E-Mini's - Candlesticks & Min. Charts, NOT!
- Thread starter ProfLogic
- Start date
My mentor told me from day one that if he caught me reading one book on "Trading" he would break all my fingers. He had a library of over 1500 books too. He said they were all worth less than the paper they were written on. The day he proved to himself, with facts, that the Market worked with perfect consistency he burned every book in his library.
As far as learning anything from me . . . probably not. A closed mind isn't worth opening.
As far as your mother-in-law . . . your remarks say a lot. Her gene pool was instrumental in creating your wife . . . which you asked to marry you. If she is dim-witted . . . will it skip a generation and do you have children? And finally she lived to be 80 . . . a grand and fine age and 4 years above average. The key there is . . . above average.
Yes there is a service for about $700 a month that offers near perfection of data but Esignal at $100 a month is good enough. A tick chart that is 80% accurate is better than a minute chart on it's best day. A volume chart that is 80% accurate is better than a tick chart on it's best day. I am switching to that $700 service in July though after my subscription runs out with Esignal. That higher priced service doesn't offer the sole indicator I use to verify price action either. I have someone writting the code to insert into the program so I can use it for a research tool. I do research so the accuracy of my findings require the best and most accurate data feed available.
First, the accuracy of the data feed from Esignal was verified from an independent firm in the UK as being 80+% accurate. The only inaccuracy was in the bunching of contracts. If an order came into Globex as 200 contracts it might be split by Esignal as 4-50 lots or 10-20 lots, etc. The number of contracts traded was exact. With Volume charts, breaking up the lots could effect how they enter the overall Market scenerio and that would be the only way they effect the accuracy of the data flow. This would be a very minute amount and would not effect the overall accuracy of ANY system. I simple used 80% as an example.
Second, the accuracy of ANY system depends on accurate data. Please don't try to tell me that is a false statement. If that is the case we might as well all go back to flipping a coin for our trading decisions.
Minute charts are totally randon because there is no consistency in transaction or contracts traded per minute.
Tick charts are better because they are made up of a specific number of transactions per bar. Transaction sizes can vary so even though these charts are better but not perfect.
Volume charts are the best because they are made up of a specific number of contracts traded per bar. This is a perfect reflection of price action.
It only makes logical sense that when trading you would want a "Perfect" or new perfect price chart to begin with. Then once you could RELY on price you could then begin to search for an (ONE) indicator to confirm perfect price.
Actually, it is you who are missing the point. By using volume bars you are already translating price action into a foreign language. It might not be chinese but it is at least greek.
Bars/candles of any type are not price action in its "purest most perfect form". This is a fundamental mistake of many traders. They see the pretty charts and think this is how price action happens. In reality price does not move horizontally across your monitor the way you have artificially forced it to with your beloved volume bar/candle.
Price moves up and down vertically!
Volume and time are distributed horizontally. In other words, if you have any horizontally placed bars on your charts you are reading chinese or greek and already complicating things let alone if you are adding a price derivative based static oscillator as most people do. (cci, ergotic, MA based bla bla bla)
Just curios, if you were trading the ES would you keep your volume bars statically set to 1000 contract segments regardless of if the day's volume was 1.1 million contracts or 500K contracts? Would you adjust your volume bars for different contracts? Stocks? Whats your favorite volume bar setting? Is it a secret?
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Bars/candles of any type are not price action in its "purest most perfect form". This is a fundamental mistake of many traders. They see the pretty charts and think this is how price action happens. In reality price does not move horizontally across your monitor the way you have artificially forced it to with your beloved volume bar/candle.
Price moves up and down vertically!
Volume and time are distributed horizontally. In other words, if you have any horizontally placed bars on your charts you are reading chinese or greek and already complicating things let alone if you are adding a price derivative based static oscillator as most people do. (cci, ergotic, MA based bla bla bla)
Just curios, if you were trading the ES would you keep your volume bars statically set to 1000 contract segments regardless of if the day's volume was 1.1 million contracts or 500K contracts? Would you adjust your volume bars for different contracts? Stocks? Whats your favorite volume bar setting? Is it a secret?
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Try CQG.
When you go to a constant volume bar (cvb) on cqg, you can modify the bar to represent actual volume, and then you select the number of contracts you want to build each bar.
For the e-mini spoos, I personally use 500 cars.
You can see a nice even flow.
I have seen some comments relating to lack of liquidity - are we talking about the same thing ? - e mini spoos - last time I looked in the day session they were over a thousand up - or is it that you were having trouble getting filled on the bid/offer because of the size?
When you go to a constant volume bar (cvb) on cqg, you can modify the bar to represent actual volume, and then you select the number of contracts you want to build each bar.
For the e-mini spoos, I personally use 500 cars.
You can see a nice even flow.
I have seen some comments relating to lack of liquidity - are we talking about the same thing ? - e mini spoos - last time I looked in the day session they were over a thousand up - or is it that you were having trouble getting filled on the bid/offer because of the size?
I see your point, but you have to have a starting point regardless of what or how you trade.
When deciding what volume to use, I normally try and find an average daily volume, then look for a starter at .05% of that volume.
I then try and use fib numbers to provide a logical step up in each number, but I am also happy to use 'big' round numbers as well, 500 or a thousand.
I then look to see how my own systems cope with the variation, since volume is not only important detirminant - so is the width of the bars (high - low) - too big and the slippage is too high, too small and there movement is too little. The important test for any system in this respect is that optimisation is limited ( I personally only have 6 choices, either fibs or bigs) and that they work well in different markets, from bonds to equity indexes.
I do not agree that this looks 'greek' or 'chinesse'. - just becasue time is removed does not alter any logic. In fact I would argue that time devolves logic. Also, my charts look nothing like a horizontal line, but if it suits you, why not put the chart up and lie down on your table to look at it!!!
Of course this all highly subjective, but this is what works for me - I'd be interested to know more about your moethods.
Regards
E