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Straight Up Straight Up
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Straight Up Straight Up

by The MoleSeptember 9, 2015

And that is why I despise holidays. I mused last week that we were sitting at an important inflection point, however that holding any positions over Labor Day was a less than tantalizing proposition. Not to go conspiracy nut on you guys but we’ve seen this play out on several occasions now – i.e. parking the tape near a prime inflection point ahead of a holiday, then take off without an entry opportunity. How dare those bastards!?

2015-09-09_zero

Alright – seriously now, I’m a bit miffed but we’re used to that by now, and as I pointed out last week: You have to be willing to walk away from a campaign unless you the odds are clearly in your favor based on your particular lens.

The only way in may have been courtesy of the Zero – I personally did not partake as I was busy during the session. However the signal range was clearly bullish all day and there was no reason to even think about short positions. I suggest you keep watching the Zero today as we are approaching the final hurdle for the bulls…

2015-09-09_spoos_update

Because since yesterday’s solid positive session the spoos have been pushing even higher overnight. At this point the bullish case is increasingly getting traction. We are near what I consider our final bullish inflection point. If 1993 is breached then I think the squeeze is on. Until that happens there is a tiny opportunity for the bears to really stick it to the bulls. Low odds and potentially large payoff. I’ve thrown 1/4R at this play with a stop near 1993. Expect to lose it though – it’s a crap shoot.

Straight up straight up…

2015-09-09_soybeans_update

Soybeans update: Brilliant entry yesterday and I’ve moved my stop to a little above break even. This really has to get out of the gate now.

2015-09-09_AUDCAD_update

AUD/CAD update: Did someone use a ruler on this chart? Can’t really complain though as our long entry is progressing nicely. Stop to break/even – could turn into a runner but be aware that we may retest the 100-hour.

2015-09-09_AUDNZD_update

AUD/NZD update: got stopped out here yesterday but the good news is that we are producing a beautiful sideways flag (of some sort) that may find resolution in the near future. I’m waiting for a touch of 1.0942 and change and so should you.

2015-09-09_NZDJPY_update

NZD/JPY update – got stopped out and flipped according to plan. Has made up for it and then some since. I am now trailing a respectable distance away.

Setups only for the subs today – please meet me in the lair:

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2015-09-09_events

Quite a bit of event risk today affecting CAD, NZD, and AUD crosses. So watch your six!

2015-09-09_gold_LT

Before I let you run and play a few thoughts on gold. Remember a few years ago when everyone was loading up on gold as it was scraping 1900. I think I posted a chart about exponential curves back then and how they usually resolve. After the obligatory first leg down everyone piled back in – here’s a link to a ZeroEdge article that listed a laundry list of reasons as to why gold was expected to hit the $2k mark the year after.

Of course it was not to be. As the old saying goes – it doesn’t matter where it’s been, all that matters is where it’s going. Think back to those days and revisit your own emotions/opinions at that time. Of course now you may look at this chart and chuckle but perhaps you were equally convinced back then? That’s how the human brain works – we always trade based on prior recent experience (i.e. recency bias).

For me personally charts like this represent the crucible that has forged me into the trader I have become over the past few years. Never believe a word they say – simply follow the charts and never ever try to fight price.

Cheers,


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • http://www.ProfitFromPatterns.com/ Ivan K

    Something to ponder ?

    For many / most market players two aspects hinder their progress towards their (written down or not) goal.

    1) Knowing when enough is enough

    2) Not appreciating the marathon aspect of their undertaking

    Let’s start with the first one … where is the ‘Uncle Point’? Am I referring to the up-side or the down-side … or both? And yes there is a third aspect of ‘enough is enough’ … that is the number of campaigns in any one period of time … day, week or even month. Hence again we are dealing with a multi-dimensional cube. Are the three linked? I’ll let you decide.

    I am also sure that in the time you have taken to read the few lines above you have already formulated some sort of answer! The only way to validate your, or any, answer, is to back-apply it on your own RBT … and even then moving forward outside the closed-end sample that you have used, the future results may or may not even close to your conclusion … such is the reality of reality from my side. And now back to point, as I am wont to say to a student from time to time.

    Part of human nature / behaviour in many people is conditioned to be optimistic / pushing the boundaries … hence when the risk-taking approach employed is banking Rs the belief (based on recency?) can seduce one to believe they are on a hot streak … that still has further to go … and hence they get caught inevitably when the synergy between their approach and the market evaporates.

    Recently Scott repeated here a truism that I am very cognisant of … “what the market gives with one hand it will (attempt) to take back with two hands” … an apt parallel being “a market goes up the staircase and down the elevator shaft”.

    There is a sweet-spot between pushing too hard and stopping too early. Whilst that sweet-spot is RBT dependent, the ‘magic’ figure may have broader validity.

    Now on the down-side of when ‘enough is enough’ … ie the loss side. As negative Rs start to add up, one of two roads are commonly traversed … either forging ahead in the belief that simply by sticking to the RBT the tide will turn … or abandoning the RBT altogether … often just as the tide does turn! The answer to this part of the game / riddle involves a number of factors … the first one being your value of R … 1% or .5% or 2% etc … another being your own DNA in relation to ‘attachment’ of the outcome (translation: your ability to deal with an x% draw in one day or one week etc) … and yet another being the ‘risk of ruin’ abstract … and most importantly on your RBT as presented by your back-application as opposed to back-test.

