2009.09.10 DRAIN THE BANKS - LIKE A RAT

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pika
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Postby pika » Sat Nov 13, 2010 5:03 am

ajaymein wrote:Hey pika...why don't you try multiple colors for different pairs for a week and see how you do. That will give you a true answer that you will actually experience.
pika wrote:
skivers wrote:
pika wrote:
TheRumpledOne wrote:A sixth sense do NOT necessarily make you a YALE Student.

Let's clear things up:

1) To trade like a RAT is to ALWAYS trade in ONE DIRECTION - either LONG or SHORT. Once you pick a "team", you can't switch.

2) The "within 20 pips of the daily high/low" is the BEST possible entry to get the maximum run.


Hi TRO,
On point (1), do you mean always trade in one direction for ALL pairs? Can I choose to be always green for some pairs and always red for others, and I won't switch the colour of each pair after I have decided on their colours? You will probably quote the experiment where the rat beat Yale students by committng to one direction, but I still cannot fully understand this.


Here's my take on it.

The market is random - It can go up - It can go down.

If you choose to go long AND short - YOU are being random.

Or you can choose to be consistent and trade ONE DIRECTION.

Now you have a true 50/50 chance of being right - All you need now is a little edge to tip that balance.


Hi skivers,
Thank you for your response. I can fully understand the point you are making. This is where I do not differ from the point that once a colour has been selected, I do not switch it. The question I am asking is whether I can choose different colours for different pairs and stick to them. The rules do not mention this, so does it mean this approach is of no concern and I can do it without compromising the edge?
So far my experience with M5 chart is the choice of colour doesn't really matter as long as I enter a trade within 20 pips from the day's high or low in the opposite direction consistently - eventually there will be a net gain. This is why I'd like to understand the context of TRO's statement regarding the choce of only 1 colour.

I believe this 'one direction' rule may apply to trades based on longer time frames like H1 and above, but not necessary for short time frames like M5. Think about it, if we trade M5 chart and only need 20 pips to meet 1-3% for the day, the chance of achieving this from prices fluctuating from the daily high or low is pretty high isn't it? For longer time frames, there will be less opportunity to do likewise since there are fewer bars to test the daily high or low, hence sticking to one colour makes sense. From a scale perspective, trading M5 chart over a day = trading H1 chart over 12 days. OK, I may get slammed again for being Yale like, but I don't think it matters if I can gain some rat wisdom in exchange. :)

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Postby SmellyTerror » Sat Nov 13, 2010 6:45 am

eudamonia wrote:Even if you don't have a 6th sense you can always fall back on simple observation:

Trade 1: I'm surprised this was even a valid trade. Momentum went immediately against you. Even if you didn't have a spidy sense you could have exited after a couple of minutes when price never went 1 pip in your favor. Loss = bid/ask spread (maybe 3 pips with slippage)

Trade 2: After a large green candle the trade entry candle barely closes above its open. Can we say lack of momentum? Exit at scratch


Trade 3: Honestly this trade was barely better than the first two. Once we start losing momentum I would be out by the middle of that 2nd red candle for probably -4. I would then have re-entered as bears fail to push us to new lows (if they can't go one way they have to go the other). Probably re-enter at the same price in the 1st third of that large green candle. Take my 10-15 pips and get out of dodge.

My largest loser is no more than 5 pips and I made 3-6 pips. Not bad considering there were a lot of fakeouts going on in that move.

Obviously not "pure" rat trading - but that's just how I would have taken the trades (and did take very similar trades on the Eur/Usd)


Assuming you're referring to the TRO post quoted by Skivvers: TRO actually said there were reasons not to have entered those trades. He didn't say there were reasons to have exited early.

"Do you see a reason not to enter those trades?"

So yeah, I'm still pretty stumped on what he was talking about.

(although I don't know where that first green arrow comes from - there's no entry there that I can see - but the second and third entries seem valid to me...)

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Postby The_Snowman » Sat Nov 13, 2010 12:58 pm

ajaymein wrote:Maybe a rule #8 that says DO NOT THINK, USE YOUR EYES would help


Rule #9 - after losing 3 trades, just go with the trend......... DOH :roll:

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Postby ajaymein » Sat Nov 13, 2010 4:50 pm

Well there you go. If it's making you pips, then why do you want someone tell you if you should make pips trading that way or not? ;-)

pika wrote:
ajaymein wrote:Hey pika...why don't you try multiple colors for different pairs for a week and see how you do. That will give you a true answer that you will actually experience.
pika wrote:
skivers wrote:
pika wrote:
TheRumpledOne wrote:A sixth sense do NOT necessarily make you a YALE Student.

Let's clear things up:

1) To trade like a RAT is to ALWAYS trade in ONE DIRECTION - either LONG or SHORT. Once you pick a "team", you can't switch.

2) The "within 20 pips of the daily high/low" is the BEST possible entry to get the maximum run.


Hi TRO,
On point (1), do you mean always trade in one direction for ALL pairs? Can I choose to be always green for some pairs and always red for others, and I won't switch the colour of each pair after I have decided on their colours? You will probably quote the experiment where the rat beat Yale students by committng to one direction, but I still cannot fully understand this.


Here's my take on it.

The market is random - It can go up - It can go down.

If you choose to go long AND short - YOU are being random.

Or you can choose to be consistent and trade ONE DIRECTION.

Now you have a true 50/50 chance of being right - All you need now is a little edge to tip that balance.


