhaps you are confusing this with technical analysis?

Indicators can be used as a confirmation of price. But I would never put indicators before price action. A simple RSI and price divergence is backtested and known to make money. However, most traders do not design any rules for a simple setup. If a trader goes long on a trading signal off a mechanical system, why do they trail a stop? Their exit should be when their mechanical system tells them to exit. I say this because the entry point was not based on price action.  

Im not saying mechanical systems are 100% useless. But those who make money off them are the minority. There are more profitable discretionary traders than mechanical traders. How did Long Term Capital Management lose money? They built a system based on historical events. When economic and market conditions changed, they got wiped out clean. 

Price is king.


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## wayneL

I made a points of reverse engineering any of the indicators you care to name, to understand what the reading was actually telling me.

An interesting thing happened out of that... I can pretty much know what the indicator will look like by looking at the price action. This makes the indicator obsolete.

Pure price action for me + pivots of various time frames. I will use a trailing stop which necessitates plotting a mathematical construct. (ie an indicator)

Sometimes an oscillator for the pretty colours (I might spot the odd divergence if I remember to look too  ).

Oscillators and other indicators are useful for "scanning" the market with to bring up a list of candidates. But to trade off..... suboptimal IMO.

Thats my $0.02


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## wayneL

Some further comments about Soultraders mechanical system comments.

SouL,

I note you trade futures. Presumably you trade a range of commodities, indicies, treasuries etc.

In this context, I wholeheartedy endorse your assertions that mech. systems to not work very well... unless one has VERY deep pockets.

It is a bit different with stocks as Tech/A and Stevo can attest to where mech systems can perform very well.

Just another $0.02

Up to $0.04 now


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## lesm

Dutchy3 said:
			
		

> Why we collectively try and complication what is a most basic of situations with all these indicators eleudes me too



Possibly some people may think that more indicators is better than less, which in reality is a misnomer.

An inherent issue is how many of those people that use more indicators believe that it provides a more reliable or higher probability that their so called analysis is correct. Whereas, less is probably best.

You may also find that people who use the more is better approach don't understand the underlying basis upon which indicators are calculated on. You will often find that they think that they are using multiple indicators for confirmation. Whereas, what they may be seeing is the same outcome calculated from the same underlying basis and represented in a different manner. Effectively the same result due to the indicators being highly correlated. Hence, a sinlge indicator is actually all that is required. Unless they are using uncorrelated indicators they are wasting their time and effort.

Depending on the underlying market dynamics they may also be using indicators that are giving misleading signals, as they are applying the indicator in a context that it actually wasn't designed to be applied in. This is a blind use of indicators for the sake of using indicators.

There are possibly too many books available that push the use of indicators, without providing a detailed description or any caveats surrounding the usage and application of indicators. The examples used, demonstrate the use of the indicator in a situation where it is designed to work, with no contra examples being provided.

This leads to a misquided view that trading can be succesful by buyng a charting/trading program taking out a data subscription and voila, anyone can be successful in the market. Yet, 90% or more of traders still fail.

A good point that Soultrader made was related to tape reading. How many people today can effectively read the tape? How many peopl today, would actually make the effort to try an understand ho to read the tape?

With tool snow aviable there will be a far lesser numbr of traders in the past that used to prodcue charts by hand. This exercise alone can provide a different insight into chart behaviour, rather than relying on fully automated approaches.

I think, from what I see, that there are far more successful mechanical traders than Soultrader is giving credit too, but he is qualifying his comment based on what he has seen.

The successful mechanical traders have done the hard yards and the work to be successful. How may traders are failing from trying to do it the easy way and don't put the effort in to developing succssful systems?

There are also successful traders using the approach referred to by Soultrader, but again these are the traders who are putting in the time and effort and not relying on books and other peoples ideas.

Cheers.


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## Magdoran

soultrader said:
			
		

> S&R and price patterns is not considered mechanical trading. You are not relying on a indicator signal. Perhaps you are confusing this with technical analysis?
> 
> Indicators can be used as a confirmation of price. But I would never put indicators before price action. A simple RSI and price divergence is backtested and known to make money. However, most traders do not design any rules for a simple setup. If a trader goes long on a trading signal off a mechanical system, why do they trail a stop? Their exit should be when their mechanical system tells them to exit. I say this because the entry point was not based on price action.
> 
> Im not saying mechanical systems are 100% useless. But those who make money off them are the minority. There are more profitable discretionary traders than mechanical traders. How did Long Term Capital Management lose money? They built a system based on historical events. When economic and market conditions changed, they got wiped out clean.
> 
> Price is king.



What a breath of fresh air, someone who talks sense about the strength of discretionary approaches – Long Term Capital Management is a great illustration of the pitfalls of basing too much emphasis on past data over what is unfolding now, and being able to anticipate key changes in the market conditions ahead of time.


Magdoran


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## lesm

wayneL said:
			
		

> An interesting thing happened out of that... I can pretty much know what the indicator will look like by looking at the price action. This makes the indicator obsolete.
> 
> Oscillators and other indicators are useful for "scanning" the market with to bring up a list of candidates. But to trade off..... suboptimal IMO.



Wayne,
Agree with your two points above.

Using both price and volume, as appropriate, provides a better indication than indicators. For short term trading I actually use an approach that is similar to what Soul mentioned in his original post. Indicators just get in the way and diminish in value. Certainly, suboptimal from a live trading perspective.


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## swingstar

wayneL said:
			
		

> I made a points of reverse engineering any of the indicators you care to name, to understand what the reading was actually telling me.
> 
> An interesting thing happened out of that... I can pretty much know what the indicator will look like by looking at the price action. This makes the indicator obsolete.




That's the point I was trying to get at. Most traders don't even look into the calculations of an indicator and what it's plotting from price (I was, and probably most people are, guilty of this when new to trading). Funnily a lot of indicators have questionable logic in the first place. I think if you're going to use an indicator, you really have to know its internals and what it's telling you--and then, you need the experience or need to have done a lot of testing to know if that means anything in the current conditions.


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## MichaelD

lesm said:
			
		

> A good point that Soultrader made was related to tape reading. How many people today can effectively read the tape? How many peopl today, would actually make the effort to try an understand ho to read the tape?



Perhaps an even deeper question is how many people today WANT to make it their life's routine to read the tape? As someone personally working towards trading for a living, I for one do NOT want a job watching the course of sales on a computer screen all day.

Entertaining and enlightening for a few hours here and there, but every day? Not for me.

(I do concur about the pointlessness of indicators in general, however).


----------



## soultrader

MichaelD said:
			
		

> Perhaps an even deeper question is how many people today WANT to make it their life's routine to read the tape? As someone personally working towards trading for a living, I for one do NOT want a job watching the course of sales on a computer screen all day.
> 
> Entertaining and enlightening for a few hours here and there, but every day? Not for me.
> 
> (I do concur about the pointlessness of indicators in general, however).





As a day trader, I trade the opening 90 minutes and the final 120 minutes. Total of 3 hours and 30 minutes everyday.

Not that bad right? 

Most of tape reading is noise. The most important thing about tape is to watch it as price reaches key levels. You are watching to see if price will hold or fold. If you plan on watching tape from 930 am - 500pm eastern be my guest. 

And professional traders are usually in it because they love to trade. Whether its tape reading, market analysis, or just remaining flat..... these are things we love to do. Whether one reads tape or one decides not to because it sounds boring is a difference in passion. 

If youre in it only for the money.... you will probably not last in the long run. Trading (and poker) is in my blood. I think about it after the close, I analyze every trade I took for the day in my head, and seek ways to improve everyday. Sometimes I even dream about it. 

And I guarantee that Im not the only one having this kind of mentality. So picture your competition.


----------



## lesm

MichaelD said:
			
		

> Perhaps an even deeper question is how many people today WANT to make it their life's routine to read the tape? As someone personally working towards trading for a living, I for one do NOT want a job watching the course of sales on a computer screen all day.
> 
> Entertaining and enlightening for a few hours here and there, but every day? Not for me.
> 
> (I do concur about the pointlessness of indicators in general, however).




Understanding how to read the tape has its advantaqes. How onerous it may become is up to the individual trader. Would argue that it doesn't need to be as onerous as it sounds.

You should find tech/a's thread on Discretionary Trading interesting as it develops, including how he uses the scanning software he has.


----------



## lesm

soultrader said:
			
		

> As a day trader, I trade the opening 90 minutes and the final 120 minutes. Total of 3 hours and 30 minutes everyday.
> 
> Not that bad right?
> 
> If you plan on watching tape from 930 am - 500pm eastern be my guest.
> 
> And professional traders are usually in it because they love to trade. Whether its tape reading, market analysis, or just remaining flat..... these are things we love to do. Whether one reads tape or one decides not to because it sounds boring is a difference in passion.
> 
> If youre in it only for the money.... you will probably not last in the long run. Trading (and poker) is in my blood. I think about it after the close, I analyze every trade I took for the day in my head, and seek ways to improve everyday. Sometimes I even dream about it.
> 
> And I guarantee that Im not the only one having this kind of mentality. So picture your competition.




Soul,

You make a couple of good points above.

People may not realise that traders, especially in the futures markets, are trading particular time frames and not necessarily the full session.

The competition is fully utilising their skills and knowledge to trade the market and are 100% dedicated to successful trading. Doesn't mean that they won't incur a loss at times, but they sure know how to hold and when to fold.


----------



## stevo

What is really wonderful is that there are so many different views on how to profit in the markets. This is what makes the market what it is and gives those that have the skill the ability to make money.

stevo


----------



## soultrader

Heres a quote from a trading buddy of mine.

"I believe focusing on market-generated information, instead of indicators (which are a derivative of price), is essential for developing a robust and sound trading methodology that will withstand the test of time."

Amen.


----------



## stink

HI All,

First i would like to say thanks to Soul for starting this thread. I started my trades based on a ridiculous combination of indicators which ended up just confusing me. Thanks to the sound logical advice on this forum i have a very basic system now that i am very happy with.

Although i would argue as others have that indicators are not useless, its just in the way you use them. Which you did say Soultrader. I find that if an indicator is telling me something different i like to go and see if i can find out why.

Anyway thanks again.

Stink


----------



## MichaelD

lesm said:
			
		

> Understanding how to read the tape has its advantaqes. How onerous it may become is up to the individual trader. Would argue that it doesn't need to be as onerous as it sounds.



As I said, I find it intrinsically interesting watching the tape on occasion, but one thing I decided quite a while ago was that in the long term, I did not want to earn my income from the market this way. Therefore, all my system development and work is geared towards systems which aim to meet this goal and which basically have minimal market contact time.

This is in no way a criticism of anyone who chooses to trade the tape, merely a reflection of my personal goals.



			
				lesm said:
			
		

> You should find tech/a's thread on Discretionary Trading interesting as it develops, including how he uses the scanning software he has.



Indeed I am, particularly since the setups (and trades) are pretty much identical to what I'm already trading short term, so I'm watching the exit strategy with great interest.


----------



## soultrader

I would like to thank the members of this forum as well too. There are alot of trading related forums out there geared strictly at fooling newbies and taking advertisement money.

I personally found this forum very interesting and its because of the forum participants. Everyone seems to respect one anothers view/opinion and the comments are always interesting. Perhaps its an Aussie thing?


----------



## sydneysider

soultrader said:
			
		

> As a professional futures trader, I have spent my early days of my career making every possible newbie mistake in trading. This involved relying on rookie indicators such as the stochastics and moving average crosses, from relying on candlestick patterns, and newbie chart patterns such as head-n-shoulders and triangles.
> 
> As a new trader I lost 2 trading accounts without cleary understanding the pure action of price. The day my trading career turned around was the day I took all my indicators off and relied soley on price action. I then studied market profile to understand price acceptance vs rejection; market balance vs market imbalance.
> 
> Now, my core methodology is based on market profile, pivots, and tape reading. Indicators in my opinion are useless. A new trader who relies on indicators will never learn the true art of trading. Market conditions change everyday and indicators and systems must be tweaked constantly. Yet, newbies look for indicators as the holy grail.
> 
> Indicators indicate. They are lagging signals. Profitable trading requires understanding market concept and understanding the language of the markets. Every trader must be in sync/zone with the markets. Just listen to it carefully... and you will be able to hear what the markets are telling you.
> 
> I always recommend new traders to stare at price and tape until they are able to understand price action. Rely on proven strategies using market internals and support & resistance levels. Tape reading offers a significant edge in short term trading. Combine strategy, knowledge, and money management and you will be light years ahead of other traders.
> 
> Good luck




I agree, but I trade from outside of Australia so it is nearly impossible to get an online broker and I am reduced to using delayed data coming from the ASX and not seeing any depth. What/where is the best place for an individual to get a live data feed with market depth and reporting on the heaviest trades in the resources sector. Who sells the software and what does it cost?


----------



## soultrader

sydneysider said:
			
		

> I agree, but I trade from outside of Australia so it is nearly impossible to get an online broker and I am reduced to using delayed data coming from the ASX and not seeing any depth. What/where is the best place for an individual to get a live data feed with market depth and reporting on the heaviest trades in the resources sector. Who sells the software and what does it cost?




Not too sure what you mean sydneysider... getting a direct access brokerage account is as easy as getting a Big Mac. Whos your broker now? I use Tradestation for my charting software but clear through a different firm.

As long as you have a decent internet connection you shouldnt have any trouble trading online. Where are you located?


----------



## sydneysider

I use a regular broker and pay full commission. I am based in the U.S. and all of the on-line brokers that I have approached such as Commsec, Etrade etc refuse to open accounts for US residents. That reduces me to pay full brokerage fees on all trades. Do you know of any on-line brokers who accept US residents?

I do an a lot of fundamental research which is extremely time consuming. I am thinking of getting a decent charting platform that can allow me to scan a large number of stocks quickly for various types of activity such as steep jumps in volume. Which software package is reasonably priced and easy to use?


----------



## Hopeful

Most standard indicators are lagging ones. Doesn't anyone use a leading indicator? The lagging ones like MAs and EMAs are pretty useless IMHO. Swing trading with a leading indicator to time your entry and exits works well (on paper). I'm a great paper trader!

Can anyone suggest the best way to learn tape reading? Is it just a matter of watching the mkt depth all day and learning through osmosis that a certain action leads to a certain result? Or is there a better way? Cheers.


----------



## wayneL

sydneysider said:
			
		

> Which software package is reasonably priced and easy to use?




Try www.amibroker.com


----------



## soultrader

Hopeful said:
			
		

> Most standard indicators are lagging ones. Doesn't anyone use a leading indicator? The lagging ones like MAs and EMAs are pretty useless IMHO. Swing trading with a leading indicator to time your entry and exits works well (on paper). I'm a great paper trader!





Interesting.. I am from Japan also.

Leading indicator? PRICE


----------



## Hopeful

soultrader said:
			
		

> Interesting.. I am from Japan also.
> 
> Leading indicator? PRICE




I'm not from Japan, I'm in Japan, BTW.

Thanks for your post, I clicked on your sig and found the book on tape reading!


----------



## swingstar

wayneL said:
			
		

> Try www.amibroker.com




I'm a big fan of AmiBroker. Excellent software, and very responsive and efficient email support. 

I use with http://www.premiumdata.net (also recommended by Wayne)

You won't get live data or depth, but that suits me.


----------



## Bobby

soultrader said:
			
		

> Indicators can be used as a confirmation of price. But I would never put indicators before price action. A simple RSI and price divergence is backtested and known to make money. However, most traders do not design any rules for a simple setup. If a trader goes long on a trading signal off a mechanical system, why do they trail a stop? Their exit should be when their mechanical system tells them to exit. I say this because the entry point was not based on price action.
> 
> 
> Price is king.



Soultrader ,

 Nice to see truth stated so accuratly, with no extra  poo-bar crap  at all ! .

Bob.


----------



## nizar

swingstar said:
			
		

> I'm a big fan of AmiBroker. Excellent software, and very responsive and efficient email support.
> 
> I use with http://www.premiumdata.net (also recommended by Wayne)
> 
> You won't get live data or depth, but that suits me.




Does any1 know any cheaper EOD data + historical?
Premiumdata is about $550/year
$35/month EOD and historical 12 years $90 once off


----------



## wayneL

nizar said:
			
		

> Does any1 know any cheaper EOD data + historical?
> Premiumdata is about $550/year
> $35/month EOD and historical 12 years $90 once off




You can do yahoo data for free if you have AB. But you'll only get about 10 months of history and it's a bit of donkey work to set it up.


----------



## soultrader

Hopeful said:
			
		

> I'm not from Japan, I'm in Japan, BTW.
> 
> Thanks for your post, I clicked on your sig and found the book on tape reading!





Study Wyckoff, Humphrey Neill, and Vadym Graifer. Good teachers on tape reading and volume analysis.


----------



## sails

nizar said:
			
		

> Does any1 know any cheaper EOD data + historical?
> Premiumdata is about $550/year
> $35/month EOD and historical 12 years $90 once off



Hi Nizar,

I purchased a downloader about three years ago from http://hquotes.com/ which downloads free EOD from Yahoo.  They currently have about five years of historical data.  I believe they allow a free trial period before registering.

Cheers,
Margaret.


----------



## soultrader

Stick with a solid platform and data. There is no need trying to be cheap on data fees when trading. 

Thats something I dont understand... if you are risking a large sum of money in trading, why dont you want the best equipment, connection, and data? You are risking alot of money just to save a few bucks?


----------



## lesm

nizar said:
			
		

> Does any1 know any cheaper EOD data + historical?
> Premiumdata is about $550/year
> $35/month EOD and historical 12 years $90 once off



Nizar,

You could always try www.downloadquotes.com, need to register. They have data for a range of markets, including the ASX, and historical data.

Cheers.


----------



## Bobby

Try this  for live free quotes, you need to link it to your provider  EG: Commsec, Westpac etc. 
Google  ( Quotetraker  ).
Now I don,t use it,  so your on your own.

Good Luck
Bob.


----------



## nizar

soultrader said:
			
		

> Stick with a solid platform and data. There is no need trying to be cheap on data fees when trading.
> 
> Thats something I dont understand... if you are risking a large sum of money in trading, why dont you want the best equipment, connection, and data? You are risking alot of money just to save a few bucks?




Im talking about data. IMO the bulk of the money spent in trading is for TIME and EDUCATION. Data is data. Speed maybe the only differentiating factor.

Oh thats right the expensive is always the best??
Ok then tell me whats the most expensive equipment for trading?
Maybe what Brian Hunter used? How much does that cost?


----------



## soultrader

nizar said:
			
		

> Im talking about data. IMO the bulk of the money spent in trading is for TIME and EDUCATION. Data is data. Speed maybe the only differentiating factor.
> 
> Oh thats right the expensive is always the best??
> Ok then tell me whats the most expensive equipment for trading?
> Maybe what Brian Hunter used? How much does that cost?




Im talking about paying for all data fees as well. And using a good trading platform. 

Do you recommend trading on a weak platform with level 1 quotes and a 258 ram computer? NO.

At least invest in a stable fast computer with at least 2 monitors (although I prefer minimum 4). Get at least 1 gig in ram and pay for cbot,cme,nyse,etc... fees. I have used several trading platforms in the past and some are unbelievable crappy. An example of a powerful platform is Tradestation. I absolutely love it. 

PS. Who's Brian Hunter?


----------



## wayneL

soultrader said:
			
		

> Stick with a solid platform and data. There is no need trying to be cheap on data fees when trading.
> 
> Thats something I dont understand... if you are risking a large sum of money in trading, why dont you want the best equipment, connection, and data? You are risking alot of money just to save a few bucks?




In principle agree. But depending on the purpose, free data is fine.

I happily pay for good futures historical and EOD data.

But for stocks EOD analysis I use Yahoo and for that purpose it's quite alright. If I want a closer look, I'll use live data from IB... also free if a customer.

For Aussie stocks I would definately cough up for accurate EOD though... not enough history from yahoo. As I don't trade the ASX it's fine for me just to keep track of whats happening.

Cheers


----------



## soultrader

wayneL said:
			
		

> In principle agree. But depending on the purpose, free data is fine.
> 
> I happily pay for good futures historical and EOD data.
> 
> But for stocks EOD analysis I use Yahoo and for that purpose it's quite alright. If I want a closer look, I'll use live data from IB... also free if a customer.
> 
> For Aussie stocks I would definately cough up for accurate EOD though... not enough history from yahoo
> 
> Cheers




Isnt yahoo data delayed?


----------



## wayneL

soultrader said:
			
		

> Isnt yahoo data delayed?




Yep,

But for live I have IB 

I use the Yahoo for EOD on stocks


----------



## wayneL

soultrader said:
			
		

> Im talking about paying for all data fees as well. And using a good trading platform.
> 
> Do you recommend trading on a weak platform with level 1 quotes and a 258 ram computer? NO.
> 
> At least invest in a stable fast computer with at least 2 monitors (although I prefer minimum 4). Get at least 1 gig in ram and pay for cbot,cme,nyse,etc... fees. I have used several trading platforms in the past and some are unbelievable crappy. An example of a powerful platform is Tradestation. I absolutely love it.
> 
> PS. Who's Brian Hunter?




James,

Do you use Tradestation as your broker as well?


----------



## nizar

OK it seems premium data is pretty good. 12 years historical.
Every1 else asking for $50/month.

Wayne is AmiBroker better than MetaStock (end of day) in terms of what they can do and user-friendly?

Im trying to work out why AmiBroker is so cheap....

Im only keen on end-of-day trading at the moment... no time for intraday...


