Charting --- who uses what?

I parsed your post below.

To get the stuff to jell a little, I'll describe the open yesterday. It was a gap open and is discussed from other viewpoints elsewhere. this will allow you to begin to understand how a person can monitor what is going on. At some point it must be recognized that a person has to focus on the indications the market gives to be able to make money continually.

Quote from JohnnyK:

Hi Jack,

What does PRV (5 min) and volume ranges to determine market paces mean?

PRV (pro rata volume) and volume ranges (under 2,500 (DU) (Dry Up), 4.500 to 6,000 (intermediate(Ice bergs)), and 10K to 12.5k (Beginner (rockets)) determine how to make money. The market is not a macro analysis nor a predictive (See Nitro's youth with chess and his current set up for monitoring) for sure mediocracy) (and see the supply/demand approach of dbphoenix) process. The market is a NOW (meaning present time only) micro entity with character and temperament (not attitude, etc as recently suggested in psychology).

You share responsibilities with the market. Neither you nor the market can step over into the other's territorial responsibility. The market "behaves". Market pace dictates how money is made. A person cannot make money in the market if he does not have the skills for that pace. Risk is in a direct inverse relationship to market pace. That is, the more forceful the markest's pace (and as a consequence it's stability and direction), the less the risk is for participating in the market.

It is logical to conclude that market price change is the only place to make money. You will find that at all times the market price is changing. If you know the market's temperament and character at all times, then you will be able to skillfully take money out of the market. Logically speaking, the market will always tell you if you have the skills required. People here bull$hit themselves about their skills most of the time. They learn by losing capital that they do not have the skills, knowledge, and especially beliefs, etc to make money. A recent thread "change your attitude and vocabulary" mistakenly points to symptoms instead of causal factors. Just as dbphoenix labels a journal on supply and demand (macros) by the name "price and volume", it does not address market money making and operating character and temperament.

Market pace, dictated by the market, is the fundamental context for making money in the market. Pace is determined by activity level and that is described, in turn, by how volume is accumulating. Charts allow you to observe this by using forming bars like temerature going up on a thermometer. Pace, by definition, is a time related phenomena. I find the 5 min chart gives a context for this and the lesser duration bars do not. Therefore, mentally calculate, for each of the 81 bars of the day, the 30 second, 1 min, 1.5 min, 2 min, 2.5 min, 3 min, 4 min, and last pro rata volume for each bar. I can compare this with the prior completed bar. To calculate each, respectively I: times 10, times 5; times 3; double and add half; divide by 3 and times 5; guess; and just watch value dissapear. I also check, by taking the difference of the two most recent values, the amount of change in the values.

Thus I know by the pro rata volume, how fast I am making money at any time. Depending upon how fast things are going, I know where to monitor and when to make decisions. This is imparitive for making money continually. for lessskilled persons, it is the key guage to keep them out of the market at all times when they are unable to get the job done.

The reason for all of this, during learning (which goes on all your life), is to continually reinforce the proper things (not attitude and vocabulary) for being able to improve skills. PNI information dictates that a person must avoid failure. Failure in humans is a very strong influence. This influence is the most instructive force humans encounter in their lives. In trading, it leads to the failure rates that are conventionally cited and believed.

You will find here in ET that what a few traders do is "unbelievable" to most traders. You are observing the effects of failure as expressed by these people who hold to their "unbelievable" oriented knowledge, experience, beliefs, lack of ability to remember, and learning. Their "learning", in fact is a "failure" in itself. They are "shut down" internally as a consequence of the "fight" or "flee" actions (behavior) of their constitutions.

So what you are reading here is "babble" and "crap" as most ET participants say about it.

Always know the pace of the market as measured by the volume ranges you put on your volume display. Use "rays" if you have Qcharts. always observe consecutive volume bars to see what pace is coming or going. draw lines on your price chart when each pace is eliminated as the day proceeds. Then as the PM starts, stop the lines as the pace returns for that volume level.

There are four trends each day. Two in the AM and two in the PM. In between, there is no pace and noise dominates.
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What is an example of a first and second derivative?

The market works like driving a car. Price goes distances at various changing speeds which change as a result of acceleration and deceleration of speed. Distance, velocity and acceleration are the three aspects of the vector for going places. For making money it is the same. The first derivative of distance with respect to time is is the rate (speed) at which money is made. This rate changes by increasing and decreasing. I use money velocity as a measure of effective trading. The higher the money velocity, the more distance you can cover.

If you know about how you are making money, then you can deal with what is upcoming most effectively. As in weight control, if you are gaining weight, the first effort to make is to stop gaining and then to follow up with losing the unwanted weight you gained. When I do a narrative on the gap oopen yesterday you can see all of this at play.

