2009.09.10 DRAIN THE BANKS - LIKE A RAT

[TheRumpledOne]

I have been thinking for the whole day today, and all I have, not very breaking through though, is:

RAT REVERSAL ENTRY WORKS ANYWHERE ON THE CHART.
Knowing that price going off the bottom will most likely continue to move in upward direction I will take every (since there are no filters) next RAT REVERSAL ENTRY (not only in the 20p. off the extremes) to follow this movement, until the opposite extreme is reached (by which I do not mean I set TP over there).
'BREAKOUT CAUTIONS REVERSAL- - let RED RATS have their turn.

Still I am not sure, if that is what I was supposed to see.

No, not quite what I had in mind.

Keep looking!!

[TheRumpledOne]

Working on a new indicator... TRO_HOLO

HO = Highest Open

LO = Lowest Open

Remember the 3 Level ZZ Semafor indicator? Lots of people didn't like it because they thought it "repainted".

TRO_HOLO determines the highest and lowest OPEN PRICE over the last 34 bars (User Input) and plots a line there. I use 34 because the 3 of the 3 Level ZZ Semafor is the 34 period High/low. TRO_HOLO also determines the highest and lowest OPEN PRICE over the last 34 bars starting with the bar that precedes the bar it just found and plots a line there.

So you have 2 low opens and 2 high opens.

Q1) What do you see?

Q2) How can you use that to be profitable?

HINT: The OPEN PRICE is the ONLY price of a bar/candle that DOES NOT MOVE once it has been plotted!!

[TheRumpledOne]

Does this help you see?

[TheRumpledOne]

Now what do you see?

[slingblade]

Blue is NY, Yellow Asian, Maroon London. Look and SEE. Now you tell me if it matters.

Frankly, I'm beginning to see that I'm having difficulty seeing much at all. I'm seeing that I tend to gravitate towards a rule which means I don't have to understand, just follow the rule. But after "seeing" that simply taking a rat reversal anywhere on the chart doesn't seem to get me the cheese I need I'm left wondering if there isn't more nuance to being a rat. I'm suspicious that there is something else to look for in order to "know" that a good setup is at hand.
The GPS seems to be a good indicator of that as it highlights rat zones. But the idea of the broker's time not mattering is throwing me as daily highs/lows are suddenly perspective dependent. Time frame not mattering isn't as hard to swallow, I get that price is the same on all TF's.

What I see from your graphic is that price makes highs/lows and reverses in all market times. Am I missing something else? I might as well draw a line anywhere on the chart.

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.

Did you ride the first part of number 2?

I'm a green rat.

No, I have not limited my entries to within 20 pips of the daily low. I have the hobbling necessity of a day job which means that I can only trade for about 1.5 hours each morning beginning at the NY open. I have tried to limit myself to 2 pairs: GBP/USD and the EUR/JPY as I didn't want to overwhelm myself with too much to watch.

Would you advise me to use the Navigator GPS indicator so that there is more likelihood of a "best" trade opportunity?

[TheRumpledOne]

You can use any indicator that tells you how far price has moved from the current daily low.

[unreconciled]

From what I see, two lines (of one kind) make a zone that looks like a nice s/r.
Price crossing both of them gives a profit opportunity.

Boosted version of dynamic s/r? :)

[TheRumpledOne]

unreconciled... you are getting warmer!

[slingblade]

I've noticed from the pics you've posted from your trades here that often the strongest moves out of the rat zone happen with the second rat reversal( on the M5 trades anyway), after a retest of the low.

[TheRumpledOne]

HINT: Look for something that is ALWAYS true, no matter what time frame.