# What are your top 5 trading rules???



## gamefisherman

We are 7 months into trading and are looking to learn as much as possible.....

We would really appreciate in discovering other traders 5 top trading rules..........

Our goals are to buy and hold for a short time.....day/s-weeks,month if it looks like hitting the skye....We wish .......one day lol

Would greatly appreciate hearing from you

Best wishes


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## Nick Radge

1. Trade in the direction of the trend
2. Cut your losses
3. Let your profits run
4. Decide your pain tolerance level, halve it and trade small enough that you never hit it
5. Patience and tenacity.


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## So_Cynical

I don't really consider myself a trader...more a buy and build, short term to long term punter.

1. Timing is everything
2. Believe in your self (Back your decisions)
3. Give trades time to come good (assuming u got the stock selection right)
4. Don't be afraid to average down (assuming u got the stock selection right)
5. U wont always get the timing right or selection  Oh and trade your plan.


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## tech/a

In addition.

Understand Risk.
Fixed fractional Position sizing.
Understand that you'll only make $$s if you have far more winning trades than losing trades.
OR
Your winning Trades are Much larger than your losing trades.
Understand Reward to Risk.

Learn how to test your trading Idea and dont trade until you know the characteristics and "Blue print of your trading method"

If you dont know the above then chances are your guessing (Gambling).


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## tech/a

Thats very dangerous advice.


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## mlross75

I only have one rule and that is that i dont take any advice and i dont give any advice , i do what i want when i want.


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## ColB

MLRoss75 said:


> I only have one rule and that is that i dont take any advice and i dont give any advice , i do what i want when i want.




Thanks for sharing that ML!  Sounds like a well structured plan!  Sort of reminds me of what I was like as a know all youngster until I grew up.


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## mlross75

its probably why im not a very good trader.


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## Nick Radge

> 1. Timing is everything
> 2. Believe in your self (Back your decisions)
> 3. Give trades time to come good (assuming u got the stock selection right)
> 4. Don't be afraid to average down (assuming u got the stock selection right)
> 5. U wont always get the timing right or selection Oh and trade your plan.




If timing is everything, why would we need to give trades time to come good? (#3)
If timing is everything, why would you need to average down? (#4)
If timing is everything, why wouldn't we get timing right all of the time? (#5)

Of course there is a simpler answer......


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## So_Cynical

Nick and tech...thanks for the giggles  u trendy's are so predictable. 

Trend following and all its rules are great for the people that it suits...that's not me.

I have a 100% winning ratio since October (only about 10 trades)..im punting with all of my bank, all of the time and doing really well, though not spectacularly well cos im selling way to early. 

I have learned alot from u guys....thanks.


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## nunthewiser

So_Cynical said:


> I have learned alot from u guys....thanks.





what did you learn?


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## wayneL

From another thread:



So_Cynical said:


> ...maths is not my strong point.


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## springhill

Never buy on  'hot tip' from a mate, or from someone who's mates uncle's sister's nephew is the director's son's cousin's dog. If you've heard it second hand, its probably really 15th hand and guess what? You're the smallest fish in the pond


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## So_Cynical

nunthewiser said:


> what did you learn?




One thing i learned is that there are systematic plans for share trading that can can and do achieve good results...also understand the argument for not averaging and not believing in anything...and its a sound argument.

Also know that i have averaged down very successfully....and have seen my trades turn around when given time and exited in profit, in fact im able to trade now because i averaged down into my LGL position last spring, and turned a big loser (45%) into a nice little winner (about 14% from memory)

Also learned that Trendy's are very predictable....and i think trend following suits certain disciplined personality's better than others.


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## skyQuake

So_Cynical said:


> One thing i learned is that there are systematic plans for share trading that can can and do achieve good results...also understand the argument for not averaging and not believing in anything...and its a sound argument.
> 
> Also know that i have averaged down very successfully....and have seen my trades turn around when given time and exited in profit, in fact im able to trade now because i averaged down into my LGL position last spring, and turned a big loser (45%) into a nice little winner (about 14% from memory)
> 
> Also learned that Trendy's are very predictable....and i think trend following suits certain disciplined personality's better than others.




Sure that's a good example? You could have bought into BNB and averaged or the myriad of other underperformers so far.


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## Timmy

Wear sunscreen
DYOR
Laugh
Back yourself
Use a stop


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## >Apocalypto<

So_Cynical said:


> Also know that i have averaged down very successfully....and have seen my trades turn around when given time and exited in profit, in fact im able to trade now because i averaged down into my LGL position last spring, and turned a big loser (45%) into a nice little winner (about 14% from memory)




based on these rules,

how did u fair in the sell off averaged down all the way???? 

the only thing that saved your 45% loss was this rally. luck saved u not your averaging. 

I knew a guy who tried that with CFD's worked great till the real selling came in. 

Yeh, you guessed it he anit trading no more.


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## Pallen

1. When people get greedy get fearful, when people get fearful get greedy

2. Never invest in anything I dont fully understand.

3. Look for stocks that are one of a kind ( Buffet style play )

4. Always check cashburn and cash position.

5. Set exits and show disciple, keep emotion out of it.


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## wayneL

gamefisherman said:


> We are 7 months into trading and are looking to learn as much as possible.....
> 
> We would really appreciate in discovering other traders 5 top trading rules..........
> 
> Our goals are to buy and hold for a short time.....day/s-weeks,month if it looks like hitting the skye....We wish .......one day lol
> 
> Would greatly appreciate hearing from you
> 
> Best wishes




Perhaps OP might like to enlighten us what sort of trader he is... Technical? Fundamental? Mental?

Then some of these rules could be tailored to be relevant.


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## So_Cynical

skyQuake said:


> Sure that's a good example? You could have bought into BNB and averaged or the myriad of other underperformers so far.




And to be 100% honest i looked at BNB and Allco etc (at the time)....and just couldn't do it, sure they had falling charts etc...but the fundamentals were just so negative, and that's what kept me out.

For what ever reason ive avoided the disasters and find myself in profit...with cash, and going forward into this peaking market....have to say that my typical buy targets seen to have evaporated into this rally...so find myself a bit directionless.


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## tech/a

> I have a 100% winning ratio since October (only about 10 trades)..*im punting with all of my bank, all of the time* and doing really well, though not spectacularly well cos im selling way to early




Punting with all of your bank all of the time.
So you use fresh air for averaging down?
100% win ratio since Oct with *10 trades *and you EXIT TOO EARLY?

Trend following is so predictable---the alternative (which is ?) isnt?
This is preferable?



> have to say that my typical buy targets seen to have evaporated into this rally...*so find myself a bit directionless*.




This would be perfect as you dont follow trends---surely.


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## explod

So_Cynical said:


> One thing i learned is that there are systematic plans for share trading that can can and do achieve good results...also understand the argument for not averaging and not believing in anything...and its a sound argument.
> 
> Also know that i have averaged down very successfully....and have seen my trades turn around when given time and exited in profit, in fact im able to trade now because i averaged down into my LGL position last spring, and turned a big loser (45%) into a nice little winner (about 14% from memory)
> 
> Also learned that Trendy's are very predictable....and i think trend following suits certain disciplined personality's better than others.





Agree, takes a bit of nerve sometimes but increasing positions going up has worked very well for me.   Momentum and volume has to be watched very close.   Picked a bottom once where a trade went dreafully wrong and got out of it but will never do that again.


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## Mr J

1. Trade good.


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## NeuromanceR

> 1. Trade good.




2. Buy high, sell higher.


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## Sean K

1. Don't trust 
2. an  
3. internet avatar's 
4. top 5
5. trading rules.

Unless they are a tiger.


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## Mr J

NeuromanceR said:


> 2. Buy high, sell higher.




Price is taken in context of the timeframe being traded, and therefore a good trade will be always taken at a low price, i.e. buy low, sell high. Anything else is a low probability trade, and therefore bad.



kennas said:


> 1. Don't trust 2. an  3. internet avatar's 4. top 5 5. trading rules. Unless they are a tiger.




You can trust mine .


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## Aussiest

NeuromanceR said:


> 2. Buy high, sell higher.




Why? Give me an example when this has worked.


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## haunting

1) buy when you are feeling scared
2) buy more when everyone in this forum is feeling scared
3) put all your money in when the whole market is feeling scared
4) learn to meditate to calm your nerves to survive this fear so you can live to enjoy your reward
5) learn to disengage yourself from the market, ie, concentrate your energy on what others are doing and react accordingly


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## Sean K

Some of these are sounding like long term (buy and hold) investment rules as opposed to short/mid term trading rules. 

I thought the intent was short term trading.


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## trainspotter

1) Give all your money to Trembling Hand
2) see above
3) see rule number 1
4) Refer to rule #1
5) D .. .all of the above.

I am convert to TH's superior knowledge. Just trying to build up the nerve to implement it.


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## fapturbo

NeuromanceR said:


> 2. Buy high, sell higher.




Of everything I've read on this post. This is the one that makes the most sense.

Why??

Because you are buying as price is heading up and you are buying in the direction of the prevailing trend.

1. Trade with Momentum
2. Trade with Momentum
3. Trade with Momentum
4. Trade with Momentum
5. Trade with Momentum

Trailing Stop + Fixed Stop for Exits.


