Price action and market participant

Leading indicators of price are best.

They vary in time from an hour to and hour and 1/2 leading of price for position trading stocks.

For intraday trading and using the market offer (high velocity trading), you only get lead times of 20 to 30 seconds and up to a minute or so. Some very good leading indicators for less frequent trading and, therefore, less precise are available for over 5 minutes at times.

Over the last 100 years there have been some very significant contributors to the field.

Most good work done in the field avoids using induction and concentrate on the more scientific approaches where the null hypothesis is applied.

For some reasons a lot of potential traders do not get to the point where they are able to reason through how the market works. It is probably best for most beginning traders to use indicators as a way to get into the ball park of trading.

Trading does come down to handling data with the correct tools and at the correct time. The markets are dynamic and the time series involved is non stationary and the data interval for monitoring and analysis has to be properly landmarked for processing.

Many interjections have been made in this thread and they, without being to critical, have not showed significant concern with the realm of the oppotunity.

I left a post up briefly on this topic today until it got harranged so I deleted it. One of the points I developed considered how the operating point moves. It moves as a consequence of having no other of many initial alternatives. As alternatives are extinguished, there comes a period before the operating point moves and after all alternatives but one have been extiguished. This leading interval of price is where to best apply leading indicators of price.

Market operating points are various and they show how price is unimpeded for significant parts of the trading fractal.

I trade all in and all the time. Therefore, my indicator considerations come down to dealing with maintaining an on going profit segment and knowing precisely when to collect the chips and begin anew without losing a beat. Above I explained that the leading price time interval is a significant one for carving the turns using leading indicators which provide signals.

the operations of the markets has not changed in the 50 plus years I have been trading. New markets have appeared, that is for sure. as they come and grow into huge pools of capital, they function as markets alwayss have. The market offers all the time and it only has two sides, fortunately. Leading indicators always telegraph up coming changes in the market operating point.

None of this is academic; it is just a reasoning process where critical thinking is always invloved. For trading purposes it is notneccesary to look at a chart that has price on it to be able to do reversal based trading.

There is a myth about markets that is associated with the unnecessary concept of "prediction". Prediction is not part of trading as any form of a requirement. All trading may beconducted in the present with leading indicators of price.
 
Quote from greaterreturn:

Jack,

I've been studying all your SCT and PVT information. It's all making sense and looks good. One question.

How is A/D a.k.a. sentiment calculated?

I'm guessing it is simply a 4 times faster measure of P up or down.

So P is (for example) a 5 minute period. V is a 2 minute period, and A/D is a 1 minute period.

P being up/down 1/0
V being C/C 1/0 from DU, FRV, or Peak
A/D being short term P up/down 1/0

That's a guess. If I'm too far off topic of the OP's question, then please PM me.

Thanks!
Wayne
More...

Accumulation/Distribution is the third and least significan variable of the Scoring. Binary scoring of P, V and A/D by this respective significance is how the natural cycle of price movement works.

As has been repeated posted this scoring was used to produce a backtest of a non universe where the average lose was about 17 dollars for an unknown number of shares of a stock in about 24,000 tests over a multi year period.

In the backtest the A/D values was used 24,000 times at the point where the value of A/D shiftd from D to A. The coding used for this has never been revealed except to say Spydertrader's codes were used from the archive here in ET. That is, some available information was put into a backtest to do something. Whatever it was apparently the results proved by statistical testing to be___________. Whatever a person fills in here is just a statement of his statistical proweress; there is only one possible answer.

I worked with a person in the academic world who asked the same question several years ago. We basically used, conservatively, the IBD EOD values that were available to subscribers of various IBD feeds. At that time the institution service was pegged at 44K a year.

A manual version we used involved a combo of volume and price indicators; namely: a volume MACD and Welles Wilder's SRI all calibrated to the post PC era.

The unusual volume chart can also serve as an A/D measuring alternative. Because it can I place the columns order such that the % change of price and the % change of "unusual volume" are adjacent. This yields a comparison of two "normalized values and you have the advantage of sampling at any periodicity you wish. By looking at the Scoring sequence, you get to see how to code up the signal sensing that is most advantageous.

Luckily you have hit upon one of the major aspects of successful trading. That is, the non stationary window. Within any fractal this landmarking varies as a direct consequence of what is in the current loop of the monitoring calculus.

