2009.09.10 DRAIN THE BANKS - LIKE A RAT

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tmanbone
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Postby tmanbone » Wed Oct 06, 2010 11:18 am

"The simplicity of the markets is it's greatest disguise"

T

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Postby tmanbone » Wed Oct 06, 2010 12:06 pm

TRO,

Do you buy market, instead of limit in, a percentage of the time? Thanks

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"The simplicity of the markets is it's greatest disguise"



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Postby TheRumpledOne » Wed Oct 06, 2010 12:11 pm

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

Current price - current daily low is less than 20.

ClLo <= 20
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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Postby TheRumpledOne » Wed Oct 06, 2010 12:17 pm

pika wrote:Hi TRO,

I've posted the questions below in another thread (Data Mining) but since we are on this page which is more relevant perhaps I'll ask the same questions again. Hope you can advice. Thank you.

"I am not exactly sure why we can't be a green and red rat at the same time. Since the daily high and daily low will not happen at the same time, that means we can apply the same method to both ends of the daily candle right?

Is there not a time when we should change the color of our rat, such as when we see a trend reversal in the longer time frame (i.e. weekly, monthly)?"



"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)

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

You sound like a YALE STUDENT.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby TheRumpledOne » Wed Oct 06, 2010 12:18 pm

tmanbone wrote:TRO,

Do you buy market, instead of limit in, a percentage of the time? Thanks

Image


For entry I always use limit orders.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby TheRumpledOne » Wed Oct 06, 2010 12:34 pm

Image

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

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."

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PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.
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Postby trueblueTEX » Wed Oct 06, 2010 12:45 pm

TRO,

Regarding Limit orders: to place a Buy Limit, price already has to be ABOVE the Buy Limit price you put in.

So do you do the following:
1) red candle closes
2) green candle closes
3) wait till price is above high of Green candle and put in a Buy Limit so that when price falls back down to that level the Buy is activated

Is that what you do?

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Postby TheRumpledOne » Wed Oct 06, 2010 1:00 pm

When I can buy at the price I want, I enter a limit order.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby trueblueTEX » Wed Oct 06, 2010 1:07 pm

Is the price-you-want always the high of the previous green candle? Or do you even put it lower, sometimes, or even pick a price that might have corresponded to a green candle a few candles ago instead of the most recent one?

You still are putting in the order while price is CURRENTLY above the price you want to enter on, correct?

I'm just trying to get my head around this with MT4.

Thanks!!

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tmanbone
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Postby tmanbone » Wed Oct 06, 2010 1:16 pm

Note the green, red, bid, ask lines in my chart. A lot of times the spread is wider than the price you want in. In the below example price wouldn't have picked up your order. TRO does mention the most important part is to get in, in the rat zone. What about this idea? Try to get the best price you can within the rat zone, whatever it takes. The sweetspots keep calling my name.

Image
"The simplicity of the markets is it's greatest disguise"



T

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