Electronic Trading Book a.k.a Taylor Trading Technique - futures io
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Electronic Trading Book a.k.a Taylor Trading Technique


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Electronic Trading Book a.k.a Taylor Trading Technique

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  #1 (permalink)
 Jaap8242 
Netherlands
 
Experience: Advanced
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Years ago, I bought the book by George Douglass Taylor. Much of what it said was not clear to me, so I put it aside.
Coincidentally I saw on the site of Polaris Trading Group ( Polaris Trading Group for Stocks and Futures Traders) a video in which in a clear way the Taylor Trading technique (3 day cycle) is being explained. Also therein an explanation is given for the electronic trading book, as presented by PTG and Taylor Trading Technique. Originally this e-Book has been designed by Richard Boisvert from https://www.taylortradingtechnique.net/.
With this data I went to work to make an Excel spreadsheet that presents the same values.
The spreadsheet is filled with ES future data, but you can use it for any other instrument.
The cycle order can be changed easily. Instructions are included in this spreadsheet.
Finally: I am in no way connected, nor do I have any ties to PTG and/or Richard Boisvert, but I think it is correct to mention them. They have helped me enormously.

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sloth
Denver, CO
 
 
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Thank you for sharing this workbook. It should serve you well in mean reverting / responsive markets. I've read Taylor's book a few times. It's not an easy read. Conceptually, it's a great approach to things in range bound markets. There's no magic 3 day cycle. I wish that there was. The entire book method is loosely based upon the greater fool theory. Linda Raschke and Marty Schwartz were a couple of market wizards who put stock in that concept. In reality - there's no measurable time cycle in short term trading and you're barking up the wrong tree thinking that it provides the path to consistent trading profits.

I do believe, however, that volatility expands and contracts. This is measurable. It's mean reverting. IF you get really deep into the mathematics of any edge that Taylor may have had - it points towards this. Price is not mean reverting -even in markets like the ES. The edge (mathematically) in things such as Taylor's 'buy day, low violation' is actually the mean reverting property of volatility.

George Douglass Taylor and Peter Steidlymeyer (market profile) grew up on the mean reverting grain markets of the 1950's - 60's. Those methods got blown out of the water in the inflationary trending markets of the 1970's where traders like Michael Marcus, Bruce Kovner, and Ed Seykota made vast fortunes.

Try fading 3 day highs and lows in an inflationary environment or even a growth environment. Short TSLA the past 5 year at every three day high and see how that works out??? But it's a sell short day!

So, I'd maintain that Taylor's book method took advantage of the mean reverting properties of volatility - not a 3 day cycle. It is best used in the direction of the trend OR in a mean reverting market.

Anyhow - thank you for providing the excel version of your trading 'book'. I wish you well in your trading endeavors.

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 Jaap8242 
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Today the Dax future.



Dax Cycle Day 3-12-2021 CD1

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 AllSeeker 
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That is interesting, I've read a very badly scanned print of the book floating on internet bunch of times as well, it was hard to read and honestly it went above my head (and honestly I had dismissed it ) then I went on to look for different things.

Now that you have presented it in excel format, this could be a call for me to look into it again.


Thanks a bunch. I do agree with sloth though, I've come to similar conclusions over the years.

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