The Divergence assists in confirming Failure at the tops (Resistance) and bottoms (Support). First, you don't trade or rely on any indicator other than price. Your momentum indicator is just there to confirm that a Resistance or Support level is finished completing. Divergence is given equal weight in the confirmation process but Physical Failure is the ultimate confirmation. When failure coincides with Divergence it adds strength to the confirmation. When Physical Failure and Divergence occur it is an even stronger confirmation. Failure always occurs at every Resistance or Support area to confirm a reversal.
Perfection! Making You Think and Go . . . Huh!
- Thread starter ProfLogic
- Start date
The Divergence assists in confirming Failure at the tops (Resistance) and bottoms (Support). First, you don't trade or rely on any indicator other than price. Your momentum indicator is just there to confirm that a Resistance or Support level is finished completing. Divergence is given equal weight in the confirmation process but Physical Failure is the ultimate confirmation. When failure coincides with Divergence it adds strength to the confirmation. When Physical Failure and Divergence occur it is an even stronger confirmation. Failure always occurs at every Resistance or Support area to confirm a reversal.
Go with/against the trend and if your wrong reverse, if your wrong again reverse...you will eventually find your way, between those S/R bands. I am not sharing what I think sounds good, but what I am sharing is how I trade the Futures with. I do not use charts when I trade but purely price. This is a hard way to trade and goes slow, but you must do size to get the benefits that the tortoise gets when racing the hare.
Also trading price action involves position size management. Without PSM your results are halved.
I find these the most important statements in regards to Futures trading:
Michael B.
P.S. I have searched for a chart, in the instrument I trade, that would trade exactly up to the resistance bands and down to the support bands the entire day, without ever breaching those bands. No matter how narrow the range gets, there is alway room for being wrong or right. When your wrong hopefully it won't be consecutive too long.
Also trading price action involves position size management. Without PSM your results are halved.
I find these the most important statements in regards to Futures trading:
- The trend is your friend and its because of the trend that the markets are not random.
- Position size management is necessary in trading profitably on a consistent basis.
- Do not try and forecast or depend upon lagging indicators, but simply choose your method of entry and reverse when wrong.
- Support and resistance are the single most powerful basis to take entries/exits from.
- Learn when to stop trading. Let your system, without emotion, decide this for you. For example if your first trade reversed off of support or resistance correctly then quit for the day with your profit. If you must reverse because you were wrong then have faith in the support and resistance bands and increase your size. Finally, quit after reversing and getting green for the day or at MOC and call it quits. Look at the trading day as a beginning for the process of getting green. It could be a long day or a short day, it doesn't really matter.
- Find what suits YOU to trade. You will be surprised to discover that many people cannot do what YOU do.
Michael B.
P.S. I have searched for a chart, in the instrument I trade, that would trade exactly up to the resistance bands and down to the support bands the entire day, without ever breaching those bands. No matter how narrow the range gets, there is alway room for being wrong or right. When your wrong hopefully it won't be consecutive too long.
ProfLogic,
The counter proof is quite simple and has been argued over a long time.
I am assuming you are saying something like:
Price is reality and a fact of the matter.
S/R should also be readable in the same way
This argument suffers from several problems. It is a classic empirical reduction argument. As J Locke would put it:
The S/R are tertiary (3rd level)** quality of a fact of the matter price.
Price here being the primary irrefutable quality.
A secondary quality is that it moves.
A tertiary quality is that is move in a direction.
** if not a fourth level attribute.
Now here is the rub as others have been pointing to. The chink in the armor is the move from primary to secondary and beyond. This where all the counter arguments attack.
One canNOT assume that properties of a primary fact are carry their full import (attributions) to secondary properties.
This is a common confusion in science. Although it appears the well order nature of systems allows for this deduction, it simply falls apart in the cold light of pure knowledge. And pure knowledge is what is required if you want to make an assertion such as "perfect readability"
Short of Pure knowledge, also referred to a priori knowledge, one need empirical evidence. And clearly S/R being perfectly readable had many "existential instantances" which counter the claim.
Is this what you are looking for?
happy to discuss. I am very well versed in this type of stuff.
"See mom, philosophy is good for something!"
--Cheers
The counter proof is quite simple and has been argued over a long time.
I am assuming you are saying something like:
Price is reality and a fact of the matter.
S/R should also be readable in the same way
This argument suffers from several problems. It is a classic empirical reduction argument. As J Locke would put it:
The S/R are tertiary (3rd level)** quality of a fact of the matter price.
