part 3. In making my calculations on the stock market, or any future event, I get the pasthistory and find out what cycle we are in and then predict the curve for the future, whichis a repetition of past market movements. The great law of vibration is based on likeproducing like. Like causes produce like effects. Wireless telegraphy, the phonograph andthe radio are based on this law. The limit of future predictions based on exactmathematical law is only restricted by lack of knowledge of correct data on past history to work from. It is just as easy to figure 100 years or 1000 years in the future as one or two years ahead, if you have the correct starting point and know the cycle which is going tobe repeated." "In order to test out the efficiency of my idea I have not only put in years of labor in the regular way, but I spent nine months working nightand day in the Astor Library of New York and in the British Museum of London, going over the records of stock transactions as far back as1820. I have incidentally examined the manipulations of Jay Gould.Daniel Drew, Commodore Vanderbilt, and all the other important WallStreet manipulators from that time to the present day. I have examinedevery quotation of Union Pacific prior to and from the time of E. H.Harriman's securing control, and can say that of all the manipulationsin the history of Wall Street, Mr. Harriman's was the most masterly. Thefigures show that, whether unconsciously or not, Mr. Harriman workedstrictly in accordance with natural law. 9 "In going over the history of markets and the great mass of relatedstatistics, it soon becomes apparent that certain laws govern thechanges and variations in the value of stocks and there exists a periodicor cyclic law, which is at the back of all these movements. 10 Observationhas shown that there are regular periods of intense activity on theExchange followed by periods of inactivity. Mr. Henry Hall, in his recentbook devoted much space to 'Cycles of Prosperity and Depression' whichhe found recurring at regular intervals of time. 11 The law which I haveapplied will not only give these long cycles or swings, but the daily andeven hourly movements of stocks. By knowing the exact vibration of each individual stock I am able to determine at what point each willreceive support and at what point the greatest resistance is to be met."Those in close touch with the markets have noticed thephenomena of ebb and flow, 12 or rise and fall in the value of stocks. What we know in science as the law of periodicity is but another instance of therhythmic sequence of vibrations, another name for the Kabalistic doctrine of numericalsequence. ⦠If Nature observes these cyclic and periodic laws, then assuredly man mustreflect them in his constitution, and, through his dependence on physical conditions, inhis thought also." Ebb and flow are words associated with the tides. In Gann's day, harmonic analysis (aterm he uses a few sentences later in this interview) was used in predicting tides certain times a stock will become intensely active, large transactionsbeing made in it; at other times this same stock will become practicallystationary or inactive with a very small volume of sales. I have foundthat the Law of Vibration governs and controls these conditions. I havealso found that certain phases of this law govern the rise in a stock andan entirely different rule operates on the decline."While Union Pacific and other railroad stocks which made theirhigh prices in August were declining, United States Steel common wassteadily advancing. The Law of Vibration was at work, sending aparticular stock on the upward trend, whilst others were trendingdownward."I have found that in the stock itself exists its harmonic orinharmonic relationship to the driving power or force behind it. 13 Thesecret of all its activity is therefore apparent. By my method I candetermine the vibration of each stock and by also taking certain timevalues into consideration I can in the majority of cases tell exactly whatthe stock will do under given conditions. Harmonic Analysis. â About forty years ago Sir W. Thompson (now Lord Kelvin)suggested that the principle of harmonic analysis might with advantage be applied to thereduction of these tidal constituents and to the simplification of the calculations; and atthe British Association meeting of 1868 he made a report describing his proposed methodof procedure."As harmony in music may be described as the union of sounds which individuallyappear different, but when blended together form a collective chord, or as the flowingtogether of several sounds into one, so the object of the harmonic analysis of the differenttidal constituents is to reduce 'the complicated motions of the tides into a series of simpleharmonic motions or waves in different periods and with different amplitudes, or ranges;and these simple harmonic constituents added together give the aggregate tide.'"Each inequality of any one of the tidal constituents is regarded as a smallersuperimposed tide of period approximately equal, producing with the chief tide acompound effect which corresponds to the discord of two simple harmonic notes in musicapproximately in unison with one another." William Henry Wheeler, A Practical Manual of Tides and Waves.
