Leading Indicators

The direct variable in markets with respect to time that leads price is volume.

This was determined by Granville a very long time ago.

So I look at all kinds of volumes. And the volume feeds I have are coded to give me leading indicators of volume.

To use volume as a leading inicaor of price you need to have the mathemtical relationship of price and volume, and especially in terms of the passage of time.

This lets you have a beginning point.

There are many ways to express the relationship and so I did many many years ago.


Again it is not important for anyone to have any of the beliefs that I have. they can or do not have to use or believe anyof this. It is a personal choice. My choice to believe is based on using the information adroitly to make money.

I write equations to state the relationship of near past volume to present volume. it gives me the three answers I need.

So you will find that none of this is written in any books anywhere. That is because what is written is written for your conventional orthodox finncial industry tradition. I do not use that stuff except to try to express things as conventionally as possible.

there is no way the three questions can deal with predicting or the future.

What is important at some point is to consider the paradigm shift from convention to extracting the potential offered. it involves shifting from an entry/exit mentality to a hold/reversal mentality. that is not going to happen anytime soon for very many people.

It is simply too hard for them to do.

So I gain an advantage that is almost unimaginable.

For taking timely actions and being profitable in the markets, there is a requirement that the successful trader always be in the minority. It is a control issue. The minority controls at all times.

So I front run the controlers.

At some point you will have to get the concept that this involves a lot of leading indicators of what you do and believe.

The minority runs ahead of what is called the "HERD" and the HERD drives the smart money.

Think of what scalpers do. thier frst order of business it to get out of the way. They are big time exit people. so scalper are sidelined repeatedl by some internal drive that they have. It is the most remarkable opposite of being in control which is what smart money does.

What does BIG money do? It languishes. It's like waking up on the tundra after no night in the summer. You look at wet boots and the distance where you are headed to explore. You keep going nowhere fast until 10:00 oclock at night and find out you didn't have lunch or diner because the sun just moved around the horizon just above it all day long and it isn't going to really set again tonight. Languish under steady sate market conditions of no apparent sensitivity to time pasing. That is big money.

I use a bouncing ball on volume. Itr it the value that the forming bar will end on when the alloted time has passed.

where is the ball? It is to the right of the last complete bar. And it is either above or below the top of the last bar. as time passes the volume bar fills and the bouncing ball goes up and down relative tothe last bar completed. What does the gap between the ball and the filling bar tell me?

Groups of bars form mountains. The bouncing bar is either on the ascending side of a montain or a descending side. or I can look at the valleys between bars. Am I going in or out of a valley?

i also look at the bar colors. they are opposite on each side of a mountian and opposite on each side of a valley except for one important time. I kno when that time is coming.

All of the baove is leading price as a leading indicator.

If I told you I have more than one bouncing ball and the the other one is on a leading indicator of the market of the first ball, you would then see more of the leading indicators of the price I am trading.

If I filled you in on the signals of all of these things then to would begin to see signals o leading indicators of price.

So at some point this gets to be overload for a person's mind. It is just too much. But the fact is that we have just begun in terms ot the lyrric aspects of the brilliant array of what markets display.

There is a continuing orchestration of how the hugest pools of capital are continuingly made available to the takers.

So I am accustomed to just moving out ahead a little to narrate it to others simply because I want them to see what is important at the actual time it is important and just when it comes about.

Wouldn't you like to see, daily, 50 contracts of ES pull money out of the market so that at the end of the day the pulled pile is bigger than the starting margin pile?

There are seven indicators like volume. They comprise the elements of each data set That is taken as a set. This is done by steering and focusing to the correct spot for each data component. Most of the signals are leading and subsequently the next reading confirms their progress.

The answer from the monitoring is either to continue to extract or to take profits and start extracting again.

See you tomorrow, perhaps.
 
Good morning Jack, you have certainly piqued my interest. i admire the fact that you obviously think out of the box. i also do that in many endeavors, but as yet i have not been gifted with insight in trading. i'm afraid i follow the same path as the herd.
i have a glimpse of what you do, but i don't understand the way you do it. i will re-read what you have written to me and also look
at Spyder's posts to try to come to grips with what you are saying. my mind seems to work best with facts presented in an
organized list format. thanks for sharing your ideas with me. Roy
 
Quote from restan:

Good morning Jack, you have certainly piqued my interest. i admire the fact that you obviously think out of the box. i also do that in many endeavors, but as yet i have not been gifted with insight in trading. i'm afraid i follow the same path as the herd.
i have a glimpse of what you do, but i don't understand the way you do it. i will re-read what you have written to me and also look
at Spyder's posts to try to come to grips with what you are saying. my mind seems to work best with facts presented in an
organized list format. thanks for sharing your ideas with me. Roy
More...

The way things are done is hard to expain mostly because of the detail. In real, time the best thing to do is start with a slow movement situation.