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## motorway

My take on levy flights--->

Antelopes use a series of random jumps ( levy flight )
To evade the chasing lions
They do not run in a predictable straight line
But by a series of side steps

Lions in turn use a series of random anticipatory pounces
they do not pounce where the antelope is
But where a probability exists where an antelope will be at particular moment

If the lion pounced where the antelope is
the Lion would nearly always catch empty air
tire exhaust and die

By pouncing where the antelope has a probabilty ( levy flight )
of being... Though the lion catches empty air sometimes.
Probability and perseverance mean that the lion will arrive at the same spot the antelope jumps to
enough times that he not only  survives but thrives

The connection to trading and markets are obvious
predator and prey
A good example of it moves and we ( or the Lion ) moves first..
( and think the antelope too, that is why the antelopes survive and thrive also)

Of pouncing to the not so superficially obvious
Of being beware of stability 
Of limited upside
Knowing what so a small amount of knowing how can  make a difference
What a lot of knowing WHAT can make a total difference ( can you predict here . or can you not )

( consider what happen to the lions that did not know what and spend their ( short ) lives trying to work out how ...) etc


And the Lions NEVER EVER PREDICT
They have a System With an Edge
Because they Know WHAT

motorway


Below some rules  found on the web




> Acting Under Uncertainty - 25 Rules Of Thumb
> 
> Beware of obvious rewards and excessive competition - they increase exposure to chance events and reduce the role of skill in acquiring rewards
> 
> Watch for hidden correlations
> 
> Be suspicious of stability or the appearance of stability - there are higher dimensions of risk lurking in the shadows
> 
> Remember that volatility begets volatility
> 
> Invest in preparation - insure against the worst-case-scenario
> 
> Take a large number of risks where the downside is clipped and well-understood (the risk of embarrassment is a good example of such a risk)
> 
> Focus on the knowledge as well as the confidence on the knowledge - calculate error rates whenever possible
> 
> Don’t play in uninsurable environments
> 
> Diversify. Massively
> 
> Be wary of conventional statistics (”R squared,” correlation) in domains where there is evidence for the existence of power-law behavior
> 
> Remember that uncertainty stems from unknowledge - chaos theory is not the same thing
> 
> In the short to medium term, the least fit can survive and even excel
> Beware of “because” and inferring causation - especially if the downside of being wrong is high
> 
> The obvious can be overpriced
> 
> The past is not the future
> 
> *Distinguish between domains with and without experts - know “how” vs. know “what”*
> 
> There are always things that can be done even with no knowledge - acting under true uncertainty need not lead to decision paralysis
> 
> *Disconfirmation is more powerful than confirmation - the problem of induction*
> 
> Absence of evidence is not evidence of absence
> 
> Strive to balance searching and acting
> 
> Look for the presence of survivorship and availability bias
> 
> Question your premises
> 
> Impact matters - distinguish between frequency and impact
> 
> Always remember - rare events are unpricable
> 
> Prepare for the worst, hope for the best







> Too much money is lost and too much money is missed
> for two simple reasons: One, trying to predict the
> future, and two, fearing the future.
> 
> 
> George F. King




SOME RULES

1) What *is* the primary Trend
2) What *is* the current position
3) Act in Harmony with 1+2 ( Not Following behind )
4) Determine scale ( which trends )
5) manage risk

motorway


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## Mr J

fapturbo said:


> Of everything I've read on this post. This is the one that makes the most sense.
> 
> Why??
> 
> Because you are buying as price is heading up and you are buying in the direction of the prevailing trend.
> 
> 1. Trade with Momentum
> 2. Trade with Momentum
> 3. Trade with Momentum
> 4. Trade with Momentum
> 5. Trade with Momentum
> 
> Trailing Stop + Fixed Stop for Exits.




Tell that to investors that were buying stocks late '07. It's not enough to just trade in the direction of the trend, we need a good price, and a good price is always a low price. If all we had to do was trade in the direction of a trend, the entry wouldn't really matter, but it does, so more is required.


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## tech/a

Mr J said:


> Tell that to investors that were buying stocks late '07. It's not enough to just trade in the direction of the trend, we need a good price, and a good price is always a low price. If all we had to do was trade in the direction of a trend, the entry wouldn't really matter, but it does, so more is required.






> Why? Give me an example when this has worked




God there's some rubbish on this thread.


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## Aussiest

tech/a said:


> God there's some rubbish on this thread.




It depends how high is "high". If you had have bought at the top of the bubble in 2007 and didn't have a stop loss, you'd be in trouble.

Would you really be game enough to enter a trade at the 4100-4200 level, given that there is still some uncertainty in the economy? I am quite happy to be proven wrong, i am not heavily invested in the market at the moment. Even if it pulled back to 4100, would you be game enough to enter with a large position? 

Waiting for a pullback to 4100 (higher than the lows) could possibly be a safer entry than waiting for a selling spree and washout. I'm just a bit skeptical about the statement "buy high, sell higher" because it's not quantified enough. You might want to say, "once the lows have been tested twice, i am happy to enter".


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## motorway

Aussiest said:


> It depends how high is "high". If you had have bought at the top of the bubble in 2007 and didn't have a stop loss, you'd be in trouble.
> 
> Would you really be game enough to enter a trade at the 4100-4200 level, given that there is still some uncertainty in the economy? I am quite happy to be proven wrong, i am not heavily invested in the market at the moment. Even if it pulled back to 4100, would you be game enough to enter with a large position?
> 
> Waiting for a pullback to 4100 (higher than the lows) could possibly be a safer entry than waiting for a selling spree and washout. I'm just a bit skeptical about the statement "buy high, sell higher" because it's not quantified enough. You might want to say, "once the lows have been tested twice, i am happy to enter".




 Is anything  too high or to low
in a absolute sense ?

Because really -->High and Low are _*relative*_ terms

high Low in relation to a turning point--> to value point ( technical )--->
to an area of changing expectations--->to  congestion---->to  Accumulation or distribution--> from dullness etc

Buy _Low_ relative to these
Sell _high_ relative to these

Rule 6
Only use dynamic definitions
never static ones to define trends ( which are the Starting and End point of all analysis )

*No how* is important when it matters

motorway


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## Mr J

tech/a said:


> God there's some rubbish on this thread.




You're not talking about your comment are you? Because mine is fine.


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## Aussiest

Mr J said:


> You're not talking about your comment are you? Because mine is fine.




Ha, lol Mr J. I thought it was fine.

Thanks Motorway, that's actually a really good way of looking at it. It's sometime easy to get stuck in a linear, static way of thinking. "Relativity", what a concept! It certainly makes you think in the "here and the now".


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## tech/a

Mr J said:


> You're not talking about your comment are you? Because mine is fine.




Yes.
Your comment is absolute and utter rubbish.



> Tell that to investors that were buying stocks late '07. It's not enough to just trade in the direction of the trend, we need a good price,* and a good price is always a low price. *If all we had to do was trade in the direction of a trend, the entry wouldn't really matter, *but it does,* so more is required.




This is the comment of someone who doesn't trade---only hypothesises.
If you did you would make such a stupid comment.
Anytime you want 3 or 4 examples backed by live trading records just let me know.
Both you and Aussi need to do some serious learning.

Highlghted for clarity.


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## nunthewiser

tech/a said:


> Yes.
> Anytime you want 3 or 4 examples backed by live trading records just let me know.
> Both you and Aussi need to do some serious learning.
> 
> Highlghted for clarity.




LOL all the examples you have shown could be off any number of demo accounts actually 

there is nothing that has been produced by you to prove otherwise 

how are those financial statements going for those buying "10 cars " at a time claims you made ?

havent seen any yet 

do love your vivid imagination tho

jog on 

p.s to those that techy is telling off because YOUR strategys dont fit in with his . dont let it worry ya i reckon .. after all he just another internet opinion/demo trader until he proves otherwise


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## tech/a

Muppets.

I own a company we have 12 in the fleet.
I will gladly place on this site for you Nun all rego papers it will cost you rightly $500 to Joe in support of allowing muppets to post on an otherwise reasonable site.

As for the statements shown For $500 each queried I will also produce the entire account for varification *REAL* no demo account.Think Ive posted around 5 or 6

Joe should make about $3000.

*Away you go muppet* I might have a mouth but I also have the goods!
Watch the muppets back off at 1000 mile an hr.

By the way dopey I also challenged a poster who it turned out HAD the goods. The bet was $500 which I sent to Joe in 24 hrs.
So I dont welch either!


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## trainspotter

tragic


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## nunthewiser

tech/a said:


> Muppets.
> 
> I own a company we have 12 in the fleet.
> I will gladly place on this site for you Nun all rego papers it will cost you rightly $500 to Joe in support of allowing muppets to post on an otherwise reasonable site.
> 
> As for the statements shown For $500 each queried I will also produce the entire account for varification *REAL* no demo account.Think Ive posted around 5 or 6
> 
> Joe should make about $3000.
> 
> *Away you go muppet* I might have a mouth but I also have the goods!
> Watch the muppets back off at 1000 mile an hr.
> 
> By the way dopey I also challenged a poster who it turned out HAD the goods. The bet was $500 which I sent to Joe in 24 hrs.
> So I dont welch either!




lol muppets 

personally couldnt care about the money ........ thats your problem if you want to pay every tom dick and harry 500 bucks .... onya ..... yes you do have a mouth my egotistical friend and personally its no skin off my nose if you verify the claims or not ....... the difference between me and you darl is that you vie and clamour for internet credibility ... wheras i couldnt give a toss 


the fact of the matter is im not paying a cent for you to bodgy up some statements to tickle your personal ego but in the same sense im still of the mind ya basically full of it until shown otherwise ......... im ok with that ....... are you ?

p.s darl no need to get so emotional on this matter ..... namecalling  often a great sign of limited intelligence


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## Mr J

Aussiest said:


> Ha, lol Mr J. I thought it was fine.
> 
> Thanks Motorway, that's actually a really good way of looking at it. It's sometime easy to get stuck in a linear, static way of thinking. "Relativity", what a concept! It certainly makes you think in the "here and the now".




Which is why I'm being a hard **** about "low" price. Like I said before, and what motorway has talked about, what matters is where the price is in context for the timescale we are trading. For investors in late '07, they were taking a horrible price, but for a day trader it would have completely irrelevant. I'm confident that most if not all examples of good trades posted would be what I consider a low price.



tech/a said:


> Yes.
> Your comment is absolute and utter rubbish.




Feel free to post examples, after all, I am here to learn. For now I will address the highlighted text. 

_"and a good price is always a low price"_

Why do you disagree? The later we get into a move, the less profit range there is to capture. Whether a price is low or high is relative to the move/timescale being traded. I believe few examples you post would be a high price, from my perspective.

_but it does_

Here I was saying that trading isn't as simple as making a random entry in the direction of a trend. Are you suggesting that it doesn't matter and that entries are not important?

Edit, tech, I don't care about statements. Your examples don't have to have been real trades.


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## nunthewiser

Before anyone stomps off and sulks / threatens to leave /gets emotionally flustered

my posts are merely to point out that we all on the internet we can do/be anything we want ... MRJ already pointed out that he not posting from actual experience merely HIS view on things ..... at least he admitted it .... 


internet experts a dime a dozen . ......dont make there opinion any more valuable than anyone elses tho

have a great day


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## Mr J

Hold up there nun, I do trade and therefore have some experience, even if it is limited. However, this discussion (and most others I get into) is not about actual trading, but about theory. I might lack trading experience, but I've dealt with this kind of theory for years, and have no reservations about getting into the mix here.


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## motorway

Aussiest said:


> Ha, lol Mr J. I thought it was fine.
> 
> Thanks Motorway, that's actually a really good way of looking at it. It's sometime easy to get stuck in a linear, static way of thinking. "Relativity", what a concept! It certainly makes you think in the "here and the now".




