Futures Indexes System and Tool Box

[bubba7]

Fractal round Up.

We have an operational fractal... the 5 min. We use 1 min for anticipation.

We learned to "tape" to the trend operating fractal. The price bars fill the "Tape" and we trade there using our signals from our indicators.

So far we have only gone to the slower fractals.

Today you get to see how to deal with FAST paced trends.

There are markets and there are trends. Each has a pace and don't think about the differences or similarities... It's NIKE time... just do it.

Today just pounce on the 1 min and do the trades.

I am not a predictor. But soon I will figure out here, how to post in such a way that you can read in advance what is coming up for you to make trades. ET has a built in lag. In the past when i was a healthier person, I would do a Yahoo voice thing running 5 to 15 min ahead of the market and someone would transcribe the litany as a preserved log of events. I have done post series on raging bull (like narrating a day's trading on a stock that went from 22 to 11 and back up to 16 all in advance of each upcoming signal).

Today you get to see the market operating at a pace that gives you fast trends, each of which can make you what you have been making per day.

The point is this: I want you to be in fractal heaven. I am getting you to a place where you can discern what fractal to be on by looking at the performance of the indicators signals we use to make money.

This intellectual transition is a killer. You are finding out that for all trend paces, the indicators work exactly the same IF YOU ARE ON THE CORRECT FRACTAL.

This is not something I can just drop on a person on day one.

However, once you see this, you are going to henceforth be in a KISS groove.

Unfortunately none of this stuff is in books nor do many people get to this level of iterative refinement.

I just had to let the market run the show for a few weeks to get you to this place by example. It has done everything I needed finally.

Now, we can play ball. You start on 5 min. You see synch and you see the prior day carry over. This puts you on a "tape" fractal. You also have the next fastest for anticipation. The indicators always work the same way and they always generate the same sequence of signals.

Now you must learn the sequences in the manner of driving a car. You will find they are automatic when driving.

You do the same sailing on water.

You do the same flying

You do the same skiing on black diamond trails or through racing slalom gates.

You do the same doing acrobatics in a glider.

We are going to review, forever, the important sequences for differing market and trend paces. I have a very deep reservoir of everything that is possible and I have distilled it into a tree of paths that eliminates what isn't possible and, in turn guides you along an optimum route for continually making you money.

We will have to repeat this stuff for equities as well because you will have to lay off money there as it builds up past the operating point of eminis. As you know the familiar is a very safe place to operate and it is difficult to give up the safety of a successful survival technique once you really have survival down where you choose to live.

A lot of people can't read what I write because I am screwed up they suggest.. Over time, I have learned that it is easier to read what I write. Reading what I am saying can often give you a feeling of not being in a safe place. At least, you have to say it's very unfamiliar. After that you get to see some humor once in a while, maybe. LOL....

the next post is going to be a pain.
Keeping a binder.
To get in a groove , repetition is a good helper outer.

What's below may appear to be a pain.

I guess everyone has their own way of trading and doing things.

It may be helpful to separate the wheat from the chaff. But everyone decides what is wheat and what is chaff. If you want to spend a little time during the weekend break it might help to run multi-copies of each page and do a cut and paste with one of the copies and keep the other in a chron file. I might do it too. If you can divide stuff into piles that relate to your algorithm, then just cut and paste an abbreviated power point type of thing for main thoughts, you then have something to leaf through and add to occasionally.

I think the problem with what I do is that it doesn't fit into how people are set up in their way of doing things. If you work on stuff for forty years you definitely do wind up in left field somehow.

Here are some topics to stash stuff in if you want to use my point of view.

Making Money

I go by tiers:

Easy: These are fast rocket trades. Intermediate ice berging.

Slow: The nice 10 points a day trends operating fractal based.

Steady: The slaloming stuff where you rhythmically pull it down.


Monitoring:

Indicators

Signals

Sidelining

Sequences of signals.

The tree for trading.

Principles:

P, V relation

A/D

Fractals


Tool box.

Beginner
20/80 Tape
Rocket ships
Scoring
Point 1,2,3 Channels

Intermediate
Volatility Taping to get Fractal
MACD Taping
Ice bergs
Stop and trading log


Advanced
Slaloms
The Matrix and probability.

Software
Equities System (C language)
Commodities flow charting (30 sheets)

Mental and Emotional repairs and maintenance
Capital growth requirements
picture work (NLP)
Quick cures (4 stepper)
Chapter 20 (18 common mistakes logging)


Chron file.

The chron file is a quasi road map but I do go to where people are to eliminate road blocks and stuff. This is highliter heaven. A major divition locations. Put in colored sheet for every time your inital capital multiple goes up one. Red is best; use green then blue later.

Trading Stop logs.
Do about one three ring binder a month. 3 to 5 pages a day including C&R's.

 

[bubba7]

Beginning of par 5 (March)
Starting to get the hang of this...I think...

Using the 5-2-3 stochastic, and the +1 or –1 MACD signal. On 5 min..

12:17 Short @832.00
12:50 xxxxx @827.75

Entered looking for an “Iceberg” When volume dried up at the previous low for the day, and with the MACD spiking lower, I took profits.

01:27 Short @ 830.25
01:35 xxxxx @ 830.25

02:00 Short @828.25
02:10 xxxxx @827.50

Both trades were an attempt to “reenter” the “Iceberg”. With volume on the low side, I had very little tolerance for any thing but a favorable quick move – it just didn’t happen, so I bailed.

In hindsight, it looks like I played the day perfectly – OK, so maybe not perfect, but pretty good.

Bottom line: 3 trades – 2 wins – 1 wash – plus 5 points.

For the week: 16 trades – 8 wins – 5 losses – 3 washes – Plus 11 points.

My wife, who usually sobs uncontrollably when I report the day’s trading results, has been in much better humor this week – she has even started talking to me again! Thank you, Jack – I have you to thank for that. With another profitable week, she may even start cooking again. (Dare I even think about what she might start doing again with an entire month of profits?)
comments on tampa's first trade
Tampa,

Your first trade...did you feel stress at 12:21 est when you got the macd +/- dry up...and the 1min macd cross up? Could you share with us what held you in the trade...was it becauseyou were iceberging it?

The reply:

Stress? Yep - lots of it

Yes, the trade was put on as a potential Iceberg. As for the one-minute chart, it's history. While it kept me out of some bad Rockets, it also took me out of too many good trades. I don't know if I will ever be able to look at it again.

So what kept me in the trade? Blind faith, and an eye glued to the price-volume relationship - the same thing that took me out. For me, much of this is a "feel" for what is going on. The indicators rule for entries, but then the price-volume action takes over. I would prefer that some nice wiggly lines told me exactly what to do - but I don't think that's going to happen.

Two weeks ago, today would have been a disaster - but now it turned out to be a fair day. Admittedly, I am far from relaxed at this point, but I hope that will change with time.

I don't know why this thread caught my attention, but it is teaching me a new way to look at things. Maybe there are a lot of traders who would look down their noses at an 11 point week - but I ain't one of them!

Just imagine, had I been trading a hundred cars, it would have been a $55,000.00 week
another to tampa:
Tampa,

I find your posts helpful. I thank you for your honesty. But I need to advance to a level of no stress, and no skirming in the seat.
Reply:
That ain't gonna happen until this (or something else) becomes second nature.

Hang in there...you'll come around.



Posted by jack hershey on 03-15-03 05:03 PM:
do this.
Run over to a trading thread called: "Determining trend". I did a quick and dirty set of 12 sequential charts for the time from pre open until after midday when the raw chart pooped out.

I will do a souped up version for the journal on two fractal pairs. one for ES and one for making money on equities using the "natural" cycle.