I find that trading stocks is a great place to begin.

Then, transfer the template to indexes.

Right now the market in ES (using 2,000 margin) is yielding more than margin in points per contract per day.

This creates an incentive to learn about leading indicators.

Here is a quicky example for stocks:

1. On a daily chart use the Stoch 5, 2, 3 and its fast line signal going through 50%

2. After that occurs, look at the volume breaking out from DU (dry Up) which is found by drawing a ray through the volume part of the chart. Set the DU level at the lowest volumes in a 6 month period. aftr the signal of 1. the DU volume signal occurs in the am usually by 11:00am NYSE time. Thus by the end of the day the volume goes to a fww times the DU; I call that First Rising Volume (FRV)

3. The price BO occurs usually within an hour of the DU being hit on volume as shown in 2. Go to a 15 min chart to see this as it happens. If you buy after the DU is hit and before the price lifts off you get a nice run of profits. I only use very high quaity stocks so thay all look alike in performance. This is a big item for making money at a high velocity.

4. Sell when the slow stoch (14, 1, 3) fast line drops below 80%. If you are trading to make lots of money in short periods of time, usually you leave trades a little early if a newly available stock can be making money for you.

For practice look at NTRI as an example. I lot of people I work with traded this stock this year. It was a 3 day hold and it traded 4 times from the beginning of 2006. The average return per 3 day period was 30%.

There are many aids to be sure you have a hot list for doing cycles at all times. This is another example of using leading indicators of those mentioned above for trading. Sorting to get lists is done with leadin indicators of leading indicators of tradng cycles.

You can see from others participating in this thread that convention rules. The convention says that there are no possibilities of having leading indicators.

The volume measure I use to vertically sort lists in real time is a recent addition to some platforms.

For Q charts, the additional new column is named "unusual volume". This is an example of how firmly entrenched the conventional orthodoxy permeates the minds of people. Naming a leading indicator of price "unusual" actually taints the average person's possibilities of using it to make money.

I do not believe it is out of the box or radical to use iterative refinement techniques to enhance making money.

Most people will not even consider what is actully possible for making money. I talked to an expert programmer who clientel is expert, and he said it sometimes takes a person 4 months to go through getting a concept on the table to the time when he actually makes good use of it. this more than just concerns of the skeptic or being prudent; it is part of the mind processes regarding adaptability.
 
Jack, i am busy reading your previous posts concerning your trading methods. i understand you at one time used TC2000 to
examine data. i currently use TC2000 and wonder if i can set up
my indicators to be compatible with your requirements. i assume all this would have to be in real time. TC2000 now has real time as well as a new addition called Snap Sheets which can input
data from Hemscott Industry Groups. which trading platform do you consider the best? Roy
 
Jack, as i read your methods i can understand your reference to volume as a leading indicator, but you also use stochastics and RS
as indicators and they lag the market. i assume you use these as part of your setup for a trade which is then signaled by volume?
 
If you apply heat to water what happens?...no matter what the past has taught you.


Quote from mc312:

What else could you possibly use to predict the future? Think about it... any prediction of what will happen or is most likely to happen has to be based on what has happened in the past. This is true in trading, scientific research, sports, whatever. The problem is to be able to assess all relevant factors in the field you're studying and find patterns that are reliable enough for your purposes, assuming that there is enough regularity in the data and your desired success rate is realistic.
More...
 
Quote from MGJ:

There's a fairly old book about computerized technical trading, which focuses on the futures markets. You might find it irrelevant because it was published in 1992. Or you might discount it because you don't trade futures. However, the book (link) does contain an interesting paragraph on page 77. It is discussing a certain indicator which I will represent here using the symbol XXX, to encourage you to find and read the book :) . It's on the shelf in many libraries, it's on the shelf at the Borders book store near me, and it's available for purchase (new or used) at Amazon.
  • In our regular talks with other traders, we have found that more of them use XXX than almost any other tool, except perhaps moving averages. XXX isn't always used as their primary study, but the traders monitor it closely and use it with other technical studies to arrive at more timely trading decisions. Among the many reasons for the popularity of XXX are its simplicity, its versatility, and the fact that it is considered to be a rare "lead indicator." Rather than merely reacting to the direction of prices, XXX can change direction before prices change direction. Very few technical studies can provide a trader with this valuable lead factor.
More...

Anybody know what the XXX indicator he is talking about? I don't want to buy the book to read one page.
 
Quote from restan:

Jack, as i read your methods i can understand your reference to volume as a leading indicator, but you also use stochastics and RS
as indicators and they lag the market. i assume you use these as part of your setup for a trade which is then signaled by volume?
More...

stochastics and RSI are momentum indicators and are not considered lagging...

I would like to add you have some good things to say Jack, but have to disagree Index trading is way easier than single stock trading
 
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