ProfLogic's Method

Insearch · Feb 26, 2009

Quote from Insearch:

Not at all Wi!son . . . I've learned more in 1mth with screen time than I did trying to understand the method for 7-8mths after work . . .

My question is not about the sequence, I think I understand it, maybe not as well as you, but I believe I have it . . . Correct me if I'm wrong . . . the hypothetical sequence I was alluding to could occur, no?

Also, you didn't answer the main point of my query . . . that is . . . Whisky's chart shows a HH after an L he is referencing . . . that L is negated because of the HH and hence the need to look for a new LH/LL sequence in order to confirm the price failure . . .

Whisky, Prof's last post on this page may be what you are looking for . . .

http://www.elitetrader.com/vb/showthread.php?s=&threadid=146039&perpage=6&pagenumber=154

Insearch · Feb 26, 2009

Quote from Wi!s0n:

If that last line was a question, then yes and no. Read my comments to Trading guy. I disagree with his interpretation of the entry. I believe the confirmation bar is the bar that breaches the LL labeled on his chart. The entry is on the close of that bar or the open of the next bar.
Whiskey's chart imo is correctly labeled but incomplete for the bigger picture. There is a LL before the L marked that is more important, also the 343 will usually but not always give you a divergence. If you take the early entries you have to take the heat/losses.
Ask yourself where is the safest entry after the market turns. The answer should be obvious.

Thank You Wi!son, in the last few pages of "revelation" I actually feel like a load has been taken off of my shoulders . . . it's amazing to think of me just 1mth ago and how far (in terms of understanding) I've come . . . I'm sure I have more to learn from screen time, but thank you again for the clarifications . . .

TradingGuy · Feb 26, 2009

Read my comments to Trading guy. I disagree with his interpretation of the entry. I believe the confirmation bar is the bar that breaches the LL labeled on his chart. The entry is on the close of that bar or the open of the next bar.

I'm not sure what you are talking about here. I didn't post a chart, and stated the entry

"would be just as price passes the last LL, as shown in the diagram posted above."

You posted the diagram, passes = breached, and as far as the actual entry, yes you can wait for the close, which on the 343 is normally about the time it takes to click the mouse. So where is your disagreement? I must be missing something, please clarify.

TG

Insearch · Feb 26, 2009

Quote from TradingGuy:

I'm not sure what you are talking about here. I didn't post a chart, and stated the entry

"would be just as price passes the last LL, as shown in the diagram posted above."

You posted the diagram, passes = breached, and as far as the actual entry, yes you can wait for the close, which on the 343 is normally about the time it takes to click the mouse. So where is your disagreement? I must be missing something, please clarify.

TG

I think he's talking about the "entry" as described/annotated by Whisky . . .

Wi!s0n · Feb 26, 2009

Quote from TradingGuy:

I'm not sure what you are talking about here. I didn't post a chart, and stated the entry

"would be just as price passes the last LL, as shown in the diagram posted above."

You posted the diagram, passes = breached, and as far as the actual entry, yes you can wait for the close, which on the 343 is normally about the time it takes to click the mouse. So where is your disagreement? I must be missing something, please clarify.

TG

I was referring to Whiskey's not yours, sorry.

Jander · Feb 26, 2009

Quote from ProfLogic:

What part of this sequence is so hard to understand?

2. AND THEN - The Histogram on your trading chart (2401) Oscillates (changes color) in Prime toward the Prime Trading Breach Oscillation on the Trading Decision Chart (for the strongest trade) or at least positive to the zero line for a strong trade.

3. AND THEN - The ERG on your Entry chart (343) Oscillates (changing color) toward the Prime Trading Breach Oscillation on the Trading Decision Chart .

To clarify point #3, the ERG on faster chart usually(always?) changes color before the histogram changes on the slower chart. I presume that as long as it is heading in the right direction, it's safe to move on to #4 ?

Whisky · Feb 27, 2009

I choose to view my current confusion as an opportunity.

