increasing, decreasing, continuing and changing
- Thread starter esjockey
- Start date
Quote from SK0:
What is the meaning of FBO in the pvt rules?
Thank you for the inquiry.
Cycling in stocks occasionally has it quirks. So it is good to be awate of the possibilities.
Failure to breakout is one of them for any pattern. Unusual volume is a breakout trading method. The column heading first appreaed on Qcharts a while back. It purpose was the same as ISD's listing in the paper of the "Top 15 in this or that. Volume for these lists was high volume to begin a large long or short price move.
Once most platform people discovered volume led price, they started to make various means of informing available. Worden Bros was outstanding at this with their "BLOCKS who name latter was changed and the compny was spun out of Worden Bros as a second generation effort. Always attend any session Chris offers to introduce a new measure from worden.
If a breakout does not have sustained volume in its support, then the breakout fails. So FBO was invented to describe the failure of BO's.
Here it is described in the color coding of the entry and the peaking colors.
If the FRV is not sustained as measured by increasing volume at the trate of change of FRV multiplier (See top of chart) then the price will not continue to lift off for a continuation of the cycle. Aftr the first day, the same requirement is in force. As you see to het to peaking, more volume than FRV volume is required. That is the multiplier at the top of the page is higher.
To get this tested we used 400,000 trades. Elsewhere is a meagre test done with 23,000 plus trades and not using any volume considerations (only an arbitrary series of days 1, 2, ,3, 4, 5 where the tester pooped out before he got the the days most commonly used for taking profits.: 6, through 8. In the 400,000 test the average daily hold was 8.1. This means that there were many holds longer than the average.
In another time period using forward testing and an ATS the duration of hold was 6.6 and the average profit was 11.1% and interval of testing was 6 months and one consequence was that the ATS designer left his work and used a combo of a custom Freightliner and 32 foot custom house trailer to travel and just return to his home on the Pacific coast periodically. we did a design for adding a hydraulically operated DTM 36 inch disk to his trailer. I was using a pair of disks at the time and tuning them to a satelite was easy because of the GPS map setting coordinates provided and because of the remote signal metering used where the computers were set up.
Elsewhere there is a comment from someone famous on how only backtesting is a means of figuring out stuff. This person omitted evaluating forward testing apparently.
I whole heartly recommend a form of forward testing called iterative refinement. Science abounds with stellar examples of forward testing. Another thing about science is that you can build on the generic rules that have emerged in many sciences and apply them to your science effort.
In this thread we are looking at a process that was designed from a hypothisis set and its parametric meaure that passed all the science and logic tests. Then as you see stated, we did a sampling. The sample was 400,000 units. From the acquired data we checked them against the design values. It fit together quite well.
One constrain came about from the very early days of forward testing for 20 to 30 years.
The choice of stocks to trade is a factor in optimizing making money. we use the Sullivan principle in doing this. As technology advances we take advantage of this. So now the stocks are determined by a click of a button.
Historically, in terms of teams working to solve the quality selection of stocks problem, this problem took the longest. It boiled down to that a computer programmer several years before had slipped up in dealing with some Fundamental Analysis (FA) and that deeply buried coding was causing unusual distributions in contemporary findings. By cleaning this up, it was possible to get the high Beta stocks more consistenly for doing the trading with automated stock lists.
There is a curve elswhere that didn't use (He wasn't directed to by the authority he was mimicing) a proper sample but unsted used a "convenient and poor sample". Obviously it is a waste of time to test a non sample of anything. scientists do not do this for several reasons.
Read all of Andrew Lo's papers to find out how a poor and slow set of realizations is determined and slowly and inevitably cast aside. read the recently posted paper "Statisitical Arbitrage in the US Equities Market", Avellanesa, Lee, 2008. Would you think the borad universe of US equities is a good sample???? Well they obtained results that are consistent with the "unwinding" theory for the quant fund drawdown of AUG07. This is humor form the uninformed studying the unprepared.
By JUN06 many of us knew and spoke the words on Camtasias that it was over and the best trading days were ahead from then on. And we recorded these great daysin video everyday. A nice archive.
The above paper is the usual: an abstract (page 1); an introduction to the parts (pages 1 through 4); the parts (pages 4 through46); and the references on two pages beginning with a refrence to the Motely fool the creation of two liberal arts kids.
On page three they find out that trading frequency is variable and by page 4 they find out that VOLUME IS A KEY but NONE OF THE MATHS IN THE PAPER DEAL WITH VOLUME.
Simply stated they deal with Sharpes of 1.44, 0.9 amd 1.1 primarily. One looksee at volume effects takes the sharpe to 1.51.
the one pager and the rules on the sheet DO NOT DEAL WITH SHARPE RATIOS that are in the ranges of any published papers.
the one pager simply has answers for trading high beta stocks to make an average of half their cycle volatility over the long half the cycle.
"Putting the Pieces Together" is a narraction (77 pages) in JUN complimented by an editing in OCT with the addition of 26 snapshots of the "unusual volume" from Q charts back when the Quant era had just ended unknown to the paper writers.
This was a 2 hour transcribed session followed by a two hour Sunday prep for trading on Monday where 26 snapshots of the planning unfolded to make, what most financial planner make in a year, of part of one day. And a whole week was planned on that Sunday.
For Gucci there is a message. SCT trades the same as PVT only it is 50 times faster.
That is what this thread is going to be about: trading the offer of the ESXX by using channels as in PVT and then using traverses of channels and then using tapes of channels.
the cash cow Basic and Basic supreme ATS's trade channels. The CASH cow intermediate will trade TRAVERSES. The Cash cow Expert will Trade tapes.
The bottom line of trading with or without ATS's is to make money and share some profits by using some profits to solve local problems.
One common local problem is PTSD which is being endured by veterans and their families in every community. The VA and the DOD does not have a handle on this problem. Neither do the politicians nor the EOP.
The people who do are skilled and working as NGO's. Find these people and help these people help our VETS.
The first effort we make is to stay on the right side of the market using the hypothesis:
If volume in increaseing, then the price trend is continuing.
w use a chart with volume and price and annotate the volume and annotate the price according to the parametric measure of the Hypothesis set.