    If your RBT is designed for active intra-day risk-taking then the down-side ‘enough is enough’ aspect increases in importance … given the compression of time versus campaigns taken. In my view the same issue arises when your approach or RBT deals with daily or even higher timeframes … it just takes longer in linear time to get to the question.

    Insights into the answer to this question may be contained in the distribution of R results … aka dependency. Additionally, one of a few different and effective Equity Curve Filters can also be harnessed to assist with when to turn a RBT off. The final sign to stop is / should be well before the account is blown up … care needs to be taken that this sign is not unrealistic.

    The third aspect of when ‘enough is enough’ deals with the number of campaigns in a given time window … be it a day or a week or even a month. By establishing the maximum number of campaigns ‘allowed’ in the time window, then temptation to keep on going can be dealt with more easily. Again, the absolute number will depend on your RBT … as well as your personal ability to function at 110% with total clarity and focus. This aspect, again naturally, will vary from person to person … irrespective of what time-interval of view is being used.

    Naturally your end conclusion regarding the ‘enough’ questions will not be (universally) the best … it will be the best that you can come up with … is it ‘good enough’ … as long as it fits in with your written goals and objectives it can be deemed as success … from my perspective.

    PS. When you have a RBT that gets involved in a number of markets it is far purer to have the Min / Max Quit based on the individual markets as opposed to being all lumped together.

  • saltwaterdog

    Great points Ivan… lots to consider

    The idea of “Max Quit” (though I prefer a term besides Quit) has a # of facets as you said. A full stop “Shut it down” level has to be the starting point, and is maybe the easiest… over the life of the RBT, at what level of drawdown will one simply stop for good with that system.

  • http://www.ProfitFromPatterns.com/ Ivan K

    ” care needs to be taken that this sign is not unrealistic” … that has to be a personal choice … mine is 50% draw … arbitrary for sure … yet …

    All about personal circumstances and attachment.

  • saltwaterdog

    Yes a personal (and yes somewhat arbitrary) decision…

    When to stop in a given period/session is more difficult… quitting in draw, when (assuming the stats support it) it can be argued that the odds of success are going up, not down, and forging ahead should be the go… maybe there is more at work that the EqC when thinking about stopping on a “bad day”

  • http://www.ProfitFromPatterns.com/ Ivan K

    S’dog – my suggestion is to always to consult your back-app of your RBT … the answer lies within … on a probablistic level naturally … as opposed to absolute.

  • BobbyLow

    Mornin Folks.

    I’ll be out for most of the day today but I was just thinking that I am so glad that other than the energy sector, I’ve managed to wean myself off of trying to swing trade equity indices. A “tip of the cap” to those that are able to do it. 🙂

    I’m still carrying a mixed bag of Long Crude, Short Energy Companies (Still waiting for these to be in sync.) And I’m still Long GBP/JPY.

    Market is what it is.

  • http://evilspeculator.com molecool

    “I’ve managed to wean myself off of trying to swing trade equity indices.”

    Maybe there is hope for ya yet? 😉

  • Richard Foster

    Ivan, Can you define back application as opposed to back testing?

  • http://www.ProfitFromPatterns.com/ Ivan K

    RF – surely … back-testing, as the name implies, is playing what-if games to your heart’s delight … only limited by your imagination … and ability to quantify … whereas back-app is, having settled on a potential road ahead, … you ‘apply’ your chosen ‘road / rules’ … commonly termed ‘out of sample’ testing.

  • Richard Foster

    Got it, thank you.

  • ridingwaves

    spx backed off in similar place as last week slightly higher..1983 vs 1977
    VIX bounced hard off long term support this morning

  • nyse

    Thanks for the reminder to check my cognitive biases at the door. GL to all a’yas.

  • Huey

    Ivan, what type of Equity Curve Filters do you use? I’ve never employed these but it seems like even using a moving average on one’s equity curve could be useful.

  • http://www.ProfitFromPatterns.com/ Ivan K

    Huey – Equity Curve filters are RBT specific … there are a number of different concepts that can be applied … a moving average is a ‘simplistic’ one that may be valid in your case … conceptualise your RBT graph as a chart … and let your imagination guide you … even the Donchian technique may work with your RBT … translation … nfi what the best fit will work with your RBT.

  • Bill

    Like the old trading proverb goes “Check yo self before ya wreck yo self.”

  • Huey

    Thanks. I’ve found these types of money management techniques hard to test, in that my testing usually indicates that no filter is best. I’ll have to research these more as it seems like a smart addition to a business plan.

  • http://www.ProfitFromPatterns.com/ Ivan K

    Huey – I suggest you throw me an Equity chart and a Distribution Histo of your campaigns … 4 eyes are better than two.

  • Huey

    Stopped out of gold long this morning, not going to re-enter on this one. Only current position is long EURUSD for .5R. Not trading very actively (or large) as I try to improve my trading plan based on some of the things I’ve been learning here 🙂

  • OzarkHillBilly

    This is one of those occasions in which I think everyone must be watching the same thing as far as U.S. equities are concerned, so we are all just lurking around. But I’ll post a comment just so Mole knows that we are paying attention. Seems like the real action on the S&P may be decided around the current levels, 1971 – 1975. Plenty of potential support and resistance baked into the cake here. I faded the open but I’m agnostic about picking any direction at this time. Maybe my short term play turns into a longer term trade, maybe I end up cashing in a few minutes after writing this.