Price here being the primary irrefutable quality.
A secondary quality is that it moves.
A tertiary quality is that is move in a direction.
** if not a fourth level attribute.
Now here is the rub as others have been pointing to. The chink in the armor is the move from primary to secondary and beyond. This where all the counter arguments attack.
One canNOT assume that properties of a primary fact are carry their full import (attributions) to secondary properties.
This is a common confusion in science. Although it appears the well order nature of systems allows for this deduction, it simply falls apart in the cold light of pure knowledge. And pure knowledge is what is required if you want to make an assertion such as "perfect readability"
Short of Pure knowledge, also referred to a priori knowledge, one need empirical evidence. And clearly S/R being perfectly readable had many "existential instantances" which counter the claim.
Is this what you are looking for?
happy to discuss. I am very well versed in this type of stuff.
"See mom, philosophy is good for something!"
--Cheers
I just read this post of yours. I was suggesting, based upn my comments on your approach to making money, that you did not succeed in getting anywhere.
I suggested that you were incorrect.
I then commented on how among a group of students (a seminar on trading), your idea, when addressed, would not play out very well.
By looking at all possibilites that exist instead of 1 of the 4 (the set I used to show your were wrong), a trader stands a better chance of making money.
But there are more possibilites that up or down as many pointed out to you.
I do not think that you accept as yet that in a sequence of two events (each having your two possibilities (Up and down)), there are four possibilities.
Suppose the seminar participants got around to suggesting that the market also for peroids of time moves laterally. Suppose they brought up a lot of reasons for the conditions of lateral movement.
You are now sitting in a group of people that see how the market can move or even not move over time.
You are saying to everyone that the is a minimum (low) between each consecutive pair of highs or vis versa.
If a black board were used and three colors of chalk (one for each kind of trend). We both know that what you suggest is something you can go put circles around. These circled items, are the basis of the whole thing you do.
Others do not do what you do because they have been down the road you are on and they have continued further. They are using the uncircled things you have omitted as well as the limited ceses you chose. They have full market pearticipation continuity and you are a presumed "edge" trader in some ways.
I am sure you will enhance what you do sooner or later. When you do you will see that the actions you now take based upon your viewpoint presently, can put you in a place that is not productive. There are two reasons: You sit at risk and no reward comes. You sit at risk and the market, after a while when you reason for entering is now evaporated, the market goes in the direction that is the same as that which you last exited (The market goes against you).
My proof was specifically designed to stay in your ball park of the UP/DOWN world. when I put you in a seminar in a place you do not like, I obviously, make a mistake because I shut down the possibility of interacting with you. What I thought might have turned out was that you would be comfortable in a setting of peers. I did not realize that you were peerless.
Now I see you are stuck(You have strong views that are not subject to refinement any more) and you want to beat me up for a week in a new subject area.
The best I can come up with is to have a beginner compete with you for just portions of days. Beginner A on most days and beginner B on two half days Tues am and Weds pm. It is just a scheduling thing for me. A is on ES and B is on NQ.
I was wondering how and why you got so ensconced in the "challenger" stuff. Have you won a lot in sports or gaming? There is another in ET that is hooked on consecutive stuff.
Nice pragmatic post.
Profit logic said:
"The Divergence assists in confirming Failure at the tops (Resistance) and bottoms (Support). First, you don't trade or rely on any indicator other than price. Your momentum indicator is just there to confirm that a Resistance or Support level is finished completing. Divergence is given equal weight in the confirmation process but Physical Failure is the ultimate confirmation. When failure coincides with Divergence it adds strength to the confirmation. When Physical Failure and Divergence occur it is an even stronger confirmation. Failure always occurs at every Resistance or Support area to confirm a reversal."
What is different about what the quote says and what you say is a very striking thing.
Profit and you get to the price at a top or bottom. You make the point of "what is next" in terms of price behavior at R or S for making money after that as time passes (many ways). You are continuing to do stuff to continue to make money in whatever way is appropriate and it is very pragmatic.
Profit continues until he gets a technical result of some sort that strongly deals with failure to advance price for cntinuing to make money in the past trend. I call this "exit" decision making.
The stuff Profit needs to add at some point if he chooses to, is to move on to what happens AFTER he confirms "failure" at R or S.
We have seen others in ET mess it up at this critical juncture over and over ad nauseum.
There is a cardinal myth that abounds in ET thaat proclaims that you can trade between R and S. There is another one that proclaims that when you hit R or S, it is time to reverse to make money. Neither are true as you point out to Profit in your post.
