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MrNatural, see what you're saying about overhead supply. I may have been overly optimistic in earlier market calls. I see we are undershooting projections for the 10-week high--at least so far.
The 200-day has been strongly magnetic to price, and so I will anticipate an attempt to get there by the 20-week high--which fits completely with The Big Bear Tease game being played, because traders will be massively shorting this rally and will be caught when the 10-week low comes in higher and faster than they would wish.
Ted
The same question put another way altogether: Is it possible that trading and investing is really a 50/50 probability, and the winners are simply those who manage the risk?
If your stats concerning market calls and trades are falling below 70 percent, you're probably demonstrating the market is essentially random--and occasionally you know something but not as often as you would like to think. ;)
I'm just asking the question because it has to be asked if we are going to set about engineering wealth. I believe the latter can be done, and my aim is to lay out standards for doing it.
And I'm hoping you guys keep any and all side discussions going on everything else involving techniques that work on the intraday charts. All good stuff. I'll catch up with you soon enough. First, I want to get people making money consistently, reliably, using the safest methods catching rides on the 5-week to 20-week waves.
Ted
I suspect you guys are a bit ahead of where I'm starting out on this board. I'm starting with absolute basics for people who just want to invest in a more casual way and work my way down to short-term trading. It will take a few weeks to get there. I'll still appreciate your thoughts and experience on the "boring" stuff (daily, weekly charts) that might make a guy 40 to 100 percent per year without too much sweat and grief.
Anyway, I agree that price itself is the best indicator. OK, now how? Have you found signals or ways of understanding price that tell you, "Own this or sell that"? Time-scale independent signals or ways of understanding price that work on daily, weekly, monthly charts.
On a side note, I would be interested in views concerning whether you think it's possible to "engineer" wealth. By engineer, I mean something more than trained luck--something you could present as a real business plan. I know all about trained luck--been there, done that--and then I lost it faster than I made it.
Obviously I wouldn't be here if I thought it weren't possible, but if someone has thoughts I'm interested.
Ted
PS
I will be dividing market data and signals into two piles:
1) Consistently, Absolutely, Always Descriptive: This is data so essential, so telling I can know with high probability to own or not own this investment. If anyone can think of a better name for this category, I'm open. I'll suggest Absolute Signals.
2) Clues: Any information that tells me a reversal may be coming or this is a strong trend or anything that would tell me, maybe this is a buy and maybe this is a sell. The first category is absolute or high-probability information. The second category is lower probability, "maybe" information. In this latter category, I would include nearly all the chart patterns such as head and shoulders or ending diagonals. All this is way to iffy to call it engineering--at least from my perspective.
The Big Challenge
Here's what I've been working on full-time for the last 5 years. What an amazing trip it's been. ;)
What is the least amount of information that absolutely describes or captures what the market is doing now--and here's the clincher--so that you can trade or invest with an accuracy that exceeds 70 percent? So that you can capture at least 60 percent of the move? So that you can capitalize on price moves wisely, knowingly--not gambling--risk taking absolutely always but with controllable risk management? With risk management so certain you could take it to a bank to fund it? The last statement is an exaggeration but I'm serious too.
I want the indicators or data that is causal always. So many indicators work in one situation and then fail in the next. Or work in a bull market and fail in a bear.
Perhaps causal is the wrong word because I'm not sure any data can truly measure the cause so that you can always predict the outcome. So "descriptive" might work better. What information is absolutely descriptive of price moves (always, bull or bear markets) such that I know to *own* the trade or investment--or I *know* to sell it?
Yep, been thinking about this quite a bit and for a long time. :) I've got some pretty good answers but if anyone wants to start throwing up suggestions, and I love to see this be a team effort.
Absolutely descriptive always. So descriptive that it's semi-predictive--"semi" because nothing is absolutely predictive. But some things I've identified are absolutely descriptive all the time (at least for the practical purposes of telling us whether to own a certain trade or to sell it.
This is a huge challenge--enormous. Some mathematicians have spent lifetimes searching for answers and have failed. I think I've found some good answers, and I look forward to sharing what I've got over the weekend and over the coming months.
