What Works in Trading & Why: Part 2

This is intended as a reply to popesidious's question, and for traders' education. There's no intentional inference with NoiseTrader's posts.

<FONT face="Comic Sans MS"><center>MURPHY’S LAWS
FOR
COMMODITY TRADERS</center>

1. It is morally wrong to allow a sucker to keep his money
2. Everyone has a trading strategy that won’t work
3. For every expert who says prices are going up, there is one who says they are going down
4. If you can drink it, don’t trade it
5. The market is not logical; it is psychological
6. The successful speculator is one who dies before his time comes
7. If you drop a dead cat far enough, it will bounce
8. The market goes your way the day after your stop was hit
ITS COROLLARY
9. The big move begins the day after your option expires
10. He who sells uncovered options goes broke
11. If you feel like doubling up a profitable position, slam your dialing finger in the drawer until the feeling goes away
12. The perfect strategy works every time until you start using it
13. If your strategy seems to be working well, you haven’t been using it long enough
14. The guy who owns the horse when it dies is the loser
15. When it comes to luck or skill, you can’t beat luck
16. Pigs won’t eat $5 corn or $500 meal
17. When the plate of cookies goes around the table, don’t forget to take a couple
18. When the market is wrong, it doesn’t pay to be right
19. He who sells what isn’t his’n, pays the price or goes to prison
20. Be right; sit tight
21. The best way to make a small fortune is to start with a large one
22. He who knows doesn’t tell, he who tells doesn’t know
23. When you’re hot you’re hot, when you’re not, take a vacation
24. The market knows more than the sum total of everyone in it
25. What everyone knows ain’t worth knowing
26. The market will do whatever is necessary to fool the majority
27. Fundamentals are seldom what they appear to be
28. If you always do what you’ve always done, you’ll always get what you’ve always got
29. The first five letters of “broker” spell “broke”
30. The market punishes those who make mistakes </font>

 

Noise Trader,

It looks to me like your bid line is just a moving average of some sort or deviant of it.

Is the bid line one of your proprietary indicators?

 

dear mr NT


thanks for taking the time to asnwer my question

in regards to the typical time frame of yours per
trade ..
do you spell it out on your website or service ?

is it hours , days , weeks or all of the above ?

 

For analysis: I look at timeframes form quarterly to intraday bars

For trade management: Its pretty simple, say I am long 3 units and have great trade location intraday, I often take a partial profit on a fraction of the position (1 unit of the original size).

I call that the 1st Partial Profit target. If I have high level of confidence, I may pass on that.

I always have a 2nd Partial Profit target which is a intermediate profit target that may be several days or a few weeks in the future where I lock in a profit.

Then I hold the remaining position for as long as I can and manage it with a loose or break-even stop.

In short, I go in if I see a high-probability entry and lay off risk in case price moves into random price development but hold a position if I can get risk-free exposure to upside volatility.

 

NT a question for you.....

Say someone takes the TD course, will I learn everything you are trading off of or do you use some proprietary things that aren't covered in the TD course. If this isn't the appropriate place to ask this question let me know.

Dan

 

Or <b>weak hands</b> (clearly seen as thready, stringy Time & Sales low volume tentative sell prints at E) were contradicted or opposed by and left the market when <b>strong hands</b> (shown by committed LARGE BLOCKS BUYS, LONG strings of those in row, and in QUICKER frequency of Time & Sales prints at point E and higher) - came into the market in <B>mass</B> at point E driving the price higher which thereby fueled a bull core buying and a strong short selling margin call rally...

as in - demand by the deep pockets money overwhelmed the tentative supply of the shallow pockets crowd... the noise easily read by the lack of commitment of the shallow pockets in their T&S prints...

the deep pockets forced gap up a few days later sealed the deal for the shallow pockets by increasing the margin calls and bada bing ya got a rally

wyckoff would be proud...

cj...

 

I'll post "What Works in Trading & Why: Part 3" as a new and separate thread.

Part 3, is out-of-sample example of the process discussed in Part 1 & 2 as it develops in real time.

This example involes the potential for a emerging new tradable rally in Biotech.

 

No, TD course is essentially a course on reading the structure of the market; that's just a fraction of what I use. Most of what I use is proprietary stuff.