DRAIN THE BANKS!! TheRumpledOne - page 45
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1) Price within 20 pips of the daily low - that is OPPORTUNITY
Last chance was at 109.45. That long entry was good for 10 or more quick pips.
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"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."
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1) Price within 20 pips of the daily low - that is OPPORTUNITY
"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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"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."
1) Price within 20 pips of the daily low - that is OPPORTUNITY
2) Red candle closes
3) Green candle closes - note the high price of the green candle.
4) Enter long at the green candle's high price
5) STOP LOSS IS 10 PIPS
6) Take whatever profit you can.
7) 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.
"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."
"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
=============================================
1) Price within 20 pips of the daily low - that is OPPORTUNITY
2) Red candle closes
3) Green candle closes - note the high price of the green candle.
4) Enter long at the green candle's high price
5) STOP LOSS IS 10 PIPS
6) Take whatever profit you can.
7) 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.
"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."
IN CASE YOU ARE WONDERING WHAT'S ALL THIS TALK ABOUT RATS..."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"Think about the stock market, which is a classic example of a "random walk," since the past movement of any particular stock cannot be used to predict its future movement. The inherent randomness of the market was first proposed by the economist Eugene Fama, in the early 1960's. Fama looked at decades of stock market data in order to prove that no amount of knowledge or rational analysis could help you figure out what would happen next. All of the esoteric tools used by investors to make sense of the market were pure nonsense. Wall Street was like a slot machine."Pg 67 - HOW WE DECIDE"Unless you experience the unpleasant symptoms of being wrong, your brain will never revise its models. Before your neurons can succeed, they must repeatedly fail. There are no shortcuts for this painstaking process." (Page 54) HOW WE DECIDEALL YOU NEED TO KNOW ABOUT TRADING* Price either goes up or down.* No one knows what will happen next.* Keep losses small and let winners run.* POSITION SIZE = RISK / STOP LOSS* The reason you entered has no bearing on the outcome of your trade.* You can control the size of your loss (skill) but you can't control the size of your win (luck).* You need to know when to pick up your chips and cash them in.Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)You can not control the probabilities of wining or losing.You can not control your average win size.The only part of the equation of the equation that you can control is your average loss size.Remember what H. Rearden said:
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)If price is NOT making a new low then it must be reversing from the low.The key point is WE ALWAYS TRADE IN ONE DIRECTION. WE ARE EITHER RED RATS (SHORT) OR GREEN RATS (LONG). WE NEVER SWITCH."Since your mind is your most valuable asset and your most valuable lever, you need to be careful what you put in it. Sometimes it is even more difficult to get rid of thoughts and ideas that are already in your mind than it is to learn something new." - Pg 119 WHY WE WANT YOU TO BE RICHDON'T LET THE RAT BEAT YOU!Great trading strategy for me.Been using it for a couple of days now and out of 10 trades i had but one loser.I tried sweet spot also and seems to work well.The only problem is staring at price levels constantly is hard on eyes.Is there an alert availailable for whwn price hits 00,25,50,75 levels?Thanks again Avery.
1) Price within 20 pips of the daily low - that is OPPORTUNITY
1) Price within 20 pips of the daily low - that is OPPORTUNITY
2) Red candle closes
3) Green candle closes - note the high price of the green candle.
4) Enter long at the green candle's high price
5) STOP LOSS IS 10 PIPS
6) Take whatever profit you can.
7) If the rules do not mention it, then it is of no concern.
"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."