----------



## soultrader

wayneL said:
			
		

> James,
> 
> Do you use Tradestation as your broker as well?




No I dont... TS execution is a little slow. I prefer to use Infinity. But the charting software for TS in my opinion is the best.

I might place a couple swings with TS but all intraday trades are not done through TS. 

TS platform fees are free if you place more than 5 or 10 roundtrips a month.


----------



## wayneL

nizar said:
			
		

> OK it seems premium data is pretty good. 12 years historical.
> Every1 else asking for $50/month.
> 
> Wayne is AmiBroker better than MetaStock (end of day) in terms of what they can do and user-friendly?
> 
> Im trying to work out why AmiBroker is so cheap....
> 
> Im only keen on end-of-day trading at the moment... no time for intraday...




I have both (though only version 7.2 metastock)

Both have their advantages over each other, but I prefer Ami. When price is factored in, it's no contest. AB hands down... particularly if using live data. But if using live data, check on compatibility.

Cheers


----------



## wayneL

soultrader said:
			
		

> No I dont... TS execution is a little slow. I prefer to use Infinity. But the charting software for TS in my opinion is the best.
> 
> I might place a couple swings with TS but all intraday trades are not done through TS.
> 
> TS platform fees are free if you place more than 5 or 10 roundtrips a month.




TS charting software certainly has an excellent reputation.. I'm surprised their platform is slow... but there you go.

Cheers


----------



## swingstar

nizar said:
			
		

> OK it seems premium data is pretty good. 12 years historical.
> Every1 else asking for $50/month.
> 
> Wayne is AmiBroker better than MetaStock (end of day) in terms of what they can do and user-friendly?
> 
> Im trying to work out why AmiBroker is so cheap....
> 
> Im only keen on end-of-day trading at the moment... no time for intraday...




Download the trial. I don't think there's any time limit, but you can only use the default database afaik.


----------



## soultrader

wayneL said:
			
		

> TS charting software certainly has an excellent reputation.. I'm surprised their platform is slow... but there you go.
> 
> Cheers





Platform is fast... just the execution system. Its not much of a big deal but for a tape reader every split second counts


----------



## WaySolid

Some interesting points made James, agree with many of them.

I'm careful of blanket statements regarding trading though, firstly a statement like 'all trading indicators are useless' is setting yourself up for a whack as all we need logically is for one to work to prove you wrong.

Firstly I consider indicators such as COT and sentiment indicators to be different to those derived from price only, perhaps there are some other catagories as well.

I'd say you are fairly comprehensively proven wrong by the success of trend following strategies over the course of history, Covell covers this in his book 'Trend Following'. Like it or not at their core they are mechanical indicator based approaches.

Also I'm not sure how a person groups someone like James Simons from Renaissance Technologies who is a convincing example of superior returns using a quant approach. To me anything you can get a bot to do is indicator based as well. 

It's actually a silly statement that 'all indicators are useless' when you think about it, better to leave it out all together and proceed with other arguments. 

Just commenting as I like jumping on trading cliches, and I have heard this one many times before.

** edit.. And it would be Kasparov who got the publicity from playing the computers from IBM. Kramnik is due to play a match soon against the latest commercially available release, he rates himself as having 'some chance'. Karpov was never very good using computers or playing against them, he is not now even in the worlds top 100, and Kasparov has retired to try his hand at Russian politics (at the moment he is still alive).


----------



## soultrader

Trend based systems do work. I agree. But this is based on a longer time frame.

The holding period of any financial instrument is decreasing each year. I think Oliver Verez mentioned this as well.

Soon, a 3 day holding period will be considered long. This is definitely going to affect a trend based system. 

In intraday trading especially in the futures market, indicators are pretty useless. Show me a profitable intraday system based futures trader and I will be proven wrong.


----------



## sails

soultrader said:
			
		

> Stick with a solid platform and data. There is no need trying to be cheap on data fees when trading.
> 
> Thats something I dont understand... if you are risking a large sum of money in trading, why dont you want the best equipment, connection, and data? You are risking alot of money just to save a few bucks?



Totally agree with you, and I pay for live data (includes intraday), however, I haven't been able to export it into metastock format for other EOD software  - so Yahoo is fine for that purpose.


----------



## nat

Incredible charts i find is fine for stocks and can take yahoo data now,as well ,hourly updates and historical data to around 14 years worth .Its free if get the 18 hours delayed version otherwise premium is 180$ a year .Nathan


----------



## soultrader

I actually pay over $200 a month just on data fees. Exchange fees plus third party market profile charting.


----------



## MichaelD

nizar said:
			
		

> Does any1 know any cheaper EOD data + historical?
> Premiumdata is about $550/year
> $35/month EOD and historical 12 years $90 once off



Nizar,

Don't skimp on your data. It is an unwise way to save money. Your entire trading/investment plan revolves around what your data is telling you.

Free data is not adjusted for things like capital returns making it inaccurate for trading decisions. As an example, look at a 3 month chart of AUN on Yahoo. This shows a drop in early September which shouldn't be there. Consider if you'd made a trading decision based on this inaccurate data.


----------



## sails

soultrader said:
			
		

> I actually pay over $200 a month just on data fees. Exchange fees plus third party market profile charting.



James, what software do you use for market profile?


----------



## Shane Baker

soultrader said:
			
		

> Trend based systems do work. I agree. But this is based on a longer time frame.
> 
> The holding period of any financial instrument is decreasing each year. I think Oliver Verez mentioned this as well.
> 
> Soon, a 3 day holding period will be considered long. This is definitely going to affect a trend based system.
> 
> In intraday trading especially in the futures market, indicators are pretty useless. Show me a profitable intraday system based futures trader and I will be proven wrong.





Perry Kaufman does a good job of explaining the difference between noise and a trend. As markets become more noisy, the trend length needs to be longer to capture the trend. True trends are usually fundamentally based eg interest rate cycles, supply demand, macroeconomic capital flows etcetc. These by their nature are longer term. This is why for most markets looking at the longer timeframe removes some of the noise component and can clearly identify the trend if present.

Cheers

Shane


----------



## soultrader

sails said:
			
		

> James, what software do you use for market profile?




I used to use esignal. A friend of mine just made a MP indicator for Tradestation this month so I am going to be using TS now. Saves me around $140 a month.


----------



## stevo

soultrader
Would you say that market profile gives a more complete picture of price? 

stevo


----------



## tech/a

Steve.

Have you ever looked into M/P? (Steidlmayer).

If your trading Futures I feel its second to none.
There is an E book from CBOT Chicago Board of Trade floating around out there I think I have it on PDF at home.
Daltons works are great but the CBOT publication is by far the most concise I have seen.
Private mail me if you want some info.Knowing your enquiring mind this would be right down your alley.


----------



## nizar

tech/a,

what do u think is a good source to get EOD data?
(compatible with amibroker)

James - Iv looked at e-signal as well, but i dont really need intraday. 
Once Im a pro (like YOU), then ill consider 4 screens and the latest and greatest. For now i just need to get myself into the game, slowly. Im pretty much just starting out.

Michael D - Can u offer any suggestions as to *good* and *expensive* EOD data?


----------



## soultrader

stevo said:
			
		

> soultrader
> Would you say that market profile gives a more complete picture of price?
> 
> stevo




Market Profile is not popular among the trading public. Why? Because it forces you to use your head. It requires creativity to be able to master market profile.

To me.. I can never trade without market profile. If the trading public caught on with this, I would not make money. 

I recommend Dalton's work. Alot of traders I know recommend the Cisco Futures study guide. I can provide you with a bunch of mp resources.. just pm me.

Dalton is also coming out with a new book sometime in Feb. I already pre-ordered it and cant wait to read it.


----------



## soultrader

nizar said:
			
		

> tech/a,
> 
> what do u think is a good source to get EOD data?
> (compatible with amibroker)
> 
> James - Iv looked at e-signal as well, but i dont really need intraday.
> Once Im a pro (like YOU), then ill consider 4 screens and the latest and greatest. For now i just need to get myself into the game, slowly. Im pretty much just starting out.
> 
> Michael D - Can u offer any suggestions as to *good* and *expensive* EOD data?





If you want to really learn to trade, you need real-time data. A little history on how I learned to trade:

I had an office job for about 1 year. During the time, I used to watch a bar chart with nothing on it which was delayed 15 minutes since I could not install anything on the computer. I had to literally refresh my browser every 15 minutes in order to see the chart formation progress as the trading day passed. I started taking notes on support and resistance levels... and would anticipate which direction price would go in the next 15 minutes. This forced me to learn price action and a short term trading style.  This went on for about 8 months. Of course after I quit, I stared at real-time data for quite some time including the tape.

What time frame are you planning to trade? If you are trying to trade as active as I am, you need to invest in yourself. This includes education, real-time data, trading platform, etc...


For those of you using Tradestation, a buddy of mine just released a new version of Market Profile. You can download it for free on my forum.


----------



## tech/a

Soul

Do you hand chart your profiles?

Nizar.

I use Bohdi.I also get data for 7 bourses (markets) mainly for testing purposes I only trade AUST stock. All I have time for!.


----------



## soultrader

tech/a said:
			
		

> Soul
> 
> Do you hand chart your profiles?
> 
> Nizar.
> 
> I use Bohdi.I also get data for 7 bourses (markets) mainly for testing purposes I only trade AUST stock. All I have time for!.





That would be insane. I know of people who still draw point and figure charts manually but not with MP. Right now I use a MP chart for Tradestation that my buddy developed.


----------



## tech/a

Yeh that it would---be insane.

I just didnt know of a platform that could be adopted to software now in use or a stand alone---although I believe there is one.

If I had tradestation or knew of a stand alone platform then i would use it without question.


----------



## nizar

James - I dont have the time to get into this as intense as you unfortunately as im studying full time and work part time. EOD trading has its appeal for now in that i can spend ~2 hours per day. And even though its not as profitable as real-time trading i dont yet have the time nor the knowledge to take trading up seriously.

Im only considering ASX stocks at this stage. CFD Indices and Forex will come(years) later.

As tech/a's thread has shown, EOD trading can still be profitable, though obviously entries and exits wont be as good. I still need to read some books, paper trading, back testing, need to get my T.A upto a satisfactory level. Then hopefully in 3-6months i can start a bit of EOD trading.

You must understand im still an **AMATEUR**

Thanks for the advice


----------



## MichaelD

nizar said:
			
		

> Michael D - Can u offer any suggestions as to *good* and *expensive* EOD data?



I personally use Paritech and am happy with their data. Trading Game data also has a good reputation and has a very nifty feature which is of sorting stocks into industry groups - a must if you are a believer in RSC analysis.

Expect to pay $300 - $400 per annum for your ASX data.


----------



## Euler

Is anyone out there using MP to trade the SPI on the SFE?
If you are, could you share your experience with us?
In all the reading I've done so far it seems to be applied predominantly to the US market or FX.  Would like to hear from people applying it to our (Aus) markets.


----------



## soultrader

I recently saw a stock trader using MP to trade stocks like IBM. It stunned me since I never encountered stock traders using market profile.


----------



## qaz

Excuse my ignorance..

What is market profile and how do you trade on it?


----------



## tech/a

*"Market profile"* is a trading methodology more commonly known as Steidlmayer.

Created by *Peter Steidlmayer* along with the *"Liquidity Data Bank"* for the Chicago Board of Trade.

Market Profile can be used to trade all liquid instruments. Along with Elliot Wave this is by far one of the most revolutionary forms of Technical Analysis in the market.

While I dont formally trade it I certainly benefit from its principles of accumulation and distribution. Well worth understanding.


----------



## qaz

Ok, sounds interesting........

I'll have to check it out.


----------



## soultrader

My core methodology revolves around market profile concepts. Definitely worth learning in my opinion.


----------



## tech/a

soultrader said:
			
		

> My core methodology revolves around market profile concepts. Definitely worth learning in my opinion.




*Soul*

Some great info here.

http://www.traderslaboratory.com/forums/f6/market-profile-trading-concepts-175.html

Do you use it on all the markets you trade?
Im also interested in whether you use it in conjunction with other analysis or simply stand alone?
If so then how you combine it.

Do you use M/P software if so what??

Some charts of profiles(Terminology etc).would be very helpful on your site as a visual representation speaks a 1000 words.

Great site.Congrats.


----------



## soultrader

tech/a said:
			
		

> *Soul*
> 
> Some great info here.
> 
> http://www.traderslaboratory.com/forums/f6/market-profile-trading-concepts-175.html
> 
> Do you use it on all the markets you trade?
> Im also interested in whether you use it in conjunction with other analysis or simply stand alone?
> If so then how you combine it.
> 
> Do you use M/P software if so what??
> 
> Some charts of profiles(Terminology etc).would be very helpful on your site as a visual representation speaks a 1000 words.
> 
> Great site.Congrats.





Hi tech,

Thank you for the compliments. I use MP strictly on index futurs as this is the only instrument I trade. Several other MP traders I know use it on currency futures, bonds, and other commodities. 

My core methodology is based on S&R levels (mainly pivots), market internals, tape reading, and market profile concepts. I do not use MP alone. I started off initially as a pivot point trader and somehow incorporated MP into my methodology. MP is more of a concept to me to understand what the market is telling me. Most of my entries are done at pivots after understanding the overall picture. 

I currently use a MP indicator for Tradestation which a member on the forum created. It saves me a ton of money. There is alot of charts on the forum, so you might want to take a look there. One interesting trader by the name of "ant" uses MP strictly and its interesting to see his ES analysis. Hope it helps.


----------



## >Apocalypto<

SoulTrader,

I agree with you to a point as my favorite trader of all time is Mr Jesse Livermore, In his books he spoke about only reading the tape (last prices being in sync with the markets strength and weakness.

But I don't agree that all indicators are useless that is a strange generalization to make as they all work in certain market situations that they best suited for.

I have been using OBV with Volume and trend lines for a while now and i have never had the idea that it is use less.

It works for Futures, ASX, Indexes. I went long on crude 2 days before the 5% rise this week cuz OBV showed an entry.

Aslong as you know what indicator to use and when, then they work.

No use using a hammer to drill a hole!


----------



## dovetree

I am a recent member of traders lab, and think the site is great. I think that soul trader makes some execellent points about learning to "read price Action" and all indicators are a derivcative of price. However, MP is just another " indicator." No better or worse than pivot points, RSI etc.

Having said that I use pivot points and price action and tape reading like soul trader , and like soul trader have been trading professional (for myself)for 15 or more years. I also use indicatirs I have developed myself that I use to confirm setups  and entries and rules for exits.
I have seen at times pivot points be totally wrong but I have also seen MProfile be completely incorrect. The difference is if MP is incorrect is it the system or the persons interpretation of what brackets are significant.
I also remember Steidelmeyer saying that he was wrong, and market profile did not work.

The only thing I have learned that I believe is 100% correct is that if everyone is doing one thing in the markets I will make dam sure that I am not doing the same also.... that is the way to make a consistent living out of trading.


----------



## wavepicker

dovetree said:
			
		

> The only thing I have learned that I believe is 100% correct is that if everyone is doing one thing in the markets I will make dam sure that I am not doing the same also.... that is the way to make a consistent living out of trading.



Agree totally with you dovetree. The fields of using fundementals and traditional TA have been thoroughly plowed for many years by many competent people. It is highly unlikely that any significant improvements is acheivable on this well-trampled ground. If significant progess is to be made in beating the the market and to succesfully "trade the traders who trade the market" then a new and unconventional approach to what the masses are using is required.

For me that has meant abandonding methodologies that others are using and coming up with something completely different that I know is out of reach of most, both in terms of knowledge and application.

I know others will jump out and say that there have been many success stories in the last 3-4 years. That is indeed true. However these are not excactly "normal" market conditions. Markets in the main don't always behave this way and we are indeed very lucky to have such strongly trending markets in the last 3-4 years.The party can (in fact history has proven that it will) be over any time. One must have a methodology/plan that is robust enough to be successfully applied in any market conditions, that is trade the markets both up down and sideways. That's the bottom line if you want to trade for a living. Otherwise you will maybe hanging around for a very long time.

Cheers


----------



## tech/a

I'll second that.

Just on the Bullmarket anyone can make a $$.

True.But as one example a 30% hit on open profit from my longterm holdings while not pleasent would still have me grinning like a Duck at the End of Duck season.

Take advantage of what the Market gives you when it gives it to you.

Dont live/trade in fear.


----------



## nizar

tech/a said:
			
		

> Take advantage of what the Market gives you when it gives it to you.




Exactly.
Let the good times roll.


----------



## wavepicker

tech/a said:
			
		

> I'll second that.
> 
> 
> Take advantage of what the Market gives you when it gives it to you.
> 
> Dont live/trade in fear.




Very much so tech, take advantage what the market gives. That includes the bullmarket or any potential bear campaigns for that matter. Who cares?

Cheers


----------



## Bobby

wavepicker said:
			
		

> Agree totally with you dovetree. The fields of using fundementals and traditional TA have been thoroughly plowed for many years by many competent people. It is highly unlikely that any significant improvements is acheivable on this well-trampled ground. If significant progess is to be made in beating the the market and to succesfully "trade the traders who trade the market" then a new and unconventional approach to what the masses are using is required.
> 
> For me that has meant abandonding methodologies that others are using and coming up with something completely different that I know is out of reach of most, both in terms of knowledge and application.
> 
> I know others will jump out and say that there have been many success stories in the last 3-4 years. That is indeed true. However these are not excactly "normal" market conditions. Markets in the main don't always behave this way and we are indeed very lucky to have such strongly trending markets in the last 3-4 years.The party can (in fact history has proven that it will) be over any time. One must have a methodology/plan that is robust enough to be successfully applied in any market conditions, that is trade the markets both up down and sideways. That's the bottom line if you want to trade for a living. Otherwise you will maybe hanging around for a very long time.
> 
> Cheers



Hello Wavepicker,

I like your above thoughts, you mentioned a plan to trade the ups & downs Plus sideways, *THATS* the hard bit.

Bob.


----------



## tech/a

wavepicker said:
			
		

> Who cares?




Indeed.

We will become optimistic opportunists!!
But then again--pessimistic opportunists!!

I used to be indecisive but now I'm not so sure.

Oh bugger it lets simply be opportunists!


----------



## soultrader

I agree that indicators can help a trader in many ways. Whatever works for you great! But still indicators are a derivative of price.

Here is an excerpt from an interview of Linda Raschke Bradford:

*AT: *  Even though you emphasize the primary role of price action, you still seem to use indicators in certain roles.
*LBR: *  You have to put indicators in context. They're background information - *never the primary reason for a trade*. That said, you can indicators to objectively scan and rank things... Indicators allow you to see something very quickly. My eye can see a rally in an oscillator, price resistance at the moving average and a little bear flag. If I just look at a plain bar chart, I can't put the price action into context as fast. Indicators can help you process the informtion a little more quickly. 

*AT: *  But something like that still won't be as objective or mechanical as something like the wide-range bar scenario, which has a defiable probability associated with it right?
*LBR: *  Asbolutely. If is easier to quantify patterns with range functions that it is with indicators, which are derivatives of price...etc

I would attach the article in a .pdf format but I can not seem to find an attachment function for this message box? Maybe someone can help me out here.

Getting back to some charts. Here is an example of why the quote made by Linda Raschke "You have to put indicators in context. They're background information - *never the primary reason for a trade*" stands true. A trader who is fairly good with price action, volume analysis, and tape does not require any indicator. This is not to say indicators are bad. But trading can be done without them. The old timers, Jesse Livermore, Wyckoff, Humprhey Neill... was never exposed to any indicators. Buying/selling was done through the study of price action and patterns (which has now become modern day technical analysis) If those guys were able to do it... there is no reason why modern traders can not rely on the same information.

Below is a daily chart of the mini-sized Dow contract. As you can see, we are still in a magnificent bull run. However, both the MACD and RSI is indicating a sell signal throughout the rally. Price is king.







Now is market profile and indicator? Well yes and no. Market profile is an interesting concept to understand the markets. It requires creativity if you apply it in your trading. Market profile makes a trader think on its own. It does not generate buy or sell signal. Once you understand it, you will see that it is only a simply study of auction theory. Supply vs demand. Balance vs imbalance. Long term buyers/sellers vs short term buyers/sellers. I do not use market profile by the book. What I have done is studied market profile and applied the concepts to it in my trading. I use the auction theory to see if the markets are in value or outside of it. Once again, it comes down to the basic questions: "What is the market trying to do now?" 

It is ackward to say whether market profile works or doesnt work. Because there is no such thing... it is not a system. If you follow each textbook instruction on what to do with market profile, it may not work according to the market. But if you have taken the concept of market profile and have applied it your trading, I truly believe a traders market understanding will increase 3folds. 

Textbook MP will say that once value high as been broke, it will become support. And once value low is broken it will become resistance. True and false. If you follow these rules blindly you will be frustrated at the amount of times price leaves value and then travels back in. A trader needs to understand whether the break of value was on good volume, good tape, etc... Here is an example of how I like to use market profile concepts in my trading. 

In the chart below, the green dotted lines represent both the value high and value low pivot (VAH and VAL). now on Feb. 6, price opens up above value and rallies to test near the previous day high. The markets love to test these extremes to test for demand and supply. The rally to the test of the previous day high was met by supply. Hence price reverses and is pushed back into value. The textbook rule of VAH become support would of not worked here. Why? Previous day high/low are favorite levels by professional traders. Unless we are seeing significant buying/selling pressure there is a bigger probability that price will not travel beyond these two points. If they do, we have a potential trend day. So professionals often like to fade these levels.







