This post is probably going to get a lot of howls, moans and maybe a few death threats. My setup I keep on posting is a real piece of shit! It means absolutely nothing to the market. The only reason I use it is because I can objectively compare volumes and use a well thought out stop. Technical analysis is an even bigger piece of shit. If it worked so good all technicians would be very wealthy(some are most aren't). Face it, most of us have all read and know by heart Edwards and Magee, or Murphy, or any one else for that matter. We all know the patterns,oscillators, indicators, fibs, bands, and ma's. We are not retards it should be just a simple execution of the well established rules and we make money. But face the truth its not that simple in the REAL WORLD. I would love the chance to go to a convention of TA's or expo or whatever other bs meeting they go on. And say that all day to everyone there with a mega phone. Now the sad truth I'm an avid technical analyst and use it religiously because nothing better exsists. Like the old saying in politics. I don't remember it word for word but it goes something like this. Democracy is a terrible form of government, but the problem is we tried everything else and they are even worse. I want you guys to try something. This is based from what police detectives or psychologists use. They ask certain questions and they can tell right away 9 out of 10 what somebody is and what they aren't. If you want this to work and improve your trading play this for real. If you answered wrong put some real deep thought into this. If you do this and really think about it and determine why you answered wrong when all the facts are so readily available. You can improve your trading greatly and shake off your amateur habits. Here's the stupid question already. What is the market to you? You know when some one said the market went 1 point up or down a point. What does the the word market mean for you. There is only one right answer. Most amateurs will always get this wrong hence one can tell if they are an amateur by simply asking this question. And there is most definitely a right answer here no matter how relative it is to your life. Heres the bloody answer already. Amateurs say the stock market or (Dow-SP-Nasdaq) Professionals say interest rates the 10yr the 5yr, the 2yr and the rest of them. Why is the rates market the true market because the world economy is based on them to some extent. The rates market totally dwarfs the stock market. Its not even close. Institutions, banks, FOMC, and any other big player cares mainly about rates. They almost could care a less about the stock market as long as its not in meltdown or in bubble status. To answer some questions directly. Stock indexes and rates have a well documented correlation. I'm not going into detail here about this because there are endless sources that talk about it. This can be found on google in a matter of seconds. I have already commented about volume in many of my posts and have recommended a site that uses the same working philosophy that I use. They offer a decent amount of free education on this well established approach. However, involving theory I will give you the rundown. When rates go up equities go down. Break on high volume retest on light volume is a valid entry signal. This is not as simple as it seems. I can tell you how to ride a bicycle. Hold the handle bars and push the pedals. Will that help you not at all you must get a feel for these things yourself from real life experience.
Thats very true. I have no problem riding the trend till the close if I'm comfortably ahead at 3pm. But its important for me that the trend was established clearly before rates closed for the day. So basically I want the trend to be established before 2:45 and I would really prefer it to get going around 1 or 1:30
Very interesting stuff. Do you consider any particular instrument to be the best indicator short term? I notice your chart is the 5year.
do you find that there are divergences between the indices and rates during your entry? (e.g., index retraces to breakout point, but rates are not retracing)
I'm on a totally different operating system with rates. Its very rare that they will have the same chart setup. It just comes from feel to know which way rates are going next, did they reject a previous level, and what is conviction behind the move.
Just wondering if any one ever uses the Nikkei to anticipate the open in the U.S.? When I look at my Nikkei charts it appears if you used the Nikkei you could of got the open in the US this week everyday so far. I've been fiddeling with this system for over a year. Some how every time I actually use it, it always fails and fails bad a very quick 40 pt stop out. I have never traded it more than a 1 lot mini because I'm scared of this setup. I have no volumes. I always see it work three times like this week and then try it and sure enough it fails. The problem is its very subjective and involves fading the most recent breakout. Which means you are walking on thin ice. Any way has anyone had any success with using the Nikkei to anticipate the US open