We use a boundary line on volume and it is sloped positive for increasing. This means when volume is sloped positive we HOF the position and stay on the right side of that market.
Tpo find the right side of the market we slide a rule into the chart from the right side. It ultimately will touch two points on the price chart.
this two points define the slope of the price as shown on the chart fractal being used. For PVT use a 30 minute chart or even a 15 minute chart.
For SCT trading of ES use a 5 minute chart of ES and a 2 minute chart of YM.
What you get is a line that has a name in TA it is called the right trend line. It is used for beginner entries.
In the unusual volume one pager, you get to draw the RTL line when the price lifts off at .25 on the prorata volume in the FRV colume. As a few hours pass you have more bars and they allow you to slide the rule in form the right and hit two points as draw a line.
For ES and YM the same thing is done using two bars.. The effort is repeated during the day and you are annotating "tapes" at first showing their RTL's.
geometrically tapes come and go quite frequently. Always leave blank space to the right of the forming bar and call that space the future.
In trading the future comes into the present and you only work in the Present. By doing more aspects of annotating you get to see tapes form and we use both sides of the path of the price. The other side of the path is to the left of the Right Trend Line (RTL).
Construct a parallelogram forn each RTL you draw and extend it out into thee future at the time you draw it.
Not many people are capable of drawing tapes or any kind of annotation. A while back DBPhoenix was a classic example. He could not under any circumstances draw a parallelogram to define the boundaries of price movement into the future.
Settle down and consider the annotating requests I made. One for volume and one for price.
we are defining three things at this point. the three things are powerful tools for trading.
1. where we are in the cycle
2. what is next in the cycle
3. How fast the sysle is changing.
What is occurring is that we have boundaries of the variables that are stated in terms of the words in the hypotheses we are using as the WHOLE NINE YARDS OF THE PARADIGM. Whole nine yards is the amount of cloth on a bolt of cloth carried on wagons by itinerante salemen on the frontier as the West was settled. View the movie 24 hours of Centennial to see bolts of cloth sold. Also see Levi in the California gold rush convert cotton sail cloth to trousers.
We have succeeded in begining to stay on the right side of the maket.
We add one more tool called PRV. Pro Rata Volume.
Imagine a day bginning. The suggestion is to enter the market once the premium has been reached. This is a point in time that is known from your preflight check fill ins which you did before open.
On the cash cow ATS we skip this complication and just take the first opportunity from the coding.
Who are the traders who do either of these things? they are simply purposeful traders. It is part of the way to satart the day.
Starting the day with being on the right side and having an annotation to tell you the right side is not too difficult.
Some drawbacks to doing this are found in the descriptions of losing traders and those potential traders learning failure and, of course failed traders who are protecting others.
Fear, anxiety and anger slow down good annotating.
Also the fight or Flight syndrome slows down good annotating.
The thread title is about annotating the parameters of the paradigm called PEP (Pool Extraction Paradigm).
Increasing and decreasing are done on the Volume panel. continuing and changing are done on the price panel. All are lines or ends of lines and new lines beginning. All are projected into the future where you have a blank space on the right of your secreen. As you have seen I do it ahead of time.
The illustration that you have seen shows a stock and where price will be going in a few days. Then the next illustration shows how, when the future came into the present, the price simply filled the boundaries set upfor it a few days before.
This makes trading more comfortable and the annotations are supportive and you feel confident.
What this means psychologically is that you can change ends of the spectrum from "incoherent" to "coherent". Since NEOXX was a MD, I gave him a machine that MD's and psychologists commonly use to check out patients who are disturbed or "disrupted" as they say technically speaking.
most people are "disrupted" because as they trade they look moslty at their pending loses and past loses before they close their accounts and quit trading. these people do "incoherence".
there are word sets that are used to examine people. Three sets are used to show incoherence for people who ar either visual, audo or kinesthetic.
We could pick among the ET'ers and show the three sets of words by simply quoting their posts which all show incoherence.
Annotating is the first step towards coherence since it answers the three questions. We have to learn to see how this works next.
In the mean time begin to annotate tapes and volume hills and valleys. Soon you will connect the tapes and hills and valleys.
If volume in increaseing, then the price trend is continuing.
w use a chart with volume and price and annotate the volume and annotate the price according to the parametric measure of the Hypothesis set.
We use a boundary line on volume and it is sloped positive for increasing. This means when volume is sloped positive we HOF the position and stay on the right side of that market.
Tpo find the right side of the market we slide a rule into the chart from the right side. It ultimately will touch two points on the price chart.
this two points define the slope of the price as shown on the chart fractal being used. For PVT use a 30 minute chart or even a 15 minute chart.
For SCT trading of ES use a 5 minute chart of ES and a 2 minute chart of YM.
What you get is a line that has a name in TA it is called the right trend line. It is used for beginner entries.
In the unusual volume one pager, you get to draw the RTL line when the price lifts off at .25 on the prorata volume in the FRV colume. As a few hours pass you have more bars and they allow you to slide the rule in form the right and hit two points as draw a line.
For ES and YM the same thing is done using two bars.. The effort is repeated during the day and you are annotating "tapes" at first showing their RTL's.
geometrically tapes come and go quite frequently. Always leave blank space to the right of the forming bar and call that space the future.
In trading the future comes into the present and you only work in the Present. By doing more aspects of annotating you get to see tapes form and we use both sides of the path of the price. The other side of the path is to the left of the Right Trend Line (RTL).
Construct a parallelogram forn each RTL you draw and extend it out into thee future at the time you draw it.
Not many people are capable of drawing tapes or any kind of annotation. A while back DBPhoenix was a classic example. He could not under any circumstances draw a parallelogram to define the boundaries of price movement into the future.
Settle down and consider the annotating requests I made. One for volume and one for price.
we are defining three things at this point. the three things are powerful tools for trading.
1. where we are in the cycle
2. what is next in the cycle
3. How fast the sysle is changing.
What is occurring is that we have boundaries of the variables that are stated in terms of the words in the hypotheses we are using as the WHOLE NINE YARDS OF THE PARADIGM. Whole nine yards is the amount of cloth on a bolt of cloth carried on wagons by itinerante salemen on the frontier as the West was settled. View the movie 24 hours of Centennial to see bolts of cloth sold. Also see Levi in the California gold rush convert cotton sail cloth to trousers.
