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THT

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THT last won the day on May 31

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  1. Trading is your responsibility - Here's a couple of methods that work and are half decent R values - but only if you use them correctly - in the wrong hands, people will **** it right up - Don't be THAT person. The vast majority of people don't understand what is going on in the markets - that's evident when you read some of the posts on this site! Markets can only do 1 of 3 things on any given day. They can move higher, move lower or remain unchanged. This simple observation can be represented by a "normal distribution curve" in statistical mathematics. The normal distribution curve is a theoretical frequency that is sometimes approximated by data that is collected experimentally. This distribution is also sometimes called a Gaussian distribution in honour of Carl F Gauss. To introduce you to the normal distribution curve, we may consider a simple experiment in which we place 10 coins into a box, shake them up and toss them into the air. We then count how many coins land with heads facing up. We then collect all the coins, put them back in the box, shake it up and repeat this process over and over until we have done it 1000 times. We will find out that in general we get 5 coins with heads up about 250 times, or 25% of the time. We will get 4 coins heads up about 210 times or 21% and 6 heads also about 210 times or 21%. We will find that we get 7 coins with heads facing up or 3 coins heads up either about 120 times each or 12% of the times. We will find that 8 coins heads up or 2 coins heads up occurs approximately 40 times or 4% of the time each. Getting 9 coins heads up or only 1 coin heads up will only happen about 1 time each or (0.1%). Getting all heads or all tails is almost a 0% probability. Since getting heads or tails is a 50:50 chance, we see that getting a 50:50 split occurs with the greatest frequency as would make sense. We can apply similar ideas to getting an up close or a down close in the markets. If we increase the total number of coins in our box to a larger number like 1000-coins, a graph will approximate a bell shaped curve. Since heads and tails are evenly distributed the mean or average occurrence is awarded. As we deviate to either side (by 1 standard deviation) the frequency of coins with heads landing up decreases proportionately. Many distribution graphs look like normal distribution curves, but are skewed to the left side or the right side. This reflects an unequal frequency of occurrence as you deviate from the mean. For example, the stock market historically has a positive skew towards up closes. It closes positive 3 times as frequently as it closes down. You could use this very simple idea to exploit short-term trades against the trend or even enter longer-term trades with the trend after a reaction. The "advantage" is simple math probabilities based on the concept of a normal distribution curve (Its also why buying and holding works over the long term) The idea is simple probability: There's always 50% chance the next bar's close is higher than current bar's close and 50% chance that it is lower. This is valid at any point in time. Thus the probability that two consecutive closes are lower/higher is 25% and the probability of three consecutive closes in the same direction is 12.5% etc. At that point, discounting any trending influences, there's 6.25% probability that the system is wrong and 93.75% probability that it is correct. This simple trading system illustrates how basic an approach can be to exploit advantages in the markets. This same concept can be used for predicting the winner in a sporting event, "Red or Black" in roulette, bets with or against the house or the roller in craps, etc. As long as you follow the previously mentioned Success Keys, you should make money. The graphs of some distributions have more than a single hump. In a typical distribution, the mean and the mode are equal to one another because the mode measures the event that occurred the most frequently. Measurements that tend to group in two areas are called bimodal because there are two distinct ranges of measurements that are the most popular or the most frequent. A common example would be student's report card grades. There are some students that simply refuse to complete their homework or study, but many other students who will complete their homework and score well on their tests. The grades will be bimodal because one group of students will get D's, another group will get A's and B's, and a few will get C's. The markets are also bimodal because at any given point in time, you have a group of traders that are expecting higher prices, a group that is expecting lower prices, and a group that is undecided or neutral. The skew of this ever-changing bimodal distribution represents the overall opinion or sentiment of the traders participating in the market. Contrarian philosophy is based on the idea that the overall opinion or sentiment of the trading majority is wrong at the opportune time. In other words, trend changes tend to occur in opposing directions when the market sentiment reaches an extreme. If the majority is optimistic and bullish then a top is near, if the majority is bearish and pessimistic then a bottom is near. If everyone wants to buy, then whom are they going to buy from? If everyone wants to sell, then whom are they going to sell to? Markets move limit up or down, or make price gaps on zero volume simply because there was nobody to buy from in an up move or nobody to sell to