Quote from JohnnyK:
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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
The smart money is the line. It is a a one unit MA of YM04m. It serves as a hinged flapper. You will be very surprised at how violently it waves you along. since it leads the cash, it is a terrific pointer. If you double the line width, it will beat you to death.
As to the offset range of variation it is about 75% of the offset so it is a screamer too. On friday we were using 20 as a nominal offset. therefore, we calibrated the squeese as a range of negative 2 or better. The stretch was more than 2 or three.
Think with me. On the top of the quote sheet I put IDU over YM04M. It is set up for subtraction. with a nominal 20 offset, I am only reading the digit to the left of decimal value. bingo. I can do single digit subtraction by simply memorizing the possibilities and knowing the result. Often I do not bother to shift my glance off the chart since i can "read" the value graphically within one unit. Also i am just looking for shift from "before" to "NOW". That is the Regal test for convergence/divergence. Bingo.
I just watch bars extend, their velocity of extension, and pinwheeling values on profits and volume.
Williams as you tell me seems to have unfortunately destroyed the signals when he did what he did.
Life is funny. I am an old glider pilot, very G conscious. I do what I want with how I monitor pressures and let my fingers resist or force what they touch. If I bank into a 1500 foot per minute up draft at 60 degree angle, I know my wingtip is making a 50 foot spiral as I climb an empire state building each minute right up to where I notice little oxygen and very cool air hitting my face to keep conscious.
What we are going to get to here is making money. This is not a cheese level of taking money out of the market. you will be taking 3 to 6 times the trend H/L out per trend four times a day. you will be on a flight where the power you use is the making money pinwheel. Next week you are in for a shock. Everything works like a swiss movement or a 100K glider that weighs 840 pounds soaking wet.
You can get to glancing here and there. There are only two things to see: continuation or flaws appearing. To take 13 actions between 9:30 and 12:30 and travel over and over through a range of nine points, all you see is "continuation" mostly. You see flaws occasionally, only. You go to DOM to deal with being on the "right" side of the market. That canonly happen on sides of channels or the flaw called failure to traverse (always on a R to L traverse). All trends have Lto R traverses on declining volume. The R to L is on increasing volume. Boinck you hit the lines at the edges. spike. reverse.
Much easier that riding thermals that are unseen. A lot easier than flying for 3 hours picking up thermals on the way.
These posts I did are not just aha's. you can count on using them to have a religious experience if you wish. They have one purpose. You will find that as you "see", you get provisional NLP pictures. As you debrief over and over, you get "beliefs". The neat part is this. The beliefs work to improve all trading techniques and methods.
All those guys that got sucked into going long on the open, got one more lesson in failure as the day began. They "predicted" and bet on their prediction. Read the thread and group the people into three groups. Read their posts for a year or so and see why they got screwed by their beliefs primarily and not just the methods they couple to those beliefs.
All of the myths of the financial industry go back to not knowiung what is going on. The recent Nobel prize is a classic of how wrong beliefs screw people to the wall. Profits relate to "fear" and losses relate to "hope". I post to counter this stuff that permeates the place...
It is most easy to see how predicting and betting on it causes "fear". It is most easy to see how being in a trade and staying in causes "hope" right after you get into knowing you are on the wrong side of the trade. These people traditionally sit in drawdowns and hope based upon risk and money management. What a crock.
The only job a person has is obeying the market. Just always be on the right side of the market and switch sides when the market tells you to. Continue on the "right side" until a flaw in the market tells you to not continue but instead to switch.
Learning how to accept provisional pictures of what is right with respect to the character and temperament of the market is the "process". reinforcing debriefing after the poker game is over, is where the provisional pictures displace the traditional myths and BS. The beliefs are continually iteratively refined..
The major alternative undertaken in ET is repeated failure being reinforced until PNI takes over and dissables the person permenantly. Not a fun prospect. "Knowing how to know" is absolutely necessary. Everyone, all the time needs to go point by point. As you do you "see" stuff (digest it provisionally). when you debrief from practicing gaining experience, you get to have a religious experience. The final assurance is noticing you are getting rich very fast.
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