Jack Hershey – MACD and Stochastics helpers for 123 and FTT's

[jack hershey]

Here is an annotation of a posted chart. It is comprehensive since I was granted some white space at the bottom of paint unexpectedly.

There are 13 turns in a fairly thin market so I made some thin market comments.

If we do several markets with this, then we get to see how liquidity works and how information is created from data feeds of all sorts.

Mature markets do provide data as we all know. Presently several intruments are beginning to reach maturity. I particularly like the currencies as an application. the applications will improveonce the market are capable of including volume.

Markets develop as did the western US where I live. We struck down helmets for motorcycling since the helmets caused too much warmth around the head. Cowboys are considered very masculine out here as well. They are very dusty most of the time nor do they wear helmets while competing in rodeos.

Do not drop MACD from the charts since we are drawing lines through the MACD to see the relationship of the two signals. Your subconscious is working overtime to correlate the MACD with the STOCH's. gradually when you wake up it will report to you as you settle into repeating you annotations and doing your long. Symbols will begin to appear to you for annotationg and logging the MACD.

It will be like coming out of the gate with a doggie to lassoo and tie in a few seconds. Obviously it is easier if the doggie runs into the loop as you are reining in. Doing two things at once is common almost everywhere.

In Argentina the cowboys use three rocks (bagged in leather on raw hide strands which they throw at animals to tie their feet first and then they knife them using a knife they keep in the back of their belts. So the reverse order works just as well.

We can learn the MACD one way or the other and it all works out if you have a reliable workhorse(s).

Argentinian cowboys can dance too because they have pantaloons; arizona cowboys can't because there is no ballroom in their tight jeans. Loosen up and get some MACD symbols on your logs.

 

[Padawan]

LOLOLOLOL

 

[jack hershey]

Some nice charts are being posted.

Because they also contain the channels and the FTT annotations, it is being made clear that there is a coincidence with the channels and FTT andd the Gaussians on Volume.

What you are observing is the way P, V works and how indicators can be adjusted (defualts set properly) and their signals (chosen to mimic the P, V) may be applied.

Long ago as DOW worked to charactrize markets. Dodd and G. worked (before and during the 30's) to understand the P and V and their intimate relationship. It was expressed binarily simply because that was the appropriate logic application.

Why did Proflogic choose his handle? Obviously because of the connection of logic to making money. Jack Hershey was chosen in identically the same way as we all know.

Peeling off 5 points using a few annotations is a consequence of connecting the dots while building the foundation for making money. The underpinnings here were derived as said above. I am asking everyone to do a drill process that in many ways replicates the slow grind I went through looking at the P, V relationship shown on all charts. We are Ampping it here by using tools off the shelf and vertical lines that show two signals. we log our little hearts out by using vocabularies of symbols to fill in columns that depict what is going on now to be able to record one of five words in a single column.

"hold" is becoming synonomous with the segments of acumulating profits.

You can see the ratio of working to inventing is getting to be a higher and higher ratio. we are doing two things at once at this point. We can chew gum and exit airplanes by walking down steps, so to speak. It is Presidential in some ways.

What I am asking for is for people to make money at 8 points a day per contract for 50 days. As you bank roll increases I am requesting that you apply it to more contracts as a means of inspiring you to do a great job that has no room for error because the challenge is one that can be accomplished.

Drawing vertical lines using lousy platforms is hard to do it takes a lot of alignment effort and line segment stacking talent or a better platform. 2008 is the yer of the platform on the global calander All rats know this since they are sharing this year.

My neighborhood made the Economist this week so I am a little giddy. I may enter the Architechectural Digest contest as a consequence. A regard our charts as the Jackson Pollacks of the 00's.

If you find, by your temperament, you have been sitting on the fence for several years, this is the time to make a display and draw some lines. If enough people simultaineously draws lines, we will create vibes around the globe. The markets are so huge it may not be possible to see the T&S rumble but it would be nice to begin to increase the size of the markets with a nudge or two here and there. Imagine, like in the movie about passing forward that some people would begin to annotate a little.

We started off with 5 points; that is 1/3 of the hole kidpwrtrader has spent a couple of months digging. What if a lot of ET could nail 250 bucks every day as the day starts? would it be too much for those making 250 bucks to be able to add 9 more contracts as time passes so they can knock down 2,500 dollars each am??

