The quant from DB is currently trading a variation of what I expound and I even went to the UK to spend a week with him going over the Method. We communicate monthly. He trades stocks so he uses it in equities where I show most examples in the Futures. The application is identical. As far as this thread loosing focus . . . I just want an answer to my question since this is my forum . . . if possible. If I am proved wrong, so be it but PROVE me wrong just don't make unsubstantiated statements. I detailed my method in this thread in various responses. I even had one individual pick up on the fact that I did reveal everything here. I love when people use their brains. The lack of someone taking those pieces, putting them together an then taking the time to scientifically prove me wrong, proves a point. It's easier to "Say" it can't be done, then to prove it can't be done. It would be nice just to hear someone say, "I'll try to prove it wrong", but that would imply someone must first put forth the effort. Effort that is not willing to be expended.
price action and direction are perfectly readable - in hindsight. but knowing current price and direction do not infer the ability to predict change in direction or velocity. This is a tautology. You define price as perfect because price always follows the definition of price. Your observation is worthless because the results you point to can be produced by a random number generator. I could plot the data points of a cockroach crawling on a wall, present them to you in chart form, and tell you it was the stock of a company called cockroach inc. and ask you how to trade it. Your method would apply as much to the cockroach path as to any other chart because you consider no input other than the available data points on the screen. Does this not set off alarm bells? Price will always cycle between tops and bottoms for the same reason that the mid points of a line will always be found between the end points. Can you "prove me wrong" on this one? Guess what? Understanding how something works does not mean being able to predict future movement with total accuracy. The more variables you have in an equation, the more potential you have for variation of outcome. Take chess, for example. Sixteen pieces on each side, sixty four squares, a handful of rules a child can learn. Yet there are more potential outcomes for a chess game than there are particles in the known universe. Prediction cannot be directly inferred from mechanics when there are enough inputs to create exponential variation of outcome possibility. Your assumption is correct in the sense that it is a tautology; in other words, what you say is true only because it's an A = A observation and thus has no value. No one would argue that price always moves between highs and lows (tops and bottoms) any more than they would argue that mid points are always between end points. When you try to progress from tautology to assertion - that the markets can be traded this way - you go off the reservation. You haven't even stated an actual method of trading as far as I can tell. The assumption that is wrong is that your observation adds value, which it doesn't. If your real question is "prove I can't trade the markets like this," then once again you show a limited understanding of logic. There are plenty of negative assertions that are impossible to prove wrong. As Eckhardt once said, prove to me there are no chocolate cakes orbiting jupiter. You can't do it. Nor can it be "proven" absolutely that fibonacci numbers are useless, or that the camarilla equation doesn't work, or that fire produces heat. Because there is always the possibility of exception to evidence provided based on current and past observation, the enthusiast can always say aha! but you still haven't PROVEN my theory to be impossible! This is why "prove me wrong" stances are immature and disingenuous. If you want to argue a proposition that others are skeptical of, it is your responsibility to produce positive evidence for your assertions. Whether the other side accepts or even considers your evidence, at least you are trying to make a case and not making camp with those who think dogs have human intelligence or microsoft runs the world because it can't be "proven" beyond a shadow of a doubt otherwise.
I'm sure most of your opponents, including me, would agree that markets are not random and senseless. They just understand that the vast majority of the time, there are far too many variables to know what's going to happen next with any degree of certainty. And even within those timeframes where a window of clarity is provided, the trader still understands that he is making a probability bet where the odds are in his favor, not laying down money on a sure thing. Price is not a standalone phenomenon. It is the resulting output, condensed into a single data point remeasured over time, of millions of combined inputs. Got that? You can discount the inputs by building a mechanical system based entirely on price action, but then you are trading with limited knowledge and probabilities, not predicting. You can never assume perfect knowledge of the future without finding a way to take all those inputs into account, in real time, which is impossible. Period. Any trader who was afraid to pull the trigger on a 60% winning percentage, assuming a decent R to go with it, has no business trading. Many traders have made millions or even billions with winning percentages of less than half that. You clearly have a bad case of holy-grail-itis.
Your post to me is a replay of stuff you said to others. To get the stuff out of the way that you posted, draw up a market that violates your stuff. By doing this you can see what you posted is not universal nor the "only" way markets work. As an alternative, use a logical reasoning proof. Simply use calculus to state the case where the limit of profit taking goes to zero between a high and low (think short trade) and is followed by (a) profit taking or (b) a limit of no profit at the limit of the next trade beginning from the end of the first trade (think long here). If you can use these two trials at limits to get two answers (a) or (b), then you can see your thesis is null.. Neatly, if you get either one or both your thesis is disproved. So where are you? I posted these above to define your thesis as a trivial case. By choosing to focus on only one of four possibilities, you have painted yourself into a corner. silly silly. To be harsh with you is not my style. Given two events each of which have two possibilities, you get four combinations that are possible. I chose for the first event just one possibility to keep it simple. By adding the second event to the first the way I did I screwed you both ways right off. The two unillustrated possibilities, add to the picture all four possibilities. You wiped away the other three and chose the "lazy" case. The two singles of no profit are the traditional "stair cases or postage stamps curves. One for continual long and one for continual short. The buy and hold theory is, of course the "conventional wisdom of the financial industry that leads to the non timing strategy of "asset allocation". Another "lazy" screw up that is wide spread. So you chose one of four possibilities. The one you think is "IT". IT is not it. By neglecting the other three, you are "lazy" and non thinking. I posted immediatley in your thread and asked for no response. Your initial post was threadbare intellectually and you asked that others not deflect the thread to "thinking". If you do not understand this in a New York minute trading is not for you.
http://www.logicalmarkettrends.com/ Ah, now it becomes clear - ProfLogic is selling magic beans. The site is listed on his profile (unless he's taken it down after this)... a stealth vendor who doesn't want to pay Baron up front. Ironically enough, I think you've done a service to new traders with this thread... by demonstrating that the pot of gold at the end of the rainbow is all too often a bucket of bullshit.