Now as you can see price then fell inside value and broke below VAL. It went on to test the previous days low to test supply and demand. It was met with demand and price went on to rally to close above the previous day high. (notice the sentiment change at the close) The textbook play of shorting VAL would of only worked on the first retracement back to VAL. After all the selling was absorbed (notice the volume spike with red volume delta at 12:00) price reversed.

So how do I play these? I personally have rules when the previous day high and low is right above/below the value area. I always look at the high and low instead of playing the value pivots. Some of you may be familiar with the 80% rule as well. (this is just the name of the setup.) When price lifts above/below value but falls within, there is a good chance price will test the other extreme value pivot. Some traders use this rule to play these setups.

Happy trading


----------



## dovetree

Hi soultrader, 

You make some good points about market profile, but I would have to say again market profile is just another indicator, with positives and negatives. Anyone can have an indicator... it is how you use it that makes the difference. Whilst I agree with you (and don't use the ind's you mention) The daily MACD you show is miss leading if you don't look at the higher time frame. The weekly MACD of the YM will show there has been no crosses to the downside( or even looked like crossing )in the time frame you show since Sept 2006. (Sorry I don't know how to attach a chart.)So the strategy should have been look for pull back to buy in the smaller (dalily time frame) and ingnore anything else until the higher time frame changed.

Market profile is nothing more than a way of measuring POSSIBLE areas of support and resistance and often pivot points line up exactly the same.

The problem with all Indicators(MP, Pivots, MACD, etc,etc) is how you use them and the ultimate indicator the hard right hand side of the Chart.

Incidentally who supplies your tick volume(tick delta), can you get it for markets other than the US markets

cheers


----------



## ducati916

jog on
d998


----------



## soultrader

Excellent duc. It seems like all you did was find a market that worked with the MACD. You entirely missed the point of the thread. 

dovetree, the TICK Delta is misleading. It should actually be labeled Volume Delta. What it does is it take the number of contracts at the bid vs the number of contracts at the ask and plots whatever the greater on top. A buddy of mine coded it up for me. If you use TS it is available.


----------



## ducati916

soultrader said:
			
		

> Excellent duc. It seems like all you did was find a market that worked with the MACD. You entirely missed the point of the thread.
> 
> dovetree, the TICK Delta is misleading. It should actually be labeled Volume Delta. What it does is it take the number of contracts at the bid vs the number of contracts at the ask and plots whatever the greater on top. A buddy of mine coded it up for me. If you use TS it is available.




Well actually no.
*dovetree* requested a YM chart, I don't have the YM chart, but the *DIA * chart is in essence going to be pretty close.

And as was stated, in the higher timeframes no signal from the MACD was triggered for a short entry.

Thus if you wish to trade the counter-trend, the entries have to be precise, and will have limited duration and or reward.

jog on
d998


----------



## professor_frink

from the opening post in this thread-



			
				soultrader said:
			
		

> As a professional futures trader, I have spent my early days of my career making every possible newbie mistake in trading. This involved relying on rookie indicators such as the stochastics and moving average crosses, from relying on candlestick patterns, and newbie chart patterns such as head-n-shoulders and triangles.
> 
> As a new trader I lost 2 trading accounts without cleary understanding the pure action of price. The day my trading career turned around was the day I took all my indicators off and relied soley on price action. I then studied market profile to understand price acceptance vs rejection; market balance vs market imbalance.
> 
> Now, my core methodology is based on market profile, pivots, and tape reading. *Indicators in my opinion are useless.* A new trader who relies on indicators will never learn the true art of trading. Market conditions change everyday and indicators and systems must be tweaked constantly. Yet, newbies look for indicators as the holy grail.



and a more recent comment-



			
				soultrader said:
			
		

> I agree that indicators can help a trader in many ways. Whatever works for you great! But still indicators are a derivative of price.



Hi James,
it seems as if you are starting to soften your stance on indicators a bit. Would that be an accurate statement? And if so, has there been any particular reason for the slight change in stance?

There has been some great dip buying opportunities into the moving average on the chart you posted(it looks like a 40 or 50 day MA). I personally think moving averages are a great lazy man's S/R area to keep an eye on. 
As for the MACD, I agree with Duc, it hasn't dished out a short signal, as it's still above the zero line- all it's showing is a loss in momentum. A quick glance at the chart and you'll see it- And that's why I think indicators get a bad rap- alot of people(especially newbies) look at the indicator first and price action 2nd, when it should be the other way around. 
The comment from LBR in your earlier post said it best- "Indicators can help you process the information a little more quickly".
IMO any indicator that helps me process information a little quicker is something I want displayed on my chart.


----------



## ducati916

*Prof*

If you look at the DIA chart, the price action displayed a picture perfect double bottom............the MACD [if you drew a trendline] was a higher low.

This sort of signal is where [potentially] indicators can be useful. You can place a tight stop on the price action, and try to catch the MACD trend.

To dismiss indicators out of hand is simply incorrect. If you don't *like* them that's fine, but they can have their uses if used correctly.

Incidentally it was *dovetree * who noted the MACD in the higher timeframe.


jog on
d998


----------



## nizar

Excellent discussion here.
I agree with what Prof said. I think MACD is quite an accurate indicator.


----------



## tech/a

*Indicators used in ISOLATION are pretty well USELESS.*


----------



## professor_frink

ducati916 said:
			
		

> *Prof*
> 
> If you look at the DIA chart, the price action displayed a picture perfect double bottom............the MACD [if you drew a trendline] was a higher low.
> 
> This sort of signal is where [potentially] indicators can be useful. You can place a tight stop on the price action, and try to catch the MACD trend.
> 
> To dismiss indicators out of hand is simply incorrect. If you don't *like* them that's fine, but they can have their uses if used correctly.
> 
> Incidentally it was *dovetree * who noted the MACD in the higher timeframe.
> 
> 
> jog on
> d998



I agree Duc.
If I was going to use the MACD, I'd be looking for that kind of pattern. Although you would have been struggling to make a buck trading the divergence on the way up(though the potential was there if positions weren't held for long-and looking at it with the aid of hindsight always helps too!)



			
				nizar said:
			
		

> Excellent discussion here.
> I agree with what Prof said. I think MACD is quite an accurate indicator.



Sorry nizar, that wasn't the intention of my post. I never meant to say it was accurate. I don't think it's any more accurate than any other indicator out there(personally, I prefer the RSI, but they basically do the same job).


----------



## nizar

professor_frink said:
			
		

> Sorry nizar, that wasn't the intention of my post. I never meant to say it was accurate. I don't think it's any more accurate than any other indicator out there(personally, I prefer the RSI, but they basically do the same job).




Yeh i meant i agreed with your observation that MACD did not turn negative ie. give a short signal, in soultraders example.

Cheers


----------



## professor_frink

nizar said:
			
		

> Yeh i meant i agreed with your observation that MACD did not turn negative ie. give a short signal, in soultraders example.
> 
> Cheers



Ok then.


----------



## ducati916

tech/a said:
			
		

> *Indicators used in ISOLATION are pretty well USELESS.*




Standalone statements are pretty well useless.

Oh, ok.

Could you not argue the inverse, that *price* in isolation is pretty useless?

jog on
d998


----------



## tech/a

Hmm cant see the mention of Price anywhere?

If you were to classify Price as a stand alone indicator,and I guess the patterns associated with price action Triangle,Flag,Pennent,blah blah,then yes.


----------



## wayneL

nizar said:
			
		

> Excellent discussion here.
> I agree with what Prof said. I think MACD is quite an accurate indicator.



The MACD is precisely accurate... in measuring the distance between two EMAs


----------



## ice

It's darwinian selection. 

If the indicators you use don't work you are quickly eliminated from the game.
And make no mistake it is a game. Treat it as such and you have a chance. Take it too seriously and it will eat you up.

FWIW the most compelling indicator I've found is when my wife says "YOU DID WHAT?"...


ice


----------



## nizar

wayneL said:
			
		

> The MACD is precisely accurate... in measuring the distance between two EMAs




LOL i really shouldnt have said that...


----------



## theasxgorilla

ice said:
			
		

> FWIW the most compelling indicator I've found is when my wife says "YOU DID WHAT?"...




I notice you said COMPELLING, but not ACCURATE.  Doesn't she trade too??


----------



## It's Snake Pliskin

professor_frink,



> A quick glance at the chart and you'll see it- And that's why I think indicators get a bad rap- alot of people(especially newbies) look at the indicator first and price action 2nd, when it should be the other way around.




Most indicators aid the eye in determining something, hence your comments on faster recognition. So if looking at price first is that going to be faster or slower? I think slower, though I am talking in the sense of diagnosis using indicators not acting on them before using price. If one needs price to help work out the indicator then the indicator is useless.

Regards
Snake


----------



## ice

theasxgorilla said:
			
		

> I notice you said COMPELLING, but not ACCURATE.  Doesn't she trade too??





No, she is both highly intelligent and highly educated; qualities which are major handicaps to successful trading.


ice.

PS. i seem to be digging myself a deep hole here so I will refrain from further comment in this thread.


----------



## professor_frink

It's Snake Pliskin said:
			
		

> professor_frink,
> 
> 
> 
> 
> A quick glance at the chart and you'll see it- And that's why I think indicators get a bad rap- alot of people(especially newbies) look at the indicator first and price action 2nd, when it should be the other way around.
> 
> 
> 
> 
> 
> Most indicators aid the eye in determining something, hence your comments on faster recognition. So if looking at price first is that going to be faster or slower? I think slower, though I am talking in the sense of diagnosis using indicators not acting on them before using price. If one needs price to help work out the indicator then the indicator is useless.
> 
> Regards
> Snake
Click to expand...


Hi Snake,

In this case, looking at the price action after checking the indicator is going to be slower, so the indicator is pretty well useless. I agree with you on that one. Most of the time(I say most as I'm sure there are exceptions to this) the MACD doesn't tell me anything I can't see from looking at price action. And as I already use MA's in my trading, I don't really see the point in having something below the chart that measures the difference between 2 averages I don't even use, so I don't display it on any of my charts.


----------



## It's Snake Pliskin

professor_frink said:
			
		

> Hi Snake,
> 
> In this case, looking at the price action after checking the indicator is going to be slower, so the indicator is pretty well useless. I agree with you on that one. Most of the time(I say most as I'm sure there are exceptions to this) the MACD doesn't tell me anything I can't see from looking at price action. And as I already use MA's in my trading, I don't really see the point in having something below the chart that measures the difference between 2 averages I don't even use, so I don't display it on any of my charts.




It appears you have it under control Professor. Like you I feel one MA is ample.


----------



## >Apocalypto<

dovetree said:
			
		

> Hi soultrader,
> 
> You make some good points about market profile, but I would have to say again market profile is just another indicator, with positives and negatives. Anyone can have an indicator... it is how you use it that makes the difference. Whilst I agree with you (and don't use the ind's you mention) The daily MACD you show is miss leading if you don't look at the higher time frame. The weekly MACD of the YM will show there has been no crosses to the downside( or even looked like crossing )in the time frame you show since Sept 2006. (Sorry I don't know how to attach a chart.)So the strategy should have been look for pull back to buy in the smaller (dalily time frame) and ingnore anything else until the higher time frame changed.
> 
> Market profile is nothing more than a way of measuring POSSIBLE areas of support and resistance and often pivot points line up exactly the same.
> 
> The problem with all Indicators(MP, Pivots, MACD, etc,etc) is how you use them and the ultimate indicator the hard right hand side of the Chart.
> 
> Incidentally who supplies your tick volume(tick delta), can you get it for markets other than the US markets
> 
> cheers




Very well Said I got that impression as well from market profile, what ever you can understand and makes you cash then stick to it no matter what it is T/A F/a


----------



## >Apocalypto<

It's Snake Pliskin said:
			
		

> It appears you have it under control Professor. Like you I feel one MA is ample.




Snake I also only use one MA, more then enough for me.


----------



## Kauri

Given that today is the second day of the current correction, did anyone using an indicator have a timely/tradable warning of this correction?? Have looked through all the posts and I can only find Cannieausek who called it using vol/range interpretation.


----------



## >Apocalypto<

Boys and girls

see attached charts

DJI was easy to see holding any long positions was not looking good 4 consecutive weak days with a break in the trend line, 12600 would have been my stop. Also there was major divergence on the MACD with the dow rising but the  MACD weakening with the break in the trend and a smart stop you would have came out of that trade missing most of the drop of yesterdays fall.

XAO was a little more tricky but i was holding 2 X 5525 call options on the xjo till this morning and i did take most of the hit. (wish i had a cfd on that no stops!)

the main problem i saw was yesterday when it closed under the trend with OBV dropping I saw this coming for a while and warned no stopped my girl friend from opening any long positions in the last 7 days!

as you can see the XAO ran into a major top at 5950 and just managed to get to 6000+ with the dow dropping which worried me we where running on vapors in my opinion.

this all gave me the feeling that opening any new long positions on the xjo was not a great idea.

on the short side i now use all my strengh not to short the market during a bull market.

but the dow was a golden opportunity to short XAO not enough evidence to back that decision   

Please note i had no idea that the china sell off was happening or did happen till this morning when i saw a 400 pt loss on wall street and had to slap myself to make sure i was a wake!

what i am saying is i sore weakness but i had no idea that would happen!

from today i see a possible bounce of the trend under 5800 on XAO and another possible entry on the long side coming soon, as long as it stays above 5800 trend.

please people let me know if u see holes in my thoughts.


----------



## tech/a

Holes.

Yeh.
The technical information from that or most charts I have seen gave no indication of a spike move down.
From your charts nothing more than a standard corrective move in a solid trend.
To try and present a case after the fact is pointless.
The only analysis that came close were those using Elliot and Volume analysis.
Warnings of possible topping was as close as I have seen to calling it.

Now a warning is enough to place shortterm traders atleast in a position of caution.Smaller positions and looking for shorts in weaker stocks.

Longterm holders could have taken "some " profits from stocks held over 12 mths (Tax implications).

Weak low volume rallies back into the fall will show weakness.
Watch for selling into rallies---this will be big holders selling off some longs.
(Best seen on 10-20 min charts).

Ill be watching today to see if this is occuring here.


----------



## Freeballinginawetsuit

Tech,

Taking a punt and trading the swings is one thing (surely the go is to exit by close). If youre confident of the market and looking for longer term value picks another scenario again.

Personally I would have concerns at holding in the marketplace ATM following volume alone and trying to pick a top of a weak counter rally. Holding O/nite is when IMO the possability of another pullback will occur rendering any stop a 'waste of space' on open.

Several of the stocks I am holding as trades Insto's have entered after me, and near the top. If they decide to exit it will be overnite or bleedingly obvious if intraday. If this happens a trigger elsewhere would seem likely to have nudged them, hence the overnight scenario.

Personally I'm off the opinion this is all a fizzer, certainly of the stocks I'm into volumes have been strong of late.....so difficult to reason why a sudden shift in sentiment over current issues would avail. Fundamentals of these companies hasn't changed one iota........specs, well I've got a couple of them and sold out into strength yesterday.

Anyway the next few days should present some opportunities, good ones or of the burning persuasion.......too early to decide which....probably wise to wait and see what pans out.  

I will trade my usual plan


----------



## Pat

Freeball,
I'd love to agree, however can you be sure things will turn around?
I must admit i've taken the same perspective as you, bargans all round, I just wish I was cashed up.
But what if where wrong?
Should we be adapting our strategy?
What is the risk?


----------



## Freeballinginawetsuit

Plenty of risk....agreed, but if you had been a follower of that train of thought the last few years well...
I'm split in two ,funds for trading (never changes) that I move profits into my long positions.
Prepared to risk my trades and sit on my longs. After 3 years at it I've been fortunate enough to have been in a lucky marketplace........the Risk? is all relative now.

If you were in the marketplace for the last couple of months,funds limited and holding as of yesterday..... I'd be looking at all my options and especially not making any rash decisions.


----------



## machi

tech/a said:
			
		

> The only analysis that came close were those using Elliot and Volume analysis.
> Warnings of possible topping was as close as I have seen to calling it.




Not quite tech/a. There were quite a few non lagging cycles projections that warned of this from as far as 2 months ago. Although EW has been quite handy, most EW analysts were not as close to the mark as for example Magdoran and few others....

EW and or Vol Analysis on its own is sometimes is not enough......


----------



## Sean K

A couple of guys were picking a pullback on the XAO analysis thread from about 7 Jan, citing the divergence of the RSI and MACD from the chart. Also, the movement away from the 200d ma was a signal of a correction to be due. 

I must note, a 'correction' as has been bandied about is not a 3% blip. A 'correction' is about 8%. We've got some room to move yet.

https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=3


----------



## >Apocalypto<

tech/a said:
			
		

> Holes.
> 
> Yeh.
> The technical information from that or most charts I have seen gave no indication of a spike move down.
> From your charts nothing more than a standard corrective move in a solid trend.
> To try and present a case after the fact is pointless.
> The only analysis that came close were those using Elliot and Volume analysis.
> Warnings of possible topping was as close as I have seen to calling it.
> 
> Now a warning is enough to place shortterm traders atleast in a position of caution.Smaller positions and looking for shorts in weaker stocks.
> 
> Longterm holders could have taken "some " profits from stocks held over 12 mths (Tax implications).
> 
> Weak low volume rallies back into the fall will show weakness.
> Watch for selling into rallies---this will be big holders selling off some longs.
> (Best seen on 10-20 min charts).
> 
> Ill be watching today to see if this is occuring here.





its all good for you to say holes but were is your analysis? How can any one predict a massive spike down you can't you can only get an idea of weakness to take defensive action, so I would love you to give us all your lead up to what happened yesterday T/A and show us how it is done!


----------



## ducati916

For an interesting indicator check out the blog.

jog on
d998


----------



## tech/a

machi said:
			
		

> Not quite tech/a. There were quite a few non lagging cycles projections that warned of this from as far as 2 months ago. Although EW has been quite handy, most EW analysts were not as close to the mark as for example Magdoran and few others....
> 
> EW and or Vol Analysis on its own is sometimes is not enough......




A lot of the fundamental boys had an ALERT pegged as well.
Lots of alerts which as I said above for those who are trading in the shorter timeframes would have been enough to soften positions.

For longer timeframes its just another day.

*Trade-it*
You cant predict the magnitude of anything.(although Elliot analysis can give likely areas of a move AFTER the move has begun.You can and its been done by many here fundamentalist and technical---alert to situations.
how you trade them is of course the key.
Conventional analysis gave/gives no clue when looking at the XJO.
Perhaps divergence. But as a conventional (divergence) technical tool divergence isnt any more reliable(in isolation) than any other technical indicator.

*Notice anything on this 5 min chart?*


----------



## Pat

Freeballinginawetsuit said:
			
		

> Plenty of risk....agreed, but if you had been a follower of that train of thought the last few years well...
> I'm split in two ,funds for trading (never changes) that I move profits into my long positions.
> Prepared to risk my trades and sit on my longs. After 3 years at it I've been fortunate enough to have been in a lucky marketplace........the Risk? is all relative now.
> 
> If you were in the marketplace for the last couple of months,funds limited and holding as of yesterday..... I'd be looking at all my options and especially not making any rash decisions.




I'm only sitting on longs at the moment, lucky. Yesterday I was laughing at my mate from work who trades between tasks.... He's not here today so I'm not sure how much was lost or gained.


----------



## tech/a

Still watching??

Whats it saying??


----------



## Magdoran

kennas said:
			
		

> A couple of guys were picking a pullback on the XAO analysis thread from about 7 Jan, citing the divergence of the RSI and MACD from the chart. Also, the movement away from the 200d ma was a signal of a correction to be due.
> 
> I must note, a 'correction' as has been bandied about is not a 3% blip. A 'correction' is about 8%. We've got some room to move yet.
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=3



Hello Kennas, 


Well done for being aware that a pull back of some kind was due.  Calling this in mid January demonstrates that you were with the savvy technical analysts.  You were one of the minority that saw that the market was looking toppy, and said so.  You even started to map out possible scenarios of how far down the market may move, which is commendable.  In my view this was the appropriate action to take, and one I fully share with you.

The fact that you stuck to this interpretation right through to the move demonstrates that you clearly grasped the strong potential for a pronounced bearish move.

However, while I salute your dedication to this position which I shared, would you accept that there is a qualitative difference between someone broadly saying “we’re due for a correction”, “it’s coming” and trying to map out how far down the major indexes may move, compared to actually identifying a specific date and a specific index level for the top in advance?

I called the 24th of Feb as the key date with Feb 23 as the most probable date for a high, on January 22.  I also called the index level of 6025 for the XAO on Feb 17.

I shot over a set of musings over to wavepicker (and others) from December to around mid January with a set of possible scenarios for some kind of pull back ranging from a small corrective move to a full correction.  I did have a longer term cycle heads up in weekly and monthly charts, but these are way to inaccurate to call a specific day, hence the pattern in the daily had to play out before I could get a more precise time and price level.

Interestingly there were a couple of times we thought a significant move may have been on early in January, but this wasn’t lining up with the work I was doing.  Hence by the time I put my first post out on January 22, I actually had a key time point that had a high probability from the work I had done which was Feb 24 with Feb 23 as the most likely date followed by Feb 26.

With all due respect, how would you compare all the other comments along the lines of a correction is coming to actually identifying and calling a specific date with a +/- 1 trading day tolerance more than a month out from the event?

Add to that calling an index level a week out from the event when I identified two target levels with 6025 as the most probable one on Feb 17.

