I need your help: an opportunity to participate in a research project.

I’ve tested market patterns, technical tools, and fundamental factors in thousands of combinations over the years. For me, this work is a quest for both truth and profits—the truth behind how markets really move, and the logical conclusion that someone who understands these truths is better able to pull some money out of the market.

This is not an easy task; there are so many ways to make errors and mistakes, and we never arrive at absolute truth. One of the things I’ve come to understand over the last two decades is that any test is a joint test of whatever pattern might (or might not) be present in the market and whatever test structure we impose on it. In plain English, this means that if we fail to find a pattern it might be because there’s nothing there, or because we looked in the wrong way.

I’ve always found tests of levels to be particularly challenging. Traders tend to have very strong convictions about the utility of certain levels, often bordering on fanatical loyalty. There are sometimes solid reasons why a level should work, and cognitive bias reinforces the importance of any level, even an imaginary level, a trader looks at. (Don’t believe me? Drop a random line on your chart and watch price action around it. If you’re honest, you will almost always see that it somehow influences and shapes prices, but it doesn’t. It’s a random line!)

Though I’ve tested various levels many ways over the years, one thing that is missing from most of those tests is human discretion. I’ll write more about this in the near future, but the quick summary is that as soon as we introduce discretion and opinion into testing, we risk contaminating and invalidating the results. (Some of the best-known pattern “encyclopedia” books suffer from this issue.) So human discretion is dangerous, but it’s also, for most traders, an essential aspect of actually using levels.

So, I need your help with a test/experiment. Please go to this link https://marketlifetrading.com/site/quiz and take the short quiz you see there. Because we are treating this as a structured research project, I can’t tell you too much about the what and why of what we are doing, but I can promise you this—I’ll share all the details here publicly when the test is done: what levels were tested, the logic behind the test structure, and, of course, the results of the test.

This is important work that has the potential to validate the use of certain kinds of levels in some markets. We may find something here that moves the ball forward significantly, and shows us something about markets that has, until this point, defied quantification.

But I need your help! It should take only a few minutes to take this short quiz. Please share it with everyone you know. Even beginning traders can contribute to the project significantly. And, warning, I’m going to be a little annoying about this with multiple reminders on twitter, etc!

Thank you. Check back here for results in a few weeks.


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.