Fractal Theory: Redux

[river]

I've had a few really good runs at times, but to this day I'd label my trading as marginally successful on the whole.

Hi llIHeroic,

Your one sentence quotation above could also describe my results with this methodology. It was great to see this thread as I'm revisiting trading the P/V relationship as outlined by Jack and Spydertrader. I'm hoping you and others trading the method might consider responding to a couple of questions.

What market and trading fractal are you guys trading? Volume on the 5m ES seems quite anemic recently and it's frustrating, for me, to trade this method without many extreme volume and high volume bars.

Are you trading SCT (almost always in) or using pieces of the method to trade entry and exit (e.g. entry after a volume trough and holding through a volume peak) or something else entirely?

Thanks for the thread!

-river

 

[tiddlywinks]

Quite interesting to hear from a few old-timers and how some have moved on from JHPV, and that others that continue on without hesitation, with pieces of it. Myself, Im in that second group. PORTIONS of JHPV are a permanent part of my trading.

Even more interesting to me is the marginal success comment by some of whom I consider longterm students of JHPV. Honestly, I'm surprised to hear that. Oh well.

Anyway, if it helps @river, I trade several futures contracts, with NQ and YM being my bread and butter. I use (pieces of, but the same pieces of) JHPV with all of them. I do not trade SCT, although I actively trade dozens of times during the day. I use 2, 4, and 20 minute charts. JH used to say to expect to take 30 to 40 trades (SCT) using a 5 minute chart. I do 50 trades plus/minus a day, using 2 and/or 4 minute charts. And I also have time to take a break and sign into ET!

One thing I will say regarding volume extremes. HFT was not as prevalent (and important) back in the JHPV learning days. With that in mind, fractals have changed. Changed is not the correct word however. I'll try to explain. Basically there are more fractals. Not really more as they have always existed, but more are visible. Think in HFT terms, ticks and seconds. The anemic volumes you cite, are in relation, in context, to minutes and hours, maybe days and weeks too. I don't want to get all professor about this, but I suggest you re-fresh your knowledge of volume bands. And I would suggest limiting yourself to 2 or 3 bands. That may help with fractal jumping if that is an issue for you.

This has been fun. Back to work.
Trade On!

 

[llIHeroic]

Nature of the Recent Markets

Thanks for weighing in on the present nature of the markets vs. that of the PV heyday. It's a topic I've often contemplated myself. I have found the recent markets more difficult to trade as well, with much more drift than charts of years past. With my current skill-set, I'd venture to say market pace may be the greatest driver of the magnitude of my edge at any given time.

In recent months, the ending points of larger fractals with clear integrity come about rather infrequently, and oftentimes the pace is so low that the exact turning points are obscured, or there is a subtle reset of the sequences that I am more likely to miss; thus what I anticipate must come next is false.

It haven't felt comfortable enough to begin making more permanent changes to my schedule to trade full-time, and with the fractal progression blurrier than usual to me in these kinds of markets I haven't been able to just take a day off here or there and find good spots.

Finding Your Fractal

So for the most part I have been on standby of sorts and looking to poach some decent trends during times of increased volatility. Regarding fractals; ideally I'd hold this whole gaussian sequence pictured below providing I hit the entry, or move one fractal faster when the pace is decent. Although as you can see the pace drop obscures a clear ending point in the final leg; which causes an early exit for me at times, and also nulls the possibility of a reversal for me; I just can't read it confidently enough.

As of late I've been toying with the usage of higher bar intervals to read sequences through low volume better, and also have been having some decent results scalping faster sequences on 1m and 2m charts with the NQ for the first 90 minutes of the day before pace drops off.

My Biggest Personal Obstacle

Even those results scaled to 10 or 20 contracts would be some very nice income, but for whatever reason I haven't been able to maintain my results when trading size. Which brings me to the bottom line in regards to my own personal trading. For some time now I've felt that I have more than enough familiarity and grasp of both the fundamentals and intricacies of the method to produce noticeable success; but some personal psychological aspect seems to keep me grounded in the realm of marginal success much more than any technical deficiency or lack of clarity does. Which I haven't been able to get the bottom of or understand how to surmount yet.

I mean, look at the quality of the charts from 07-08 or years prior to that. The method is not as complicated as we've made it in recent years; and it offers plenty of opportunity to consistently bank the low-hanging fruit. More than anything else I admire the individuals who have not only been able to successfully learn this method, but have also developed the internal ability to pragmatically deploy it in reality to it's full extent, which is the part I haven't been able to do. Which it sounds like baro-san and Steve have. Major props to you guys.

 

[river]

Regarding fractals; ideally I'd hold this whole gaussian sequence pictured below providing I hit the entry, or move one fractal faster when the pace is decent.

Thanks for the chart snippet from today's ES with channels and gaussians.

Your coding of "price cases" produces the best looking chart i've seen for this methodology. Any chance you would consider making it publicly available in the thread "Software Used to Trade Jack Hershey Methods"?

-river

 

[llIHeroic]

I believe the initial package with Spyder's bar colors and initial price cases is a downloadable library called PVFiles from Trade Navigator. It might even be referenced in the TL thread. Since then there's been a private modification or two of that.

I don't feel that the script I am using is mine to release though. However I didn't think twice about posting my chart so it probably wouldn't be that difficult to mimic if you were so inclined.

 

[llIHeroic]

My 90m this morning on 1 NQ contract. You can get away with just about anything in vol like this..

 

[llIHeroic]

Here's my total curve for the NQ morning sessions when I can make time for them. Don't feel comfortable scaling this curve while it's so crappy. A few decent runs like this can keep me above ground, but in lower pace I'm far from satisfied with my performance. I know I can do a lot better.

Stepping away from a completely rigid structure and building in a few more options/allowed over-rides in my trading has afforded me greater flexibility but my emotions can also affect my trading to a greater degree. The way I'm feeling has a way of subtly influencing my decision-making. A lot of the DD is coming from sub-par execution when I'm not in the best head-space, especially under the momentum of lethargy that begins to build during strings of losses.

 

[tiddlywinks]

My 90m this morning on 1 NQ contract. You can get away with just about anything in vol like this..

Very nice Hero! That's how it's done. LMAO! You also make the point that many non-JHPV traders don't seem to understand... volatility is wonderful, use it!

And here's a thought... If you had traded 2 contracts, you'd be at or better than 1x the daily range! And now, WMCN.

Again, nicely done Hero.

 

[llIHeroic]

Again, nicely done Hero.

Thanks for the kind words.

Also, @river

Here is an example of my more classical ES trading. Sometimes I just hold a single leg of the slow fractal, like I mentioned before, and exit on what seems to be a clean completion point; either from time constraints or if I'm not 100% certain of what's coming next.

Sometimes I end up leaving a lot on the table, but I figure a bird in the hand is worth two in the bush. This really is such a clean day for the method though; it's making me look a lot more competent than I really am @_@

 

[river]

The anemic volumes you cite, are in relation, in context, to minutes and hours, maybe days and weeks too. I don't want to get all professor about this, but I suggest you re-fresh your knowledge of volume bands.

Hi tiddlywinks,

Thank you for sharing the fractals and indices you are currently using in your trading. I'm glad to read of your long term success using essential portions of JHVP. I hope I, Hero, and others following this thread who haven't reached our desired level of results with the methodology join you in the long term consistent success group!

In your advice above, are you using "volume bands" as another phrase for market pace lines similar to the chart Mak posted years ago or are you referring to Jack's "A thru K volume bands" as described in the "Market System of Operation" thread a few years back?

-river