I decided not to make a big song and dance about it till I’d winded out my longs and had set up shorts hence my warnings became stronger on the 26 Feb, about as strong as I thought appropriate.


I salute that you saw it coming too, and posted to that effect, well done.



Regards


Magdoran

P.S. Here are the relevant posts, well in advance: 

•	22 January 2007 see post 645 in “Zinc the metal for 2006", 
•	Then on 01/02/07 post 4 in “Trading The SPI - Gann Techniques”,  
•	Clear comments on 23 and 26 Feb on “Can we quit job and invest in stocks full time?” post 99, 106, and 112, 
•	I gave the actual high target of 6025 as my first choice in "ZFX – Zinifex" post 1408 on 17 Feb.


----------



## Magdoran

Trade_It said:
			
		

> Boys and girls
> 
> see attached charts
> 
> DJI was easy to see holding any long positions was not looking good 4 consecutive weak days with a break in the trend line, 12600 would have been my stop. Also there was major divergence on the MACD with the dow rising but the  MACD weakening with the break in the trend and a smart stop you would have came out of that trade missing most of the drop of yesterdays fall.
> 
> XAO was a little more tricky but i was holding 2 X 5525 call options on the xjo till this morning and i did take most of the hit. (wish i had a cfd on that no stops!)
> 
> the main problem i saw was yesterday when it closed under the trend with OBV dropping I saw this coming for a while and warned no stopped my girl friend from opening any long positions in the last 7 days!
> 
> as you can see the XAO ran into a major top at 5950 and just managed to get to 6000+ with the dow dropping which worried me we where running on vapors in my opinion.
> 
> this all gave me the feeling that opening any new long positions on the xjo was not a great idea.
> 
> on the short side i now use all my strengh not to short the market during a bull market.
> 
> but the dow was a golden opportunity to short XAO not enough evidence to back that decision
> 
> Please note i had no idea that the china sell off was happening or did happen till this morning when i saw a 400 pt loss on wall street and had to slap myself to make sure i was a wake!
> 
> what i am saying is i sore weakness but i had no idea that would happen!
> 
> from today i see a possible bounce of the trend under 5800 on XAO and another possible entry on the long side coming soon, as long as it stays above 5800 trend.
> 
> please people let me know if u see holes in my thoughts.



Trade It,


There are alternatives to using lagging indicators and oscillators.  The technical analysis style I use doesn’t use any of these.

If you care to sweep back through my posts on technical analysis I suggest that these kinds of indicators actually obscure “seeing” the market, and McLaren characterises them as “trading shadows on the wall” (unless you use them the way wavepicker does with his cycle analysis/FFT style).

Just a bar chart and volume to the trained eye will tell you a lot if you know what you are doing without any tools or indicators at all.  Pure charting and knowing how to interpret the data is central in my opinion to improving your analysis.

Key concepts like understanding trends and more importantly counter trends is central – especially pattern of trend, wave structure, divisions of range (retracement and extension).  Add to that time cycles and knowing how to use these effectively can be very powerful.

Anyone with any kind of solid grounding in technical analysis was able to see the probabilities increasing for a pull back of some sort recently, and many posted to this effect well in advance, some even calling fairly accurate time and price level windows, so the capacity to do so is there.  

The current methods you are employing are highly unlikely to identify these patterns; hence you will have to accept the limitations of your chosen style of trading, and live with it, or consequently decide to embark on some research into alternative methods.  It’s your choice.



Regards,


Magdoran


----------



## Sean K

Magdoran said:
			
		

> Hello Kennas,
> Well done............. well done.



Thanks Mag, but what we were saying wasn't rocket science, it was pretty bleeding obvious IMO. The bulls just didn't want to admit that the market does correct sometimes. In my opinion it's still got some to go. 

As far as calling precise point levels and dates, I am am not, and never will, call precise dates and numbers as this is impossible IMO and fraught with danger. If you claim this is possible and don't get it right EVERY time then you have limited credibility in my mind. T/A is probabilities, not certainties.

I am very impressed that you got it right this time. It will be interesting to see if you can repeat this feat into the future to validate your theories. I look forward to seeing how you go. 

Well done!


----------



## tech/a

Moggi.

Do you need recognition??

To some of us it is and was just part of trading.
Different strokes for different methodologies.
Taken (currently) over the past 4 yrs is but a blimp.

Decisions now are no different yet analysis will pop up buys and sells (Shorts)/covers.

Is it really about being right to the day or being able to trade your method,wether you get it right,wrong,or partiailly right and wrong?

Infact is trading about being right?---Think about it.

I certainly think that ANY business---this is no different---is about being profitable---sure at times more so than at others and sure some business owners will be better at business than others.

Business isnt about singular events,and my veiw is that sound un stressful business is structured in such a way that singular events even catastophic or a string of events are catered for.

Mate you know your stuff---thats evident in your postings more so than your calls.


----------



## Magdoran

kennas said:
			
		

> Thanks Mag, but what we were saying wasn't rocket science, it was pretty bleeding obvious IMO. The bulls just didn't want to admit that the market does correct sometimes. In my opinion it's still got some to go.
> 
> As far as calling precise point levels and dates, I am am not, and never will, call precise dates and numbers as this is impossible IMO and fraught with danger. If you claim this is possible and don't get it right EVERY time then you have limited credibility in my mind. T/A is probabilities, not certainties.
> 
> I am very impressed that you got it right this time. It will be interesting to see if you can repeat this feat into the future to validate your theories. I look forward to seeing how you go.
> 
> Well done!



Hello Kennas,


Oh how right you are about probabilities, you’re preaching to the converted here, I assure you (this is one of McLaren’s key concepts).  Fully agree with you here, and if you read through my posts you’ll see that it is an ongoing theme in them.  

And very true, being able to repeat this kind of analysis has to have its pit falls like any other approach.  There is no such thing as 100% accuracy…  I believe in Douglas’ axiom “anything can happen” and “Every moment in the market is unique”.

As for time and price points, I’ve been doing this for a while now, and am getting better at it, and also with campaign planning too. But it, like EW has its limitations I assure you, and is only applicable in specific circumstances…


Regards



Magdoran


----------



## Magdoran

tech/a said:
			
		

> Moggi.
> 
> Do you need recognition??
> 
> To some of us it is and was just part of trading.
> Different strokes for different methodologies.
> Taken (currently) over the past 4 yrs is but a blimp.
> 
> Decisions now are no different yet analysis will pop up buys and sells (Shorts)/covers.
> 
> Is it really about being right to the day or being able to trade your method,wether you get it right,wrong,or partiailly right and wrong?
> 
> Infact is trading about being right?---Think about it.
> 
> I certainly think that ANY business---this is no different---is about being profitable---sure at times more so than at others and sure some business owners will be better at business than others.
> 
> Business isnt about singular events,and my veiw is that sound un stressful business is structured in such a way that singular events even catastophic or a string of events are catered for.
> 
> Mate you know your stuff---thats evident in your postings more so than your calls.



Hello tech,


Thanks for the vote of confidence, much appreciated.

My recent posts are not an issue of personality, but of trading style.  Remember in the “Improving Chart Analysis” thread when you and Lesm were questioning the potential for accuracy in time and price using cycle styles last year?  So yes, in a way I think the technical analysis style warrants recognition…

For quite a while you guys wanted some real time demonstration of the time cycle techniques in action.  Well, here is an example.

There are still people that are trying to discount this style, and when an example like this occurs, some are claiming it was an “each way bet”, or that it was a fluke…

The point I am trying to make is that there is a qualitative difference to identifying the potential for a significant move broadly, to identifying time and price points more precisely, and weighting the probabilities effectively.  I just feel that many are missing the point here, and are trying to rewrite history.

And YES being able to make precise forecasts when using derivatives makes a huge amount of difference to the bottom line.

It is about maximising returns and minimising risk consistently, and good technical analysis is critical to this.

I would just like to see some honest objectivity and balance in this area.  What’s wrong with that?


Regards


Magdoran


----------



## tech/a

Nothing.


----------



## Dr Doom

Hi mags,
So how does your system handle a correction like yesterdays, as so far as being able to look forward and identify the next major 'event' either way, up or down. That is, is it predisposed to pick major events the longer a trend continues or is it less effective now that some of the steam has been let out of the market?. I've tried doing basic time anlysis but it gets a bit too mathematical for me as it's obvious there is usually a parabolic component as the trend continues. Is this correct? Do you have to be a maths professor to do this?.
DD


----------



## Magdoran

Dr Doom said:
			
		

> Hi mags,
> So how does your system handle a correction like yesterdays, as so far as being able to look forward and identify the next major 'event' either way, up or down. That is, is it predisposed to pick major events the longer a trend continues or is it less effective now that some of the steam has been let out of the market?. I've tried doing basic time anlysis but it gets a bit too mathematical for me as it's obvious there is usually a parabolic component as the trend continues. Is this correct? Do you have to be a maths professor to do this?.
> DD



Hi doc,


A bit busy right now… so will try to respond later…

Read through all my posts on T/A and you’ll get the idea – a lot was ventured in the “Improving Charting Analysis” thread (although I’ve done a LOT of work since then).

As for this down move, sure, have a full campaign already mapped out with decision making points and contingencies…

Just read through my posts and you’ll see the key dates I’ve already posted on this campaign if it pans the way I think it will…


Mag


----------



## It's Snake Pliskin

People,

Markets are irrational and destructive - simple.
If you can trade around that then good work. China flapped its wings and it reverberated- coincidental the resultant action? Maybe.

Magdoran good work with the calls. It is dangerous heading down that path of believing in calls though. The above dictates my attention to the markets without the need to pick whens and wheres.

Basically it could have been going to happen anytime, be prepared - simple.

Just some thoughts.


----------



## Magdoran

Dr Doom said:
			
		

> Hi mags,
> So how does your system handle a correction like yesterdays, as so far as being able to look forward and identify the next major 'event' either way, up or down. That is, is it predisposed to pick major events the longer a trend continues or is it less effective now that some of the steam has been let out of the market?. I've tried doing basic time anlysis but it gets a bit too mathematical for me as it's obvious there is usually a parabolic component as the trend continues. Is this correct? Do you have to be a maths professor to do this?.
> DD



Doc,


Not an easy question to answer fully or simply.  But I’ll try my best…

The forecast I made in the system was about as valid as you can get, hence the confidence to call it on the ASF.  It projected 6025 for the XAO with 23 Feb the highest probability.  The time was evident in the forecast mid January.  The price in this case was the harder of the two, and was only reliable about a week and a few days before the time point (I had a range of possibilities, and needed to eliminate the majority to arrive at the most probable).

So, how does this work in the recent scenario?  Having this kind of precise forecast to work with would be a distinct advantage wouldn’t you say?  Hence wound out all my longs into the high (all done by lunchtime on Friday 23 Feb), and looked to go short just before this as the index neared the price target with fully worked campaign of projections in time and price for a range of bearish models with contingencies built in.  Wound out all positions yesterday morning waiting for the likely bullish counter trend looking to re-enter short.  Like Kennas, I have time and price targets built in.  

But to accurately project from this point with minimal bearish price data is problematic.  Sure I have price and time targets, but these need to be validated by the pattern of trend as we go along.  At key points the reliability improves dramatically as the campaign unfolds if the original work is validated, and if not, it is either adjusted accordingly, or discarded.  But I need to see specific things happen at key points to remain confident in the forecast.  Sure, there are long term projections, but these cover a broader area in time and price, and are much less accurate, but can be used in conjunction with daily charts at the appropriate point in time.

I must also recognise the collaboration with wavepicker over the past few months since we started to cooperate after we exchanged ideas on ASF (sounds like a dating service doesn’t it? Ha!).  His EW work, straight charting, and his cycle work have been very helpful in tandem with the work I have been doing.

The market though will do what it want to do, and anything can happen in it, hence no forecast is reliable, but is in essence a “best shot guess” with failure criteria inbuilt into the trade planning.  When it works, it is freaky how accurate projections in time or price can be, or on some occasions like this one where time and price are “on the money”.  McLaren has spent a lifetime on this approach, and if you’d done all his course work, and much outside it, it’d make a lot more sense, but it is very involved, and takes years to master.

No you don’t need to be a maths professor.  It is nice if you have one in the pocket for specific things, but being a maths professor qualifies you for some aspects of the market, and may actually disadvantage you in other areas.

Have a look at the posts I’ve made over the last year on technical analysis threads rather than have me try to regurgitate/retype it all here, then maybe generate specific questions and clarifications if you can wade through it all.

Hope that helps, Doc.


Regards



Magdoran


----------



## wayneL

It's Snake Pliskin said:
			
		

> People,
> 
> Markets are irrational and destructive - simple.
> If you can trade around that then good work. China flapped its wings and it reverberated- coincidental the resultant action? Maybe.
> 
> Magdoran good work with the calls. It is dangerous heading down that path of believing in calls though. The above dictates my attention to the markets without the need to pick whens and wheres.
> 
> *Basically it could have been going to happen anytime, be prepared - simple.
> *
> Just some thoughts.



EXACTLY

That is really the message of the bears, it is not necessarily to not go long or to go short, but to be prepared for any possible contingency. The message is frustrating, annoying, downright infuriating to some.

Economies are so leveraged, so precariously balanced that the poo can hit the propeller at anytime.

Preparation for some can be their normal plan with predefined exits etc, ah-la Tech/As' mech system, for others like me it could be options, diversifying into soft commods etc.

But cognizance of these sorts of possibilities ensures financial survival.

Good Trades


----------



## wavepicker

It's Snake Pliskin said:
			
		

> People,
> 
> Markets are irrational and destructive - simple.
> If you can trade around that then good work. China flapped its wings and it reverberated- coincidental the resultant action? Maybe.
> 
> Magdoran good work with the calls. It is dangerous heading down that path of believing in calls though. The above dictates my attention to the markets without the need to pick whens and wheres.
> 
> Basically it could have been going to happen anytime, be prepared - simple.
> 
> Just some thoughts.




So true Snake. It's amazing how irrational a lot of the folk are even in this forum. For months(years even) people have been performing what Prechter calls "Linear Thinking". In other words, projecting the current trend into the future. Anyone who has been around markets knows that this is a false sense of security. When every man and his dog starts buying the dips because they think prices will just keep on keeping on, then that trend has just about gone as far as it will go. What seems logical is what usually does not happen in the market.


Having been around in the 87 crash and dot.com crash days really woke me up becuase I thought just like them.

As for this move how far down??  Well, if the market has not topped, and it does go further, it won't be by much at all. If this is the case, consider this a big warning. If it has in fact topped and I think that is the case, then we have to be prepared for a multi month correction back to sub 5000.

65, 34, 17 week cycles in the market have topped and are all pointed down.
160 and 90 day cycles are curently hard down and therefore we will probably see a decline for the next 2 weeks when they start approaching a low.

Cheers


----------



## wavepicker

Magdoran said:
			
		

> Trade It,
> 
> 
> If you care to sweep back through my posts on technical analysis I suggest that these kinds of indicators actually obscure “seeing” the market, and McLaren characterises them as “trading shadows on the wall” (unless you use them the way wavepicker does with his cycle analysis/FFT style).




In actual fact I am not using indicators as such at all. I am extracting groups of ranges of "dominant cycles" from the price data. These cycles are not easily apparent in the raw form of the price data  because this data on many occasions is  "trending" up or down. What has to happen first is for the data to be detrended.  Thereafter cycles can be found more easily and represented as a trace by modifying MA's as we know them such that the lag is removed. These MA's are good represenatations of what the cycles are doing, but because the "response" of a MA is different, then the amplitude of the cycle may vary as well, but not the period or phase.

 The key however is finding the groups of ranges of dominant cycles.  From here it can be determined if a cycle is bottoming/topping or or in a trend that is not over yet. Futher to this,cycles can be extrapolated into the future to detrmine where prices will trend.

cheers


----------



## theasxgorilla

wayneL said:
			
		

> That is really the message of the bears, it is not necessarily to not go long or to go short, but to be prepared for any possible contingency. The message is frustrating, annoying, downright infuriating to some.




This is really trading or investing 101.  Contemplate the worst case scenario, prep for it, then open the position anyway and pray you make a profit.


----------



## Dr Doom

Thanks for your time & answer Magdoran, I shall do my homework.  

Wavepicker, how do you 'detrend' data?


----------



## lesm

Magdoran said:
			
		

> Hello tech,
> 
> Thanks for the vote of confidence, much appreciated.
> 
> My recent posts are not an issue of personality, but of trading style.  Remember in the “Improving Chart Analysis” thread when you and Lesm were questioning the potential for accuracy in time and price using cycle styles last year?  So yes, in a way I think the technical analysis style warrants recognition…
> 
> For quite a while you guys wanted some real time demonstration of the time cycle techniques in action.  Well, here is an example.
> 
> There are still people that are trying to discount this style, and when an example like this occurs, some are claiming it was an “each way bet”, or that it was a fluke…
> 
> The point I am trying to make is that there is a qualitative difference to identifying the potential for a significant move broadly, to identifying time and price points more precisely, and weighting the probabilities effectively.  I just feel that many are missing the point here, and are trying to rewrite history.
> 
> And YES being able to make precise forecasts when using derivatives makes a huge amount of difference to the bottom line.
> 
> It is about maximising returns and minimising risk consistently, and good technical analysis is critical to this.
> 
> I would just like to see some honest objectivity and balance in this area.  What’s wrong with that?
> 
> Regards
> 
> Magdoran



Hi Mags,

Your posts are as lucid as one would always expect.

There is no question about you knowing your stuff. Demonstrated many times.

Agree that honest objectivity and balance is required in this and many other areas. Good healthy debate and discussion, even challenging approaches is also a good way to learn.

The question in my mind is with respect to the precision that is implicit or alluded to in how time based analysis is presented.

If I can be a bit of a devil's advocate here.

One should question implying or inferring a high degree of confidence in qualitative approaches, unless other information is available to support it. This may mean that a level of quantification (or maybe knowledge based or experiential factors) is/are being applied. In this regard, +/- 1 day in market terms implies a high degree of confidence or that there is a low standard error on the forecast or prediction.

If we assume that the forecast or prediction is based on the information provided in the chart regardless of the technique used, then information or events that are out of scope of the analysis have not been considered.

If any external events later influence or alter the outcome then it cannot be concluded, in practical terms, that the outcome is necessarily valid based on the original analysis.

In experimental research this type of outcome would be referred to as a contaminated experiment, hence the outcome cannot be considered valid.

I assume that the analysis did not take into account recent events related to the Chinese market or Iran's nuclear activities or other factors that caused the latest correction besides normal market cycle activity.

It may also have just been a matter of coincidence, so unless we turn back the clock and remove the external events we will never really know.

With respect to your comment on rewriting history. History in the markets has show that various approaches work well in some time frames or cycles and not in others. In this regard, we should not forget the lessons learnt from history. We should also remember that as the market dynamics change that we need to change, modify or refine our approaches to suit the dynamics of the time. That is unless anyone can truly develop a method that suits all market conditions and the changing dynamics.

There are a number of areas of technical analysis and approaches that should be challenged, as too many players are still chanting a mantra that is potentially outdated and is inadequte for dealing with market dynamics. Bit like a one size fits all approach that is fundamentally flawed and no lateral thought processes.

Anyway, having said the above, I really like your work as well as wavepicker's. One area of wavepickers work that piqued my interest was related to his comments on detrending and his approach to cyclical analysis.

Look forward to your response and it was a good prediction.

Regards,
Les.


----------



## Magdoran

lesm said:
			
		

> Hi Mags,
> 
> Your posts are as lucid as one would always expect.
> 
> There is no question about you knowing your stuff. Demonstrated many times.
> 
> Agree that honest objectivity and balance is required in this and many other areas. Good healthy debate and discussion, even challenging approaches is also a good way to learn.
> 
> The question in my mind is with respect to the precision that is implicit or alluded to in how time based analysis is presented.
> 
> If I can be a bit of a devil's advocate here.
> 
> One should question implying or inferring a high degree of confidence in qualitative approaches, unless other information is available to support it. This may mean that a level of quantification (or maybe knowledge based or experiential factors) is/are being applied. In this regard, +/- 1 day in market terms implies a high degree of confidence or that there is a low standard error on the forecast or prediction.
> 
> If we assume that the forecast or prediction is based on the information provided in the chart regardless of the technique used, then information or events that are out of scope of the analysis have not been considered.
> 
> If any external events later influence or alter the outcome then it cannot be concluded, in practical terms, that the outcome is necessarily valid based on the original analysis.
> 
> In experimental research this type of outcome would be referred to as a contaminated experiment, hence the outcome cannot be considered valid.
> 
> I assume that the analysis did not take into account recent events related to the Chinese market or Iran's nuclear activities or other factors that caused the latest correction besides normal market cycle activity.
> 
> It may also have just been a matter of coincidence, so unless we turn back the clock and remove the external events we will never really know.
> 
> With respect to your comment on rewriting history. History in the markets has show that various approaches work well in some time frames or cycles and not in others. In this regard, we should not forget the lessons learnt from history. We should also remember that as the market dynamics change that we need to change, modify or refine our approaches to suit the dynamics of the time. That is unless anyone can truly develop a method that suits all market conditions and the changing dynamics.
> 
> There are a number of areas of technical analysis and approaches that should be challenged, as too many players are still chanting a mantra that is potentially outdated and is inadequte for dealing with market dynamics. Bit like a one size fits all approach that is fundamentally flawed and no lateral thought processes.
> 
> Anyway, having said the above, I really like your work as well as wavepicker's. One area of wavepickers work that piqued my interest was related to his comments on detrending and his approach to cyclical analysis.
> 
> Look forward to your response and it was a good prediction.
> 
> Regards,
> Les.