We have succeeded in begining to stay on the right side of the maket.
We add one more tool called PRV. Pro Rata Volume.
Imagine a day bginning. The suggestion is to enter the market once the premium has been reached. This is a point in time that is known from your preflight check fill ins which you did before open.
On the cash cow ATS we skip this complication and just take the first opportunity from the coding.
Who are the traders who do either of these things? they are simply purposeful traders. It is part of the way to satart the day.
Starting the day with being on the right side and having an annotation to tell you the right side is not too difficult.
Some drawbacks to doing this are found in the descriptions of losing traders and those potential traders learning failure and, of course failed traders who are protecting others.
Fear, anxiety and anger slow down good annotating.
Also the fight or Flight syndrome slows down good annotating.
The thread title is about annotating the parameters of the paradigm called PEP (Pool Extraction Paradigm).
Increasing and decreasing are done on the Volume panel. continuing and changing are done on the price panel. All are lines or ends of lines and new lines beginning. All are projected into the future where you have a blank space on the right of your secreen. As you have seen I do it ahead of time.
The illustration that you have seen shows a stock and where price will be going in a few days. Then the next illustration shows how, when the future came into the present, the price simply filled the boundaries set upfor it a few days before.
This makes trading more comfortable and the annotations are supportive and you feel confident.
What this means psychologically is that you can change ends of the spectrum from "incoherent" to "coherent". Since NEOXX was a MD, I gave him a machine that MD's and psychologists commonly use to check out patients who are disturbed or "disrupted" as they say technically speaking.
most people are "disrupted" because as they trade they look moslty at their pending loses and past loses before they close their accounts and quit trading. these people do "incoherence".
there are word sets that are used to examine people. Three sets are used to show incoherence for people who ar either visual, audo or kinesthetic.
We could pick among the ET'ers and show the three sets of words by simply quoting their posts which all show incoherence.
Annotating is the first step towards coherence since it answers the three questions. We have to learn to see how this works next.
In the mean time begin to annotate tapes and volume hills and valleys. Soon you will connect the tapes and hills and valleys.
The year that was spent journalling the SCT was divided into parts. Originally the syllabus was set to do a topic a month. That arrangement was dropped very soon and we put in another month per topic.
The parametric measuring was done in months 1 and 2 to get the annotation tooling pefected.
The combination of Carnap. Bayes and his opposite the "frequentists", and Keynes provides the underlying for the Hypothesis Setand it parametric measure. The pragmatic outcome is the words: you must do the annotations completely and comprehensively to optimize making money by taking the market's offer.
The general expression is "doing the Work".
This means, geometrically speaking that two points determine a line and the market gives the points and you draw the line.
Often people cannot "do the work" or do not keep up with the market's giving.
Since we build from the smallest level of detail to the gross level of detail, anyone anytime can simply step in and perform making the gross outer boundaries and forgo any work to build up from the smallest components.
Also it is tue that when a person begins to move from incoherence towards coherence, he is not used to having an orderly mind at his disposal or being in a non disrupted place.
If you read Steenbarger coaching Greenspoon so he can make 10,000 dollars a net day trading 400 contracts through 60 turns a day, you get to see how incoherence makes a person so unproductive in the use of quite a bit of capital in an organization that considers Greenspoon good and worth paying Steenbarger some of that 10,000 a day.
Here we are talking about using simple building blocks to make a whole and using the whole as beginners to make high velocity money with few turns a day (4 to 7).
Gucci was on one day not current with what the market was "telling" so that he could annotate and understand the measures of volume and price.
The trader/market partnership is based on the fact that the market gives "tells". Specifically the market is always right and it is the job of the trader to welcome TRUST coming into the space.
Enough "ball ParK" lets do "batting practice".
Putting up charts of annotations is done in Iterative refinement and all those charts are simply done and are the "doer's" realization of his mind's "built" nature and its tuning.
Here is batting:
Draw tapes. From tapes draw traverses. From traverses draw channels in price.
In volume, draw the rising volume envelope and the falling volume envelope
Make mistakes rather than not do it.
There are 81 bars a day in ES and more in YM. Place them above oneanother and draw lines. The YM will give you the clues for the ES before the ES shows the clues.
Use the lookup table results to add rays to volume for pace.
Gucci will post here every day the beginning of each new channel in ES. At the beginning of each channel a beginner hold begins.
As you see on the illustrated cash cow chart, the Basic cash cow gives a trading signal related to the channel beginnings. Price is not used in cash cow. No annotating is done. BUT the same answers result.
This is simply because the two trading apporaches use the same pool extraction paradigm. All trading approaches from the paradigm give the same results. The Price Action approach gives the same answers as the each of the others.
Our objective is to trade a few times a day when each new channel begins. We trade on point 1 of a new channel as beginners.
To bat you need to have in your mind how tapes make traverses and how traverses make channels.
As Gucci bats, he swings on the appearance of point 1 of the channel.
Lets talk about others than Gucci who are airheads who know nothing and have not done the work. They do not swing the bat to make money on the pitch of point 1. Why don't they?
It is not just plain old fashioned stupidity. What it is is that they do not have in their minds when to swing the bat.
Gucci knows when to swing because he knows how the pitcher's wind up goes and he knows the pitcher is throwing to a catcher who has his mitt up in the neighborhood of the catcher's desire for where the ball should be thrown.
In SCT annotating is giving the pitcher a target to hit. AT Rosenthal Collins it is Jack or Spyder putting a finger on a screen and saying this is where you get back to even if you do what I tell you instead of fucking up again.
They wait they see the pitcher wind up they see the pitch and they swing the bat and lock in profits on the turn as beginners trading a channel.
Four to 7 pitches a day.
Lets look at the pitch in detail.
We have failure all over the place. we are looking at failure on several panels (a panel is a rectangular container of information flowing out of the computer to a CRT or other display and it has a solid line boundary that may make it possible to move the panel around on the screen or it is fixed in a larger multi-panel aggrigation.
As the end of a channel nears, the next channel begins. This is definitely Little League convenience.
The batter is standing there having made money for a quester to a seventh of a day. He has stood through pitch after pitch that did not appeal to him as a beginner channel hitter.