I am not a hot shot at this graphic stuff. So it will improve and others here can redo the stuff to make it super.

You need to do this for your binders. I am going to put scoring into it as well. I will give you a really hot way to handle level II stuff as an exercise in how A/D works as well.

A?D means accumulation /distribution. This is the third variable after price and volume on how markets work.

I know there are people who think volume doesn't matter. Just be patient a little on this matter. I feel you need the opportunity to consider it from the viewpoint of risk management and also anticipation.

We are going to slip into a modus here where we will be picking up on improving money velocity in chunks. A chunk will be a doubling or the existing rate that is contemporary.
some backtester’s comments:

I know that a variety of people here now swear by Jack's methodology, but my primary observations here are

(1) Just about everyone who trades with his methodology is actually applying a lot of subjectivity to it so that the entries and the exits vary substantially and many trades are not taken at all.

(2) The total test period is so short that it's absolutely impossible
to draw any meaningful statistical conclusions. The historical backtest over several years has a number of such months that happen to be profitable, however, long term analysis doesn’t agree with such a conclusion.

Now I am not saying that everything Jack has proposed is wrong or without merit. Perhaps with some additional rules, or combined with intuition there is merit in his ideas. However, all the hard and fast rules that he has defined are not profitable over any sustained period of time.

Posted by jack hershey on 03-17-03 09:08 AM:
enjoy.
Okay by putting together all the pieces you see a nice situation. The synch keeps you alert on the gap. You nail down points 1,2,3 and you have a trend. The point 3 is kewl because it's on the right line and you have the risk out of the way. As you ride along you need to use the indicator signals just the regular old way for your skill level.

The advanced guys get to use MACD today and slalom along once that phase starts up.
new point 3
Now we see the difference between absolute (MACD) and relative (% based Stoc).

We are in a positive trend where the first burst from the inital point 3 is done.

New point 3 time.

The experts slalomed until we got to convergence in the congestion, convergence, centering sequence.

you see volume going to DU.

for those who wish a bracket is an appropriate safe entry technique. More later on that stuff
.

The beginners did the rocket thing and washes.

Ice berger intermediates are hanging in doing the point 1,2,3 thing

We have a bounce off the right line and a flat top pennant formed to correlate formation wise.

Get a new point 3 and hang in there.

Beginners will have another rocket in the 13:15 pm start up.

13:15 will coma a little early today so set up now for it.

a couple of you will use the 50% BO up to trigger. Go for it.

I am stepping up my commentary to be a little further ahead in my comments. It may bias you into making more money. Also there is a chance I might screw it up so that will be fun for the detractors.

For back testing you can see about 8 backtests to do so far. I now know that the backtesters cannot perceive the nuances of this stuff so don't worry about it. My stuff appears to be subjective as they are only an order of magnitude apart so far.

Watch that FTP BO. Get sequence note down on this one.
Here is an important segment; we are trying to get a first step in learning accomplished. I try to move the person along but the step is too tall. That happens. The key, then is to lower the step to make it a size that is possible.
Also I will in version II add here the 12 charts mentioned below somehow. I will also get the 4 stepper in the journal as a NLP exercise.

Jack, I am confused - would it be possible for you to post a chart with today's trend lines drawn in?

Take a minute.
Go from the 5 to the 15 then to the 30, then to the 60

Do you see a kind of happening here?

Now drop back to the 5 min.

We are trying to pull down some money here. You have a run from 790's to 850 ish. We need to pick off more than the point to point value at all times (call this a 60 points).

Even though the pm volume has not picked up, just like it didn't on Friday, you still can watch and do the regular stuff.

Posted by tampa on 03-17-03 01:47 PM:
Quote from tampa:

...oh da pain, da pain.

Not from losses, but from a lack of belief. I saw the "buy signal" at 10:05, but was too afraid to take it.

02:25 Long @857.50
02:30 xxxx @857.50

Entered a potential "Rocket" that wasn't.

All in all. it was a very disappointing day - all the work, all the reading and study was for naught, because I obviously just didn't have enough faith - damn-it.
Thanks for the reply.

Do take the trouble to get those 12 charts I made.

Tomorrow is just the first day of the rest of our lives. We can start there.

You actually are at a very good place and I am here too.

We can nail this down tomorrow.

 

[bubba7]

Look over my posts. I am making a best effort with each day as it goes down.

By posting a little ahead of time today I wanted to let you know what's on my mind for the different levels and what looked most probable to me.

Aside from the global scene, we all have to take what is in the space and work with it. It would be neat if we didn't have the global overlay going on..it is so....whatever.....

The neat thing is that the markets can be very informative to us all the time.

With all this background crap to choose from, we get an excellent chance to use our stuff to just cut through everything there is. Because it works day in day out and all the time, we get to do the job.

It is not important to prove how you can get from beginner to expert. The range of income is different for sure. But an old beginner (meaning lots of days in the groove) is making a lot too because he is doing 25 contracts in each rocket.

for the icebergers it was a terrific day. There is something in the math that is so sweet when the market attitude is long. You just can't break that 20....LOL.....

The money velocity is almost like being at a stop sign or LA in the rain on a hyway. But the fact is you can creep. After a few month of ice berging you can do the 25 contracts at intermediate too. We did a more than 10 point creep up today. That is enough for 25 contracts to give you 250 point which is a little over the margin requirement for a contract.

So here is what is going on for you. Fear is there it turns out.


Think of the 12 charts I did. couple it with the post I did in the Trader's block thread. I did a four stepper there. The four stepper is kewl.

Let me make a little note first. I have been recruited by departments of psychiatry here and there. I do read a lot of the posts here from a particular viewpoint. The four stepper is a deeply founded technique to shake the crap out of a person by doing it unobtrusively. Read trader's block. I couldn't get connected to the author except by a ploy that I did. The ploy was to ask her a Q that didn't matter compared to what I wanted to do.

I was enabled by her when she answered. I did something to get her to do something that she wouldn't do on her own.

I wanted her to read aloud many words in groups and then just get on with things after that.

Look at her posts the day after. Just consider something here. She isn't ever acknowledging what happened to her. Who cares if she does. But look at the behavioral change she takes on. by reading her own words.

Okay. I keep piles of four stepper sheets here. When I mentor people I get a pile of them out. Smile and laugh about it. They do 4 steppers for us.

I am so ridiculous that they spent almost all of their time in debriefing filling in sheet after sheet. They do it for each and everything that they say to me that is contrary to their desire to progress down the road.

What you want can be put inside you somewhere. Every time things need adjusting, do it with a four stepper.

What you are going to have happen is this: You are going to subconsciously deal with stuff and it is going to be a heck of a lot of fun.

Today was a neat day for using stuff even in the incomplete state that it exists. What we are doing is just making money with a way that is good for people on any level that they are on. Iteratively, a consciousness manifests that builds on a foundation of success. It keeps reinforcing. People can show up at any point in their transition to being rich. Each one releases inside somehow to start to make money as and when they desire. Fortunately the marketplace has an abundance of items, tools and supports for everyone to be rich.

So here we go!!!!! You are going to like this.

Posted on 03-18-03 02:41 PM:
My Stoch Trades
Well returned from vacation and today really sucked.

I am going to start fresh and just take it like a beginner. As always, feedback is welcomed.

My beginner trade ENTRY criteria both lines above 75 or below 25 and a MACD Hist reading +0.4 or -0.4.

Exit: look for stoch above 25 or below 75...also look for MACD XO after a rocket is entered for my exits. (if this is diff. than anything jack has said please let me know-thanks.)

Also, working on putting 1-2-3 pts together to keep from getting shaken out when stoch barely gets below 75 or 25 after a setup and then reverses...work in progress.