What if we find out that this works on most currency pairs? woudn't that be helpful to a lot of traders here and there all over the world? I think it would.

We could begin to do the show Survivor for 39 days in various parts of the world where thay have exchanges and elcetricity to run displays on green laptops owned by children where they loan them to their parents. The write's strike is over so it may be possible. One I would especially like to see is Cramer in the Congo or Kudlow in the Crimea. Or Paulson in Pakistan.

We are doing 50 days. 39 days is close enough to get winners. We could have tribal councils for giving an additional contract to a person on the tribe that got the most people to join their tribe each week.

We all know that sooner or later we have to do position trading with universes of stocks. We may want to have Survivor universes all over the world too. As the tribes grow we will have to lay off capital in those locals for the corporations forming and ooperating.

This over the years is going to be more fun than elections. Making money is going to become contagious.

 

[Padawan]

Gotcha. Here's the chart so far...

 

[jack hershey]

Quote from PointOne:

A better outcome on the DAX:

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1787170]Dax110208[/url]>

49 pts in 3 hours, 9 actions marked, 2 losers, 3 winners. Stopped for dinner.

Let's say a person wants to trade as a beginner. He wants to just do forest on his display. He wants to just do a few teades a day that deal with the outside envelope of the price and volume annotations.

MACD helps to show these longer holds on the slower fractal of the forest. It goes outside of the 20/80 band and "hangs".

Long ago I made "icebergers" Tape the 20/80 band on their screens. We used duct tape or an electronic alternative.

If you consider the forest you can see the 5,2,3 triggers getting on the right side of the market and the MACD "hanging" outside of the 20/80 band just keeps the postiion rolling along.

A turn just becomes the Entry on 5,2,3 and and Exit when the 14,1,3 goes "back into the band". This is "Ole man riber" trading at it's finest. You ignore the intra-forest traverses shown on the 5,2,3.

And it is on the DAX it turns out.

Doing the 5,2,3 reversal tattoo does clip off more profits and you have some washes, perhaps. This is just using 5,2,3 to trade in more detail than the forest.

A 0 to 100% indicator (STOCH's) do stretch and squeeeze according to the data in the envelope of the data default container. So you can notice that ever though the volume pace is changing from one pace to anther, the STOCH's keep on humping as the bunnydoes. NOT So for the MACD which is an absolute type equation. We will convert the conners-Hatwrd volatility compression equation from a STOCH type math to a MACD type math in a while to gain this absolute trait.

The absolute trait lets us see hanging as a characteristic. Out side of the 20/80 band a thing happens that is like pinning a volt or amp meter or a rate of climb gauge on a glider (rate of fall is possible too). The needle only goes so far and it doesn't jump out of the gauge.

Pinning MACD is possible. There is the platform scaling change that is possible. We do not as humans see scale change easily since we are not going to be killed if we do not observe it.

So as we become accustomed to the MACD being pinned; we learn to see it unpinning just before it goes back into the 20/80 band. This is an exit signal for us and in a few ways it is a little early. This virtue allows us to savor profits on the sideline occasionally.

What is happening in this forest mode is that we do not have to deal with dominant internal patterns. The reason is that the defaults on the MACD are outside the period of patterns and inside the period of trends. The adjustments made to the original MACD are largely related to the advent of the PC and electronic data transfer. The adjustments to the signals are also so related.

We will at some point become very competent about fully extracting what the market offers. For now we just creep up into the unbelievable levels of extraction by CW standards. In effect we filter out the lessor opportunities and stay quite relaxed.

Trading coarse dominants cuts back the trades per day. I often judge my trading by making ratios of trades as compared to other traders in the category of "Great traders you have never heard of". I have a 1 to 1 with Netto and I run about 30 seconds ahead for example. He is an 8 digit trader.

we have started out on the middle level of trading and I want to proceeed from there and not regress back to the coarse level only. This commentary is just a "context" statement.

Trading, forest FTT to FTT is evident from the above comments.

I feel bearing down with two signals and learning logging vocabulary is where the action is for those using this journal thread. We are now pointing in ES and pipping in DAX. We can work any of the markets around the world with this drill. doubling in a week is the theme over the 50 days.

To activate you set up a display and draw vertical lines and keep a log.

You can decide to not do this until the cows come home. It is your choice to not be rich.

