Iterative Refinement

[ehorn]

Hi Spyder,

It appears that there is a direct correlation to pace and visible fractal levels. Or to say, that as pace shifts, so does the fractal which the market is operating on. Would it be accurate to consider pace levels to be directly correlated to the fractal which is developing? And/Or does a pace increase just "compress" the faster fractals into intra-bar type moves?

To me this seems logical (and a useful application) but I was hoping to get your thoughts.

Thanks for any insight.

 

[charts]

Quote from ehorn:

Hi Spyder,

It appears that there is a direct correlation to pace and visible fractal levels. Or to say, that as pace shifts, so does the fractal which the market is operating on. Would it be accurate to consider pace levels to be directly correlated to the fractal which is developing? And/Or does a pace increase just "compress" the faster fractals into intra-bar type moves?

To me this seems logical (and a useful application) but I was hoping to get your thoughts.

Thanks for any insight.

The market operates simultaneously on many fractals. On any given resolution chart we see a filtered superposition of their effects ... The pace is the resultant of the amplitudes of all the fractals at the given moment.

 

[ehorn]

Quote from charts:

The market operates simultaneously on many fractals. On any given resolution chart we see a filtered superposition of their effects ... The pace is the resultant of the amplitudes of all the fractals at the given moment.

More specifically, my inquiry was referring to the 5M chart and using pace (in this example step-down) as an indicator for anticipating when a trader can know that the market is suggesting that a fractal shift is occuring and (with this knowledge the ability to know) that the market is using faster visible fractals to make its way to operating points on a slower (higher) fractal.

 

[TIKITRADER]

As we enter this week, I would like to wish everyone of you a wonderful Holiday.
I hope everyone of you enjoy your family, friends, and all that this week will bring to you.
The contributions were amazing this year. I was very fortunate to be included in this journal and participate in the journey.

Very big thank you to Spyder, who was not planning on being involved the entire year.
He probably stuck around 8 months more than he intended.
It is greatly appreciated,as an amazing journal came to life.

Enjoy the Holiday everyone, be safe.

 

[charts]

Quote from ehorn:

Yes, but more specifically, my inquiry was referring to the 5M chart and using pace as an indicator for anticipating when a trader can know that the market is suggesting that a fractal shift is occurring and (with this knowledge the ability to know) that the market is using faster visible fractals to make its way to operating points on a higher fractal.

The way I see it, to make good use of the PV relationship a minimum V is necessary in order to extract the signal from noise. Higher pace (volume) means that the PV relationship works on faster resolution charts too. Higher pace means larger price swings too, and especially when trading at (or toward) the end of the bar, the account variations could get larger. During such periods it is then both possible and advisable to make use of faster resolution charts (e.g. 2 min). Another option would obviously be to sit them out

 

[ljyoung]

I was going to post this on "Technical Strategy" but it's 3 AM London time so I thought I'd post on IR rather than wait till the AM. My reason for wishing to post elsewhere has to do with fact that the exercise was triggered by an observation on YM's price action after the close of RTH on Friday.

Does anyone attach any significance to the fact that the YM 16:02 bar for 12/19/08 made the lowest low since the down channel began at 14:18 on 12/17/08? If this is to be taken 'seriously' it would suggest that we have just had a signal for change from the YM and are ready to begin a new up channel? If this is so then what does this mean for ES?

What bothers me about this interpretation is that we would have this rather scrawny looking up traverse in between a pair of large down traverses. As well one would have to have the P2 for the up traverse for YM at 10:26 on 12/19/08 and for the ES at 10:30 on 12/19/08.

On the plus side, channel-wise, things make more sense.

In the attached chart it means that what is labelled as a red down channel is in fact a monster traverse and as well there is no green up channel. The 'real' down channel is bounded by the thick orange lines.

My crudely drawn Gaussians attempt to match the orange down channel.

TIA

lj

 

[palinuro]

Quote from ljyoung:

If this is to be taken 'seriously' it would suggest that we have just had a signal for change from the YM and are ready to begin a new up channel? If this is so then what does this mean for ES?

What bothers me about this interpretation is that we would have this rather scrawny looking up traverse in between a pair of large down traverses. As well one would have to have the P2 for the up traverse for YM at 10:26 on 12/19/08 and for the ES at 10:30 on 12/19/08.

On the plus side, channel-wise, things make more sense.

...

lj

Interesting, lj. Attached is my ES chart for Friday, which sees the market the same way. I don't have a problem with the 'scrawny' up traverse, since the pace is significantly higher over that traverse ( which suggests a shift in market sentiment is underway - and corresponds to ehorn's observations above. )

Re pt 2, I think pt 1 would be the FTT of the down channel .... pt 2 to come.

- palinuro

 

[ljyoung]

Quote from palinuro:

Interesting, lj. Attached is my ES chart for Friday, which sees the market the same way. I don't have a problem with the 'scrawny' up traverse, since the pace is significantly higher over that traverse ( which suggests a shift in market sentiment is underway - and corresponds to ehorn's observations above. )

Re pt 2, I think pt 1 would be the FTT of the down channel .... pt 2 to come.

- palinuro

Thanks for the feedback palinuro. A couple of questions if you don't mind. I see 2 pink lines on the left of the chart. The top one would correspond to my 'monster' traverse (which I originally had annotated as a red down channel), while the bottom one corresponds to the 'old' traverse. If that is so, P2 for the blue up traverse can't be inside the boundaries of the 'monster' traverse. My 'orange' channel monitoring would correspond to what you have for your red down channel.

I don't understand what you mean by, "Re pt 2, I think pt 1 would be the FTT of the down channel .... pt 2 to come." Could you explain please.

It's kind of interesting if what we are going to see is the start of a new up channel, as opposed to the 'green up channel now' case (which is what I had originally), which would have us going up to complete the last up traverse of the green channel and then moving down. Seasonality fits with the 'orange' channel scenario, IMO.

lj

Edit: If by this you mean that we don't yet have the FTT (P1) for the down channel (and the last pink traverse) then I agree with you.

Edit2: What would clinch it is if ES either opened lower or else made a low less than 873.50, quickly in the AM.

Edit3: Doh! Yes, I should have removed that stuff on the chart (P1,P2) at EOD 12-19-08.

 

[ljyoung]

I see a workaround for my problem with the P2 of the blue up traverse but it's late and will discuss at another time.

Bottom line is new up channel beginning soon. The PFC is very important and if the market shows my analysis to be wrong then I learn from it. If I say nothing and nobody else does as well, then no one learns.

lj

 

[Spydertrader]

Quote from ehorn:

Would it be accurate to consider pace levels to be directly correlated to the fractal which is developing? And/Or does a pace increase just "compress" the faster fractals into intra-bar type moves?

Whatever fractal one chooses to trade develops in a very specific way. As such, all examples of a given trading resolution develop in the exact same fashion. If a trader canot see the previous statement as true, accurate and without exception, then I'd encourage said trader to redefine that which they believe they already know.

Pace changes can provide clues to the trained eye, but do not operate within a vacuum. Something far more important runs the show.

Quote from charts:

in order to extract the signal from noise.

'Noise' does not exist.

- Spydertrader