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MightyOne
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Postby MightyOne » Sun Dec 14, 2008 5:20 pm

TheRumpledOne wrote:Image

I saw MightyOne's post on BabyPips:

Allow me to sum it all up for you

You can trade any pair that moves, we don't want to trade a pair that just sits there and does nothing.

What is a pair that moves? Check the daily average true range!
(up at the top: insert --> indicators ---> Oscillators ---> Average True Range: set average to 21.

(Do this when the market is closed unless you write an indi or are bored)

This is my rule: If the ATR 21 is not at least 150 right now then I am wasting my time with this pair! (Based on DAILY RANGE)

For day trading I would set up a list of pairs I would trade first:

Get a pen and paper and put each pair (with a major) in one of the 3 groups.

Multiply their tick value by their 21 ATR and create an ABC list:

A: Highest Value
B: High Value
C: No set ups in the other pairs.

A = Top 3 pairs
B = Next 2 best pairs
C = All the rest.
D = Less than 150 pip range (DON'T TRADE IT!)

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

That should give you an idea what to trade.


Thank you very much!
Now I can put the pen down :shock:

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MightyOne
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The "Zero Sum" Business

Postby MightyOne » Sun Dec 14, 2008 7:15 pm

Behold!

The truth behind support and resistance!



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TheRumpledOne
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PRICE IS THE SAME ON ALL CHARTS.

Postby TheRumpledOne » Sun Dec 14, 2008 7:22 pm

Image

PRICE IS THE SAME ON ALL CHARTS.

TRO_PRICE_IS_THE_SAME plots a line from the 1 min, 5 min, 15 min, 30 min and 60 min opens.

When you look at a 1 min chart, the data is condensed from a 1 tick chart into 1 min bars.

When you look at a 5 min chart, the data is condensed into 5 min bars.

When you look at a 60 min chart the data is even more condensed into 60 minute bars.

You have to UNDERSTAND this to KNOW what you are SEEING.

It may sound SIMPLISTIC but it is the ESSENCE of PRICE.

I have attached the indicators so you can play with them so perhaps you can finally SEE what I mean.
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TRO_PITS.zip
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IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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MightyOne
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The "Zero Sum" Business

Postby MightyOne » Sun Dec 14, 2008 7:26 pm

PART 2:

Can you imagine placing a trade to profit in a direction where there is almost no money left?

Consider that a professional will risk 1-2% of his account.

This means that when price moves a number of pips that equals ~2% of his account that he is out of the market and NO MORE of his money can be gained by any other trader.

So where do your massive profits come from?

The answer is the medium and long term traders who are IN PROFIT with medium to HUGE stop losses!
As day traders we each take turns filling the gap on these traders while at the same time filling the gap on other day traders using smaller charts!

Support and resistance just means that the money ran out in the direction being traded and for the size of the traders being targeted at that moment.

Think about a glass of water that is 2% full...
Do you want to take that traders drink? Is it worth it?
What about a glass that is over flowing into other cups...
Oh, you want that water now don't you!

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TheRumpledOne
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Re: The "Zero Sum" Business

Postby TheRumpledOne » Sun Dec 14, 2008 7:57 pm

MightyOne wrote: Behold!

The truth behind support and resistance!




The truth?

"THERE IS NO SPOON.

IT IS NOT THE SPOON THAT BENDS. IT IS ONLY YOURSELF."

THERE IS NO SUPPORT AND RESISTANCE, SUPPORT AND RESISTANCE EXIST ONLY IN YOUR MIND.

I am NOT JOKING!

The H1 chart people tell the M1 chart people that M1 is all noise.

The D1 chart people tell the H1 chart people that H1 is all noise.

The W1 chart people tell the D1 chart people that D1 is all noise.

H1, D1 and W1 are all CONCEPTS that exist only in YOUR MIND.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Re: The "Zero Sum" Business

Postby MightyOne » Sun Dec 14, 2008 8:27 pm

TheRumpledOne wrote:
MightyOne wrote: Behold!

The truth behind support and resistance!




The truth?

"THERE IS NO SPOON.

IT IS NOT THE SPOON THAT BENDS. IT IS ONLY YOURSELF."

THERE IS NO SUPPORT AND RESISTANCE, SUPPORT AND RESISTANCE EXIST ONLY IN YOUR MIND.

I am NOT JOKING!

The H1 chart people tell the M1 chart people that M1 is all noise.

The D1 chart people tell the H1 chart people that H1 is all noise.

The W1 chart people tell the D1 chart people that D1 is all noise.

H1, D1 and W1 are all CONCEPTS that exist only in YOUR MIND.


My reply in Babypips thread:

The funny thing about support and resistance is that most are looking for a breakout.
How then is price supported or resisted?
I would say that S&R create entries around them like a swarm of bees and then price moves to exits.
The magnitude of the move to the exits are similar to the strength of the support or resistance.

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

The picture above was meant to show why price corrects and moves to where it does.
PART 2 then further explains the "why."

You are right that there is no such thing as support and resistance, but price will stop (seemingly being resisted or supported) when there is very little "loss potential" in the current direction.

This happens on every chart where there is a move that shows a large group of traders are likely to be holding onto a fat profit that is yours for the taking.

Wouldn't the traders move their stops up?

You don't know what time frame they are watching; to them
it might look like a good idea to move to BE (as so many others do)
and get "zero lined" in the process.

Some body was fortunate enough to get a big piece of the pie (from a trader of a higher time frame) and smaller traders try to get that piece.

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TheRumpledOne
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Postby TheRumpledOne » Sun Dec 14, 2008 9:01 pm

Image

I modified the Level Sensor Indicator to use 2 colors. I added an input that tells the indicator at what level to change color.

I have the default at 50%. So if most number of "hits" on a price was 100, then if a price had move than 50 hits, it would be colored.

This is similar to MARKET PROFILE but it doesn't use volume.

This might help you SEE something about price.
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IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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TheRumpledOne
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Postby TheRumpledOne » Sun Dec 14, 2008 9:10 pm

If you think about PRICE, you may realize that for each open trade there is a "happy" price or TP and a "sad" price or SL.

A seller may sell to:

Stop loss
Take profit
Enter a Short Position.

A buyer may buy to:

Stop loss
Take profit
Enter a Long Position.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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TheRumpledOne
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Postby TheRumpledOne » Sun Dec 14, 2008 10:18 pm

Image

Looking for "easy money" gap trades.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Re: The "Zero Sum" Business

Postby razorboy » Mon Dec 15, 2008 12:50 am

If support and resistance exist in the minds of enough other traders - they manifest themselves in reality - that is really the only thing that matters - other people believe they exist - doesn't mean anything to me other than a good entry point


TheRumpledOne wrote:
MightyOne wrote: Behold!

The truth behind support and resistance!




The truth?

"THERE IS NO SPOON.

IT IS NOT THE SPOON THAT BENDS. IT IS ONLY YOURSELF."

THERE IS NO SUPPORT AND RESISTANCE, SUPPORT AND RESISTANCE EXIST ONLY IN YOUR MIND.

I am NOT JOKING!

The H1 chart people tell the M1 chart people that M1 is all noise.

The D1 chart people tell the H1 chart people that H1 is all noise.

The W1 chart people tell the D1 chart people that D1 is all noise.

H1, D1 and W1 are all CONCEPTS that exist only in YOUR MIND.

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