Favorite Futures: equity and fx futures and options
Posts: 29 since Sep 2013
Thanks: 6 given,
I subscribe to Mack's YouTube content, but I don't agree with his perception of the market that he laid out in the first video you posted. The "donaters" he speaks of are retail and they don't inject a sufficient amount of capital to the zero-sum equation that he references. Institutional and various well-capitalized proprietary trading is the source of market patterning. The little retail trader is only swept along in the larger flow. Therefore, the bulk of capital that is trapped in/out of a market is not retail. Furthermore, if one believes that liquidity benefits his strategy, and he is trading against trapped participants, he should want them to be deeply positioned. In my opinion, the best way to perceive the other side of the market is to merely presume that you are trading against yourself (or against someone that is using your exact strategy). When I do this, most market perception becomes automatic (irrelevant) and I'm left with the psychologically simpler work of just testing my strategy against the market.
Despite this trivial criticism of Mack, I think he's got a solid perception of markets when it comes to patterns. He mentions profit taking at measured moves and correctly points out that this is where traders fall into traps, but we differ on just who is trapped. Check out his tactics on channel measured moves. Its a rarely taught reliable pattern.
The following user says Thank You to Leon of Pizza for this post:
I agree with you. Not all traders trade the 2000 tick chart, and lots of time a 1 tick trap cannot even be seen on a time based chart. I do like his observation of "close outside channel, two measured move to the opposite direction and resume the original trend". It's actually a second entry on a 5 min chart, but much easier to spot on a tick/volume chart.
Lot of you guys are pretty good on Pats stuff. Can anyone please guide me on how to do my drills off line to get good at this stuff. I understand pats methodolgy but do not know how to get better at it. I really appreciate it if someone can guide me on this.