Hello Les!


Great to see you in action!  How are you?  How is your trading?  Hope it’s all going well.

By the way, I have digested Phantom of the Pits, and incorporated some of the thinking into my approach, but in a kind of opposite way to the way he works.  I figured out that he was a very short time frame player, and his T/A was limited which drove his trading style, rules and psychology.  Oddly enough, some of his approaches are antithetical to my style which is fine (horses for courses), but the contrast was very useful, and highlighted some areas I made radical changes too (for the better).  So thanks for that, it was quite constructive.

Thanks also for the salutation.  Much appreciated.

Now down to the issue at hand:  There’s nothing wrong with healthy scepticism and free and open debate.  You know I embrace this as much as you do.

I agree that history has shown that certain methods are better in specific conditions.  I have consistently supported this position in many of my posts, so you will only get agreement on this point from me.  

The point I was making about the attempt to rewrite history was that there were some posts which were making out that their approach was the only one which has identified the imminent high, which was untrue.  Several methods identified that the trend was at risk which is commendable.  With respect though, I didn’t see any other call for a top from a month out with a specific +/- 1 trading day date, let alone call the index level (in this case within a point).

Now, I have also consistently held the view that any method has limited application, including all the techniques wavepicker and I use independently or in tandem.  In fact I did say in several posts that EW, time cycles, and even straight charting are really limited to a minority percentage of conditions.  I believe this to be true of most technical analysis approaches.

Having said that though, the beauty of EW and geometric/time cycle based approaches is that these styles have what I would describe as being fairly universal concepts which can be applied in a broad range of market conditions.  Interestingly the strength of these styles is in their innate flexibility, and if a practitioner is thoroughly conversant with the discipline’s theory and practice, is able to apply a broad range of techniques and axioms to practically any market.  The wisdom required is knowing when to use which technique.

As for random events upsetting patterns of trend, you are certainly correct, a nuclear war could inadvertently start tomorrow, an asteroid could bring on the next ice age, the sun could blow up… and other equally facetious events… but how likely are these events?  I keep plugging the Douglas line that “anything can happen” and accept this.  

Even the best looking forecast can fall to pieces instantly, no argument.  The point I make is about probabilities and how to assess these in a dynamic environment where there are no certainties.  This is the challenge for any approach.  There is no holy grail, but there certainly are differences in the effectiveness of different approaches.  

What I’m doing is welding together a range of disciplines and approaches in order to achieve the best mix of consistently profitable analysis, risk management, strategy, and trading style in an environment where the outcomes are unknown (all any of us have is our best shot method – its just that some methods work better than others).  Will the geometric/time cycle based system work every time?  No, of course not.  The art is in knowing when to use it, and how.  I have just demonstrated how powerful it can be in the right hands used correctly, that’s all.  If that doesn’t peak serious players’ interest, that’s fine too.

Given that there was a lot of scepticism about the Geometric/time cycle based style in the past, and calls for a practical demonstration, I would have thought that pretty much picking the day from a month out, and the price from a week out would have been more than sufficient.  Can this be done consistently?  Behind the scenes you bet it can, and a select few have seen accurate prices come in, or accurate times, over and over.  They know who they are.  Do I believe in this style?  You bet I do.  What amazes me is when the peon brigade make fascicle comments like it’s an “each way bet”.  What utter nonsense.

As for taking into account all events in the world, this is not likely.  My appraisal is that we all have to sift through a deluge of information (much of it conflicting) and somehow make financial decisions based on our individual understanding.  This is one method of doing that.  It is not perfect because information is not perfect.  But I’ll tell you, it’s a bloody lot more effective than a simple moving average crossover, that’s for sure!


Warm regards


Magdoran

P.S. Geez Les, we'd better stop this, or I won't get any work done!  Mag


----------



## tech/a

Moggi.

Your either an exceptionally fast typist or your the best Ive seen in time management.


----------



## lesm

Magdoran said:
			
		

> Hello Les!
> 
> 
> Great to see you in action!  How are you?  How is your trading?  Hope it’s all going well.
> 
> By the way, I have digested Phantom of the Pits, and incorporated some of the thinking into my approach, but in a kind of opposite way to the way he works.  I figured out that he was a very short time frame player, and his T/A was limited which drove his trading style, rules and psychology.  Oddly enough, some of his approaches are antithetical to my style which is fine (horses for courses), but the contrast was very useful, and highlighted some areas I made radical changes too (for the better).  So thanks for that, it was quite constructive.
> 
> Thanks also for the salutation.  Much appreciated.
> 
> Now down to the issue at hand:  There’s nothing wrong with healthy scepticism and free and open debate.  You know I embrace this as much as you do.
> 
> I agree that history has shown that certain methods are better in specific conditions.  I have consistently supported this position in many of my posts, so you will only get agreement on this point from me.
> 
> The point I was making about the attempt to rewrite history was that there were some posts which were making out that their approach was the only one which has identified the imminent high, which was untrue.  Several methods identified that the trend was at risk which is commendable.  With respect though, I didn’t see any other call for a top from a month out with a specific +/- 1 trading day date, let alone call the index level (in this case within a point).
> 
> Now, I have also consistently held the view that any method has limited application, including all the techniques wavepicker and I use independently or in tandem.  In fact I did say in several posts that EW, time cycles, and even straight charting are really limited to a minority percentage of conditions.  I believe this to be true of most technical analysis approaches.
> 
> Having said that though, the beauty of EW and geometric/time cycle based approaches is that these styles have what I would describe as being fairly universal concepts which can be applied in a broad range of market conditions.  Interestingly the strength of these styles is in their innate flexibility, and if a practitioner is thoroughly conversant with the discipline’s theory and practice, is able to apply a broad range of techniques and axioms to practically any market.  The wisdom required is knowing when to use which technique.
> 
> As for random events upsetting patterns of trend, you are certainly correct, a nuclear war could inadvertently start tomorrow, an asteroid could bring on the next ice age, the sun could blow up… and other equally facetious events… but how likely are these events?  I keep plugging the Douglas line that “anything can happen” and accept this.
> 
> Even the best looking forecast can fall to pieces instantly, no argument.  The point I make is about probabilities and how to assess these in a dynamic environment where there are no certainties.  This is the challenge for any approach.  There is no holy grail, but there certainly are differences in the effectiveness of different approaches.
> 
> What I’m doing is welding together a range of disciplines and approaches in order to achieve the best mix of consistently profitable analysis, risk management, strategy, and trading style in an environment where the outcomes are unknown (all any of us have is our best shot method – its just that some methods work better than others).  Will the geometric/time cycle based system work every time?  No, of course not.  The art is in knowing when to use it, and how.  I have just demonstrated how powerful it can be in the right hands used correctly, that’s all.  If that doesn’t peak serious players’ interest, that’s fine too.
> 
> Given that there was a lot of scepticism about the Geometric/time cycle based style in the past, and calls for a practical demonstration, I would have thought that pretty much picking the day from a month out, and the price from a week out would have been more than sufficient.  Can this be done consistently?  Behind the scenes you bet it can, and a select few have seen accurate prices come in, or accurate times, over and over.  They know who they are.  Do I believe in this style?  You bet I do.  What amazes me is when the peon brigade make fascicle comments like it’s an “each way bet”.  What utter nonsense.
> 
> As for taking into account all events in the world, this is not likely.  My appraisal is that we all have to sift through a deluge of information (much of it conflicting) and somehow make financial decisions based on our individual understanding.  This is one method of doing that.  It is not perfect because information is not perfect.  But I’ll tell you, it’s a bloody lot more effective than a simple moving average crossover, that’s for sure!
> 
> 
> Warm regards
> 
> 
> Magdoran
> 
> P.S. Geez Les, we'd better stop this, or I won't get any work done!  Mag



Hi Mags,

Your certainly predictable, knew it wouldn't be a short response.   

Everything is going well. Been quiet marketwise, as we had a death in the family, which required a change of focus and priorities.

Have been spending some time learning EW in more detail and working on some alternative approaches to trading.

Over the last few years have moved on to what I would describe as strategy trading. Hence, it required rethinking the trading approach and looking at developing strategies for different conditions/situations.

Glad that you found POP useful. It's interesting that although something may be in opposition to our views or beliefs that it can cause us to relook or rethink our approach and provide some beneficial refinements.

No disagreement with a number of the points that you have raised. Information overload trying to take account all possible scenarions would lead to too much confusion and conflict endign up in analysis paralysis.

The external events or influences will always exist, we just need to be in a position to ensure that we manage their impact in an effective manner. The risk management element of the equation.

Would certainly support your point related to flexibility and the use of a range of techinques depending on th esituation. As you will appreciate, failure to adapt to market conditions or dynamics will place people on the wrong side of the market. Not a healthy place to be.

Think that the issue with a number of the proponents of cyclical/time based approaches is they put it forward in a manner akin to a black art. They then compound the issue by not being prepared to explain their approach or demonstrate it at a practical level.

This is an area where you have always been open, especially on the 'Improving Chart Analysis' thread, in providing a practical demonstration and answer questions. Your more recent activities have expanded on this aspect.

A little bit of scepticism is always healthy. It is certainly better than accepting approaches at face value and not really understanding the underlying theory and concepts. This can lead to poor application of the approach, discarding it for the wrong reasons or trashing it unmercifully.

Its has been interesting watching pyschology in action over the last few days as we have seen recent events unfold. The next few weeks should also be interesting.

One day some people will learn to be more control of their trading and they will realise that it is just another day in the market and to deal with it accordingly no different to any other day. As tech/a would say 'follow their blueprint', will certainly reduce the stress levels.

Certainly intersted in the approach that wavepicker and yourself use, as I see some benefits in it. Will need to have read through McLaren as well. Another thing to put on the To Do list.

With regard to the peon brigade, while they may be good with the cliches, it's what they really do in the market that counts at the end of the day.

Will keep it short, so that you can get some work done.

Regards,
Les.


----------



## wayneL

theasxgorilla said:
			
		

> This is really trading or investing 101.  Contemplate the worst case scenario, prep for it, then open the position anyway and pray you make a profit.



For some.

For others it is seeking non correlated instruments in the commodities markets, trading any instrument both short and long, and/or the use of option strategies to either hedge, trade direction, or trade volatility.

Cheers


----------



## wayneL

wayneL said:
			
		

> For some.
> 
> For others it is seeking non correlated instruments in the commodities markets, trading any instrument both short and long, and/or the use of option strategies to either hedge, trade direction, or trade volatility.
> 
> Cheers




Just adding:

The trading 101 version will get you out and into cash while the market is tanking.

But I can tell you, myself, Doom, Mag, The Ducster et al (there are plenty of us here) fully intend to profit from this blip/correction/bear market/crash/apocalypse (insert favourite emotive phrase).

Cheers


----------



## Magdoran

tech/a said:
			
		

> Moggi.
> 
> Your either an exceptionally fast typist or your the best Ive seen in time management.



Hello Daffy,


Possibly a bit of both, but I can touch type which helps.  All those years of 150+ page IT tenders does wonder for your keyboard abilities I assure you!  Also, having a good dialogue with a piquant poster helps motivationally too!

Mag


----------



## Magdoran

lesm said:
			
		

> Hi Mags,
> 
> Your certainly predictable, knew it wouldn't be a short response.
> 
> Everything is going well. Been quiet marketwise, as we had a death in the family, which required a change of focus and priorities.
> 
> Have been spending some time learning EW in more detail and working on some alternative approaches to trading.
> 
> Over the last few years have moved on to what I would describe as strategy trading. Hence, it required rethinking the trading approach and looking at developing strategies for different conditions/situations.
> 
> Glad that you found POP useful. It's interesting that although something may be in opposition to our views or beliefs that it can cause us to relook or rethink our approach and provide some beneficial refinements.
> 
> No disagreement with a number of the points that you have raised. Information overload trying to take account all possible scenarions would lead to too much confusion and conflict endign up in analysis paralysis.
> 
> The external events or influences will always exist, we just need to be in a position to ensure that we manage their impact in an effective manner. The risk management element of the equation.
> 
> Would certainly support your point related to flexibility and the use of a range of techinques depending on th esituation. As you will appreciate, failure to adapt to market conditions or dynamics will place people on the wrong side of the market. Not a healthy place to be.
> 
> Think that the issue with a number of the proponents of cyclical/time based approaches is they put it forward in a manner akin to a black art. They then compound the issue by not being prepared to explain their approach or demonstrate it at a practical level.
> 
> This is an area where you have always been open, especially on the 'Improving Chart Analysis' thread, in providing a practical demonstration and answer questions. Your more recent activities have expanded on this aspect.
> 
> A little bit of scepticism is always healthy. It is certainly better than accepting approaches at face value and not really understanding the underlying theory and concepts. This can lead to poor application of the approach, discarding it for the wrong reasons or trashing it unmercifully.
> 
> Its has been interesting watching pyschology in action over the last few days as we have seen recent events unfold. The next few weeks should also be interesting.
> 
> One day some people will learn to be more control of their trading and they will realise that it is just another day in the market and to deal with it accordingly no different to any other day. As tech/a would say 'follow their blueprint', will certainly reduce the stress levels.
> 
> Certainly intersted in the approach that wavepicker and yourself use, as I see some benefits in it. Will need to have read through McLaren as well. Another thing to put on the To Do list.
> 
> With regard to the peon brigade, while they may be good with the cliches, it's what they really do in the market that counts at the end of the day.
> 
> Will keep it short, so that you can get some work done.
> 
> Regards,
> Les.



Hello Les,


Oh, I am so sorry to hear about your family tragedy, please accept my sincerest condolences.  I can only imagine the grief for your family (I have been there too)…

Glad to see you’re looking into EW, that is a journey in itself that I am still working through myself.  wavepicker is very knowledgeable and gifted, and spins my head sometimes with his T/A skills.

Good luck with your journey too, sounds like you are developing as well, good to see.

The reason why geometric/cycle based styles seem to be “black box” is that they require a lot of individual development based on recognising the pattern of the trend, and it almost works counter intuitively at first (as does the market I suppose). It is not easy to learn (just as EW is involved too), but if you can stick it through, ultimately very rewarding. 

Re McLaren, you could either go to a seminar if he is giving one, or there is the foundations DVD set if you are so inclined.  For me, it changed my trading radically, and I’ve never looked back – and I hope it does for anyone interested in gaining a solid T/A background.

As for the peanut gallery, how true, the market is a teacher that’s for sure!


Regards


Magdoran


----------



## >Apocalypto<

Magdoran said:
			
		

> Trade It,
> 
> 
> There are alternatives to using lagging indicators and oscillators.  The technical analysis style I use doesn’t use any of these.
> 
> If you care to sweep back through my posts on technical analysis I suggest that these kinds of indicators actually obscure “seeing” the market, and McLaren characterises them as “trading shadows on the wall” (unless you use them the way wavepicker does with his cycle analysis/FFT style).
> 
> Just a bar chart and volume to the trained eye will tell you a lot if you know what you are doing without any tools or indicators at all.  Pure charting and knowing how to interpret the data is central in my opinion to improving your analysis.
> 
> Key concepts like understanding trends and more importantly counter trends is central – especially pattern of trend, wave structure, divisions of range (retracement and extension).  Add to that time cycles and knowing how to use these effectively can be very powerful.
> 
> Anyone with any kind of solid grounding in technical analysis was able to see the probabilities increasing for a pull back of some sort recently, and many posted to this effect well in advance, some even calling fairly accurate time and price level windows, so the capacity to do so is there.
> 
> The current methods you are employing are highly unlikely to identify these patterns; hence you will have to accept the limitations of your chosen style of trading, and live with it, or consequently decide to embark on some research into alternative methods.  It’s your choice.
> 
> 
> 
> Regards,
> 
> 
> Magdoran




Magdoran

thanks for the comments, 

i still disagree with you that obv is a useless indicator it shows money moving in and out of the market, it's connected straight to volume.

Now If you sweep though my posts you will also see I was saying I saw a pull back aswell on the XJO  XAO & agreed the dow was very weak on the short term.

why cuz I could see it running into a wall but i will not sell untill it breaks my lines that i have drawn in not a breach a break, weather it breaks it by 200 pts or 50 is up to the market.

I saw this coming as well heance the reason i did not open any new positions on the XJO after it closed above 6000 it did not look right to me.

but the DOW was clear as day that it was sick on the short term.

guys i have only been trading now 1.5 years and only worked out a system 6 months ago so please keep it coming i value all your points.

but if your going to have a shot at any ones trading methods and say the way u do it is better, then i would like to see charts and proof supporting your claims

because differnt things work better for differnt people


----------



## Magdoran

Trade_It said:
			
		

> Magdoran
> 
> thanks for the comments,
> 
> i still disagree with you that obv is a useless indicator it shows money moving in and out of the market, it's connected straight to volume.
> 
> Now If you sweep though my posts you will also see I was saying I saw a pull back aswell on the XJO  XAO & agreed the dow was very weak on the short term.
> 
> why cuz I could see it running into a wall but i will not sell untill it breaks my lines that i have drawn in not a breach a break, weather it breaks it by 200 pts or 50 is up to the market.
> 
> I saw this coming as well heance the reason i did not open any new positions on the XJO after it closed above 6000 it did not look right to me.
> 
> but the DOW was clear as day that it was sick on the short term.
> 
> guys i have only been trading now 1.5 years and only worked out a system 6 months ago so please keep it coming i value all your points.
> 
> but if your going to have a shot at any ones trading methods and say the way u do it is better, then i would like to see charts and proof supporting your claims
> 
> because differnt things work better for differnt people



Hello Trade It,


I hope you find my comments constructive and thought provoking, that is my intention.  Offering alternative view points for consideration.

Of course you disagree with my view on OBV.  It’s what you are used to, and if it works for you, fine.  I discarded this approach a long time ago, and that was my decision too.  It really depends on your preferences, ability, and style, doesn’t it?

As for recent events, many saw the indexes were looking tired, which is great, and you are obviously one of them, good to see.  But few knew when to act with precision.  Those that couldn’t tell either exited or protected or reduced their longs, which was wise.

As for using a moving average exit, it gets you out often at the wrong time, when it’s often obvious it’s time to get out, and if you use my style, you can project probable areas of support and resistance in time and price, hence know when to take partial profits and full exits, and when to add/re-enter positions.  But this has a lot to do with trading styles.

While I have read a few of your posts, have you read through mine?  I have systematically stated my case, and if you care to wade through all my posts on T/A, my position may make more sense.  Rather than me revisiting all the old arguments, why not take the time to go right back through these discussions and see what you think, then raise whatever counter arguments you like there?  (Forgive me but I’m getting tired of having to reinvent the wheel)… How does that sound?  

Regards


Magdoran


----------



## wavepicker

Magdoran said:
			
		

> Hello Trade It,
> 
> 
> As for using a moving average exit, it gets you out often at the wrong time, when it’s often obvious it’s time to get out, and if you use my style, you can project probable areas of support and resistance in time and price, hence know when to take partial profits and full exits, and when to add/re-enter positions.  But this has a lot to do with trading styles.
> 
> 
> Magdoran




Totally agree with you Mag, using lagging MA’s  does not compare to looking at the pattern of the trend.   For starters the way most charting packages are set up to use MA’s is really wrong.. The only exception offcourse it if you are using a zero lag filter or something very close to that.  The most common ones are are as follows:-

-Hull MA
-Weighted MA
-John Ehlers MAMA Moving Average

There are a few others as well that have recently been developed such as the Jurik filter

But one really has to find out what the MA doing and what it is representing on order to best utilize it. In the case of a MA of a selected span it is representing the sum of the cycles greater than the span selected.

Otherwise as you say, traders using such systems are just "chasing shadows accross the wall".

Cheers


----------



## >Apocalypto<

Magdoran said:
			
		

> Hello Trade It,
> 
> 
> I hope you find my comments constructive and thought provoking, that is my intention.  Offering alternative view points for consideration.
> 
> Of course you disagree with my view on OBV.  It’s what you are used to, and if it works for you, fine.  I discarded this approach a long time ago, and that was my decision too.  It really depends on your preferences, ability, and style, doesn’t it?
> 
> As for recent events, many saw the indexes were looking tired, which is great, and you are obviously one of them, good to see.  But few knew when to act with precision.  Those that couldn’t tell either exited or protected or reduced their longs, which was wise.
> 
> As for using a moving average exit, it gets you out often at the wrong time, when it’s often obvious it’s time to get out, and if you use my style, you can project probable areas of support and resistance in time and price, hence know when to take partial profits and full exits, and when to add/re-enter positions.  But this has a lot to do with trading styles.
> 
> While I have read a few of your posts, have you read through mine?  I have systematically stated my case, and if you care to wade through all my posts on T/A, my position may make more sense.  Rather than me revisiting all the old arguments, why not take the time to go right back through these discussions and see what you think, then raise whatever counter arguments you like there?  (Forgive me but I’m getting tired of having to reinvent the wheel)… How does that sound?
> 
> Regards
> 
> 
> Magdoran




Frist as I stated before I am a 25 year old newbie to this.

I have looked at your posts in trading the spi you do have great posts well done on your recent analysis 

now i have only used OBV for a while now used to use MACD and ma's and i found the same probs they do lag, MACD and MA in a side ways market will drive u nuts on false signels. The daily dow chart i posted is proof of that 

using trends obv with volume is what works for me now on this bull market , there is a weakness to try and time shorts using this set up

on the long side it works great entries in September and jan after sell offs stopped that's why i wont agree with you that it's usless or not good cuz i have made lots of cash since the may correction.

