Leading Indicators

[jllm03]

I have always liked to use the CCI (14).
It has been a good indicator of when the price is in an over bought or over sold condition.
I will look for any reading outside the +200 or -200 as a point for a turn around.
If you look back at a daily chart you will see the CCI turns just before the price does.

My 2 cents...

 

[NihabaAshi]

Quote from restan:

...i would ask you which neural networks system you think is best for trading?

I don't use any esoteric trading systems such as neural networks...never had.

There are some decent threads (I've seen them but can't remember their specific titles) here at EliteTrader.com about neural networks.

You may want to use ET search function in the upper right side of the website to find those discussions.

Mark

 

[jack hershey]

Quote from toc:

What are good price based leading indicators that have stood the tests of time.

Am told %R is one but does not give smooth signals. What else is out there. Cheers!

There are several that have stood the test of time and some of them came early on into the stream of knowledge about trading the markets.

Generally people who are not using leading indicators have chosen not to because they do not work for the person. There is a lot of extrapolating from this vantage point by the people who are unsucessful in using leading indicators. Often it is possible for another person to believe what they hear and leave the opportunity unused.

There are some constraints on using leading indicators. By dealing with these constraints almost all the doors are open for using leading indicators.

Sorry this post is so short but maybe some conversation can result from the points I have made so far.

I am a user of leading indicators.

 

[restan]

Jack Hershey, i'm sure a lot of people will want to talk to you about leading indicators. would you mind discussing your use of them?

 

[jack hershey]

Quote from restan:

Jack Hershey, i'm sure a lot of people will want to talk to you about leading indicators. would you mind discussing your use of them?

Sure thing. My views are just based on experience and the practical process of considering things over and over and seeing what is possible.

I am an amateur and I only trade retail in two markets.

So I span the range of your prior comments except for the neural networks stuff. There, I just depend on knowledge I have from reading and talking to people in the business.

I deal with optimizing making money so having what I need ahead of price movement is particularly calming and it particularly helps to extract what is on the table.

The most interesting part is the very short term places where leading indicators give you an advantage.

The leading indicators that set you up well ahead of time are also very helpful; this is a common aspect of stock trading in a swing or position trading manner.

For a lot of people I have met it is an interesting process to go though with them as they change their former views.

I'm glad to talk about anyhing that catches your fancy. And my views are not ones that work for everyone. A very good way to check out something is to find out if it works for you. If it doesn't then it is not a consideration that has any validity for you. That is just the way it is.

I use many different leading indictors. And what makes them work is sometimes hard to understand by others. I am not a person who thinks stuff up out of the wild blue yonder. It is a result of changing one problem to another problem that allows a little work to be done here and there. graduallyit all comes together and you can then step to a higher plateau of consideration and understanding.

So I name things by how they work or their derivation. That means they are screwy and quirky to others.

I never did get interested in the probability stuff. I work from the viewpoint of extracting the potential that the market puts on the table.

Thus I need to know at all times and ahead of time what is going on and what is coming up.

I always take sets of data and I never take a single element data set. I do not do reaction and that kind of thing.

Once a person has the data set, everything from that moment on is rote and automatic since the data set gives you the specific answer all the time.

I have watched many people trade. It is rather conventional for them to be in an emotional kind of state of some sort.

 

[restan]

Jack, i appreciate your reply and the way you think. as far as i know there are no predictive technical indicators. i would be very happy to be proved wrong in this statement. since most technicians or 'chartists' use common indicators which all derive from price and volume, there can be no prediction in an event which has already occurred, unless you have some evidence to the contrary. i have been reading about you on the 'net and i'm aware you have a following that speaks very highly of you.
i am also an amateur who specialises in option trading. i'm a little short in the math department, so i do not trade with too much reliance on the ''greeks'' or volatility influences. since you only trade two markets, am i to assume your methods would not work in options on equities? Roy

 

[jack hershey]

Quote from restan:

Jack, i appreciate your reply and the way you think. as far as i know there are no predictive technical indicators. i would be very happy to be proved wrong in this statement. since most technicians or 'chartists' use common indicators which all derive from price and volume, there can be no prediction in an event which has already occurred, unless you have some evidence to the contrary. i have been reading about you on the 'net and i'm aware you have a following that speaks very highly of you.
i am also an amateur who specialises in option trading. i'm a little short in the math department, so i do not trade with too much reliance on the ''greeks'' or volatility influences. since you only trade two markets, am i to assume your methods would not work in options on equities? Roy

To work up your comments, I do interat with the staff at Thinkorswim. the reaon has to do with making some aspects of their 11 platforms more responsive to making money on options.

As for the top part of your post, you are in a set of characterisitcs that a lot of people use to describe themselves and their orientation, most of which is based on their use of the conventional orthodox financial industry traditional paradigm.

I never got into that groove.

I attached a chart tht shows the boxes I live in as a trader.

Think of me as a trader who is extracting money out of huge pools of money.

I will think of you as you have described yourself.

 

[restan]

Jack, i have read the comments of Spydertrader about your method and he refers to a ''journal''. do you have a posting of your methods that one could read? i would like to understand what you are doing. Roy

 

[jack hershey]

Quote from restan:

Jack, i appreciate your reply and the way you think. as far as i know there are no predictive technical indicators. i would be very happy to be proved wrong in this statement. since most technicians or 'chartists' use common indicators which all derive from price and volume, there can be no prediction in an event which has already occurred, unless you have some evidence to the contrary. i have been reading about you on the 'net and i'm aware you have a following that speaks very highly of you.
i am also an amateur who specialises in option trading. i'm a little short in the math department, so i do not trade with too much reliance on the ''greeks'' or volatility influences. since you only trade two markets, am i to assume your methods would not work in options on equities? Roy

I use leading indicators in the present and I do not have a need to predict.

