Iterative Refinement
- Thread starter Spydertrader
- Start date
When I was post-doctoral fellow at Rice back in the '80's my mentor remarked one time that he couldn't understand why I insisted on/persisted in doing the same experiment over and over again. What he failed to appreciate was that I was looking at a variable which he considered to be inconsequential.
You would appear to share some of his characteristics, but perhaps not. I simply have not PROSPECTIVELY looked at sufficient instances of the variable I am considering to be able to say with reasonable certitude what the effect is, if indeed there is an effect. In other words although the literature is replete with any number of references to the significance of an outside up or down price marker, I am not yet satisfied that I have all of the possible contextual aspects in place in relation to the trading method I am currently using.
If you do possess such certitude then that's inestimably cool, for you.
lj
BTW, a general comment: Today, so far, appears to be an example of an "M" day persuant to a non-monotonic decrease in the V pattern of the first 3 bars of the 5 min ES.
Hi Avi...
Thank you for your answer
I totally agree that Decreasing Dominant Volume means "Change" in a normal situation. But this is, as you know too, not always the case. Lateral movement and Flaws are examples of that, and these examples usually mean "continuation" (if we are talking at Tree Level).
If we see ES at LTL and price continue to increase, even if we have decr volume, that doesn't mean we will hit "reverse" or "exit", because that may not mean "change", if we do it, we may see price continue to increase asking us why didn't price turn around, and the reason could be beacuse price drifted in some kind of lateral movement or we had some intrabar flaw of some kind.
About the price being on a formation, again, I agree with you about what we should usually do. But context has a very important role on this methods, so, what do we call, if we have ES sitting on LTL and we see YM price bar changing direction with good volume even if bar boundaries still are inside previous bar ?
Thanks again for your answer
Regards,
Thank you for your answer
I totally agree that Decreasing Dominant Volume means "Change" in a normal situation. But this is, as you know too, not always the case. Lateral movement and Flaws are examples of that, and these examples usually mean "continuation" (if we are talking at Tree Level).
If we see ES at LTL and price continue to increase, even if we have decr volume, that doesn't mean we will hit "reverse" or "exit", because that may not mean "change", if we do it, we may see price continue to increase asking us why didn't price turn around, and the reason could be beacuse price drifted in some kind of lateral movement or we had some intrabar flaw of some kind.
About the price being on a formation, again, I agree with you about what we should usually do. But context has a very important role on this methods, so, what do we call, if we have ES sitting on LTL and we see YM price bar changing direction with good volume even if bar boundaries still are inside previous bar ?
Thanks again for your answer
Regards,
Thereby illustrating the utility of completing and repeating one's prescribed observation. Some of you may remember me asking Spyder in Futures III if on M/W days, there was a monotonicity constraint on the V decrease of bars 1-3 of the 5 min ES. He informed me that observation would reveal the answer to my question. Today, for me, was prospective observation #1 and I will dutifully record what I find at the end of RTH.
lj
(V0/5 = 35,346; V5/10 = 32,509; V10/15 = 34,083) for DTNIQFeed ITC data feed.
In all 'situations', the difference is the CONTEXT.
'Seeing' the market requires three things:
1) Price/Volume on properly annotated charts
2) Sequences (must know them cold)
3) Context
Yes, context!
If using just the YM and ES, we wait. With 'bar overlap' we must go to finer tools to see the right side of the market.
Nice to have you back, Pepe!
Hi Guava,
My opinion:
The term "Change" is commonly used but it has two different interpretations imho.
The first is "Change" in the pure sense, and is used generically speaking. It doens't have a context, a resolution, nor it's linked to anything else. It's like the "Decr vol = change", "Red bar on Long channel = change" and so on. In this interpretation, it is true that every direction change on price is a "Change" signal.
The other meaning of "Change" is when we add Context and Resolution level. When this is the case, we link Price and Volume with "knowledge" and we "ignore" some pure signals for change. We do that because we know how the sequence of events work and we want to stay at a specific resolution level. So, it is not a "change" signal for us, trading at Tree level, when Pt2 is made and we see the traverse to Pt3, nor it's a "change" signal when we see Price moving away from Pt3 too, but it is a "Change" signal when we see the FTT