in a down move. The markets are simply skipping price levels to find an agreeable price where someone will be willing to sell or buy. This particular information will not necessarily make you a better trader, but it is intended to give you another perspective. It is important to understand that the price action of markets "reflect" the "feelings", "attitudes" and emotional energy of the various groups of traders participating in the market. You must learn to keep your emotions out of your trading decisions at all times. It is very easy to miss a good trade because you had a few losses. It is also very easy to take an unnecessary risk after a few winners! I'm not prepared to to show examples of this, but there are times when the markets move into a form/type that is massively in the probability of the trader and not the house Looking at profitable trading methods: Triangles can be very profitable, so can Pin/Hammer bars - Trade them in the right environment and they will work, trade them in the wrong "type" of market form and they won't do to well Right that concludes this post - I wish 99% of you all the best and profitable trading If you cannot make money from the techniques and rules I've given, I would re-read and if still no luck, give up - as I said you don;t want to be that trader, trying for years over and over to consistently fail - someone famous once said "Repeating the same mistakes over and over expecting different results is insanity" I'm off on my summer break - this year at home - will resume full-time trading in September Stay Safe THT
  2. Right that's me for the summer, I'll update and finish the Market Education page but other than that I'll be back in September, so any comments/messages etc are unlikely to be looked at until then. You should have worked out that it is perfectly possible to be able to forecast the markets short-term direction by us of Indicators when used the right way - whether you make money is up to you As you can see from the mid-week update - the expected pullback was not much, this was then followed by a buy signal
  3. Nasdaq100 Broken Feb high Double top or Higher?
  4. If you buys via the normal share dealing route then any gains are subject to capital gains tax - this tax year you can make gains of £12,300 the rest is subject to taxation at varying rates depending on your tax status - 10% for a basic rate tax payer and 20% for high rate tax status etc - see https://www.gov.uk/browse/tax/capital-gains You can buy the SAME shares and ETF's within an ISA - its exactly the same as share dealing but you don't pay capital gains 0 its a tax-free wrapper for investments Your first port of call should be an ISA, then one for your spouse if you have one, then share dealing - Then every year use the share dealing account to fund new ISA(s) contributions I haven't bought a share or ETF outside of my ISA for the past 10 years - doesn;t make sense tax wise
  5. Right - so we've got the KEYS to SUCCESS nailed down in the previous posts - If you set the right money management, risk and applied those strict rules then you could trade a simple coin toss - I remember testing this method back in 2012, the rules were: Every Full or New Moon (YES!) I would toss a coin and go long if heads came up and short if tails did I used a % of ATR (Average True Range) for the stop and a preset target of 3 times risk (3R) The system either worked or it didn't You couldn't live of the off the system, BUT it did have a positive expectancy and ended the year in profit A good idea is having this experiment on a chart for a year just to see how a simple toss of a coin (50% probability) can work in the markets Before I show you a couple of simple trading methods, I just want to explain a couple of things about the markets There's ONLY 3 things a price bar can do - go UP, DOWN or end the period neutral Markets display mathematical points of force at the major turning points - I just cannot believe that people with a Scientific or Engineering background don't dominate this industry - My swing file is just but a simple VECTOR! So How do you view the markets? UP, DOWN, SIDEWAYS? You're FORCED to - all you can view a price chart on is a 2 Dimensional chart - which shows price action moving in a UP/DOWN or SIDEWAYS fashion When I understood this - things for me fell into place ( you might not be able to see it) - what if price action is actually 3 Dimensional and forced onto a 2D viewing platform - it explains why things aren't linear and exact Take the big weekly chart of the FTSE100 Index in the charts above - Imagine that from 2000-2003 and 2007-2009 price was coming towards you and from 2003-2007 price was moving away Look at the chart below - TRIANGLES show up often - Anyone with a high school education (debatable for some people though!) knows that Triangles are the building blocks of geometric platonic solid structures Price reaches the bottom and then reverses - If we could "twist" our view of the action, we would see it clearer Notice the Triangles, there are NOT square on to our view, they are twisted - this is what causes uneven/unequal time between lows I'll leave this for your own research if Interested - but it is perfectly possible to trade highly successfully without knowing this - but it does help to explain those times when your stop is just hit and then prices reverse as you intended! Bonus Trade example: The chart below is a zoomed in view of the chart immediately above, as it shows a highly profitable trading chart formation - the chart is the WEEKLY chart of the FTSE100 Index Guess What? As per WD Gann - this method came from the 1930's / 1940's period! All details are on the chart - This trade worked straight away, for the RR even at the 1 app target I'd of been prepared to be stopped out 5 times for those sorts of returns Load of old Bull????? Here's the DAILY FTSE100 Chart from 2010, showing similar formation, but the ratios are slightly different because of the 3D nature on a 2D chart - again this one would have offered you a min of 8R return: In the next post I'll show you a couple of other high probability trading methods (basic skill level trades), which will complete this THT Market Education (I've only skimmed the surface there's lots more methods and techniques that work in the markets - but the key thing is the EXPECTANCY and RISK aspects) Wishing you well on your trading journey