HE KNOWS WHY EACH AND EVERY PITCH WAS NOT THE PITCH THAT BEGINS THE NEW CHANNEL.
HERE IS A PITCH BETWEEN POINT TWO AND POINT 3 OF A CHANNEL. Is the pich worth hiting? NO IT IS NOT
What did gucci have to know to know it was not a good pitch? I think we all get it except those who have not doen the work. They do not know what is going on.
Step back from the plate. Take a minute, think of batting practice and years of coaching. You know volume hiking; you know the internals of volume. You kbow how to annotate tapes, traverses, channels internals on dominants and internasl on non dominants. You have seen the automated charts for years that come from platforms the PhD's have supervised the building of.
Back to the plate. Are you coming off a RTL on a dominant traverse with a dominant tape and is that tape going to have an FTT as the traverse is going to have and FTT as the channel is going to have an FTT? Is that hike on volume coming to the top of a peak. You have 12 seconds to check that PRV and see if it is off peak. Is it? YESSSSS then swing the bat and go have lunch take a walk or call a friend or go shop for groceries we don't even need you to run the bases.
What you did was lock in a profit segment and what you get to see is volume decline and the RTL get hit and volume pick up as the price gopes through the RTL towards point 2. You have to WAIT to get there and the get to point 3 and to get to a chance to bat again.
You are always in a channel you are always in a traverse. You may be in an internal where price is not moving much for a while until the internal is over.
Why can't a person trust the market. No one has that job. Trust comes FROM the market to you.
I'll put up some charts later.
The parametric measuring was done in months 1 and 2 to get the annotation tooling pefected.
The combination of Carnap. Bayes and his opposite the "frequentists", and Keynes provides the underlying for the Hypothesis Setand it parametric measure. The pragmatic outcome is the words: you must do the annotations completely and comprehensively to optimize making money by taking the market's offer.
The general expression is "doing the Work".
This means, geometrically speaking that two points determine a line and the market gives the points and you draw the line.
Often people cannot "do the work" or do not keep up with the market's giving.
Since we build from the smallest level of detail to the gross level of detail, anyone anytime can simply step in and perform making the gross outer boundaries and forgo any work to build up from the smallest components.
Also it is tue that when a person begins to move from incoherence towards coherence, he is not used to having an orderly mind at his disposal or being in a non disrupted place.
If you read Steenbarger coaching Greenspoon so he can make 10,000 dollars a net day trading 400 contracts through 60 turns a day, you get to see how incoherence makes a person so unproductive in the use of quite a bit of capital in an organization that considers Greenspoon good and worth paying Steenbarger some of that 10,000 a day.
Here we are talking about using simple building blocks to make a whole and using the whole as beginners to make high velocity money with few turns a day (4 to 7).
Gucci was on one day not current with what the market was "telling" so that he could annotate and understand the measures of volume and price.
The trader/market partnership is based on the fact that the market gives "tells". Specifically the market is always right and it is the job of the trader to welcome TRUST coming into the space.
Enough "ball ParK" lets do "batting practice".
Putting up charts of annotations is done in Iterative refinement and all those charts are simply done and are the "doer's" realization of his mind's "built" nature and its tuning.
Here is batting:
Draw tapes. From tapes draw traverses. From traverses draw channels in price.
In volume, draw the rising volume envelope and the falling volume envelope
Make mistakes rather than not do it.
There are 81 bars a day in ES and more in YM. Place them above oneanother and draw lines. The YM will give you the clues for the ES before the ES shows the clues.
Use the lookup table results to add rays to volume for pace.
Gucci will post here every day the beginning of each new channel in ES. At the beginning of each channel a beginner hold begins.
As you see on the illustrated cash cow chart, the Basic cash cow gives a trading signal related to the channel beginnings. Price is not used in cash cow. No annotating is done. BUT the same answers result.
This is simply because the two trading apporaches use the same pool extraction paradigm. All trading approaches from the paradigm give the same results. The Price Action approach gives the same answers as the each of the others.
Our objective is to trade a few times a day when each new channel begins. We trade on point 1 of a new channel as beginners.
To bat you need to have in your mind how tapes make traverses and how traverses make channels.
As Gucci bats, he swings on the appearance of point 1 of the channel.
Lets talk about others than Gucci who are airheads who know nothing and have not done the work. They do not swing the bat to make money on the pitch of point 1. Why don't they?
It is not just plain old fashioned stupidity. What it is is that they do not have in their minds when to swing the bat.
Gucci knows when to swing because he knows how the pitcher's wind up goes and he knows the pitcher is throwing to a catcher who has his mitt up in the neighborhood of the catcher's desire for where the ball should be thrown.
In SCT annotating is giving the pitcher a target to hit. AT Rosenthal Collins it is Jack or Spyder putting a finger on a screen and saying this is where you get back to even if you do what I tell you instead of fucking up again.
They wait they see the pitcher wind up they see the pitch and they swing the bat and lock in profits on the turn as beginners trading a channel.
Four to 7 pitches a day.
Lets look at the pitch in detail.
We have failure all over the place. we are looking at failure on several panels (a panel is a rectangular container of information flowing out of the computer to a CRT or other display and it has a solid line boundary that may make it possible to move the panel around on the screen or it is fixed in a larger multi-panel aggrigation.
As the end of a channel nears, the next channel begins. This is definitely Little League convenience.
The batter is standing there having made money for a quester to a seventh of a day. He has stood through pitch after pitch that did not appeal to him as a beginner channel hitter.
HE KNOWS WHY EACH AND EVERY PITCH WAS NOT THE PITCH THAT BEGINS THE NEW CHANNEL.
HERE IS A PITCH BETWEEN POINT TWO AND POINT 3 OF A CHANNEL. Is the pich worth hiting? NO IT IS NOT
What did gucci have to know to know it was not a good pitch? I think we all get it except those who have not doen the work. They do not know what is going on.
Step back from the plate. Take a minute, think of batting practice and years of coaching. You know volume hiking; you know the internals of volume. You kbow how to annotate tapes, traverses, channels internals on dominants and internasl on non dominants. You have seen the automated charts for years that come from platforms the PhD's have supervised the building of.
