Rules for ZL and MOMO

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Jalarupa
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Postby Jalarupa » Thu Jun 09, 2011 11:16 am

adaseb wrote:And I don't know why everybody here keeps suggesting to read the Never Lose Again Thread or the Lukx thread. 99% of the content there is crap.


A good story has to start from the beginning...

Plus you get to see the great journey's everyone has taken and that should be very inspiring to witness...

I mean its kinda awesome to see how far many of the traders here have come...

But yeah thats me...

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Postby flip4_mac » Sun Jun 12, 2011 12:59 am

I totally agree with XXX and adaseb

NLA was way to long ;overwhelming posting and question all out of place. To many people posting mistaken setups. It would be best, in one single read-only thread or eBook (am willing to pay btw) and separate thread for users posting chartss and question. It should take no more than 2 hours to read and understand the concepts and no more 1000 hours to practice and master these concepts.

Humble
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Postby Humble » Mon Jun 13, 2011 2:42 am

I do not disagree with what you say however, you will not find a book of rules, it's a concept (of equilibrium). There is no: when a blue squiggly line crosses an upside down tangent go long if the moon is waxing and short if it's waning.

These threads of MO's attempts to draw our attention to what he sees on a chart are not easy for non traders to follow. Just look for posts by MO, like the two adaseb reproduced on the last page and study them as needed. Look for some posts by dragon33 and es/pip, both traders before MO's posts and better traders after them.

You will come to see that even they interpret MO's teachings differently, we all get from him what we can, whilst he is kind enough to suffer our ignorance.
Is price closing higher or lower than something? Simple yet powerful question. ..MO

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bredin
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Postby bredin » Mon Jun 13, 2011 3:26 am

I dont think anyone magically becomes a good trader by reading a set of 'rules'

This is a journey which takes time.

To an already profitable trader, many of MOs concepts can be implemented immediately, since their experience allows them to equate the chart concepts with with their own interpretations.

To someone starting at zero (or worse, someone whos come from a mechanical approach) it will always be a daunting prospect since the methodology requires a new mindset to their own....

Brain First, Then Money.

Anyway, since that will be ignored, the rules are

1. MOMO
2. Z-Line
3. Porche

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Postby speed26 » Sat Nov 26, 2011 5:09 pm

Im currently composing in a document all posts of relevance (to me) from Lukz thread.

es/pip, dragon, mo, adaseb...just trying to filter the relevant stuff, it gets crazy in there!

I think it isnt just a case of 'rules' for ZL/Momo. Im starting to see multiple dimensions to the markets. Only certain ones make coin consistently, meanwhile zl's and momo are a guideline, a 'heads up!', the market showing its cards on momentum/exhaustion.

Meh, just rambling here...

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Postby Pro Trader » Sun Nov 27, 2011 12:20 am

A lot of the lukx thread isnt useful but there is some gold in there from the likes of Dragon, MO etc so its worth reading. I read it from start to finish a few times before everything I needed sank in properly. There is no short cut.

I don't trade exactly how Dragon trades but I've taken what I need and made it my own which is what everyone needs to do. Find they're own way.

Momo and Zl's are definately the way forward though in my opinion.

Thats just me though

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Postby Relativity » Sun Nov 27, 2011 5:15 am

speed26 wrote:Im currently composing in a document all posts of relevance (to me) from Lukz thread.

es/pip, dragon, mo, adaseb...just trying to filter the relevant stuff, it gets crazy in there!

I think it isnt just a case of 'rules' for ZL/Momo. Im starting to see multiple dimensions to the markets. Only certain ones make coin consistently, meanwhile zl's and momo are a guideline, a 'heads up!', the market showing its cards on momentum/exhaustion.

Meh, just rambling here...


You are not rambling here lol. You are actually quite right spot on.

ZLines and Momo do work.

From what I see the easiest way is to look for extremes, since at any extreme, there are always people leaving the market to create retracements. If there are enough people leaving to make the retracement become a reversal, price WILL tell you through Zlines and Momo. Its almost sure profit.

Say if you see a Zline broken by a Momo on a M30 chart off a D1 or W1 or MN1 extreme, try checking the PA on a M1/M5 level. There is a high chance you will see a 'reversal pattern' like triple top or head&shoulders there. This is the part many do not understand, even myself till recently. Even through I understood PA on a micro vs macro level, I had to find some way to 'link them up correctly'.

