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Here's an interesting proposal


Some people may remember me from when I was one of the most prolific posters in the general public forum. I am still the person on MyPivots with the highest post count of anyone (in fact, right now I have more posts than the next two highest posters combined). My intention with posting in the general forum was always to give of myself, not to advertise my books. I sell so few books that it would be near impossible to cover my expenses just by selling books. It's beyond comical for anyone to state that I could 'become rich' selling books of this depth and specialization (which tend to appeal only to a very small niche market), or any such nonsense. What I did was discover a lot of cool things about trading that I find useful.

I wanted to share this, so I spent thousands and thousands of hours writing all this up in books that total over two-thousand pages (something I have not seen one single person anywhere do for free, including all the top traders here at MyPivots). I decided to sell them, and my desire was to be paid about minimum wage for my efforts. In other words, just compensate me the minimal amount for the effort to do all that it took to produce hundreds of free commentary on my website, do the charts and writing for the books, go to the printer and do all that is required there, run my free forum (it is not open access, but it is 100% free, always has been, always will be). Notice, too, that my website has never had a single ad on it in over twelve years. Never has, never will.

I completely quit posting in the main open forum area years ago. There was a big issue where I was attacked, called a troll (are you kidding me, look at the quality and content of my posts), and so on. I decided that, unfortunately, those people cost all the beginners and such all they could have learned from all future posts because I was not going to give so much of myself and be treated like that. I have decided to make one more post here, in my own public area. I will close this topic so no one can reply. Feel free to start you own topic elsewhere in the public area and shred me to ribbons if you want. If you start one in my section here for that purpose I will just delete it.

So, why post now? I saw the word ‘rat’ was a link when that word was used in my forum (not as part of ‘Ratchets’, but in another context), so I clicked on it. That brought me via another link to this page:


http://www.mypivots.com/board/topic/7088/-1/the-fib-grid


I had either not seen that page, or have purged it from my memory long ago. It’s like four and a half years old. I want to comment that what is on that page (at the end, in regards to me, and in the first post with the snide comment about Borsellino perhaps stealing from me) is the biggest pile of steaming garbage I have probably ever seen. I wanted to address that. In doing so I will make an offer that I hope is taken up, but I am sure won’t be.

When I started coming up with my additional Fib derivations most Fib related people I knew rejected them. Scott over at Harmonic Trader really liked my .886, though. He did laugh at how many Fibs I had derived, and it was a standing joke when we’d meet at the local traders meetings. He’d constantly rib me, asking how many new numbers I had now, like twenty? So, I knew people wouldn’t be very accepting of the new concepts. The .886 is the fourth root of phi (.618). You can also take the square root of .618, then take the square root again, which is the same thing.

Now, here’s one thing I know about people, and it has proved true in this forum to the nth degree. People post everything. And if they know of a ‘secret’, they will do whatever it takes to find that secret and post it, just to ‘put it to’ the person who thought they could have a secret. What’s the mantra in this forum (and probably all others)? Everything should be free. Nothing worth having can’t be had for free on the Internet. Heaven help you if you ever need surgery and the only way for you to get it is via a surgeon who learned ‘everything he needed to know’ in a forum. Forums have their place, but in my opinion it shouldn’t be the entirety of one’s information.

Anyway, when you do the fourth root of phi, you get .8866517… This is .887 when rounded properly. ‘Truncation’, i.e. cutting off the number, not rounding, is a very specific mathematical approach that is not done very often in a case like this, is not used by non-mathematicians for the most part, and isn’t called for here, in my mathematical experience. When I wrote the first book and introduced this number I said it was .887, but I will truncate instead and call it the .886, because it rhymes with .786, a number that is well-established, and that might help people remember it, and accept it more easily.

Now, given this, what are the chances that someone else derived this number via the fourth root of phi, and also decided to truncate instead of round (something not done or published/posted on any other Fib number ever. If it was, Bruce would have rounded .618 to .61, not .62) ? I don’t know, five billion to one? A hundred billion to one? Actually, more likely an essentially zero percent chance. So, if you see it posted as .886, I think the odds are they got it via what I published, although after perhaps hundreds of times being passed along. (And by the way, if you round to two digits even the mathematically challenged would round this to .89, not .88.)

In my first book I mentioned how Gann did work with the concept of eighths. So 1/8, 5/8, and so on. I published a table in there showing how these eighths line up with the fib numbers, and that I thought that was not a coincidence. When trying to find trading areas, not exact points, it’s as close as I feel we need. So, 5/8 = .625, and phi = .618. To my way of thinking, that’s the same within the margin of error we can nail down a trading spot. 3/8 = .375, and we all know phi squared is .382. Again, close enough as far as margin of error. And how about 10/8? It equals 1.250. Everyone knows 1.272. And 9/8? It equals 1.125. The reciprocal of .886 is 1.128, and on and on…

And now, how about 7/8? .875. What does that round to? .88. Now, Gann lived before I was born. He was looking at .88. Do I think that no ancient mathematician, one who lived before the Great Pyramid of Giza was built, had ever taken the square root of phi, and then taken the square root again? Get serious, of course that had been done thousands of years ago.