Here are my trade signals for today:

1. (a) 9:50 stoch(9.68, 26.88) MACD Hist: -0.72

- maybe a little picky but wasn't below 25 so i waited....

(b) 9:55 stoch(5.13, 15.69)

- good signal. looking for short on break below low of bar...never happened NO TRADE.

2. 10:25 stoch(89.74, 77.78) macd hist: 0.85

- good signal. looking for break above high of bar...never happened NO TRADE.

3. 12:00 stoch(15.00, 22.79) macd hist: -0.5

-good signal volume low (5,138). looking for a break below low of bar....never happened. NO TRADE.

4. 12:30(15.00, 23.33) macd hist: -0.09

-not sure to think of this signal as a continuation of the prior failed rcoket b/c there was no GOOD MACD HIST reading and volume was pathetic....either way did not break below low of bar. NO TRADE.

5. 1:00(93.75, 75.83) 12:50 MACD hist:+0.4

-volume again was low. entered on break of high of bar 863.00. 1:20 stoch(73.68, 78.95) and 1:25(73.68, 75.44) macd was prezeling and volume stinking and fed looming i exited flat

long: 863.00
sell: 863.00
p/l: 0.00

6. 2:00(3.85, 14.14) macd hist: -0.71

-right before fed, but never broke below low of bar so NO TRADE.

7. 2:25(6.25, 21.31) macd hist: -0.60

-entered on break of low of bar 858.25. 2:35(41.67, 17.82) exited when high of this bar was taken out at 861.75.

short: 858.25 day: -3.50
cover: 861.75
p/l: -3.50

8. 3:45 there was good stoch signal but no macd hist signal until 3:55 bar.

2 trades -3.50 total. 1 loser, 1 flat.

today felt very difficult.
A reply by someone:
Dawg,

From my beginners perspective, you did well to escape with a minus 3.5 . For me, it seemed like the "Rocket strategy" was just picking tops and bottoms during todays session. The reversals, however, looked like they would have worked out, but that part of the strategy is not in my tool belt yet. I'm gonna fill out a "four stepper", examine my "washing" technique and start anew tomorrow.

good luck
I commented to both people:

It was an absolutely lousy day except for formations.

The formations were classic and worth saving.

Congestion to convergence to centering and a bracket failure to BO. The volume continually declined to centering. The light unsustained volume was a perfect BO failure.

For experts it was a slalom day.

The PM volume was there as the MACD was on neutral and over 30 min after the BO failure to BO. The MACD never did give a BO signal and divergence. All this is complimented by the Stocs traversing the band with little price variation (a relative % type characteristic). Some normal end effects at the end of the day.

Personal comment. Don't expect to trade during a 48 hour mandate like this ever.

Dawg's post reads like skilled clockwork here. The no trade situation is so important to have down. Just as important is the wash exit when no trend appears.

The BO after centering is a class failure to BO and the lack of sustained increasing volume is the "flaw" that was being looked for. When you set your bracket spread on the center of the centering, you simply keep the spread "outside" the failure price range.

The fact of the matter is that doing "not trading" perfectly is just as important as trading.

I am posting on this stuff where not trading is just as important to explain as trading.

We are still in the groove on a day like this by not trading as we are when everything is going our way.

Tampa, dawg et al each makes good tracks in the sand as they go from here to there. You only go through the transition once. For whatever reason it is just like after you have it down it's hard to explain to anyone. Like landing a glider is hard to explain.
The fist rollover came up and some missed it. I deleted the dialogue but there were some observations that people only go through once. I commented on the wash trades that came up for every one in a flat market.

Precisely the thing to do. (Wash) You will be slaloming in a few weeks. Count on it. (Wash trades are the foundation for slaloming) The wash trade is the most important trade in the world. From it you learn that you are in charge of everything.

When you deal with it just like driving to and from a stop sign, the world is yours financially speaking. You will get to a point where you look around and you make your moves knowing everything is being done just like driving defensively.

My personal feelings here at this point are that there are many many reinforcing comments coming into the picture and a lot of you are beginning to realize the results of the strong efforts you are continually making.

These times are difficult globally. This is a severe test of market theory and it is giving us an excellent demonstration of the fundamental reliability of the context we operate in.

 

[bubba7]

color=green]Posted by dawg on 03-19-03 08:53 AM:
1. i am not using the 'next 5 min bar'....the 5 min bar that CLOSES with a reading of higher than 75 on the 14,1,3 stoch. that is the bar i am looking at. i don't enter during the bar b/c many times it is above 75 during the bar and reverses downward. i tried using the 1m. but it screws me up. by waiting and buying above the high of the bar i have avoided many losing trades and believe i am giving up very little on the upside so net net i feel i was coming out ahead.

again this is just my own opinion.

2. the 25/75 reading has been suggested by jack as a way to get an early jump on the rocket.

3. iceberg is for intermediates and i am not trading that method.

again i think what jack is giving us is a way of examing and getting in on the right side of the market (i.e the trend)...i don't think by waiting for the bar to close i have altered the core methodolgy in any way...i may be a half point late on a trend, but at the same time i don't enter on false trend readings....also i feel better entering this way.

are you guys entering during the bar(even if it during the 1st minute of the 5 minute bar) or waiting for the bar to close and entering at the close of the bar?

so the only minor change (imo) is buying above/below high/low of the bar the gave me the signal..

for example: i get a buy singal that closes .25 below the high of day and has been sig resistance i am not going to enter unless that resist is broken. i think you should look at other factors other than just the numbers (chart formations, etc.) and i think this goes along with what jack has been saying.

again i am not saying my way is the right way, but i didn't think i made any significant changes.[/color]

To set the scene:
Quote from jack hershey:

The wash trade is the most important trade in the world. From it you learn that you are in charge of everything.

WASH TRADES

Jack H.,

Please get into wash trades and how one should go about "practicing" them. Usually, as soon as you buy something, if you sell it immediately, it will be a loss. If you sell too soon, you never give the trade time to go your way.

So, what are we to do with wash trades? How do we practice them and how are we supposed to use them? How do we learn from them that we are "in charge of everything" as you say? If I was to practice them right now, what would I do, specifically?[color]


My responses

As you approach the intersection.........

Okay. Seriously.

You are looking at the market in a very astute manner. Our context is this: We are trading plateaux by plateaux. We get the drill down completely on that plateaux and as we look ahead we see the scramble we have to make over the talus and stuff to climb and struggle up to the next level to cruise across.

The time spent on a given plateaux is the profits made, nothing else. Profits define skill.

Wash trades are very significant in this measure of skill. They are powerful because they prevent erosion of prior successes.

We are not going to be living in the land of win loss ratios, draw downs, consecutive anything’s. macro random this or chaotic that.

We anticipate; we have sequences. They all lead us to flawless trading.


When we approach this plane of attentiveness, we discover that we can clearly see when the market pops a flaw into what is going on. The beginning of wash trades doesn't begin by your having this perception or these sequences under your belt.

So you are now tuned to desiring to know how to do it. And clearly you see that you might not actually "wash" every one because of costs etc.

What the drill is all about is pushing everyone to become very conscious of the tell tales, and in particular the flaws that creep in.

You may be saying now:"Get on with it" On the other hand some of this stuff could fill a book.

I will post here an early warning system for you on this stuff. All these things that come up are extremely important and the most important thing is that you bring them up.

I am starting the wash story now.

For all time keep in mind that volume "pushes" the price. This means specifically that volume is ahead of price getting it to where it is going. It's a timing push.

People make up the market and their consistency and numbers rule the roost. If the particular people, at any time, who control things loose their punch or are slow to maintain the group's will, there is a failure to achieve completion.

