2009.09.10 DRAIN THE BANKS - LIKE A RAT

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ajaymein
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Postby ajaymein » Thu Oct 21, 2010 2:07 pm

TheRumpledOne wrote: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."

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

PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.


Shouldn't you enter within 20 pips of the daily low? Unless I am mistaken, you went short at the red line which doesn't follow the rat rules.

Just curious...i don't trade this method often but keep up with it.

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tmanbone
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Postby tmanbone » Thu Oct 21, 2010 2:19 pm

The trade was entered @ 1.5748 or lower and exited @ 1.5777, eyeballing it. The red rat plot triggered after the long trade.
"The simplicity of the markets is it's greatest disguise"

T

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Postby ajaymein » Thu Oct 21, 2010 2:53 pm

Ahh, gotcha...the red line makes more sense now.

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Postby SmellyTerror » Thu Oct 21, 2010 3:54 pm

Is this the right place to ask about mechanics? Otherwise I could start a thread?

Long story short: does anyone have any tips for setting up MBT Navigator to trade the Rats?
(you can skip the rest of the post, it's mostly waffle)

...basically, I'm paper-trading the Rat on MBT Navigator. In the short time I?ve been doing this, I've been comfortably making my 10 pips a day. Another few weeks of that and I'll throw in my money. And TRO's not kidding about not needing indicators - I don't, I just trade the system direct from the charts (I'm using MBT to trade, and IB for charts - simply because it's available) and it's working. I make (pretend) money.

So far so good.

What I'd like to see is if anyone has tips setting up and using MBT Nav. At the moment I've got minor problems with setting up an entry: that is, it's too slow and potentially error prone to type in the right stop and limit to enter. I end up manually entering at market - but I'm trading EUR/USD at busy times, so the spread is tight enough to make that reasonable. Not optimal, but it'll do me, and I'm making my pips, so yay for me.

It's the exits that are a real pain: I can't find any quick way to adjust stops. The hotkey system seems pretty rudimentary. It's left me with a simple (but painful) exit: I have a 10 pip stop, but any other exit is done by using one hotkey to close all orders, then a second hotkey to close all positions. It's painful for three reasons: 1. I have to cancel my stop before it will let me close all positions (if I don't, nothing happens), and that means a delay of one or two seconds while that gets processed; 2. This also means that, for two seconds, *I have no stop*. If I have a power failure I could be very, VERY screwed; 3. I can't scale out of positions. It?s point 2 that'll be the real killer for me when I go to a paid-up account.

The only alternative I can see is to re-configure the order doodad once a position is open, ready to scale out at market with no attached stop. Again, that's do-able, but 1. It's a pain, slow to set up, and prone to human error; 2. Once I exit (I think) I'd still have that original stop still sitting down there, needing to be cancelled. Again, if I have a power failure that order could be triggered, and I could be in some real trouble.

What I want is to be able to do, very simply, is exit all positions and close all open orders with a single key-stroke. Anything else people can suggest is bonus.

(Incidentally: IB lets you set up a stop -> limit +x order, and place that direct on the chart (so it fills in the numbers for you), complete with attached stop - so you can have it all pre-configured, then just click it on the top of a green-bar. In goes the order with a nice clear line on the chart. Another line shows where your stop is. Once the position is open you can adjust the stop just by dragging it (again, all displayed on the chart), and you can exit instantly simply by dragging the stop up past the price. That?s pretty much perfect, IMO. My problem with IB is that - in the demo account - any order takes a month to fill. You can plonk your entry line deep into the ask, and it still won't fill half the time. I gather this is an issue / bug with the demo account, but I've also heard some horror stories about the live account, too. Unless I can get someone to confirm IB works well on a live account, I'm going to stick with MBT).

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Postby tmanbone » Mon Oct 25, 2010 7:10 pm

TRO being interviewed by Traders Interviews about the Rat.

http://www.traderinterviews.com/wimpy_m ... on-TROFree
"The simplicity of the markets is it's greatest disguise"



T

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Postby trueblueTEX » Mon Oct 25, 2010 7:18 pm

*** S W E E T ***

Thanks, Tman, I'm listening to TRO, now!!!

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Postby trueblueTEX » Tue Oct 26, 2010 12:21 am

Well, I at least got 2 pips :-)


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TheRumpledOne
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Postby TheRumpledOne » Tue Oct 26, 2010 1:32 pm

Image


"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.

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

PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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ajaymein
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Postby ajaymein » Tue Oct 26, 2010 2:18 pm

RESULTS IN THE MAKING

Image

I don't even trade this method but I love it. :smt048

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TheRumpledOne
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Postby TheRumpledOne » Tue Oct 26, 2010 2:20 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."

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

PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.
__________________
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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