As an old MTS type from BTL I am very conscious of Information Theory since it was primary to AT&T for so long. In communications certainty ranks high in priority. The division of IT (Information Theory) successful high velocity trading deals with is the non probabilistic part. Sufficiency feeds certainty.

For you, all the while you have completing bars on each fractal since you landmark by look backs that are precisely designated by the fractal duration. Intrabar considerations are a historical examination for you. You keep all considerations tuned to the present and if you adopt a certainty philosphy and strategy All deltas happen in NOW (the present). Fortunately, that brings up looking at how the future comes into the present.

By reviewing the market's operations purposefully for 50 years, some things come to light. Adjacency becomes the most valuable observation. Since I have sewn fro most of my life, I use a zig zag attachment for strengthening connections often. In archtecture, I often install beams that I necessarily install in situ as vertical laminents using prescribed fasteners. I require the cabinetmakers doing this to lay out the patterns and predrill them before assembly. In modern architecture, straight lines are passe. Complex curves are the vogue and natural naterials are supreme. Fabricating associated roofing trusses rquiers a lot of stubbing and uniquness. Often their designers like to be on site for erection and the inspectors enjoy seeing complex approved drawings manifest into local beauty.

The variables of the markets create matrices. The operating point of the market moves on the matrices... Each dimension has extremes not often visited. By understanding how each dimension works, it gradually comes to light (meaning your mind has grown to be able to differentiate along the dimension) how things work. There are many dimensions and here and now, encoding one of them has come on the table.

When the IBD institutional package was coming on line, I was involved and declined to use it as part of the shae out. Here in ET I decline a lot of things people insist that I do to meet their proof requirements, as well. Most of these requirements placed on me are humourous.

If you can envision dimensions, the matrices they form, then you can use critical thinking to determine how the operating point in markets moves relative to time passing and externalities and internalities of markets.

I used to try to make the point using a tic tack toe set of cells. The operating point was the center most insulated cell. More or less dimensions are required for movement. Deeply seated behind this is the conclusion that market do not jump around (mathematically speaking). The other key aspect, we have agreed to not put on the table. This is not selfish on our part. More like icing on a cake where the cake really doesn't need icing.

If you mind can differentiate on the first levels of trading, then the operators will build more regions to differentiate on higher levels.

PA is not sufficient so there cannot be certainty ever.

P, V is a four possibility system and can yield certainty when the vector nature of P and V are part of the picture. Status, time rate of change and acceleration, gives additional degrees of freedom to the dimensions. 2 become 6 with the consideration of time all in a non stationary window that is landmarked. More degrees of freedom are added by non stationary and by landmarking.

P, V, A/D orients us more to the players.

Add in another referent P, V and A/D

Add in the four econometric aspects. the relationships of direct, indirect, induced and substitution effects.

Add in INFLUENCE through the WEIGHTING of the players.

Everything is part of the mix. By opening up the markets (putting up 4 or more platforms to look into things via assorted feed systems) is to have a sensory imput and through purposeful scientific and critical thinking, a person goes through personal changes according to how HE works.

Asking about A/D is asking about further differentiating the mind.


more....
 
remainder of above...

The OP took a brief shot at trying to connect the participants and the markets. He is stymied and will be for quite a while.

Here is a question. What happens if you test something?

There are two views in this thread.

One guy got an answer and the other guy determined that he has a lot of learning and work to do.

The answer one got settled for had no statistical significance. The causal factor was not half of the test per se (one half was f*cked up for sure) it was the wrong sample and the impossible duration of the sample.

When the second guy begins to test mulitdimensions and understands that the migration of the operating point comes from all other alternatives being closed off, what does he have at hand? A new question. How long before the actual change is the actual change dictated? Well he has a way of doing bars where they are always complete (he looks back to landmark).

This combo (his feed orientation and knowing alternatives are extinguished) is unbeatable.

That in a cruder way is why the volume signal to price entry time offset in PVT is about an hour to an hour and 1/2. This in an even cruder form long long ago is why the SEC was screwing up their computer monitoring on my accounts.

What is it like to live and trade in a WMCN world. In a place where you see WWT (or WTF as some call it) when WWT happens.

Drills are the underlying mind building factor. They build connections.