On Static Vs  Dynamic

think of how moving averages
oscillators
etc
and certain ( most ? ) definitions of trend

Would tend to not distinguish the different aspects
between these two charts ( Blurring & Blunting )

The aspects that are IMPORTANT



> If you follow a normal random walk for a very long time, you start seeing "normal" behavior --* the small steps cannot be seen, and the overall motion is determined by the average affect of all of the steps.*
> 
> _For a LÃ©vy flight, the overall position is nearly completely determined by the long, rare steps -- the "flights" -- *and thus there is no averaging out of the individual steps.* _
> 
> At the bottom of this page are the normal and LÃ©vy walks for 10000 steps. Those same walks, followed for 100000 steps, are shown here:




The random Walk is not and almost never can be a Stock chart
( Yet most TA is Static )

The Levy Walk is much closer to a Stock chart

Levy walk *+ memory *is most like a stock ( any market ) chart

This is why certain moves are much more important than others


WHY THE MEAN IS NOT GOLDEN

and why ,TRENDS MATTER very much indeed..

motorway


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## Timmy

That is great stuff thanks motorway.  Hadn't heard of the Levy Flight/walk.


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## wonderrman

how can you judge a low price? a low price might seem good at 2 but then it could promptly fall to 1. is that an even better lower price? 

how can you judge a high price? it might seem high at 10 but promptly rise to 12? is that an even higher price?

"buy low sell high" is a cliche that is as ridiculous as "buy high and sell higher". i would argue that the later is a tad more right then the first though.

the hypothesis behind buy high and sell higher is that we should only buy in uptrends, so as traders we will most probably always miss the the lowest low (the "bottom"). so buy high and sell higher is considered to be more right as we will buy high, in turn to make sure we do not experience losses of capital while waiting for the final low to take place (buying low in the downtrend). we're simply riding the primary wave of the uptrend.




the only thing that matters is the time involved and the point on the chart. as traders we want good entry points compared to a previous position on the chart. traders shouldn't care if the price is low, high, or in the middle. if the pattern as you view it looks good to make some profits we should take the trade, who cares if the price is 2 or 10. 

wonder.


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## tech/a

Mr J said:


> Which is why I'm being a hard **** about "low" price. Like I said before, and what motorway has talked about, what matters is where the price is in context for the timescale we are trading. For investors in late '07, they were taking a horrible price, but for a day trader it would have completely irrelevant. I'm confident that most if not all examples of good trades posted would be what I consider a low price.
> 
> 
> 
> Feel free to post examples, after all, I am here to learn. For now I will address the highlighted text.
> 
> _"and a good price is always a low price"_
> 
> You have no idea how low or high a price is at the time of the trade.
> Only in hindsite.
> 
> 
> Why do you disagree? The later we get into a move, the less profit range there is to capture. Whether a price is low or high is relative to the move/timescale being traded. I believe few examples you post would be a high price, from my perspective.
> 
> _but it does_
> 
> Here I was saying that trading isn't as simple as making a random entry in the direction of a trend. Are you suggesting that it doesn't matter and that entries are not important?




Thats exactly what Im saying.



> Edit, tech, I don't care about statements. Your examples don't have to have been real trades.




They will be real.
I have provable trades going back to 2002 ish.


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## Annwn

OK, back to the thread - 

A Traders Ten Commandments

1. Thou shalt cultivate patience and use it diligently.

2. Thou shalt cut losses, lest thee lose a lot instead of a little.

3. Thou shalt not be greedy lest thou squander all thy profits.

4. Thou shalt eye all charts as a hawk eyes prey, and determine their meanings.

5. Thou shalt embrace Bull and abhor Bears, unless thou knowest well how to sell short

6. Thou shall never act on tips alone from anyone, including forum participants.

7. Thou shalt know thy security well, in all its aspects.

8. Thou shalt absorb knowledge all the rest of thy days, and apply it meaningfully.

9. Thou shalt not panic, for panic leads to irrational acts.

10. Above all, thou shalt think for thyself   

Not sure where this came from originally, but is stuck to the front of my  trading plan.

Cheers


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## Mr J

> "buy low sell high" is a cliche that is as ridiculous as "buy high and sell higher". i would argue that the later is a tad more right then the first though.




It may be a cliche, but it is dead on, as that is how a trader secures a profit.



> the hypothesis behind buy high and sell higher is that we should only buy in uptrends




Not at all, you just seem to be looking at it as a straight-forward statement rather than as an idea. The order doesn't matter.



> we want good entry points compared to a previous position on the chart.




Yes, and my argument is that any good entry we do take is a low price, whether or not we may perceive it as low. You can mark any point on that chart, and it is probably possible that at some timeframe it is in fact a low price. The problem is people look at that chart and see the obvious movement there, rather than considering what may be happening on slower or faster timeframes. Many prices that would appear "high" on the chart would be "low" on a faster chart.


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## mazzatelli

motorway said:


> The random Walk is not and almost never can be a Stock chart
> 
> The Levy Walk is much closer to a Stock chart
> 
> Levy walk *+ memory *is most like a stock ( any market ) chart
> 
> WHY THE MEAN IS NOT GOLDEN
> 
> and why ,TRENDS MATTER very much indeed..
> 
> motorway




That looks alot like Geometric Brownian Walk which would suggest stochastic trends/random process
EDIT: motorway, I noticed that GBM can be characterised by Levy


----------



## Aussiest

wonderrman said:


> the hypothesis behind buy high and sell higher is that we should only buy in uptrends, so as traders we will most probably always miss the the lowest low (the "bottom"). so buy high and sell higher is considered to be more right as we will buy high, in turn to make sure we do not experience losses of capital while waiting for the final low to take place (buying low in the downtrend). we're simply riding the primary wave of the uptrend.
> 
> the only thing that matters is the time involved and the point on the chart. as traders we want good entry points compared to a previous position on the chart. traders shouldn't care if the price is low, high, or in the middle. if the pattern as you view it looks good to make some profits we should take the trade, who cares if the price is 2 or 10.




This is actually a really good way of explaining it. Thanks for clearing that up Wonder


----------



## Wysiwyg

Mr J said:


> You can mark any point on that chart, and it is probably possible that at some timeframe it is in fact a low price.




Everything is comparative. (in life too) Well done.


----------



## tech/a

This system buys high and sells higher.
Has been traded live for 5 yrs and just started up again after 2 yrs "swithched off"

http://www.thechartist.com.au/forum/ubbthreads.php?ubb=postlist&Board=53&page=1

If you want to read a few thousand pages on it.

Here is the Equity chart up until it was shut down (All trades exited at a period of time).


----------



## wonderrman

Mr J said:


> Yes, and my argument is that any good entry we do take is a low price, whether or not we may perceive it as low. You can mark any point on that chart, and it is probably possible that at some timeframe it is in fact a low price. The problem is people look at that chart and see the obvious movement there, rather than considering what may be happening on slower or faster timeframes. Many prices that would appear "high" on the chart would be "low" on a faster chart.




your argument is fine and i don't really have any care for it. my point is a "low" or "high" price of a stock doesn't really matter at all. who cares if the price is low or high, as long as the chart works it doesn't really matter one iota if if the price is a low one or high one. 

time is the key.

btw, some trading rules as the thread suggests.

1. buy accumalation, sell distribution, do nothing in consolidation

2. confirm with volume

3. protection with stop loss

4. don't take tips

5. don't smile about a stock and don't cry over one either

wonder. 

wonder.


----------



## sammy84

A few more rules which I found have saved me;

1. Know when to sit out. There is no point trying to trade a market which doesn't currently suit your trading style.
2. Find other distractions so that you don't just trade for the fun of it.


----------



## tech/a

Which one/s are best lows to buy?


----------



## Mr J

tech/a said:


> Here is the Equity chart up until it was shut down (All trades exited at a period of time).




And there are plenty of "low" prices visible on that chart. There would be many, many more on a faster chart. I think you may be misunderstanding my definition of a low price. It doesn't have to be low visually on a chart, but low relative to the prices surrounding it. A low price is simply what a trader would view as an attractive price.



			
				wonderrman said:
			
		

> my point is a "low" or "high" price of a stock doesn't really matter at all. who cares if the price is low or high, as long as the chart works it doesn't really matter one iota if if the price is a low one or high one.




You may ignore it, but that does not mean it doesn't matter. If you're a sensible trader, you don't ignore it whether you know so or not. As you said, timing is key, and good timing means taking an attractive price.



			
				tech said:
			
		

> Which one/s are best lows to buy?




That has absolutely nothing to do with what I'm talking about.


----------



## nunthewiser

1. always know how much you will lose before you enter the trade and stick to it.


2. a stock is a 3 letter word , to be used and abused do not fall in love with it 


3. do not trade  to gain back a loss


4. in the heat of the moment , take a step back and look again 


5. opinions are like arseholes , everybody got one .........listen to all but paddle your own canoe at the end


----------



## nunthewiser

6. double check all orders submitted


----------



## tech/a

Mr J said:


> And there are plenty of "low" prices visible on that chart. There would be many, many more on a faster chart. I think you may be misunderstanding my definition of a low price. It doesn't have to be low visually on a chart, but low relative to the prices surrounding it. A low price is simply what a trader would view as an attractive price.
> 
> 
> That has absolutely nothing to do with what I'm talking about.




Show me a low on a Chart that you *ARE* talking about.
An example.

Your arguement has no substance regardless of timeframe.
Just let me know which timeframe each chart is in.


----------



## beamstas

So_Cynical said:


> 1. Timing is everything
> 2. Believe in your self (Back your decisions)
> 3. Give trades time to come good (assuming u got the stock selection right)
> 4. Don't be afraid to average down (assuming u got the stock selection right)
> 5. U wont always get the timing right or selection  Oh and trade your plan.




Flip this upside down and you get my thoughts

1. Timing is nothing. Trade management is everything.
2. Don't believe in yourself, if you are wrong then forget about it. Next Trade.
3. Cut losing trades off fast.
4. Never average down. Averaging up is OK.
5. I agree here, you won't always get the selection right.


----------



## tech/a

Ah _some_ sence.


----------



## nunthewiser

7. never let other ppls ideas of how you should trade blind you to trading a very profitable support/resistance bounce at least they can provide a very nice low% loss point on historically defined stoploss levels


----------



## nunthewiser

beamstas said:


> 4. Never average down. Averaging up is OK.
> .





joe bloggs bought 1000 xyz at 10 bucks when he first entered the market , knew nothing about stoplosses etc 

xyz now $1 mr bloggs now has a bit of knowledge/ experience behind him and spots an awesome reversal pattern ......he buys 30,000 

is he wrong for taking on the same stock as a new trade in the process creating an exit for his long term anchor hold ?