Translations: We can look at a lot of this from the viewpoint of physics. There is also a rhythm of things caused by loosely connected intentions and needs. It is like war games played on several levels.

Physics, psychology and war.

Okay we have all the fluff off the table and we focus on the market through volume (the people exercising their will) and price (what they want and control).

We need to focus only on the failure stuff. This makes washing a KISS thing.

Whenever we enter (using rules of a given level) it is from anticipation and with an expectation. We are putting ourselves ahead of the herd so they can drive us and our profits. The one and only thing that has to happen is that the herd keeps the push going by sustained and increasing efforts.

That is it. No more is required.

Now you can "see". It explains everything. I did a post for zbear's colleague in a chop session yesterday. I quantified the volume there as a way of "calibrating" the readers.

All we have to do is glue to the volume on the trading fractal after we enter. We can do pro rata stuff to see if it is sustained, increasing or pooping out.

i havean interruption.

I'll be right back

Posted by balda on 03-19-03 10:11 AM:
Did I do it right?
Short at 11:38 @ 861.50
no volume on Break Down. (no volume on BO -- reversal?)
Cover when stochastics crossed 20 line up
at 11:46 @861.00
+0.5
__________________
It doesn't matter where you get in, it where you get out that counts

Posted by dawg on 03-19-03 10:33 AM:
Last Trade
Here is what i did:

11:05 bar stoch(15.79, 21.14) macd hist -0.5 low of bar 865.00 ---->SHORT SIGNAL (below 25 on 14,1,3)

with the low of day right below 864.50 and today had been a range day so far. I waited until the low of day was broken.

Short @ 864.25 11:11
Cover @ 861.25 12:01 +3.00

from 11:40 to 12:00 volume decreased significantly 5m macd xo at 11:55. with the minisucle vol and xo i exited BEFORE the stoch crossed back above 25.

Posted by tampa on 03-19-03 10:38 AM:
Re: Last Trade

Quote from dawg:

Here is what i did:

11:05 bar stoch(15.79, 21.14) macd hist -0.5 low of bar 865.00 ---->SHORT SIGNAL (below 25 on 14,1,3)

with the low of day right below 864.50 and today had been a range day so far. I waited until the low of day was broken.

Short @ 864.25 11:11
Cover @ 861.25 12:01 +3.00

from 11:40 to 12:00 volume decreased significantly 5m macd xo at 11:55. with the minisucle vol and xo i exited BEFORE the stoch crossed back above 25.



WAY TO GO, dawg

Posted by jack hershey on 03-19-03 10:39 AM:
Re: Re: Re: Re: DAWG Day

Quote from jack hershey:




As you approach the intersection.........

Okay. Seriously.

You are looking at the market in a very astute manner. Our context is this: We are trading plateaux by plateaux. We get the drill down completely on that plateaux and as we look ahead we see the scramble we have to make over the talus and stuff to climb and struggle up to the next level to cruise across.

The time spent on a given plateaux is the profits made, nothing else. Profits define skill.

Wash trades are very significant in this measure of skill. They are powerful because they prevent erosion of prior successes.

We are not going to be living in the land of win loss ratios, draw downs, consecutive anythings. macro random this or chaotic thats.

We anticipate; we have sequences. They all lead us to flawless trading.

when we approach this plane of attentiveness, we discover that we can clearly see when the market pops a flaw into what is going on. The beginning of wash trades doesn't begin by your having this perception or these sequences under your belt.

so you are now tuned to desiring to know how to do it. And clearly you see that you might not actually "wash" every one because of costs etc.

What the drill is all about is pushing everyone to become very conscious of the telltales, and in particular the flaws that creep in.

You may be saying now: "Get on with it" On the other hand some of this stuff could fill a book.

I will post here an early warning system for you on this stuff. All these things that come up are extremely important and the most important thing is that you bring them up.

 

[bubba7]

I am starting the wash story now.

For all time keep in mind that volume "pushes" the price. This means specifically that volume is ahead of price getting it to where it is going. It's a timing push.

People make up the market and their consistency and numbers rule the roost. If the particular people, at any time, who control things loose their punch or are slow to maintain the group's will, there is a failure to achieve completion.

Translations: We can look at a lot of this from the viewpoint of physics. There is also a rhythm of things caused by loosely connected intentions and needs. It is like war games played on several levels.

Physics, psychology and war.

kay we have all the fluff off the table and we focus on the market through volume (the people exercising their will) and price (what they want and control).

We need to focus only on the failure stuff. This makes washing a KISS thing.

Whenever we enter (using rules of a given level) it is from anticipation and with an expectation. We are putting ourselves ahead of the herd so they can drive us and our profits. The one and only thing that has to happen is that the herd keeps the push going by sustained and increasing efforts.

That is it. No more is required.

Now you can "see". It explains everything. I did a post for zbear's colleague in a chop session yesterday. I quantified the volume there as a way of "calibrating" the readers.

All we have to do is glue to the volume on the trading fractal after we enter. We can do prorata stuff to see if it is sustained incerasing or pooping out.

i havean interruption.

I'll be right back



Okay
Right after entry we focus on volume. We do a prorata continuing assessment to determing if it is sustained, increasing of decreasing. It has to keep rolling along to continue the price action. If it doesn't then a failure will occur.

You go to the 1 min as well. This lets you see the signal to noise ratio on the volume. You can divide volume here on this fractal into a base value (the noise) and the variable part (signal). Think of it as a carrier (noise) and a signal (variation). If the signal is not sustained and persistent and being enhanced, then you are potentially into a flawed situation.

I GO DEEPER HERE TO MAKE THE POINT

Yesterday in that detailed post I mentioned I tried to introduce the notion that there can be an expectation that the people playing have roles where subgroups of them are furthermore identifyable. I, for simpilicity of ID's use a harmonic identification.


The people who swarm into things often look like accumulators. We have had the experience here with situations where there are strong urges to exit (these are not based on market stuff but relate to past experience with money in markets and particularly loosing money after having "made" it)). We stem this by focusing on what is right and developing (the point1,2,3 of trend formation). Accumulator swarms turn into distribution swarms.

In cycles they turn out to be triggered by a peaking of money velocity. The money is being made ever faster and they get anxious. Anxiousness leads to action.

If you look at the scoring chart you see that A/D has twice the frquency of volume. Volume in turn is twice the frequency of price.

In a potential failure situation, we track volume. You can reinforce this with the flipping of A/D that shows up as a harmonic on the price. It is best detected as a money velocity change.

For those who like maths. The harmonic is an odd one (third) and very prevalent (good amplitude) and without an offsetting phase angle.

For varying market paces it shows up in a variety of formations. I have then sorted out on a matrix and related to the fractal level as well.

You will get all of this to KISS.

Let me build a record though.

All the above gets you out AT ALL TIMES THAT THE TRADE DOES NOT BUILD But it also keeps you in with confidence AT ALL OTHER BUILDING TRADE TIMES.. Both of these things will turn you into slalom players soon enough during congestion.

Thus, we are out by now if the volume didn't sustain and increase.

Looking ahead

If you are an expert ( making 150 to 250 K a year per contract), you can play congestion opposing the whiplash of others who are paying you. You chicken out when convergence switches from an odd harmonic over lay to an even overlay.

This is where the harmonic goes to even (second) and then volatility indicators have to kick in to make the trading signal measurements.

The shift is from triangular wave forms to square waves. From convergence to centering. The volume gets so low that you almost do not have a signal riding the carrier. Thus you just get two levels of volatility to use as signals.

What is buried in all of this is the BO for the next trend.

Centering ends with a loss of noise. Hard to imagine but the people are sitting there and they are in disagreement and thus frozen from participation. I use set of equations (Boolean) to track all of this stuff. The "landing" of trends is the practical place but the "centering" is also a volume driven price phenomena.