Back to the plate. Are you coming off a RTL on a dominant traverse with a dominant tape and is that tape going to have an FTT as the traverse is going to have and FTT as the channel is going to have an FTT? Is that hike on volume coming to the top of a peak. You have 12 seconds to check that PRV and see if it is off peak. Is it? YESSSSS then swing the bat and go have lunch take a walk or call a friend or go shop for groceries we don't even need you to run the bases.
What you did was lock in a profit segment and what you get to see is volume decline and the RTL get hit and volume pick up as the price gopes through the RTL towards point 2. You have to WAIT to get there and the get to point 3 and to get to a chance to bat again.
You are always in a channel you are always in a traverse. You may be in an internal where price is not moving much for a while until the internal is over.
Why can't a person trust the market. No one has that job. Trust comes FROM the market to you.
I'll put up some charts later.
What is the trading strategy?
We take the markets offer by staying on the right side of the market.
From time to time the market tells us a new profit segment is beginning with the advent of a new trend. At first we only bat on a channel level since there are only a few times at bat daily for making nice profit segments.
Spyder posted a segment once. It was checked out and stated by the detractors that is was too good since it hit each turn on the chart (not posted by Spyder, he just posted the print). Obviously to a person who cannot do this because he did not do the work Spyder did and then taught to others, the print is difficult to believe.
Spyder does believe it though. One reason is that he has the 46,500 that the 146 minute hold did on a specific day between two specific times where the market T&S shows the trades. Spyder swung the bat twice when all the annotations (the pitcher winding up and throwing the pitch) came together.
How much money do you make if you swing at the wrong pitch. Well not too much probably only a few points for each contract you have. When do you figure out that you will not make more on that swing? It is the same place for a channel the same place for a traverse the same place for a tape. It is the respective next FTT on that trading fractal.
So if you make a mistake, then just take a small profit to get back on the right side of the market.
Lets look at the second strategic part of the approach:
Be in the market all the time.
This is something all big money tries to do and they do it poorly apparently. Pairs trading is a fun example of how to stay in the market and not make much money compard to the offers.
We stay in the market all the time and as we do we also stay on the right side of the market. This is done with reversal trades. A reversal trade is part of the market trading tooling because smart traders like its convenience. This was not always true and really meant a lots of writing on cards on the trading desk floor telephones. It meant a lot of record keeping for traders too. Each record had 10 factors including salutations, meaning (who's got your cards this time).
for airheads, this rule is a nut buster since they are sidelined most of the time and they have betting losses to deal with also.
It is very incoherent as a concept for most people who minds are already disrupted by fear, anxiety and anger.
for coherent people who deal in support, comfort and confidence it is a good idea to have only one set of feelings to deal with be being in the market all of the time.
there are many people who try to learn SCT and postpone being in the market all the time and doing reversal trades. this is simply the fact that as yet they do not partner with the market nor do they have the "circle" working that is tells>> acceptance>>> trust>>> value>>> and increasing while doing each lap durng the routine of MADA.
how does thie step occur for going from exit/entry to hold reversal?
It doesn't ever for most people. there is simply no possibility for these people to listen to the market. Why? Well they are thinking up bets and risk management and stops instead. They are doing somthing to "beat" the market which is always right.
This is a tough kind of premise to believe in. Look at the language and word choices of thse kinds of people. Especially sports oriented people. On WAll Street, the best and brightest behave this way too. ET stands for Elite something.
What is it like to go to a luncheon with a terrific speaker that does a Q and A? My job (low three digits per hour in the early 60's portal to portal from Geenwich ) was to scribble Q's for club members to ask. the consequence was, after lunch I got to meet the speaker who came to the table to find out who asked the Q's.
Having the always in the market and on the right side is foriegn to the movers and shakers who get their conswquences. My questions were out of the box and pointed to something else than CW that was working. I moved to Zurich, Switzerland after a few years of that. Toys and travel.
Reversing is a tough concept if you do not have a hypothesis set and a coresponding parametric measure. You cannot imagine how tough this is to swallow at the financial think tanks or Indian Harbor Yatch Club or Oyster Bay ot Larchmont or City Island. BUT hooking up to a guest buoy worked quite well.
If the elements of the hypothesis set are mutually exclusive and totally comrehensive, there are no loop holes involved. If you get to have a single parametric meausre in terms of its character (a time rate of change meausre only), then there is only one punch line left to conquer. the limiting case for hypothesis has to be TWO.
What happens when you sit around with the best and brightest and they "get it". I don't really know as yet, except for the "PhD's" who did get it and all the others that they taught. I only know from the viepoint of the few expert traders who sit on the panels called "Great Traders You Have Never Met" at the Trader's Expo. NONE of these persons are vendors per se, but they all are very wealthy and have terrific programmers. There is a split on whether they do reversals of not. None of these people are full time traders since no one of them has to be when they got that rich.
The definition of a full time trader is someone who hasn't learned to trade as yet.
If you pull down 46.500 dollars on a 40 contact trade thatlasted 146 minutes, what do you do with your time? Among the group we all know the answer is "anything you want".
Hold and reversal trading lets a person do anything they want. It is a strategy of trading and life style.
The TWO part mutually exclusive hypothesis set with one parametric measure takes probability of Bayes out of the piture since the Keynesian requirement of "like kind" is met and so is Carnap's Logic Theory requirement. This is what frightened, seriously, the members of the NYC Institutional Investor's Club of the early 60's.
We wind up in a binary vector world where the binary vector is velocity for the two market variables.
If you reach an "end point" of one hypothesis, you have switched to the beginning of the other hypothesis with toal certainty and zero probability. So what is left to do is pragmatically "read" the market or "see" the market or "feel" the market if you are A, V or K or a combo. I am even steven on all three as a consequence of my breeding a simple fluke of fate.
The HOLD hypothesis is at play almost all the time. The REVERSE hypothesis is at play onlt during ened of the HOLD hypothesis.
This makes reading the market a left/right process. AND more important you stop dealing with OPPOSITES and begin to deal with two orthogonal elements: continuing and changing.
All of this counterintuitiveness is difficult for those who strive to be "right" instead of rich. CW cannot be a winning strategy; instead it is a sales strategy as is well known.