It is easy to monitor making money. If you enter and begin to make money, you are making progress. As time passes you will continually observe the increases. C&R's are related to this.

Also, you can observe when tyoustop making money. Further you can see when to reverse if you are not making money but it is in decline. As these things occur you check things out to see if you should take action./color]



How does the "smart money" indicate an end of a traverse?

I observe that smart money leads the cash in commodities. This is a belief and "truth" for me. (not attitude nor vocabulary). I mentor to provisionally install beliefs. What makes people successful or failures is their belief system. Everyone has one before they begin trading. failure is a result of "acting" upon "beliefs". The wrong beliefs give you failure. A lousy final exam to have to take, but that is how it is.

So I monitor the relationship of "smart money" to the cash in the Dow Jones Industrials. I chose this because since 1957 I have watched the Dow jones cash and because smart money makes money and protects itself on the DJ futures.

As smart money moves out ahead of cash, it causes the "offset" between the two to change since the cash has not changed for that moment. During periods of mutual change, the "offset is unaffected; it is neutral. When trends end and reverse you get the same effect as when they begin. Trends never end in optimal ways, there is always some fudging around. Thus you know fully that the trend is not continuing for multiple reasons. You take profits.

I ask people to annotate my beginner prints on 5 min charts to observe what happened. If they complain that they cannot see the detailed "end effects" on the price/volume chart, they are correct. This allows them, in the future, to add the INDU/YM04M comparison and use the market log.doc columns. It also allows them to see that they need to monitor the DOM on their trading platform.

What you see mostly on the INDU/YM04M comparison is that the offset goes to neutral at the end of a trend. during most longs it stays in squeese; during most shorts, it stays in stretch. when itwiggles around continually you are not in an trend. This I call "mud". When cash is in a stall, dip or hitch on the INDU, you will find "mud". During congestion, convergence and centering at midday, you see high and low bands of mud with translations from one to another periodically. You trade these by doing the opposite of whipsaw. The INDU/YM04M gives you leading signals for when to go long or short off the outside extremes of the bounding envelope of the CCC.

Can you expand on the 2 pair and spiking sequences technique?

Yes. I will post a description of ES for the gap open of friday. It will demonstrate how to make money by doing the proper monitoring. When you read it you will see definitively why most people regard what I write as crap and babble. Their collective views are a result of where they are operating. Reading my stuff is an inflaming experience for most people. A contributor to the "attitude and vocabulary thread suggests keeping a personal journal for a few days for various reasons. what this effort reveals is where a person is operating. The more entrenched the PNI results are from failure, the more and more the inflamations get. None of what I have posted so far deals with remediating this. for me, many many people here are keeping public journals of their inflammations. I deal with this information vis a vis working with a leading expert on the I of PNI. so very fortunately it will lead over time to two things. how to assess individuals and how to work through the remediation, if possible, for those individuals difficulties. We know at this point that it is the AIDS of trading as it parallels the I breakdown in performance.

Thanks,

JohnnyK [/B][/QUOTE]
 
Its amazing to read one apparently well studied user of charts decry other users of charts. Those other chart users are allegedly hostile and uninformed .. wedded to failure.

I don't use charts. They would be useless for creating a numeric trading model .. both for creating and fine tuning, in my case, a zero sum statistical model for reading (ie forecasting) the market ahead for each day, and again in my case, that market is the DOW.

If you use chart calculations or interpretations to make money .. fine.

Do I look at a live chart? Yes of course I do. It gives me a running 2 dimensional picture of the price alongside the flashing bid/offer price from my trading platform. As well I can read chart patterns as any other trader but I still do not use the chart for my trading model. A chart can picture both price and timing live that is in a visually helpful form .. just that; a convenience, a utility.

The thing is the mind wants to maximize the degree of certainty it expects. Trading otherwise becomes increasingly fraught the greater the degree of your lack of foreknowledge.

Short answer: I prefer a model that gives very high probability in advance. I want to be certain about what I do before I do it (ie to trade and with what weight and prepared scale in).

Horses for courses. And each to his own.
 
I attached a chart that I used friday. 5 min ES04M.

The open on the INDU synched really fast. In two 2 min bars. so from then I had data for the squeese and strech and i calibrated the offset. This is dull work to start the day.

The DOM is where I work for the 2 pairs and spikes. All trading can be done this way continually as a final vernier on squeesing out best profits. I figure that you have the opportunity and nothing else to do.


My beliefs are the basis of making money. They are what I have iteratively refined as times changedover about 50 years. For anyone, their beliefs are what allows them to get anywhere. there are hundreds of ways to make money. All kinds of ways work. There are many people in ET who make some money, that is for sure. I happen to really like making money; it allows anyone to be free to do what they want.

