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Old Oct 17th, 2011, 10:46 PM   #1
TheRumpledOne
 
 
Join Date: Aug 2006
Location: Tucson, AZ
Posts: 738


"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)

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

"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

=============================================
GREEN RAT REVERSAL TRADE

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."

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

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.

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

PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.
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Old Oct 17th, 2011, 10:53 PM   #2
TheRumpledOne
 
 
Join Date: Aug 2006
Location: Tucson, AZ
Posts: 738
What is the fascination some traders have with SQUIGGLY LINE indicators?

I see people spending a lot of time on them.

DON'T YOU REALIZE THEY ARE A MYTH?

SEE PRICE.

SEE PRICE MOVE.

SEE PRICE MOVE UP.

SEE PRICE MOVE DOWN.

THOSE ARE THE ONLY WAYS THAT PRICE MOVES.

SEE TIME.

WHAT TIME IS IT?

WHAT'S THE PRICE?

WHAT TIME IS IT NOW?

WHAT'S THE PRICE?

DID PRICE GO UP OR DOWN?

IT IS ALL RELATIVE!!

WHAT DO YOU THINK A SQUIGGLY LINE INDICATOR IS GOING TO TELL YOU THAT YOUR EYES CAN'T TELL YOU?

DO YOU BELIEVE THERE IS SOME MAGIC FORMULA THAT WILL ENABLE YOU TO SEE THE FUTURE?

WHAT IS THE HIGH OF THE DAY?

IS PRICE NEAR THAT HIGH?

IS PRICE GETTING CLOSER TO THAT HIGH?

IS PRICE AT THE HIGH OF THE DAY?

IS PRICE MAKING A NEW HIGH?

IS PRICE MOVING AWAY FROM THE NEW HIGH OF THE DAY?


WHAT IS THE LOW OF THE DAY?

IS PRICE NEAR THAT LOW ?

IS PRICE GETTING CLOSER TO THAT LOW ?

IS PRICE AT THE LOW OF THE DAY?

IS PRICE MAKING A NEW LOW ?

IS PRICE MOVING AWAY FROM THE NEW LOW OF THE DAY?

TRADING IS SIMPLE.

DO NOT COMPLICATE IT.

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

PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.
    Quote
Old Oct 17th, 2011, 10:54 PM   #3
TheRumpledOne
 
 
Join Date: Aug 2006
Location: Tucson, AZ
Posts: 738
95% of traders lose.

Do you think most of them were using "conventional wisdom"?

What about all of the fund managers who can not beat the index?

What about all of the fund managers who have lost billions?

THERE IS NO TREND.

TREND IS A CONCEPT.

TREND EXIST ONLY IN THE MIND OF THE TRADER.

Look at the chart and tell me if the trend is up or down.

TREND IS RELATIVE TO THE OBSERVER JUST LIKE TIME WHICH IS ANOTHER CONCEPT.

One must separate what is REAL from what is CONCEPTUAL.
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Old Oct 17th, 2011, 10:55 PM   #4
TheRumpledOne
 
 
Join Date: Aug 2006
Location: Tucson, AZ
Posts: 738
How the rat would trade...

The rat would win 2 out of 3 trades by trading as follows:

If previous bar is red, then look to go short at the previous bar low.

If previous bar is green, then look to go long at the previous bar high.

Remember, once you hit your daily goal QUIT TRADING or else the rat will beat you.

DO NOT BE FOOLED

PRICE IS THE SAME ON ALL CHART PERIODS.

The reason you enter a trade has no bearing on the outcome. You need to INTERNALIZE this.

Using these "rat" entries will NOT make your trade a winner. That's up to the market.

The "rat" entries have a STATISTICAL EDGE that can be exploited for profit.

During a 60 minute period, how many 5 minutes candles are there? 12. Do you think your chances of winning are better with up to 12 entries or 1?

Now, there are 24 hour bars in a day but only 1 previous daily high/low. Do you think your chances of winning are better with up to 24 entries or 1?

DO NOT OVER TRADE.
    Quote
Old Oct 18th, 2011, 04:03 AM   #5
HATEtheRisk
 
 
Join Date: Aug 2011
Location: Europe
Posts: 1,587
i like your posts.....

but your strategy is horrible.....
    Quote
Old Oct 18th, 2011, 07:32 AM   #6
Trvlwanderer
 
 
Join Date: May 2006
Location: The current Superpower
Posts: 3,986
Your last thread was deleted because you TAKE DONATIONS so you started another one?

Why don't you just trade this thing and make money? You have been pumping it on SEVERAL forums for over 2 years always claiming it is to HELP people.

You NEVER answer any tough question with anything other than condescension.

Learn how to TRADE Avery and you wouldn't have to "suspiciously" sell (for donations) on trading forums.

Just trying to help.


BTW....the RAT is aweful when back tested. I will keep the Yale education.
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