  • Huey

    Thanks! I’ll post those when I’m at my other computer this afternoon.

  • http://www.ProfitFromPatterns.com/ Ivan K

    Huey – kewl … others may also choose to share their insights.

  • BKXtoZERO

    Mine back when I had big problems was NONE. It was bottomless and I was always right the timing was just wrong.

  • mugabe

    textbook rejection of top of range .. pretty clear now

  • OzarkHillBilly

    Right, and now back within that triangle. I typically don’t lend a lot weight to trendlines and formations, unless there are plenty of touchpoints and coinciding support/resistance levels. Seems as if we have a plethora to choose from here, so keeping it simple is important.

  • Mark Shinnick

    Not intending to interfere with your process..but pointing out that the ( in this case gold) inflection point trade is one where one must quickly reverse…because any other action reflects a directional bias. on this day, gold has set off a H&S reversal that happens to measure below the 1094 support. What’s more interesting about all this is in the longer view- what gold looks like its doing is a messy continuation pattern of its overall downtrend….which this little H&S could set off. So…rather than exit a gold position, think in terms of the power potential that exists at points of inflection.

  • OzarkHillBilly

    Mark made a great point about trading inflection points. Two thumbs up. I used to be extremely guilty of letting directional bias interfere with exiting losing trades around inflection points, to the extent that I would then let perfectly good entries slip by for fear of getting sucked into another loser.

    As far as trading gold, if you are already trading currencies, you may want to consider simply sticking to those. Since any movement in gold appears to be highly dependent upon the currency you are betting with, I’ve found it helpful in the past to always consider what the dollar is doing if that’s your base.. Since the dollar trend still seems to be pretty strong, I’m cautious about any gold longs. There will be some great opportunities to look for in gold when the dollar appears to have reached a good top …… just be mindful of correlations in the trades you might be taking on.

    Anyway, just my two cents. Like Mark said, I don’t want to interfere with anyone’s process. I’m far from the most experienced person here.

  • Huey

    That last sentence doesn’t sound like much of a plan! Should have an exit plan before entry 😉

  • Billabong

    Today was a big reversal across the board. All things being normal, I would have expected a flat to small range day … not ES up 26 points and now down 1.

  • http://evilspeculator.com molecool

    Dude, I’ve got a feeling you have no system whatsoever. Clearly you’re winging it based on emotional whims. Stop trading and find a system – any system. Beg borrow steal if you have to. Or if you don’t have the time/willpower/skill to do that then find someone who has a system and let him/her trade your coin.

  • OzarkHillBilly

    That’s a good point, so I’ll elaborate and open myself up to criticism and condemnation for this discretionary trade. Above 1975ish, especially within a strong move up or going into the close, I’m out. Below 1971 and especially 1969 I’m in, at least into the close.

    That was my thinking this morning when I wrote that post. Now that we are taking another stab down, I’ll reevaluate my stop.

  • http://evilspeculator.com molecool

    Not really unusual what’s happening. The name of the game is to lock retail out of as much price action as possible. If you look at most of the big moves up – they happen in thin tape either before the session opens or late in the tape after trapping folks into contrarian positions. It’s all a mind game – the trick is to be able to read the signs and get positioned near inflection points and then ride the coattails of the big dogs.

  • http://evilspeculator.com molecool

    Please explain to me what qualifies as a discretionary trade.

  • Huey

    Thanks for the comment, point noted 🙂 For this trade a reversal wasn’t in the plan as I didn’t see it as a two way trade (maybe incorrectly). Years ago I was a chronic over-trader so I that bias has led me to not even thinking about taking reversals. I’ll do some research and see if I can convince myself there are smart times to reverse my position. Just being on this site a short time has made me aware of many shortfalls I’ve been overlooking 🙂

  • http://evilspeculator.com molecool

    “There will be some great opportunities to look for in gold when the dollar appears to have reached a good top”

    That level of thinking is exactly why retail rats like you keep losing. Why does it have to be a contrarian trade? How about just ride the tape until it has reached a top?

    Anyway, as you’re not responding to my comments it seems you’re going to just keep doing what you’re doing and then eventually blow up. That’s a promise – I have seen many of your type of the past eight years – they’re all ancient history. What they all share in common: They knew better and spent more time debating the Mole than learning what works.

    And who’s still here today?

  • http://evilspeculator.com molecool

    See ya guys – I’ve seen enough for today.

  • Richard Foster

    Since Scott banned me from trading, by my rules i’m now allowed to type… Mole.. how do you make a system out of “the trick is to be able to read the signs and get positioned near inflection points and then ride the coattails of the big dogs” Seriously, I’m not trying to wind you up. I see these events every day and keep wondering how to translate them into a system that can be effectively traded. It looks too unpredictable and vague. Or is this just another whole level I have yet to get to?

  • Mark Shinnick

    Dead-nuts correct: These “smart times” can vastly eliminate go-nowhere over-trading during the wrong times so as to preserve mental and financial capital for times that matter most. The Mole bases most everything on defining those “smart times”, so you are at the right place 🙂

  • http://evilspeculator.com molecool

    I spent six months watching DarthMole and labeling/marking charts. Then I sat down and wrote Scalpius in less than a week – well, the basic system that is. Another month of running tests and refining it. So that’s how you create good systems. 80% is just observing the tape – the flow – the volatility – it’s basic characteristics. What we call a system is simply a set of rules that permits us to navigate the flow of the tape. In a way it’s like a game – how can you get to level X in the most efficient fashion. Every game scenario (if it’s multi player) is slightly different but you know the obstacles, your weapons, your lifespan, shields, utilities, etc.