Now onto what just happened i saw weakness but i had no idea when it would occur only evidence was if you watched china during that day then watch our market sell of to 44pts you could have said ok short it but I did not see it coming like it did come.

your style of trading is something that interests me a lot cuz Jessie Livermore is my fav trader.  he used tape reading to feel for weakness and strength in the markets

i will want to look at learning that in the near future.

thank again for your reply Magdoran and i value your coments


----------



## >Apocalypto<

Magdoran and others 

OBV

just shows on that day weather the volume for that day was selling or buying all i want to see is that its buying volume. I dont veiw it as a magic entry signal

on real time is does not even lag it moves all day with the price bar or candel


----------



## Magdoran

Trade_It said:
			
		

> Magdoran and others
> 
> OBV
> 
> just shows on that day weather the volume for that day was selling or buying all i want to see is that its buying volume. I dont veiw it as a magic entry signal
> 
> on real time is does not even lag it moves all day with the price bar or candel



The way I look at markets now is radically different to that style of approach.  The belief being that that kind of indicator actually obscures what is really going on… but that’s just my opinion of course…

Oh man is your head going to spin when you start trying to read through some of the technical analysis concepts in depth and try to get your head around the concept of market cycles, not in the orthodox way, but really start to perceive these things.

I look forward to the day seeing the light go on in your head, and the revelation hits you!  Good luck in your Journey!


Mag


----------



## >Apocalypto<

Magdoran said:
			
		

> The way I look at markets now is radically different to that style of approach.  The belief being that that kind of indicator actually obscures what is really going on… but that’s just my opinion of course…
> 
> Oh man is your head going to spin when you start trying to read through some of the technical analysis concepts in depth and try to get your head around the concept of market cycles, not in the orthodox way, but really start to perceive these things.
> 
> I look forward to the day seeing the light go on in your head, and the revelation hits you!  Good luck in your Journey!
> 
> 
> Mag




Magdoran

One thing I have learnt in the market is to never try to be right once you try to do that you always lose!

And the way I have approached this conversation with you has been like that I have jumped up with ego trying to defend my knowledge with out asking you why you say this.

I must say sorry to you for being pig headed.

I would like to understand more about your trading style and techniques is there any books or links to information i could read?

Regards
Joesph


----------



## Magdoran

Trade_It said:
			
		

> Magdoran
> 
> One thing I have learnt in the market is to never try to be right once you try to do that you always lose!
> 
> And the way I have approached this conversation with you has been like that I have jumped up with ego trying to defend my knowledge with out asking you why you say this.
> 
> I must say sorry to you for being pig headed.
> 
> I would like to understand more about your trading style and techniques is there any books or links to information i could read?
> 
> Regards
> Joesph



Hello Joseph,


There’s absolutely no problem at all with having a dialogue, or even a little polemic, as long as it’s in good spirit… that’s how many of us learn, isn’t it?

I also don’t have a problem with constructive scepticism, or with people being reluctant to easily negate or modify their approaches at the drop of a hat.  Core ideas should not be easily discarded, and generally modified after careful consideration and research.  Certainly pig headed stubbornness and stupidity are not virtues I would ascribe to, which usually involves an unhealthy dogmatism wedded to faulty ideas without the possibility of change and improvement.

If you want to know more, just take your time, and go right back to the threads I and other T/A players have commented in, and use your own judgement to try to make sense of the discussions.  I don’t have a monopoly on good ideas (far from it), but I do have some alternative views to contribute to the mix, and maybe some of the dialogues you read may speak to you.

Interestingly Les drew my attention to “phantom of the pits” which was a very interesting read, but was kind of the inverse of what I and others I’ve collaborated with are doing.  But just reading it led me to consider avenues I probably would not have readily considered that were beneficial…

You might find the same thing in your journey.   All the materials that I can provide is contained in a range of posts I’ve made, and I’m sure you will be able to pick and choose whatever you like from it (as well of course from the other notable posters in the threads too).

Rather than name all the other notable posters that are worth reading here, I’ll let you decide that for yourself.

Just be open to considering new ideas, that’s all. Open, but discerning.


Regards


Magdoran


----------



## >Apocalypto<

Thanks Magdoran will do,


----------



## tech/a

Joseph.

Ive got to agree with Moggi here.
From what I see Moggi uses a combination of Elliot and Gann.
both time and price cycles along with price points and price projections both up and down.

I wont comment on Gann---*BUT*

If your going to MAXIMISE profits in the business you need to know.

*(1)* Where Price is at relative to that which your trading *right now*
(a) A corrective move?
(b) A consolidation ?
(c) A trend or impulsive move?

*(2)* Where Price is GOING
*(3)* When will it get there.
*(4)* When will price show me my analysis is correct---our incorrect.
This is the one most get have problem getting their head around as it appears to the un trained that the goal posts get moved during a trade!!

While it may appear Moggi is being egotistical (Its nice that its someone else and not me for a change),he's not.
He can and so can quite a few others I know---and I'm getting better at it.

Answer *ALL * of the above in the majority of charts, in his trading.

Just sit back and think for a minute.

*WHAT WOULD IT MEAN TO YOUR TRADING* if you could do all of the above?? (1-4).

Radge put it best I feel,analysis is a continual
"Prove,Disprove,Prove,Disprove."

There is no point in even attempting to explain how he trades to the masses,or anyone who uses Elliot,VSA or for that matter GANN.
It takes years to master,even to gain a competency,Ive been at it spasmotically for 12 and a have a basic understanding.Even this is enough to improve my short term trading Dramatically.

Demonstrations will be seen as bewildering (No GANN traders I havent turned,not to GANN).to those with little or no understanding.

Its WELL worth the effort and if at anytime you consider *trading* as opposed to Investing--- serious amounts in the market (Say that which you would invest on a house) you NEED to know (1-4).

I like Dynamic Trading by Robert Miner.
Advanced GET for software and Tradeguider for VSA.
But other may differ.
Expensive--yes to most--but show me a decient business that wont consist of considerable investment in TIME and MONEY.

Its no ego or arrogence its just too hard to wrap up in a paragraph or 2

Thats how some of us can come across,but it can become tedious,Im sure you understand.


----------



## It's Snake Pliskin

Trade_It said:
			
		

> Magdoran and others
> 
> OBV
> 
> just shows on that day weather the volume for that day was selling or buying all i want to see is that its buying volume. I dont veiw it as a magic entry signal
> 
> on real time is does not even lag it moves all day with the price bar or candel




Joseph,
OBV is not the most accurate way of determining what volume is doing. Look at its construction and ask: what is it made up of? In realtime is it more important than momentum?


----------



## >Apocalypto<

> OBV
> 
> just shows on that day weather the volume for that day was selling or buying all i want to see is that its buying volume. I dont veiw it as a magic entry signal




Snake

I am not saying its the best, all I am is thats what it does.

Momentum is also great, I dont use it though.

All I know obv works for me and works well in seeing the way the markets moving.

So that's all that matters.


----------



## >Apocalypto<

tech/a said:
			
		

> Joseph.
> 
> Ive got to agree with Moggi here.
> From what I see Moggi uses a combination of Elliot and Gann.
> both time and price cycles along with price points and price projections both up and down.
> 
> I wont comment on Gann---*BUT*
> 
> If your going to MAXIMISE profits in the business you need to know.
> 
> *(1)* Where Price is at relative to that which your trading *right now*
> (a) A corrective move?
> (b) A consolidation ?
> (c) A trend or impulsive move?
> 
> *(2)* Where Price is GOING
> *(3)* When will it get there.
> *(4)* When will price show me my analysis is correct---our incorrect.
> This is the one most get have problem getting their head around as it appears to the un trained that the goal posts get moved during a trade!!
> 
> While it may appear Moggi is being egotistical (Its nice that its someone else and not me for a change),he's not.
> He can and so can quite a few others I know---and I'm getting better at it.
> 
> Answer *ALL * of the above in the majority of charts, in his trading.
> 
> Just sit back and think for a minute.
> 
> *WHAT WOULD IT MEAN TO YOUR TRADING* if you could do all of the above?? (1-4).
> 
> Radge put it best I feel,analysis is a continual
> "Prove,Disprove,Prove,Disprove."
> 
> There is no point in even attempting to explain how he trades to the masses,or anyone who uses Elliot,VSA or for that matter GANN.
> It takes years to master,even to gain a competency,Ive been at it spasmotically for 12 and a have a basic understanding.Even this is enough to improve my short term trading Dramatically.
> 
> Demonstrations will be seen as bewildering (No GANN traders I havent turned,not to GANN).to those with little or no understanding.
> 
> Its WELL worth the effort and if at anytime you consider *trading* as opposed to Investing--- serious amounts in the market (Say that which you would invest on a house) you NEED to know (1-4).
> 
> I like Dynamic Trading by Robert Miner.
> Advanced GET for software and Tradeguider for VSA.
> But other may differ.
> Expensive--yes to most--but show me a decient business that wont consist of considerable investment in TIME and MONEY.
> 
> Its no ego or arrogence its just too hard to wrap up in a paragraph or 2
> 
> Thats how some of us can come across,but it can become tedious,Im sure you understand.




Tech/A

Thank you very much for the post you and Magdoran have given me a reply with merit and meaning which i value very much.

I am on a never ending quest to improve my trading and learn to be at one with the market i am still in a major battle with myself right now and i am trying to keep it simple.

What i have read from Magoran and you last reply have opened my eyes to a new frontier of understanding and vision to the market.

Again thanks and I am looking at all your posts and now also reading Yogis as well.

For now I will stick to what is working and making money in this current market situation but my new education has begun.

Thanks again guys.

Regards
Joseph


----------



## nizar

tech/a said:
			
		

> Joseph.
> 
> Ive got to agree with Moggi here.
> From what I see Moggi uses a combination of Elliot and Gann.
> both time and price cycles along with price points and price projections both up and down.
> 
> I wont comment on Gann---*BUT*
> 
> If your going to MAXIMISE profits in the business you need to know.
> 
> *(1)* Where Price is at relative to that which your trading *right now*
> (a) A corrective move?
> (b) A consolidation ?
> (c) A trend or impulsive move?
> 
> *(2)* Where Price is GOING
> *(3)* When will it get there.
> *(4)* When will price show me my analysis is correct---our incorrect.
> This is the one most get have problem getting their head around as it appears to the un trained that the goal posts get moved during a trade!!
> 
> While it may appear Moggi is being egotistical (Its nice that its someone else and not me for a change),he's not.
> He can and so can quite a few others I know---and I'm getting better at it.
> 
> Answer *ALL * of the above in the majority of charts, in his trading.
> 
> Just sit back and think for a minute.
> 
> *WHAT WOULD IT MEAN TO YOUR TRADING* if you could do all of the above?? (1-4).
> 
> Radge put it best I feel,analysis is a continual
> "Prove,Disprove,Prove,Disprove."
> 
> There is no point in even attempting to explain how he trades to the masses,or anyone who uses Elliot,VSA or for that matter GANN.
> It takes years to master,even to gain a competency,Ive been at it spasmotically for 12 and a have a basic understanding.Even this is enough to improve my short term trading Dramatically.
> 
> Demonstrations will be seen as bewildering (No GANN traders I havent turned,not to GANN).to those with little or no understanding.
> 
> Its WELL worth the effort and if at anytime you consider *trading* as opposed to Investing--- serious amounts in the market (Say that which you would invest on a house) you NEED to know (1-4).
> 
> I like Dynamic Trading by Robert Miner.
> Advanced GET for software and Tradeguider for VSA.
> But other may differ.
> Expensive--yes to most--but show me a decient business that wont consist of considerable investment in TIME and MONEY.
> 
> Its no ego or arrogence its just too hard to wrap up in a paragraph or 2
> 
> Thats how some of us can come across,but it can become tedious,Im sure you understand.




Great post tech. Thanks for taking the time.
I was gonna say its your best post but its probably not.
Thanks for the book title as well its next on the list.
Cheers.


----------



## IFocus

> If your going to MAXIMISE profits in the business you need to know.
> 
> (1) Where Price is at relative to that which your trading right now
> (a) A corrective move?
> (b) A consolidation ?
> (c) A trend or impulsive move?
> 
> (2) Where Price is GOING
> (3) When will it get there.
> (4) When will price show me my analysis is correct---our incorrect.
> This is the one most get have problem getting their head around as it appears to the un trained that the goal posts get moved during a trade!!






> Just sit back and think for a minute.
> 
> WHAT WOULD IT MEAN TO YOUR TRADING if you could do all of the above?? (1-4).
> 
> Radge put it best I feel,analysis is a continual
> "Prove,Disprove,Prove,Disprove."




Hmmm….. tech/a  looks like Nicks influence is gaining ground,  I aim to gain the same, the 4 points  are I feel an excellent contribution to the forum and to any method that is used to trade markets.


Focus


----------



## Magdoran

nizar said:
			
		

> Great post tech. Thanks for taking the time.
> I was gonna say its your best post but its probably not.
> Thanks for the book title as well its next on the list.
> Cheers.



Nizar,


Just be aware that to use Robert Miner’s style of EW, you really need to use his proprietary software to do this.  Unlike the Prechter style where all you need is a bar chart and volume in terms of software, so most good charting programs will do (where you are learning a key interpretation and slightly modified version of R.N.Elliott’s original work.  Do not think you can grasp this in 5 minutes either).

Tech, (and I do think he is a gifted technical analyst of some note in his own right) has recently focused on the Miner/Fisher school of Elliott Wave theories, hence you should be aware of the Prechter school of thinking which historically brought EW back into vogue after decades of obscurity. 

Prechter and Frosts book on EW is a must read in my view if you really want to learn EW.  At least know what it is about even if you depart from it, or adopt a modified style.

Regards


Magdoran


----------



## It's Snake Pliskin

tech/a


> It takes years to master,even to gain a competency,Ive been at it spasmotically for 12 and a have a basic understanding.Even this is enough to improve my short term trading Dramatically.




...and you have only just recently realised the potential of short term trading tech. 

Just an observation of how you have changed and no attack on you. Your comments are appreciated and valuable.

Snake


----------



## It's Snake Pliskin

Trade_It said:
			
		

> Snake
> 
> I am not saying its the best, all I am is thats what it does.
> 
> Momentum is also great, I dont use it though.
> 
> All I know obv works for me and works well in seeing the way the markets moving.
> 
> So that's all that matters.




Ok Joseph.
I shall leave you to it. When you discover its weaknesses feel free to post.
Snake


----------



## Kauri

Magdoran said:
			
		

> Nizar,
> 
> 
> Just be aware that to use Robert Miner’s style of EW, you really need to use his proprietary software to do this. Unlike the Prechter style where all you need is a bar chart and volume in terms of software, so most good charting programs will do (where you are learning a key interpretation and slightly modified version of R.N.Elliott’s original work. Do not think you can grasp this in 5 minutes either).
> 
> Tech, (and I do think he is a gifted technical analyst of some note in his own right) has recently focused on the Miner/Fisher school of Elliott Wave theories, hence you should be aware of the Prechter school of thinking which historically brought EW back into vogue after decades of obscurity.
> 
> Prechter and Frosts book on EW is a must read in my view if you really want to learn EW. At least know what it is about even if you depart from it, or adopt a modified style.
> 
> Regards
> 
> 
> Magdoran




   Mag, 
         For Miners E/W any software with Fib tools is suitable, his proprietary software simplifies it, but is not essential.
         Cheers


----------



## wavepicker

Kauri said:
			
		

> Mag,
> For Miners E/W any software with Fib tools is suitable, his proprietary software simplifies it, but is not essential.
> Cheers




I have not studied Miners book in any depth, but for me it appears a little too mechanical in nature. Just depended what you want and the type of trader you are too. Also some key EW patterns in his book (and Nicks book too) appear not to be mentioned. Perhaps to try and simplify things, not sure?


----------



## Kauri

wavepicker said:
			
		

> I have not studied Miners book in any depth, but for me it appears a little too mechanical in nature. Just depended what you want and the type of trader you are too. Also some key EW patterns in his book (and Nicks book too) appear not to be mentioned. Perhaps to try and simplify things, not sure?



  Possibly, but regardless, proprietary software isn't needed.


----------



## wavepicker

Kauri said:
			
		

> Possibly, but regardless, proprietary software isn't needed.




He makes mention of time cycle projections, I would have thought that to 
use this application it would have been easier to use his software??


----------



## Kauri

wavepicker said:
			
		

> He makes mention of time cycle projections, I would have thought that to
> use this application it would have been easier to use his software??




  What tool does he use for making the time cycle projections??


----------



## tech/a

It's Snake Pliskin said:
			
		

> tech/a
> 
> 
> 
> ...and you have only just recently realised the potential of short term trading tech.
> 
> Just an observation of how you have changed and no attack on you. Your comments are appreciated and valuable.
> 
> Snake




Snake.

Gunna be honest here.

I've not been in the position where I've needed or wanted to create a short term cashflow from short term trading. What happened was that I have a ticker on my desk,Marketcast and had watched often as I worked many many trades grow from 10c to 50c in a few weeks.
Id often have a dig at myself that I WATCHED another 200% move just go by.

So One day I saw another get going so I bought $20k worth and a few days later I sold it for $43k. So I simply applied the M/M rules I know and traded a few. No plan--No blueprint,just experience.
It became pretty obvious that there was some serious investment potential in short term trading. So unlike LONGTERM trading to me short term needs the 4 above addressed.
Id done Prechters course around 10 yrs ago and forgotten most.I've watched Wave and the other guy that took off (Forget who he was) and Radge on his journey. I want simple easy,software that will HELP and the ability to trade both ways and the answer to the 4 questions above.

Thats where I'm at. Im setting my trading platform method and blueprint up.
Why Serious investment in $$ terms demands serious business admin.
It will be part of the overall diversification of Investment---not THE chosen investment method.

IFOCUS

Ive watched Nick for over 10 yrs.
His influnce in not only Elliot wave---which is very minor pales in comparison to him switching on the light to WHAT makes your profitable in trading---regardless of HOW you choose to trade.

But I will say this.
Short term is distinctly different to longterm trading.
So is options to CFD's.

Fundamental to technical.

There are some EXCELLENT contributors who specialise in each individually or combined methods who pull no punches and add fantastic value to this forum.I have picked up much from many in all aspects that interest me.
Sincere thanks.


----------



## Magdoran

Kauri said:
			
		

> Mag,
> For Miners E/W any software with Fib tools is suitable, his proprietary software simplifies it, but is not essential.
> Cheers



Hello Kauri,


Thanks for your post, great to get your perspective on this subject, much appreciated.

From my understanding of what I’ve seen, the way this style is marketed, you are strongly recommended to use the software to utilise the key concepts of that style, are you saying this isn’t so? My understanding and impression was that there is a timing aspect to the style in Dynamic Trader, and that in practice the software is pretty much critical to this particular process.

Certainly, the core common tenants of EW are covered as in any reputable EW course, so there is no disagreement at this level, any reasonable Elliott course should deliver the ground floor “101”basics.  However my understanding was that the key value proposition that is used to promote this approach is in the areas that this style is differentiating itself from other styles, namely the area that the software is presumably able to augment.  Do you have a different perspective to this, and if so, would you mind outlining it in as much detail as possible please?  

Since Nick identified Robert Miner as his source recently, I have been investigating it for comparison to the Fisher approach, and contrasting these with Prechter – I’m an inquisitive creature in my nature, and love to research and tinker with things and theories.  Hence my knowledge of Miner is limited to my recent reading of some of his works, and the second hand impressions from those that have studied his works (probably not to the extent that Nick has).

What exactly is your knowledge of Fisher, Miner and Prechter Kauri?  You seem to be an EW practitioner of sorts, but I noticed wavepicker had to outline the “1-2 1-2 1-2 nesting pattern” to you recently, hence to what extent do you think you can effectively compare and contrast the styles (especially Miner to Prechter)?

Regards


Magdoran


----------



## Magdoran

tech/a said:
			
		

> Snake.
> 
> Gunna be honest here.
> 
> I've not been in the position where I've needed or wanted to create a short term cashflow from short term trading. What happened was that I have a ticker on my desk,Marketcast and had watched often as I worked many many trades grow from 10c to 50c in a few weeks.
> Id often have a dig at myself that I WATCHED another 200% move just go by.
> 
> So One day I saw another get going so I bought $20k worth and a few days later I sold it for $43k. So I simply applied the M/M rules I know and traded a few. No plan--No blueprint,just experience.
> It became pretty obvious that there was some serious investment potential in short term trading. So unlike LONGTERM trading to me short term needs the 4 above addressed.
> Id done Prechters course around 10 yrs ago and forgotten most.I've watched Wave and the other guy that took off (Forget who he was) and Radge on his journey. I want simple easy,software that will HELP and the ability to trade both ways and the answer to the 4 questions above.
> 
> Thats where I'm at. Im setting my trading platform method and blueprint up.
> Why Serious investment in $$ terms demands serious business admin.
> It will be part of the overall diversification of Investment---not THE chosen investment method.
> 
> IFOCUS
> 
> Ive watched Nick for over 10 yrs.
> His influnce in not only Elliot wave---which is very minor pales in comparison to him switching on the light to WHAT makes your profitable in trading---regardless of HOW you choose to trade.
> 
> But I will say this.
> Short term is distinctly different to longterm trading.
> So is options to CFD's.
> 
> Fundamental to technical.
> 
> There are some EXCELLENT contributors who specialise in each individually or combined methods who pull no punches and add fantastic value to this forum.I have picked up much from many in all aspects that interest me.
> Sincere thanks.