If you look at the organizational block diagram I did to the "expense" scale for the Stark top 50 fund, you see the way the smartest and the brightest use the top tier B school skills to wheel and deal to get "investors" and "Keep" investors.
here we just use a paradigm to extract that capital through the third element.
We take the markets offer by staying on the right side of the market.
From time to time the market tells us a new profit segment is beginning with the advent of a new trend. At first we only bat on a channel level since there are only a few times at bat daily for making nice profit segments.
Spyder posted a segment once. It was checked out and stated by the detractors that is was too good since it hit each turn on the chart (not posted by Spyder, he just posted the print). Obviously to a person who cannot do this because he did not do the work Spyder did and then taught to others, the print is difficult to believe.
Spyder does believe it though. One reason is that he has the 46,500 that the 146 minute hold did on a specific day between two specific times where the market T&S shows the trades. Spyder swung the bat twice when all the annotations (the pitcher winding up and throwing the pitch) came together.
How much money do you make if you swing at the wrong pitch. Well not too much probably only a few points for each contract you have. When do you figure out that you will not make more on that swing? It is the same place for a channel the same place for a traverse the same place for a tape. It is the respective next FTT on that trading fractal.
So if you make a mistake, then just take a small profit to get back on the right side of the market.
Lets look at the second strategic part of the approach:
Be in the market all the time.
This is something all big money tries to do and they do it poorly apparently. Pairs trading is a fun example of how to stay in the market and not make much money compard to the offers.
We stay in the market all the time and as we do we also stay on the right side of the market. This is done with reversal trades. A reversal trade is part of the market trading tooling because smart traders like its convenience. This was not always true and really meant a lots of writing on cards on the trading desk floor telephones. It meant a lot of record keeping for traders too. Each record had 10 factors including salutations, meaning (who's got your cards this time).
for airheads, this rule is a nut buster since they are sidelined most of the time and they have betting losses to deal with also.
It is very incoherent as a concept for most people who minds are already disrupted by fear, anxiety and anger.
for coherent people who deal in support, comfort and confidence it is a good idea to have only one set of feelings to deal with be being in the market all of the time.
there are many people who try to learn SCT and postpone being in the market all the time and doing reversal trades. this is simply the fact that as yet they do not partner with the market nor do they have the "circle" working that is tells>> acceptance>>> trust>>> value>>> and increasing while doing each lap durng the routine of MADA.
how does thie step occur for going from exit/entry to hold reversal?
It doesn't ever for most people. there is simply no possibility for these people to listen to the market. Why? Well they are thinking up bets and risk management and stops instead. They are doing somthing to "beat" the market which is always right.
This is a tough kind of premise to believe in. Look at the language and word choices of thse kinds of people. Especially sports oriented people. On WAll Street, the best and brightest behave this way too. ET stands for Elite something.
What is it like to go to a luncheon with a terrific speaker that does a Q and A? My job (low three digits per hour in the early 60's portal to portal from Geenwich ) was to scribble Q's for club members to ask. the consequence was, after lunch I got to meet the speaker who came to the table to find out who asked the Q's.
Having the always in the market and on the right side is foriegn to the movers and shakers who get their conswquences. My questions were out of the box and pointed to something else than CW that was working. I moved to Zurich, Switzerland after a few years of that. Toys and travel.
Reversing is a tough concept if you do not have a hypothesis set and a coresponding parametric measure. You cannot imagine how tough this is to swallow at the financial think tanks or Indian Harbor Yatch Club or Oyster Bay ot Larchmont or City Island. BUT hooking up to a guest buoy worked quite well.
If the elements of the hypothesis set are mutually exclusive and totally comrehensive, there are no loop holes involved. If you get to have a single parametric meausre in terms of its character (a time rate of change meausre only), then there is only one punch line left to conquer. the limiting case for hypothesis has to be TWO.
What happens when you sit around with the best and brightest and they "get it". I don't really know as yet, except for the "PhD's" who did get it and all the others that they taught. I only know from the viepoint of the few expert traders who sit on the panels called "Great Traders You Have Never Met" at the Trader's Expo. NONE of these persons are vendors per se, but they all are very wealthy and have terrific programmers. There is a split on whether they do reversals of not. None of these people are full time traders since no one of them has to be when they got that rich.
The definition of a full time trader is someone who hasn't learned to trade as yet.
If you pull down 46.500 dollars on a 40 contact trade thatlasted 146 minutes, what do you do with your time? Among the group we all know the answer is "anything you want".
Hold and reversal trading lets a person do anything they want. It is a strategy of trading and life style.
The TWO part mutually exclusive hypothesis set with one parametric measure takes probability of Bayes out of the piture since the Keynesian requirement of "like kind" is met and so is Carnap's Logic Theory requirement. This is what frightened, seriously, the members of the NYC Institutional Investor's Club of the early 60's.
We wind up in a binary vector world where the binary vector is velocity for the two market variables.
If you reach an "end point" of one hypothesis, you have switched to the beginning of the other hypothesis with toal certainty and zero probability. So what is left to do is pragmatically "read" the market or "see" the market or "feel" the market if you are A, V or K or a combo. I am even steven on all three as a consequence of my breeding a simple fluke of fate.
The HOLD hypothesis is at play almost all the time. The REVERSE hypothesis is at play onlt during ened of the HOLD hypothesis.
This makes reading the market a left/right process. AND more important you stop dealing with OPPOSITES and begin to deal with two orthogonal elements: continuing and changing.
All of this counterintuitiveness is difficult for those who strive to be "right" instead of rich. CW cannot be a winning strategy; instead it is a sales strategy as is well known.
If you look at the organizational block diagram I did to the "expense" scale for the Stark top 50 fund, you see the way the smartest and the brightest use the top tier B school skills to wheel and deal to get "investors" and "Keep" investors.
here we just use a paradigm to extract that capital through the third element.
The last element or concept is that money is made through price change.
This is evident on the P&L but we do not use it in the paradigm in any way. As you saw in the Cash Cow and its ATS's there is no price component.
We use the envelpes of price but we do not meausre price differences to get degrees of freedom in the paradigm.
The making of money is a RESULT not a CAUSE.
So the If's of the hypotheses are not in terms of price. Only the THEN's speak of price results.
Graphically it is when price does nothing that a signal is generated, geometrically speaking.