What I said was that I saw an area coming up recurrently, so I set out to find a Fib-derived number for the area. I have done this for many other areas, and published most of those in my books. First I see a behavior, and then I set out to quantify it. In this way I saw the area was around the .886, and I derived the number. Now back to what I was saying about people and forums. How come, with all the forums going way, way back, no one can produce one single time stamped post citing the .887, its derivation, and its specific application in trading before I published it? Not one. Go ahead, I challenge you to cite the post.

Now, once I started my website, all I heard was about the guy in a bar in England who was talking about the .886 over twenty years before I published it. And the other guy blah, blah, blah. But, despite all these people, including as Bruce says (although he can’t find the source…) Borsellino discussing it in 1996, no one posted it to any forum or anywhere, even though people post everything. And a lot of this is about ego, so imagine the desire to be the first to post something that is on no forums anywhere. Yet despite all these people knowing this info, and doing interviews and discussing it, no one posted it anywhere.

And also imagine that every last person out there calls it the .886, yet these are people that are citing this did not come from me, they either derived it, or got it from the guy in the bar in England, or from Borsellino, etc. Then why aren’t they calling it the .887? Now, is Borsellino, in Bruce’s reference, referring to Gann’s .88 (rounded). And since that’s been around for generations before Borsellino was even born, does it have anything to do with my work? I have no idea what Borsellino is doing, and without more detail (like what exact number Borsellino is using, since Bruce is rounding here in a way I would not, to only two digits), I’ll continue to have no idea.

I will say one thing unequivocally. Many, many years ago, I was offered a free trial in Borsellino’s live trading room, created after he left the pit. This was after I wrote my books and the .886 was just starting to get popular. In the room a turn was called because the ‘.886’ was there. Not the .88, and not the .887. In Borsellino’s live S&P trading room the .886 was cited. Get serious. Even if he discussed the .88 in 1996 and got it from say Gann’s idea or something of that nature, why is his room calling it the .886, a specific truncated version of the number that I choose to mathematically ‘incorrectly’ adopt because it rhymed with .786 and I thought it would be easier to remember for people and they’d be more willing to accept it?

Look, I don’t give a rat’s behind if anyone thinks I did or didn’t derive the .886 for use in trading first, or after hundreds of others did it. I have derived many other number that I find useful in everyday trading. Most I have published, some I haven’t. I use them daily. No one has ever mentioned any of them anywhere I have ever seen. Not in any forum, not in any interview, not in any book, chat room, anywhere. I know I derived them myself. If others found a few of them and never told anyone, good for them. That’s surely possible.

It’s not in the Fibs anyway, it’s in how I use them with lines, patterns, and many other things all in combination. Since that’s an infinite number of possibilities, I am 1,000% sure no one, ever, has come up with what I do. The statistical odds of that (or of someone coming up with anyone else’s trading plan that is constructed from many, many odd parts that are unpublished and combined in various complex ways) is essentially nil. And that’s all I care about, for me and my trading, on a daily basis.

I was trying to think how much I use the .886, as far as how much it plays into my ‘Trading Plan’. My gut instinct was to say 1%. I actually studied on this, crunched some back of the envelope numbers, and at best I think it is closer to 0.01% of my ‘Trading Plan’. In fact, as time has evolved and I’ve learned new stuff and developed new ideas (it’s been just about eleven years since I wrote the last book), I almost never use it. I’m not saying it is any less useful that it ever was, only that I have specialized in certain areas, and the area of the .886 and what happens there isn’t the area I focus on.

But the bigger point is the ‘trading area’ is at best 10%-20% of my ‘Trading Plan’. It’s about entry, management, price action reading, ‘context’ and so much more. I have practiced endless hours putting myself in randomly and trying to use all the other skills to maximize the outcome. I try to help traders with all the other skills. Imagine if you could get in randomly and still have a net positive outcome over a large series? It’s just so not that much about the trading area. Truthfully, I just get real tired when I listen to people drone on and on about how important the trading area is. Trust me, it’s only a tiny part of the ‘Trading Plan’.

