A System that can't Lose...

[walt123]

This topic started in another thread, but got a little convoluted.
We're on the right track now, and I think this method/approach may
be of interest to others.

So, you want a winning system that has the potential to be profitable
forever? Try the following:

First, let's apply common sense.

If a million people are looking at the same market aspects you are, what
are the odds of any of those aspects providing you with *substantial*
profit? The best you can hope for is some small profit for a little while.

Books and systems out there can offer general education, and some basic
ideas on where to start, but if any of the aspects of such showed strong
profit, do you think their creators would have disseminated that information
for any amount of money?

Bearing this in mind, we can see that aspects of the market that are
unknown or known by few, have much more potential for profit.

But how to go about it......

First, you will need a minimum of general knowledge.

1. Elliot Wave theory
2. Candlestick theory
3. Mathematical logics

With the Elliot, don't concern yourself with the overall pattern. Study the
Characteristics(how they act) and logic of the waves (swings) themselves.

With candles, familiarize yourself with the basic patterns, and study the
logic behind those patterns.

With mathematics, there are market logics such as indicators and other
mathematical interpretations of the market, and then there are logics
outside the realm of markets but still applicable. Chaos theory and
Probability Theory are a few examples. Familiarize yourself with the math behind each logic, but focus mainly on the *logic* the math is supposed to represent.

Now that we have our minimum general knowledge, let's turn to the "base"
of the market: the AB pattern.

The AB pattern is simply an upswing followed by a downswing, or a
downswing followed by an upswing.

Consider the aspects of each bar in the swings:

1. Position in swing
2. Relationships of High and Low (individually and in groups)
3. Relationships of Open and Close (individually and in groups)
4. Relationships of bar range (individually and in groups)

Next, consider the relationships of the swings:

1. Size of swing
2. Average number of bars in swing

When studying this, try to work out the logic behind what you are seeing.

Now that you've done this, it's time to consider the logics.

The trick is to think about the logics you have accumulated, and how they
go together. Play with it. Move the logics around. Compare and contrast
them. Add them and subtract them. Find new ways to put them together.

Your time will be well spent. If you can isolate just *one* pattern, you
will do very well.

As an example, the price pattern I use began with the logic behind Chaos
theory. From that single logic, I extrapolated a single market aspect that
proved to have a powerfull confluence with other market aspects.

In closing, I assert that, based on reason common sense and personal
experience, the patterns you find with this method will yield results far
superior to any known approaches. Further, these patterns should
continue to yield profit for many years. I have used 1 or 2 patterns for
over a decade.

The logics of the market and math are diverse and many. So, Let's talk
about logics traders use. Give the specs of your logic and it's uses....etc.

[mich]

Originally Posted by walt123

This topic started in another thread, but got a little convoluted.
We're on the right track now, and I think this method/approach may
be of interest to others.

So, you want a winning system that has the potential to be profitable
forever? Try the following:

First, let's apply common sense.

If a million people are looking at the same market aspects you are, what
are the odds of any of those aspects providing you with *substantial*
profit? The best you can hope for is some small profit for a little while.

Books and systems out there can offer general education, and some basic
ideas on where to start, but if any of the aspects of such showed strong
profit, do you think their creators would have disseminated that information
for any amount of money?

Bearing this in mind, we can see that aspects of the market that are
unknown or known by few, have much more potential for profit.

But how to go about it......

First, you will need a minimum of general knowledge.

1. Elliot Wave theory
2. Candlestick theory
3. Mathematical logics

With the Elliot, don't concern yourself with the overall pattern. Study the
Characteristics(how they act) and logic of the waves (swings) themselves.

With candles, familiarize yourself with the basic patterns, and study the
logic behind those patterns.

With mathematics, there are market logics such as indicators and other
mathematical interpretations of the market, and then there are logics
outside the realm of markets but still applicable. Chaos theory and
Probability Theory are a few examples. Familiarize yourself with the math behind each logic, but focus mainly on the *logic* the math is supposed to represent.

Now that we have our minimum general knowledge, let's turn to the "base"
of the market: the AB pattern.