A purposefully learning person is going through a process that is not somethig that he can be aware of. We sense consciously and unconsciously. The conscious part is very small. It is a ball point dot on a 3X5 card where the conscious portion is the ball point dot.

All of the sensing does go into your mind. It is not well organized bu it goes to places that are designated by the mind. this huge pile of sits there and while you turn off your senses, (while you sleep) it gets handled. You have REM with ou eyes shut. As you do over and over a routine (like MADA), you mind later organizes itself so it works better for you in the future.

Thus, your inference gets to be more substantial. Trader 666 has been able to reread and listen and listen to what he thinks I said. He abstracts the part that is welded now into his mind. He f*cking knows I said that going from 10,000 dollars to 1 million can be done in 100 days. That meeting was so much fun. We all talked and delved into what an order of magnitude was. Usually people flew in from all over the country. I always had many charts sent to me (like NTES) and we scanned them with a portable scanner like a pot luck line...LOL.. such great learning and back and forth. One of the seven dwarfs always attended. Grumpy....lol

Anyway, a person who is learning and growing DOES NOTICE things when he wakes up. He gets a conscious confirmation of how his unconscious has become conscious. There is some humor in this. People sometimes say they know something but they do not know how they came to know what they know they know. Debriefing after trading usually tells them the answer after a while. AHA's and aha's add up.

Drills as related to a learning planned process in comparison the the traditional "just keep looking at the screen and you will find something that fits your personality" is a major fork in the road. It is the same as the comparison of the routines: MADA and OODA, respectively.

As mentioned above, the markets are not like being a fighter pilot in a dogfight (where John Boyd invented OODA for training and fighting purposes). A person can make the choice that being a fighter is what the markets call for and then hone his reaction skills. This is the CW theme.

By looking at market operating point migration and when, just before, a step in the migration you know you know, you deal with a different conjunction of feeleings and sensing.

The CW reaction oriented feeling sensing set is anxiety, anger and fear. The MADA, pool extraction anticipation feeling set is support, comfort and confidence.
 
This post is OT for the thread but it does put in the picture how many trqaders kill their trading operations by screwing up their minds during RTH.

09-11-08 12:54 PM
________________________________________
Quote from polpolik:

thanks guys. The crisis I'm talking about is not a string of losses, I've been doing quite well in the market all year until about 2 weeks ago when things start to unravel. My account has experienced a 10% drawdown since then. And I'm starting to feel like "fuck it" to losses when I normally don't even let it run.

I'm beginning to become careless and my thoughts are clouded. During the trading day, while trading, I would just walk away from the computer and take a short nap ~ maybe to just stop thinking about the problems.

But yeah, I started this thread in hopes of hearing similar situations from people and how they are able to segragate situations like these from their trading.

I have talked to a doctor friend of mine and I have been talking to family and friends.

I'm starting to lose interest in trading lately, too, so I suppose I need to take a break.
________________________________________



Thank you for outlining your issues and condition.

Often it is best to check out the more critical elements you have to deal with.

3 minutes for absence of breathing, 3 hours for absence of drinking water and three weeks for absence of food.

So what big change occurred for you? You have shut down a good percent of your energy supply to your brain.

Ordinary breathing takes about 2 to 4 % of your energy. The state your are in breathing uses about 33% of your energy.

By continuing to be on the wrong side of the optimum (think of a parabola that peaks in the first quadrant.) Think Laffler type curve. You have shifted well to one side of the worst of the two sides and are way down from optimum. The many symptoms you announced are an impressive combination.

Below is the loop you are in and you see it sustains itself as a positive feedback loop for maintaining a very screwed up psychophysological complex problem.

attachment.php


Just as in the recent dancing contest where a person (Ms Osmond)fainted on camera went to three specialists (heart , body specialists and mind doctors) that did not tell he what was wrong; she got an email that solved her problem. You can view the before and after videos to see the solution.

The simple fix for you is tennis balls and 3M Micropore tape. Put the tennis balls in your bed to get you off your back and use the tape over your mouth at all times of stress. There are many different times and use the tape all night too.

I probably should attach a 50 question test for you to take that would prove to you all the problem C0-2 symptoms you are having. If you want to see a permanent case read for "tone" the bighog posts, particularly in the PA threads where he shares his stresses.
Attachment: bohr effect as shown by stressed beginner.jpg
This has been downloaded 31 time(s).
 

