2009.09.10 DRAIN THE BANKS - LIKE A RAT

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tfg
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Re: How do you know when the daily high or low has been reac

Postby tfg » Fri Feb 11, 2011 8:27 am

Avery, all your RAT statistical analysis, however, are calculated based on daily high/low. Therefore, the RAT edge i.e. "two out of three RAT reversal trades likely be a winner" theoretically speaking could only be achieved if the trades are taken within 20pips of daily high/low.

If after taking the trades within the current high/low, the price then makes a new high/low. This immediately put your trades out of the RAT edges identified by the stats and the trade will statistically likely (not always if you are lucky) become a loser.

Although you can't (and don't know) if the current high/low is the ultimate daily high/low, RATs are willing to take the risk to find out?

Am I making sense? Please enlighten...

TheRumpledOne wrote:
tradervic1963 wrote:TRO, How exactly do you know when the daily high or low has been reached? Isn't only until the day is over and price action is complete for that 24 hour period that you can determine exactly what the high or low was for that day? Price could open, make a high, drop and then near the end of the day retrace to higher than it was right before the day opened. Do the donational indicators clarify that the high or low has been made for the day? I want to believe but my brain is so addled from technical trading that I don't get it!


You do NOT know until after the day is over what the high and low price are for the day. But you do know that sooner or later as price makes a new high or new low that the high will be the high of the day and the low will be the low of the day.

Nothing can tell you what the high and low is until the day is over.

But the RAT doesn't have to know. The RAT accepts the "not knowing" and acts accordingly. And that is why the RAT beats the Yale students.

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Postby TheRumpledOne » Fri Feb 11, 2011 12:58 pm

Image

<-------------------------------------------------------------------->

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

<-------------------------------------------------------------------->

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

<-------------------------------------------------------------------->

Trading is GUESSING. If it wasn't, you wouldn't need a STOP LOSS.

THINK ABOUT IT!!


<-------------------------------------------------------------------->

MAXIMUM RISK = 2% * ACCOUNT BALANCE.

STOP LOSS = 10 PIPS. (INCLUDING SPREAD)

POSITION SIZE = RISK / STOP LOSS.

<-------------------------------------------------------------------->

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.

<-------------------------------------------------------------------->

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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Re: How do you know when the daily high or low has been reac

Postby TheRumpledOne » Fri Feb 11, 2011 1:07 pm

tfg wrote:....

If after taking the trades within the current high/low, the price then makes a new high/low. This immediately put your trades out of the RAT edges identified by the stats and the trade will statistically likely (not always if you are lucky) become a loser.


What makes you think this puts the trade out of the RAT edges?

The trade does not have to become a loser.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby TheRumpledOne » Fri Feb 11, 2011 2:18 pm

Image

Someone asked about trading time frames other than M5.

PRICE IS THE SAME ON ALL CHARTS. You are NOT trading charts, you are trading price.


<-------------------------------------------------------------------->
DRAIN THE BANKS - LIKE A RAT

for H1 (60 MINUTE) CHARTS.

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

2) Red H1 candle closes within 20 pips of the current daily low

3) Go long when current H1 candles is green

4) STOP LOSS IS 10 PIPS

5) Take whatever profit you can.

6) If the rules do not mention it, then it is of no concern.


<-------------------------------------------------------------------->

MAXIMUM RISK = 2% * ACCOUNT BALANCE.

STOP LOSS = 10 PIPS. (INCLUDING SPREAD)

POSITION SIZE = RISK / STOP LOSS.

This is how you make 2% per day.
<-------------------------------------------------------------------->

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

Today, I am using the MO REVERSALS indicator that I coded.

<-------------------------------------------------------------------->

Trading is GUESSING. If it wasn't, you wouldn't need a STOP LOSS.

THINK ABOUT IT!!

<-------------------------------------------------------------------->

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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Re: How do you know when the daily high or low has been reac

Postby tfg » Fri Feb 11, 2011 2:31 pm

...because the RAT stats (on which the RAT edge is based) was calculated using the historical daily high/low (ie. after the trading day is complete.), not the current daily high/low at a time.

If the current high/low (within the 20 pips )on which you entered a RAT trade at a time subsequently turns out to be the daily high/low after the trading day close, obviously the RAT edge exists and supported by the RAT stats.

However, if the current high/low (within the 20 pips )on which you entered a RAT trade at a time subsequently is superseded by a new daily high/low, clearly the trade was not entered (within 20 pips) of the true daily high/low on which RAT stats/edge was calculated. Therefore, by definition, there is no RAT edge or not yet proven an edge.

Although a trade may always have a chance not to turn out as a loser in the absence of an edge, this is not a RAT trade to the definition that I understand?

