Ignoring for now what the catalyst may be for the start of the move...... Any insight or opinions on the feasibility of the "3 day rule" in regard to short term trends ? Day 1 "smart money" a reversion or start of a new leg, big relative volume. Day 2 "herd money" continuation. Day 3 "dumb money" with shrinking volume. ....Day 4 it is over.
That’s a weird posting to me. If you wonder if it works or not: try it. If it works:fine! If it does not work: find out why and solve it or dump it. I do believe in these four cycles but not in the format day 1-2-3-4. Each part of the cycle can be longer or shorter. Depends on the market behavior. After day 4: what now? “smart money reversing position??? Because if not why did they get out of their actual ? Problem is that the “herd money” might still make good money while the “smart money” is missing part of the trend if the trend continues, turning the “smart money” into “stupid money”.
Yes it is an odd post. I have tested...like most patterns it works sometimes. Just looking for opinions, yours was worthwhile.
I understand this is in a 1950 publication based on his grain and commodity trading during the 1930's. It would be interesting to learn of current use of his techniques.
It could be in various combinations day 1 smart money day 2 herd money day 3 herd money day 4 dumb money ie day 5 over 1st hour smart money 2nd hour herd money 3rd hour dumb mone ie 4th hour over 1st hour smart money 2nd hour herd money 3rd hour herd money 4th dumb money ie 5th hour over etc etc etc It all depends on big AND small boys. It all depends on how smart and how foolish they are, how calm and how fearful and how greedy they are. and when the big AND small boys interact, you have the various combinations which I have just mentioned.
%% Sure,SSS12, we can find some patterns there; as far as day 4, i always look for more than 4+ runaway trends.But I use 5 hour candle charts also. About the main flaw i see, in those patterns, i average more than 10 hours per day; +you may be right on the smart money. But some money likes trends ========so they are in before day one,+ days 1-4 days. If i lived in Chicago city limits i may do if differently ; but i like more than 4 days+ dont want a system based on frequent comiss......