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2012 DRAIN THE BANKS LIKE A RAT .... CONTINUED

Posted: Mon Jan 02, 2012 2:10 pm
by TheRumpledOne
2012 DRAIN THE BANKS LIKE A RAT .... CONTINUED


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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)

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"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

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1) Price within 20 pips of the daily low (ClLo < 20): This is OPPORTUNITY

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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.

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PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.

Posted: Tue Jan 03, 2012 10:50 am
by newscalper
TRO - I've been studying the London Close methodology which has many many similarities to your RAT method. Would it be fairly simple to ammend the rat zone indicator such that iBreakOutPips (that's the outside line of the rat zone I think), rather than being a fixed number of pips is set as a % of ATR(5)?

Thanks

Edit - actually scratch that - the rat zone indi is too complicated I think, just ammending TRO trade lines will do it as the ATR code is already there I think?

Posted: Tue Jan 03, 2012 3:33 pm
by TheRumpledOne
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<-------------------------------------------------------------------->

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.

Posted: Tue Jan 03, 2012 6:02 pm
by newscalper
Here it is, it's a complete hack of one of TROs indis to use for the London Close strategy but seems to work OK.

I tried to use TRO_TRADE_LINES_ohlm but couldn't get it to work for some reason so used TRO_ATR_LINES which is pretty much the same code but just for the ATR bit, so there's another indi in there for Daily ATR for that reason.
Session hours are set for my broker and UK so you'll need to change those.

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Posted: Tue Jan 03, 2012 9:13 pm
by TheRumpledOne
All You Need To Trade Is A Horizontal Line

http://youtu.be/IFJFuJ6-tQY

Posted: Tue Jan 03, 2012 10:00 pm
by TheRumpledOne
THERE IS NO TREND!

http://youtu.be/rnPMI4lOq8E

Posted: Tue Jan 03, 2012 11:36 pm
by MightyOne
TheRumpledOne wrote:THERE IS NO TREND!

http://youtu.be/rnPMI4lOq8E


Are we calling it statistical range from now on? :wink:

Posted: Wed Jan 04, 2012 12:27 am
by MightyOne
newscalper wrote:TRO - I've been studying the London Close methodology which has many many similarities to your RAT method. Would it be fairly simple to ammend the rat zone indicator such that iBreakOutPips (that's the outside line of the rat zone I think), rather than being a fixed number of pips is set as a % of ATR(5)?

Thanks

Edit - actually scratch that - the rat zone indi is too complicated I think, just ammending TRO trade lines will do it as the ATR code is already there I think?


Here is a 10 x 2 P&F chart (using 1m data):

http://i41.tinypic.com/ddi985.gif

20 pips is probably your best chance to make money no matter if you are a green or red rat.

Posted: Wed Jan 04, 2012 9:41 am
by newscalper
It probably is but the line I've created isn't instead of the RAT zone - it's to see that there's enough countertrend movement coming into the london closing period to consider taking the trade. If there is you get in with a limit on a retrace - deep fib swing of that swing. It's purely a scalp.

Posted: Wed Jan 04, 2012 4:25 pm
by newscalper
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