Attachments

NB: this was a followon where three classes of traders were described:

1. retail

2. bandits

3. the calvary who catches bandits.

everybody was riding horses, etc.


Quote from jack hershey:

4. smart money

blah blah

5, parasitic frontrunners (high velocity traders)

blah blah

1, 2 and 3 as described are myth laden and that's how it goes.

All have bots or ATS's nowadays and they do their thing and the results are well known.

How to leapfrog from 1 to 5 as a retail trader is the opportunity. So do it.

In Harris you see about 30 plus numbers to add to the list of five. Page 199.

Lets say paysense, who's mind is cross wired considerably wanted to learn to differentiate al little regarding the relationship of cash and indexes.

Daily indexarb.com publishes a number before the open. THIS IS THE DAY'S RELATIONSHIP BETWEEN THE CASH AND THE RELATED INDEX.

Moses, of course, wrote the formula and carried it down the mountain to the tribes who were travelling at the time.

As a parasite (5), I recognize I NEED TO HAVE ITS MEANING AND USE down cold and by rote if necessary[. Reading about it is NADA.

Next I ned to use it in an excellent way by INCORPORATING IT INTO A LEADING INDICATOR of the very leveraged indexes I am trading.

This concoction MUST include what smart money (the guys who watch the calvary from the nearby hillside surrounded by pretty chicks, mint julips and race horses AND WHO GAMBLE ON THE OUTCOMES using super and terrific data feeds of price and volume derivatives out of Crays).

Next I deal with the non-stationary window and continually assure it is properly landmarked for using exclusively and only the data that is in PLAY.

Since THE NUMBER (out of Moses calulator) is a carrier upon which things ride, I count the distortion by points and show this drift. It serves to tell me specifically when the 3's and 2's come in to PLAY. I set it with an n-1 bias so I have a leading indicator of the algo's and bot's.

Finally, I like to display how far 3 and 4 ar leaning forward in their saddles and how much dust they will be generating when they apply the whips and spurs. I use an air quality indicator for this and it is tied to the commander's horse's balls as a go no-go gauge. The distance from the first horse to the last horse in these clumps of ordinance followers is also known to me with my field glasses (volatility surges).

So what is it all like? Knowing what is going on with leading indicators of index price is the best game in town. The tells all come from the 30 some players on the list.

In order of importance:

4, 3, 2, 1.

Paysense you are screwed because you have gotten so cross wired. You chose...you have beliefs......you got the consequences. Sell your saddle.
More...
 
Thanks for the info Jack. It's all salient and pertinent.

Your often get off the mechanics of trading into the physiology and psychology. That's important.

In my case, I can trade successfully. I learned some chart formations early on like retracements and made money.

Then I learned other things and made money. Sometimes I lost, sure.

Those profits are a very strong reinforcement that always drives me back to learning more.

But I never considered myself a successful trader simply because of never reaching the goal of financial independence.

You mention that point in something I read that good traders focus on their money velocity. That's my focus.

Sure, I know different ways of trading to make money. But they never fit my business plan for 3 reasons.

1. Those strategies trade too infrequently so they grow capital quite slowly.
2. They suffer drawdowns so you have to start with significant capital that I dont' have.
3. I dont' trust them enough to use OPM.

I like the contrarian ATS strategy I was working on (and still have) but even though it trades every day, it only trades average of 5 days per day so it's out most of the time.

So now I'm working on an ATS for SCT and PVT.

Wayne
 
I learned something in your works yesterday that clarified volume even better due to the "hitches" and "stalls".

So I realize why you said in your last post about the need for "normalized" volume data.

I did normalize volume but I think the technique I used caused it to become a little bit lagging. So I will try your suggestion above for normalizing it instead.

At the moment, I'm working on implementing the channels.

So far, I have 3 channel objects created (they operate simultaneously).

1. The first finds 2 most recent Higher Lows and draws a line through them and extends it to the right to form an up TL. It also draws a parallel line on the other side of the market to bound the up trend channel.

2. The second program does the opposite by looking for lower highs to draw a down trend line and the parallel one opposite that one

3. Finally, I have a short term channel tool to bound the "traverses" across those trend line channels. It uses linear regression by looking at the current bar and going as bar back as it can with still having at least an 90% correlation. Then it draws bounding lines on the chart and extends them out 5 bars.

