2009.09.10 DRAIN THE BANKS - LIKE A RAT

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TheRumpledOne
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Postby TheRumpledOne » Fri Aug 13, 2010 12:51 pm

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"Now, 2 patterns of market behavior happen on a regular basis:

1) the price breaks to new high's (or low's)

2) the price reverses from new high's (or low's)

They happen regardless of time frame (with the obvious limitations explained above)

They are phenomena that can be exploited without the fear if found out by others, that they might cease to exist." - H. Rearden
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TheRumpledOne
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Postby TheRumpledOne » Mon Aug 16, 2010 12:21 pm

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"Look, for example, at this elegant little experiment. A rat was put in a T-shaped maze with a few morsels of food placed on either the far right or left side of the enclosure. The placement of the food is randomly determined, but the dice is rigged: over the long run, the food was placed on the left side sixty per cent of the time. How did the rat respond? It quickly realized that the left side was more rewarding. As a result, it always went to the left, which resulted in a sixty percent success rate. The rat didn't strive for perfection. It didn't search for a Unified Theory of the T-shaped maze, or try to decipher the disorder. Instead, it accepted the inherent uncertainty of the reward and learned to settle for the best possible alternative.

The experiment was then repeated with Yale undergraduates. Unlike the rat, their swollen brains stubbornly searched for the elusive pattern that determined the placement of the reward. They made predictions and then tried to learn from their prediction errors. The problem was that there was nothing to predict: the randomness was real. Because the students refused to settle for a 60 percent success rate, they ended up with a 52 percent success rate. Although most of the students were convinced they were making progress towards identifying the underlying algorithm, they were actually being outsmarted by a rat."

P64 HOW WE DECIDE (italics added)

=============================================

"Now, 2 patterns of market behavior happen on a regular basis:

1) the price breaks to new high's (or low's)

2) the price reverses from new high's (or low's)

They happen regardless of time frame (with the obvious limitations explained above)

They are phenomena that can be exploited without the fear if found out by others, that they might cease to exist." - H. Rearden

=============================================

1) Price within 20 pips of the daily low - that is OPPORTUNITY

2) Red candle closes

3) Green candle closes - note the high price of the green candle.

4) Enter long at the green candle's high price

5) STOP LOSS IS 10 PIPS

6) Take whatever profit you can.

7) If the rules do not mention it, then it is of no concern.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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TheRumpledOne
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Postby TheRumpledOne » Mon Aug 16, 2010 12:29 pm

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1) Price within 20 pips of the daily low - that is OPPORTUNITY

Last chance was at 109.45. That long entry was good for 10 or more quick pips.

=======================================

"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."
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Postby turboeskimo » Tue Aug 17, 2010 1:54 am

Still have no positive result. Maybe I do something wrong or maybe have huge spread. Btw, what's better: five digits after dot or four?

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Postby bredin » Tue Aug 17, 2010 3:32 am

makes no difference.

you will need to post screenshots of your failed trades for anyone to be able to give proper advice....

Its rare to get a run of entries that go straight to sl without being in profit at some point, mabee you are exiting late.

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Postby MightyOne » Tue Aug 17, 2010 3:34 am

I have no idea why so many people fail at this method, it couldn't be more simple than this:

Image

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trueblueTEX
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Business sense...

Postby trueblueTEX » Tue Aug 17, 2010 11:30 am

MightyOne wrote:I have no idea why so many people fail at this method, it couldn't be more simple than this:

http://i35.tinypic.com/2r5rvas.gif


MO, my dad used to say, regarding his business sense, "If it was raining $100 bills, I'd be picking 'em up at 50 cents an hour for the man."

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Postby webmail4tom » Tue Aug 17, 2010 11:38 am

MightyOne wrote:I have no idea why so many people fail at this method, it couldn't be more simple than this:

http://i35.tinypic.com/2r5rvas.gif


MO,

one reason might be the time frame. Your example is a wonderful one. The 15-min time frame takes out some noise even though watched live and traded by the rules would have been a tough one.

3 to 4 pips in the green and suddenly turns to bring you to 9 pips in the red. So all depended on the precise entry and a good fill with low spread.
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tfg
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Postby tfg » Tue Aug 17, 2010 11:50 am

MO,

It looks like you trade RAT on m15?

Do you take RAT trade only within 20pip off extremes? Do you take any RAT trades outside so?

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TheRumpledOne
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Postby TheRumpledOne » Tue Aug 17, 2010 12:13 pm

Image

1) Price within 20 pips of the daily low - that is OPPORTUNITY
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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