As we saw in the research results of examining the failure of traders we see it happens after they are intuitivelt and analytically disrupted that they do the opposite of what is done to win in trading. See the Economist 11APR09, page 78.
In "doing the work", for five years we advocated for a routine that included closure each lap. this established a cery cool situation since all was binary all was vectored and all was certain and had zero probability. MADA has a fourth part that brings closure always. The classic CW paradigm ends with a TEST. this is total uncertainty in a probabilistic setting.
Steenbarger actually video tapes his clients going over the edge in terms of disruption of their ability to analyze and to use ant residual intuition. Check the feedback system of John Boyd that he uses: OODA.
Your logs on each row end on the right with closure and usually the symbol is H for hold an action that is behaviorally passive and comfortable.
In MADA you log M and simply turn 180 degrees away from the screen and do ADA to reach closure.
All trading of SCT is done as price continues to move from right to left. That is it. When it stops moving, on that fractal you have reached the end of a profit segment.
No price change to the left is when the segment on that fractal has completed. It is a time when the Left Trend Line has not been reached as it was before. As you know the LTL can be "pushed" further to the left with a VE. That is a name given to a price more profit movement called "Volatility Expansion" VE means HOLD to us all.
If we have certainty and no propability and if we have a routine that ends each lap with closure, then we are tending to be coherent. There is no incoherence and fight or flight. We are NOT competing, we are extracting from a sales oriented system. We are NOT, over and over constructing a probabilistic nw hypothesis to test by betting and seeing if we win or lose (considering all their risk and money management to keep money sidelined) like the CW guys.
the market continues for a beginer all day long with 4 to 7 moments when the price stops moving to the left of the traded fractal and a new profit segment begins.
We are in the market.
We are always on the right side of the market
And we make money segment by segment from price change which allows use to extract the offer.
Look at my Black's hobby of making the offer on the fractal he trades.
20,000 bucks gets you 40 c0ntracts to trade. A 20 point channel gets you 46,500 dollars FTT to FTT, two sings of the bat in 146 minutes..
Annotate to monitor. Do analysis so you know where you are, what is next and how fast it is changing.
Do decision making each application of the routine, the passive comfortable, supportive, knowlegable Action is always HOLD to reach closure that LAP of MADA. Once in a while you use the other Hypothesis; then you decide to REVERSE and take a behavioral action on the execution platform.
MADA doe not involve looking at your chips. cash in your chips after hours.
This is evident on the P&L but we do not use it in the paradigm in any way. As you saw in the Cash Cow and its ATS's there is no price component.
We use the envelpes of price but we do not meausre price differences to get degrees of freedom in the paradigm.
The making of money is a RESULT not a CAUSE.
So the If's of the hypotheses are not in terms of price. Only the THEN's speak of price results.
Graphically it is when price does nothing that a signal is generated, geometrically speaking.
As we saw in the research results of examining the failure of traders we see it happens after they are intuitivelt and analytically disrupted that they do the opposite of what is done to win in trading. See the Economist 11APR09, page 78.
In "doing the work", for five years we advocated for a routine that included closure each lap. this established a cery cool situation since all was binary all was vectored and all was certain and had zero probability. MADA has a fourth part that brings closure always. The classic CW paradigm ends with a TEST. this is total uncertainty in a probabilistic setting.
Steenbarger actually video tapes his clients going over the edge in terms of disruption of their ability to analyze and to use ant residual intuition. Check the feedback system of John Boyd that he uses: OODA.
Your logs on each row end on the right with closure and usually the symbol is H for hold an action that is behaviorally passive and comfortable.
In MADA you log M and simply turn 180 degrees away from the screen and do ADA to reach closure.
All trading of SCT is done as price continues to move from right to left. That is it. When it stops moving, on that fractal you have reached the end of a profit segment.
No price change to the left is when the segment on that fractal has completed. It is a time when the Left Trend Line has not been reached as it was before. As you know the LTL can be "pushed" further to the left with a VE. That is a name given to a price more profit movement called "Volatility Expansion" VE means HOLD to us all.
If we have certainty and no propability and if we have a routine that ends each lap with closure, then we are tending to be coherent. There is no incoherence and fight or flight. We are NOT competing, we are extracting from a sales oriented system. We are NOT, over and over constructing a probabilistic nw hypothesis to test by betting and seeing if we win or lose (considering all their risk and money management to keep money sidelined) like the CW guys.
the market continues for a beginer all day long with 4 to 7 moments when the price stops moving to the left of the traded fractal and a new profit segment begins.
We are in the market.
We are always on the right side of the market
And we make money segment by segment from price change which allows use to extract the offer.
Look at my Black's hobby of making the offer on the fractal he trades.
20,000 bucks gets you 40 c0ntracts to trade. A 20 point channel gets you 46,500 dollars FTT to FTT, two sings of the bat in 146 minutes..
Annotate to monitor. Do analysis so you know where you are, what is next and how fast it is changing.
Do decision making each application of the routine, the passive comfortable, supportive, knowlegable Action is always HOLD to reach closure that LAP of MADA. Once in a while you use the other Hypothesis; then you decide to REVERSE and take a behavioral action on the execution platform.
MADA doe not involve looking at your chips. cash in your chips after hours.
More on batting practice.
we learned that MADA is a routine with closure each lap.
we also worked during M to annotate Vand P. We learned to build from tapes to traverses to channels.
the day begins with an entry on the Synch when we Know the market sentiment and use it for the entry. There may be carry over from the prior day so sentiment is known in that context.
We trade channels and so we take the entry along the sentiment of the channel.
Say we have just a point 1 of the channel at synch. Look at this illustration which shows the legs that follow synch.
we learned that MADA is a routine with closure each lap.
we also worked during M to annotate Vand P. We learned to build from tapes to traverses to channels.
the day begins with an entry on the Synch when we Know the market sentiment and use it for the entry. There may be carry over from the prior day so sentiment is known in that context.
We trade channels and so we take the entry along the sentiment of the channel.
Say we have just a point 1 of the channel at synch. Look at this illustration which shows the legs that follow synch.
