Quote from jack hershey:
Please set up a tab for the 5 upcoming cycles (Excel sheets). There are several columns mentioned.
What are those cycles and what in those columns?
It still may be the case that guys like A. Lo say what they say and Congress passes legislation that, in turn, is turned into regulations like we have today and which are going to change next 15JUL11.
What`s gonna happen after 15JUL11?
What is it that smart traders exploit as indicated by BF?
Smart traders are parasitic to the "herd". They anticipate the "herd".
The "Herd" is a relative conseption
3 thoughts about behavior
- Thread starter TradeWrecker
- Start date
I tried to post 5 cycles but in my cut and paste haste, I forgot to index the cycle 3 to cycle 4 and cycle 5. This probably stumped you since you think cycle 3 is repeated twice.
the columns for the Excel for each cycle will probably stump you as well. Ammo pointed out that I am not dumbing down things enough and you are proving it. Thats the way it goes.
When you begin to do trading, you will also keep records AND your IB will also send you records. The IRS has standard ways to enter the trading results a retail trader has over the fiscal year.
Excel is sometimes used by traders for planning, strategy and doing the daily routine.
It is not possible for you to envision any of these things, apparently. Maybe in time you will become familiar with the possible connection between trading and Excel. some people use other than Excel for constructing what is known as "spreadsheets".
I actually know people who "log" on spreadsheets. In PVT type position trading of stocks more than just logging is done. you can search a few Excel sheets that were used to present the "Universe" of PVT trading. You can also look over some of the trading logs of PVT trading that were posted on excel spread sheets.
It is very complex to explain in simple terms how record keeping relates to trading and learning to trade in more effective and efficient ways. There is a connection.
The 10,000 hour myth that permeates the Conventional Wisdom is one outstanding myth that can be debunked by using an Excel spreadsheet. You can probably guess one of the columns that would be used. It might be called "time spent", for example.
After 15JUL11 there will be a 60 day "comment" period. Again, you may not be familiar with how the Executive Branch of government works. Usually a child gets to study this at some point. In the Boy Scouts, there is a "required" Merit Badge that relates to how the government works. Pick up the Merit Badge pamphlet and "do the work" to get its requirements met.
"Herd" is something that is "most" observable in markets. I watch it and I also watch "Smart Money". The combinatiion of the two is what makes me an expert "parasitic trader". Larry Harris on page 199 shows the 32 categories normally occupied by the investment industry.
In the Excel spreadsheet there will be 204 trades. They will be ID'ed by a number between 1 and 204. The column entitled "cummulative target value" will have 200 for trade 1 and 767,000 for trade 204. This means the minimum column width has to be able to accomodate 6 digits and a comma. Rounding is another consideration.
This column will be used for comparison with other similar columns.
Most columns can be completely filled in at the time the Excel is set up (yesterday). All the "cummulative target values can be filled in "automatically" since there is a formula for each of the cells based on other "known" cell values.
Cell 204 will relate to cell 203 and have a + sign and add a product of two other cells (one a number of contracts (40) and the other the number of points per contract(3)). This product will also be multiplied by 50.
By having a plan and a strategy, you can have an Excel spread sheet. By following a daily routine expressed on the "kmown entries" of the spreadsheet, you can learn to crawl, walk and run as the days pass.
We know a trade can take 15 minutes and we know there are 204 trades. This is part of the 10,000 hours myth. 51 hours of it over 60 days. In between, annotating and logging and glossary 3x5 card building will happen.
Card 1 is DOM.
Card 2 is increasing volume
Card 3 is sentiment
Card 4 is long
Card 5 is short.
Card 6 is point(s)
Card 7 is Red.
Card 8 is Black.
Card 9 is price movement.
Card 11 is "2".
Card 12 is pattern.
Card 13 is B2B
Card 14 is R2R.
card 15 is 2R.
Card 16 is 2B.
Card 17 is fractal
Card 18 is nested.
Card 19 is increasing
Card 20 is decreasing.
Card 21 is continuing
card 22 is change.
card 23 is enter
card 24 is wait
card 25 is hold
card 26 is reverse.
card 27 is exit.