So the market opens at 9:30 and the ES has been available 24/7. There are 81 bars per day on the ES on qcharts. When mentor I start ahead of the open. So we have completed getting warmed up before open.

On bar 1 there was an entry. It was after the four minutes of the INDU/YM04M synch. It was a spike in the last minute.

On bar 2 it was deja vu plus. Three additional events occurred: a lull ocurred in volume after the faders got faked out They did not know it apparently). And the second spike occurred (deja vu).

So by the second bar you have 5 reasons for your entry. As life goes, you enter when you want based upon your confidence to make money.

At this point I am in. synch. Spike (top). Spike (bottom). Faders making mistake. Lull. Failure to BO after fade. lol. And deja vu (spike, top).

I monitored synch on my comparison chart for INDU/YM04M. The spike (top) was in minute 5 of 5 min bar 1. Spike (bottom) started bar 2 (a fader entry action) an immediate lull followed with 1min (times 5) and 1.5 min (times 3) volume crapping out relative to 30 sec (times10 and prior bar volume).

You know now what isn't going to happen. And if you were, aggressive you would be in and pushed by faders. The lull was gratuitous and very helpful.

Around the end of bar two you found out the "resume" of the faders entry was screwed at the peak of bar 2. lol. You saw the Bid ask filling on DOM (protective stops). On the first volume increases, you saw smart money driving the direction to create the spike and evryone who was going would be in by then as spike was left behind.

So bar 2 spike sets the trend and with over 10K per 5 min we are "taping" for beginners. You have point 1 on bar 2 top.

The next bar finalizes making money for the foreseeable (not predicting) future. Point 2 on a "tape" is the other end of the piont 1 and point 3 bars. Point 3 is the top of the bar after the point1 bar. It is bar 3.

Bars 3, 4 and 5 are humorous bars. They cascade stop outs (slowly) of the faders who screwed up with entry long. The rate of making money is about a tick a minute or 2 points every ten minutes per contract for beginners on up in skills except for trading faders.

As bars change there are no spikes on any bar and new bars begin as "inside bars" (staying within the trend boundaries (most recent completed bar) nicely). then the bars "extend the trend by "growing" in volatility steadily. All at 20K (twice the "taping" volume rate) per bar. Steady as we go taping money velocity at 2 points per ten minutes (12 points an hour is a good beginning of the day clip). For Trend Fader, a detractor in ET, this is called "ridiculous". He has a serious "failure" difficulty he tells us by his posting "vocabulary". he posts where he is stuck instead of considering the "attitude and vocabulary" stuff in psychology.

As you monitor, you watch for conditions to allow you to take profits as a consequence of market signals. Bar 5 gives you the coarse signal. On the comparison chart, you see a developing situation (mud). A spike finally occurs and it is on the right to left traverse of the tape. To make money you exit on extremes of trends.

In a "taping" trend you are looking for several things. They are:

Money velocity changes; the leading indicator of smart money; the tape extreme; a 2 pair; a spike.

All this happens on bar 5. On a tape you reverse because you have a spike ending after a 2 pair.

All of this is described at the bottom of the SCT summary synopsis I posted recently.

What happens is that the bar extends. Then it goes back a tick pair. Now you have a 2 pair. Observe this as a vernier on the taping trend. the favoring of one or the other tick pair lets you know the trend is done. It will not move to extend and it favors being one tick pair from the extreme instead. you then see it go three pairs back and thus forming what I call a spike. A spike is three pairs back from the extreme.

I am aggressive for making profits so I tend to nail the profits as an engaging enterprise. I reverse on bar 5 trying to nail it within one tick of the bottom using market orders.

A succession of events follows. I am looking for one thing. The new point 3. Other are doing ES channels in a journal. I am not there because I am considred unwelcome by a couple of people there. there is point 3 discussion there. You see that a supply/demand person doesn't know what new point three or even point 3 is. Who cares. It is just a commentary on the mind set of people towards how they personally have learned about what trends are. My way is not the hyway by any means. Youcan read about trends. At some point you discover they form in two stages: initial and then for the long haul.

The initial trend line (always on the right side) is broken before the prior bar opposite end (end opposite the trend direction) is exceeded. This extends further until the retrace (fade) ends. At this point the former trend resumes at a slower pace on a spike which, of course, is again the trade reversal signal for action.