The AB pattern is simply an upswing followed by a downswing, or a
downswing followed by an upswing.

Consider the aspects of each bar in the swings:

1. Position in swing
2. Relationships of High and Low (individually and in groups)
3. Relationships of Open and Close (individually and in groups)
4. Relationships of bar range (individually and in groups)

Next, consider the relationships of the swings:

1. Size of swing
2. Average number of bars in swing

When studying this, try to work out the logic behind what you are seeing.

Now that you've done this, it's time to consider the logics.

The trick is to think about the logics you have accumulated, and how they
go together. Play with it. Move the logics around. Compare and contrast
them. Add them and subtract them. Find new ways to put them together.

Your time will be well spent. If you can isolate just *one* pattern, you
will do very well.

As an example, the price pattern I use began with the logic behind Chaos
theory. From that single logic, I extrapolated a single market aspect that
proved to have a powerfull confluence with other market aspects.

In closing, I assert that, based on reason common sense and personal
experience, the patterns you find with this method will yield results far
superior to any known approaches. Further, these patterns should
continue to yield profit for many years. I have used 1 or 2 patterns for
over a decade.

The logics of the market and math are diverse and many. So, Let's talk
about logics traders use. Give the specs of your logic and it's uses....etc.

Hi Walt,

Interesting concepts correlating EW, candles and Maths. Could you briefly elaborate how do you correlate price pattern to chaos theory. I guess you are talking about timeframes of a day or more.

Additionally, can you give an example of application of your method to an instrument such GBP/USD. I have just completed my assesment of EW to GBP/USD. You can find the thread on "Elliot Wave ..." in newbie section.

Cheers,

Mich

[fsprea]

Hi friends,
that's just to subscribe here. No time, right now, unfortunately but I am very interested. (I'm coming from the previous thread).

Mich, nice thread yours too, although I must say that, for the few that I know, your EW count (the last one) for today looks a bit strange to me.

The two rules of classical EW that in my view are violated are
1. W3 must be the most extended. In your chart W1 seems longer in time & price
2. W4 can never overlap W1, that is grossly violated in your pattern.

But maybe this is just my ignorance, and anyway it is only marginally on topic here.

Looking forward.

Fabio

[rhodytrader]

Originally Posted by tymen1

It is corect money management that decides whether you will be a winner or loser - not your trading system!!

I cannot agree with this tymen. It takes a good system, good money management, and good psychology (to execute both the other two) to be a winner. No one element can make you a winner, but the lack of any of the three will make you a losing trader.

[trav72]

Originally Posted by tymen1

And then Walt123 mentions the use of Astrology!!
Well that just wrecked any hope of even getting credibility with me!!

there is more than one view. The much respected Dr.S.Sivaraman has a lively daily blog over on fxstreet discussing live market analysis which is based on his respected alogrithm - which has astro-pyhsics as an element of it...If you branch out you will find more than one view! It is all about listening and learning and not thinking you know it all and seen it all before.

Who is Dr.S.Sivaraman?


Dr.S.Sivaraman was born in 1952 and got his Ph.D in applied statistics in 1979. He served as professor for 28 years under University of Madras, Chennai, India. During 23 yrs of his post doctoral work he developed a statistical algorithm to predict the world markets direction, trend,trend reversal,time and levels using astro-physical parameters ('X- Factor ') influencing human decision making and herd mentality which are the main governing forces of the markets world over.

He has several analytical and financials articles to his credit. He is providing the Forex market forecast through Accurate Currency Markets Forecasting and Managed Account Services to various subscribed financial institutions, banks,and traders of different parts of the world. He also provides online Professional trading training to members -how to read the intentions of the operators and effective trading strategies to earn from any market condition at ease.

He has contributed user friendly features like trailing stop,trailing hedging order etc.in actforex trading platform developed for online trading to all investor at for his exclusive multiple managed accounts facilities. He also efficiently manages trading accounts for wealth management companies and high net worth clients. His forecast is being published in fxstreet since 2001.He also gave several Q&A sessions for fxstreet.com audience

[Sweet Pip]

Originally Posted by trav72

there is more than one view. The much respected Dr.S.Sivaraman has a lively daily blog over on fxstreet discussing live market analysis which is based on his respected alogrithm - which has astro-pyhsics as an element of it...If you branch out you will find more than one view! It is all about listening and learning and not thinking you know it all and seen it all before.

