Quote from jack hershey:
kiwiautotrader;
Were you to approach coding for an ATS from the viewpoint of market behavior instead of any other, then you could address the key concerns of automation.
A simple example of a work in process would be the six methods of FB123.
Another point could be introduced by the concept of filters. Filters do not work as it turns out but they do lead to another aspect. That is timing. A coding name for timing is gating but again gating what?
By looking at FB123, filters and gating, you get to see market context and status come onto the table. It may become apparent that these are collectively a way to determine when it is time to do what.
Edges as Alan's D, U M pointed out was a way of building a succession of systems, each proceeding from the most fundamental market basic advantege available. I guess it is named the "Holy Grail" as a generic.
What you posted was a "case" or a pattern. It doesn't work as you found out and all the "patterns" like you invent do get to the 50/50 you have found to be their limit. That is very good. the deductive conclusion is that you are not the role player for providing the patterns. As Alan said the role player for this is "the Market"
FB123 filtered out six Venn regions in the Market Universe. He had to learn to know that he knew when one region or another was ineffect. For programmers this is the filter in opoeration.
The particular coding for each of the six has been alluded to sufficiently to be able to do the filtering AND to do the trading code in each filter.
There is another alternative.
You can do it intellectually in a short time on a few sheets of paper. It comes down to a pattern and how the pattern works in a nest of fractals. As you get to the unobservable, then just use your intellect.
Why the Holy Grail turned out to be such a pattern is easy to explain but it is very unexpected in the eyes of a conventional wisdom follower such as you of FB123. The market gives you the pattern on its variables. Four words are involved.
As you see FB123 uses both variables. Alan did not use both variables. One person is looking for the common pattern still. The other is applying probabilities to a core concept (an edge).
One thing to keep in the picture is that the control of a market does not ly with the majority. BUT on the other hand a single person inventing is kind of silly. Read my response to the guy who thought the NYSE was foreign to me. There I point out how doing 60 trades @10% a year is not what they do in NYC. About 25 lines of code make this kind of trading casually possible for anyone from JR High on up.
I don't know quite what it is that hides the market operation from everyone, but if you have two variables and you treat them in their only binary maner of movement, how can you miss understanding that there are only four certain possibilities over all?
How can FB123 come up with six modes of operation of the market and how can Alan generate a series of edges from his most basic sytem?
My conclusion is that almost no one adds the flavor that trends overlap to the picture.
You do not deal with trends, either.
The task of the trader is to learn to drive a car. He has to deal spatially, with patterns and with movement. Little babies do it by learning to balance, then learning to walk around. By 2 1/2 they are getting into everything in their environment successfully. They use three brain operators: spatial, patterns, and movements.
You have two variables. Each one does two things. If they aren't you wait until they do. They say 95% of potential traders fail. I've heard it gets emotional too.
What is the deal if you are making 10% every 4 days trading stocks on a 30 minute chart. What is the deal if you are trading a 5 minute chart for the ES?
We posted as a courtesy for five years to explain one pattern that has four words describing the pattern.
Three green followed by two red followed by two green and you can't make money? So what follows this if you do not jump fractals? Three red followed by two green followed by two red. Was there a volume trough in the three's. Where are the peaking volumes? So you have one more peak than trough. Where is the remaining trough?
Code it up.
Funny thread, so close but so far.
