Quote from Grob109:
*****I think it would be better to back up a little. The 1, 2, and 3 go together to make trading a very smooth money making process. No predicting just monitoring the sequence and differentiating the coming and going of the 8 parts of the cycle.
they are defined by the three variables of the market which I chose because of their importance.
In order of declining importance I picked P, V , and A/D. They are all determined by people. People's views are what runs the market. All activities occur because of disagreements about the entitiy that is traded in the market.
Kewl... OK. The binary sequencing is simple enough. In class at the undergrad level, we did synchronous programming which can be translated right onto PLA's (programmable logic arrays) if I remember correctly. Asynchronous stuff is where we throw out the clock for efficiency (my girlfriend aced that class). ALSO KEWL but OT! Ok so Price, Volume, Acc/Dist. Price action is a result of Volume action, Volume action a result of Acc/Dist. The last appears somewhat tricky but I watch for it on the T&S (should do it on Level 2 but institutions effectively color the tiers beyond what I can percieve as decipherable A/D shifting). So 3 binary variables with 2 possibilities (2^3 = 8 unique states). The combinatorics of which can be the following 8 States (computational science treatment - ie state machines). I use xor instead inclusive or to make clear that the states do not overlap.
Price Up
AND Volume Up
AND Accumulation
XOR
Price Up
AND Volume Up
AND Distribution
XOR
Price Up
AND Volume Down
AND Accumulation
XOR
Price Up
AND Volume Down
AND Distribution
XOR
Price Up
AND Volume Up
AND Accumulation
XOR
Price Up
AND Volume Up
AND Distribution
XOR
Price Up
AND Volume Down
AND Accumulation
XOR
Price Up
AND Volume Down
AND Distribution
So the nodes are the above and the progression across the nodes is controlled by the underlying variable shifts (a/d for volume, volume for price).
An integration of views occurs continually.
Do you mean integration in the mathematical sense? The sum of buying and selling (acc/dist)?
Finally, it comes down to two groups of people whose views are opposed to each other except for one point of agreement.
OK, I get this two and actually do watch for this on T&S. The immediate participant wants to exit his position and the buyer wants to enter the position. Both have opposing beliefs of the future state of the price action, thus they trade only as a single consequence of agreeing upon the current price.
As you see the maths skills involved so far are not very apparent. But reasoning skills have entered the picture. I really can't expect anyone to gleen much from what I suggest at first. It is difficult to examine how to make money anywhere and most people are copy cats in the final analysis. Very few people do anything original anywhere it turns out. So reading me is just a fun thing for now.
Forgive me for being wordy. I touch type as fast as I think so it's difficult to realize when I haven't written too much. The reasoning is logical. More buyers then sellers and vice versa (supply and demand at work). Fewer suppliers/sellers, buyers will increase their bid price to the ask for the desired supplies. Fewer buyers, suppliers/sellers decrease their ask price to the bid to offload their supply.
I made a chart of four columns to just list all the combinations and permutations. Obviously it is the "counter" of repeated addition that yields multiplication. Relays or bi stable multivibrators of 12AX7 tubes did this each count requiring a micro second.
You mention a chart of four columns, but I only see 8 states. The combinations I presume are 3 variables each with 2 states (2^3) and hence 8 permuations of 3 variables with 2 states.
The chart counts from 7 to 0 in 8 steps. This is what completes a cycle. Think of periodic functions (some math at last). Lay out 360 degrees on the X axis and plot a sine wave. The making money cycle starts at a phase angle of -90 degrees. for money making it is a long trade followed by a short trade.
Here I have to decide an important thing for you. Do I continue or do I let you label each 45 degree increment with the numbers associated with that part of the money making cycle.
The chart is attached below. I had to think hard about how to treat phases and it was somewhat tricky to get the sequencing right. I've attached with full annotations. A 1 implies an increase in the value of the variable, a 0 denotes a decrease in the value of the variable. I adjusted the amplitude only for appearance reasons. I had to carefully think about this to make the binary and sine curves and their phases gel. When I adjusted the phases, it brought up a serious question, do these variables get treated independently and if so, then the curves themselves will continually move in and out of phase with respect to each other. As a consequence, a single state may be so brief that it passes by unobserved. Is this true?
I just saw your other posts. You are quicker than I on these forums and I thought I was monitoring continually.
