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Trading the high/low

  • #1
  • First Post: Dec 13, 2008 5:35am Dec 13, 2008 5:35am
I was reading Bemac's excellent "Killer" thread and came upon the following posts which really piqued my interest:

Quote
The best trader I have ever met was this hippy looking guy who came down from the mountains or something to this local 4x meeting I happened to attend about 5 years ago. He turned 4k into 60k in 3 months or something doing nothing but trading the bid/ask. He kept a note book and would keep track of what numbers kept showing up as the high/low of every time frame from 5 minutes up to the weeks and months. Doing that, he scalped every nook and cranny and basically beat the crap out of FXCM to the point where they called him a cheater and put him on manual execution. I don't get the calling him a cheater, but I can understand putting him on manual. Anywho... I was so completely blown away what this guy did just watching the bid/ask and writing down numbers in his little notebook. That was one of the major inspirations for going chartless and focusing on just the numbers.
Quote
He didn't use big leverage. Just a ton of trades when all was said and done. The one that really stuck out to me that I think got lost on everybody else in the room was that he was also a very good craps and blackjack player. Good enough to almost make a living at it. The part that stuck out was that this guy was not afraid to lose a trade or a hand of blackjack. He said keep'em small and get on with the next trade. Stay with the game plan because you'll come out ahead in the end if you stick with it. Take care of risk blah blah blah. Everybody else in the room was too busy asking about the money they thought they could make doing it his way. These were almost all 4x Made Easy users btw.

I am just trying to figure out how such a trading method would work. Is it something like trading towards the high/low when price gets close to it? But then how would the multiple high/lows from all the different time frames would work into that? Any insights will be really appreciated.
  • #2
  • Dec 18, 2008 8:25pm Dec 18, 2008 8:25pm
The guy kept track of the high/lows of multiple frames going back weeks. So he could tell if price was near the high/low of the week or of last week or even last month. He broke that down into highs/lows down to the minute. He'd basically trade every little level of support/resistence capturing small pips against the trend and big pips with the trend.

I think he was basically doing what a floor trader would be doing just watchign the ticker tape.

Technically, one could do the same thing drawing support/resistence and trend lines.
  • #3
  • Dec 18, 2008 10:47pm Dec 18, 2008 10:47pm
So I wonder if having to "go manual" would basically kill this guy's edge to remain profitable?
  • #4
  • Dec 19, 2008 2:46am Dec 19, 2008 2:46am
Thanks a lot, JR97. I have a lot to think about.
  • #5
  • Dec 19, 2008 4:31am Dec 19, 2008 4:31am
Hi, i believe this tread is all about you asked:

http://www.forexfactory.com/showthread.php?t=67211
roll over (carry trades) that can be used for good hit rates
  • #6
  • Dec 19, 2008 4:58am Dec 19, 2008 4:58am
Quoting Matax
Hi, i believe this tread is all about you asked:

http://www.forexfactory.com/showthread.php?t=67211
roll over (carry trades) that can be used for good hit rates
I believe that thread has nothing to do with what I asked.
  • #7
  • Dec 19, 2008 5:23am Dec 19, 2008 5:23am
Quoting JR97
I think he was basically doing what a floor trader would be doing just watchign the ticker tape.
Reminiscences of a Stock Operator (Edwin Lefevre) springs to mind. More of a read for entertainment purposes (it is Jesse Livermore's biography) with a few great lessons thrown in than an instructional book. A great insight into the mind of real old school trader all the same.

You can read it here:

http://www.scribd.com/doc/3932626/Ed...ersary-edition
  • #8
  • Dec 19, 2008 10:25am Dec 19, 2008 10:25am
Quoting KudzuFX
So I wonder if having to "go manual" would basically kill this guy's edge to remain profitable?
It totally did. He was cussing them pretty good. They wouldn't give him a legit reason but his style pretty much kicked their ass so they cut him off. I'm not sure who he ended up going with, but I imagine IBFX. This group meeting was at IBFX.
  • #9
  • Dec 19, 2008 11:55am Dec 19, 2008 11:55am
Quoting JR97
It totally did. He was cussing them pretty good. They wouldn't give him a legit reason but his style pretty much kicked their ass so they cut him off. I'm not sure who he ended up going with, but I imagine IBFX. This group meeting was at IBFX.

