Best indicators ?????????????

[Jerry030]

There is a risk to asking academics about math and the market.

1) Their background is in systems with much different dynamics. Ex: number of cancer deaths over 20 years due to point source PVC pollution in drinking water supplies, etc. The market is a dynamic semi-chaotic feed back looped open system. If the academic doesn’t work with complexity theory he will be totally clueless on the market.

2) Those who can, do, those who can't teach.

Quote from ProfLogic:

No offense Jack but you didn't answer my question.
I've poised this question, outside of a market environment, to math professors, literally, all over the world and the answers was always the same.

"Yes, you can come to a conclusion to the equation but the conclusion will ALWAYS be a greatly varying range of numbers based on the frequency of change inside that specific environment with a random starting point and random ending point. At best the starting point would be fixed but the ending point, in a variable environment will ALWAYS be random.

[A fixed and stable whole number] +/x/÷/- [A fixed and stable whole number] = [A fixed and stable whole number]

[A constantly varying whole number] +/x/÷/- [A constantly varying whole number] = [A constantly varying whole number]

[A fixed and stable whole number] +/x/÷/- [A fixed constantly varying whole number] = [A constantly varying whole number]

[A constantly varying whole number] +/x/÷/- [A fixed and stable whole number] = [A constantly varying whole number]

To clarify my position: On a time based chart, every time a new bar is created the equation changes thus changing the outcome decision because the weight (volume) of the bar is different from the previous bar. A tick based chart varies as well, just not to the extreme as a time based chart does.

I ask this question to non-market technicians to get an unbiased answer because market technicians seem never to be able to give me a specific answer. This is because most live in a variable environment and are constantly trying to find fixed answers to their questions . . . which isn't impossible but their answers are only fixed for ONE BAR.

I understand what you do Jack with adding a volume indicator to your time based charts so that price direction is at least partially derived from the amount of volume associated with the time based bar but this is translation of volume to time which isn't exact. It's close and definitely better than some but not exact.

I also agree, in part, with your definition of [Trend - a price change segment over time in one direction) is "continuing" or "changing"] but you can't have a fixed definition of Trend in a variable environment. I would change YOUR definition, in my environment to, [Trend - price change segments, where those segments are based on exact & consistently based volume oscillations that specifically confirm price is either "continuing" in its current direction or "changing"direction]

We should always strive to achieve exact and precise answers to our questions. We should never settle on "close" as a reasonable conclusion.

 

[ProfLogic]

Quote from Spydertrader:

Your logic here (and that of those esteemed mathematicians) contains a False Premise.

Since the equation which defines a trend does not contain a number of bars, adding extra bars does not alter any equation.

By form of an analogy, the definition of what you eat for breakfast does not change based upon the amount of reading material sitting on your kitchen table. Eggs, bacon, toast, cereal and coffee remains 'breakfast' whether you read 'The Economist' or the ingredients on the back of the cereal box.

- Spydertrader

Lets compare apples to apples please.

Nothing was stated regarding the "number of bars" the point I'm making is the amount of volume that is contained in each time based bar is not the same, not a constant, is constantly changing, is randon & NEVER an amount known in advance. Creating a capped volume bar chart your bars are: ALWAYS the same, ALWAYS a constant, NEVER changing, NEVER randon & ALWAYS known in advance.

Since price and volume are the only fixed factors in the equation, then price and volume should be the only elements in the price portion of the chart. When you introduce time you're introducing a variable because now each bar contains an ever changing amount of volume. This makes the equation unstable and ever changing.

 

[ProfLogic]

Quote from Jerry030:

There is a risk to asking academics about math and the market.

1) Their background is in systems with much different dynamics. Ex: number of cancer deaths over 20 years due to point source PVC pollution in drinking water supplies, etc. The market is a dynamic semi-chaotic feed back looped open system. If the academic doesn’t work with complexity theory he will be totally clueless on the market.

2) Those who can, do, those who can't teach.

