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Making of a method
- Thread starter game
- Start date
Quote from ammo:
game, everyone seems to start(making of a method) from a small timeframe,try the opposite if you are still simming,look at the larger timeframes and notice what the biggest players are doing, eventually you would like to understand how they operate, the smaller players are their merchandise,think of the fisherie example,then with a small acct,you wouldnt have to trade 3 or 5 or 10 trades a day,you could trade once or twice a month,and build up your capital to increase those trades in either size or frequency,those are the easiest trades,tradingf the intraday moves builds in a fear factor,trading the extremes, longer term s/r,even on sim,you are always (99% of the time)aware of the big players motives, you have the large picture in your head,unlike a scalper who at first is like an ant at a picnic not noticing the large boot descending upon him
I hear you on the large TF perspective. That is exactly what I have been doing when preparing for the upcoming day by monitoring trend and S/R on the Daily, hourly and min bar intervals. Without longer term context, there would be no intra day method for me.
You are suggesting swing trading and yes, perhaps in the future I may. But I believe that trading intraday swings is the best option for me because:
1) The number of at bats. I need practice and intraday provides a lot of opportunities to observe PA.
2) Intraday offers the best Return on Investment because:
a) Capital is turned faster and thus compounds more
b) There are no barriers to scale based on my current capital base
c) Leverage
All of this is contingent upon developing a solid method. I am gaining confidence that this is happening for me.
the first p[art of this chart that is unmarked is a normal up day, the 2nd part, marked is the beginning of a trend day,it's relevance is muted because of the 11-12 30 timeframe when the big players are resting,but when one starts to flatline, in this case the dvol,and the other keeps rising,it's an absence of sellers and the market trends up into the 2 15 central time zone edit meant to mark it but forgot, the dvol is flatlining from about the 10 45-50 central time area
Attachments
not suggesting swing trasde from the start,just that the larger timeframe,bigger players,s/r hold more often, so frequency of losses is minute,2nd,you may learn by osmossis how they trade think,manipulate and can apply that parroted thought pattern to your trading,learning from the minute timeframe produces a lot of fear alrms,bells, and whistle which will later have to be unlearned..edit ..apologize for the terrible typingQuote from game:
I hear you on the large TF perspective. That is exactly what I have been doing when preparing for the upcoming day by monitoring trend and S/R on the Daily, hourly and min bar intervals. Without longer term context, there would be no intra day method for me.
You are suggesting swing trading and yes, perhaps in the future I may. But I believe that trading intraday swings is the best option for me because:
1) The number of at bats. I need practice and intraday provides a lot of opportunities to observe PA.
2) Intraday offers the best Return on Investment because:
a) Capital is turned faster and thus compounds more
b) There are no barriers to scale based on my current capital base
c) Leverage
All of this is contingent upon developing a solid method. I am gaining confidence that this is happening for me.
What is the signal that determines future price over the longer term?
Over the long term price is a reflection of value (discounted cash/earnings). This is the signal, as has been shown by Shiller's studies of market PE ratios being a good signal for returns over the next 10 years (long term). Market as a weighing machine. But only works for long term. Hence, value investing as time arbitrage.
The noise in this context (context being long term price prediction) is the short term variation (behavior based price movement) around this signal .
What is the signal that determines future price over the shorter term?
The signal in this context is the breakdown of diversity and the emergence of herd behavior. The noise in this context is the variation around the balance between supply and demand, i.e. the fluctuation around the auction market value level. Market as a voting machine.
Over the long term price is a reflection of value (discounted cash/earnings). This is the signal, as has been shown by Shiller's studies of market PE ratios being a good signal for returns over the next 10 years (long term). Market as a weighing machine. But only works for long term. Hence, value investing as time arbitrage.
The noise in this context (context being long term price prediction) is the short term variation (behavior based price movement) around this signal .
What is the signal that determines future price over the shorter term?
The signal in this context is the breakdown of diversity and the emergence of herd behavior. The noise in this context is the variation around the balance between supply and demand, i.e. the fluctuation around the auction market value level. Market as a voting machine.
Perhaps the increase of HFT, and of technology in general, is a big positive for those who trade behavior. The increase in correlation across markets means more herding and more dramatic phase transitions from value to trend. The recent asset bubbles support this hypothesis. It's probably a great time to be day trading.