Now, on to my offer. I could go on and on ranting about how aggravating I find the comments in that post, and how inaccurate they are, but I won’t. Partly because I just don’t need the aggravation, and partly because I know with 100% certainty it would change nothing. Not one single person reading this or anything I could say or post will change their viewpoint one tiny little fraction. Here’s a quote from the post:

“The challenge is that we have a public and private forum for Jim Kane here on mypivots. I have yet to ever see either you or Jim call any turn in the market ever. Lord knows I have asked many times. Are we suppose to pay thousands of dollars just to POSSIBLY see a market turn called and make Jim Kane wealthy in the process by buying his products? I am not a member of his private room. We have members who take trades in the ES threads as they unfold and don't charge money for that! Jim knows he told me he was planning to post in the public rooms last March but that hasn't happened so lets not go down that path again. Perhaps it's there and I missed it but I'm starting to feel I've been bamboozled.”

I am not going to address, again, how ridiculous it is to think I am going to get rich selling my books. I don’t even recall this post, or what Bruce said about me making calls in the public area, or any of that. My goal in the public area was to help educate newer traders with general trading principals (after all, it has been made perfectly clear over and over that there is essentially zero value to making calls that aren’t explained so they can be understood and hopefully learned and duplicated (i.e. so don’t do it), and my work is far, far too complex to ever explain in a general forum, no less expect anyone to read it and be able to just duplicate it). I make in advance, ‘real-time’ reads on the market in my private forum endlessly, and have for years and years and years. I have over 31K posts. All time stamped. I know what I can do. And by the way, that forum is not open access, but it is free. Always has been, and always will be. Free, no charge. I do not charge for access.

If my goal is to not get any MyPivots readers to buy my books, what is the purpose for me to duplicate that in the public area? I believe wholeheartedly that my style, my work, is not a good fit for the MyPivots readers. It is not a style suited to anyone I have ever seen post in the public area of the forum. I am trying to get anyone ‘out there’ not to buy my books. And there is nothing for me to ‘hawk’ in my private forum, since everyone there already has my books.

Anyway, here’s my offer. I will grant Bruce access to my private forum for the purpose of him assessing my ‘real-time’, time stamped reads on the market, over the course of years and years. I will do this on one condition, and Bruce would have to publically declare he will honor this. I ask that he go over a very reasonable (i.e. large) sample size over a broad time period, and go back to the charts and mark his own charts with what I said, and what happened. Ten examples mean nothing. I have over 31K posts in there. What is a representative sample?

Statisticians (I have some background here) would say 1% minimum. Some argue that’s not near enough. Given how markets change over time, care would have to be taken that the sample was representative. Then post your assessment, not in terms of percentages or anything like that (since, for example, a trend trader (such as my style) could potentially make wild amounts of money at 30% ‘winners’, in fact at 3 to 1 reward/risk the break even is 25% winners, and that’s based on a binary outcome, stop out or hit the full winner, and my style is a trailing stop method that attempts to put most trades at neither outcome), but with a simple statement you will stand behind:

A) In my opinion this guy knows what he is doing, or

B) In my opinion this guy is full of it

Pretty simple. I’m willing to put it right out there for examination. Guy can ‘certify’ any posts and their timestamps that Bruce wonders about, as he surely has records for every post, any edits done, and so on. Let’s put this to rest once and for all (and for those cynics that think this is a ‘publicity stunt’, well, two things I can say: 1) I will publically pledge to take no orders from any MyPivots readers (which I prefer anyway) tied to this post if that’s what Bruce wants, and 2) if Bruce gives my reads the thumbs up, then I’ve been deemed by the top poster at MyPivots as ‘legit’, so all is better than good, and it’s a non-issue). As far as I know, I have never sold a single bookset to a MyPivots reader anyway.

I mostly do all those posts not only to assist my followers (which is a very small number, so small that you can clearly see how little I made writing the books, surely not the wealth creating vision Bruce paints), but to create a track record I can look back at, and others can study. And so my readers can see that I can, indeed, read this in ‘real time’.

All we need to make this happen is for Bruce to contact me personally. I am not going to debate this in the forum, or get involved with all the haters out there that want to shred me. I am not going to read any posts ‘out there’, so if you want, have a field day. I’m just saying that the offer is there. I do not expect Bruce to take me up on this. I expect it will be too much work, or too much time, too much happening in his personal life, or some other thing. But my almost 32K posts, all time stamped, stand ready to be examined under a microscope. Just be prepared for what you are about to find out, that’s all I can say.

I will have one caveat that I also have to mention. This is my proprietary material in there. I can’t have it posted to any public forum or told to anyone after this examination. I would require Bruce to sign a very standard non-disclosure agreement before hand, such that he will not reveal anything he sees in there, as far as techniques and such, to anyone under any conditions, or share his login. This is very standard, run of the mill for anyone taking any trading course anywhere, so it should be no issue. I would be very wary of anyone who said they want access to my proprietary materials, but wouldn’t sign a non-disclosure agreement because I should ‘trust them’ even though I have never met them.

I will await personal contact…