ProfLogic's Method
- Thread starter El Guapo
- Start date
- Status
Good question.
Absolutely not.
The ERG on your Trading Decision Chart is ONLY used to determine trend and trend is ONLY good for strength. THe Strength of this chart was (is) a Primary Bear so we already knew that the overall strength was down. Having the ERG at that level only showed me that there was even more push to price in the down direction ahead . . . which there was.
nice trade Pismo.
The strength chart ERG was against you and recently Prof stated, "Your strength chart has two components; ERG and histogram. ERG is long term strength and Histogram is short term strength. I will take a trade where the Histogram is against me but never the ERG and never both are against the trade. I at least want the ERG in my favor".
Also, the entry rules only make reference to having the strength chart Histogram in the same direction.
Would you and Prof comment on this trade as it was clearly against the strength ERG? Thanks.
The ERG will Oscillate (change Color) as the Histogram crosses the zero line.
The short from 708.25 was, for me, Near Perfect because it was a PPF toward a Breach PPF, not a Breach. So I am leary of the trade to begin with. The 2401 IS in a Bear Trend so the strength is obviously down, the 16807 IS in a Bear Trend but the ERG is UP and the Histogram is down.
This makes the Short from 708.25 Aggressive. Once the ERG oscillated the safer trade was the short from 700.25 but by then the Histogram wasn't somewhere you were happy with.
This is what you go through trading the faster charts . . . POTENTIAL NOISE. When you get those PERFECT trades, they are swee but those Near Perfect trades lull you in with a sense of profits and sometimes they work and sometimes they break even. The more screen time you have the more confidence you have at taking these marginal trades but personally I like the longer term becasue they contain the ULTIMATE safety and that is from the strength of the longer term charts.
Remember that 117649 short? It is still valid with no oscillation PPF to exit from as yet. There is the possibility of a Histogram Convergent Oscillation setting up on the 117649 reflected in a potential ERG Convergent Oscillation setting up in the 16807 . . . but there is no EXIT until there IS and Oscillation.
To add . . . all of these PPF/Breach Oscillations that are occuring on the faster charts are simply confirming the direction of the 117649 short.
Yes I'll add it but the point I want to make is that it is better to take the trades on the slower charts.
I would prefer you learn to read the charts form the faster charts because it gives you more oscillations to reference but when it comes to actual trading use the slower charts. Lett headaches.
Question about 1 & 3
If the labels in #1 are created from the next faster/entry chart:
Wouldn't #3 have already occured?
Are you waiting for it to oscillate twice or do you mean to say that the direction of the ERG should be in the same direction as the DECISION Histogram?
Also, thanks for all of your effort. I've spent the last few days devoting some time to understanding the methodology. It took a while just to figure out the terminology and then the labeling system. I'm using the code (I think) Whisky posted for NT and it isn't quite the same as yours so the labels don't correspond 100%. I understand it doesn't have to as you are teaching the method and not every little detail. The problem is when something like this happens:
What this means is our indicators have to be calibrated to show the same information. I understand this is not your responsibility as you've given out much more than most people on ET.
To that end, I've figured out how to put the faster/entry ERG onto my DECISION chart so I can approximate where labels occur. Once I get things calibrated, I will write the code for the auto-labeling.
For those interested: Take Whisky's code and divide the input parameters by 7. Then set your Prime Threshold to 21 (vs. 10). I've found somewhere around this number to be an accurate depiction... I still don't know why though
. If you want to clean it up, comment out the sections of the code that display the histogram.- Status