When volume goes below DU (dry up) you are dealing with noise phenomena. This stuff is priceless in value for really killing the market. The reason is quite simple. The market is not being made and anything that hits it is going to be seismic. We will use this at the expert level to prep for the pm start ups coming out of 13:15. If some good slalom people begin to post I will ease into it.

Summary.

We learn to wash to save bucks on prior profits.

Volume is the simple key. It has to sustain the entry; if it flags as the micro trend begins we see this as a pro rata measurement and by popping over to the 1 min.

Market exit.

BE sure, if you previously had anxiety at point 3 times, to stay relaxed on this just like you have become relaxed while setting each of the points 3's for trends.
Watch the MACD and the Stoc on this volume assessment; they correlate quite well.

Some experts can tack here (do a reversal) by seeing on the 1 min what's up.

 

[bubba7]

A major set of comments on what is going on here vis a vis making money.

There were three back tests and they all showed losses. The losses shown varied by one order of magnitude. All of the backtesting seemed to be restricted to the beginner level and did not include doing wash trades.

I was hoping that the backtesters could do some iterative refinement as new topics for improving were introduced.

Two things happened. There was a perception that nothing new came up and there was no testing for intermediate ice bergs nor was there a test of slaloming in congestion as an exit on the fast pace trend end. There was no testing on the point 1,2,3 channel set up to stay in the channel. There was not testing on the use of a second point 3 as an adjustment either.

I did some fractal switching to slow down some hair trigger stuff. Here is how it went for that. We went to a 15 to 30 min channel one day and the next to a 30 and 60 min channel. In both those days if the indicators on these fractals had been used a vast amount of the total daily range would have been picked off.

Finally, go to the choppy market thread and back test the rules I showed there for the 11, 14, and 18th of March, 2003. With that frequency and using those rules (intermediate to expert) you can see, perhaps, that the basis of you comments is something that you can modify by doing about 6 additional back tests so we can tell us how iterative refinement works.

Now move to the big leagues. There are many many people smarter than me; their wealth for example speaks for itself. Do a “what if”. Assume that most people have their own methods and they read stuff here to enhance what they already find to be terrific.

Use trendy and wally as examples. Trendy has a method. She might want to stick in a thought from here and improve what she does. Wally made over 10 points in the 18th flat market and only had one screw up of 3+ points. What if he did a wash on the trade that went against him. You can see he is making more daily than the daily spread as it is. He might use a thought from here to "fix" something.

A back tester on here posted 364 trades and not one wash. His losses weren't quite his wins. What if he decided to not have losses by going out on entries that faded on him.

Finally, thanks for your comments. I think the comments are the best part of the 70 pages. A few people are making a sustained effort to improve. Well I am one of them. As you read the 70 pages, see if there is something there you didn't either invent or know of from your endeavors whatever they might be. Assess them relative to the things you do. Certainly, so far you have rejected everything.

The reason you are reading the pages is clear. (We know you skipped a lot too). The pictures you use to comment are clear too. It's something to have a three week attention span for anyone these days. If you volunteer your minimum acceptable standard of performance for commodities futures indexes and equities trading, I would really like to learn what the standards in ET are for each of these.
Some trades on on 03-19-03
...not an easy one, but...

11:32 S @862.25
11:42 X @860.75

Entered on a "Rocket" signal. Bailed when volume dried up.

02:47 L @870.00
02:52X @871.25

Same as above.

Bottom Line: 2 trades - 2 wins - Plus 2 3/4 points.
More:

My Stoch Trades
My trades and thoughts on today:

1. 11:05 bar stoch(15.79, 21.14) macd hist -0.5 low of bar 865.00 ---->SHORT SIGNAL (below 25 on 14,1,3)

with the low of day right below 864.50 and today had been a range day so far. I waited until the low of day was broken.

Short @ 864.25 11:11
Cover @ 861.25 12:01 +3.00

day: +3.00 last 2 days: -0.50

from 11:40 to 12:00 volume decreased significantly 5m macd xo at 11:55. with the minisucle vol and xo i exited BEFORE the stoch crossed back above 25.

2. Now this one is a wowser...at least for me

2:10 stoch(13.04, 27.88) macd hist: -0.44...had me on alert for a short , but then the next bar

2:15 stoch(13.04, 20.46) but no vol (3188) and never broke low of bar so NO TRADE ENTRY, BUT i was now on the look out for a REVERSAL trade based on a potential MACD XO.

failed rocket setup ---->macd xo long

2:25 5m MACD XO volume picks up AND a price thrust got me long at 866.50

held as this trade as it turns into a rocket. we then get the vol/price spike at 2:45. and then vol drops off significantly...i wanted to look for a point 3, but with a good profit i checked out at 871.25 @ 3:03

point 3 shows up at 3:10 to me.(i have been struggling trying to get these down..curious what others did)

long 866.50 2:31
sell 871.25 3:03 +4.75

day: 7.75 last 2 days: 4.25

the second trade is definitely not a beginner trade, but is a trade jack has talked about: reversing out of a rocket into the opposite direction on a macd xo.

anyways attached is my chart of today's action with my trendlines.


Some comments comparing Stoch Thread with learning to drive. I agree.

re: KISS
I can remember learning to drive a car when I was in high school. We were given a book on rules of the road and a book on driving defensively. I went to drivers ed for months and spent time in a simulator. I went out with my permit and drove with anyone who would escort me. I sweated a lot while driving and couldn't concentrate while the radio was on. I was scared most of the time but everyone told me "don't worry, it's easy" and they made it look easy. Eventually I got my license and was a danger to myself and others those first few months while I got the hang of things. Today, those days are long forgotten while I negotiate fast/slow/congested traffic effortlessly with the music on loud, sipping a drink or while talking on a cellphone (hands free, safety first of course). Driving is SO easy for me now.

It's not too difficult for me to imagine looking at learning the "Jack Hershey" techniques in a similar way. I am a relative trading newbie. He's willing to escort and teach and I am gobbling this stuff up. Eventually, if the rocket technique itself doesn't work for me, I have already learned a lot of new jargon and info about ES, MACD, STOCH, Price/Volume etc.

As far as I can tell, at no time has Jack tried to get any money out one person on ET. If he were trying to sell something, of course I can see the need for real proof of his earning statements. In the mean time, as long as he's willing to comment and answer questions, I'm willing to sift through 70 pages and more.

By the way, can anyone tell me what is a C&R and how is it accomplished?

C&R means Cancel and Replace and existing order

 

[bubba7]

2 PROBLEMS

GUYS,

I have been following this thread since it started. I see 2 clear problems:

1) Some traders are not doing exactly what Jack has said to do. Slight changes can make big differences. TAMPA, you are NOT following Jack's system. You skip trades left and right and basically exit whenever you want. That is TOTALLY FINE, but you shouldn't claim you're trading Jack's system. DAWG, you're not trading Jack's way either. Where did the enter above highs/below lows come from? Again, this is totally fine, we don't all have to trade the same way. However, it needs to be understood that people are NOT following Jack's method completely. If without making adjustments to what jack has stated, the trading method is not profitable, we need to ask Jack why.

2) Jack does add more and more to a system, while making it seem like you can make money with just the initial elements. Like trendy pointed out above, first it was just stochastics and macd readings to enter. People traded that and it didn't work. Then he said use the MACD histogram to filter out trades. Then it was use the 1 min. chart, too. Now it includes channels and volume, etc.

Jack, we need to know specifically what is needed to make money. If you can't make money trading just with stochastics and MACD histogram as you instructed, please state so. If it requires more than that, we need to know this. Why should anyone trade your way tomorrow if it's not going to work and next week you will say it didn't work because we need to add more elements to the system? I understand that it may take weeks or more to explain how you trade, but you should tell us to hold off on trading until you've stated everything that is required to make money.