My style as any trend reaches R or S is to just "stay on the right side" of the market and continually extract profits. Rarely do I ever see a trend "reversal". Most often I see a LATERAL trend that has to be slalomed simply as a "next faster fractal swing trade". In effect, the same set of rules that I use are continually applied, as usual, to trend traverses on channels going to R or S, and then after that I trade the traverses of the LATERAL channel that rides along the Top of R or the Bottom of S.
My perception is that Profit must be really busy dealing with the conditions that appear in the LATRAl channel that follows the R or S. He must see the initial "failure get confirmedl, then he sees the price retrace, hit a limit very soon and come back and "bash" against the R or S where it just went through he "failure routine.
I didn't look at any of his charts but i bet their are several rpeatd notations on them that say the same thing and they are place in rows across the chart at the same relative height.
Now the punch line. To make money in trading, meaning really ripping it out of the market, you work your tail off between "confirmed failures" Profit is focussed upon. Many turns of trading cycles occur between R and S and vice versa. I generally prognosticate that most days have four significant moves. Each is subdivided into several profit taking turns. 40 actions are common for me (scalling it part of it). I notice 1 high and one low for each day. Usually in this multifractal context (where several channels are concurrent) it is rare to be at R or S. And even more rare to find an R and an S in one single day.
It is difficult for anyone like Profit to go to a place like where you are in your post to him. To have Profit consider what you say to him is a real reach. Profit focuses on one particular combination of many and, further, he focuses on the "end effects" of that combination at the expense of considering the "non end effects" (and that is where the most money is made by breaking up the non end effect translations (traverses) into "takings" to lock in profits).
The greatest benefit to a person in Profit's shoes when he moves to your views is that he gets to consider the combinations he is currently ignoring. Presently, and in fact, by not being able to differentiate (his "failure confirmation" claims not with standing), Profit is really "hanging out in the wind" sometimes without recourse to monitoring aids that would protect him as you are protected by your "stream of conscious monitoring".
What gets a person to excellence is being able to be cogniscent. I know, strange babble. Not really, though. If you cut yourself off from considering many parts of the map and you focus on a self determined favorite part you like, you are always going to be surprised when you are sitting on the wrong side of he market.
You have the perfect tool. Man, you can use it with consumate skill. So what, when it is time to wipe off the tool and put it back in the tool box until its appropriate use comes up again. All you can do is put it away. Don't even try to use it in the wrong application.
Our jobs as market mechanics is to be able to check out the market, get clar on what's what and get to work with the appropriate tools to fix things (meaning optimizing taking money out of the market).
Grob,
Arriving and getting there will still leave the doors open for growth and the day that I can meet you.
Michael B.
Arriving and getting there will still leave the doors open for growth and the day that I can meet you.
Michael B.
Short answer? I would love to take a vacation and read the long one.
First the Markets can only go up or down . . . they can't go sideways. The Markets are never stagnant and flat-lining. If the Markets are open they oscillate. This being said there are only two directions the Markets are able to go . . . up or down.
If I understand you, you think Support & Resistance float. My comment - Support & Resistance are fixed until they are either breached and replaced or are failed to be breached and replaced . . . on a per chart basis . . . period. That is something one can see with no need to ask someone else's opinion on.
I don't quote others because I rely on research that I can verify. If I didn't personally verify the data's authenticity . . . it is suspect. I think all traders should adhere to that principle.
a) you've never seen a sideways chart?
what do you call it when a futures market trades at lock limit for a full session without moving? what do you call it when a takeover candidate trades in a vice grip range for months at a time?
b) you do realize that markets aren't two dimensional, right? that a "chart" is simply ink on paper or pixels on a screen, an abstraction of a collective concept and not the concept itself?
c) say you meet a blind trader who has found a way to represent price movement in sound form, via ranges on a musical scale. are you going to tell him markets can only go "up" or "down?" and what would you call it when he gets a continuous tone?
d) would you argue with a trader who interprets data vertically and thinks the market goes left and right?
Apparently I must be blind then, because I don't see that at all. Support and resistance are only "fixed" in the sense that the past is fixed; that which has already happened is a part of the permanent record. I guess I would say support and resistance disappear from one place and rematerialize in another, like that guy Raiden from Mortal Kombat. (Anyone remember big trouble in little china? one of the coolest movies ever...)