Outsource,
Here is a note:
When each trade (204, for example) is earning 6,000 dollars and it takes 15 minutes to do, how long does it take to enter the formula for that cell you ARE going to do so you know to be doing trade 204 after doing trade 203 after doing trade 202, etc. .............. after doing trade 1 with 2 contracts for 2 points profit (200 hundred dollars profit).
What does a packet of 25 3x5 cards cost? How many different colors are you going to buy? What will the colors symbolize?
Use the green cards for OOE's.
To earn a merit badge a Boy Scout gets a merit badge pamphlet and he does the work. A MB counselor helps him understand how to do the work. He goes before the Merit Badge Council and they ask him questions and give him the merit badge if he did the worK. He takes the merit badge card to the council office and buys the merit badge. Then he sews the merit badge on his MB sash. He gains rank when he gets enough merit badges done and of the correct kind. After a while he just does merit badges because he "gets it".
Trading is different. it makes a person very rich if he does the work. If he doesn't go the work he does not get rich. If you do the work improperly, you don't get the merit badge.
So far, you are just an observer watching the world go by.
Five cycles of trades: 24, 36, 48, 48, 48. 51 hours IN the market over 60 days. 12 days a cycle.
Observe....... years, probably
Talk...... years, probably
crawl..... years, probably
Walk ..... not possible for most
Run....... never going to happen.
Here is a note:
When each trade (204, for example) is earning 6,000 dollars and it takes 15 minutes to do, how long does it take to enter the formula for that cell you ARE going to do so you know to be doing trade 204 after doing trade 203 after doing trade 202, etc. .............. after doing trade 1 with 2 contracts for 2 points profit (200 hundred dollars profit).
What does a packet of 25 3x5 cards cost? How many different colors are you going to buy? What will the colors symbolize?
Use the green cards for OOE's.
To earn a merit badge a Boy Scout gets a merit badge pamphlet and he does the work. A MB counselor helps him understand how to do the work. He goes before the Merit Badge Council and they ask him questions and give him the merit badge if he did the worK. He takes the merit badge card to the council office and buys the merit badge. Then he sews the merit badge on his MB sash. He gains rank when he gets enough merit badges done and of the correct kind. After a while he just does merit badges because he "gets it".
Trading is different. it makes a person very rich if he does the work. If he doesn't go the work he does not get rich. If you do the work improperly, you don't get the merit badge.
So far, you are just an observer watching the world go by.
Five cycles of trades: 24, 36, 48, 48, 48. 51 hours IN the market over 60 days. 12 days a cycle.
Observe....... years, probably
Talk...... years, probably
crawl..... years, probably
Walk ..... not possible for most
Run....... never going to happen.
Quote from gucci:
Ouch!. That's gonna hurt...
Jack, you have to stop being so brutal.
Run is a state of performance at the highest levels. That would be being an expert trader.
Baron asked me to be dignified in my comments to others. The comments I am making here are fair comments.
Shooting the messenger is SOP in ET.
I do not think it is brutal to post several levels of performance and to note how potential traders perform at those levels.
To become a skilled trader takes skills and knowledge and those two items come from "doing the work"
It takes a lot of work to be able to "run" or even "walk".
I left out Card 10 which is Gaussians. That is dry humor.
What level is a potential trader operating at if he has no plan, no strategy or no routine?
Where is a potential trader who does not iteratively improve all of these items in the manner suggested by Behavioral Finance?
Some potential traders do not succeed. How many just observe? How many just Talk? How many just crawl along?
Not many potential traders can walk and almost no potential traders get to the last stage of running with the ball.
Lets say just 50% of the traders are expert traders that take 50% of the market's offer. Can people in this group figure out the column titles for a spread sheet?
Behavioral Finance, collectively, has defined the foibles of traders. When a potential trader knows that he has many challenges, it is incumbant on the trader to shape up or he is going to be shipped out.
Attached is the Excel spread sheet that covers the five cycles. Several cells have yet to be fillled in but it does represent a plan and a strategy. The routine is MADA.