Just wanted to throw this out there so we can start noodling it.
Ted
PS
Why 70+ percent? Because if you're hitting under that, you probably don't have real knowledge, practical knowledge, knowledge that can be applied.
This board--the purpose of PriceTeam--is applied knowledge, knowledge that can be used to engineer wealth without luck or accident. Now we will capitalize on luck every time it comes along, but the best way to prepare for luck is to *know* what you're doing. ;)
It's going to be fun.
Hi guys, thanks for showing up. This is the kind of discussion I'm looking forward to. Will appreciate your insights into volume as we move along--want to see the real-time calls and how you make 'em.
Ted
RSKS: I read your post again. They do NOT move too fast to use volume for entries. Try the 5 minute chart, the 13 minute chart, you'll see the volume spikes after a sharp rise; after a sharp decline. Look at 'em enough and you'll get a "feel" on how to use volume. It's a bit of science, a lot of "art," read: some experience.
RCKS: Yes, futures mostly. I pull up the Ym or Es chart. Watch price and volume: "You can't have one without the other." [old song] After a sharp move, up or down, I look for massive volume. After massive volume comes in it's possible to fade, go against, the prior move for a quick/high probability trade. Not a home run or a triple; usually just a single or double.
Hi Lee
I don't post on Zeev's thread much, reminds of him too much. I miss that guy.
You still trade futures largely, correct?
How do you use volume their?
It moves too fast to use volume for entries , no?
Hi RSKS: <"The best indicator of all to follow is price."> IAnd the second indicator is volume, arguably the most misunderstood indicator in the known universe.
PT
You mentioned you have a cycle low coming in around 5/12, do you track cycle high's as well?
One thing I've held in the back of my mind about trading and I think it is worth reminding ourselves of this from time to time, is that the best indicator of all to follow is price.
MrN
The cycles on your chart look to be equal length and each being 18 weeks, correct?
I just realized I posted the wrong chart in my previous post.
this is the one I meant to post...
http://stockcharts.com/c-sc/sc?s=$XII&p=D&yr=0&mn=10&dy=0&i=p14710040762&a=135265803&r=9321
I'll get back to you later regarding my background, the sun is shining for the first time in over a week and my lawnmower is calling.
3:25 pm. See the dip, but this energizer bunny market could still catch another current up, based on what I'm seeing now. The upward bound structure remains intact as of this moment. Still think SPX 900 is possible by mid-next week. We'll see. I've enjoyed a great run pushing this line of reasoning. Let's see if it works one last time.
Ted
Greg, nice chart. I'm fascinated by all aspects of the market and price.
One of the things I'm most interested in is engineering practical methods for consistent trading and investing. So from that perspective, the cycles shown do little to assist me--or so it would seem. Just saw your second chart, and I do find that information more telling!
Will be laying out some of my "price engineering" solutions over the weekend.
What is your work background by the way--if you're willing to say?
My background is technical writing, systems analysis, and knowledge base systems (where we mapped experts' knowledge and then organized it in a software system). This background gives me the bias that if we really know something, if we have a true method or system of doing anything (including analyzing the markets or trading), it can be programmed into a computer. If what you're doing can't be automated, then it probably isn't knowledge. Just my opinion and a first crack at what I'll be laying out soon.
Ted
I'm still standing by my Institutional chart, I don't see us working through that overhead supply anytime soon.
http://stockcharts.com/c-sc/sc?s=$TICK&p=1&yr=0&mn=0&dy=4&i=p33006910374&a=159755525&r=7086
The following is a cycle chart that I started in the fall of "06" and it continues to amaze me that the cycles are still fitting rather well.