When people talk about support or resistance "holding" or being "broken" etc. etc. they are speaking purely in metaphorical terms, to create shared reference to a concept that in reality has no physical properties. There is nothing tangible to actually hold or break except in the trader's mind. Therefore when you correct someone who says float because you prefer to say fixed, you are just being silly.
What research and data are you talking about???
Look, the bottom line is this: there is no money in trying to understand a chart. The trader's goal is to understand what the chart represents. There are no intrinsic principles of behavior that can be inferred from a limited abstract. You are always inferring from a larger whole, that which you have abstracted.
All market movement is the result of human endeavor (and computer programs, which have no concept of 'chart' at all). Human endeavor is consistently influenced by factors outside the data set - no matter what data set you're talking about - and these factors are constantly changing in real time. Therefore you can never assume perfect knowledge from a limited data set, and the method of abstraction you choose doesn't really matter as long as it consistently communicates.
Is this really that tough to grok?
Grob,
Out of respect for your years in academia I will try to respond to some of the statements you made here. I remember one of my professors telling me one day to "question everything and believe nothing in your text books till you verify it yourself." Just so you don't skew that to "all books", he meant that in relation to "problem solving" and the class was Logic. That class was unique. We sent in over 75 corrections that year to the publisher of our Logic text book.
By the way . . . it's Professor not Profit.
"Profit continues until he gets a technical result of some sort that strongly deals with failure to advance price for cntinuing to make money in the past trend. I call this "exit" decision making." - I get Failures at tops and bottoms that are consistently and perfectly confirmed. These Failures on the tops and bottoms are perfectly and inversely mirrored. The reason to exit a buy is the exact reason to enter a sell if the confirmation is perfect.
"The stuff Profit needs to add at some point if he chooses to, is to move on to what happens AFTER he confirms "failure" at R or S." - Not much to add . . . Buy at Support Confirmation and sell at Resistance Confirmation.
"There is a cardinal myth that abounds in ET that proclaims that you can trade between R and S. There is another one that proclaims that when you hit R or S, it is time to reverse to make money. Neither are true as you point out to Profit in your post." - First, you can trade between Support and Resistance. You personally feel that is false because you know of no perfect confirmation from the tops and bottoms to allow to to trade it successfully. But that is your opinion based on past data not current proof. Second, when you breach or fail at previous Support or Resistance it is only time to PREPARE for reversal not to immediately reverse. The confirmation the Market sets-up is your reason to reverse.
"My style as any trend reaches R or S is to just "stay on the right side" of the market and continually extract profits. Rarely do I ever see a trend "reversal". Most often I see a LATERAL trend that has to be slalomed simply as a "next faster fractal swing trade". In effect, the same set of rules that I use are continually applied, as usual, to trend traverses on channels going to R or S, and then after that I trade the traverses of the LATERAL channel that rides along the Top of R or the Bottom of S." - This is what I would like to sit down with you and prove. I see Trend Reversals all the time and have specific infallible methods to track them. The crazy part is that those methods are all based on common actions traders talk about every day. It truly is a case of not seeing the forest for the trees. I will gladly spend a few days with you Glob proving what I am talking about at my expense. You made the jab about being scared to set in front of my peers to discuss this, well I would be willing to do that at any time as long as I can show you personally the proof first and then you can put me in front of anyone you want. As far as the Market moving Laterally . . . not on your life. Every moment the Market is open it oscillates which is another statement I can prove.
"I didn't look at any of his charts but i bet their are several rpeatd notations on them that say the same thing and they are place in rows across the chart at the same relative height." - You would pee your pants if you saw my charts. If your academic background is as you say it is . . . you will immediately understand what you are seeing. I would love to show them to you.
"I generally prognosticate that most days have four significant moves. Each is subdivided into several profit taking turns. 40 actions are common for me (scalling it part of it)." - Since January there has been an average of almost 2.5 perfect trade set-ups per day. As far as scaling in and out of trades I have a strong opinion there. I believe scaling shows a total lack of confidence in your trading techniques. You are telling yourself, "I'm getting out here with some of my contracts because I have no clue where the Market is going from here."
"It is difficult for anyone like Profit to go to a place like where you are in your post to him. To have Profit consider what you say to him is a real reach. Profit focuses on one particular combination of many and, further, he focuses on the "end effects" of that combination at the expense of considering the "non end effects" (and that is where the most money is made by breaking up the non end effect translations (traverses) into "takings" to lock in profits)." - Wrong, we talked, we agree . . . perfectly . . . we progress.