What makes this thread unique is that it is totally foreign to CW and all the dosages that one gets from CW over time. If a person can just let a split personality reign using this on top of the engrained CW, at some point he will be able to spend profits from this world in the old CW world and not have too many nervous tics. No one in the world expects anyone who is too far gone to do this. But it is possible for them to let any child over 5th grade (First Form) about this as a really fun game along side reading the Wall Street Journal and watching talking head on TV.

We all know that as one goes through life our propensities for learning various skills changes. Children can learn languages; later art, music and math kicks in; in the 20's people can get into philosphy, etc...

This is an artistic endeavour (spacial reasoning) with a twist of arithematic. We are engaged in making use of the plasticity of the mind. That is we are enlarging a part of the brain by making use of the constantly created neurons that ride up radial glial fibers spaced out through the ventricular zone and feeding all parts of the cortical surface. We are repeating a process that was a normal emphasized part of early age growing. Dell migration across the glial trail is always available and we are doing a drill to enhance this process. In our case we want to handle immigration as much as possible and we recognize deportation has nothing to do with improving the situation.

So we see posted the verbal measures of the fact that it is hard to get the pot boiling again. Just keep applying yourselves and it will get easier and easier because you just happen to be building your brain so your mind works better.

 

[jack hershey]

Quote from callmate:

Nice chart Point One. Have you automated the entry and exit lines on the main chart and on the 5, 2, 3 stochatics window?

Here is my effort for this morning

I used the unused portion of this chart to make some points.

You can see I am introducing patterns, seven altogether over five trades. This means there is something significant at hand; more patterns than profit takings by staying on the right side of the market.

In another thread, I tried to make a few points since the OP had struck gold by introducing a BIG topic in trading in the NN context.

Here we see that patterns are always in the picture and further they have a lot to do with the MODE of the market. Our holds are all Continue MODE and all of our actions occur in Change mode. When we are sidelined during a Change we can see that nondominant patterns are there. We also se that in holds a diffrent sets of patterns are possibly in effect. i posted in that thread the notion of MODE and dom/nondom formed four quadrants by taking the combinations of two elements two at a time to be able to differentiate that two sets of internal patterns exist and that they are mutually exclusive. The post was deleted in the NN thread on patterns. This is a neat occurance because it shows the state of things in computer science and quants, etc..

What I am doing in this post is adding some vocabulary symbols for the columns related to channels and formations and signals in STOCH's and MACD. They all deal with internal patterns of channels. The set of stalls, hitches and dips deal with dominant traverses and the various pennants deal with non dominant traverses.

We suspend our trading during patterns in a passive way. That is money is not being made temporarily and we are in the market (during Dom) or sidelined during non dom. Because we are always between signals during these times we can see better what it means to be between signals. Between signals is a nice place to be; it is certain and comfort able either in or out of the markets.

Obviously for NN's to work they must be regarded in a larger NN overlay. There happen to be two separate levels of overlays above the patterns. The combinations of the off and on ness of these overlays prescribe the NN pattern sets that will be discerned as pattern NN outputs. The patterns in the two sets also sequence quite nicely.

All work done to add information to systems often comes down to making it possible to see (for the variable set under consideration) the answers to three migatory questions:

I know, many of you are reciting them now.

1. What is the current operating point.

2. What is the next one?

3. How fast are the operating points changing?

If quants found Alexander's method what would they know? They would know that the parts of the composition of things is important. They would begin to do art by composing and juxtaposing parts of the whole. Aplying AM is just slicing and dicing subsets of the whole into workable stuff.

Our display has vertical segments that show algebraic stuff and show feed data in consumable portions. It is sliced and diced to make the display. We see what is adjacent to what. We draw a line from the bottom up for entry and from the next to bottom up for exits. We are artful (filled).

Suppose we Amp it up a bit and do the YM and the ES. This is simply merging two fractals (5 and 2) and two markets (ES and YM). Such an expansion of the data feed and the annotation will allow us to be more precise and reinforced by doubling the drill rate. I know there are technical considerations. Skip those for now, just use the log as the coordinator. It is already set up for that. Think of those glial fire poles chucking those neuron up to the cortical surface.

I miss the classroom. Ten years of precipitating an average shift of 1.23 sigmas on the SAT's was a blast. Changing amptitude is even more fun that just pumping knowledge and skills. ETS almost stuck to their guns that it wasn't possible.

A high radial glail fiber diet was just what was needed.