----------



## beamstas

nunthewiser said:


> joe bloggs bought 1000 xyz at 10 bucks when he first entered the market , knew nothing about stoplosses etc
> 
> xyz now $1 mr bloggs now has a bit of knowledge/ experience behind him and spots an awesome reversal pattern ......he buys 30,000
> 
> is he wrong for taking on the same stock as a new trade in the process creating an exit for his long term anchor hold ?




Apples and Oranges


----------



## Mr J

tech/a said:


> Ah _some_ sence.




Sense.



> Your arguement has no substance regardless of timeframe.




That's because you have no idea what I'm talking about. It's partly my indirect way of explaining it, but it's also you being unwilling to see things from another point of view, particularly before rubbishing it.

We know that everything is relative. Markets move on many different timescales, and each will tell a different story. A 1min chart will be doing one thing, a 5 min chart something else, a 15 min chart something else again and so on. Moves on faster charts coincide those of slower charts so what may be a retracement on one chart is a trend on another.

To relate this to my point about "low" (attractive) prices, my point is that any good trade will probably occur at a "low" price on one chart, regardless of where it is on the chart at which we are watching. The trade will probably also correspond better to that other chart than the one we are watching. 

For example, say we are watching a chart and the current wave has been running some time. We enter anyway, at a relatively high price, because we think it will run some more. This may seem like a bad trade because we are entering on what seems to be a high price. However, it may very well be a wave of its own on a faster chart. The trade will look completely differently on the two different charts. On the slower chart, it looks like we've entered high up in the wave to sell at a slightly higher price. However, on the fast chart we may have entered on a trough and sold at a peak. 

I mean this example to show that buying high and selling higher can also be buying low and selling high from another perspective (a different timescale). Therefore, I believe my point about buying low and selling high (in either direction) is true.



beamstas said:


> Flip this upside down and you get my thoughts
> 
> 1. Timing is nothing. Trade management is everything.
> 2. Don't believe in yourself, if you are wrong then forget about it. Next Trade.
> 3. Cut losing trades off fast.
> 4. Never average down. Averaging up is OK.
> 5. I agree here, you won't always get the selection right.




1. One could consider timing to be part of trade management. Also, timing could be defined several ways.
2. Belief in oneself could just be considered confidence.
3. Not a flipside really, as one can cut losers and give trades time.
4. I imagine this is okay in the right hands.
5. Arguable. If we receive 2:1 on a heads but it comes up tails, were we wrong?

Not saying you're wrong, just another way of looking at it.


----------



## gamefisherman

A HUGE THANK YOU TO ALL THOSE WHOM HAVE CONTRIBUTED..........We really appreciate it, even the comical ones..........lol

We are in the process of going through each post and adding notes to our stock study book.........Due to the great number of good ideas its already over 2 pages.....................

We usually like to send a personal message to people that post in our threads but due to the number of replies this isnt feasible.........but please know that we are very grateful for all the advice you have written........... great site.......and great people..........

Cheers


----------



## Nickj

Attached are 25 good Trading Rules that are pretty well explained.

Hope it helps


----------



## nunthewiser

HEY MAN THANKYOU . 

not often a thankyou comes ......onya 

i do hope theres the odd bit here that maybe of use .

i would like to apologise on behalf of a few of our one eyed posters , i think they all quoting from the same book, so in there view that makes them right and eveyone else wrong ........

not to worry tho , in the real world we all know that life/markets is not just black and white and i do hope you succeed in your foray into the markets

cheers


----------



## tech/a

nunthewiser said:


> joe bloggs bought 1000 xyz at 10 bucks when he first entered the market , knew nothing about stoplosses etc
> 
> xyz now $1 mr bloggs now has a bit of knowledge/ experience behind him and spots an awesome reversal pattern ......he buys 30,000
> 
> is he wrong for taking on the same stock as a new trade in the process creating an exit for his long term anchor hold ?




Awsome reversal fails and trade falls to $10c so he buys another 500,000 stock is delisted. HIH comes to mind there are countless more.
All he had to do was buy at $10 and sell at a protective stop of say $9.80.



Mr J said:


> Sense.
> 
> 
> 
> That's because you have no idea what I'm talking about. It's partly my indirect way of explaining it, but it's also you being unwilling to see things from another point of view, particularly before rubbishing it.
> 
> We know that everything is relative. Markets move on many different timescales, and each will tell a different story. A 1min chart will be doing one thing, a 5 min chart something else, a 15 min chart something else again and so on. Moves on faster charts coincide those of slower charts so what may be a retracement on one chart is a trend on another.
> 
> To relate this to my point about "low" (attractive) prices, my point is that any good trade will probably occur at a "low" price on one chart, regardless of where it is on the chart at which we are watching. The trade will probably also correspond better to that other chart than the one we are watching.
> 
> For example, say we are watching a chart and the current wave has been running some time. We enter anyway, at a relatively high price, because we think it will run some more. This may seem like a bad trade because we are entering on what seems to be a high price. However, it may very well be a wave of its own on a faster chart. The trade will look completely differently on the two different charts. On the slower chart, it looks like we've entered high up in the wave to sell at a slightly higher price. However, on the fast chart we may have entered on a trough and sold at a peak.
> 
> I mean this example to show that buying high and selling higher can also be buying low and selling high from another perspective (a different timescale). Therefore, I believe my point about buying low and selling high (in either direction) is true.
> 
> .




Trading retracements or trading continuations each is simply presenting a setup for a trade. Each could succeed or fail. Neither entry mechanism is the key to more profit.
Exit could be
Trade management will certainly be.

I fully understand your "Logic" Buying at $8 on a pullback/double bottom/bottom of a Bollinger band/Major support is better than buying a high at $10 when a stock climbs to $20.You wont ever know before hand wether you'll be looking at this scenario in hindsite.

My arguement is that many will never re visit a price lower than a new high---so we wait--and wait---and wait worse we dont consider the trade?
Price may also reach Serious Major support only to fall 3 days later to even lower amounts.

Your entry regardless of what it is or how you come about it *is nothing more *than a starting point!



> Attached are 25 good Trading Rules that are pretty well explained.




*Excellent.*


----------



## nunthewiser

tech/a said:


> Awsome reversal fails and trade falls to $10c so he buys another 500,000 stock is delisted. HIH comes to mind there are countless more.
> All he had to do was buy at $10 and sell at a protective stop of say $9.80.
> 
> 
> 
> !





i see you didnt read my post re stoploss and joe bloggs not knowing etc , dont matter .... he is now a bit more experienced and would have stopped out on all hold at 98 cents as he picked an entry at $1 that provided a definate major support line ...


 dont matter was merely a hypothetical scenario


----------



## tech/a

> in the real world we all know that life/markets is not just black and white




Actually both life and trading should be exactly that.
Black or White NO grey.
Life becomes far simpler and so does trading.


----------



## beamstas

The bricklayer analogy in that pdf is great

Brick by Brick..


----------



## Mr J

> I fully understand your "Logic" Buying at $8 on a pullback/double bottom/bottom of a Bollinger band/Major support is better than buying a high at $10 when a stock climbs to $20.




I'm not saying buy on a pullback, I'm just saying that buying a high price isn't necessarily a high price. If we buy into what we think is a higher point in the wave because we think it's going to break out or something, then it's not really a high point in the wave (at least by our judgement). If we buy into a higher point of the wave looking for momentum to carry it a little higher, we're probably making a trade that better relates to a faster chart, and on that faster chart we would have been buying into or after the retracement (we may miss these on the slower chart, so the trade isn't really efficient on the slower chart).



> Your entry regardless of what it is or how you come about it is nothing more than a starting point!




Agreed, but we enter because we think we're getting a good price - we think we're getting a discount to where price will be in the future. I think we've just got a bit of potatoe-potahtoe going on here, may be that I have a weird way of looking at things, and maybe a weird way of explaining it. 



tech/a said:


> Actually both life and trading should be exactly that.
> Black or White NO grey.
> Life becomes far simpler and so does trading.




I would say it's both. It's as simple or complicated as we make it. But then maybe you don't disagree, and you're just suggesting to keep it simple?


----------



## Aussiest

Well, two of mine are:

1. When in doubt, don't

2. Hold out for your entry or exit level if all else looks reasonable. Eg, if you know you can squeeze a bit more out of a trade, stick with it. Don't panic or get complacent and close out too early.


----------



## beerwm

sounds like bull-market talk-

buy low / average down / give trades time to turn good

cause everything eventually goes up.....right?


----------



## Wysiwyg

Nickj said:


> Attached are 25 good Trading Rules that are pretty well explained.
> 
> Hope it helps




Makes me wonder what  he uses to enter trades. Coins  


> I’m unable to even set up a Fibonacci study or Moving Average study on a charting package, let alone know how to trade with such data. I have no formal training in market fundamental analysis. I don’t understand the economic causal relationship between the actions of the Federal Open Market Committee and Treasury bond prices or equity prices.
> 
> How, then, have I been able to succeed,day after day, trading the markets for more than 20 years?


----------



## tech/a

> I'm not saying buy on a pullback, I'm just saying that buying a high price isn't necessarily a high price. If we buy into what we think is a higher point in the wave because we think it's going to break out or something, then it's not really a high point in the wave (at least by our judgement). If we buy into a higher point of the wave looking for momentum to carry it a little higher, we're probably making a trade that better relates to a faster chart, and on that faster chart we would have been buying into or after the retracement (we may miss these on the slower chart, so the trade isn't really efficient on the slower chart).




Well you've lost me completely I have no idea what your on about.

Your definition of buying low has become a clouded tangle of timeframes.
Cant you post a few charts explaining what your saying or are you just as confused as I am?

Id be really interested in seeing whatever this is traded in realtime.
Not every second but simply Ive entered here because (Chart/s).
Now I'm exiting here because (Chart/s)


----------



## wayneL

Just to throw some fuel on the fire:

http://www.aim-users.com/

(Not my cup of tea, but interesting)


----------



## MRC & Co

1)  Know what's happening in the big picture, i.e. global macro environment.  Where are funds sloshing their money, what correlations are there and why are they correlated that way, at that point in time.
2)  Narrow that down and pick a specific instrument, now you know where it sits in the big picture.
3)  Always have a daily view, a 60 minute view and a 5 minute view (if your trading intraday).
4)  Know your levels very well, combine them with trend structure and price patterns and you can now define entries/exits and trade with a bias, use volume for tops/bottoms or to confirm a trend (depending on bar range and close).    
5)  Be contrarian, buy/sell pullbacks or pick tops/bottoms.