"Our jobs as market mechanics is to be able to check out the market, get clar on what's what and get to work with the appropriate tools to fix things (meaning optimizing taking money out of the market)." - Profound and true. Yes, I agree. But I don't think you truly believe what you say. I created a tool that I have spent 8 years tweaking, perfecting & verifying and your only response is to verbally blast it as hog wash without even giving it the courtesy of personally verifying it or killing it. That my friend is not the attitude or mind-set any "educator" should project . . . especially one from Wharton.
Out of respect for your years in academia I will try to respond to some of the statements you made here. I remember one of my professors telling me one day to "question everything and believe nothing in your text books till you verify it yourself." Just so you don't skew that to "all books", he meant that in relation to "problem solving" and the class was Logic. That class was unique. We sent in over 75 corrections that year to the publisher of our Logic text book.
By the way . . . it's Professor not Profit.
"Profit continues until he gets a technical result of some sort that strongly deals with failure to advance price for cntinuing to make money in the past trend. I call this "exit" decision making." - I get Failures at tops and bottoms that are consistently and perfectly confirmed. These Failures on the tops and bottoms are perfectly and inversely mirrored. The reason to exit a buy is the exact reason to enter a sell if the confirmation is perfect.
"The stuff Profit needs to add at some point if he chooses to, is to move on to what happens AFTER he confirms "failure" at R or S." - Not much to add . . . Buy at Support Confirmation and sell at Resistance Confirmation.
"There is a cardinal myth that abounds in ET that proclaims that you can trade between R and S. There is another one that proclaims that when you hit R or S, it is time to reverse to make money. Neither are true as you point out to Profit in your post." - First, you can trade between Support and Resistance. You personally feel that is false because you know of no perfect confirmation from the tops and bottoms to allow to to trade it successfully. But that is your opinion based on past data not current proof. Second, when you breach or fail at previous Support or Resistance it is only time to PREPARE for reversal not to immediately reverse. The confirmation the Market sets-up is your reason to reverse.
"My style as any trend reaches R or S is to just "stay on the right side" of the market and continually extract profits. Rarely do I ever see a trend "reversal". Most often I see a LATERAL trend that has to be slalomed simply as a "next faster fractal swing trade". In effect, the same set of rules that I use are continually applied, as usual, to trend traverses on channels going to R or S, and then after that I trade the traverses of the LATERAL channel that rides along the Top of R or the Bottom of S." - This is what I would like to sit down with you and prove. I see Trend Reversals all the time and have specific infallible methods to track them. The crazy part is that those methods are all based on common actions traders talk about every day. It truly is a case of not seeing the forest for the trees. I will gladly spend a few days with you Glob proving what I am talking about at my expense. You made the jab about being scared to set in front of my peers to discuss this, well I would be willing to do that at any time as long as I can show you personally the proof first and then you can put me in front of anyone you want. As far as the Market moving Laterally . . . not on your life. Every moment the Market is open it oscillates which is another statement I can prove.
"I didn't look at any of his charts but i bet their are several rpeatd notations on them that say the same thing and they are place in rows across the chart at the same relative height." - You would pee your pants if you saw my charts. If your academic background is as you say it is . . . you will immediately understand what you are seeing. I would love to show them to you.
"I generally prognosticate that most days have four significant moves. Each is subdivided into several profit taking turns. 40 actions are common for me (scalling it part of it)." - Since January there has been an average of almost 2.5 perfect trade set-ups per day. As far as scaling in and out of trades I have a strong opinion there. I believe scaling shows a total lack of confidence in your trading techniques. You are telling yourself, "I'm getting out here with some of my contracts because I have no clue where the Market is going from here."
"It is difficult for anyone like Profit to go to a place like where you are in your post to him. To have Profit consider what you say to him is a real reach. Profit focuses on one particular combination of many and, further, he focuses on the "end effects" of that combination at the expense of considering the "non end effects" (and that is where the most money is made by breaking up the non end effect translations (traverses) into "takings" to lock in profits)." - Wrong, we talked, we agree . . . perfectly . . . we progress.
"Our jobs as market mechanics is to be able to check out the market, get clar on what's what and get to work with the appropriate tools to fix things (meaning optimizing taking money out of the market)." - Profound and true. Yes, I agree. But I don't think you truly believe what you say. I created a tool that I have spent 8 years tweaking, perfecting & verifying and your only response is to verbally blast it as hog wash without even giving it the courtesy of personally verifying it or killing it. That my friend is not the attitude or mind-set any "educator" should project . . . especially one from Wharton.