So far this is looking a lot like your examples. NOTE: I can use the above routines any any fractal simultaneously on my custom platform.

I'm using a 10 tick chart for now.

Importantly, I already have the code that can calculate for any channel the current price level of the top or bottom lines from any bar in future. That's important to automate the reversals.

It's my goal is to make the charts look like the ones your use, Jack. For everyone else, I realize they look like a royal mess at first. But there's a reason for all those lines!

I will post an image of the chart here, this evening.

After the channels look correct so I can see the action correctly, I'll can also send an image showing what I have for P, V, A/D graphically to get that right.

The final step will be learning the operating points betters and the other rules of the binary P,V,A/D.

FYI, I read and understand those concepts in theory from traderuniverse.com but looking to understand them enough to implement in the ATS.

Sincerely,
Wayne
 
ET has turned back into a nice place where constructive people share their ideas and experiences. Why? It's because I started using the ignore feature.

Frankly, since nobody is asking for money on ET, then who cares if someone writes posts others never understand because they're gibberish, over our heads, just too long or in another language?

Anyone who posts comments like that about anyone else on ET gets on my ignore list.

If you're reading this, it's easy to do. Just just click their username and then click Add to ignore list.

Sincerely,
Wayne
 
Quote from euclid:

Have you seen the post in that thread where he talks about being recruited (copied below). You can see why Jack selected him for grooming. I find it all more than a little disturbing.
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Euclid, I just noticed your post earlier. What do you find disturbing?

You quoted my previous post about the need for humility and willingness to learn. Not sure what you mean by "recruited".

Maybe you have a useful suggestion. Please share it. If not, let me know. It seems my ignore list is growing rapidly since I started trying to understand Jack's stuff.

Sincerely,
Wayne
 
Quote from ehorn:

Hi Wayne,

I too have been focused on coding up the modules which Jack has outlined in other posts. Particularly, the ones where he builds up each module taking inputs and producing outputs which become storage for analysis and decisions or inputs into subsequent modules. The application is very much in the "prototype" phase of development. But since you were speaking of development of the PE principles, I thought I would share.

I have just begun the analysis into the channel annotation module (3 levels of channels). I am working on some prototype code for that using the P/V relationship and channel rules and hope to begin incorporating these into the program soon. I am amazed how brilliant the mind is and well... unfortunately, I am just not that great of a developer, but I will press forward with the development of the application as it has been very enjoyable and enlightening. :)

For now, I have been working on coding the cases, volume, and P/V modules and performing analysis and decision making on these output data points. I have attached an image of todays results from the existing prototype code and here is a link to the replay from today (ES 5 minute). It is an AVI file (and pretty big too ~ like 50 mb, so it takes some time to buffer). I am pleased with the trending results too. But there is definately room for refinement and the channels will add a much needed "container" to help make more informed decisions and more accurate trades, IMHO. The prototype has some quick code in place to begin evaluating the analysis and decision making logic. For instance, it always enters on Bar 3 and always exits on bar 78 (on a 5 minute chart). Every trade in between is a reversal and every trade is made at the close of the bar. I have no medium or fine level indicators coded at this point (i.e. YM, STR/SQU, DOM, TICK, etc...).

The next keys I am focused on (besides the channels module) are to refine the logic for filters and context, as they relate to analysis and decision making (i.e what to do in internals, Peak Volume, etc..., when to take the signal for change and when to filter for context and so on). This prototype is a Windows Forms application, developed using C# .NET 2.0... It is very crude at this point but is offering me a great bed for developing and testing strategies using Jacks principles.

Anyways, just thought I would share and wish you all the best on your development.
More...


ehorn, lovely post and great work!!

Your post didn't sink in last night but you gave me the idea of posting an image of mine to get better feedback form you and Jack and anyone else.

I do see that it seems we're taking slightly different approach to the channels. Hmmm. I will study your post more closely tonight and compare to what I have.

Hope collaboration pays off!

I'm also using C# but I upgraded to .NET 3.5 I'm using ZedGraph as the graphing component.

If you don't already have a class for doing linear regression, I have one along with an NUnit test I will share if you PM me.

Wayne
 
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