part 4 Thus, I affirm, every class of phenomena, whether in nature or inthe stock market, must be subject to the universal law of causation andharmony. Every effect must have an adequate cause. 18 "If we wish to avert failure in speculation we must deal withcauses. Everything in existence is based on exact proportion and perfectrelationship. There is no chance in nature, because mathematicalprinciples of the highest order lie at the foundation of all things.Faraday said: 'There is nothing in the Universe but mathematical pointsof force.' 19 "Vibration is fundamental; nothing is exempt from this law; it isuniversal, therefore applicable to every class of phenomena on the globe."Through the Law of Vibration every stock in the market moves inits own distinctive sphere of activities, as to intensity, volume anddirection; all the essential qualities of its evolution are characterized inits own rate of vibration. Stocks, like atoms, are really centers of energies, therefore they are controlled mathematically. Stocks createtheir own field of action and power; power to attract and repel, whichprinciple explains why certain stocks at times lead the market and 'turndead' at other times. Thus to speculate scientifically it is absolutelynecessary to follow natural law."After years of patient study I have proven to my entire satisfactionas well as demonstrated to others that vibration explains every possible phase and condition of the market. ----------------"My calculations are based on the cycle theory and on mathematical sequences." "Mathematical science, which is the only real science that the entire civilized world has agreed upon, furnishes unmistakable proof of history repeating itself and shows that the cycle theory, or harmonic analysis, is the only thing that we can rely upon to ascertain the future." "Mathematics is the only exact science. All power under heaven and on earth is given to the man who masters the simple science of mathematics." "Every movement in the market is the result of a natural law and of a Cause which exists long before the Effect takes place and can be determined years in advance. The future is but a repetition of the past, as the Bible plainly statesâ¦" After years of patient study I have proven to my entire satisfaction as well as demonstrated to others that vibration explains every possible phase and condition of the market." "After exhaustive researches and investigations of the known sciences, I discovered that the Law of Vibration enabled me to accurately determine the exact points to which stocks or commodities should rise and fall within a given time. The working out of this law determines the cause and predicts the effect long before the Street is aware either." "By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and what point the greatest resistance is to be met. "Those in close touch with the market have noticed the phenomena of ebb and flow, or rise and fall in the value of stocks. At certain times a stock will become intensely active, large transactions being made in it; at other times this same stock will become practically stationary or inactive with a very small volume of sales. I have found that the Law of Vibration governs and controls these conditions. "Thus, I affirm, every class of phenomena, whether in nature or in the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause. "If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said: `There is nothing in the Universe but mathematical points of force.' "Vibration is fundamental; nothing is exempt from this law; it is universal, therefore applicable to every class of phenomena on the globe. "After years of patient study I have proven to my entire satisfaction as well as demonstrated to others that vibration explains every possible phase and condition of the market."-------------------------- My conclusion: Grandmaster Gann was a perfectionist in statistics of cycles. The more data he could analysis in statistics the more longer and shorter time cycles he found, while studied this cycles how often they repeat them selfs - while different cycles flow into other cycles, what is called the law of harmony. This cycles are what i call patterns and every pattern have its own statistical rules of where price have to go in which time window, because statistics of the past say so. I think, his big secret, is simply that he have found out, that statistics of the past, do forecast the future exactly, with the tool of stochastic process - that is a nature law - the law of vibration. That was also my first clue about how to make money in a field what looks on the first view random, but with applied mathematics, it is everything else, but not random. My statistics also tell me, that time pattern are rule price pattern, and Gann agrees on that point. Best Regards and good profits, HATEtheRisk ------------------------------------------ The whole article is here. http://www.scribd.com/doc/65263938/WD-Gann-Law-of-Vibration
You don't understand what commodities futures are, then. Because these markets allow for physical delivery, the real Long interest can differ vastly from the real Short interest, resulting in a persistent imbalance moving into the last trading day(s) for a particular expiry.
Putting a finer point on it perhaps, the strictly speculative element is zero sum. As for the commercial hedging component, there is the opportunity cost that can accompany hedging which, at least in the abstract, can bring it back to zero sum. And so, here we are. But to reiterate, among the speculators who close out their positions before last trading day, it is strictly zero sum (minus costs). And I suspect that this is how most of us here at ET would be classified, rather than as commercial hedgers.
Sebastian Mallaby writes about Jim Simons and Rennaisance Technologies in his book, More Money Than God. I read the book soon after it was published, about two years ago, but if memory serves, Simons's trades averaged about 90 minutes or so.
I think day trading would really only be a losing game if you aren't able to manage risk and set realistic goals for yourself such as a profit target and daily risk potential your account can sustain. I think it's really dependent on the longevity of your account and how long you are able to participate in these markets with your initial deposit. Other than that, if you are a newbie and trade these markets thinking your a pro with a good amount of volume, chances are you'll lose your whole account within your first few weeks of trading :/
I only trade stock and options and I guarantee there are real quantifiable edges. I have traded for a living for a long time and I do well. For those who believe otherwise I advise you to either quit now and save time and money or be prepared to put in the work required to find and implement edges. It is obviously very challenging because most must lose for you to win and you are competing with some of the brightest people in the world.
Aren't most of it hft and automated? Manual traders placing bets on charts of > 15 min , will often get different outcomes for same set ups .Reading set ups on lower time frames and predicting prices , it can be quite difficult as no one knows the order flow.The order flow and hidden order flow dictates prices and order flow changes several times a day.Day trading is almost like placing blind bets with different outcomes .
Daytrading is not impossible. You can do it. Just find very very very reliable entries. It's following that method that will tear you apart at times if you can't handle it.