Here we are inducing growth in retreads and it just as much fun. I let myself occasionally imagine certain folks getting rich. I mean, what would it be like if surfer could actually have a reception for more than 8 ET'ers. I can't leave here because I am irrigating my oldest llama twice a day and pulling packing. To ask spyder what quality of vodka he will be bringing is equally humorous. Maybe next year Netto and I have have a go at live trading. What would it be like to be running in five markets using vertical lines for two signals...LOL It would scare the heck out of the Expo types.

 

[jack hershey]

Oops.

See attached. I had to wait 60 seconds.

 

[jack hershey]

Make a note to compare the unused portion I annotated and see how it jibes with the beginning of the used portion of that chart.

The fact that portions of things flow into the next portions is something you can bank on . what is at hand is the fact that markets do not jump around all over the place. They migrate and the is MIGRATE in all caps. Once a person knows this, he has a foundational building block second to none.

Data cycles used, undeer the consideration of migration, become most informative through the use of the dynamic of adjacent data sets. This calculus can become he basis of how to determine enough is enough. What I am suggesting is that for pool extraction there is a limiting case for how much energy to expend to get margin performance increases.


This is like determining how work is approaching an asymptote of performance.

We do know fairly well how profits segments relate to the daily range as a multiple.

Looking at pool extraction as compared to making money from imbalances in the vein of regression to a mean, there is no comparison except when a person has ramped up the data cycle rep rate. Regression, due to rep rates ordinarily only measures the imbalance within the trending and it does not deal with the trend being in existance to any degree. regression is a one way street that is going toward the mean at all times no matter whether there is an increase in money velocity.

Our focus is only on the absolute money velocity as a performance standard and we will be incresing the rep rate of data to the pont that we optimise or reach a compromise of not doing any more work than is worth while in rewards.

We will have a preference of simply laying on more contracts to extract more in comparison to squeezing every 10,000 out of the market every day.

The rep rate that humans can handle is limited. The computer is capable of doing a high rep rate and translating this into occassional announcements at the frquency humans can handle. We will stop a little this side of "much ado about nothing". generally I call this the "astonishing level" in CW terms.

The general ratio of quant to this is that a quant year (25%) is two days (16/40 x 100 %) for us, roughly speaking.

By introducing the YM on a two minute chart we have moved from 5 min to 2 minute data feed slices.

As we go further we will look at how the curves get to the signal levels by seeing them approaching under conditions of divergence. Then we will examine conditions of convergence. we are definitely gong way beyond the place where everything looks alike. We are adding tons of neurons to do work and we are setting up a lot of proteins in our memory banks to be able to deploy the biological grease in synapses. We are what we eat so to speak and the way we will measure it is in terms of our synaptic selves.

At around 100 milliseconds per lap we will deem this as the shortest sensory data we will be handling. Below this rep rate we will not worry and we can let automation handle this unsensible stuff. A tic on a 100 contracts is just a 1,000 bucks to us from now on . We will probably leave 10 tics a day on the table while running a 100 contracts. This is 10,000 dollars.

Don't wear the same scarf to the trading desk everyday.

 

[callmate]

Thank you Jack for your comments and the annotated chart above. I have only just noticed it. Ok I will compare it with today's chart and see where it takes me.

I created a log today but found the early part of the morning very confusing up until bar 11. There was no decent pull back and point 3 to the downside was not so obvious in realtime although both fast and slow stochastics and MACD were indicating a screaming short.

My log is too messy to be posted, I hope to write it up again and post it later on.

 

[Padawan]

That was some kind of mental exercise! I found myself often falling behind the pace with the log entries, annotations, and hitting the button on some of the trades, but kept pressing forward. I understand it's a learning process and had many mistakes, which included:

1) Somehow omitting a bar and then falling one bar behind in the log entries without noticing it for a while

2) Getting faked out on one of the trades by entering on a fast stoch 50 cross before the bar closed.

3) Several mishaps with entries in wrong cells.

4) Not completely following the rules, or being uncertain in some areas what constituted a signal (based on previous mistakes that Jack corrected on the 020708 chart)

5) For the first46 Bars, I thought my 5,2,3 stoch was set correctly, but it was really set to 25/75.

Overall, though, it feels really good to have a document that has the potential to show you where you did things correctly and where you did other things improperly and exactly when. It's a work in progress, but there's a definite sense of accomplishment filling in the first log real-time. I'm definitely the type that needs to write stuff down so this helps.