  6. Again another great call by THT
  7. Larry Connors did a study on this in the 90's (using stops or not) I use stops - I just add a point or 2 to cover spreads etc The markets are mathematical points of force, the laws of probability and probabilistic returns apply to trading - most people never get in sync with that hence the high failure rate Dr. Van Tharps book "Trade your way to financial freedom" details probability, statistical returns, win distribution and risk brilliantly. Hope it helps and good luck on your trading journey
  8. This was written 111 years ago - 99% of it still applies today - Ignore #1 Gann had a win rate of 90%+ he could afford to take huge gambles per trade and the fact could time the market. It's my belief that if you stick to theses rules you'll be virtually there as a trader, the only missing part is a method that works and produces returns W.D. GANN'S MOST IMPORTANT MONEY MANAGEMENT RULES * Divide your capital into 10 equal parts and never risk more than 1/10th of your capital on any one trade. This applies to all remaining capital as well. * Always use stop loss orders to protect your trade and place it immediately after entering a position. * Never overtrade by taking large positions. This would violate your capital rule. Remember " safety first." * Never let a profit run into a loss. When the market moves in your favor and you have a profit that is double the amount of risk you were willing to take, move your stop loss order so that you will have no loss of capital if hit. * When in doubt, stay out or get out. * Trade in active, liquid markets. * Don't close your trades without a good reason. Follow up the position with stop loss orders to protect your accumulating profits according to the rules. * Accumulate a surplus of capital. This rule is very important. After you have made a series of successful trades, put some money into a surplus account to be used only in emergency or in times of panic. * Never average a losing position. This is one of the worst mistakes a trader can make. * Never get out of the market just because you have lost patience or get into a market because you are anxious from waiting. * Avoid taking small profits and large losses. * Never cancel a stop loss order after you have placed it when entering a trade. * Avoid trading too frequently, getting in and out too often. * Be just as willing to sell short as you are to buy long. * Never change your position without a good reason based on set rules. * Avoid increasing your trading activity after a long period of success or a series of profitable trades.
  9. Thought as much - Forums are full of idiots like you - which is why the TA is generic, I have absolutely no Interest in improving your bank balance - T"£$s like you are grabbers - stalking forums pretending to be the big I am's, whilst in the background trying to pinch other more successful traders ideas For crying out loud you seem to trading a MACD strategy - good luck with that one - might be one of the reasons you're not doing very well Before I started this post - people like you were in my mind - you've proved me right and I'm so glad that my TA hasn't helped you, because it was designed to do just that, to test the forum for jerks, without giving too much away
  10. DMEDIN - Do you trade for a living? Because some of your other posts - I might get them and copy the text you've typed, suggests you're desperate to BE a trader, but can't quite get there If you're doing much better than me how come I trade for a living and you seem to not to? You have absolutely no idea what I've done this year - and how do you know that I'm showing on a public forum a great trading system? Muppets like you, are highly likely to nick it You really are pathetic -what an absolute ****
  11. Possible Buy signal has flashed on the FTSE250 Index RSI has Ticked UP above 50% level - Bullish Obviously no trade is guaranteed, but everything about this says long trade is on Couple this to the Individual stocks that make up the FTSE250 Index and lots of them are flashing buys on my charts from todays price action - All I know is that as a trader another buy signal has been given in conjunction to the other buy signal that flashed 8 trading days ago
  12. And when you take price action away the swings become even more clearer
