The Lawrence Chan Blog

My guy has come up with a prototype for delivering real-time bias reports / system signals for the site. We will be doing some testing later tonight to see if it holds up well.

If you see some odd display of the pages, it is likely we did something wrong and affected the styling of the site.

Nothing to worry about.

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I posted about the expectations of Dow component changes right before it took place last month.

The outcome is almost 1000 points drop starting right on the day of component change, just like what happened before. Stock market indices are funny this way.

What’s next?

1. 3 pushes up pattern in place (highlighted by red lines)

2. The 1000 points selloff confirms the completion of the pattern (the 1st green line)

3. Yellow zone is target area for the 3rd push up

4. Red zone is 50% expansion from 1st quarter of the year (highlight by orange horizontal line at the left side)

5. Should Dow turns lower from here, the pale green zone is the minimal target.

6. Pale green zone is both measured move target based on the 1000 point selloff and also the high of the 1st quarter of this year (highlight by blue horizontal line at the left side).

Notice the duration of each swing has been getting shorter and shorter. The swing that significantly expand in terms of time will mark the direction of the market for many months to come.

Not to be superstitious here, but historically such time compression often coincide with major natural disaster that triggered the past selloffs.

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Forex 1-minute data is now available from the historical data download page.

https://www.daytradingbias.com/?page_id=105159

Depending on my team’s progress, they should have some other data ready for download in a few days.

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Be ready for major messy price actions as US government is about to give us a completely confusing Non-Farm Payroll Report on October 22, 2013 this coming Tuesday.

First, the data is likely to be a mess.

Is it the original data collected as of the last cut off day?

Or does it incorporate the adjustments that BLS usually receive in the weeks following the cut off day?

Second, within 2 weeks the next NFP will be out.

I am not sure how people fit this piece of data back into their analytical models without questioning its validity.

This data point is now likely a dirty one as adjustments could be made based on what happened in the global financial markets so far over the past 2 weeks.

If I am going to predict anything, I will say welcome to a major roller-coaster ride this coming week.

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This video is a talk / Q&A back in 2009 on his book Outliers. This video is 50 minute long.

There are 2 things in the video worth special mentioning here:

First, the 10,000 hours rule is approximately 10 years for many people in the research results he has look into. Trading, an intensive mental exercise, can range from about 4 hours to 10 hours a day depending on the instrument you choose to trade. If you are really focused in learning to trade properly, it will still take at least 5 years (i.e. 10 hours a day) to get you to a point you are very good at trading.

The point is that you have to be patient and persistent in your quest to become a good trader. You need a plan where you will put in at least several years that you know you may not be profitable at all. There is really no shortcut.

Second, a recurring theme in the video is privileged advantage which can affect your chance of success in your pursuit of a career in trading significantly. When you are young, you may not be in a position to choose trading as a career. When you have already established a career in another field you may not be in a position to jump ship and give it 5 years to achieve consistent performance in trading.

For those who are not lucky enough to have support from their family or a cushion of capital large enough to sustain the long road to trading successfully, my advice is to look at alternative trading. Trading is not a single path skill. There are many markets to choose to choose from that require very low initial capital. There are also many trading styles that allows you to trade while you are making your ends meet.

If you plan your trading carefully, you will be able to overcome the initial disadvantage eventually.

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