Quote from jack hershey:
More on batting practice.
we learned that MADA is a routine with closure each lap.
we also worked during M to annotate Vand P. We learned to build from tapes to traverses to channels.
the day begins with an entry on the Synch when we Know the market sentiment and use it for the entry. There may be carry over from the prior day so sentiment is known in that context.
We trade channels and so we take the entry along the sentiment of the channel.
Say we have just a point 1 of the channel at synch. Look at this illustration which shows the legs that follow synch.
I have only shown the beginning of the time Gucci holds to go from his opening entry to the FTT of the channel. We know on an M day or a W day it is a hold of many bars and a lot of things happen in between. For a beginner in SCT it is an eventful period and we saw in boot camp that it was difficult to just do the annotating as time passed and the log said Hold every pass of the routine MADA.
Gucci has expressed that he was losing huge amounts of money while trading through a day.
As you see for a beginner, trading channel FTT's is not going to happen often. FTT's do happen on traverses and most frequently on tapes. Also the are "internals" of one kind on dominant traverses and internals of another kind on non dominant traverses.
BUT for a beginner there is a lot of time to sort these things out on the log and in doing the MADA routine.
The simple beginner goal it to learn to annotate to do M of MADA. The A in MADA for analysis is to determine to hold if a channel FTT has not arrived. On carry over days it can come soon er than non carryover days.
Lets jump ahead to expert. An expert trades each FTT of the tape level. He has seven leading indicators of the arrival of the FTT on the tape.
Why don't SCT learners just jump into it with both feet and do expert trading?
I had lunch with a guy who has a sniper on his crew and we were talking about how hard it is to get guys to come in and deal. The guys we want to see have the same thoughts all the time. They have had the bad trader's experience but in another occupation.
Beginners haven't had the experience so it is better to not do "expert" right off. If a beginner can work to gain purposeful expereince then he doesn't have to go through being in a bad place and having difficulty dealing with it.
A beginner has to go along annotating tapes to get traverses to get channels, but he can be in the market as he does this since he is on the right side of the market.
Messy is how it starts out simply because the annotation has a lot of lines that extend into the future after the purpose of the line ends. Who cares... messy is good.
Most learners have gone to school and they learned what was expected and how to get grades and brownie pionts. In trading you still see a lot of posts by people trying to be right and get brownie points from those who they want to judge them.
In trading, however, what scores is the bottom line and the bottom line only.
For beginner the FTT of a channel is where the segment profits are taken. It is simply a line from the prior FTT to the present FTT where the next trade is beginning.
What is in between is analyzed and the answer is HOLD. Basically put 81 holds down the action column of the log and be prepared to erase a few (4 to &) and replace them with an X for reversal. Or just overwrite an X in a smudgy sharpie X.
Beginners like the first tape, hate the second tape and like the FTT on the thrid tape because they got to point 2 of the channel. From point 2 to point 3 there is less fun and more waiting while occasionally not making money. From point 3 the beginner is usually headed into the FTT of the channel on peaking volume.
He Bats and reverses. Volume is falling and he is only making so much money slowly and coming to the RTL. IF he batted on FTT then BO of the RTL is where he starts hiking up the mountain on volume again and is headed for point 2 of the second channel.
All through this the beginner has the bad havit of looking at his chips instead of the slopes of the lines of the tapes, traverses and the channel.
What if he could see ALLOF THE TIME that he is to the left of the trendlines he has drawn for each current tape, traverse and channel. If he isn't then he just annotates wht he has missed and gets caught up. This is how the beginner learns about internals (the places where price isn't doing anything.)
It took months for NEOXX to annotate in a timely manner (meaning within fifteen minutes of what had happened). Naturally, a person can annotate as it happens as an alternative.
Now Gucci is posting a chart at the time each new channel begins. The purpose is to see the few channels that occur each day and to see that channels are made of traverses and traverses are made of tapes and internals. When he does it for five days (20 plus channels), then he will be posting the beginning of each traverse as it happens. After enough days of that we go to expert and get the job done by using the antiwhiplash part of SCT. So we do not have very far to go to be at expert for Gucci.
As we go to traverses we will begin to bring in the leading indicators of price so there is no longer any mystery in checking out pur and perfect annotating.
As we go we will be adding contracts. Obviously if we can do an order of magnitude in PVT in less than 100 days* we can do an order of magnitude faster with Gucci.
We can do 5K per contract margin and after a while slip it lower. we can work down to 500 bucks which is what experts do.
*there was a screwed up test (not a "backtest" since backtesting is defined as logical) where a person looked at cycles of price. He found one part of the cycle and not the other (he said there were not enough of the second kind). What he found was if he used a longer duration the test turned out better but it never had as many exits as entries. He knew how far he had to go to get as many exits as entries but he didn't go there. The average was 8.1 and he stopped at five. Did he know his results would be erroneous as a consequence? No apparently not. He only knew what he said. He said the test was worst at the shortest and always got better even as far (at just over a quarter of the way) as he went using the wrong universe. IF you are doing long trades and do not come to an exit signal, what does that tell you?
Edit: Here we work out of the problem of losing repeatedly by being on the wrong side of the market. We go from channel on the right side to traverses on the right side and to tapes and internals on the right side. In trading to take the offer, there are two concurrent tests: timing and snetiment: they must align.
As we go we will be adding contracts. Obviously if we can do an order of magnitude in PVT in less than 100 days* we can do an order of magnitude faster with Gucci.
We can do 5K per contract margin and after a while slip it lower. we can work down to 500 bucks which is what experts do.
*there was a screwed up test (not a "backtest" since backtesting is defined as logical) where a person looked at cycles of price. He found one part of the cycle and not the other (he said there were not enough of the second kind). What he found was if he used a longer duration the test turned out better but it never had as many exits as entries. He knew how far he had to go to get as many exits as entries but he didn't go there. The average was 8.1 and he stopped at five. Did he know his results would be erroneous as a consequence? No apparently not. He only knew what he said. He said the test was worst at the shortest and always got better even as far (at just over a quarter of the way) as he went using the wrong universe. IF you are doing long trades and do not come to an exit signal, what does that tell you?
Edit: Here we work out of the problem of losing repeatedly by being on the wrong side of the market. We go from channel on the right side to traverses on the right side and to tapes and internals on the right side. In trading to take the offer, there are two concurrent tests: timing and snetiment: they must align.