----------



## tech/a

*Question.*

If timing is so important wether conventional "Go with the trend" OR "Contrarian-- pick tops and bottoms" would you expect to out perform.
Lets say the ASX 300

(1) Buying highs to out perform--
(2) Buying Bottoms.

*Say* buy the highest high for 1,2,3 or whatever years and sell after increase in price of 100,200,300 or whatever %
OR
*Say* buy the lowest low for X periods1,2,3 or whatever years and and sell after increase in price of 100,200,300 or whatever %

*Say* over 10 yrs. Or suggest time frames for entry exit and test priods.


Which would you expect to out perform?
Would any out perform the market (Regarding the statement--Entry is important)?

I havent tested any but will if others dont beat me to it!
Happy if you do---save me some work.


----------



## Mr J

tech/a said:


> Well you've lost me completely I have no idea what your on about.
> 
> Your definition of buying low has become a clouded tangle of timeframes.
> Cant you post a few charts explaining what your saying or are you just as confused as I am?
> 
> Id be really interested in seeing whatever this is traded in realtime.
> Not every second but simply Ive entered here because (Chart/s).
> Now I'm exiting here because (Chart/s)




Okay take the picture below. On the left is a chart of a slower timeframe, and on the right is a faster timeframe. My aim here is to show that a trade could look completely different depending on the timeframe we look at, and therefore a high price is not necessarily a high price, because it is all relative.

We take an entry at point 1, seeing momentum, and hoping to capture a small profit. We do that at point 2. The faster chart shows what may have happened if we had made the same trade on a faster chart, entering somewhere near 3 and exiting at 4. On the slower chart, it looks like we're buying near the top of a wave - a relatively high price. However, once the trade objective is considered (ride momentum to catch a small profit), I think a faster chart would have been more appropriate to make the trade, and we may have come up with something similar to the left.

Might still be unclear, so maybe I'll explain my perspective. I view a chart as a piece of a greater picture, and containing many pictures of its own. Every chart is part of a larger move not shown on the chart, and every chart contains many smaller moves than may only be apparent on a faster chart. The "one chart's retracement is another's trend" factor. Since I look at charts that way, I always consider what a trade might look like on another chart, and it often completely changes how the trade looks. What most may consider a high price could very well be a cheap price on another chart, so when someone looks to "buy high and sell higher", my argument is that they are probably buying low and selling high, whether they know it or not. If they're buying high on the faster charts, then it's not an optimal trade.

You suggested that I buy into or just after retracements, and that is true. It may not be true on the chart I'm using, but it would be true on a faster chart. I have charts of various timeframes open just for this reason, because regardless of the chart I'm trading, I will also use the information on faster charts to make an entry.

Hopefully someone understandings by ramblings .


----------



## tech/a

I understand.
I have multiple timeframes open for shorter term trading myself.
All your doing is finding a pattern in a timeframe which suits your mindset/criteria. Thats fine but just trade the timeframe in which the patterns/criteria belong.

From my experience.
You can refine a retracement entry on a daily using a 10 min chart which may show a new high being made for 150 periods.(150/10 min periods).
But what your actually trading is the retracement in the daily and that is what should ultimately control the trade.

10/60 and Daily.

Still it *doesnt mean* these entries OR exits are any more reliable/ profitable than any other.
All they do is supply Beginning/During/ and End points.
What you do with them will determine success or failure. 

Again experience has taught me this.


----------



## Mr J

> All your doing is finding a pattern in a timeframe which suits your mindset/criteria. Thats fine but just trade the timeframe in which the patterns/criteria belong.




I don't jump around different timeframes, and the ones I use I do trade differently, so the chart on which the trade is made is the one that controls it. A few months I looked at letting the trends of a faster chart control the trade, but it was significantly less profitable. My fast trades do what the fast chart tells me, the medium what the medium tells me etc.


----------



## tech/a

Mr J said:


> I don't jump around different timeframes, and the ones I use I do trade differently, so the chart on which the trade is made is the one that controls it. A few months I looked at letting the trends of a faster chart control the trade, but it was significantly less profitable. *My fast trades do what the fast chart tells me, the medium what the medium tells me etc*.




And so then *we are back to square one*.

That said (Written above) You have no idea wether you have entered a trade at a low or a high for that matter until it can be seen in hindsite.

If you look at all the charts I posted above they can be in ANY timeframe.
You simply DONT know if its a well timed buy/or its is "THE" low.

Timing cannot be claimed until after the fact.


----------



## Mr J

You always seem to reply just before I check!



> That said (Written above) You have no idea wether you have entered a trade at a low or a high for that matter until it can be seen in hindsite




Fine, what we perceive to be a high or a low, a good or bad price.



> Timing cannot be claimed until after the fact.




In the way that we claimed we timed it correctly or incorrectly? That's arguable, because we can obviously only trade the information we have at the time. If we make a trade in situation that we know over the long run is +ev, then it can be argued that the trade was a good one, and that timing was correct, regardless out of the outcome. 

It is how we trade the situation that matters, not whether the result proved us right, because the result *can't* prove us right. We're playing a game of probabilities, and all that matters is that the probabilities are in our favour. From one perspective, if one has an edge, one can never be wrong (ignoring mistake trades) even if the trade loses.


----------



## fapturbo

Mr J said:


> Okay take the picture below. On the left is a chart of a slower timeframe, and on the right is a faster timeframe. My aim here is to show that a trade could look completely different depending on the timeframe we look at, and therefore a high price is not necessarily a high price, because it is all relative.
> 
> We take an entry at point 1, seeing momentum, and hoping to capture a small profit. We do that at point 2. The faster chart shows what may have happened if we had made the same trade on a faster chart, entering somewhere near 3 and exiting at 4. On the slower chart, it looks like we're buying near the top of a wave - a relatively high price. However, once the trade objective is considered (ride momentum to catch a small profit), I think a faster chart would have been more appropriate to make the trade, and we may have come up with something similar to the left.
> 
> Might still be unclear, so maybe I'll explain my perspective. I view a chart as a piece of a greater picture, and containing many pictures of its own. Every chart is part of a larger move not shown on the chart, and every chart contains many smaller moves than may only be apparent on a faster chart. The "one chart's retracement is another's trend" factor. Since I look at charts that way, I always consider what a trade might look like on another chart, and it often completely changes how the trade looks. What most may consider a high price could very well be a cheap price on another chart, so when someone looks to "buy high and sell higher", my argument is that they are probably buying low and selling high, whether they know it or not. If they're buying high on the faster charts, then it's not an optimal trade.
> 
> You suggested that I buy into or just after retracements, and that is true. It may not be true on the chart I'm using, but it would be true on a faster chart. I have charts of various timeframes open just for this reason, because regardless of the chart I'm trading, I will also use the information on faster charts to make an entry.
> 
> Hopefully someone understandings by ramblings .




Buy Stop Above a Turning Point in the Market Down.

SL Below Previous Turning Point Up in the Market.

Move SL up when each new Turning Point Up occurs... keep doing this until finally get Stopped out.

Buy Higher Sell Higher .....


----------



## tech/a

Mr J said:


> In the way that we claimed we timed it correctly or incorrectly? That's arguable, because we can obviously only trade the information we have at the time. If we make a trade *in situation that we know over the long run is +ev,* then it can be argued that the trade was a good one, and that timing was correct, *regardless out of the outcome*.(Uhhh? thought you said the outcome was +)




If a trade ends up a loss or profitable it can be argued only in hindsite.
At the time of placing any trade or exiting any trade we just don't know how good it really is. Even with stop orders, the stops will do their job but in hindsite how perfect that job was will be clear. If the trade was stopped within tolerance or exited with good R/R then its an "Acceptable" job.

What we do know at the placement of a trade is risk. (Mind you most don't even know that!).



> It is how we trade the situation that matters, not whether the result proved us right, because the result *can't* prove us right. We're playing a game of probabilities, *and all that matters is that the probabilities are in our favour.*





Which you don't know until you have enough past data to tell you whether your Idea/method has a higher probability of success.
This doesn't necessarily equate to higher win rate either!



> From one perspective, if one has an edge, one can never be wrong (ignoring mistake trades) even if the trade loses.




If trading a plan with a blue print from rigorous testing. If you don't have a data set of results you don't actually know.
T/Trader has a massive edge over the market and its correct only 30% of the time.

Mind you if you know how to keep Positive expectancy on your side of the agenda and absolutely control risk than you can trade without a Tested methodology.However I would argue that those who practice this do so through "Method". A very deliberate method of cutting losses and maximising profits.
If you go back to Reply (1) there in lies the truth.
Reply (2) gives one a way to equate "The truth".

Once people prove to themselves that the true edge IS "The Truth" they can move forward and trade most anything in most any time frame.
In my view.

Just elaborate on your "Perspective".


----------



## Sunder

1. Back test your trading system - preferably in blocks of 12 months. If any of the 12 months seem out of sort with any others, perhaps your system only works in particular markets and be aware the market can change quickly. A low volatility stock that almost never trips false alarms the last two years, can suddenly move 5% a day for three months during turbulent times, costing you brokerage and giving you losing trades. If there are some prerequisite that your system relies on (i.e. low/high volatility), then keep an eye out on those prerequisites.

2. Trade small to start off with. (That's when starting trading, not your initial position) Never put all your eggs in one basket, even for a "sure thing". Remember the two sayings "The bargain of the century comes once a week" and Mark Twain's quote that ranks as one of my favourites: "It's not what you don't know that gets you into trouble. It's what you know for sure that just ain't so." Small also helps with discipline. If you can't close out a losing stock when it's lost $1000, what hope do you have of terminating a $10,000 loss when you "know for sure" it's going to turn?

3. Have someone keep you accountable. Explain to them your rules, make sure they understand it. If a trade signal is triggered, you call them, you tell them that you are executing a trade. If you fail to call them, they have to call you. "I notice BHP dropped below its 20 day EMA yesterday. Did you close out your position? No? Why not?". Obviously this has to be a reciprocal favour, or else someone who loves you/owes you. Mine is my fiance, although sometimes she's a bit sloppy with the calling... 