Who is Dr.S.Sivaraman?


Dr.S.Sivaraman was born in 1952 and got his Ph.D in applied statistics in 1979. He served as professor for 28 years under University of Madras, Chennai, India. During 23 yrs of his post doctoral work he developed a statistical algorithm to predict the world markets direction, trend,trend reversal,time and levels using astro-physical parameters ('X- Factor ') influencing human decision making and herd mentality which are the main governing forces of the markets world over.

He has several analytical and financials articles to his credit. He is providing the Forex market forecast through Accurate Currency Markets Forecasting and Managed Account Services to various subscribed financial institutions, banks,and traders of different parts of the world. He also provides online Professional trading training to members -how to read the intentions of the operators and effective trading strategies to earn from any market condition at ease.

He has contributed user friendly features like trailing stop,trailing hedging order etc.in actforex trading platform developed for online trading to all investor at for his exclusive multiple managed accounts facilities. He also efficiently manages trading accounts for wealth management companies and high net worth clients. His forecast is being published in fxstreet since 2001.He also gave several Q&A sessions for fxstreet.com audience

Even more known is W.D. Gann. (June, 1878 – 14 June, 1955) Gann market forecasting methods are based on geometry, astrology, and ancient mathematics. Many charting programs & systems today come with and are based on many aspects of his methods and indicators.

Seems to me that it has it's place whether some like it or not and there is nothing with less credibility than those who can't respect that!

[Sweet Pip]

I've been using fib patterns...butterflies & gartleys mostly. The base pattern of them is the AB=CD which I gather is an element of the Elliott wave theory? Are you saying I should focus more on the symmetry of price & time of their swings and not so much on what fib levels they measure to? Then once I have "my" pattern, then figure out what the best probability it projects for a risk/reward target using parts of this & that that I have learned thus far?

I'm thinking that perhaps when it comes to common sense for many newbies, telling them to use it kinda leaves them hanging out to dry because it's common for us to not have a sense of the market quite yet...lol. That's why we're here...to get some. So if this is more of an exercise in getting there, I hope you plan to spell it out a little more at a level the majority of your audience is at.

[wrtm_19]

Originally Posted by walt123

This topic started in another thread, but got a little convoluted.
We're on the right track now, and I think this method/approach may
be of interest to others.

Hi, I'm interested in what you have to show/teach/share.

Gartleys and butterflies are my base for trading so I guess somehow this relates with what you do (at some point of course)

Could you post a chart explaining a trade so we can get a better idea of your method?

Regards

[soul786]

I'd be interested in reading more of these methods and ideologies and how they correlate to trading. It's a bit out there but that's what makes it more interested. Any direction or recommended reading you guy's would suggest?

I assume a simple google search would work but at the same time I prefer valued sources Preferably even in book form.

[fsprea]

Hallo people,
now that the "preliminary discussion" has already taken place,
as a contribution to a possibly common work for refining our analytical skills, as suggested by Walt, I propose to look at a chart together (finally).
As for my first post (or the last in the other cramped thread, I don't remember) I find perhaps even more valid than a "packaged" system Walt's indications, because he's not trying to sell us a system, but indicating how to acquire a method (although just with general suggestions: but everybody has the right to chose how much, what and how to disclose...).

So: to get hands dirty, I propose here an EURUSD D1 chart with a very preliminary count of swings and price levels. I will start on my own to make some counts and calculations, but today I'm around (for my 'damn' job) the whole day (and night). So I want to let me surpise also by your contribution and critique. If I come to something, I promise I'll let you all know.

Bye

Fabio



(P.S.: this chart comes from FXDD, which is GMT+2, so maybe you can find some differences, being this the forex cash, with your broker-data. I hope that patterns can be robust enough to be recognizable even with these fx problems!)