A response to the post:

Yes, but if he needs weeks to elaborate on that completely, I have one problem with that which boils down to this: the longer you trade the simpler it should be for you. Jack is 70 years old. His systems are pretty complex for someone of his market experience. Moreover, they are getting ever more complex every day, as you noticed. When Jack is 75 and keeps progressing with complexity at the current pace it is quite likely that he will need 20 years to get his ideas across. I wish him well, but he may not be around when he is 95. So I would rather be pleased if he simplified his systems instead of complicating them. Otherwise we may never hear the last word from him, I am afraid.

More commentary that clarifies:


Fruity, this may come as a shock to you, but this is not a rigid method of trading. If that's what you are looking for, you are not going to find it. When you get what appears to be a signal, you must verify it with the price/volume action. The same is true for exits - price/volume action. Obviously, this is somewhat subjective. Learn to deal with it, or look elsewhere. Complain all you like, but Jack will not be posting a neat list of rules to make you filthy rich. This is not a system - it is a way of trading, a way of reading the market.

From dawg

fruity
just want to be clear i always have said how i am trading jack's methods-break above/below. Why do i do this b/c to this day i am still not sure what 'the perfect entry' is...

-are you supposed to wait for 5m to close?

or

-do you enter the moment (even if it mid-bar) you get a signal and then it reverses during the bar...what would you do then?

-jack mentioned using the 1m to 'anticipate'...well if you have trouble with the 1min what do you do?

-so i tried to remove any questions about the trend....i wait for the bar to close and buy the break bove/below...i have no idea why i would enter during the bar unless you were skillfull with the 1min (which i am not). do i think this alters the methodology-no.

-again i don't think jack is trying to hand out a cut and dry system, he is trying to make everyone understand what makes up the elements of a potential trend/reversals/channels and enter accordingly. it is not black and white and that is what people have a problem with.

-some people use 75/25 others use 80/20, yet both are part of the methodology but would yield differemt results.

-another one is when stoch move slightly below 75, but forms what looks like pt 3 to make up a channel...do you exit or hold...i don't have a problem with this, but others do.

-someone tell me EXACTLY what the beginner method is made up of(i know i couldn't)....and i don't think you need to....i think you choose what fits you and allows you to be successful...for me it was only a small tweak that allowed me to be more comfortable, but it hasn't changed the underlying principles that make it work in my opnion. others incorporate a few things into their current trading.

-don't be lost in the details but identlify what it is telling you about the bigger pciture

anyways my worthless 2 cents. good luck everyone.
fruity
well i believe tampa is trading using some tweaks suggested by jack...like using the
5-2-3 instead of the 14-1-3 and incorporating a MACD of +/- 1 to ensure a strong trend...so i wouldn't expect his trade to resemble mine at all....but that is ok and that is point. He takes what he needs of the overall larger methodology and makes it work for him.

another comment

trading 101
Folks,

I personally am here to learn how to trade. I have been trading full time for 2 years. I buy books to learn how to trade better. I must say that what Jack is teaching here people pay money for. I am attracted to his unique style, his confidence and wisdom when he speaks.

Most people will not make it through this thread and will not be ready yet for what Jack is teaching. That driving the car comparison in the earlier thread was a great story. I tend to agree.

Have I learned anything......well yes....I have/am learning to time trends and this is what Jack is teaching us. There are way's to make money in congestion too, but we have a long way to go with this....if we can make it that far...and If Jack will continue.

Traders and traders to be.....This is a pro-trader sharing his knowledge with us....you should bow down....and ask him how high to jump...it is not everyday that we would get such an opportunity.

I do not believe that it is our business what Jack trades...I would venture to say that his net worth is greater than anybody in this thread....well maybe not tampa...

I believe Jack is teaching us because he has reached a place in his life and trading career where he can teach and feel good about it. Please do not take this away from him (and me)

A response to the comments:

Everyone,

I am not anti-Jack. I want to learn as well. However, it is impossible to get clear answers from him. For example, after 2 large posts by Jack, I still have no idea what I'm actually supposed to do to practice wash trades. Why is this so? Jack, I want to practice wash trades. What do I do while sitting at my computer? I don't need philosophy. Just tell me what I am physically to do.

Also, maybe I'm a total jerk, but I find it quite annoying when someone says buy when stochastics and macd histogram do this, etc. and you can make $100k or whatever a year per contract. When people try it, they don't get the results and then Jack says, well you need to look at the 1 min chart and volume..oh yeah, and practice wash trades, too. Why didn't he say that before? What will we find out we have to do next?

 

[bubba7]

3-20 Signals and Trades
1. 9:45 stoch(18.18, 20.20) macd hist -1.0 low:866.25 (also low of day)

entered on break of low. red bar green bar drop was a little nerve wracking. the 10:30 bar was a bullish engulfing-type (although light on the vol) bar and 5m macd xo and broke my downtrend channel so i exited. (see chart)

short @ 866.00 9:47
cover @ 860.75 10:34 +5.25

day: +5.25 last 3 days: +9.50

side note: if you reversed long on the macd xo as you exited the rocket you again got a very nice trade - it eventually turned into a rocket. (i think there is a lot of potential in these type entries)

2. 11:05 stoch(77.05, 82.12) macd hist: +1.49 high: 872.50 (also high of day)

never broke the high so NO ENTRY.

side note: the macd xo at 11:30 ended in congestion. also formed a bull flag.

DID NOT TRADE UNTIL AFTER MID DAY

3. 1:15 stoch(96.88, 81.31) macd hist +0.55 high: 875.75 (also high of day)

entered on break of high 876.00. mkt was making new high but macd was not (diverg.) volume was not strong for new highs (especially for new highs of this recent bounce) 1:55 5m macd xo...exited on bounce at 876.75 .

long @ 876.00 1:20
sell @ 876.75 2:00 +0.75

day: +6.00 last 3 days: +10.25

side note: again on the macd xo if you reversed from you rocket this was another good trade as it eventually turned into a rocket.

4. 2:40 stoch(12.00, 24.00) macd hist -0.47 low: 873.25

entered short on the break at 873.00. 2:55 bar had crappy volume and 3:00 was a reversal. 3:05 macd xo exit at 3:12 @ 873.50

short @ 873.00 2:47
cover @ 873.50 3:12 -.50

day: +5.50 last 3 days: +9.75

side note: again if you reversed from you losing rocket in to long at macd xo you had another ok trade as it turns into a potential rocket that doesn't set up.

3:30 had a long signal but it never broke the high so i did not enter

attached is my marked up chart for the day

Has anyone else been looking at the macd xo reversals from rocket endings and failures?
Nice trading, dawg

I didn't do as well. I just was not "in the zone" this morning, and when I "got into" it this afternoon, the best I could do was a couple washes (sigh).

admittedly, the war news has me spooked...

Too bad none of this works, and can't be understood.

Some questions came up:

[clor=green]MACD settings
Jack,

I noticed that my MACD Hist numbers and XO points were sometimes noticeably diff than Dawg's. I see now that my data provider (eSignal) has settings for every little piece of the MACD indicator.

Oscillator line : EMA or SMA.
Signal line: EMA or SMA
Source: Close, Open, High, Low, (H+L)/2, (H+L+C)/3, (O+H+L+C)/4

Looking at a simple definition of MACD (Google is so handy), I would surmise that the settings would normally be:

Oscillator line : EMA
Signal line: EMA
Source: Close

Presto, my numbers/XO points now match Dawg's.

I was grimacing about eSignal's "off" defaults, then I realized that I would now sometimes get signals and XO points a bar earlier/later than I used to.