4. I'm still learning. Maybe when some of the rules debated now are settled, they'll make position 4.

5. I'm still, still learning. Ditto with position 5.


----------



## tech/a

Sunder said:


> 1. Back test your trading system - preferably in blocks of 12 months. If any of the 12 months seem out of sort with any others, perhaps your system only works in particular markets and be aware the market can change quickly. A low volatility stock that almost never trips false alarms the last two years, can suddenly move 5% a day for three months during turbulent times, costing you brokerage and giving you losing trades. If there are some prerequisite that your system relies on (i.e. low/high volatility), then keep an eye out on those prerequisites.




If you have a trading system that holds for longer periods a set of tests every 12 mths wont reflect a set of results for which the system is designed.
The data period is far to short.



> 2. Trade small to start off with. (That's when starting trading, not your initial position) Never put all your eggs in one basket, even for a "sure thing". Remember the two sayings "The bargain of the century comes once a week" and Mark Twain's quote that ranks as one of my favourites: "It's not what you don't know that gets you into trouble. It's what you know for sure that just ain't so." Small also helps with discipline. If you can't close out a losing stock when it's lost $1000, what hope do you have of terminating a $10,000 loss when you "know for sure" it's going to turn?




There are times when all eggs in one basket should be a priority!
True re losses. Many get to a point where taking the loss is just to painful.
Don't get there in the first place!



> 3. Have someone keep you accountable. Explain to them your rules, make sure they understand it. If a trade signal is triggered, you call them, you tell them that you are executing a trade. If you fail to call them, they have to call you. "I notice BHP dropped below its 20 day EMA yesterday. Did you close out your position? No? Why not?". Obviously this has to be a reciprocal favour, or else someone who loves you/owes you. Mine is my fiance, although sometimes she's a bit sloppy with the calling...




You really need to have *SELF* discipline!


----------



## motorway

beamstas said:


> Flip this upside down and you get my thoughts
> 
> 1. Timing is nothing. Trade management is everything.
> 2. Don't believe in yourself, if you are wrong then forget about it. Next Trade.
> 3. Cut losing trades off fast.
> 4. Never average down. Averaging up is OK.
> 5. I agree here, you won't always get the selection right.






tech/a said:


> Ah _some_ sence.




For Clarity are you two stating,

That in the system results that tech has posted

Anyone could have gone short at each signal ( instead of long )
and made as much or even more return

and you have data that proves that ?

*



			Timing is nothing. Trade management is everything
		
Click to expand...


*
That where you start an entry has no effect on results ?
That every entry is as good a short as it is a long ?
Simply manage the trade ?


motorway


----------



## tech/a

motorway said:


> For Clarity are you two stating,
> 
> That in the system results that tech has posted
> 
> Anyone could have gone short at each signal ( instead of long )
> and made as much or even more return
> 
> and you have data that proves that ?




I have data which shows that Random entry gives a result which isnt a great deal worse than the actual system entry.





> That where you start an entry has no effect on results ?
> That every entry is as good a short as it is a long ?
> Simply manage the trade ?
> 
> 
> motorway




Perfect timing is not possible.(Well I havent seen it in anything but rare occasions).
My point is that given a set of conditions for entry say long entry that result wont vary a great deal from one set of long conditions to another.
Using a short entry set of conditions for a long however does.
Infact most entries *in profit making*systems I have tested dont perform any better/much better than random.

Ive not yet tested one which gives a result more than 10% better than random. Ie remove the entry conditon and just set random entries.
TT is a few %.
This indicates to me that its not the entry making the profit!


----------



## MRC & Co

tech/a said:


> *Question.*
> 
> If timing is so important wether conventional "Go with the trend" OR "Contrarian-- pick tops and bottoms" would you expect to out perform.
> Lets say the ASX 300
> 
> (1) Buying highs to out perform--
> (2) Buying Bottoms.
> 
> *Say* buy the highest high for 1,2,3 or whatever years and sell after increase in price of 100,200,300 or whatever %
> OR
> *Say* buy the lowest low for X periods1,2,3 or whatever years and and sell after increase in price of 100,200,300 or whatever %




This is my entire problem with the method tech, it is purely mechanical, I wouldn't care which of those would outperform because I would never try to trade that way.  Over 10 years, I don't see any edge in specific timing, but it's not my niche.  

Here is my example of which I traded recently and just one of many of what I mean by my rules (then again, these aren't really rules, just tried to give a few basic ideas):

Risk appetite was on a high, sentiment was bullish when S&P was at 930-955s in that range at the top, currently percieved risk assets (all to do with corrlations) were for the most part, sitting on their recent highs.  Whilst risk averse assets were on their lows (USTs, USD index).  All required a technical pullback.  Understand global macro environment.  Geithner and the US were desperte to hold up the USD, as any serious break down in it, could cause a run of sorts on both USTs and the USD, effectively destroying their QEP attempts.  Meeting with the Chinese to support USD and some spectacularly successful record bond auctions in the US were enough to turn the tide.  S&P false broke 950 and this looked firm resistance.  Considering oil was on it's highs and now being viewed as a potential to hinder any economic recovery (further push in stocks), whilst bonds were also on their lows, resultant in high yields, particularly a steep curve, passing into the mortgage market hindering rates (believe 30 year mortgage rates are effectively priced off the 10 years), and we had a perfect storm of global macro factors to push the S&P down.  We knew the level on the S&P of 950 was near range top and a perfect area to get short in anticipation, considering the trend structure was also running out of momentum.  That is timing to me.  

We got down to 870s looked as though we would push below the range (probably to the 50% retracement on S&P at 810ish) and on a Monday, Asia positioned short for this event.  Overnight, Europe and US put in a huge push higher.  Coming into earnings season with the first being what we know as a company that ALWAYS beats the street in GS, we had some bullish appetite.  The S&P came back up to 900s and you could clearly see Asia panic out on Tuesday in the order flow.  Guys dumping at market and HUGE size coming online and showing their hand, they wanted to be clipped and wanted out.  Nobody there to clip them?  Why not?  Everybody who was anybody or otherwise referred to as 'they' were now pricing for a rally.  Tuesday, get long.  Of course, this could have just ended up in chop, but I think it was clear by the action that there was a decent probability of a rally.  Just prior to this, the S&P had false broke an important level just above the 870s, on no effort and tiny range bars, with a move back through 900s and the rest of the factors probably a good reason to time an entry.  Not buying the exact low in this case, but still timing nonetheless.  

Combination of knowing the overall environment, knowing where everything sits in the picture, knowing what the current psychology is behind the moves, knowing what it would take to shift that sentiment and understanding levels and how markets move to narrow it down and time specific entries.  

Of course, intraday has less fundamentals and more simply flow, lower probability IMO, but more opportunities.


----------



## Garpal Gumnut

OK listen up.

Follow these rules and you will always make a profit.

1. Buy a monkey,a dart and 2 copies of the AFR.

2. Pin the Stock prices pages from the copies of the AFR to a cork board so that all stocks are visible.

3. Train the monkey to throw the dart at the pages. ( This is the time intensive part.)

4. Go long on any stock the monkey hits directly with the dart, if it falls between two, go short on both in a bear market, and long on both in a bull.

5. Ensure the monkey is adequately pissed, the first monkey I had preferred Jamesons, my most recent one will only drink Sazerac Rye, its more expensive, but he's performing better than the first.

gg


----------



## Timmy

MRC & Co said:


> This is my entire problem with the method tech, it is purely mechanical, I wouldn't care which of those would outperform because I would never try to trade that way.  Over 10 years, I don't see any edge in specific timing, but it's not my niche.
> 
> Here is my example of which I traded recently and just one of many of what I mean by my rules (then again, these aren't really rules, just tried to give a few basic ideas):
> 
> Risk appetite was on a high, sentiment was bullish when S&P was at 930-955s in that range at the top, currently percieved risk assets (all to do with corrlations) were for the most part, sitting on their recent highs.  Whilst risk averse assets were on their lows (USTs, USD index).  All required a technical pullback.  Understand global macro environment.  Geithner and the US were desperte to hold up the USD, as any serious break down in it, could cause a run of sorts on both USTs and the USD, effectively destroying their QEP attempts.  Meeting with the Chinese to support USD and some spectacularly successful record bond auctions in the US were enough to turn the tide.  S&P false broke 950 and this looked firm resistance.  Considering oil was on it's highs and now being viewed as a potential to hinder any economic recovery (further push in stocks), whilst bonds were also on their lows, resultant in high yields, particularly a steep curve, passing into the mortgage market hindering rates (believe 30 year mortgage rates are effectively priced off the 10 years), and we had a perfect storm of global macro factors to push the S&P down.  We knew the level on the S&P of 950 was near range top and a perfect area to get short in anticipation, considering the trend structure was also running out of momentum.  That is timing to me.
> 
> We got down to 870s looked as though we would push below the range (probably to the 50% retracement on S&P at 810ish) and on a Monday, Asia positioned short for this event.  Overnight, Europe and US put in a huge push higher.  Coming into earnings season with the first being what we know as a company that ALWAYS beats the street in GS, we had some bullish appetite.  The S&P came back up to 900s and you could clearly see Asia panic out on Tuesday in the order flow.  Guys dumping at market and HUGE size coming online and showing their hand, they wanted to be clipped and wanted out.  Nobody there to clip them?  Why not?  Everybody who was anybody or otherwise referred to as 'they' were now pricing for a rally.  Tuesday, get long.  Of course, this could have just ended up in chop, but I think it was clear by the action that there was a decent probability of a rally.  Just prior to this, the S&P had false broke an important level just above the 870s, on no effort and tiny range bars, with a move back through 900s and the rest of the factors probably a good reason to time an entry.  Not buying the exact low in this case, but still timing nonetheless.
> 
> Combination of knowing the overall environment, knowing where everything sits in the picture, knowing what the current psychology is behind the moves, knowing what it would take to shift that sentiment and understanding levels and how markets move to narrow it down and time specific entries.
> 
> Of course, intraday has less fundamentals and more simply flow, lower probability IMO, but more opportunities.




Wow - great stuff MRC, thank-you.


----------



## Cartman

Timmy said:


> Wow - great stuff MRC, thank-you.




:iagree:  

could i read between the lines Mirc and see u becoming a "high volume" swing trader in the future??  onya m8


----------



## beamstas

motorway said:


> Anyone could have gone short at each signal ( instead of long )
> and made as much or even more return
> 
> and you have data that proves that ?
> 
> That where you start an entry has no effect on results ?
> That every entry is as good a short as it is a long ?
> Simply manage the trade ?
> 
> 
> motorway




Firstly, no.
Going short at every signal would not produce the same results, why? Because going short is a whole different game to going long. Im not saying that it doesn't matter if you go short or long, im saying the entry doesn't matter. 

