fork4k

Re: Market Matrix So, I've played w/ the market matrix philosophy for a month now. Did a bunch of paper trades on historical and ongoing data. Created a few matrix solutions on some stocks. All in all, much more familiar with the market matrix approach. So what is my opinion of it now that I have a wee bit of experience (paper trading experience, i.e.). Well, its not quite all that its cracked up to be ... but it still has potential, I think. hermanhass is right ... there're times when it seems as if a matrix point simply doesn't appear. Its not often ... but it does appear ... the matrix point sometimes presents itself not as swing but as just a single day with a lower low / lower high or vice versa. Yuck. But thats not the main problem imo since it happens rarely. The problem when I was paper trading is that I tended to mark off points prematurely; only later to find that the actual matrix point didn't appear till a few bars later. The solution? I could increase my stops to account for such cases where I'm just a day or two off from the actual point; however, I have no logical way (ATR?) of deciding where my stop should be then. Alternatively, I could integrate other indicators as a confirmation. However, right now, I want to try something different. Still using the matrix. Also using some rudimentary elliott wave counts. However, instead of outright buying and shorting stocks, I want to try my hand at options. Because with options, time is on my side ... and the matrix is all about time! So even if the stock doesn't move in my direction, so long as it doesn't move against my direction, I could still be profitable. However, with options, I don't know a reliable way to paper trade it, so I am going to execute actual trades with a wee bit of money. Let's see how they go! My first one ... on the SPY: hxxp://img269.imageshack.us/img269/6074/spymatrixtest.gif So what's my plan? Based on the closing prices on Friday, I believe I can execute a $122/$124 call credit spread for 0.20 each (or $20 per contract). I've queued up the order and plan on closing my position once the spread goes down to 0.10 per contract OR if price seems to have formed an MC1-6, MC1-7 but crosses above the MC1-6 (in which case while MC1-6 was MC2-9, MC2-9 was not MC3-17). Will update once my position opens / gets closed.

Re: Option Trading Home Study Course does any1 have the quick start guide + 4 strategy guides that come with the course?

Re: Market Matrix Haven't traded with it yet. There's something about it that I find interesting which is why I'm studying it. My current trading relies solely on price action by using a lot of elliott wave and fibonacci while completely disregarding fundamentals and news (I do use stochastics as well ... but not in the conventional way it is used). I like the belief that everything you require to trade can be found by merely studying a chart of an actively traded market. Something about that just makes sense to me. Price patterns over long periods of time seem less "manipulatable" compared to news or fundamentals or whatnot. That's just me. So far (6 mts in the equity markets with a fairly even split between long and short positions), my trading strategy is working out well. It's not spectacular but its consistent. Haven't had a losing month yet (and I don't day-trade). For every dollar I risk, I'm making a little over 25 cents. It isn't great (yet ;)) but the deviation between the expectancies of my individual trades is fairly low. Anywaysss ... back to why I am starting to like the market matrix / delta stuff. I guess I can see myself integrating it well into my current trading plan. It fits well into my belief of price action providing everything I need to execute trades with a good probability of going in my direction. I'm faaaar from trading with it yet (don't wanna mess around with something thats working :P) but over the next few months I'm planning to study it and analyze my completed trades in the context of the market matrix to see how / if it could have helped.

Re: Market Matrix Hi Folks! I'm back with another market matrix question. I've started creating my own matrices to get practice doing it and applying the matrix rules properly. I wanted to confirm how many MC1 cycles I need to complete to get a full matrix solutions. I believe I need a total of 96 completed MC1 cycles and my reasoning is as follows: 1. Assuming I need a minimum of 8 cycles to get a meaningful average, then I'll need 8 full MC3/4 cycles. 2. Each MC3/4 cycle is 4 years in length and needs MC2 cycles to get the MC3/4 points. Each MC2 cycle is 1 lunar year in length so I'll need 32 MC2 cycles to calculate 8 MC3/4 cycles (8 * 4 = 32) 3. Each MC1 cycle is one lunar month (approx 4 calendar months) in length so I'll need 3 MC1 cycles for each MC2 cycle. Therefore, I'll need a total of 96 MC1 cycles for 32 MC2 cycles (8 * 4 * 3). If there's anyone who creates your own matrix cycles, could you please confirm? Or do you normally find that for the large MC3/4 cycles you don't need much accuracy so you don't need as much as 8 full cycles to complete your calculations? Thanks!