Avery, I am just trying to clarify my own mind. I don't understand why the RAT trade also work for me on the current high/low that don't become the daily/low despite RAT stats was not calculated on the currently high/low at a time. for me. Am I missing something?




TheRumpledOne wrote:
tfg wrote:....

If after taking the trades within the current high/low, the price then makes a new high/low. This immediately put your trades out of the RAT edges identified by the stats and the trade will statistically likely (not always if you are lucky) become a loser.


What makes you think this puts the trade out of the RAT edges?

The trade does not have to become a loser.

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Postby tradervic1963 » Fri Feb 11, 2011 2:47 pm

So really, since we do not know what the real high or low will be (or was) until the end of the day, all we can do is take the current high or low, assume that this will be the actual high or low for the day, wait for price to reverse, and then jump into the trade with a ten pip stop loss. Its that easy, but statistically speaking will beat the Yale student in the long run?

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Postby tradervic1963 » Fri Feb 11, 2011 4:13 pm

Thanks Tokyo Drifter! and thank you TRO, I think I get it now. Let the forward testing begin...

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Re: How do you know when the daily high or low has been reac

Postby TheRumpledOne » Fri Feb 11, 2011 6:52 pm

tfg wrote:...because the RAT stats (on which the RAT edge is based) was calculated using the historical daily high/low (ie. after the trading day is complete.), not the current daily high/low at a time.

If the current high/low (within the 20 pips )on which you entered a RAT trade at a time subsequently turns out to be the daily high/low after the trading day close, obviously the RAT edge exists and supported by the RAT stats.

However, if the current high/low (within the 20 pips )on which you entered a RAT trade at a time subsequently is superseded by a new daily high/low, clearly the trade was not entered (within 20 pips) of the true daily high/low on which RAT stats/edge was calculated. Therefore, by definition, there is no RAT edge or not yet proven an edge.

Although a trade may always have a chance not to turn out as a loser in the absence of an edge, this is not a RAT trade to the definition that I understand?

Avery, I am just trying to clarify my own mind. I don't understand why the RAT trade also work for me on the current high/low that don't become the daily/low despite RAT stats was not calculated on the currently high/low at a time. for me. Am I missing something?




TheRumpledOne wrote:
tfg wrote:....

If after taking the trades within the current high/low, the price then makes a new high/low. This immediately put your trades out of the RAT edges identified by the stats and the trade will statistically likely (not always if you are lucky) become a loser.


What makes you think this puts the trade out of the RAT edges?

The trade does not have to become a loser.



You are OVER THINKING THIS... Perhaps, you are YALE MATERIAL!

http://admissions.yale.edu/freshman-application-process
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.

tfg
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Re: How do you know when the daily high or low has been reac

Postby tfg » Fri Feb 11, 2011 8:11 pm

I rest my case and will not bring this up again.

It seems the point that I made here is of no existing RAT traders' concern and the answer to my question is simply "over-thinking" as far as RAT trading goes.

Thanks.

TheRumpledOne wrote:
tfg wrote:...because the RAT stats (on which the RAT edge is based) was calculated using the historical daily high/low (ie. after the trading day is complete.), not the current daily high/low at a time.

If the current high/low (within the 20 pips )on which you entered a RAT trade at a time subsequently turns out to be the daily high/low after the trading day close, obviously the RAT edge exists and supported by the RAT stats.

However, if the current high/low (within the 20 pips )on which you entered a RAT trade at a time subsequently is superseded by a new daily high/low, clearly the trade was not entered (within 20 pips) of the true daily high/low on which RAT stats/edge was calculated. Therefore, by definition, there is no RAT edge or not yet proven an edge.

Although a trade may always have a chance not to turn out as a loser in the absence of an edge, this is not a RAT trade to the definition that I understand?

Avery, I am just trying to clarify my own mind. I don't understand why the RAT trade also work for me on the current high/low that don't become the daily/low despite RAT stats was not calculated on the currently high/low at a time. for me. Am I missing something?




TheRumpledOne wrote:
tfg wrote:....

If after taking the trades within the current high/low, the price then makes a new high/low. This immediately put your trades out of the RAT edges identified by the stats and the trade will statistically likely (not always if you are lucky) become a loser.


What makes you think this puts the trade out of the RAT edges?

The trade does not have to become a loser.



You are OVER THINKING THIS... Perhaps, you are YALE MATERIAL!

http://admissions.yale.edu/freshman-application-process

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Postby tmanbone » Fri Feb 11, 2011 10:41 pm

Image

Beware the zone moves. Don't forget your exit playbook.
"The simplicity of the markets is it's greatest disguise"

T

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