I do have the data to back it up and can provide it if you want to question it. I also have a trading system that can produce 20% CAR even through the 2008-09 crash, using random entries.

You can analyse the market as much as you want, but at the end of the day you still have no idea what the market is going to do tomorrow. You can never be 100% certain.

Motorway, i suggest you read Scott Barlows interview in Radges book. You''ll be amazed, this bloke can trade at a 10% win rate and still be ahead at the end of the year. How does he do it? He manages the trades. He doesn't even have an entry criterea, he subscribes to get entries, and wins 30% of the time. He is an extreme example of trade management, but a good one. He doesn't care less about the entry, it's the management and exit that makes the money.

I did a little experiment using Howard Bandys P<0.05 rule of shutting down a system, from another thread on here. 50% of the time for the last 250 days the market closes higher, 50% it closes down, approximately, for each stock. P<0.05 at 5 days in a row, up or down, at 50/50, so if you have a system that goes long after 4 down days, theoretically you should have a 95% win rate. In reality you have a 30% win rate. 

The market isn't predictable enough to have an entry that gives you a great edge, if it was we would all be millionaires.

I know i will be proven wrong by someone showing stats of a backtested system that has a MA Crossover entry or something ridiculous, but entries are nearly always curve fitted. People analyse charts and look for characteristics that are in trades they don't want, and make a provision to filter out the stocks that do that.

Let the winners run and cut the losers short, simple.

I give you this challenge. If you trade mechanical, remove your entry and backtest. You will find that the profit will increase/decrease very slightly. It's not the entry giving you those results, it's the management of the trade and the exit.

Go and code something up in amibroker with random entries, and you'll actually be suprised at how well the system performs.

You won't make money because X moving average crossed above Y and the volume was XYZ and the RSI was under 20, the market doesn't care about all that.

Here is another example: I coded a system for someone the other day, and a requirement was that the RSI had to be under 30 in the last 10 days. Now common sence would say this is a good thing, the stock is oversold and should come up, the results were poor.... I then removed the RSI filter and backtested, the system produced more than 3x the previous CAR. 

Does it make sence that buying stocks that are even overbought gives you more profit than buying stocks that ARE oversold? No, not really, it doesn't make sence, but then again, the market deosn't care where the RSI is.

Brad


----------



## Wysiwyg

Yes, Tharps (others?) teaching on position sizing, stop loss and take profit are really eye opening. Something experience in the market doesn`t teach.


----------



## Mr J

fapturbo said:


> Buy Higher Sell Higher .....




I've already explained why that can still be viewed as buy low sell high. Your additions don't change that, and moving the stop up is just a product of riding a trend.



			
				tech/a said:
			
		

> If a trade ends up a loss or profitable it can be argued only in hindsite.
> *At the time of placing any trade or exiting any trade we just don't know how good it really is.* Even with stop orders, the stops will do their job but in hindsite how perfect that job was will be clear. If the trade was stopped within tolerance or exited with good R/R then its an "Acceptable" job.




It can be argued (and therefore I will do so ) that we do know how good a trade is, we just don't know the result. We aim to put ourselves in a position where we perceive the probabilities to be in our favour. If they are, and we have entered the way we think on that setup, then the quality of the entry is decided. If we apply the same thinking to the exit, then the quality of the exit is also decided, and therefore we know how good the trade is before it is even placed (at least if we execute it as planned). We just don't know the result.



> Which you don't know until you have enough past data to tell you whether your Idea/method has a higher probability of success.
> This doesn't necessarily equate to higher win rate either!




It's a matter of perspective (as is everything I'm debating). We could apply our performance of other trades in that setup to come up with a probability. It won't be accurate for that specific trade, but it will over that setup going forward (assuming that we know our overall winrate, and assuming that the performance of that setup will remain consistent over time - a big assumption I know).



> Just elaborate on your "Perspective".




Not my perspective. Much of what I post isn't my only view on things, just one of multiple perspectives I've probably formed. This perspective suggests that if we're a +ev trader, then we assume every trade we make (that isn't a mistake) is +ev at the time we make them. Therefore, our decision is always right, and the trade is always a good one.

Example, we flip coins, I get 2:1 on heads. It lands on tails. Despite the result, it was a good trade. If we made this deal on many coins and came across a coin that hand both sides as tails, despite the fact that this specific trade was horrible, the trade can also be argued as good.

Before I was arguing high can be low, and now that bad can still be good. 



> Infact most entries in profit makingsystems I have tested dont perform any better/much better than random.
> 
> Ive not yet tested one which gives a result more than 10% better than random. Ie remove the entry conditon and just set random entries.
> TT is a few %.
> This indicates to me that its not the entry making the profit!




This is quite interesting. If you don't mind, I'd like to hear more of your thoughts on this. I know you're not saying the entry doesn't matter, but it seems to be half the battle to me. My current view is good entry, good exit. I believe they combine to give a good R:R. Better entries improve the potential profit range, and allow for tighter stops. Good exits minimise losses and maximise profit. Note that I would only consider an entry to be good if it also takes place in what we deem to be a good situation.



			
				beamstas said:
			
		

> I give you this challenge. If you trade mechanical, remove your entry and backtest. You will find that the profit will increase/decrease very slightly. It's not the entry giving you those results, it's the management of the trade and the exit.




I may be wrong, but I can't agree. I trade waves, and if I get in too early, the probabilities are not in my favour. If I get in late, I've hurt my profit range, and perhaps so late that I enter just before the peak. I am absolutely certain that the entry is a huge deal, at least in my trading. Without a good entry, I feel the probabilities are not in my favour, and I could significantly harm my profit potential. As you say, cutting losses quickly and maximising our wins is the key, and I feel a good entry is necessary to do that. I'd love to be proven wrong, as it would make my trading that much simpler for me.



> Does it make sence that buying stocks that are even overbought gives you more profit than buying stocks that ARE oversold? No, not really, it doesn't make sence, but then again, the market deosn't care where the RSI is.




It does make sense, because they're not necessarily oversold :.


----------



## motorway

beamstas said:


> Firstly, no.
> Going short at every signal would not produce the same results, why? Because going short is a whole different game to going long. Im not saying that it doesn't matter if you go short or long, im saying the entry doesn't matter.
> 
> I do have the data to back it up and can provide it if you want to question it. I also have a trading system that can produce 20% CAR even through the 2008-09 crash, using random entries.
> 
> You can analyse the market as much as you want, but at the end of the day you still have no idea what the market is going to do tomorrow. You can never be 100% certain.
> 
> Motorway, i suggest you read Scott Barlows interview in Radges book. You''ll be amazed, this bloke can trade at a 10% win rate and still be ahead at the end of the year. How does he do it? He manages the trades. He doesn't even have an entry criterea, he subscribes to get entries, and wins 30% of the time. He is an extreme example of trade management, but a good one. He doesn't care less about the entry, it's the management and exit that makes the money.
> 
> I did a little experiment using Howard Bandys P<0.05 rule of shutting down a system, from another thread on here. 50% of the time for the last 250 days the market closes higher, 50% it closes down, approximately, for each stock. P<0.05 at 5 days in a row, up or down, at 50/50, so if you have a system that goes long after 4 down days, theoretically you should have a 95% win rate. In reality you have a 30% win rate.
> 
> The market isn't predictable enough to have an entry that gives you a great edge, if it was we would all be millionaires.
> 
> I know i will be proven wrong by someone showing stats of a backtested system that has a MA Crossover entry or something ridiculous, but entries are nearly always curve fitted. People analyse charts and look for characteristics that are in trades they don't want, and make a provision to filter out the stocks that do that.
> 
> Let the winners run and cut the losers short, simple.
> 
> I give you this challenge. If you trade mechanical, remove your entry and backtest. You will find that the profit will increase/decrease very slightly. It's not the entry giving you those results, it's the management of the trade and the exit.
> 
> Go and code something up in amibroker with random entries, and you'll actually be suprised at how well the system performs.
> 
> You won't make money because X moving average crossed above Y and the volume was XYZ and the RSI was under 20, the market doesn't care about all that.
> 
> Here is another example: I coded a system for someone the other day, and a requirement was that the RSI had to be under 30 in the last 10 days. Now common sence would say this is a good thing, the stock is oversold and should come up, the results were poor.... I then removed the RSI filter and backtested, the system produced more than 3x the previous CAR.
> 
> Does it make sence that buying stocks that are even overbought gives you more profit than buying stocks that ARE oversold? No, not really, it doesn't make sence, but then again, the market deosn't care where the RSI is.
> 
> Brad




Have no problem with any of that
because number of days up or down

IS RANDOM

Good entries possibly can not be found with any of the things you mention in your post
( GOOD meaning can make a difference )

And Prediction has ( depending on what you mean ) nothing to do with it

prediction only applies when NO HOW MATTERS

What most people do when they think they are predicting
is just a naive  projection forward eg Your Mov average , buy RSI < 30
number up or down downs etc
No entry based on these things CAN most likely MAKE A DIFFERNCE..

What can is having a precise
defintion of trend ( mathematical precise )
and as early ( without unnessary confirmation )
recogniton of...

For an EOD trader can just 1 days data reveal exploitable trend ?
If so what other information can improve hit rate 

There are many risks to reward
opportunity a very big one.

trends up down or sidways
days up to days down are RANDOM
NO "Signal" based on such can be very usefull

motorway


----------



## beamstas

Motorway,
I agree with what you are saying about the trend, getting aboard a trend is what makes you the money. ALOT of people will design a system that has a poor entry, and believe that this is what makes them money. It's called curve fitting.

I think the part where alot of people go wrong is they use an RSI, Stochastic, Moving average or some other type of indicator to try and "predict" a trend before it starts.

I agree 100% about the randomness of the days. You have just tossed a coin 19 times, each time it is heads. What is the 20th toss? Of course, it's still 50/50. Some people will try fool themselves and say heads, as the coin toss has had 19 in a row why can't it make 20? Some people will say tails, it's had 19 heads it can't possibly have another one! This is the difference between optimism and pessimism, the wise man will say that there is still a 50/50 chance, as you have said. So basing a trade off this is foolish and will never give you an edge.

Of course, if you can mathatatically define a trend and filter noise, you are doing better than me, and have probably found a valid entry that does give an edge. The problem i face is all stocks have a varying degree of zig in their zag, and to apply the same formula to every stock (in doing so will make a robust formula) is very hard to do. Well done.

Mr J.