Re: Market Matrix For anyone who is familiar with the material, I have a quick question ... unless I am misunderstanding the material, the numbering in the screenshot below is incorrect, right? Because you can only have a maximum of four points within a phase (err ... I hope my terminology is right ... what I mean is 4 numbers within two lines :P) and in the case I circled above he has labeled 5 points within two lines. If the labeling below is indeed correct, could you please explain why? It seems like an important rule isn't being followed (or is this a guideline?) which I find strange that the author didn't notice. The material seems quite interesting, but this seeming error is putting me off ... http://img707.imageshack.us/img707/6512/incorrectnumbering.png

Re: Keystone group - Equity Trader 101 video course I seem to be able to download it fine. Downloading chapters 10 through 16 without any problems.

I've always thought to be a successful trader, you need to ensure you consistently follow a method without jumping from one method to another as soon as you start seeing a losing streak. A key part to being able to stay consistent with a trading approach is to have both a business and a trading plan. At least, for me, I found both improved my results considerably and kept me much more focused on the things that most effected my bottom line. This forum seems to have quite a few talented (and more importantly, profitable ;) traders). So this got me curious ... how many of you have a business and a trading plan written down? I ask this because most of the literature expounds on the importance of these two. My own personal experience seems to be in line with this conventional wisdom. However, I'm eager to see if there are many successful traders who don't have a business / trading plan? Maybe it's all a waste of time for some people? So what do I mean by a business and a trading plan. A business plan, in my opinion, covers topics such as: 1) What is your overall goal with trading? Beyond making money (which is obvious ... although what kind of money? A steady stream of cash (i.e. income growth)? An increase in your total equity (i.e. wealth creation?), what other goals do you have of your trading? 2) What are your fundamental beliefs about the markets? 3) When you try a new trading approach (maybe you are going to try trading a new market? Maybe a new entry / exit strategy?) what kind of restrictions are you going to place to make sure that as you experiment with the new strategy, you do not blow a serious hole in your existing trading capital? 4) What kind of position sizing algorithms do you plan to use? 5) What are your maximum acceptable drawdowns / minimum desired profit levels? 6) What kind of tools do you want to use with your trading? 7) When do you know you need to stop trading because your losses are too much and you need a time out? In contrast, a trading plan, in my opinion, would cover topics such as: 1) What is my ideal setup to enter a trade? 2) How am I going to enter the trade (pyramid in? Single entry?) 3) How am I planning to manage my trade (exit? Stop loss? Trailing stop loss?) While you will probably have one business plan, you might have multiple trading plans depending on how long you have been trading. So yeah ... all this typing :P ... back to the topic ... how many of you have written a business / trading plan?

Re: What's your strategy for coping with big losses? What I do is get some perspective on the big loss ... this'll be hard to do at first because you don't have enough data ... but, basically keep a track of every trade you do. And represent the results of every trade in terms of a risk multiple. i.e. let's say you were risking $100 on a particular trade (eg: Buy 100 shares @ $10. Stop loss @ $9.) but in the end you made $200. Represent that as 2R (you made twice how much you theoretically risked). On the flipside with that example, lets say you lost $150. Represent that as -1.5R (i.e. you lost one and a half times (probably because of a gap / slippage) the amount you theoretically risked. Now average all your risk multiples to get an answer to the question: "On average, for every unit I risk, how many units do I gain". NOW, even if you have one crazy trade where you lost a lot, that's ok ... look back on the effect this anomaly had on your average return on each dollar risked ... you'll realize that once you have enough trades, these few odd balls shouldn't adversely affect your overall performance much. If you are just starting out, then, as some other posts suggested, focus on capital preservation not growth ... when starting out, your goal is to LEARN without paying much for it ;). Risk a very small amount of your capital on each trade (say 0.25% of your equity) and you shuldn't have huge drawdowns. But still represent all your trades as risk multiples ... this way once you get enough trades and a good enough average risk multiple, you can start upsizing your risk per trade.