2009.09.10 DRAIN THE BANKS - LIKE A RAT

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TheRumpledOne
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Postby TheRumpledOne » Mon Nov 22, 2010 1:15 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 Nov 22, 2010 2:01 pm

KrystalSkull wrote:Thanks TRO for the wonderful indicators ..... love ya work, awesome job!

Questions:

If we are looking only to make maximum 5 trades per day and the first 3 trades are losers,

do we still make the next 2 trades on the same currency in order to try and catch the reversal,

or do you look for another pair of interest?

Also have you or anyone noticed if the odds are higher in sticking to one currency pair (per day)

even if the H1 bias turns against you, or again find a new pair that has the H1 bias in your favor?

at the same time trying to find a pair that is also above the daily and weekly open (if you are a green rat)?


The maximum 5 trades per day is where you start to go astray.

If you have 3 losing trades in a row. It's time to take a TIME OUT and regain focus. Obviously, you are not SEEING what price is doing in the moment. Instead, you are ANTICIPATING (incorrectly) what price will do in the future.

Wouldn't it be foolish to switch pairs AFTER 3 losses in a row when you "know" price will eventually move in your direction?

All you have to do is WAIT.

Can you do that?

Or should you be seeking admittance to Yale?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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KrystalSkull
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Postby KrystalSkull » Mon Nov 22, 2010 2:50 pm

OK got it! .... yep Yale question for sure!

ZEN
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Postby ZEN » Mon Nov 22, 2010 3:20 pm

TheRumpledOne wrote:
KrystalSkull wrote:Thanks TRO for the wonderful indicators ..... love ya work, awesome job!

Questions:

If we are looking only to make maximum 5 trades per day and the first 3 trades are losers,

do we still make the next 2 trades on the same currency in order to try and catch the reversal,

or do you look for another pair of interest?

Also have you or anyone noticed if the odds are higher in sticking to one currency pair (per day)

even if the H1 bias turns against you, or again find a new pair that has the H1 bias in your favor?

at the same time trying to find a pair that is also above the daily and weekly open (if you are a green rat)?


The maximum 5 trades per day is where you start to go astray.

If you have 3 losing trades in a row. It's time to take a TIME OUT and regain focus. Obviously, you are not SEEING what price is doing in the moment. Instead, you are ANTICIPATING (incorrectly) what price will do in the future.

Wouldn't it be foolish to switch pairs AFTER 3 losses in a row when you "know" price will eventually move in your direction?

All you have to do is WAIT.

Can you do that?

Or should you be seeking admittance to Yale?


Absolutly wonderfull, absolutly wonderfull, pur zen! Thanks TRO!
Today it's better!

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TheRumpledOne
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Postby TheRumpledOne » Mon Nov 22, 2010 6:51 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!



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TheRumpledOne
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Postby TheRumpledOne » Mon Nov 22, 2010 7:00 pm

ZEN wrote:Absolutly wonderfull, absolutly wonderfull, pur zen! Thanks TRO!


BE THE LEAF!

http://www.youtube.com/watch?v=XK_4Z5DZcNM
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby maddman » Mon Nov 22, 2010 10:51 pm

Go With The Flow...

wkestler
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Postby wkestler » Mon Nov 22, 2010 11:05 pm

TRO, What does the red arrow means in your last chart?

Thanks,

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Postby TheRumpledOne » Mon Nov 22, 2010 11:09 pm

The Red Arrows are RED RAT REVERSALS.


RED RAT REVERSAL - SHORT ENTRY CRITERIA: 1) GREEN CANDLE CLOSES 2) RED CANDLE CLOSES 3) PRICE TOUCHES LOW OF PREVIOUS RED CANDLE - ENTER SHORT. STOP LOSS IS ALWAYS 10 PIPS.


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 BUT the RAT REVERSAL entry works ANYWHERE on the chart.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby PebbleTrader » Tue Nov 23, 2010 12:49 am

"We look backward too much and we look forward too much; thus we miss the only eternity of which we can be absolutely sure - the eternal present, for it is always now." - William Phelps

NOW is the only moment that matters!
Life is just a journey

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