The way I interpret the rules (I'm probably wrong but consistently so) is:

1-You can wait for the 2401 histo to turn black...and have more confirmation...and increase your risk to the stop...and perhaps miss the move...and...and...and...

OR

2-You can apply rule 2 in page 10:

"2. Verify Histogram is in Prime but not yet oscillating." (2401), and THEN look for a 343 ERG blue-red, and THEN

look for a PF bar sequence.

Now everyone knows what a PF bar is (white on both sides).

NOW here we are:

Wilson says that CONFIRMATION bar has to breach the LL that sets up the PF sequence. I disagree (but maybe consistently wrong).

The way I interpret it is that the CONFIRMATION bar only needs to have a lower high than the PF bar, then close, THEN entry is on the next bar open.

I agree with Wilson in that the exits are tougher (and more important).

Now, if someone could code this...

Thanks for the debate.

JW

asiago · Feb 27, 2009

Regarding the Pf bar discussion..

I am too a student that wasted countless weeks trying to apply this method .."my way"..
However at one point the light did go off ..and i could see.

Here is a daily chart of a wahtever stock..for a swing trade.
The clarity it presents gelled the whole method in any chart and or time frame.

1-I marked the histogram going black in prime

2- then price goes down for x bars... (2 in this case)

3-Then price start a "countermove" going up..GOING TO MAKE PF BAR..For 6 bars in a row it created a pf bar higher than the previous one.
(Notice how the histogram never changed color during this process)

4 Finally a confirmation bar..which i noted

5-Entry on the next bar open

6- Hang on to your hats

This is my rendition...If i did something wrong no doubt Prof will correct me..

Asiago...now that' some good cheese.

ProfLogic · Feb 27, 2009

Quote from Jander:

To clarify point #3, the ERG on faster chart usually(always?) changes color before the histogram changes on the slower chart. I presume that as long as it is heading in the right direction, it's safe to move on to #4 ?

ALWAYS, if it occurs before . . . no trade is taken and you wait for another oscillation set up.

CORRECT.

ProfLogic · Feb 27, 2009

Quote from asiago:

Regarding the Pf bar discussion..

I am too a student that wasted countless weeks trying to apply this method .."my way"..
However at one point the light did go off ..and i could see.

Here is a daily chart of a wahtever stock..for a swing trade.
The clarity it presents gelled the whole method in any chart and or time frame.

1-I marked the histogram going black in prime

2- then price goes down for x bars... (2 in this case)

3-Then price start a "countermove" going up..GOING TO MAKE PF BAR..For 6 bars in a row it created a pf bar higher than the previous one.
(Notice how the histogram never changed color during this process)

4 Finally a confirmation bar..which i noted

5-Entry on the next bar open

6- Hang on to your hats

This is my rendition...If i did something wrong no doubt Prof will correct me..

Asiago...now that' some good cheese.

PERFECT . . . let me also re-label the "PF BAR" for you as being the "LAST PF BAR". The reason is that the preceeding 5 bars were "PF Bars" too.

1. Candle before Blue up arrow was price bottom
2. Candle at Blue arrow held no significance
3. 1st Candle following candle at Blue Arrow = 1st PF BAR
4. 2nd Candle following candle at Blue Arrow = 2nd PF BAR
5. 3rd Candle following candle at Blue Arrow = 3rd PF BAR (Matching PF Bar)
6. 4th Candle following candle at Blue Arrow = 4th PF BAR
7. 5th Candle following candle at Blue Arrow = 5th PF BAR
8. 6th Candle following candle at Blue Arrow = 6th PF BAR (Top - bar you labeled as PF)
9. 7th Candle following candle at Blue Arrow = CONFIRMATION BAR (You won't know when the last PF Bar bar has been created until the Confirmation Bar is finished)
10. 8th Candle following candle at Blue Arrow = ENTRY BAR (Enter Short on open of this Bar)

ProfLogic's Method

Attachments