2009.09.10 DRAIN THE BANKS - LIKE A RAT

[bredin]

lukx, also note the beautiful short zline that you could have traded in up to a few hours later than your entry. the green pips were there, eventually.

G.

[trueblueTEX]

Bredin, I am zline-challenged. Would you mind pointing out the zline on lukx's chart?

[Humble]

lukz, that's the trouble with indi sometimes. I learn more by drawing lines by hand. Here's your 4 hr chart. Definitely a time for green rats to wait if they are using a 4hr chart.



If the "somewhere" line holds, then you were right in hindsight but would expect to get stopped out, entering too early. You might want to see a close above the ZL or the down memo bars open, before looking for a long trade of any sort.

[lukx]

well TRO i though I can see but unfourtanetely I took EG trade and lost:

There are 3 winning green rat reversal trades you could have taken after your loss. Why didn't you take any of those and make up for your loss plus some pips ?

I was busy at work, earning money for trading, to then pass it to eudamonia

[TheRumpledOne]

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

[TheRumpledOne]

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.


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The important part is to enter WITHIN 20 pips of the daily low. The RAT REVERSAL is only one entry method.

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"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."

[eudamonia]

well TRO i though I can see but unfourtanetely I took EG trade and lost:

There are 3 winning green rat reversal trades you could have taken after your loss. Why didn't you take any of those and make up for your loss plus some pips ?

I was busy at work, earning money for trading, to then pass it to eudamonia

Get on the right side of the trade lukx! I'm getting worn out from stealing all your cash

[bredin]

Bredin, I am zline-challenged. Would you mind pointing out the zline on lukx's chart?

Humble has marked it nicely on the chart he posted.

G.

[pman]

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.


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

The important part is to enter WITHIN 20 pips of the daily low. The RAT REVERSAL is only one entry method.

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

"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."

TRO - this may sound stupid but can I ask which indicators you are using there? Specifically which indicator are you using to show the lines along the daily low and 20 pips above the daily low with the box shaded, aswell as the narrations to the right of the graph showing D1 high, D1 low etc and qouting the current price at the top of the screen?

Cheers mate

[TheRumpledOne]

"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)

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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

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

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.
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