This episode makes me wonder if it is possible for the little guy to remain profitable if the brokers have the "room" to knock you out of play, even under the umbrella of current laws and regulation.
  • #10
  • Dec 19, 2008 12:04pm Dec 19, 2008 12:04pm
Quoting KudzuFX
This episode makes me wonder if it is possible for the little guy to remain profitable if the brokers have the "room" to knock you out of play, even under the umbrella of current laws and regulation.
This isn't an isolated incident. I've heard of many instances of FXCM putting people on manual.

For the most part, I think it's like counting cards at blackjack. You have to adjust your betting so as not to give it away that you're counting cards. Maybe lose some on purpose or hit when you should stay. In trading terms, that could mean don't go scalp the crap out of the market every day. Maybe just 2-3 a week and spread it around to different brokers. Or just trade larger time frames where manual execution and precise to the minute to the pip timing isn't everything.
  • #11
  • Dec 19, 2008 12:54pm Dec 19, 2008 12:54pm
lol I think that guy is not real ...... OR

he might lose the 60k the next three months

people whining about indicators running toward naked chart, and now trying to not even look at the chart

just my 2 cents

honestly I met lot of traders, especially professional institutional ones who kept their BEST PERFORMANCE trade records during a very short time frame in their folder just to show their prospects about future trading result. the best I have seen is 1000% in 2 weeks trading cfd US stocks. I don't bother to evaluate the authenticity of the reports but my biggest question is whether or not such performance is repeatable, because without consistency, his/her achievement doesn't mean anything. so far I haven't met one with consistency, but lots who show only the tip of the iceberg.

in reality most of them are moving from one institution to another, trying to catch bigger and bigger fish. some who finally tired of being so manipulative are getting another job.
  • #12
  • Dec 19, 2008 2:30pm Dec 19, 2008 2:30pm
What does go on manual mean? You can't use your computer to trade?
TRO
  • #13
  • Edited 4:52am Dec 20, 2008 2:40am | Edited 4:52am
Here's an interesting chart I got sent the other day.
Attached Image (click to enlarge)
Click to Enlarge Name: highlo.gif Size: 19 KB
  • #14
  • Dec 20, 2008 2:44pm Dec 20, 2008 2:44pm
Quoting pipsalot
Here's an interesting chart I got sent the other day.

interesting-
any explanation?
  • #15
  • Dec 20, 2008 3:02pm Dec 20, 2008 3:02pm
Yeah, another forum member sent me this chart showing a commercially available indicator which counts the number of times a specific price was the high/low on all timeframes over a set number of bars. These would presumably be the numbers used by that trader.
  • #16
  • Dec 20, 2008 4:28pm Dec 20, 2008 4:28pm
pipsalot,

Two yrs ago I met a trader @ a trade convention that explain almost I believe the same method as you describe, but I didn't take him really serious as we were in a bar & into about 5 drinks, so I never gave it another thought. I do remember he was with FXCM, but said he kept below their radar by not over trading & he did have loser in the mix.

I forgot about this until I stumbled into this post. Maybe it has merit, worth a try.
  • #17
  • Last Post: Dec 20, 2008 10:38pm Dec 20, 2008 10:38pm
Quoting Gift_Art
lol I think that guy is not real ...... OR

he might lose the 60k the next three months

people whining about indicators running toward naked chart, and now trying to not even look at the chart

just my 2 cents

honestly I met lot of traders, especially professional institutional ones who kept their BEST PERFORMANCE trade records during a very short time frame in their folder just to show their prospects about future trading result. the best I have seen is 1000% in 2 weeks trading cfd US stocks. I don't bother to evaluate the authenticity of...
Yeah, I made up the whole story. I have so much to gain by telling it,eh?

Maybe dude did lose it all later, I don't know. But trading support/resistence without a chart is still trading support/resistence. Why is that so hard to fathom?
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