2009.09.10 DRAIN THE BANKS - LIKE A RAT

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TheRumpledOne
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Postby TheRumpledOne » Mon Feb 14, 2011 12:39 am

oktar:

Forget about the EA. EAs are for YALE STUDENTS.

Learn to trade a method manually, BEFORE attempting automation.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby tradervic1963 » Mon Feb 14, 2011 12:54 am

Well, if the EA proves that the strategy doesn't work, it may be worth taking a look at it. I personally believe in the RAT theory, the market always opens, makes the first high or low of the day then reverses and makes the second low or high of the day. The first high is always easy to spot, its right after the London open, you just have to wait for the reversal and jump in-a twenty pip box is a very generous entry point-and works for me.

Just one thought though, the rats may have beat the Yale students, but don't forget it was Yale graduates who designed the experiment to begin with...

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Postby TheRumpledOne » Mon Feb 14, 2011 2:20 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 (ClLo < 20): This is OPPORTUNITY

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

WHY ISN'T EVERYBODY DOING IT?

Most of you know I catch a lot of flak on my forums because SOME PEOPLE don't like the way I post.

One worn out argument that is used repeatedly is, "If this is so (simple, great, profitable, ), then why isn't everybody doing it?"

Simple answer is because SOYLENT GREEN is people!

We all know exercise is great, but how many actually exercise?

We all know smoking is bad, but how many do it anyway?

We all know which foods are bad for our health, but how many eat those foods?

We all know that we should save for our future and spend less than we earn but who does that?

The list is almost endless.

As long as there are people, there will always be some STUPID people and some smart people making STUPID decisions, where STUPID is defined as knowing better but acting otherwise.

Meanwhile, the RATS are still beating the Yale students.


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

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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Postby TheRumpledOne » Mon Feb 14, 2011 2:46 pm

tradervic1963 wrote:Well, if the EA proves that the strategy doesn't work, it may be worth taking a look at it. I personally believe in the RAT theory, the market always opens, makes the first high or low of the day then reverses and makes the second low or high of the day. The first high is always easy to spot, its right after the London open, you just have to wait for the reversal and jump in-a twenty pip box is a very generous entry point-and works for me.

Just one thought though, the rats may have beat the Yale students, but don't forget it was Yale graduates who designed the experiment to begin with...



"Well, if the EA proves that the strategy doesn't work,...."


Spoken like a true YALE STUDENT!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Relativity
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Postby Relativity » Mon Feb 14, 2011 2:48 pm

The strategy does work. Just keep trading ONE direction. Commit to it. When you trade this way, things will become ALOT more simpler since the only thing left to solve is timing.

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Postby TheRumpledOne » Mon Feb 14, 2011 2:54 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.

tradervic1963
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Postby tradervic1963 » Mon Feb 14, 2011 4:53 pm

TRO, I am not a Yale Student! Just brainwashed by years of working with EA's and fancy indicators and not getting anywhere. I believe the RAT system works and I'm in...I do believe the first hi/low after the London open is the higher probability trade though...

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TheRumpledOne
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Postby TheRumpledOne » Tue Feb 15, 2011 12:00 am

To make the RAT system work, you have to TRADE IT!

Trading this way is based on STATISTICS. Probability does not exist in trading. That being said, run the statistics on the high/low after the London open and show the results. The results will speak for themselves.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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1992 DREAM TEAM
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Postby 1992 DREAM TEAM » Tue Feb 15, 2011 4:39 am

Two questions

1. If I am charting with MT4 and placing orders with MBT navigator, which price do I use for rat trades? They are always a little different.

2. I remember TRO saying he uses MBT navigator and not the newer MBT desktop pro. Why?

rat
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BIAS ON RAT INDICATOR

Postby rat » Tue Feb 15, 2011 8:43 am

Greetings

1/ Must we wait for bias in weekly daily and hourly to be same then can go long or short when used the rat zone indicator ??

2/ when to trade this rat indicator best ? after london open ?

3/ why this forum website already have 50,000 site attacks ? :P
this is not wikileaks :lol:

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