Complex theory MUST to be applied to variable enviroments to make them at least marginally understandable. Simple math can be applied to fixed and stable environments with consistent results.

 

[RCG Trader]

Quote from ProfLogic:

Lets compare apples to apples please.

Nothing was stated regarding the "number of bars" the point I'm making is the amount of volume that is contained in each time based bar is not the same, not a constant, is constantly changing, is randon & NEVER an amount known in advance. Creating a capped volume bar chart your bars are: ALWAYS the same, ALWAYS a constant, NEVER changing, NEVER randon & ALWAYS known in advance.

Since price and volume are the only fixed factors in the equation, then price and volume should be the only elements in the price portion of the chart. When you introduce time you're introducing a variable because now each bar contains an ever changing amount of volume. This makes the equation unstable and ever changing.

I think the only thing that changes in the price volume equation is Rate Of Change.

What u are doing is the same thing they are doing.

You use volume as the constant.

They use time as the constant.

Price and time are the variables in your equation as u don't know when the volume bar is going to complete.

They don't know how much volume per unit of time.

Price is what u both act on, however.

You trade based on price failures in the direction of trend as defined by momentum. I believe, without extensive study that u get out when momo flattens out.

They trade on the premise that volume change will manifest in price. They are using the momo of volume as far as I can tell.

Looking at different engines on the same aircraft it would seem to me.

Caveat Emptor

 

[jack hershey]

I recognize that you wish to confine the mathematical discussion to a particular system of mathematics as you have shown us. I also know you prefer constant volume bars.

As jerry has shown, he has chosen a stat oriented system and an iterative refinement technique.

Most people, as you do, prefer short answers. I chose to work very hard and do what I was told to do. Problem solving uses math as a tool. Chosing the tool was dictated to me by the problem.

Segments of profit are available. The market IS the source of the offer.

Below is a short statement that I stand by.

By considering the cases of the market possibilities, it turns out they are finite and granular to boot. From this, comes the P, V relationship.

Trends overlap and this fact is combinable with the finite cases.

The Law of Large Numbers is in effect in markets the are suitable for making money taking profit segments. This is just a pragmatic consideration.

The above is where my answer to you came from. It is acceptable to me and it is not acceptable to you.

What I got from the owrk of other and my work was a solution to a problem. Conveniently, it enables those who use it to take the market's offer.

By assembling the necessary mathematical elements, the complete market description is made available. Rationally and logically, using the tool of mathematics, no stones are left unturned. This was made possible by two things: the market is granular and a full and whole logical mathematical tool is available.

 

[ProfLogic]

Quote from RCG Trader:

I think the only thing that changes in the price volume equation is Rate Of Change.
What u are doing is the same thing they are doing.
You use volume as the constant.
They use time as the constant.
Price and time are the variables in your equation as u don't know when the volume bar is going to complete.
They don't know how much volume per unit of time.
Price is what u both act on, however.
You trade based on price failures in the direction of trend as defined by momentum. I believe, without extensive study that u get out when momo flattens out.
They trade on the premise that volume change will manifest in price. They are using the momo of volume as far as I can tell.
Looking at different engines on the same aircraft it would seem to me.
Caveat Emptor

I agree that the "rate of change" speeds up and slows down throughout each day but the "rate of change" is a constant on a time based chart but not on a volume based chart. On a volume based chart as volume increases the frequency of the bars being created increases.

This is absolutely NOT depicted the same on time charts and capped volume charts.

I use volume as a constant because volume is not corruptible. On time based charts volume isn't stable. I would never imagine why anyone wouldn't want stability in their charting.

I absolutely know when my volume bar completes. It will complete when a specific number of contracts are traded that match the user defined volume bar chart I created. If I have a 2000 volume bar chart then a new bar is started after the current bar fills with 2000 contracts. BUT . . . decisions aren't based on bar completions they are based on the purity of price movement and that is the creation of cycles which are perfect using volume bars and are unreadable and inconsistent using time bars.