As they say in rocket science: "We have acquired point 3". draw the new right line and draw the new left line through old point 2.

we are in our third trade that over laps the values of both trade 1 and trade 2. we are making money for the third time on these values. As "ridiculous" as this sounds, you will get to believing that this is routine wvery day at least for times a day.

we are trading right to left on trade 3; L to R on trade 4 and R to L on the last trade (5) of the first of two AM trends. THE H/L is 9 points and you have more than a 3 times over lap on most values in that H/L range. In maths you can think of 3x H/L as an efficiency limit for each trend in the H/L. There are 2 in the AM and 2 in the PM usually.

I have described 45 minutes of a H/L that ranged 9 points.

I used the 2 pair and spike 6 times.

By quitting time at 12:30, you use it 7 more times of a long trend that covers 2/3 of the original short for 9 points: 6 points covered by overlapping the price values more than three times because of the slower trend pace. The overlap increase to twice the times.
 

Attachments

Quote from Cheese:


I don't use charts. They would be useless for creating a numeric trading model .. both for creating and fine tuning, in my case, a zero sum statistical model for reading (ie forecasting) the market ahead for each day, and again in my case, that market is the DOW.


Do I look at a live chart? Yes of course I do. It gives me a running 2 dimensional picture of the price alongside the flashing bid/offer price from my trading platform. As well I can read chart patterns as any other trader but I still do not use the chart for my trading model. A chart can picture both price and timing live that is in a visually helpful form .. just that; a convenience, a utility.


Short answer: I prefer a model that gives very high probability in advance. I want to be certain about what I do before I do it (ie to trade and with what weight and prepared scale in).

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Hi Cheese,

I like the live chart at quote.com too. Sounds like you have a simple plan. I am reminded of Nicholas Darvas.

Are you familiar with his work? How would you compare your approach to his? What do you like about your approach? How did you come up with the idea?

In short, how would you describe your approach?

JohnnyK
 
Quote from Cheese:

Its amazing to read one apparently well studied user of charts decry other users of charts. Those other chart users are allegedly hostile and uninformed .. wedded to failure.

snip, snip....


Your opinion of what I do is fine with me as I'm sure it is with others.

There are zillions of people hwo use charts in many many ways. I am glad that they do and I know many many of them are very sucessful in a variety of ways.

Very few people are hostile. Those who are are important to learn from. Most all people are informed as a consequence of their efforts. What they are informed of and how they became informed is as diverse as any you or I can imagine.

As a result there is a spectrum of results.

Among all of these are hostile types and types that are really in trouble. Really in trouble.

Finally, I have detractors. I am able to characterize them according to how they comment. Nothing more nothing less. Thier comments depict where they are and what they think. They are examples of how people become as a consequence of their experience. I find that I am, personally, a target.

What I do is average and only a result of long limited experience. In other than investment and trading, however, I am not an amateur in several fields. I got to have many experiences related to people in difficulty over a wide range of problem areas. In, contrast, I have also had the opportunity to work with a spectrum of problem solvers in many problem areas.

I am, in ET, very intolerant of people who crap around with me in any way. And at this point I keep them on notice to not continue to screw arouind with me. For some reason they cannot ignore what I say and stand for. I am not ignoring them for the express purpose of making them explicit examples of what not to being doing.

So far, most of them have been increasing the quality of their behavior. I do not go to where they are in their activities. Once a person has taken the trouble to make personal comments about me, that person gets the opportunity to learn from me and becomes an example to others with respect to points I wish to make.

I always take the time to read what you post when I run across your posts in the topical areas where you appear. This opportunity you have taken, provided me with your assessment of a lot of stuff.

Your comments about failure do not really reflect my views on other specific person's failures. People who post judgements of me that are personal and unfounded have a lot to deal with. I apparently am a "messenger" to some people. To other detractors, there are themes where I am simply grouped into their genralized difficulties and dislikes. Shooting me is not a cure in any case.
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Quote from Grob109:


I monitored synch on my comparison chart for INDU/YM04M.
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snip...

Thanks Jack,

I appreciate this synopsis of the first 45 minutes of friday as you show how your various methods synthesize together.

I will begin evaluating it point by point as I can digest it.

I understand the INDU/YM concept. It reminds me of Larry Williams' "premium/discount" concept. Yours is on a much faster time frame, which is new to me. As I look at the 2 minute INDU/YM chart you supplied, I take it the solid grey line is the cash and the bars are the futures, or is it visa versa? At any rate, it does appear to be a subtle cue. For calibration, I wish there were an absolute type indicator that calced the spread and showed it plainly. Without this, how exactly do you calibrate by eyeball?

Nextly, you are using the INDU/YM relationship to enhance ES trading. If it works it works, right?

Thanks,

JohnnyK
 
Quote from WinSum:

I use a keychain etch-a-sketch. It's lighter than a laptop and don't have to worry about batteries.

:D

keyetch.jpg
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lmao, excellent grafix WinSum.

riskarb
 
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