Do you have an opinion on any of these settings? Or am I splitting hairs here since I'm basically in beginner mode?[/color]


My response:

Matching dawg is most common.

The E of EMA lets change get an edge over non change. This does allow a better signal given the consideration that something is always in the space.

To change the subject, the volume variable value is always of a minimum value or greater. This constantly present minimal value is like noise in a system. And the variation above, this is signal to you. For price there is similarly something that is always there. We get a better look at the change in price with the E version. Regression stuff is another kind of example of this theme.

When you read the MA of price crowd's viewpoints particularly with reference xo's you can readily see that they usually are throwing large portions of cycle profits in the toilet. A lot of this is lag as it turns out. The C and D of MACD cuts into the lag and furthermore when you get into sequence we will use rate of change of stats to get a "leading" signal.

My NQ trade for today is ...
... simulated. I haven't thrown any money at it until I gain enough confidence in the method. Besides, I haven't been doing too well lately ...

I will attempt to trade it in a very simplistic manner, as I didn't have time to read the whole thread and get to the part about fine tuning (got to page 20 or so, will finish it this weekend):

entry as soon as fast line crosses 80 or 20
exit as soon as it crosses back.

Will try to enter on fast moves and avoid ranges.
I have the MACD up but I'm only watching it.

The first cross (of the 20) occurred before the open, so I stayed this one out as it looked choppy too.

Entry: cross above 80 at 10:55 @ 1065.50
Exit: at cross below 80 at 11:03 @ 1073.50
for +8.00.

Fast line crossed back up on the next bar but didn't enter as pace had slowed down. MACD didn't cross the whole time, diff was greater that 1 at all times.
Then I had to go to work

Nice going dawg, I wish mine were real too.

I agree with you. Lately there's been too much anger and bashing on these boards.

Good trading to all.

More trading questions

For 03-21-03

Dawg, I understood your methodology to be to not enter a trade until there has been a breach of the 5 min. signal bar, which is the method I would use as well to confirm the strength of the trend.

Looking at the 9:45 bar, I see stoch. of 31 and 35, which would not be an entry signal beneath its low. The 9:45 bar does provide the proper stoch signals, and I thought you would have entered upon the breach of that low, which would still have been a good trade. So, was this just the quarterback calling an audible at the line of scrimmage? If so, nice call. Or, am I misunderstanding your methods?[color]

Response

Posted by dawg on 03-21-03
i attached a picture of my chart and see on the info bar....are you using all settings? i checked another chart under all settings and it read 33,37....i don't use all setting (although i have it on another chart)...this is definitely a question i don't have a clue about....to use all settings or not....if you aren't and our setting still don't agree then i am throwing the computer out the window.

here is my reasoning:
i just assumed we were looking at the non-alll settings and by waiting the 15 minutes for the 'synch up' trading off the non-all settings is fine....we waited 15m becuase of the gaps between the charts and stuff.

Two echanges to get it straight

Posted by trendy on 03-21-03 09:42 AM:
Dawg, after looking at your chart I figured out why we don't jive on the signals. I have my 5 min. set to start at 7:00 a.m. , it looks like yours is set at 9:30. I set mine early so that any a.m. gaps don't overly influence the indicators. Don't know if that is good methodology or not. Any way, now I know why you did when you did it.

Posted by dawg on 03-21-03 09:45 AM:
trendy
cool. always a little paranoid that my indicators are screwy and i am trading off some broken squiggly line.

 

[bubba7]

My running comments:

This will fill in some interconnections. The point 1,2,3 will allow you to see to hang in longer in the snse that you can take a tend to daily resistance every day. The same is true for support. By using right lines all the time you know whether you are heading for either support or resistance.

If the market is flat, (Low absolute indicator values (can't use relative ones for this)), then you go to slaloming on MACD and volume combo.

You can see when, yesterday the end effects started. This is a time of day to hang it up when you are riding either support or resistance cause the volume has to be there to drive it. If the volume is driving stuff, then there is just a one direction drift.

Some Questions

Jack,

The "watch out label" at the stoch 50% line on your chart of the NQ you posted in your last post....... why "watch out" there?. The oly signifignce was the fast line was spread far apart from the signal line.


THE 50% Is IMPORTANT

I guess I put the ellipse in there in such a way to over emphasize. It is the original point 2, so maybe a person can get disoriented. The bar (candlestick)which it is on could be significant because of the volume returning to a higher value and the fact that the "long" trend was setting up. This happens at a moment when the Stoc has a choice of riding the 50% or continuing to the 80% and getting on with the trend.

In the entry sequence where people have their risk regime in play by picking just how many entry signals that they wait through before taking on the trade, this bar turns out to be one that causes concern both if you are already in (my choice) or still confirming stuff. Getting past the 50% was crucial. There is a wiggle there that can get amplified.

Instead of writing all this on the chart I wrote watch out and some words that wouldn't fit in the box.

The original poster, I think, used the red#'s for a trade. I wanted to illustrate the safe ground that he was on and also show more opportunity to him.

I like your attitude about this; I'm sure you picked off the market bottom as real reversal opportunity right on the first two bars before and after the BO through the right "short" trend line. To do that on low volume shows the cat is coming off support and it's going to be a blast through midday. (A la the MACD set of continuingly reinforcing unflawed signals. The two volume sequences (weak on resistance price) and the failure to bump off right side visa vis volume poop out where classic. It was a ride from support to resistance with strong sequence sgnal sets all the way.

My mental orientation is to not let myself see delineations on any scale finer than 10 point gradations. By amplifying price by five as done here, it tends to make me less smooth in my personal calibration.

Next trades

3-21 My Trades
cable went out for several hours midday so i missed the big midday runnup.

my review:

1. 11:10 s(10.34, 23.74) macd hist -.73 low 876.50

this was low never broken so NO TRADE was entered.

note: the action of the 11:15 reminded very much like the action on tuesday at 10:00...we got a short signal at the low of day and the next bar was a lower volume inside green bar that led to good reversal...again volume drying up being a key and was followed by a macd xo. both led to good reversals.

also the sequence was failed rocket from low of day---->macd xo ----->potential rocket zone

also after the big midday runnup the macd xo marked the beginning of a downtrend channel which lead to a potential rocket setup.

2. 1:45 s(3.45,16.76) macd hist -.56 low 886

entered on break of low of the bar....now here some people might differ on what to do. mkt bounce and stoch left the short zone, BUT was still within my defined downtren channel (see chart) so i held as i was looking for my pt 3. i would have exited had the downtrend channel been broken or the macd xo....reverses off the top of channel and stochs reenter short zone. ok we get ANOTHER short signal at 2:15 s(8.33, 23.55) and that same sneaky low volume inside green bar shows up AGAIN. so when the high of the 2:20 is broken i am history at 856.00

short @ 885.75
cover @ 856.00 -0.25

day: -0.25 4 days: 9.50

note: again the macd xo off of the failed rocket led to a trend move that lasts the rest of the day. actually turns into a rocket.

3. 2:50 s(96.00, 85.62) macd hist +0.67 high 890.50

enter on break of high. again stoch spikes briefly below and someone sticking to the letter of the law might exit, but this is the first red bar of this entire trend move (i.e point 3). held to end of day and exited at 894.50

long @ 890.75
sell @ 894.50 +3.75

day: +3.50 4 days: +13.00

very happy with the week w/ only 4 days of trading for me (w/ missing monday which had a big trade and today's midday move) and all this war crap. have a good weekend.


comments on NQ chart

Jack, thanks for the feedback.
The reason I took the entry is that the signal was triggered, with volume on the rise and enough room to resistance. One additional reason was that price crossed the 20 SMA. Before looking at your method I was trading an MA cross that tested well, was capturing 20 pt moves but had too many whipsaws.