Volume per unit of time is completely random and useless because no two sequential time based bars are identical except by shear coincidence.

I trade based on pure cyclic price oscillations which I further confirm with momentum. Momentum is a factor in my cycles but not my ultimate trigger or ultimate exit reason. The cycles are perfect. Creating fractional parts of the cycles allows me to see cycles inside cycles so I can enter and exit each trade with the greatest safety and always with the strength at that particular chart pushing at my back as the cycle oscillates building on profit.

I understand that they trade on the premise that volume change will manifest in price but that isn't a constant nor is it precise. I feel that there is a central point between what Spyder and Jack does and what I do that could extract the most consistent parts of each and produce something pretty amazing but my offer of putting our heads together has always met with resistance so I don't push the point.

I don't need what they do and they don't need what I do because we are both profitable but I at least will never stop looking for a way to improve on the trading environment and they evidently have.

 

[HumbleBobby]

Quote from Humpy:

Which indicators do YOU recommend and why ?

I have been using Macd, RSI, Mov averages etc. for years with mixed results.

Perhaps you favour a mixture of 2 or more indicators to compliment each other ??

I change my indicators according to the market direction, if it is a trending market I would use one set of indicators, and if it's a non- trending market I would use another set.
So first you need to recognize the trend and then use the proper type of indicators according to the trend (easier said than done)
Trend indicator example: Aroon, CSI, Macd, DMI, Moving averages, Parabolic SAR and RSI (analysis paralysis)

 

[Spydertrader]

Quote from ProfLogic:

Nothing was stated regarding the "number of bars"

Of course you did. I quoted you in my post. (Your words) "Every time a new bar is created the equation changes." In order for an equation to change by the addition of a "new bar" (a number - one) then 'numbers of bars' must (by default) be in the equation.

Quote from ProfLogic:

the point I'm making is the amount of volume that is contained in each time based bar is not the same, not a constant, is constantly changing, is randon & NEVER an amount known in advance. Creating a capped volume bar chart your bars are: ALWAYS the same, ALWAYS a constant, NEVER changing, NEVER randon & ALWAYS known in advance.

For you, creating Constant Volume Bars allows you to 'see' that which the market has provided. For me, it is precisely this change in Volume (over time) which shows the marklets trends. Contrary to your beliefs, one can know (in advance) the changes in Volume because they always (on every fractal) repeat - without exception, without error, without anomoly - each and every trading day in every market on the planet. In fact, here they are:

B2B 2R 2B
R2R 2B 2R

Quote from ProfLogic:

Since price and volume are the only fixed factors in the equation, then price and volume should be the only elements in the price portion of the chart. When you introduce time you're introducing a variable because now each bar contains an ever changing amount of volume. This makes the equation unstable and ever changing.

Again, I have not introduced time into any equation. The two equations provided have zero to do with time and operate exclusively within the Volume Pane of a chart.

How long (how many bars, minutes, hours, days, months , or years) a trend lasts on a particular trading fractal results from the market itself. One need not know how long a specific trend will last. One only need recognize how a specific trend ends and begins. All trends end and begin in the exact same fashion it turns out.

Since you didn't like my breakfast analogy, perhaps dominos have a better fit for your specific orientation.

Find a box of dominos. Note, they each exist of equal size and weight (relative to each other). Set up 5 dominos in a row - with equal spacing - a distance less apart than the length of each domino. Push the first one in the line. Does not the last one always fall?

Do the same drill with 5 million dominos. Push the first, and at some point in the future, the last domino falls. One need not know how long (how much time passes) the trend (the total number of dominos which will fall) will last, but one sure as hell knows how to see the trend begin (Domino One drops) and end (Domino One Million drops). Once again, this Domino 'Trend' begins and ends, in the exact same fashion - a falling domino.

While each domino requires a certain segment of time to fall (just as each Price Bar requires a certain period of time to form) neither the numbers of bars (or dominos) nor the 'type' of object (bars or dominos) 'create' the trend. With dominos, the 'trend' exists as a result of 'energy' (that 'push' of Domino One transforming potential energy into kenetic). With the market the 'trend' results from something else entirely.