  • Richard Foster

    I looked at the Darth Mole page on Monday is it still available to subs or was it just as a short trial through August?

  • Malcolm O’Mara

    Present. 0 trades.

  • OzarkHillBilly

    Dude, I can’t argue with you (even if I could, I wouldn’t), as you are right about not me not having a fully functional RBT system. I have, however, done a lot of work in eliminating/analysing/processing emotional whims and ego trips that have led to mistakes, which were always my doom in the past. Part of that process has simply been doing some pen & paper work, including the painful task of looking at past tax returns.

    I have been borrowing from ideas that you, Scott, and Ivan have posted especially recently, regarding RBT systems. My main hurdle there has just been in the process of figuring out where and how to get started in developing those skills, but there’s plenty of info regarding that available, and that’s helped get the little lightbulb in my head to shine a bit brighter recently.

    One of my eventual goals is to employ money in one of your 100% mechanical systems, but I’m a long way from that.

  • Billabong

    “Since Scott banned me from trading, by my rules i’m now allowed to type…” LMAO (belly laugh).

  • OzarkHillBilly

    Any trade one elects to take outside of a 100% mechanical / RBT based system.

  • OzarkHillBilly

    I was just trying to keep it germane to the subject of inflection points, that’s all, no more than that. Sorry about the delayed responses.

  • http://evilspeculator.com molecool

    Still available for free – all you have to do is to sign up. But I just mentioned it as an example. Find your own lens and build a system around it – but spend a lot of time watching the tape. It’ll come to you one day.

  • http://evilspeculator.com molecool

    Forget about 100% mechanical – very few people can do that. I have coded most of my life and it was one of the toughest things I have done.

    Focus on rules – on actually HAVING a system which includes campaign management. Then go about actually manually testing it (forward). Then you can think about trading it. Right now you’re just winging it.

    A flurry of inefficient/detrimental/random activity does not represent progress and will not lead to success.

  • http://evilspeculator.com molecool

    WRONG! Try again.

  • http://evilspeculator.com molecool

    He will fly up, come to your house, and kick you in the nuts. You’ve seen the video – better behave.

  • http://evilspeculator.com molecool

    Inflection points are not the same as reversal points. You seem to have a whole catalog of misconstrued perceptions.

  • http://evilspeculator.com molecool

    Old school…

  • http://evilspeculator.com molecool

    Is there a WordPress theme that allows me to bitch slaps certain readers?

  • Richard Foster

    Exactly what I was afraid of.

  • Richard Foster
  • Mark Shinnick

    Yeah…better those slaps than the markets.

  • SirDagonet

    Felix: What do you think?

    Max: I think…

    [Max sees one of Felix’s bodyguard draw his gun out]

    Max: I think you should you should tell that guy behind me to put his gun down.

    Felix: What?

    Max: I said I think you should tell that guy behind me to put his gun down, before I take it and beat his bitch ass with it.

    edit:

    https://www.youtube.com/watch?v=H-dw_4MFpz8

  • BKXtoZERO

    It’s called “Scott.exe”

  • SirDagonet

    haaaaaaaaaaaaaaa

  • CandleStickEmUpper
  • Billabong

    Yes Sir … but Richard Foster said it …. LOL

  • Billabong

    Anyone else have a sell signal on CL?

  • Billabong

    It’s starting to look like a channel for ES … 1900 – 2000.

  • randomuser6789

    I have been doing this very thing. I can’t tell you how much I have learned about myself and my own psychology as I have done this.
    I can code. But when I get a trade signal, will I take it? Will I hang in the trade when my rules say to, or will I get a) greedy or b) scared and exit too early? To trade a system, you have to trust the system. You have to know you have an edge and stick to it.

    All of my pathetic retail rat-brain habits are screaming at me to break the rules, and I don’t even have money on it yet. You may be way ahead of me Ozark, but listen to Mole, Scott and Ivan. They know their stuff.

  • Kevin Mcdonald

    Its about to break down from the triangle its been forming the last few days…

    Tomorrow should resolve it.

  • BKXtoZERO

    for what my lens is worth 44 is the line in the sand but when it breaks there probably won’t be a chance to get on. to my lens it is another inflection point that is hard to position in front of but what do I know?????

  • Billabong

    You probably know more than most of us….

  • hellbent

    lots more

  • BKXtoZERO

    I doubt that but I sure did bitch slap crude this year prior to stopping trading to work on a system:

  • Skynard

    Rut Roe

  • mugabe

    ‘To trade a system, you have to trust the system.’
    Couldn’t agree more – seems obvious, but it isn’t.

  • SirDagonet
  • Scott Phillips

    What’s really sad is that this is probably the best trading community on the web.

    Like winning the special olympics, but still having Down syndrome ;-(

  • hellbent

    I was joking :p Build a quickie system around how you outsmarted the oil market and backtest it. See if it’s an edge…

  • Scott Phillips

    It’s not enough.

    Being a good chartist is going to get you hosed.