Hey Daffy,


Boy, what a convert you are!  I remember when you were really sceptical on EW, and short term trading!  Snake is right, what a magnificent journey you have been on!

And now you’re even looking into how to trade the short side.  What a change!  Well done, and I’m happy that there has been some payback for all the hard work you have put in over the last couple of years.

I must say when you made a couple of EW calls recently I almost fell off my chair, and what’s more they were really good calls too.

It’s funny, but it seems we are both determined to rattle everything that moves, aren’t we?


Kind Regards


Magdoran


----------



## Bronte

Yes, we totaly agree with Magdorans observations
Well done & a much improved duck


----------



## Kauri

Hi Magdoran,
                   A simple observation, Miners software is not needed to apply his version of E/W. When I first read his book I started off applying it with the built in tools available in both Metastock and Amibroker. Nothing more, nothing less. 


> "an EW practitioner of sorts"



    I wouldn't, and in fact haven't ever, professed to be this, in fact in many of my posts I state that I am starting out with E/W and am on L Plates. Basic E/W is simply a tool I try to utilise alongside others in my "campaign", I attempt to use it to identify a trend, its position and direction, my position, and wether a trade taken has a good probability of being profitable. Simple I know, but in life I have found that complicated is not allways better. As stated in some of my posts I still get it wrong more often than I get it right, but hey didn't we all have to learn to crawl before we could walk??  


      Please post as a quote from any of my posts where I have even mentioned  Fisher, Miner,or Prechter, let alone compared their styles. 


			
				Magdoran said:
			
		

> Hello Kauri,
> .........
> What exactly is your knowledge of Fisher, Miner and Prechter Kauri? You seem to be an EW practitioner of sorts, but I noticed wavepicker had to outline the “1-2 1-2 1-2 nesting pattern” to you recently, *hence to what extent do you think you can effectively compare and contrast the styles (especially Miner to Prechter)?*
> 
> Regards
> 
> 
> Magdoran




     Regards

               Kauri


----------



## Magdoran

Kauri said:
			
		

> Hi Magdoran,
> A simple observation, Miners software is not needed to apply his version of E/W. When I first read his book I started off applying it with the built in tools available in both Metastock and Amibroker. Nothing more, nothing less.
> I wouldn't, and in fact haven't ever, professed to be this, in fact in many of my posts I state that I am starting out with E/W and am on L Plates. Basic E/W is simply a tool I try to utilise alongside others in my "campaign", I attempt to use it to identify a trend, its position and direction, my position, and wether a trade taken has a good probability of being profitable. Simple I know, but in life I have found that complicated is not allways better. As stated in some of my posts I still get it wrong more often than I get it right, but hey didn't we all have to learn to crawl before we could walk??
> 
> 
> Please post as a quote from any of my posts where I have even mentioned  Fisher, Miner,or Prechter, let alone compared their styles.
> 
> 
> Regards
> 
> Kauri



Hi Kauri,


Thanks for that.  Like you, I am striving to expand my knowledge, feeling that I am at the brink feeling forwards.

This is such a multifaceted area that I am aware that there are many different viewpoints and perspectives.  I believe even having a discourse when people don’t fully agree can be enlightening, and was seeking to get a feel for where you were coming from.  So, you see, I’m always interested in peeling away the layers of the onion as you can imagine.  This is in part how I learn and qualify ideas, including yours…

I was interested to see if you had looked at a range of sources and what your opinion was on the subject.  Thankyou for outlining your present observations and I look forward to seeing how you progress.  There are some great resources of knowledge on this site, and I’m sure you will in due course contribute more as you develop.



Kind Regards



Magdoran


----------



## Kauri

Magdoran said:
			
		

> Hi Kauri,
> 
> 
> Thanks for that. Like you, I am striving to expand my knowledge, feeling that I am at the brink feeling forwards.
> 
> This is such a multifaceted area that I am aware that there are many different viewpoints and perspectives. I believe even having a discourse when people don’t fully agree can be enlightening, and was seeking to get a feel for where you were coming from. So, you see, I’m always interested in peeling away the layers of the onion as you can imagine. This is in part how I learn and qualify ideas, including yours…
> 
> I was interested to see if you had looked at a range of sources and what your opinion was on the subject. Thankyou for outlining your present observations and I look forward to seeing how you progress. There are some great resources of knowledge on this site, and I’m sure you will in due course contribute more as you develop.
> 
> 
> 
> Kind Regards
> 
> 
> 
> Magdoran




    Hello Magdoran,
                        There are indeed  some great resources of knowledge on this site, in my short time here I have already learnt which contributers quietly add value and knowledge.
                         Thanks for your encouraging words.
        regards
                 Kauri...


----------



## It's Snake Pliskin

tech/a said:
			
		

> Snake.
> 
> Gunna be honest here.
> 
> I've not been in the position where I've needed or wanted to create a short term cashflow from short term trading. What happened was that I have a ticker on my desk,Marketcast and had watched often as I worked many many trades grow from 10c to 50c in a few weeks.
> Id often have a dig at myself that I WATCHED another 200% move just go by.
> 
> So One day I saw another get going so I bought $20k worth and a few days later I sold it for $43k. So I simply applied the M/M rules I know and traded a few. No plan--No blueprint,just experience.
> It became pretty obvious that there was some serious investment potential in short term trading. So unlike LONGTERM trading to me short term needs the 4 above addressed.
> Id done Prechters course around 10 yrs ago and forgotten most.I've watched Wave and the other guy that took off (Forget who he was) and Radge on his journey. I want simple easy,software that will HELP and the ability to trade both ways and the answer to the 4 questions above.
> 
> Thats where I'm at. Im setting my trading platform method and blueprint up.
> Why Serious investment in $$ terms demands serious business admin.
> It will be part of the overall diversification of Investment---not THE chosen investment method.
> 
> IFOCUS
> 
> Ive watched Nick for over 10 yrs.
> His influnce in not only Elliot wave---which is very minor pales in comparison to him switching on the light to WHAT makes your profitable in trading---regardless of HOW you choose to trade.
> 
> But I will say this.
> Short term is distinctly different to longterm trading.
> So is options to CFD's.
> 
> Fundamental to technical.
> 
> There are some EXCELLENT contributors who specialise in each individually or combined methods who pull no punches and add fantastic value to this forum.I have picked up much from many in all aspects that interest me.
> Sincere thanks.




Tech,
Thanks for the account of your journey. 
What did you think of Prechter's material?
Snake


----------



## wavepicker

Kauri said:
			
		

> What tool does he use for making the time cycle projections??




Chapter 5 -Dynamic Time Projections. Have not read book in any depth but he has a long chapter on Time, most probably using some sort of Fibonacci time extensions.  I would imagine it would be easier to accomplish this task using software that was scratch built for such a purpose. The the rest of the applications as you say maybe acomplished with a basic software fib tools.

Perhaps a dedicated EW software like AGet would have built into it to do this?

Cheers


----------



## tech/a

Magdoran said:
			
		

> Hey Daffy,
> 
> 
> Boy, what a convert you are!  I remember when you were really sceptical on EW, and short term trading!  Snake is right, what a magnificent journey you have been on!




Not really Always had a great deal of respect for Elliot and Steidlmayer Stratagies.Just didnt use them---didnt need them as I traded/Trade longterm portfolio Systems trading.



> And now you’re even looking into how to trade the short side.  What a change!  Well done, and I’m happy that there has been some payback for all the hard work you have put in over the last couple of years.




Trading short is a necessity in my view if your trading in shorter timeframes.
As for payback,if you mean that which the market has provided--I have no complaints, its NOT improvement I'm looking for its a new TYPE of trading.
Like when i went from Buying and holding Houses to Developing apartments.



> I must say when you made a couple of EW calls recently I almost fell off my chair, and what’s more they were really good calls too.




Thanks Moggi your patronism doesnt go un noticed.



> It’s funny, but it seems we are both determined to rattle everything that moves, aren’t we?




Thats not my intention.

*SNAKE*
Pretty heavy going from my memory of around 8 yrs ago.
I guess when you use it regularly its more foremost in your mind.
Its really when I saw consistent PRACTICAL use of Elliot that I realised that this was a serious analysis tool in the hands of trained exponents.


----------



## Magdoran

tech/a said:
			
		

> Not really Always had a great deal of respect for Elliot and Steidlmayer Stratagies.Just didnt use them---didnt need them as I traded/Trade longterm portfolio Systems trading.
> 
> 
> 
> Trading short is a necessity in my view if your trading in shorter timeframes.
> As for payback,if you mean that which the market has provided--I have no complaints,its NOT improvement I'm looking for its a new TYPE of trading.
> Like when i went from Buying and holding Houses to Developing apartments.
> 
> 
> 
> Thanks Moggi your patronism doesnt go un noticed.
> 
> 
> 
> Thats not my intention.
> 
> *SNAKE*
> Pretty heavy going from my memory of around 8 yrs ago.
> I guess when you use it regularly its more formost in your mind.
> Its really when I saw consistent PRACTICAL use of Elliot that I realised thet this was a serious analysis tool in the hands of trained exponents.



Tech,


Apologies if it came over as patronising.  That was not my intention.

I was commenting on how much your tone and focus has changed over the year.

The payback is about the tremendous amount of input you have made on this site, and if you can get something back I though that was great...

The comment about rattle everything that moves is referring to what I perceived to be an unquenchable thirst for knowledge.  You do have an inquisitional style sometimes (I’d know, I have been on the receiving end of it).

The comment about falling off my chair when you made those calls was because you surprised me since I had you pegged as a mechanical trader, and you did some really gifted charting to the point that I thought you’d missed your calling it was that good.

Daffy, you really need to learn how to take a compliment.


Kind regards



Moggie


----------



## tech/a

> Daffy, you really need to learn how to take a compliment.




I dont look for them.
Ive recieved a few in my time but not on forums.
On forums as you well know you get this constant---

Who the hell do you think you are--George Soros!!
If you're a Fundamentalist---Warren Buffet.



> I was commenting on how much your tone and focus has changed over the year.




True, took more of an interest in shorter term. Destroyed a few "Trueisms".



> The payback is about the tremendous amount of input you have made on this site, and if you can get something back I though that was great...




That happens all the time and has since I strated on forums 10 yrs ago. Even a singular snippet has proven to be sage advice at times.
Often the message is buried and emerges "When you're ready and capable of accepting it"

"I remember sitting in a room full of Tech Analysts at an ATAA meeting in Adelaide---I went as a guest as Radge was speaking. Radge was speaking on *What* made you profitable at about 25 mins into a 60 min presentation for me the Penny dropped like a smack in the mouth (Had a few in my time, smacks and penny dropping). I hadnt come looking for anything but sure as hell found it! I just GOT IT! I looked around the room and as Radge delved, demonstrated, explained and questioned it was obvious that the entire room DIDT GET IT. Not that I was a genius, just that THEY werent ready or capable of accepting "WHAT makes you profitable."

*This was an ATAA meeting TECHNICAL ANALYSIS makes you profitable, Radge you're not speaking our language!!!*

Actually he was they werent UNDERSTANDING his.



> The comment about rattle everything that moves is referring to what I perceived to be an unquenchable thirst for knowledge. You do have an inquisitional style sometimes (I’d know, I have been on the receiving end of it).




Actually I used to----but for perhaps 20 yrs dont. I find that anything worth persuing will become aparent very clearly often when you're not looking. The oil floats to the top. Often we are blind to the obvious. OR most see it but DONT RECOGNISE what it is that they see. Ive often posted the "Process of Opportunity"



> The comment about falling off my chair when you made those calls was because you surprised me since I had you pegged as a mechanical trader, and you did some really gifted charting to the point that I thought you’d missed your calling it was that good.




In many ways I still am. My care to detail in RISK which I can make mechanical is almost fanatical. My mechanical background has taught me what I NEED to avoid. Ive seen mediocre methods turned into brilliant results by making very small changes. TechTrader is one---a very average methodology---yet its pretty difficult to replicate in real trading for the greater majority.---Is it the analysis which makes the profit?

Oh Moggie/Bronte---Thanks.

No I'm not a Gann fan.


----------



## Magdoran

tech/a said:
			
		

> No I'm not a Gann fan.



Indeed Daffy, presently you are not… 

But you could be… 

If you dared. 


(If you dared to walk on the wild side, and engage on a journey into regions unknown and uncharted by you  - limited only by your imagination).


Judging by your tenacity, and ingenuity, and based on the quality of your T/A work of late, I think you have both the capacity and the right attitude to succeed (well beyond even your current high bar – which is already formidable).

But it is not my place to convince you.  The door is open, but only you can choose to walk through it and explore what is behind it, or not.  I respect that the choice is completely yours.

I still think that the last 12 months has been quite a journey of discovery for many who have contributed to or accessed ASF, and that includes you and I Daffy, wouldn’t you agree?


Mag


----------



## >Apocalypto<

It's Snake Pliskin said:
			
		

> Ok Joseph.
> I shall leave you to it. When you discover its weaknesses feel free to post.
> Snake




Snake,

Would love you to explain to me the advatages of using momentum on a daily and weekly chart compared to OBV and how it reads volume better.

Regards
Joseph


----------



## tech/a

Magdoran said:
			
		

> Indeed Daffy, presently you are not…
> 
> But you could be…
> 
> If you dared.
> 
> 
> (If you dared to walk on the wild side, and engage on a journey into regions unknown and uncharted by you  - limited only by your imagination).
> 
> 
> Judging by your tenacity, and ingenuity, and based on the quality of your T/A work of late, I think you have both the capacity and the right attitude to succeed (well beyond even your current high bar – which is already formidable).
> 
> But it is not my place to convince you.  The door is open, but only you can choose to walk through it and explore what is behind it, or not.  I respect that the choice is completely yours.
> 
> I still think that the last 12 months has been quite a journey of discovery for many who have contributed to or accessed ASF, and that includes you and I Daffy, wouldn’t you agree?
> 
> 
> Mag




I have what I need.
Ive looked behind the door. I can and do succeed without it.
Keep it simple.
Its *NOT* the analysis which makes the profit!
Seems like a conundrum one which you'll know the answer to in the clearest of terms once youve found it.

Moggie perhaps you have your own journey of discovery yet to come.

*There is a vast chasm between analysis to APPLICATION of that analysis.*
Excellent analysis doesnt necessarily equate to a profitable trading.

Both Technical and/or Fundamental.


----------



## motorway

Hello Trade it ( And everybody else ).... My first post here ..

Ok My focus is on price and volume... And centred on the method, observations and teachings of Richard Wyckoff..

Intersting word indicator... Because maybe that is what We are looking for when We look at a chart ...So looking at price and volume From a Wyckoff perspective is looking for indications at what more informed traders and investors are doing or not doing..

As to "indicators'' They cease being valid when they become time constrained and time distorted... The problem of optimization and time which is speeding up and slowing down producing jumps and not walks.... 

Ok some things don't suffer from this problem and can give valid indications.

Trend lines for one.. And watching price in relation to a trend line probably can allow one to read in a more timely way all the things indicators purport to  reveal to Us ... eg momentum

OBV ... Is an interesting one ... It is not time constrained or distorted in the way a moving average is...  But it can be a very blunt instrument.


Who invented OBV....???  and How should it be used..

Wyckoff and /or His associates ... in the early 1930's developed an optimism/pessimism index and when used in two forms created a trend barometer...

Now the two forms were one built from course of sales intra day and the other from the end of day close..

Now both signaled pessimism and optimism.. But of different groups and divergence between the two indexes were as important as with the price.

And the rules for using this as something to give indications was more subtle and in some ways the opposite of the rules of thumb that OBV entails..

Wyckoffs concept of effort and result (The force the Volume in relation to the result, the price range and stride produced) was always the key..

With EOD charting an approximation can be made with OBV (end of day) and Accul/Distrib ( approximating course of sales )... When these show divergence then that is a flag giving some indications. 

motorway


----------



## tech/a

M/W.

Good to see you around.
More quality added to the board.


----------



## ducati916

*motorway*

ARMS index ratio [see blog] sounds like the very same thing.

What would you make of the volume on the NASDAQ sell-off in May, as contrasted with the sell-off this past week?

For individual stocks, you will need access to T&S data if you wish to construct an ARMS ratio.

jog on
d998


----------



## >Apocalypto<

motorway said:
			
		

> Hello Trade it ( And everybody else ).... My first post here ..
> 
> Ok My focus is on price and volume... And centred on the method, observations and teachings of Richard Wyckoff..
> 
> Intersting word indicator... Because maybe that is what We are looking for when We look at a chart ...So looking at price and volume From a Wyckoff perspective is looking for indications at what more informed traders and investors are doing or not doing..
> 
> As to "indicators'' They cease being valid when they become time constrained and time distorted... The problem of optimization and time which is speeding up and slowing down producing jumps and not walks....
> 
> Ok some things don't suffer from this problem and can give valid indications.
> 
> Trend lines for one.. And watching price in relation to a trend line probably can allow one to read in a more timely way all the things indicators purport to  reveal to Us ... eg momentum
> 
> OBV ... Is an interesting one ... It is not time constrained or distorted in the way a moving average is...  But it can be a very blunt instrument.
> 
> 
> Who invented OBV....???  and How should it be used..
> 
> Wyckoff and /or His associates ... in the early 1930's developed an optimism/pessimism index and when used in two forms created a trend barometer...
> 
> Now the two forms were one built from course of sales intra day and the other from the end of day close..
> 
> Now both signaled pessimism and optimism.. But of different groups and divergence between the two indexes were as important as with the price.
> 
> And the rules for using this as something to give indications was more subtle and in some ways the opposite of the rules of thumb that OBV entails..
> 
> Wyckoffs concept of effort and result (The force the Volume in relation to the result, the price range and stride produced) was always the key..
> 
> With EOD charting an approximation can be made with OBV (end of day) and Accul/Distrib ( approximating course of sales )... When these show divergence then that is a flag giving some indications.
> 
> motorway





Thank you for that explanation motorway,

I use it with a few other rules to trade, not on its own. It works a treat for me when used in conjunction with the other requirements.

But if u used it on its own to trade you would have a hell of a time, stopped stopped stopped!


----------



## >Apocalypto<

tech/a said:
			
		

> I have what I need.
> Ive looked behind the door. I can and do succeed without it.
> Keep it simple.
> Its *NOT* the analysis which makes the profit!
> Seems like a conundrum one which you'll know the answer to in the clearest of terms once youve found it.
> 
> Moggie perhaps you have your own journey of discovery yet to come.
> 
> *There is a vast chasm between analysis to APPLICATION of that analysis.*
> Excellent analysis doesnt necessarily equate to a profitable trading.
> 
> Both Technical and/or Fundamental.




So true, so true Tech/A


----------



## It's Snake Pliskin

Trade_It said:
			
		

> Snake,
> 
> Would love you to explain to me the advatages of using momentum on a daily and weekly chart compared to OBV and how it reads volume better.
> 
> Regards
> Joseph




Joseph,

My comments were more alinged to: *what is the difference in the short term*?

Volume I feel is of importance with the accumulation and distribution phases over the medium to longer terms whats happening at key points. But short term like one day or week, does volume really matter? If not, then OBV is not really going to add anything. If momentum is the better choice what indicator is of use? Maybe the ADX or RSI would suffice. Ultimately price itself is going to be the one for me.

Once again look at the OBV construction and try to understand it? As I don't use it, due to it's construction, I am no better to comment any further and don't have the time to deconstruct it for you. 

Please let me know what your investigation reveals.
Regards
Snake


----------



## It's Snake Pliskin

motorway said:
			
		

> Hello Trade it ( And everybody else ).... My first post here ..
> 
> Ok My focus is on price and volume... And centred on the method, observations and teachings of Richard Wyckoff..
> 
> Intersting word indicator... Because maybe that is what We are looking for when We look at a chart ...So looking at price and volume From a Wyckoff perspective is looking for indications at what more informed traders and investors are doing or not doing..
> 
> As to "indicators'' They cease being valid when they become time constrained and time distorted... The problem of optimization and time which is speeding up and slowing down producing jumps and not walks....
> 
> Ok some things don't suffer from this problem and can give valid indications.
> 
> Trend lines for one.. And watching price in relation to a trend line probably can allow one to read in a more timely way all the things indicators purport to  reveal to Us ... eg momentum
> 
> OBV ... Is an interesting one ... It is not time constrained or distorted in the way a moving average is...  But it can be a very blunt instrument.
> 
> 
> Who invented OBV....???  and How should it be used..
> 
> Wyckoff and /or His associates ... in the early 1930's developed an optimism/pessimism index and when used in two forms created a trend barometer...
> 
> Now the two forms were one built from course of sales intra day and the other from the end of day close..
> 
> Now both signaled pessimism and optimism.. But of different groups and divergence between the two indexes were as important as with the price.
> 
> And the rules for using this as something to give indications was more subtle and in some ways the opposite of the rules of thumb that OBV entails..
> 
> Wyckoffs concept of effort and result (The force the Volume in relation to the result, the price range and stride produced) was always the key..
> 
> With EOD charting an approximation can be made with OBV (end of day) and Accul/Distrib ( approximating course of sales )... When these show divergence then that is a flag giving some indications.
> 
> motorway





Motorway,

good to have you here.
Notice how Hank wrote a book?