The 27 3x5 cards and their definitioins are suffucient to do the five cycles.
If any person wishes, they can simply go back from their last trade 203 more past trades and log them on the Excel spreadsheet.
Similarly, person can start whenever he pleases to fill in the spreadsheet.
The Dom and non dom columns DO NOT HAVE TO BE CONSECUTIVE VOLUME MOVES. For me, they may be or I may chose to spread things out here and there to make a point about the flexibility a -person has with respect to his effective and efficient performance.
Tuesday has come and gone and the first cycle has begun....... I guess from your post that the new dominant and sentiment cycle is long?odd if we are in a depression. I am probably misinterpreting as usual.
Jack
Here is a monthly ES.
Do we have an HVS here with a resumption to dominant or do we have an entirely different situation going on here ?
Here is a monthly ES.
Do we have an HVS here with a resumption to dominant or do we have an entirely different situation going on here ?
Your comments are appreciated.
Any day can be used to begin cycle 1. If a person is reading this a year or so from now, the Excel still applies. Suppose a person decides to skip a day here and there. That's fine, the cycle pauses for that time period.
One of BF's precepts is how people relate to markets. Time applied is a key issue. Time in the market is one thing and time on the sidelines is another. The time in column is set up to show just how much time is spent in the markets as opposed to the real time passing.
On a 5 minute chart the dominance and the sentiment change during the day. Overall, we are in a Depression. Using weekly and monthly charts shows the Depression and the stages of going through the Depression. BUT for trading a plan, the plan is to keep it simple for the first cycle.
I explained the first cycle's goals and character. I used words that can be defined on 3x5 cards.
For me, the trading will be done on the ES and I use a 5 min chart and keep three levels of nested fractals running on that chart.
By knowing the next 204 trades to do 5 cycles before I do this illustration for an appendix, is an orientation to the future and what the trades will bring.
The expectation is that in cycle 1 only dominant trades will be taken. They could be long or short vis a vis sentiment. Annotations show each the dominance (on volume) and the sentiment (on price).
Conveniently volume, leads price. This makes annotating a process whereby volume is annotated first and price is anotaed second.
Adjacent bars is how annotating begins. It is probably not too difficult to use adjacent bars to annotate.
Many many thoughts could occur to a potential trader starting out.
Behavioral Finance suggests that he make changes in his approach when emotions signal to him that he is having an emotional moment.
The depression fractal is a long ways from the trading fractal. The trading fractal is a bar by bar fractal and the bars are well defined by looking at them as they form.
I estimated and posted that the "time in" would be about 51 hours for the 204 trades. This could be happening in as little as 60 business days.
Anyone who wishes can amplify his definition of sentiment and his definition of dominance.
It looks like each fractal has its own sentiment and its own bominance or non dominance.
I both cases, it can be discovered that sentiment is one thing or one other thing. As to dominance, it either is present or absent. If dominance is absent, then non dominance is present.
What is it like for an observer or a talker? It is inconsequential since the person is not learning nor trading. These are stages of a potential trader's experience where the experience is not purposeful or effective or efficient.
What is dominanting at this time of experience is A and D of BF.
If a person reaches the stage of annotating and recognizing dominance and non dominance, his next small step is to recognize the sentiment at that time.
The ES operates 6 1/2 hours a day. Cycle 1 is dealing with 2 fifteen minute periods a day. 24 of these will occur during cycle 1. Time in is done with 2 contracts to make 2 points twice in a day as the beginning level of trading.
"Time in" will be approximately 6 total hours for cycle 1. Duriung the 12 days, minimum, at least 78 RTH's will happen. During this RTH time, it will be possible to annotate and to log the OOE's that are occurring on all levels that are observable.
Make card 28 OOE which stands for order of events. Use a green 3x5 card for OOE and for each OOE that is discovered. fortunately, for anything you need to define, you can just do research and cut and paste onto a 3x5 card or an electronic file that is topical. Each card that is made is a consequence of a specific decision to learn and grow.
The mind will be growing during this time. The growth will be either for learning how the markets work or learning repeated failure. As BF suggests, it is the choice of the person.