    Mole is right, 100% mechanical is not for everyone.

    An example of a decent workable system would be.

    1) While market type = high volatility bear
    2) Search for pullbacks to prior overhead resistance
    3) Enter on limit at overhead resistance with stop XATR away.
    4) Move trade to breakeven at 1.2R
    5) Bank partial profits at XXR
    6) If bollinger bandwidth on lower timeframe turns up take half profits
    7) If trade posts a trend day against us in the first 3 days exit trade
    8) If trade has not made 1R MFE by 5 periods exit win lose or draw
    9) No more than 3 simultaneous positions
    10) On 10% drawdown lower position size to .5% per trade
    11) on 15% drawdown lower position size to .25% per trade

    I just pulled this out of my ass right now on the spot. A real thing wouldn’t be too far removed

  • Scott Phillips

    Inflection point is a test. Pass or fail.

    The idea is not to PREDICT but to OBSERVE.

    If its passing it’s inflection point test – one side will be exhausted for a while and get beaten up

    If it’s failing its inflection point test – the sideline traders will pile in for a gangfuck.

  • Scott Phillips

    Read what Mole wrote very carefully – mucho wisdom there

  • Malcolm O’Mara

    XLF @ 22.50 and I’ll be short via FAZ. XLF closed @ 22.92.

  • Scott Phillips

    The problem is that you are “trade hunting” – looking for reasons to be in a trade.

    It makes it very difficult to be truly objective, and also very difficult to be consistent.

    For example, thor is a system buying pullbacks in uptrends at support. We know that’s an edge.

    The long term edge is in being consistent, when you are saying “this is a trendline violation” , “this looks like a triangle” etc… you are mixing a bunch of stuff together and making a soup.

    Better to think about one setup you like. Could be opening gaps, flat bollinger bounces off support, bollinger squeezes, pullbacks in uptrends, exhaustion in high volatility bear markets. Look at 100 different examples of it, and start writing down what you see,

  • Scott Phillips

    Ivan has his own terms for everything. What he calls a “back app” others would call a “walk forward”. What others call a “system” is a RBT in Ivanese

  • hellbent

    Msg for the Asian market..

  • Richard Foster

    Yes I’m sure. It’s already copied and pasted into my notes,

  • http://www.ProfitFromPatterns.com/ Ivan K

    You are very welcome

  • http://evilspeculator.com molecool

    It is the best trading community – period. But in my time here I have realized that 99% of the people who attempt to become traders will fail. I’ve put a SHITLOAD of time into conveying the basics tenets of how to succeed in this game – and so have you. I remember that kick ass series you posted and heaven knows I have written several THOUSAND posts on various subjects over the past few years.

    How much has stuck? Very little. I still see people attempting to squeeze a round pig into a square hole. Meanwhile I’m working on a cold fusion device suspended by anti-gravity plates. I never realized how uninspired the average retail rat really was – my mistake was to project from my own level of initiative and ability to sacrifice. All I’m seeing here are platitudes on a daily basis and much ado about nothing. Just parse the comment section and see if you find anything of value.

    Forget about campaign management discussions – I don’t even see fucking entries. Everyone is looking at equities all day although I am posting a laundry list of setups every day. Which nobody even mentions. So I am starting to question my role here and whether or not my time is wasted. I do enjoy what I do and I have enjoyed building this community. But if I don’t see a change here I may have to pull the plug.

  • http://evilspeculator.com molecool

    You would think that people are capable of looking up a word in the dictionary.

  • http://evilspeculator.com molecool

    It’s the same indicator that Scalpius is based on. Which has produced 50R in its first month. You’d think there would be a rush to sign up – but last time I checked less than 10 people were subbed.

    See above – I sometime thing that I’m wasting my time here.

  • http://evilspeculator.com molecool

    There are dozens of system in there. All one need to do is to look at the tape and write down what stands out. Try to analyze when certain patterns are bound to happen. Then attempt to enter there and forward test. Pretty simple.

  • BobbyLow

    Getting close but I tend to lag a little behind you. I’m looking at a close < 43 to go short. I'm still long but just barely. It's in slice and dice mode again but this time I'm going to stick with my plan until it get's into a decent trend that sticks. In the mean time, I'm still short Energy companies via ERY. So my combined lens is kind of cross eyed at the moment. But it is what it is.

  • http://www.ProfitFromPatterns.com/ Ivan K

    B’bong … each to their own … basis daily I had a sell 3 days ago … hence today was Period # 3 … and currently I have a potential buy on for tomorrow / today … should the market have its own mind and continue down to break the nearest (Valid) Spike Low there will be 2 buy setups present … one of which requires one of my 5 buy timing tools to act.

  • http://www.ProfitFromPatterns.com/ Ivan K

    Yes I do indeed … each with their own very specific meaning … I have found general’ese somewhat vague and open to interpretation … thank you for the compliment also.

    EDIT: Congratulations also on your 300 effort … btw … was that the first time to achieved the lift of 300 ?

  • hellbent

    AUDNZD: holy f^%$!

    Can you please tell us more about your system, Mole?

  • http://www.ProfitFromPatterns.com/ Ivan K

    Hammer formation coupled with a FakeOut buy setup … slip factor in the hollow market phase?

  • BKXtoZERO

    wow. hope not. You mean comment section or the whole thing?
    I will get to work this winter. you have been a huge help to me anyway so thanks.