----------



## motorway

Ducati

Some comments on and by Richard Arms at a seminar He gave:

"Volume is key!  It tells you what is happening.
Buy a car, you want to see the engine, does it have the power to get up the hills?
He took the (Richard) Wyckoff course
Stock Market Course they call it now.
If you can still get them, it's good work.
They used to loan the material, with a lock and key."

So I would expect His work is built on that foundation..
ease of movement etc are Wyckoff terms...

Market breath I have a 1909 article on

I once saw a who's who of who had done that Wyckoff course.. So a lot of TA is can be traced to Wyckoff..

Take trend lines..

From a Reuters seminar on TA

"Trendlines are one of the simplest and most useful
indicators in Technical Analysis. They also happen to be
one of the most misused.
"One of the biggest mistakes made by beginners and
professionals alike, is inconsistently defining and
drawing the trendline. To be useful, the trendline must
accurately reflect the definition of the trend."
(Victor Sperandeo)
The Classic Trendline
THE WYCKOFF TRENDLINE
The principles and conditions that make up the
"classical trendline" are in many respects a variation of
Wyckoffs original findings on this subject. Wyckoff
included the following conditions:
Firstly, he argued that a trendline requires you to join only
two price extremes as opposed to three. He qualified this
by specifying that the two price extremes had to be
consecutive and of similar magnitude. 
This condition of similar magnitude to validate a trendline
is now disregarded by most traders . It is however, an important measure
of the change in trend. For instance, if a Wyckoff trendline
is breached, the concept of similar magnitude indicates the
degree of the change in trend of that particular time frame.
A second concept included by Wyckoff in his analysis of
trendlines, was the idea of a trendline that is "recovered".
In other words, the concept that a breach of a trendline
does not always automatically render that trendline invalid."

Which Brings Us to analysis of the NASDAQ


The Wyckoff 5 Step Method 

Step 1: 

Identify the trend and the position within that trend of the general market. 

Ok The particular tools Wyckoff used for step 1

are 1) Trendlines (normal and reversed)  So with the NASDAQ That would be a Valid demand line and an overbought line... NASDAQ Is in a uptrend..

But with price extended right over the top of the overbought line

2)  1/2 way points (are used as a measurement of relative strength on a rally or reaction. )

3) Thrusts, ( The price difference between consecutive tops in up trends or between consecutive bottoms in downtrends.)
and 4) Figure Charts. 


OK IF you draw a Valid trend channel

Then this comment is pertinent to the May action and the most recent

"The importance of the reverse use of trend line is that it is determined by points at which the opposition came in to stop the move. The reverse use of trend lines is drawn through where it is stopped, where the opposition came in and actively stopped the trend, to stop it and reverse it even on a temporary basis. Later on supply might come in at the same angle to stop the move again."

So on this basis the action is the same... The trend is the same and the position in the trend is the same..

Price weakness last time was very weak there was significant "ease of movement"  

With this recent action You can easily see a lessening of stride ( same effort less and less result ) before the climatic day..


Wyckoff I think would suggest now there are always those who buy on reactions on dips.. So it is the character of the next rally that is what matters

He would have been long the NASAQ and on substantial profit

He believed in tight stops allowed by correct entry... Raised to break even
at first valid opportunity... But then plenty of lee way to allow for natural reactions and to allow profits to run...
He looked to exit on indications ..

So if He did not exit already, he would probably suggest trailing the stop behind the next rally..

We would be looking at the ease of movement of this rally
How much do the bars overlap, How narrow are the bars.. Where are the closes... What is the volume etc..

A substantial  pullback in the NASDAQ when you look at the charts was 
not unexpected.. At this stage it could be a shakeout... or preliminary supply
and the start of a major down move... The character of the next rally will
tell Us more..

I don't invest/trade in US stocks So the remarks are general..

If the next rally fails and your stop is triggered 
You probably have a very good short..

We have had a sign of weakness... So a failed rally is what Wyckoff called a
last point of supply...

In an uptrend
A Wyckoff Buy
is at the bottom of a reaction
So that was the lows after May...

Up at the overbought line... 
We are looking for shorts
until a new trend channel establishes itself

Wyckoff advised looking at daily weekly monthly and point and figure charts

tech/a thanks for the welcome

Under Step 1
You could see Elliot wave being a tool  (Or anything else if it works)
Some well known Wyckoff traders are Elliot wavers too..
I know very little about EW... And not sure what Wyckoff would have thought.
He saw His system as complete And advised not mixing methods..

Even a normal reaction would will be significant

" Every change in the market consists of waves of buying and selling that last just as long as they can attract a following. When the following is exhausted for the time being, the wave ends and a contrary wave sets in."

Another thing Wyckoff did not like market weighted indexes.

He preferred to pick the 5 most sensitive stocks (in a market or a sector)
average their price and add their volumes and use that for market analysis.

The price volume relationships then were both amplified and had more clarity.

As to the anticipated extent of a move...  Here he used P&F in a special way
The peculiar characteristic of a P&F chart to move in 45 degree angles
and its way of measuring a trading range by fluctuations and not time ..

Fluctuations tease out and crystalize contingent demand and supply
what Wyckoff called cause and effect...

Potential energy...

So there is a start at some Wyckoff analysis.


motorway


----------



## motorway

Hello snake

Thank you for the welcome.. I know of USA sites where there is good wyckoff
discussion even then Wyckoff is almost like it is under lock and key..

So I noticed the serious and worthwhile discussions on this forum and thought I would give it a go...

I was interested in P&F for 15 yrs... that led Me to Wyckoff about 3 yrs ago
And I continue to be amazed by the material and always learning new things..

Yes There is So little available directly on Wyckoff Method

Hank Pruden's material is  good... 
So His book should be ... 

It Can be pre ordered on Amazon.. 
Hits the shelves in April..

motorway


----------



## It's Snake Pliskin

motorway said:
			
		

> Hello snake
> 
> Thank you for the welcome.. I know of USA sites where there is good wyckoff
> discussion even then Wyckoff is almost like it is under lock and key..
> 
> So I noticed the serious and worthwhile discussions on this forum and thought I would give it a go...
> 
> I was interested in P&F for 15 yrs... that led Me to Wyckoff about 3 yrs ago
> And I continue to be amazed by the material and always learning new things..
> 
> Yes There is So little available directly on Wyckoff Method
> 
> Hank Pruden's material is  good...
> So His book should be ...
> 
> It Can be pre ordered on Amazon..
> Hits the shelves in April..
> 
> motorway




Motorway,

I have all of his articles but he has taken them off his site, only some in Spanish are left. 
I won't get the book because I feel it will be regurgitation of what I have. the wyckoff technique is simple really but learning it in the first place can be an expensive affair (i hear) or a patchy affair. It is something I feel the masses don't need to protect its value as a viable system. I agree PF charts are good things, showing the extent of the cause. 
I looked at constructing my own barometer based off Wyckoffs but it seems too much of a task for me. 

Talk to you later.
Snake


----------



## ducati916

*motorway*

Quite a long and detailed post. This section interested me.



> As to the anticipated extent of a move... Here he used P&F in a special way
> The peculiar characteristic of a P&F chart to move in 45 degree angles
> and its way of measuring a trading range by fluctuations and not time ..




That now makes a number of methodologies that incorporate this 45 degree line; Gann and now we can add Wyckoff.

Now intrestingly I had never really looked at the previous trend lines in this context, but the Gann dominance of the 45 degree line had intrigued me, viz. what rational explanation, if any, was there?

For the answer, we need to refer back to Keynes, and his General Theory of Employment, Interest & Money here we find the theory of Economic equilibrium which is expressed in alebraic form;

PE = C + c[1 - t]Y + I + G + NX

PE = Planned Expenditure
C = the amount of output consumers wish to consume
c[1 - t] = consumers disposable income [after tax]
I = the amount of capital investment via business
G = Government investment in capital goods
NX = net exports
Y = total expenditures/total income

Once the eqation is solved via inputing the necessary values, you are left with PE = Y which if plotted graphically, represents a 45 degree angle.
This = equilibrium.

The stock market has subscribed to equilibrium theory since almost the year dot, and if used correctly can become a very useful and profitable tool.
Statistically, equilibrium theory carries a high probability level, with a 95% confidence level and standard deviation of 2.

jog on
d998


----------



## motorway

> I have all of his articles but he has taken them off his site, only some in Spanish are left.




They are still there and available but the links are not
If you have the article page bookmarked that page is still available..




> I won't get the book because I feel it will be regurgitation of what I have.




Hopefully We get to look inside it a bit.... Only one section is on Wyckoff
out of the three..



> the Wyckoff technique is simple really but learning it in the first place can be an expensive affair (i hear) or a patchy affair.




Well there are subtleties to it.. it is very methodical and logical.. But will be only as good as the judgement that one develops through experience.

He said it was like crossing a busy street.. You just did it always gauging and judging when to move when to hold bobbing weaving through the traffic..

You can give a child all the rules.. But it is only experience and judgement that makes the crossing safe and sound..

We have to be able to recognize strength and weakness.. Strength in weakness and the weakness in strength... he also said it was like a movie
Some get who did it after the first few frames.. Some sit through halfway
some still don't know after it is finished.. What I have seen of the course  has a lot more in it .. It is still available .



> It is something I feel the masses don't need to protect its value as a viable system.




 Wyckoff is not about working because others don't or do use it..
Wyckoff is about demand and supply..

And the fact that there are different groups in the mkt ( very modern idea  far from the one time horizon same resources same knowledge rational man of EMH,.. )

The more informed Vs the less informed..
Those with huge financial resources Vs those who haven't
Different time frames.. Risk tolerances etc etc

And the fact that  mkts are manipulated by everybody..
But that those with the biggest wallets will have the most significance..

Just the act of choosing to buy sell or not manipulates the mkt..
The simple interaction of market and limit orders manipulates the mkt.
The way people are and the way they act manipulates the mkt..
Those waves of buying and selling..

So analysing supply and demand will always work
and always provide opportunity..

And probably there are more who what to be told by someone or something what to do anyway... Than develop their own judgement ..

Wyckoff said of most people 



> There are those who think they are studying the market when all they are doing is studying what someone has said about the market...Not what the market Has said about itself




 Wyckoff is against all mechanical methods
even the tools like trend lines are not to be used mechanically.
Everything is sensitive to what is happening..

There will always be accumulation, distribution , marking up and marking down

motorway


----------



## It's Snake Pliskin

Good points Motor!


----------



## rcctradings

Magdoran said:


> Nizar,
> 
> Tech, (and I do think he is a gifted technical analyst of some note in his own right) has recently focused on the Miner/Fisher school of Elliott Wave theories, hence you should be aware of the *Prechter school of thinking *which historically brought EW back into vogue after decades of obscurity.
> 
> *Prechter* and Frosts book on EW is a must read in my view if you really want to learn EW.  At least know what it is about even if you depart from it, or adopt a modified style.
> 
> Magdoran




Hi Folks,
I've been un-earthing skeletons in my quest and looking up Prechter from this discussion, I've come across the following article:
http://www.avaresearch.com/articles/713/The-Embarrassing-Track-Record-Of-Robert-Prechter-Part-1.html
Who is right? Who is wrong? Is he worth reading about?
Any views highly appreciated!


----------



## minwa

rcctradings said:


> Hi Folks,
> I've been un-earthing skeletons in my quest and looking up Prechter from this discussion, I've come across the following article:
> http://www.avaresearch.com/articles/713/The-Embarrassing-Track-Record-Of-Robert-Prechter-Part-1.html
> Who is right? Who is wrong? Is he worth reading about?
> Any views highly appreciated!




No one is "right". Only the market and your profit & loss in your account is right. 

Do be aware of loudmouths in financial media - eg. Prechter. Not saying dismiss him automatically, just do a bit of research, a bit of reading of his material and applying them, see if it fits you and works for you.

Personally I think Elliot Waves are a joke. But my personal opinion hardly matters. There are many Theorists that think they can predict the turning point to the next wave. Give it a go yourself see if its works for you.


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## Porper

minwa said:


> Personally I think Elliot Waves are a joke.




A lot of people that don't understand how the theory works think the same. First of all it's "Elliott Wave" not "Elliot" which tells me straight away that you haven't studied it. It is no better or worse than any other technique i.m.o. However Prechter is a broken record who has been predicting the end is nigh for Donkey's years. It's a shame as he brought the theory back to the public eye pretty much by himself in the 70's - 80's.

The main problem with the Wave Theory for me is that you can "force" a count onto a chart if you have a bias to which direction you think price is going to head...just like Prechter has been doing for all these years. Mind you he has earned...and is still earning a fortune out of his scaremongering. 

Robert Miner's teachings are much better from a trading perspective as he keeps it simple.


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## pavilion103

Porper said:


> A lot of people that don't understand how the theory works think the same. First of all it's "Elliott Wave" not "Elliot" which tells me straight away that you haven't studied it. It is no better or worse than any other technique i.m.o. However Prechter is a broken record who has been predicting the end is nigh for Donkey's years. It's a shame as he brought the theory back to the public eye pretty much by himself in the 70's - 80's.
> 
> The main problem with the Wave Theory for me is that you can "force" a count onto a chart if you have a bias to which direction you think price is going to head...just like Prechter has been doing for all these years. Mind you he has earned...and is still earning a fortune out of his scaremongering.
> 
> *Robert Miner's teachings are much better from a trading perspective as he keeps it simple*.





I've read some of his work and I enjoyed it. 

I haven't delved into EW too much, but I see some merit in it. 

Like you said though, forcing a count is a bad error when undertaking this form of analysis.


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## tech/a

Just to add to Porper's comments.

*Firstly to Prechter.*

The guy makes more from Newsletters than anything else.
He knows that sensationalism sells. He is also correct in that the western monetary system is in shambles.

If you really want to scare the bejeebas out of you grab this for an excellent read.

http://www.penguin.com.au/products/9781921880131/extreme-money-masters-universe-and-cult-risk

But the point is that the whole worlds economic bureaucracy is fighting to keep the insatiable machine a float.
Prechters  down fall is he keeps looking for a finality with only one Tool Elliott.

Let me tell you that when it does collapse even partially which occurred in 2008/9 *blind Freddy will see it *as we did then. They made films about it.

Lets face it he gets a heap of press and as its been said even bad press when used correctly can be very powerful.

There are new bunnies born every day---they keep hearing the contrarian view. (IE Forget about the crowd step outside---that's how you make REAL money) Prechter is way way out of the crowd.

But youll always get those who just have to know---what if he IS RIGHT THIS TIME? 
(1) I could make a fortune 
OR
(2) I could lose a fortune.(My super).

What Prechter does wrong in my view is he falls victim of the beauty of Elliott himself.
He remains concreted to his conviction in the direct light of technical evidence to the contrary.

*THAT IS VERY POOR TECHNICAL ANALYSIS.*

Clearly the whole economic world is committed to growth even in the light of total incompetency (It could be argued). I don't follow Prechter but would suggest that trading anything bullish in a chart (And clearly the indexes shown are showing and have shown clear bullish sentiment ) while holding the view many hold without continually placing a date on it---would be more beneficial----Well Id have thought.

*So to Elliott Wave.
Is it worth the effort.*

There are quite a few who I respect as traders who use it and use it profitably.
I do.
Boggo here does and has shown many times trades at setup and completion.
Radge does and I've seen countless setups play out.

Having said that any experienced analysts will tell you they have seen just as many fail as well---I'm no different but I can unequivocally tell you that knowing how to apply the analysis and how to trade when analysis both *succeeds AND Fails *is more important than the* ANALYSIS ITSELF*!

*But what do you need to know.???*

Personally my view is you need to know the *BASICS* of a count.
You need to know that a count is clear and concise---infact my rule is that if I cant see it instantly then I wont use Elliott in my analysis on *THAT* chart in *THAT* timeframe. (When its clear I've found it *VERY* Powerful)
Even when its clear I will use it in *CONJUNCTION* with other analysis.
I never use it to set a price target in stone.---But will be very aware of that level.---other analysis can confirm or negate the analysis at wave pivots.

I never attempt to count complex corrective moves. I use other analysis for what's happening within a corrective move.
So in a nut shell.

*KEEP it SIMPLE*

If your a discretionary trader I strongly suggest you include it in your arsenal.
If your lazy like me then get MT predictor or Advanced GET (My choice) *but* make sure you are an *EXPERT *at the basics---be capable of marking up your own chart. (So you know when the algorithm in the software is struggling to find a clear concise count!)


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## Boggo

Porper said:


> Robert Miner's teachings are much better from a trading perspective as he keeps it simple.






tech/a said:


> *But what do you need to know.???*
> 
> Personally my view is you need to know the *BASICS* of a count.
> You need to know that a count is clear and concise---infact my rule is that if I cant see it instantly then I wont use Elliott in my analysis on *THAT* chart in *THAT* timeframe. (When its clear I've found it *VERY* Powerful)
> 
> Even when its clear I will use it in *CONJUNCTION* with other analysis.
> 
> *KEEP it SIMPLE*
> 
> If your a discretionary trader I strongly suggest you include it in your arsenal.




 to all of the above.

A recent example.
Bought SEA on at breakout at $1.05 (identified in a Metastock scan) that also had potential from an EW perspective.

On the chart below note the red volume bar appearing (July 2nd) in an area where a potential EW target maximum also appeared (tech/a can expand on this particular volume process much more eloquently than I can).

Got taken out at my stop of $1.21. I may be completely wrong in what I have done but for me this process works but in quite different ways for different stocks. This is just one example where there are up to four elements involved in the entry and in the exit.
If this stock does come back into the W.4 area or breaks out from the recent high then it may be revisited but for now it is just a trade that made a profit.

Any one piece of software will only do what *it* is designed for, in the case of EW software it will find patterns and present them to you. It doesn't take into account all the other factors that you need to have at your disposal.

(SEA - click to expand)


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## pixel

Porper said:


> A lot of people that don't understand how the theory works think the same. First of all it's "Elliott Wave" not "Elliot" which tells me straight away that you haven't studied it. It is no better or worse than any other technique i.m.o. However Prechter is a broken record who has been predicting the end is nigh for Donkey's years. It's a shame as he brought the theory back to the public eye pretty much by himself in the 70's - 80's.
> 
> The main problem with the Wave Theory for me is that you can "force" a count onto a chart if you have a bias to which direction you think price is going to head...just like Prechter has been doing for all these years. Mind you he has earned...and is still earning a fortune out of his scaremongering.
> 
> Robert Miner's teachings are much better from a trading perspective as he keeps it simple.



*
I admire your poise, Porper.*

No matter how uneducated an objection, you keep your cool and explain your reason - pro and con - why you use Elliott Wave counts to estimate likely future market behaviour. I haven't studied EWs to the extent necessary to allow me an in-depth judgment. But I have been in contact with several expert traders that use them very successfully. One facet common to all of them: If an extrapolation (expected outcome) fails to materialise - something that happen with any analysis method, be it technically or fundamentally based - *the true EW analyst will go back and adjust his wave count.* IMHO, that defines the Professional: *Recognition that one's analysis delivers a potential outcome, not a prediction.* Some methods are delivering outcomes that have a high probability of success; others "get it right" less often. The trick lies in recognising which is which and then mustering the humility and courage to switch to Plan B.

PS: As to Prechter's earning ability, your comment reminds me of an old adage from a place and time far away. It translates as *"He who can, does. He who can't, lectures."* 
(If one were sarcastically inclined, one might add, "He who can't either, criticises.")


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## minwa

pixel said:


> *
> 
> PS: As to Prechter's earning ability, your comment reminds me of an old adage from a place and time far away. It translates as "He who can, does. He who can't, lectures."
> (If one were sarcastically inclined, one might add, "He who can't either, criticises.")*



*

That adage doesn't work in trading.  For example Buffet and Soros have proven they can "do", but they also "lecture" (books, maybe "seminars" as well I duno). Prechter's newsletters may be bad performance but he WRITES what people WANT to hear - his primary reason for writing is to sell. Maybe he is a very capable individual turning lots of profits in his personal accounts which we don't see - maybe his own trading doesn't following his writing analysis. He is not going to write "probably slightly more upside, but too risky, not worth r:r, stay in cash" which he does in his own account. He will stay in cash in his account and write "bull market roaring ahead - here's the hottest picks" or "the top is almost here - get ready to load up on shorts" - these will sell more subscribers.

We know in Soros and Buffets case - "He can, and does. He can, and lectures. He can, and criticises."*


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## tech/a

And then.

*Ignorance is an expensive teacher.*

Spot on Pixel
Your both on the same page!


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## banco

minwa said:


> That adage doesn't work in trading.  For example Buffet and Soros have proven they can "do", but they also "lecture" (books, maybe "seminars" as well I duno). Prechter's newsletters may be bad performance but he WRITES what people WANT to hear - his primary reason for writing is to sell. Maybe he is a very capable individual turning lots of profits in his personal accounts which we don't see - maybe his own trading doesn't following his writing analysis. He is not going to write "probably slightly more upside, but too risky, not worth r:r, stay in cash" which he does in his own account. He will stay in cash in his account and write "bull market roaring ahead - here's the hottest picks" or "the top is almost here - get ready to load up on shorts" - these will sell more subscribers.
> 
> We know in Soros and Buffets case - "He can, and does. He can, and lectures. He can, and criticises."




I don't think Soros is a good example.  His methods are highly discretionary and he usually talks about economics more generally.  Buffett's methods are obviously based on Ben Graham but lots of people have read Ben Graham and there's only Buffett.  It's not like you have CTAs giving away the details of their systems.


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