IMO a lot of it boils down to 2 problems on the whole :

Charting Methodology problem :
Generally a technical issue
The best we have are candlestick charts with OCHL. This chart has all the information we need, but is not so perfect.
These candles are not meant to be read individually, but to read them as a whole with some kind of context. The context used can be either price or/and time. This means we have to find ways to 'link' them up.

This is the hard part. With experience it gets easier, but certain indicators do help at some level. The problem is which indicator? Basically any indicator that does not add to what price is telling you, but tells you more clearly what price is doing.

There are various ways to do :
-Edges from Statistics/Follow Candle Body Color (time + price based : e.g. TRO)
-CC/Momo/ZLines (time + price based : e.g. MO, dragon, ES)
-P&F/Renko (price based e.g. Snap, MO)
-Zigzags/Waves/Swings/Trendlines (time + price based e.g. Ray Barros, Masterforex, MO)

If it takes you too long to interpret, its usually the following problems :

1-Its the wrong indicator as it is adding to the price action data unnecessarily, not making the true PA come out. Our brain can only handle at the most 4-6 pieces of information at any one time. Here there are 2 approaches :
a-Keep it as simple as possible. Most of the time these methods involve drawing a few horizontal lines at the right places. Then trade off how market reacts to these lines.
b-Make an indicator to do the reading for you, then summarize the result in the most simplest and most straightforward way possible

Try to get the best of both worlds. However both approaches face the same problem : you must be very sure that the methodology is timeless and enduring, regardless of market changes. We have to define what is 'need'. The simple answer is 'whatever that works'. Its either you :

a-try it purely off the advice of other successful traders WITHOUT adding anything to it. This needs time and experience. This is actually the best way, since the successful trader can also correct your psychology for you (if you allow him). The problem is that not all good traders can teach just as well, since trading itself is an art and can be difficult to 'impart'. And not all students are willing to let go and change their ways. Sometimes its a personality/emotional issue as well.
b-do your own research. This needs time and experience again. This is hard if you don't know how to do coding / data analysis / actual PA research.
c-a combination of both, the obvious ideal

2-It is the right indicator, but the trader has not let go of his previous incorrect interpretations about it, which prevents him from using it correctly. This is regardless of level of experience. This is also why someone new at trading can actually be successful, but later start to slowly fail.

Finally, not to mention that almost all trading platforms are created with the broker in mind, not the trader. When you know this, your thinking about handling the markets WILL change. One will be asking oneself why go through all the trouble when they are trying to fool us anyway.

Why bother to complicate and make a science of possibility false information? (reminds me of Signalbender/Stealthtrader LOL) Might as well keep it as simple as possible.

Find out what is the reality of price action, then use it straight off. A lot of this is just pure simple observation (without interpretation, the slow but sure way) and statistics (the faster but possibility problematic if one does it wrongly).

The best way to solve these problems is to start anew with a naked chart(!!!) Its painful, yes.

This is a very very thin line. I am guilty of it more than once, but its a good learning and humbling process. Which brings us to the 2nd problem.

Trader problem :
Generally a psychological issue

Letting go of all previous perceptions/interpretations and relearning how to see.

The trader still has to deal with himself eventually. Up is up, down is down. A lot of traders (including myself) like to ask additional questions like 'how much? when?' These happen because of fear. Fear of what?

a-fear of the methodology not working or using it wrongly when you actually got both the methodology and usage is correct. This is easier to solve if the stronger trader is trading beside you.
b-having a right methodology but using it wrongly. Again, the stronger trader is trading beside you will be able to spot this for you.
c-having a wrong methodology and also using it wrongly. This is the hardest to spot. Most traders are here. They get the wrong mentors to assist them with their trading. It aren't totally their fault, really.

Admittedly speaking, if one 'solves' the charting methodology problem, handling the trader problem does get a lot easier. But its not the all in all solution.

Yeah, like how others said it before, it does take some time. Don't rush it.

That's all.

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Postby jarnapal » Sun Nov 27, 2011 10:05 pm

bredin wrote:3. Porche

G.


:lol:

speed26
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Postby speed26 » Mon Nov 28, 2011 11:10 am

"From what I see the easiest way is to look for extremes, since at any extreme, there are always people leaving the market to create retracements. If there are enough people leaving to make the retracement become a reversal, price WILL tell you through Zlines and Momo. Its almost sure profit."

