Many traders, particularly those who are new or have not been successful, make trading way to complicated. They take in way too much information, much which is irrelevant to identify a trade opportunity. Often they have very extensive and complicated trading plans with inputs and rules that they may not understand and have not clearly thought out how they will benefit the trading decision.
Just a couple of logical, well thought-out rules should be all a trader needs to gain at least a modest but consistent profit. In High Probability Trading Strategies, I describe four key factors (pieces of information) to use to identify a condition with a high probability outcome – multiple-time-frame momentum, simple pattern position, price position and time position. Each factor is extensively described and illustrated in its own chapter and the video CD that is included with the book. A trader should master each, one at a time, until he or she not only knows how to use the information for a trading decision but why.
Any one of the factors itself should give a trader an edge. A trader should be able to implement just a couple factors to build a successful trading plan. Master the dual-time-frame-momentum setup and the price support/resistance targets. Plus, master simple and objective entry and exit strategies and you should be able to develop a simple but profitable trading plan. Notice that I said “master.” That means you have identified the specific and objective momentum and price conditions that must be in place before a trade is considered, and you have “mastered” simple entry and exit strategies for any trade. “Mastery” also means implementing a trade decision each and every time a setup meets the conditions of your trading plan. Failure to act at the appropriate time will definitely result in a failed outcome.
Implementing a very simple plan with just one or two pieces of information (conditions) and simple entry to exit strategies may not result in excessive profits, but it is the first step toward greater success. If you are not able to master the simple procedures, you will never master the more complex.
In your two timeframe (in this case 60 min and 15 min for daytraders) system, you sometimes use different oscillators for the longer timeframe (DTOSC 34,21,13,13 OR sometimes, DTOSC 21 or DTOSC 13,8,5,5), but it appears you almost always use a faster oscillator (eg.,DTOSC 13,8,5,5 or DTOSC 8,5,3,3)for the 15 min timeframe. Today the DTOSC 13,8,5,5 showed a bullish reversal in the mid afternoon, while the DTOSC 34,21,13,13) was still very bearish in the 60 min timeframe. The 15 min DTOSC 8,5,5 also became bullish. A profitable trade would have been used the faster oscillator for the 60 min. When does the trader ignore the slower oscillator? Is the shorter timeframe always best followed with the faster oscillator?
Very wise and powerful words indeed. Please keep up the good work!
Best Wishes for a Happy, Healthy, & Prosperous New Year.
Al Kamego
Is this a one-way blog? Questions but no answers.
John, I believe Bob is traveling to China and India…hence no reply. Your question is one that I have asked myself when starting out. The DTOsc settings should be chosen based upon how they oscillate with the highs and lows of the timeframe you’re looking at. The shorter timeframes will always appear to give entry signals but they frequently give you a false signal. Compare each DTOsc against the highs and lows and select that one for your filter. I check these every so often to confirm them but once selected, use them for the entry/exit stragies and no longer bounce back and forth between them. Pgs 15-18 in Bob’s book may help and the CD has examples too. Hope this helps.
As someone who was just learning trading, this book is the first time I learned and managed to practice. But I want to know more and because already bought many books, I had to read them, one by one. After months of study, I was just a waste of time, I found this book is the best and provides complete instructions.
Now, my focus back to deepen your teaching, and practice it, and try to forget the others so that no confusion. I have to put faith and practice in earnest so that it works, instead of mixing it with other teaching. I have to build the right habits according to instructions from your book and success is only a matter of time.
Thanks Bob, and continue your masterpiece.
Hey Robert, currently reading dynamic trading, but will definitely move onto ‘High Probability’ when I’m done. I’ve also just subscribed to the DT forex newsletter and am learning how to use it on its own, as well as incorporating it with my existing analysis, and its giving me a huge boost of confidence!
Thanks again for all that you do
Hi Robert.
I am currently reading HPTS but I have some problems in identify waves. Some of your examples the waves are clear but others I really do not know why you considered a little movement of the market as a wave. Some little movements of the market you did not considered as a waves. How can I make it simple to consider a movement as a wave?
Thanks
Roberto
Roberto: I do not have a totally objective way to identify what is considered a completed wave. I have tried many methods from a set percentage change or number of bars, but each approach has its weakness. We have a routine in Dynamic Trader that identifies pivots (or waves) by a factor of the ATR (average true range) whichs works good but I usually end up editing the pivot file. Usually, it is just a logical judgment from looking at a chart. In most cases it is obvious. If you have to struggle identifying the waves (or significant pivots) on a chart, best to pass it up and trade a chart where you are confident of the pivots.
Dear Sir,
In fig 3.3 on page 53 in the book there is a Graph of $XAU.
There is a comment that says ” If the decline is a correction the market should not decline below the swing low shown …..”
Would some one tell be which swing low this comment refers to, the one on approx March 15th or March 30th or April 27th.
If the comment refers to April 27th, then surly this is the date of the wave A? If so then surely the price should rise to a HI of B then fall BELOW the April 27 low to form wave C and then rise to create the overlap above point A?????
So the comment can not refer to the April 27 low, in which case I ask again which swing low is being reffered to?
Sorry for being stupid, but I just can not see which point in which wave in each diagram is supposed to be above or below which swing high or low.
I hope someone will help I am reading this over and over and can not piece it together.
I really would appreciate some help here.
Regards to all
Huw
It is referring to the March 14 swing low.
Many Thanks Bob
Regards
Huw