Tuesday, 7 September 2010

Predicting the Future

It's 5am in London as I write this. I've just been reading a thread over at Traders Laboratory, HERE. It's a thread by a group of the better guys over there and they are speculating where we are in the longer term cycle of the stock market.

It made me think back about 40 years. I grew up in Australia and I was fortunate enough to have picked my parents well. The year I graduated high school, before I went to university, I started what was to be an almost annual trip around the world. I starting by flying from Sydney to Honolulu, then to L.A. and ever eastwards, through London, Europe, Hong Kong and then back to Sydney.

It was probably the third trip or so, after I had become interested in the market, that I discovered a program on American TV, hosted by a guy named Louis Rukyser, called Wall Street Week.

As I was there at the end of the year, I always caught the show where they had a lot of smart people predict where the Dow would be at the end of the following year. I listened intently as the smart people gave their reasons and numbers, and was enthralled at the insight that these clever people had. After a couple of these years I got curious about how these predictions turned out, so I wrote them down and looked at them a year later.

It wasn't long before I realised that these clever people didn't have a clue about what was going to happen in a year's time. I realised that the time frame was too long and too many unforeseen things could happen in the mean time. It was then, I think, that I became a very short term trader.

So, when I read the thread I've linked above, I enjoyed the intellectual exercise, but know that as far as I am concerned I can see the next logical scale out point, but no further. I am really only interested in the trend of the time frame I trade. The rest, except for a few times in my lifetime, is just throwing the dice.

Market Profile Tool: There is a newish set of MP indicators for MultiCharts available at a new low price HERE. The price is now 149 Euro. It can't do splits put that is a limitation of easylanguage and the platform.

Today was a quiet day after yesterday's holiday but green enough.


  1. Hi EL,

    You very often take the gap trade, in which you try to the previous close level...

    Are there any other directional "facts" that you look for? I mean do you care for the open range breakout, which has been mentioned by Steidlmayer several times... Do you mainly take trades off the open? What about the reversal that usually occurs at 10:00 NYT? Which of these patterns are intersting for you?



  2. Samer, I use my normal methodology for outside in trades and require a support or resistence to lean against. I take notice of the daily market rhythms but they can't be used for entries as precise timing must come from order flow and momentum. And some days the market acts differently from so called "normal".

  3. EL please can I find anywhere more detailed table of context for both DVD CONSISTANT PROFITABILITY set and DVD THEORY SET ??
    Thank you

  4. Anon, I've got a more detailed description which we will put onto the ELTraining site (http://eltradertraining.blogspot.com) under a page called DVD CONTENT.

  5. EL, are there any other blogs similar to yours that you visit on a regular basis?

  6. Anon 007, None that I have found. If I had, I probably wouldn't be writing this one.