It is irritating to many poeple on here to be subjected to tripe. I read his first post in passing and said "sowhat". Now a dozen pages later. I am going tho have to get down to business. by neglecting the other three cases, he puts people ointo great jeopardy. Case one "buy and hold long. (Short has zero limit) Case 2 Sell and hold short (Long has zero limit) Case 3 Flat market (Btoh long and short are at zero limit) Case four "Lazy" choice. (No zero limits). This raises the profound and major major consideration that these four do not represent the true market operating conditions. There are four more that I have not put on the table yet. But I shall. Profit logic is going to get an experience that he has never had before. If he walked into a grad seminar I was conducting a Wharton and laid this on the table it would be something else for that session.
Nice posts dh. ProfLogic, you would have been smarter to just put your site's link in your sig and just said "hi". Nothing like your own advertising shooting itself in the foot, eh?
finally, the REAL professor of logic speaks ! thank you darkhorse-- you are shining brightly once again. surfer
Wow, I will respond . . . "Your method would apply as much to the cockroach path as to any other chart because you consider no input other than the available data points on the screen. Does this not set off alarm bells?" - When verifying Price Movement soley from a standpoint of the movement itself and not "What" makes it move, no other information is needed. One then "takes for granted" that the movement will be random and then only needs to look for "what" is perfect in the movement of the randomness that is sequential and perfectly consistent. this answer addresses a number of your statements, so I won't preface each unless you want me to. ". . . the mid points of a line will always be found between the end points. Can you "prove me wrong" on this one?" - No, because if the line is finite and greater than zero, you are correct. "Guess what? Understanding how something works does not mean being able to predict future movement with total accuracy." - No, you are correct but if you perfectly understand it, given time, practice and confirming it for yourself . . . you will. "Prediction cannot be directly inferred from mechanics when there are enough variables to create exponential variation of outcome possibility." - Agreed, that is why I've proven that once a top or bottom has confirmed in price, you only have 2 possible outcome at the sequential oscillation point . . . breach or failure . . . which are both self-confirming. "You haven't even stated an actual method of trading as far as I can tell. " - As I stated in another response, a couple of individuals have picked up on the fact I have outlined the whole Methodology in this thread and understand it, and trade it. "The assumption that is wrong is that your observation adds value, which it doesn't. If your real question is "prove I can't trade the markets like this," then once again you show a limited understanding of logic." - Another personal slam at the institution of higher education that gave me credit for my thesis. Next alumni meeting I will have to make them aware of that. Thanks. "As Eckhardt once said, prove to me there are no chocolate cakes orbiting jupiter. You can't do it. " - This one is fun. I got an "A" for this one 25 years ago. Let's see, first we must verify the existence of chocolate cake, it's ingredients and origin. Besides the mass of cake to open space would mean it would also have to be containerized. The cake, flour, eggs, milk & chocolate are earth animal or grain products. We know because of the atmospheres and gravity on Jupiter they can not be produced there . . . as we know it. Now with that in mind, if there were chocolate cakes orbiting Jupiter they would have had to be delivered by an earth vehicle. Since the only earth vehicle, that we know of, to pass Jupiter was Voyager. If we looked at the inventory log for Voyager and found no chocolate cakes on the inventory and knew, without doubt, there was no delivery system on Voyager to introduce cakes to the atmosphere, we could ascertain that with 99.9% certainty there are no chocolate cakes orbiting Jupiter. Would this be a perfect assumption, no but a reasonable conclusion based on common knowledge. And we both know that's a silly question. But I did get an "A". "Nor can it be "proven" absolutely that fibonacci numbers are useless, or that the camarilla equation doesn't work, or that fire produces heat." - Fibonacci numbers aren't useless . . . they keep the masses trading off balance because of their inconsistent accuracy. Camarilla wasn't invited and at some time in the near future please allow me to light the fire under your BBQ to cool your ribs. "the enthusiast can always say aha! but you still haven't PROVEN my theory to be impossible!" - I cut a pretty wide berth on proving me wrong. "If you want to argue a proposition that others are skeptical of, it is your responsibility to produce positive evidence for your assertions. Whether the other side accepts or even considers your evidence, at least you are trying to make a case and not making camp with those who think dogs have human intelligence or microsoft runs the world because it can't be "proven" beyond a shadow of a doubt otherwise. " - OK, I can prove that price perfectly oscillates between confirmable momentum tops and bottoms and that those tops and bottoms are increment chart specific. But I'm not arguing the point I could be wrong. I just want someone to give me one example of a situation where the Market isn't cyclical, oscillating & trending.
Thanks for taking the time to explain this to the professor. When I first started trading I was in a great rush because with all the computer power, quants etc. I thought it wouldn't be long before the markest would go flat. After all if one person found the holy grail they would soon have trillions in profits, never lose. Now I see that it can never happen- except in the mind of those who don't trade.