Relativity wrote:Generally speaking, the method is profitable.
It cannot be profitable. Single candle reversals are never profitable long-term, even when you attempt to pick the bottom of a larger time frame, which is all the BuyZone, SellZone attempts to do.
Relativity wrote:I speak from experience : the rat method is more than just logic based. There are certain discretionary parts where EAs cannot really take over, yes. e.g news, market interventions, option barriers... etc.
I speak from a decade of trading experience, and I can tell you that human beings can be just as inept at handling these same market events. These things that you mention don't hinder the Rat. The Rat is not aware of there existence and therefore, the Rat's results will settle in a pattern of distribution around these events over the long-term and thus become irrelevant to whether or not the method itself is sound, which it definitely is not.
Relativity wrote:Give it a go at the EA. But I warn you that the rules aren't really all there in black and white. Looks logical, but it 'works' and it doesn't 'work' too. There are more 'rules' than expected IMO.
TRO, always says that his rules are in black and white. He always states that to read into the rules is the incorrect approach to trading like a Rat, because the Rat is supposed to be color blind.
Rules that disappear when convenient might work for paper trading, but that dog won't hunt when real cash is on the line.
And, yes - I would agree. There are "more rules" than expected, indeed. Just because a small bar pivots on a one bar reversal, does not mean the world pivots with it. A "take what you can" Limit level is ethereal and therefore, there is no mechanism for ever determining and/or calculating your future potential success using the method. A limit level MUST be established, as that is the basis for all realized profit. If there is no underlying predicate for determining when it is time to take money off the table, then there is no underlying method. That simply cannot be argued logically any other way.
Relativity wrote:There's the part where there's a plan A / B / C, 'depending on market conditions'. Watch TRO's youtube videos. Also, think about where does he live... it gives a big hint what timing window is this method more profitable.
Any method is most profitable when the market generates above average ATR per unit of Time. If magnitudes go away, it matters not where one might live, or when they might decide to use any method. Magnitude drives everything in financially traded markets and with the right indicator, there is no hidden secret as to when magnitudes in any time frame are the greatest throughout the trading session.
However, this also exposes a serious flaw in the Rat method. When magnitude per unit of time increases, the 10 pip Stop level has an increasingly higher degree of probability for being struck before any ethereal Limit level that is not defined.
Magnitude can be your friend, or it can be your worst enemy when you don't understand the rest of the pieces that go along with it. Blindly entering a position predicated on a one bar reversal, is like committing suicide. The account (no account) will survive the encounter long term.
Relativity wrote:These are the things that TRO will not say. I understand why he would do that : I think he can't be bothered anymore. Its a good thing actually. Why should he give us everything on a plate? Does he owe us anything? Nope.
That's what I tried telling me for years, but they still assume that I owe them something on a silver platter. That's how people are, very unappreciative of what they do get. They lack the imagination to take what you give them and move their knowledge to the next level on their own. So, they develop an attitude of resentment towards you for your success in those things that they were given, but were unable to develop further on their own.
Been there - done that - ain't going back. I hand pick those I wish to work with these days. It is a much better method for fulfilling my desire to help those who want to help themselves, rather than trying to educate the ineducable.
Relativity wrote:Also, for traders to mature correctly, one should self discover as much as they could to come up with their own trading rules. The discovery process IMO is critical to blood traders to become traders. What TRO did is to give the basic template. That, I thank him for that. Then, I work off it.
The one bar reversal was not given to you by TRO. It is at least 60 years old. That's a fact.
A much better, more well seasoned entry would be the 2B Vic Entry. Google it. It contains a number of well defined "market patterns" that do a decent job of signaling enough of a change in direction, to warrant an entry. It also uses the Reversal Pattern of Candles, to identify potential pivots in the market, like the Rat and like the same pattern found many years ago. However, with 2B Vic, if you overlay his entry protocol with a developed understanding of Harmonics and Harmonic Patterns, you can create a real Trading Methodology that works approximately 78% to 82% of the time. Not bad for a non-system derivative trade logic.
But, as you say, it is up to the trader to learn how to put 2 and 2 together. It is also up to the trader learn how to properly discern good information from bad. Far too many novice traders have yet to learn that in the online trading community.
Relativity wrote:So specifically speaking : I don't take the rat rules directly as it is. As much as I wanted and tried, it doesn't work for me. However, I make my own rules + create my variation of the rat method + consider the 'unspoken rules' + take the concept of trading D1 extremes / rat trading / 20 pips from D1 high or low / whatever its called. It does work!
At some point, after having some success in trading, the trader start to question the degree to which something "does work" so they can improve long-term profitability. Growing capital is about optimizing that which "does work" to a point where it works better than what the average or typical trader can produce.
Relativity wrote:So I've made my own EA to test my trade logic. Pretty good. I do give TRO credit for the concept thou.
It is 60 years old. People used to stand out in the Street, before Wall Street turned into what it is today, and did the same exact thing for short-term profits. Only back then, they were reading tapes and shouting orders out the window down to the sidewalk, literally.
The one bar, or up tick reversal is nothing new. Sorry. Try 2B Vic and not how long he's been sharing it. And, not even Victor, is the original idea source behind that.
Relativity wrote:I am aware of MT4 tick data being available, so no worries I am at your side for this one.
Yes. Just Google Birt's Patch, or Birt's EA Review and you will have tick data and an automated process for backtesting in MT4 at your fingertips.
I decided not to post the equity curve of the EA that I built using the Rat Methodology. There's just no point in doing that on this forum anymore. People will willingly walk right off the side of a cliff, even if you show them what hitting the bottom will look like just before they do it.
Anyway, interesting post.
I've got my eye on you.