Anti-Jack Trading

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Quote from hypostomus:

Since you all appreciated my Anti-Jack trade so much, I will grace you with my NAZDOIL study, the source of many a wisely untaken trade. I have found that if this system calls a trade, and I do the opposite, I always make money. Now, you may find it strange that I do not simply invert the study, but I have found in backtesting that it is impossible to reverse a negative expectancy system to make it profitable, so I don't tempt fate. BTW, beware, this method is flavor-sensitive. It will not work with Brent or West Texas, only Sweet Light.
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Did Jack have you pegged, or what?!

"Almost all B people live and do what they do in the land of opposites. They are deeply locked in to many many myths that center on opposites."

http://www.elitetrader.com/vb/showthread.php?s=&postid=832926#post832926
 
How very apt! Thanks for that. A pathethic example of Jack trying to use NLP in a negative way in a print medium. But a nice try.

I will give you an example that may prove his point. From time to time I amuse myself by drawing channels, mostly to remind myself how misleading they can be. At 2:39 ET today in NQ price bounced off the right side. Now Jack would say "See!" But I look at it and see that it was two ticks away from the VWAP. And that it was the fifth channel you would have drawn for the afternoon.
 
It is not my intention to be funny, I just report what I see. For those of you who have traded in your comic book collection for a lifetime subscription to the WSJ, check on page D8 today. "Find out if you have what it takes. Introducing Virtual Stock Exchange." It's an on-line multiplayer game from MarketWatch, a DowJones company. It depicts a silly old guy like me in athletic gear high-fiving his simulated wins.

Now the moderator may think, what has this observation to do with strategy? Everything, I think. Such simulations encourage traders to get pumped, to act impulsively, to "go for it." The more people take the obvious trades, the greater the opportunities in the non-obvious trades. The more people trade standard indicators (as opposed to custom), the more pronounced the herd behavior.

In the same WSJ issue is an article about daytraders in Mumbai who only need to make $12-17 a day to live like kings. THEY'LL show some respect for my 1 NQ point! And since it only takes 31 seconds to make, they can move on to their day jobs or girlfriends or begging or whatever. I shall move to Inja and become a ghourou!
 
To continue elucidation of Anti-Jack trading strategies, I assert that strategy starts with philosophy. Not that I am anybody or know anything, but at least you can read and comprehend my prose, as opposed to that of some people we know. And like the Sufi wise fool Nasruddin who looked for his lost keys under the lampost because "The light was better there", you'll keep reading.

After an intense study of Jack (which yielded mostly intense headaches), I realized that we approach the markets with quite different views. Jack espouses the glacially slow 5 minute bar ("The things they say are awful c-c-cold. Hope I die before I get old!") From that view proceeds such faulty opinions, loftily opined, that "volume leads price". Being a supreme twitch, I am glued to a customized T&S visualization, essentially a tick chart. From that it is quite clear that price generally leads volume. Price being what market makers play with to create the volume they live off of. So I am micro, Jack is macro. The distinction perhaps extends to tonal vs. nagual. It certainly offers in contradistinction the noisy quantum vs. the seemingly smooth Newtonian.

The relevance to strategy development? It's all about premises. And where those premises lead. To crisp understanding of market action which distinguises between the random and the determined? Or to fuzzy overly complicated Aristotelian theorizing.
 
I have done the thinking to make what I do a mechanical process. In doing this I discovered that the work of Pascal does not apply to the markets. Instead, with six deegrees of freedom as an input and foure degrees of freedom as the trading out put, the automated approach internally goes through five stages to, in a logic construct swell to 70 degrees of freedom where no more than 5 are applicable at any time and where the logic steers and focuses on the pertinent application of logic at all times.

The above is the articulation, mathematically, of the set of truths I have acquired over time for monitoring data sets, analyzing data sets with the possible conclusion set, the pairs of decisions for each conclusion, and the set of timely actions that result from the set of decisions that are possible.

As I looked at the markets, I gained knowledge, skills and experience. In about 25 years I came to the place where I could do the required logic schematics over 15 years ago. In the last fifteen years I have added some efficiency and effectiveness refinements.

This post is not what anyone writes in books or reads when they buy books. Learning is a process that occurs over time.

My views are based upon delving into the matters at hand and, over time, reaching conclusions based upon the truths of how the market works. In public, the assessor level, the beginner level, and some intertmediate level stuff is at play. But, so far, not much beyond that. One exception is the YM/ES leading/lagging relationship that is now being used operationally. I regard this as intermediate plus functionality.

To design and build what you want to supply takes the coding of several (many many in fact) items arranged in an array that involves seven processes which feed each other in an arrangement of links and nodes. I gave two examples of nodes in a post recently: sentiment and pace; six levels of one and five levels of the other. All eleven signals of their presence or absence (think Boolean) serve to "gate" other information to other nodes. All of this is secondary in nature and the primary considerations are more complex.

What I feel is the answer to the problem is knowing all the coefficients of all the functions on seven sequential levels of consideration. If three differing periods of regression are needed to define sentiment; I noted each regression duration and the exacting gating of the boolean values through to the primary comparitor (one of many) that provided the NOW decision result required at that moment.

The camtasias show the operations at the tick pair level for about two hours where the annotaed future moved into the present as set up about twenty bars in advance. This means that trading takes place by just giving up the spread at turning points in the market price.
 

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Quote from hypostomus:

Sorry, I don't trade ES. At around 1575, NQ is worth more than ES. Besides, I am constitutionally incapable of going long.
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RU related to Alan Abelson?

DS
 
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