Your volume action comments are interesting - the sequence that you mention, what do you mean by right side - the right ascending trendline?
Do you suggest holding through the whole move?
Or exit when the volume dries up with failure at resistance and reentry on bounce off trendline with volume picking up?

More questions after I read the whole thread - I see that dawg is familiar with 1,2,3 and end effects.



My mental orientation is to not let myself see deliniations on any scale finer than 10 point gradations. By amplifying price by five as done here, it tends to make me less smooth in my personal calibration.



I had it set to a 10 point scale but I resized the window before I posted the chart. I find this very helpful as I was using the "autoscale" setting (that makes charts look nicer as you mentioned) and was often mistaking a wiggle for a big move. One scale for all allows you to calibrate your eyes to the chart.

 

[bubba7]

More detail on the above:

Jack, thanks for the feedback.
The reason I took the entry is that the signal was triggered, with volume on the rise and enough room to resistance. One additional reason was that price crossed the 20 SMA. Before looking at your method I was trading an MA cross that tested well, was capturing 20 pt moves but had too many whipsaws.

**** I am so glad you point out the MA inherent potential for getting whipsawed. We all want to have a standard component in our approach to head off whipsawing and, as a counter to be able to slalom in the whippingness.

Your volume action comments are interesting - the sequence that you mention, what do you mean by right side - the right ascending trendline?

****I am trying to impose an orientation on people when they assess a picture. I label the channels from the viewpoint of time instead of profits. Time on the right side is the future. The right side of a channel is where the end is going to occur. We will get to using the highest profit exits if I can get there soon. For now I am looking towards "anticipating" as a concept to prpare people for possibilites and, then in turn, doing eliminations of alternatives that are less and less likely. When an unlikely event occurs it is often one that raises risk markedly. These things often turn out to be the clue that is crucial.

*****Like for the space crew, had they known a piece took three days to reenter they would have known easily that its specific gravity dictated that it was structural and was lost as a result of a yaw manuver where eccentricity affects higher density mass. It is trouble in center city stuff.

****You cite resistance s a meaning full future anticipated condition vis a vis a MA mid trend entry. Very cogent and certainlt a key facet of MA trading. all my annotations were of the same ilk vis a vis taking whole tend trades.

**** Seting up the trend, assuring that it is not a "failure to BO" (by tracking the P, V sequence), setting the money velocity and pace of market (point 2) in comparison to the volume (push calibration), resetting point 3 as the next volume DU coasts into the picture, etc. These are all articulated by many sequence indicator signal events as they just tick off one after another. Knowning the sequences is like having an inspection clip board for any technical or materials handling process that adds value. certainlty if a step is awry, you focus and handle it. I call this a flaw and it sets you up for a decision and action. This is how "wash" trades get sooooo smooth for people. They (people) are in a place where drawdowns are history; later, in fact they are playable (like the slalom on whipsaws) and profitable.

Do you suggest holding through the whole move?
Or exit when the volume dries up with failure at resistance and reentry on bounce off trendline with volume picking up?

*****You should endeavor to use an entry that picks up more of he move and hold until your resistance tests come into play.

** Continue with the MA that handles this market. (It is so very true as you say that you have to continually calibrate MA's to the contemporary market. (I posted previously on how to optimize this but no one entered the dialogue). With this working, lets try to get the lag on the MA cured by seeing where a "leading" signal can be derived from it. I think KISS is the main theme all the time. Adding stuff is best done as a temperary thing where either the addition replaces something aftr a sufficient time overlap or the addition becomes a tempoary magnifying glass for gleening something already there to be seen.

****Like NASA is making up a list of resident time in space for parts that fall off. They are ranking things by specific gravity as the key factor for extent of remediation required.

*****The bounce off the right line is almost as important as point 3. Keeping in a trade begins with getting point 3 down. The second point 3 is a bounce off the right line problem exactly like the subsequent bounces after th adjustment. You take resistance as a limit and divide money gained per bounce to see how many can occur. As you see max volume BO lessen on each bounce you get ready for creming mid channel for max price. this is where you also know to exit as a reversal and the confirmation is the BO through the right line. The reversal point becmes your new trend point one.

****You can see all of this flows. What we are doing is gradually becoming familiar with making money all the time every day.

*** the annotated chart we are working from gives you a nice intraday trend sequence set of basics. One of the things i look forward to is seein Tampa take a trend all the way. As you say dawg has it down. The people who "see" how starting simple and making steady profits have an advantage. they are able to perceive that you use a mechanical means to establish an emotional base that then enables you to have a descretionary mental capacity. It is not in use but it is there.

Contrast your articulation with that of trendy. She is not yet at the point of any differentation emotionally. The black and white world is a stiffling one. Criticising people for not playing by mechanical rules, demonstrates and inability to gain confidence to participate in real markets. At some point, every wealthy person has gone through transitions away from a mechanical lifestyle. Training can facilitate or hinder this. Wally and trendy exhibit this stuff in parallel ways, one in physics the other in beans.

More questions after I read the whole thread - I see that dawg is familiar with 1,2,3 and end effects.

**** yes kewl. I hope I filled in some stuff already that is coming up for you.

I had it set to a 10 point scale but I resized the window before I posted the chart. I find this very helpful as I was using the "autoscale" setting (that makes charts look nicer as you mentioned) and was often mistaking a wiggle for a big move. One scale for all allows you to calibrate your eyes to the chart.

** Yes I agree with you. Thanks for the space too.

I parsed this below. look for ****'s.



Jack,

Thanks for addressing my questions. As promised, I'm back with more today after reading the thread up to page 39. It took me four hours, but it was worth it - I see the method in its intended perspective now, and even beyond that, the rhythm of the market throughout the day. Thanks to all for posting their results and charts.

**** I will get the pages copied and in order and do an edit amd markup ASAP. I have dictating and transcriptions services so I can redo everything form an information viewpoint rather than a response viewpoint. This war thing is an excellent context for how difficult a market can be in uncertain times.

So here are my questions on the stuff that I've read so far (I apologize if they were already answered, but a little repetition will only reinforce some, IMO, important facets). The questions go to the others following the thread too.

****There are three aspects of learning that help out. What you are doing is priceless. The four stepper contains two others: Assessment and speaking aloud. By characterizing you situation (Step1) you assess. By expressing your goals and doing it aloud, you deal with the intellectual and the emotional by imprinting (Steps 2 and 3.) This is a replacement process for NLP pictures. Step 4 is a closure mechanism for a soft (step 1) and a forceful (Step 3) set of impressions. You will find by doing the "eureka" thing that there is a much faster transition from level to level.
Watch how the transition of profitability goes with the posters of results. They are annotating success in processing methodology.

****There is a profound thing happening. Pay particular attention to their washes and how they operate with failures of trends to form and how they stay in trades longer and longer.

1. 1 min chart for prorating: do you have stochastics and MACD on this chart as well? Same settings? What do you base your decision on - price action with S/R levels, or indicators? I'm inclined to keep this simple, since it is a "helper signal " not a main one - so price action and S/R only.

**** when we get into it you will see that fractal pairing is so powerful. As a side trail watch brandonf as well. He uses a slower set (3) fractals where he chooses an appropriate one. He then goes to a faster set (3) to pair with his trading fractal to "confirm" what is coming up as a trading signal. I did a "tape" thing to get people to the slowest fractal possible for monitoring a given market pace. This is where price bars fill the point 1,2,3, channel by their volatility. The set of indicators work the same on all fractals.


**** keep your charts on any fractal identical. I am on Qcharts so I just change the "interval" and my indicators come right along.