It does not conform to any cycle analysis that I'm aware of, I just placed the lines in relation to the peaks and troughs of the oscillators shown. I have not adjusted the lines since "06"
After opening the link click the chart to enlarge it.
http://stockcharts.com/c-sc/sc?s=$NDX&p=W&yr=4&mn=0&dy=0&i=p53973004489&a=87310615&r=1133
If you know any straightshooters who know how to trade or who are motivated to learn, please assist me in recruiting. We need people who know how to slice and dice a market, who understand the scientific method (without going overboard), and who know how to ask great questions. About going overboard on science, there comes a point when I know something, and I don't necessarily need 2 years and double-blind studies to prove it. Not that I'm against the latter either. Simply balanced in approach, and if you have something practical that works, I will try it--carefully ;).
Whether they are interested or not, I would enjoy participation from the following Hall of Fame members (in no particular order):
Chris (Mr. GE)
PMiles
Cash
MrMoney
Sentiment
MetalFill
TJWNY
Hesperion
Bobjack
Chuck
Frank
Northam
DowDeva
JimQuince
Techcharter
Apologize if I've forgotten any other great human beings out there.
Ted
1:44 pm: Strategy note: Caution going short here--especially in the Financials. I noticed CNBC talking heads repeating the idea that "you don't want to be going long now" and "you don't want to be long going into the release of the stress test results." It was almost an invitation to short. Invitations to short all too often are followed by the big squeeze.
FAZ and SRS are a bit elevated compared to other short vehicles, and I wouldn't be surprised to these flattened in a squeeze. Would love to see FAZ at $7 or less--may or may not happen--just a wish.
I'm 100 percent cash at the moment. Not sure how I will handle this. Will look for great entry opportunities at the very least and then will keep reasonable stops.
Ted
Thanks Greg. You're awesome. I look forward to laying out some theories that will simplify trading and investing to such an extent that I can't begin to imagine where we will be one year from now. I don't want to oversimplify though. Even if with the best understanding in the world, if I'm not thinking like a champion, I won't get too far in the trading business. We are up against a world of money and the best trading minds in the universe--and powers which we can only begin to glimpse or imagine. ;)
Ted
PT, congrats on the new board. I think you will find this is the best way to go.
I have a cycle chart to post later...after I clean it up a bit.
No worries!
Greg
Welcome to PriceTeam!
It will take a few days to really get rolling. Please feel free to start posting right away if you are interested in participating here. My promise to you is the quality of this board will rise to the top in internet world. Two reasons: 1) The quality of communication will be consistently high, attracting the best trading minds around. 2) We will be laying out what is perhaps the most effective understanding of price possible. To put it simply, successful trading involves buying high-probability structures and avoiding and/or selling low-probability structures.
As of Friday, May 1, I'm looking for a market top soon and a mild retreat into the 10-week cycle low (Hurst) May 12 (+/- 3 trading days). Currently I'm not expecting any dramatic drop but perhaps a test of the 50-week ma.
Thanks for stopping by, and I'll be posting more soon.
Ted
Welcome to the Price Research and Trading Team
We are dedicated to pooling our best intelligence and understanding of price dynamics to achieve a 70+ percent accuracy rate both in trading and market calls.
This is not a general chat board. This is a business meeting--24 hours a day, 7 days a week, a stream of focused creativity, market analysis, and trading techniques. Because this is a business meeting and a continuous brainstorming session, freedom of communication will be protected even while posts will be managed to a high standard. Meaningful, thoughtful analysis and civil dialog invited. Other things will go poof! To post here, you will need to be a paying member of InvestorsHub. They provide a great service. Please support their work.
While all trading models and methods are welcome, the focus is on the science of price behavior and trading. Be prepared to answer this question repeatedly: Does your TA method produce reliable market calls and trades with an accuracy rate exceeding 70 percent? If it doesn't, the method is probably not a meaningful description of price behavior--or you're not applying what you know with enough consistency to call it a business--a huge issue which will be addressed thoroughly here.
The purpose of PriceTeam is two-fold: 1) To attract individuals and businesses interested in improving trading and investing results. 2) To lay out an understanding of price
that consistently produces market calls and trades with an accuracy rate exceeding 70 percent. Our focus is applied knowledge, knowledge that can be used to engineer wealth without luck or accident. We will capitalize on luck every time it comes along, but the best way to prepare for luck is to *know* what you're doing. ;)
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