  • Richard Foster

    Not from my point of view your not.
    I’ve already learnt some very useful things here, from your posts, in a short space of time. I’m still digging through the archives and have been reading (and re-reading today) Scott’s brilliant series on system building which I am acting upon.

  • BKXtoZERO

    Perhaps Ban/Lock contribution w/ a 3 strikes system of conduct unbecoming of a trader. Perhaps starting with me….. That would weed things down for you to the level of professionalism you desire.

  • hellbent
  • http://evilspeculator.com molecool

    Net-Line Sell Level touch coupled with the 100-day SMA. I have been pimping those types of setups for years here. Most of them are being ignored.

  • http://evilspeculator.com molecool

    I’m not that much different than most of you guys. Only difference is that I show up every single fucking day and I put in the time and effort required. Food for thought.

  • http://evilspeculator.com molecool

    Yeah, there would be 2 people left in two weeks.

  • http://evilspeculator.com molecool

    Why wait for winter?

  • BKXtoZERO

    This is going to be hard but I do plan on trying this winter. I am a 10 day chart kind of a guy w/ an eye to a month max for holds. It will be a serious challenge to try to systematize what I think. Basics of risk control being most of trading, not TA or entry have helped, I would like to think in lots where 1/4 to 1/2 comes on or off at given bollingers or MAs is my idea so far.

  • http://evilspeculator.com molecool

    What he means to say is that you have a buffet of ideas in your head and when you look at a chart you try to see which one fits and if there’s some way to trade that chart. This approach is highly subjective and easily leads to pattern fitting – similar to form fitting in system dev.

    What you need is one lens – one approach – one system. Make that one work. Once you are sure that approach is consistent and has a solid edge then you can consider adding more systems.

  • hellbent

    It’s taken me awhile to see that you do in fact use a system(s) for your daily setups. To the uninitiated… they read like discretionary tips from an old pro.

  • hellbent

    One has to apply oneself to the task at hand. The vast majority, I suspect, are too absorbed picking entries and watching the PnL do its thing.

  • http://evilspeculator.com molecool

    Based on your position sizing that’s not a lot of return IMO. What is your R size?

  • BKXtoZERO

    I’m at work right now, 9 hr days, this past 3 day weekend I worked harder on the house than at my job. Winter is coming and I have wood to protect, sheetrock to knock out, insulation to go in. Just did my daughters room, ours is next. It gets cold and damp in Seattle and last winter sucked ass. Need heat too….. luxury stuff…. then more doctor appointments/injections for the nose thing at Stanford, (2 more visits at least) then there is the 3 year old. When I do something I do it right and I know this will be time consuming as it is not my natural skill set. I want all aspects covered, money management/stops/ more important that front end TA imho.

  • BKXtoZERO

    I’d rather see you happy. even if I am gone or many others.

  • hellbent

    I’ll venture to say:

    1) 10 day chart.. Yeah OK. Stick with that if it suits you. Matters little to a potential system most likely.
    2) Max hold time.. Fine, if you want that as part of your exit. Probably no edge there..
    3) To systamatise what you think… ask yourself why you think it. This is the meat of the endeavor.
    4) Yes risk control is important but because we’ve got tools and something other than shit for brains this part is pretty easy. Consistency is the key.
    5) Scaling… only muddys the water. See if you have an edge first then worry about scaling to see if it can be improved upon.
    6) Bollingers or MA’s… Is that how you outsmarted the oil market??

  • BKXtoZERO

    Keep in mind that I was the worst kind of idiot prior to
    reading your stuff, and that I had it “all on red or black” most of the time with a bias in mind at all times, revenge trading, no stops, adding to losers, top picking all the time, every bad thing you can think of for years. In more recent history I divided my account into 1/4 to 1/5s. I don’t trade futures so I can’t get the leverage you guys do and that would be more than I can handle
    anyway. For over the counter 3X products this position size yields me what seem like decent gains w/out getting blown out.

    I keep different types of positions (metals/oil/bonds/vix)
    although everything is highly correlated anyway. I also looked at results and decided to avoid vehicles I was worst at and stay with ones I was “good” at. For me stocks suck so I just stay away for the most part. I have avoided “set ups” that I used to salivate over and been quite happy not to stick myself in
    the eye with a screw driver. I will probably be banned now since position size has been 20R. The difference for me
    has been that I embraced the concept that risk control is most of trading. I use stops and have a plan. l seldom stay in unless I can get up on a trade to start with. I still fail the standards here but am far better off than I was. Rome wasn’t built in a day. I will start some kind of system this winter. Thanks for all you do.

  • evilasevildoes

    watch 43 stop around 37

  • evilasevildoes

    agree best advice I ever got was to perfect one set up so well you are 99% effective

    then move on to the next set up pattern you want to perfect next

    be honest with yourself is essential

    I started in TA with recognizing double tops and bottoms on point and figure back in 1974……still works today, went on from there……Dorsey Wrights book a big help…and recognizing fib patterns and trend lines support and resistance and got into sector rotation bullish percents recognizing wat currency was the carry trade when money was leveraged, where the order flow was on options, etc….best ever was the magical third pierce of a trend line and the 4th hit of that trend line and reversals,,,until the end of a trend when they run it to 5th hits and a reversal to getchya…

  • hellbent

    You seem to like ‘Occam’s duct tape’ better… Do your homework buddy 😉

  • evilasevildoes

    first time ever I entered a gold short today three times….third worked like a charm…persistance paid off….will reenter short soon

  • BKXtoZERO

    not familiar with “Occams Razor”. I think I may try to start sooner than planned w/ spare time and end of evenings. thanks.