Yes, as in a 1-2-3 pattern where 1 is the extreme, 2 the momo, 3 the entry on pullback to momo base.

I have a feeling that the truth behind markets, the 'main' concepts all pro traders build succesful systems on is nothing more than Momentum and Exhaustion. Everything else i think is pure baloney/irrational/unpredictable.

What i get confused on big time is all this timeframe stuff, so many TF's, always looking at higher timeframes, yet, isnt the higher timeframes created from the smaller ones??? So why look up? Shouldnt we be looking 'down' so to speak?

"Finally, not to mention that almost all trading platforms are created with the broker in mind, not the trader. When you know this, your thinking about handling the markets WILL change. One will be asking oneself why go through all the trouble when they are trying to fool us anyway."

This is another important point IMO, how can you trust a data feed when its like you said? All that unecesary clutter/tools distracting one from the truth, that is hidden in plain sight...

"Why bother to complicate and make a science of possibility false information? (reminds me of Signalbender/Stealthtrader LOL) Might as well keep it as simple as possible."

Hmm...trading from a horizontal line (reference point), defending the line...

I actually believe (correct me if im wrong) that pretty much all systems work, PROVIDING, the trader knows when to trade and when NOT to trade.

Lets face it, even a random line placed on a chart has its merits, because price will either cross and continue, or bounce and reverse from it.

So with this in mind, would it be possible to engineer a trading approach that incorporates momentum/exhaustion with a simple reference point (line) to build a profitable method/system?

Not opening a can of worms here, just being honest and hopefully find guidance/advice from pros, if their willing to :D

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Postby Relativity » Mon Nov 28, 2011 12:08 pm

speed26 wrote:"From what I see the easiest way is to look for extremes, since at any extreme, there are always people leaving the market to create retracements. If there are enough people leaving to make the retracement become a reversal, price WILL tell you through Zlines and Momo. Its almost sure profit."

Yes, as in a 1-2-3 pattern where 1 is the extreme, 2 the momo, 3 the entry on pullback to momo base.

I have a feeling that the truth behind markets, the 'main' concepts all pro traders build succesful systems on is nothing more than Momentum and Exhaustion. Everything else i think is pure baloney/irrational/unpredictable.

What i get confused on big time is all this timeframe stuff, so many TF's, always looking at higher timeframes, yet, isnt the higher timeframes created from the smaller ones??? So why look up? Shouldnt we be looking 'down' so to speak?

"Finally, not to mention that almost all trading platforms are created with the broker in mind, not the trader. When you know this, your thinking about handling the markets WILL change. One will be asking oneself why go through all the trouble when they are trying to fool us anyway."

This is another important point IMO, how can you trust a data feed when its like you said? All that unecesary clutter/tools distracting one from the truth, that is hidden in plain sight...

"Why bother to complicate and make a science of possibility false information? (reminds me of Signalbender/Stealthtrader LOL) Might as well keep it as simple as possible."

Hmm...trading from a horizontal line (reference point), defending the line...

I actually believe (correct me if im wrong) that pretty much all systems work, PROVIDING, the trader knows when to trade and when NOT to trade.

Lets face it, even a random line placed on a chart has its merits, because price will either cross and continue, or bounce and reverse from it.

So with this in mind, would it be possible to engineer a trading approach that incorporates momentum/exhaustion with a simple reference point (line) to build a profitable method/system?

Not opening a can of worms here, just being honest and hopefully find guidance/advice from pros, if their willing to :D


Higher timeframes help to measure level of Exhaustion.
Lower timeframes help to measure level of Momentum.

Yeah trusting the market feed is one thing. How the trading platform is designed is another. I know one particular (losing) trader showing me her trading platform. I asked her about setting stop losses and she said her broker doesn't provide her any! I checked it for myself and its true.

Yes its possible to engineer such a system. In fact, all of us are doing it. The only problem is no one agrees on 'what to look at'. Because all seem to work well on their own and have their merits.

It can be :
Price - how high and low (no introductions here)
Time - how left and right (same)
Angle Slant - how steep (e.g. trendlines)
Depth - how deep -> Volume (e.g. tick/contracts)

There might be more, but I say these 4 are enough.

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