  13. OKAY - I'm assuming that you'll read those books, understand about expectancy, risk, position sizing etc as it's absolutely vitally Important - It's a massive reason that most people fail You need to treat trading as a BUSINESS, most people can't run a business either, so you have the double whammy of people failing to run a business properly, sticking to rules, techniques, trades when they show up (discipline basically) and a complete lack of understanding for risk and position sizing If you end up blowing up an account It's most likely going to be because you've ignored running your trading business as a business (discipline and/of following a plan of rules), position sizing, risk, trade management or the method your trading just does not work and has a negative EXPECTANCY! You now need to MASTER the charts - I'm a 100% chartist / Technical Analysis Trader - I do NOT look at economic activity, information or analysis - the chart reflects all that in past price data We will be basically "reading" a chart - It will be how I read the chart, that might differ from yours - there's multiple ways to read a chart - just remember, we're looking to be able to make money fast from it - we don't need to know why something happened Chart below is the WEEKLY Time Frame of the FTSE100 Index In this chart we're using an ultra simple method of defining the trend - It's NOT perfect though what about the times when UP transfers to DOWN, Isn't that hugely Important? Of course is it - Buying in a down trend isn't a profitable route to take for a short-term trader But for some this exceptionally simple and easy method could help them to see through the 'fog' Some Use Moving Averages and Indicators to confirm/determine trend (The MA's are: 10 Period Simple Moving Average of the H-L price bar, 21 Exponential Moving Average of the H-L (EMA), 55 EMA and 89 EMA) Whatever works for you the chart below is the same FTSE100 WEEKLY chart of a 10 period Simple Moving Average of the High-Low, projected 10 bars into the future No one method is perfect - You just HAVE to find out what suits you and you're style/personality Or you can show the swings of the market did you know that W.D. Gann waaaaaaaay back in 1909, 111 years agoooooo - wrote trading courses that showed swing trading with the swings I've shown above and in the chart below - 111 years ago! Psst! Shush - Don't tell anyone, but his methods still work today, in today's markets - Anyone using swings, swing highs and lows and 50% price retracement levels, are using the same methods he used over 100 years ago! Did I tell you just how much of a genius that man was? Some of my most treasured trading methods were borrowed from his works Now it is true Gann used Astrology in his analysis - I've never found that it has usable use in the markets - If I'm going to use some method then for me it has to massive out perform a coin toss and from the limited Astrology I've looked at it's not better than 50% Anyway we digress! What I use: Well I use a combination of things - I use the chart that shows the multiple MA's and the DTF Indicator and I use the swing chart above and the one below The swings in the charts below are determined by the software i use and they use market volatility and a special filter based on price action to move from up to down etc - There's nothing wrong with setting the Blue swing line at say 10% and the Red/Green swing file at say 5% - this means that once price has moved up or down 5% then it will change, so in the chart below we see the swing low point in March 2020, the swing line colour was Red, that switched to green once price had risen by X% and the Blue line in the chart above would have altered its up/down swing once price exceeds 10% For the Time being just focus on seeing their value as a trend line identifier (We'll look at swings later on as they have much much more use than just identifying trend direction) Now my charting software allows me to analyse all those individual swings too - So for any market I look at I can tell you the min-max and average swing size, BOTH the BLUE ones and the RED/GREEN ones - one use of this could be to identify the times of the year the biggest swings happen in, the day of the week with the biggest moves happen on, I could project a price rhythm zone on the chart to show me the price range the next swing up/down should conform to, I can do the same with TIME too - for a trader KNOWING the zone a low or high should arrive in can be exceptionally highly advantageous and guess what? - It throws the laws of probability massively into OUR favour Zoomed in view of the 2014 to present section of the chart above But typically I'm looking for a visual quick confirmation of Rising swing lows and rising swing highs for an UPTREND and lower swing lows and lower swing highs for a DOWNTREND go through the charts I've shown you and satisfy yourself of this fact, higher highs and lows etc Also as W.D. Gann said 111 years ago - When a reactionary swing is greater in BOTH Time and Price than the other reactionary swings in a trend then watch out for the trend to potentially change - its not 100% certain but its another good heads up When price action ventures into the range of the previous swing, then it muddies the water and that's when trading ranges can form Remember you can use whatever suits you to determine trend - I'm just showing you what I've found most useful - Remember "We're here to make money from the markets, and that MEANS being RIGHT" I mentioned swing file analysis - this the the SP500 Index swing file since 1962 - Used in the right way you can us the stats to trade from to your advantage! I have NOT tweaked the swings, I've just let the software select them, so there'll be a couple that you could refine to make the data more accurate - but for the purposes of this example, we don't need to - it's good enough as an example. All about having the right tools to trade with as you wouldn't expect your builder to build your house with a tea spoon and knife! As you can imagine it takes time to produce these posts so I won't be posting for a while - as you enough to digest for the time being Stay Safe!
  14. It would help if I posted the DAILY chart - apologies Here it from Sat's analysis:
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