- Spydertrader

 

[Spydertrader]

Quote from ProfLogic:

but the "rate of change" is a constant on a time based chart

You seriously believe this?

Find an Eighth Grader. Have him instuct you on the proper use of y= mx +b.

- Spydertrader

 

[jack hershey]

Here I comment upon the application of the problem solving solution.

Two procedures have come to the fore over the ages. Ours is nothing compared to the main procedure in terms of its application and or effect on the markets.

Your solution has in its application the use of the main procedure. I refer to the feedback loop designed and used by John Boyd and later transferred to the pragmatic process of extracting the market's offer. OODA is the acrynym. It is easily searched and abundant applications are described. It is a routine as expected. It is wholistic as well.

We chose to use a routine (MADA) based on the finite nature of the problem. The routine provides closure each time it is cycled. OODA also provides closure as a routine.

The two routines can be compared and contrasted. They have no overlap.

What I have found over the last 50 years is that these separate and non overlapping orientations make it difficult for people to understand each other.

Since I am the small fish, I have made a considerable effort to become parasitic to the main procedure used by almost everyone in the financial industry. Larry Harris in his seminal work included a box for us in his hierarchy, so our relative station is well defined.

The finite sets for each of the four sequntial parts of MADA each have decreasing elements. This means a funnel like effect occurs as a person uses the routine to complete his trading process.

We chose to use transfer to others this ability by "building their minds" as is done in any endeavor requiring knowledge, skills and experience.

In reverse order, the elements of A are two, the elements of D are five. The M is just a status report fed to A for analysis.

Pragmatically, a person decides to trade on a fractal. He has to consider a slowr fractal and a faster fractal to answer the three Analysis questions.

1. Where is the market in its cycle?

2. What is the next element in the cycle

3. How fast is the cycle changing?

All are answered in the Present. Three fractals have the information displayed all of the time. Only one pattern exists, so it is easy to gather the infomation in the Present.

In the pattern three price moves occur and four volume moves occur. The word move is a time rate of change consideration. Time in markets is the basis for timing the markets (extracting the offer). No one in ET knew or understood the red sentence when they arrived here. No moderator knew or understood this when they arrived here. For most people there will never be a reason to think about or process the red sentence.

As you see what I state is gibberish and unbelievable and astonishing to those who use the main procedure OODA and believe the conventional wisdom to the exclusion of all other thinking.

Boolean Algebra is the algebra of base 2. All bases have their own unique algebras, as is well known. The science of logic, uses the base 2 methods, largely. Infomation theory has two basic forks: probabilistic and non probabiliistic. OODA uses the former and MADA uses the latter. MADA is Boolean Algebra based as are most computers and electronic tools, today. You use Bayesian math or "frequentist" math. I use 1's and 0's.

I do not have to argue the riddle of induction; that has been done very adequately (and in the building where I was a graduate assistant, serendipitously). I make my stand as a problem solver who uses critical thinking to solve problems. I feel deduction is the requirement and all considerations of the market MUST be acknowledged and handled.

In the pattern you see B or R standing for Black (long) or Red (short). The two values of the last A are either "continue" or "change". In trading, the corresponding platform tools are HOLD or REVERSE.

Fractals nest in a three to one ratio using the overlapping pattern as the criteria.

Trading is like doing anything that requires knowledge and skills. My examples are drivng a car, riding a bike, skiiing, sailing, gliding, swimming, reading, writing, arithmetic, tennis, figure skating, brushing your teeth, growing beans or lettuce, and washing your cars. All are supportive, comfortable and confident PROCESSES that involve a mind that has been built in an orderly manner.

The knowledge and skills come from purposeful experience.

The people who have built their minds to trade like driving a car can sometimes read my posts after 6 months or a year or so. It takes very little time to learn how to trade. It happens in direct proportion to the rate at which you build your mind rationally. The market is always correct.