A fast STOCH chart has been annotated and put up. Thanks so much; this is a super aid for everyone.
The chart is a five minute ES chart and it's buddy the YM looks the same with the added advantage that there is an leading offset of the YM and the ES.
the signals from the fast STOCH are entry oriented with respect to reversals.
The slow STOCH is exit oriented with respect to reversals.
All of these things put us in the ball park. And CHANGE batting takes place between the two. Annotated two minute and five minute charts are very high quality signal generators. Defaulted STOCH's and MACD's also give us signals on bars (endings solidify them) as the forming lines are floppy and hinged on the solidified portion of the chart. we observe the floppiness to our advantage.
Trading 81 bars a day is a fairly accurate way to make money. We can view our effectiveness and efficiency from such a vantagepoint.
At this point everyone has white space on the right of their charts and we are annotating charts into the future. It is commone for me to project a non dom gaussian into the time line of a chart, for example. then I know the approximate time of a potential B2B or R2R (I am capable of putting a vertical tick (short vertical ime in heliotrope) throught the pace level and its Gaussian intersection. I can also coordinate this tick with an anticipation on the fast and slow STOCH's. This all adds up to where it is possible for a potentially tough decision to be made.
You can check out ET's trading and see where most people have difficulties. The subject is how a retrace becomes a reversal or a beginning of a new dominant traverse. We are on the RTL and a lot of times there is no question since there has been an FTT. What is at hand is the BO or FBO (Todd terminology).
If a trader is unable to make decisions, it is because of lack of or faulty analysis. Here in this thread out intentions are to tie together what we need to do good analysis so that decisions take care of themselves.
The thinking processes is a "funnelling process". We only have a few elements in the decision set. the above example was chosen because it is pertinent to a lot of failure in trading. On the other hand the most frequent common decision that is made is one that leads to more money being made by inaction, meaning continuing to hold. The MODE column of the log always takes care of this. When you put a C in a row for a given bar, it means you are holding through that bar.
As an aside. If you are fully annotated and you see a dominant traverse is four bars long, you can look at four rows on your log and see four C's. You can put three of them in ahead of time if you wish. There is nothing wrong with filling in as much as you know ahead of time. you can always put ticks on the long to show where real time is happening to keep straight. as a matter of fact, why not run out 3,4, or 5 bars ahead once in a while to keep your "anticipator" happy.
Lets go back to the BO/FBO on RTL @ a possible R2R or B2B moment. The FBO gives a R2B or B2R, we know that.
At this time, the fast and slow STOCH's are going to be very clear about the signals. For a BO nothing happens. It is the greatest WWT that there is. No sentiment change on the fast; the extreme continues on the slow.
On the otherhand a FBO is signalled by a slow STOCH exit and then a fast STOCH entry. A gate opens up so to speak for a period of time. we go to a medium and then fine level of detail to take care of the precise turn at that time.
How many CHANGE cases do you have to run through during off hours of the market? Do them all. you can simply make 1/3 of a page of a log as mini sheets to do each of the possibilities. Do odds, evens, FTT's, BO's , VE's, and FBO's. Some are identical, arrange all of them in sequences and stack them on your trading desk.
You can also do all the internals. Do a stack of dominant patterns (hitch , stalls, dips). Do the non dom pennants (FTP, FBP and SYM). Make a whole sheet to go through the CCC. Do a pm BO sheet.
The STOCH's give you the MODE and the sentiment. You see it is possible use the 13 columns to narrate all of the MADA sequences that could come up during the day.
KIWI put up sone nifty MACD charts that have the correct annotations on them. Review these and I will do a development on the MACD tomorrow and on Monday I will try to get a lot of Q's answered if no one else steps inand answers. Be sure to make up a set of MACD photos and then put each in their sequence to have a train. you can make up a Moebis strip on this too. I may have spelled Moebis wrongly; someone can fix that.
We can all see that this fits into the iterative refinement thread as well.
If you know any young people (third to sixth formers), think about giving them the log to work with. For whatever reason making graphs by hand (EOD for stocks), annotating graphs and doing logs for a school year is like changing the whole world for a young person. They simply get to see that they can do anything in the world that they want. It takes the meaning of money out of the religious category since they see so much of it is available all the time. The log is a language ultimately. We are beginning with annotating photos as a vocabulary drill. Photo trains become sentences and trading is telling the story of the yellow brick road to anything you want to do for the world. Take a deep breath.