  • Malcolm O’Mara

    You are the master mole, but it does not seem bad to me.
    My only concern would be hanging on to a loosing positions for so long. -20%+ is a leap of faith. Just an observation; if you would pull the trigger for a 3% gain, why wouldn’t you do it at a 3% loss?

  • BKXtoZERO

    Good point. That is why I need to finally find out if a hard RBT system is better than what I’ve been doing. I’ve been getting poked hard so it is time. I am far from perfect and what I don’t know could fill books.

  • Mulv

    I’ve learned more useful information from following this community than 16+ years of trading as a market-maker. Of course, this doesn’t do shit to prove that your time isn’t wasted. I suspect that there are a lot of lurkers, like myself, who genuinely appreciate what you do, though we don’t return the favor. I took a shot at developing my first system in the first half of this year. I did not respect the data sufficiently so will need to go back and take another crack at it, but I could not have done even 25% of that still insufficient development without what I learned here.

    Scott’s series last year was inspirational and I am committed to working through those steps to better myself as a trader and to develop multiple trading systems for futures and forex, though 10 hour days makes the progress slow. At the moment, I’m working on better understanding myself and what about me affects my trading. I have some good traits — disciplined, intuitive about when I’m positioned wrongly, curious, open to the unexpected, and attributing my success and failure to myself alone. I have a lot of bad traits — impatient, suggestible, not thinking deeply about markets, not testing enough, and, worst of all, not keeping a notebook / journal. I am profitable over my career thanks to some luck and good risk management… but I suck. I’m going to keep working through this and then on to market beliefs. Hopefully, I will be able to contribute something meaningful to this community in the future. In the meantime, I hope you don’t pull the plug.

  • TheRooster

    hey mole

    do you mean it was tough psychologically to go 100% mechanical or that the work to to be set up for automated trading was tough?

    My rules are coded for the systems i am trading live but I still input the orders. I am now working towards going intervention free so it would be good for me to know what challenges i might face.

    regards

    Roy

  • BKXtoZERO

    Ivan, if you could be so kind. Can you tell me if you have different systems for different time frames on CL. I ask because the markets generally went from trending (where most on here seem to thrive) to being volatile. Do you feel one should stop trading if they are a trend follower or have a different system perhaps faster for volatility? Just a general answer is fine. I am starting to try to put something together to match my “lens” how I see things. I am also curious about your 5 “buy timing tools” in general terms no secrets. Thanks in advance.

  • BKXtoZERO

    OK, so it means the simpler of equally performing plans is best. Less moving parts to question/go wrong. Thank you. I am starting in tonight. Do you use price history data to feed into a system/spreadsheet to crunch statistics for a mechanical type of output or do you simply use hourly/daily charts, SMAs bollingers etc and then physically act according to your rules or is it mechanical?

  • BKXtoZERO

    I finally started the process today myself. Thanks for posts like this and many others.

  • BKXtoZERO

    You also said this which I saved and will re-post from a document I have been saving stuff into:

    For instance, off the top of my head.

    If you were to take 60 minute FX charts where the bollingers were
    pointing ROUGHLY (visually) sideways and the bollinger bandwidth was
    NOT the lowest in 100 bars (not squeezed) AND excluding counter trend
    trades where the daily and weekly were aligned in the same direction
    and a strong trend (however you want to define it)

    I am quite sure that entering on a limit at the 2,20 bollinger,
    moving stop to breakeven at the middle line, and a target of the
    opposing bollinger, with a stop somewhere between .5 x ATR (14) and 1
    x ATR (14) would be an extremely strong edge.

    Scott
    Phillips Mod Scott
    Phillips • 9
    hours ago

    For instance, pulling up a random chart for today – with a 1xatr
    stop
    breakeven win approx 2R loss -1 trade still open stop at
    breakeven

    so 4 trades 1R (at least with an open trade) worthy of further
    investigation

    with a .5 x ATR stop breakeven 4R win loss ongoing trade
    (breakeven)
    4 trades 4R. e 🙂

    This is selling the
    top and buying the bottom of ranges in a sideways market.

    You could use envelopes, keltners, any sort of method you like,
    there is a fundamental edge there because when the market is evenly
    balanced scalpers come out. Buying the low and selling the high of a
    trading range is an edge
    Buying dips in a trend is an edge
    Buying
    breakouts is an edge
    Opening gaps are an edge

    Whenever I see people relying on pitchforks, gann theory, wave
    theory, complicated theories and all kinds of weird ass bullshit,
    most often it is reflection of internal “I don’t want to be like
    everyone else” bias.

    The simple things we know and can all agree on are far more likely
    to be edges than complicated theories that only you and a few others
    like.

  • hellbent

    You can use whatever data source and format suits the task. I don’t think that is where system design begins though. Read, really read, what Mole, Scott and Ivan have to been telling everyone. Perhaps also read the Systems book that I put a link to above. I think it will help.

    Think on Ivan’s concept of a four dimensional cube in reality for a bit too. Get it straight in your head what you are trying to achieve.

