Beyond the hype of hershey futures method journal

[no. 22]

Quote from RoughTrader:

5) The FTT. The concept is clear enough, but i'm still confused unfortunately. As an FTT is forming, what must we look for as a confirmation that the bar indeed is an FTT? Is it not possible for a bar to potentially be an FTT, only to see price continue on to reach the LTL (for the long case).

My point is, starting from the point where price is sitting on the RTL, there can be many bars that fail to reach the LTL. There still exists the possibility that eventually the price will make its way back to the LTL without a BO to the downside. If this is the case, do we need to wait for the close of a bar to BO of the channel to confirm we had an FTT one or more back?

My central problem is the timing of the stop-and-reverse as the bullish channel morphs into the bearish channel (meaning, the channels overlap). If we wait for the confirmation as described in the previous paragraph, we've already missed the opportunity. We've either taken a good hit to our open profit, or worst case, the open trade has turned into a loser.

RoughTrader

This is the same question about whether you wait for the bar to complete or make a decision intrabar. Only the authorities can provide an answer.

But for your second paragraph, is it possible that you need to draw a new LTL for those shorter bars moving up the RTL of your present channel?

 

[RoughTrader]

Quote from Joab:

Are you here to ask questions and find answers or are you just entertaining yourself with this thread?

In order to quant this strategy you would probably need a lot of IF / THEN but only WHEN's written into it.

I have played with Spyders version of this method for many months and all I can tell you is to look for the obvious and if it's not there then it's just not there.

The main issue with the method is there is way to much subjectivity suggested in the volume analysis and therefor I doubt highly that you will succeed in programing it.

I wouldn't waste my time posting meaningless questions. I firmly believe that a system should have concrete rules based on price action, and can be numerically described (even if complicated). Any "system" that employs soft, on-the-fly human decisions in the slightest sense cannot be verified at all. Its rules are stochastic in nature, largely determined by the subjective interpretations of the trader.

I'm not interested in debunking this work. I see many claims about it, but no one has put in any effort to SYSTEMATICALLY VERIFY the method. If indeed this method requires soft decisions by the trader, it is unverifiable from a quantitative standpoint. The only recourse is to study, put in the screentime, and practice it until it either works for you or you simply cannot make it work at all.

Given the available documentation, it seems to me that this method can be captured by hardline quantitative rules. That is my objective at this point. I simply do not understand the method enough to define the rules, that is the information I am seeking in this thread.

RoughTrader

 

[RoughTrader]

Quote from no. 22:

There is a notion of RTL, which means Right Trend Line. If the trend is up, it may be best to enter when price touches the RTL, which is the bottom of the channel. When the trend is down, it might be best to enter when price touches the RTL, which, in a downtrend, is the upper channel line. Apparently they got the notion of Right Trend Line by extending the lines to the top/bottom of the chart and called the Right Trend Line the one that intersects the top/bottom of the chart to the right of the Left Trend Line. Draw it to see it.

Again, you have to go to the source(s) to find out whether it is permissible to trade before point 3.

Could you explain more about the triangle wave and being out of phase?

Actually, the example I made about the sideways chop wasn't a good one. Quite to the opposite, it seems that if one were to build a channel around the chop starting with a 1-2-3 formation, then you could remain synchronized with it unless it constantly breaks the trendlines of the channel.

I apologize, I'm still trying to understand the proper trade timing inside the channels.

Roughtrader

 

[no. 22]

Quote from RoughTrader:

... many claims about it, but no one has put in any effort to SYSTEMATICALLY VERIFY the method. If indeed this method requires soft decisions by the trader, it is unverifiable from a quantitative standpoint. The only recourse is to study, put in the screentime, and practice it until it either works for you or you simply cannot make it work at all. ...

/B]

If it can't be systematically verified, I'd say that anyone trying to do it with wetware is going to experience mixed results, at best.

 

[RoughTrader]

Quote from no. 22:

This is the same question about whether you wait for the bar to complete or make a decision intrabar. Only the authorities can provide an answer.

But for your second paragraph, is it possible that you need to draw a new LTL for those shorter bars moving up the RTL of your present channel?

Yes, I see your point and have been considering this idea for some time. The channels I have been discussing so far relate to the larger trend channels found intraday. However, many smaller channels can be built inside the larger context. Ultimately, I am trying to understand how the smaller channels provide insight that the larger context channel is changing direction, and trades should be taken appropriately.

My hope is that the authorities on this method will provide some commentary in this thread.

RoughTrader

 

[RoughTrader]

Quote from no. 22:

If it can't be systematically verified, I'd say that anyone trying to do it with wetware is going to experience mixed results, at best.

What is "wetware"?

 

[no. 22]

There is an issue.
Have they generalized channels?
What about "channels" that are flat, where people might say that trading is "range bound." These flat channels would be ones where there aren't RTLs and LTLs, but Top and Bottom trend lines, because they are horizontal, parallel and inclined at zero degrees. You see, they haven't considered everything.

 

[no. 22]

Quote from RoughTrader:

What is "wetware"?

Wetware is the human brain, like and unlike software and hardware.

 

[Joab]

Quote from RoughTrader:


I simply do not understand the method enough to define the rules, that is the information I am seeking in this thread.

RoughTrader

Fair enough but from my experiences with Jack and all his buddies is that they are mostly the high academic and nerdy type (no offense) and if it could have been black boxed it would have been by now.

 

[jack hershey]

Quote from no. 22:

Recently, Spyder told someone to wait for the end of bar. Recently, Jack has said that he guages sentiment intrabar. You've really got to go to the source to get clarification on this issue, because it's very important.

This is simply a manual skill level issue. Anyone can make effectiveness and efficiency considerations to suit their taste. we always recommend working at a particular skill level for a period before moving on to a greater skill level.

Optimization is not what is on the table in adjusting, over time to varying conditions. A person has to experience the variety of conditions at each skill level.

In SCT, each successive skill level builds on prior levels. A person does not drop one level of skills and go to the next level of skills. I speak of beginner on level 3 as a core. The following five levels are shells around this core.

Because the markets are counterintuitive it is very important to be very precise in understanding the operations and operating points of the market. There is no such thing during a trade as looking at the same thing all the way through a profit taking segment.

As skill levels are built so is the list of degrees of freedon sets that one steers and focuses upon.

It is not possible to look at SCT through the eyes of a person who follows the conventional orthodoxy. This is not a negative statement; it is just a simple matter of fact. when a person comes to the fork in the road vis a vis what market operation paradigm he going to to use to view the market, he simply makes a choice of one or another system. The systems do not overlap very much.

Sentiment exists simultaneously on several levels. SCT uses three.