Hi skivers,
Thank you for your response. I can fully understand the point you are making. This is where I do not differ from the point that once a colour has been selected, I do not switch it. The question I am asking is whether I can choose different colours for different pairs and stick to them. The rules do not mention this, so does it mean this approach is of no concern and I can do it without compromising the edge?
So far my experience with M5 chart is the choice of colour doesn't really matter as long as I enter a trade within 20 pips from the day's high or low in the opposite direction consistently - eventually there will be a net gain. This is why I'd like to understand the context of TRO's statement regarding the choce of only 1 colour.

I believe this 'one direction' rule may apply to trades based on longer time frames like H1 and above, but not necessary for short time frames like M5. Think about it, if we trade M5 chart and only need 20 pips to meet 1-3% for the day, the chance of achieving this from prices fluctuating from the daily high or low is pretty high isn't it? For longer time frames, there will be less opportunity to do likewise since there are fewer bars to test the daily high or low, hence sticking to one colour makes sense. From a scale perspective, trading M5 chart over a day = trading H1 chart over 12 days. OK, I may get slammed again for being Yale like, but I don't think it matters if I can gain some rat wisdom in exchange. :)
:wink: :wink:

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Postby TheRumpledOne » Sun Nov 14, 2010 4:21 am

Image

TRO2010_OHLC_HIST shows:

TOP LINE: if the open is above or below the previous open.

NEXT LINE: if the high is above or below the previous high.

NEXT LINE: if the low is above or below the previous low.

BOTTOM LINE: if the close is above or below the previous close.

Can you RATS SEE a pattern?
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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pika
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Postby pika » Sun Nov 14, 2010 6:18 am

ajaymein wrote:Well there you go. If it's making you pips, then why do you want someone tell you if you should make pips trading that way or not? ;-)

pika wrote:
ajaymein wrote:Hey pika...why don't you try multiple colors for different pairs for a week and see how you do. That will give you a true answer that you will actually experience.
pika wrote:
skivers wrote:
pika wrote:
TheRumpledOne wrote:A sixth sense do NOT necessarily make you a YALE Student.

Let's clear things up:

1) To trade like a RAT is to ALWAYS trade in ONE DIRECTION - either LONG or SHORT. Once you pick a "team", you can't switch.

2) The "within 20 pips of the daily high/low" is the BEST possible entry to get the maximum run.


Hi TRO,
On point (1), do you mean always trade in one direction for ALL pairs? Can I choose to be always green for some pairs and always red for others, and I won't switch the colour of each pair after I have decided on their colours? You will probably quote the experiment where the rat beat Yale students by committng to one direction, but I still cannot fully understand this.


Here's my take on it.

The market is random - It can go up - It can go down.

If you choose to go long AND short - YOU are being random.

Or you can choose to be consistent and trade ONE DIRECTION.

Now you have a true 50/50 chance of being right - All you need now is a little edge to tip that balance.


Hi skivers,
Thank you for your response. I can fully understand the point you are making. This is where I do not differ from the point that once a colour has been selected, I do not switch it. The question I am asking is whether I can choose different colours for different pairs and stick to them. The rules do not mention this, so does it mean this approach is of no concern and I can do it without compromising the edge?
So far my experience with M5 chart is the choice of colour doesn't really matter as long as I enter a trade within 20 pips from the day's high or low in the opposite direction consistently - eventually there will be a net gain. This is why I'd like to understand the context of TRO's statement regarding the choce of only 1 colour.

I believe this 'one direction' rule may apply to trades based on longer time frames like H1 and above, but not necessary for short time frames like M5. Think about it, if we trade M5 chart and only need 20 pips to meet 1-3% for the day, the chance of achieving this from prices fluctuating from the daily high or low is pretty high isn't it? For longer time frames, there will be less opportunity to do likewise since there are fewer bars to test the daily high or low, hence sticking to one colour makes sense. From a scale perspective, trading M5 chart over a day = trading H1 chart over 12 days. OK, I may get slammed again for being Yale like, but I don't think it matters if I can gain some rat wisdom in exchange. :)
:wink: :wink:


As I've mentioned, I am curious about the context of TRO's one direction rule and hope to learn more. I have shared my thoughts and do not assume they are perfect. There may be others who see things differently and I'm sure there is no harm with sharing in a sincere and constructive manner to learn from each other. It's ok if nobody is interested or curious enough to discuss this topic. We can move on.

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MightyOne
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Postby MightyOne » Sun Nov 14, 2010 10:34 am

Not exactly in the rule book but here it goes:

http://i52.tinypic.com/308ccic.gif

http://i55.tinypic.com/func08.gif

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Postby genlogins » Sun Nov 14, 2010 11:12 am

hey MO, from thos picrues above, what means BO?
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skivers
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Postby skivers » Sun Nov 14, 2010 11:19 am

MightyOne wrote:Not exactly in the rule book but here it goes:

http://i52.tinypic.com/308ccic.gif

http://i55.tinypic.com/func08.gif


Interesting- You took two shots after the same higher high with a +3 followed by +17 - that little green price rejection candle gave you the reason to get in again.
Last edited by skivers on Sun Nov 14, 2010 11:28 am, edited 1 time in total.

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Postby MightyOne » Sun Nov 14, 2010 11:27 am

skivers wrote:
MightyOne wrote:Not exactly in the rule book but here it goes:

http://i52.tinypic.com/308ccic.gif

http://i55.tinypic.com/func08.gif


Interesting- You took two shots after the same higher high with a +3 followed by +17 - that little green price rejection candle gave you the reason to get in again.


I was saying that you either would have made 3 pips or possibly get stopped out or up to 17 pips if you didn't get picked off.

I should point out that I am a Macro Rat...

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