So I am putting on the table a viewpoint that is different than yours.

You look at the present and do predicting as a way to make money. Or you look around and see people using indicators and you think and know that they are saying that the indicators are predictive and they and you know they are composed of historical data. Everyone knows this is not possible and most of the time they all say this to each other. Consensus reigns and all is well.

What I am doing is looking at NOW to gather sets of data. Bam Bam Bam.

A Bam for me comes in four parts. The monitoring part is a comparison. It is an update that takes place in NOW. the prior OW is compared to the present NOW.


We are both concerned with two things. Each of us has chosen two things to concern our selves with. My two and your two are different.

I do not deal with the future you do deal with the future and you say it with the word "predict".

I never got to deal with prediction. It is a favorite of some people and that is for sure.

I see things as a situation where the future comes into the present and I am sitting in NOW all of the time watching that happen. I no ability to step over into the future.

What I do do, however, is continally evaluate the present by comparin it to the very near past. Thus my two things are the present and the near past. What is on the right for me is the present and what is on the left for me is he near past. Your right is the future and your left is the present.

I am a parasite of smart money and as such I position my self to front run smart money in a way that their sentiment is a leading indicator of current price.

So the beginning of this conversation relates to where each of our viewpoints is different towards the markets. I could not do what you do in terms of risk taking.

Making a prediction and betting on it and waitng to find out the results of the bet is simply off limits to me risk wise.

Neural networks, chaos, and random walk all look for the advent of anomolies. If they appear there is a bet on their returning to EMH conditions. This wager is a practical one for them apparently and it is based on getting almost nothing out of the deal. Their annua results generally prove that real value in returns is not attained.

My basis of profiting is to consider the change of the indexes annually as a wash in money value. It is the breakeven.

So I agree with you that pedicting and having leading indicators to do it is not possible and it also turns out to not be necessary to make money.

I use leading indicators to extract the potential that the market is offring at any given tme and I use smart money performance as tthe thing to front run.

 

[jack hershey]

Quote from restan:

Jack, i have read the comments of Spydertrader about your method and he refers to a ''journal''. do you have a posting of your methods that one could read? i would like to understand what you are doing. Roy

As a coincidence Spyder and I were just chatting on the phone to make some arrangements. We plan about three meetings out and they are a national group of people who do what you and I are talking about.

We are taking the group to a 50 contract level on ES as our next goal, for example. I was sad to here that one of the more prolific posters on ET took a beating and is now mployed and unfortunately became ill. We hope to work with him continually to get him back up to his former levels and our levels of performance.

The journal is on ET and Spyder has been the host. Lately we have begun the segway into SCT trading and the PVT trading is going to advance to expert in the near future.

There are several other sites. they are used by teams of people to write and edit and to do code and testing. There are also sites for picking up stufff like videos and documents.

As part of my agreement to not be banned, I agreed to not refer to or mention any such sites by specific name and location. My interest here is to support the advancement of people and their becomig wealthy. To that end, hits are what allows that in the final analysis. Information transfer here on the level of the people who want it. It is a match as I post as a responder primarily.

I now have dragon 9 operating, four books outlined and the Tucson MeetUp meets in a week to determine the thrust of the meetings and my prep for them for 2007. That is not a part of ET. Nor is my writing this up as books. The ET focus is exchanging trading information and chatting about real time market conditions.

We plan to make everything mechanical and available shortly as another aspect of helping people out.

for leading indicators, this conversation may be helpful as it unfolds. It is called "grobbing" by many but for me it is just a conversation.

I feel that the key to making money is extraction and dealing in the present NOW only sand with respect to making timely decisions.

If you can, visualize always having the answers to three basic questions. Where are you now? What is next? and how fast are things changing? At your finger tips. This comes from a combination of things.

This makes it possible to only have two basic decisions to make at any given time.

They are: do I continue to make money? or do I take profits and reverse sides of the market?

I am using information to know which side of the market the market is on. I continually know the answer to this question with leading indicators.

For e I keep the future on the right side of my display and it is empty except for one thing. ANNOTATIONS.

One comment Todd (Spyder and I agreed on was the number of time the market reversed on one such annotaion, recently. It reversed four times on the annotation that was projected into the future. we also discussed the number of time things have to be demonstrated in the chat room before the activity that is going on is understood.

Here is a simple example. People in ET believe that channels are drawn after the fact only. This is a belief and the belief is not true. It is true on some platforms that lines cannot be drawn to the right of the forming bar and on some platforms the foring bar has to be on the very rigt side of the chart and cannot be moved. all of these things canbe believed as well until a perosn stops using a poor platform and gets one that does allow for what I do.

Roughly speaking it takes four platforms to get the picture and even thenthere are lots of coded items in boxes that have been custom coded and that use incoming data.

Also there are the issues of what to look at and when to look at it. Mechanically speaking it is a 5 degree of freedom feed that breaks out into 70 degrees of freedom and they are "gated" in 5 stages to the out put of 5 degrees of freedom. None of this is possible for quants to understand or much less see in their minds.

A lot of this is leading indicators of price as we may have a chance to find out here.

Volume is a good place to begin.