  • BKXtoZERO

    wow the whole book in PDF. Took a quick whiz through prior to bed, doesn’t seem too bad to understand. More layman’s theory than heavy math based, this alone looks like months for me and I will read it. THANKS!

  • hellbent

    It’s a nice book. I’m extremely grateful to the author.

    Not many people really understand what a system is..

  • hellbent

    ZB short could be quite juicy. Again.

  • http://www.ProfitFromPatterns.com/ Ivan K

    B’zero – I shall pen something later for all to potentially benefit from regarding how to deal with a market that has lost its ‘trendiness’ .

    Regarding the ‘timing tools’ that are part of my arsenal … 6 of the 12 setups in my toolbox have an additional hurdle to overcome to facilitate a potential entry … in other words, even though a setup is complete, the process calls for a timing tool to be present as well … before a position can be contemplated … using my L.I.V.E. approach … Look > Investigate > Verify > Execute … in that order … quite often people act in the reverse order.

  • OzarkHillBilly

    Hey Mole, sorry for not responding until now. I knew you’d roast me for that but I was in a hurry. Since you originally asked for an explanation, I’ll elaborate a bit. I realize that my definition was insufficient. This is essentially the maxim that I’ve been keeping in mind in order to help move me along the spectrum from a fly-by -the-seat-of-my-pants, read about it in a newsletter approach. A side effect of this is that I tend to conflate RBT with 100% mechanical systems, and associate monkeys throwing darts with discretionary trading.

    But if I had simply said “Any trade one elects to take outside of a 100% mechanical system,” would that have been technically correct? One could say that even a mechanical system is discretionary, since it can simply be turned off and on. I’m not trying to quibble over it; I just find that sometimes the things that people discuss might not have the same meaning in each others’ minds. I’m thinking that the answer your looking for is that a discretionary trade is made within the bounds of a set of rules which are either very firm or relatively loose, depending on where the trader falls on the mechanical / monkey spectrum, and the trader is free to choose whether or not he will follow his RBT system signal based on other factors.

  • OzarkHillBilly

    Thanks. You’re basically right. The only thing I’ll say in my defense here is that I wasn’t contemplating any trade off of what I was writing in the above comment, but rather just noting what many market participants are probably watching, rightly or wrongly. Basically it was slow here this morning so I thought I’d comment just to comment. The trade I did enter this morning was based on what appeared to be a budding failure get on top of the recent range.

  • OzarkHillBilly

    Thanks Mole. This reminds me of a question that I might raise on a slow day in the future. As for my comment above, I didn’t mean to imply that I would be making any trades based on what I was noting.

  • OzarkHillBilly

    I definitely pay attention, even if they think I’m not.

  • OzarkHillBilly

    Thanks. This is actually along the lines of what I’ve been trying to come up with over the past couple of weeks, and it gives me an idea of where I’m on the right track and what I need to develop in more detail. I’ve recently abandoned another idea and I’m putting another on the backburner.

    As for charts, I love to look at them as much as anybody but I’m painfully aware that it’s less rewarding the longer you look at them.

    100% mechanical would only be for me if I had more than one account or if I was simply unable to trade anymore.

  • OzarkHillBilly

    Give it a few more months at least.

  • OzarkHillBilly

    Dude, I’m not trying to debate you. I don’t recall ever having done that, and if I gave that impression somewhere along the lines, then I assure you it was not intentional. But unless we are talking about my long forgotten college calculus definition of inflections (some stuff to do with changing curves, which I do suppose works here), I figured it was ok to lump inflections and reversals together in a casual thread, since I’m far from the first to do it here. I thought an inflection could lead to what is commonly referred to as a reversal, which is one reason we watch for them, and the reversals are of course only clear in hindsight. Sorry that my perceptions and/or terminology are wrong; I will refer to a dictionary as you suggested.

    As for my general statement regarding buying gold if one thinks the dollar has topped, I didn’t think I mentioned anything that precluded either riding the dollar up or riding gold down. Just a casual, offhand statement, or so I thought, with an implication that better long opportunities for gold are in the future, IMHO. I don’t think I’d even attempt to pick a top in anything anymore, unless I just had money to burn. My best trade last year turned into a position that I rode for three months, riding SLV down as bottom picker after bottom picker appeared to talk about the death of the dollar, etc. I’m quite happy to ride a trend. I still need plenty of work but I’m a long way from being the loser I was.

  • http://evilspeculator.com molecool

    All information I don’t need – once again, what is your position size?

  • http://evilspeculator.com molecool

    Looks like you’ve got your hands full. I personally wouldn’t be able to trade which that much on my plate.

  • http://evilspeculator.com molecool

    ) ( ) (
    ( /( ( ( ) ) ( /( ) ) * )
    )()) ( )))( ‘ (()/( )()) (()/(` ) /(
    ((_) ) ((_)() ) /(_))((_) /(_))( )(_))
    _((_)((_) _(())_)() (_)) ((_) (_)) (_(_())
    | | || __| ((_)/ / | _ / _ / __||_ _|
    | .` || _| // / | _/ | (_) |__ | |
    |_|_||___| _/_/ |_| ___/ |___/ |_|

  • http://evilspeculator.com molecool

    that comment is useless without a chart and/or an idea of how to trade it

  • BKXtoZERO

    average is 8-10K per position. Roughly 1/5 account size.