Your timing and post is very hindsight based. The market is going to trend as it's going to trend. You can't ever be sure you are in too late until after the fact. All you can do is buy and manage the trade. We can all look back on trades and say "i should of entered sooner" or "i should have entered later", but at the time of entry you cannot possibly know, Im talking about certain entries having an edge over a random entry.


----------



## nunthewiser

beamstas said:


> Let the winners run and cut the losers short, simple.
> 
> Brad






Mr J said:


> I  As you say, cutting losses quickly and maximising our wins is the key,
> 
> :.




sounds great man ......

how come i keep hearing about sticking to profit targets on next page ?

if one sticks to profit targets how does one let there winners run ?

frankly thinks a lot of cliche's that get bandied around kind of contradict themselves on a constant basis


----------



## nunthewiser

8. view most trading cliche's written in books as being mainly full of crap in real life scenarios


----------



## tech/a

*J*

Entry discussion will unfold.



> What can is having a precise
> defintion of trend ( mathematical precise )
> and as early ( without unnessary confirmation )
> recogniton of...




Characteristic.



> (1) For an EOD trader can just 1 days data reveal exploitable trend ?
> (2) If so what other information can improve hit rate




(1) Yes,I can tell a great deal about a days trading by looking at a 10 min or 60 min chart. I can reveal anticipation. 
(2) Characteristic.



> There are many risks to reward
> opportunity a very big one.




Constant shuffle taking trades in anticipation ---off loading non or weak performers and adding strongly to those which are performing.



> trends up down or sidways
> days up to days down are RANDOM
> NO "Signal" based on such can be very usefull




As I have found.

I believe the very first reply to this thread by Nick Radge states all we have been discussing!

*1. Trade in the direction of the trend***
2. Cut your losses
3. Let your profits run
4. Decide your pain tolerance level, halve it and trade small enough that you never hit it
5. Patience and tenacity***.*

Those *** are applicable to Characteristic and Opportunity.



> 8. view most trading cliche's written in books as being mainly full of crap in real life scenarios




Not all but agree many are accepted as gospel without investigation which would reveal their incorrect application and interpretation.
Its worth the time and effort.


----------



## Mr J

beamstas said:


> You can't ever be sure you are in too late until after the fact. All you can do is buy and manage the trade.




It is true that we can't know whether we're too late at the time we make the trade, but my judgement of when it is too late for entry comes from watching these situations hundreds of times. Usually, the retracement comes soon after I deem it judge it too late. Yes, often it continues to run, but in my observation it seems to me it is not a +ev entry. Perhaps there are other factors affecting this, such as the timeframe I trade or the size of my stops.



> We can all look back on trades and say "i should of entered sooner" or "i should have entered later"




I don't. I know know precisely where I want to enter, and at what point I will no longer be willing to enter. These points are determined before I enter the trade. If I enter early or late, it is because I have ignored my acceptable range of entry.



			
				nunthewiser said:
			
		

> if one sticks to profit targets how does one let there winners run ?




I suppose sticking to profit targets in the sense that one doesn't sell before that point. Either way, I don't believe in a fixed profit target, and maybe not in a profit target at all. I try to take what the market is willing to give, if that limits me to 2 points then so be it, 20 points then great. I want to let winners run, but only if the market continues to give me a reason to do so.


----------



## Wysiwyg

Mr J said:


> These points are determined before I enter the trade. If I enter early or late, it is because I have ignored my acceptable range of entry.




Holy dooly, all ye have to do is enter the trade in "acceptable range" and every trade will be right. That is fantastic


----------



## Mr J

Wysiwyg said:


> Holy dooly, all ye have to do is enter the trade in "acceptable range" and every trade will be a right. That is fantastic




Yeah, okay, that's exactly what I meant .


----------



## beamstas

Thanks for the response(s), Mr J & Motorway.
Nothing better than a good discussion, it benefits everyone. 

Brad


----------



## Aussiest

nunthewiser said:


> 8. view most trading cliche's written in books as being mainly full of crap in real life scenarios




Lol, makes me wonder. Take what suits you, ditch the rest.


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## MRC & Co

Cartman said:


> :iagree:
> 
> could i read between the lines Mirc and see u becoming a "high volume" swing trader in the future??  onya m8




Hey C-man, well it's another strategy I have been working on for some time now and am very pleased with the results.  Always ongoing, but am working with a bit of a team on it now, including some global macro guys who far superceed my ability to analyse the environment.  It's really the result of my intraday trading, along with the influence of Soros, Tudor Jones and Druckenmiller who seemed to back up my thoughts on the markets the more I read of them which was a nice surprise.

Also, add to the part when we were rallying, that same Tuesday I believe it was, after Asia panicked out of shorts, Europe bought up worse than expected ZEW and Industrial Output and US bought up worse than expected Retail Sales.  A big positive for the bullish thesis.


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## Cartman

MRC & Co said:


> am working with a bit of a team on it now, including some global macro guys who far superceed my ability to analyse the environment.  It's really the result of my intraday trading, along with the influence of *Soros*, Tudor Jones and Druckenmiller who seemed to back up my thoughts on the markets the more I read of them which was a nice surprise.





marrying the macro with the micro sounds like a healthy strategy 

do u use the Soros aching back "indicator" as well  ---  bit hard to plot that one on a chart


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## MRC & Co

Cartman said:


> marrying the macro with the micro sounds like a healthy strategy
> 
> do u use the Soros aching back "indicator" as well  ---  bit hard to plot that one on a chart




First point, yes, I watched a bit of Stephen Hawking lately and his melding of the quantum world with the theory of relativity, gave me a bit of inspiration!    ha ha, I wish I was that damn smart!

Second point, I haven't quite mastered the "aching back indicator" as of yet, but I'm sitting in a chair deemed unsafe by OH&S standards, so I'm sure it won't be too far away!  Then every trade can feel like a bad one, as it already does!


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## Cartman

MRC & Co said:


> First point, yes, I watched a bit of Stephen Hawking lately and his melding of the quantum world with the theory of relativity, gave me a bit of inspiration!    ha ha, I wish I was that damn smart!
> 
> Second point, I haven't quite mastered the "aching back indicator" as of yet, but I'm sitting in a chair deemed unsafe by OH&S standards, so I'm sure it won't be too far away!  Then every trade can feel like a bad one, as it already does!





lol --- thank u Mirc -- my 5th trading rule is now sorted --- "thou shalt not trade with a backache lest ye end up in a 'black hole' of despair" --i know you know what it means but someone might like to translate it into english


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## MRC & Co

Cartman said:


> lol --- thank u Mirc -- my 5th trading rule is now sorted --- "thou shalt not trade with a backache lest ye end up in a 'black hole' of despair" --i know you know what it means but someone might like to translate it into english




ha ha, nice melding of your own there C-man, Soros and Hawking, now that could cause some problems!  A reflexive financial black hole


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## Iggy_Pop

1. Do not use borrowed money

2. Use money you can afford to lose (at least a percentage)

3. Do not use equity in your house to invest in shares

4. Do not buy shares with high debt levels

5. Do as your wife tells you


You may not make a lot of money but you can sleep at night, and a happy wife is always a good thing.


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## Garpal Gumnut

Garpal Gumnut said:


> OK listen up.
> 
> Follow these rules and you will always make a profit.
> 
> 1. Buy a monkey,a dart and 2 copies of the AFR.
> 
> 2. Pin the Stock prices pages from the copies of the AFR to a cork board so that all stocks are visible.
> 
> 3. Train the monkey to throw the dart at the pages. ( This is the time intensive part.)
> 
> 4. Go long on any stock the monkey hits directly with the dart, if it falls between two, go short on both in a bear market, and long on both in a bull.
> 
> 5. Ensure the monkey is adequately pissed, the first monkey I had preferred Jamesons, my most recent one will only drink Sazerac Rye, its more expensive, but he's performing better than the first.
> 
> gg




Just a follow on from these five rules.

A new study just needs a live parrot.

Ockhams Razor.  A parrot, with apologies to Monty Python.

http://www.news.com.au/story/0,27574,25896489-23109,00.html

gg


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## So_Cynical

tech/a said:


> Punting with all of your bank all of the time.
> So you use fresh air for averaging down?




Haven't averaged since late April...i mean why average after the bottom?

Must admit i did a little (new position) average a few weeks ago...and lol its come good already 

As for my bank, i sorta meant that i wasn't sitting on the side lines waiting for anything....if ive just exited a position then ive got a buy order in the next day, and because i low ball...sometimes it takes a while to get filled.



tech/a said:


> 100% win ratio since Oct with *10 trades *and you EXIT TOO EARLY?



Yep 100% winners...top 5 average down highlights

MRE 30 cents, now 1.11 
TRY 75 cents, now 1.72
ENE 1.52, now 2.49
EVG 4 cents, now 6 cents
SUN 4.50, now 7.90

With my new positions i have been exiting within a target range (8 to 14% profit) not exiting with a stop....now with hindsight this has cost me serious money, as in lost profit...but needed to be done to free up capital for the next position....RE: my rule #5 "u cant get it right all the time".



tech/a said:


> This would be perfect as you don't follow trends---surely.




Yep...ive sorta come to the conclusion that the market of the last 9 months or so has very much suited me and my style....times are a changing.  perhaps time to start trend following....just dont know if i really could get used to top buying and losing 40% of my trades :dunno:


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## tech/a

So_Cynical said:


> Haven't averaged since late April...i mean why average after the bottom?
> 
> Must admit i did a little (new position) average a few weeks ago...and lol its come good already
> 
> As for my bank, i sorta meant that i wasn't sitting on the side lines waiting for anything....if ive just exited a position then ive got a buy order in the next day, and because i low ball...sometimes it takes a while to get filled.
> 
> 
> Yep 100% winners...top 5 average down highlights
> 
> MRE 30 cents, now 1.11
> TRY 75 cents, now 1.72
> ENE 1.52, now 2.49
> EVG 4 cents, now 6 cents
> SUN 4.50, now 7.90
> 
> With my new positions i have been exiting within a target range (8 to 14% profit) not exiting with a stop....now with hindsight this has cost me serious money, as in lost profit...but needed to be done to free up capital for the next position....RE: my rule #5 "u cant get it right all the time".
> 
> 
> 
> Yep...ive sorta come to the conclusion that the market of the last 9 months or so has very much suited me and my style....times are a changing.  perhaps time to start trend following....just dont know if i really could get used to top buying and losing 40% of my trades :dunno:




Savvy investment strategy.

Average down-----8-14% profit target.
100% win rate 
$10k Bank
Now $10,800-$11,400.

Priceless.


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