ProfLogic's Method

LostTrader · Apr 21, 2009

Well, as long as we are making assumptions, here is my current view:
Given three fractally related charts, assuming that N represents the exponent of the Trading chart fractal (middle one at 7**N Volume), then

Quote from oraclewizard77:
Let's assume for sake of argument that on a higher chart, we have a green price oscillation trending up.

the Strength(N+1) ERG is rising. The rules on p10 say Histogram, but a later post said ERG required, Histogram optional.

Next, let's assume on a lower chart we get a PPF HL.

A PPF HL label appears on the Trading Chart(N) which was immediately preceded by a Breach HH label. The Histogram(N) is below the PrimeSupport threshold (i.e., < -10), and the ERG(N-1) is both below the PrimeSupport threshold and rising.
I also remember a later post that speaks of requiring these in a sequence, while now I am looking for all these checks in one fell swoop.

Next we wait and see that we get a PF failure bar. Then we get a confirmation bar that is higher than the PF failure bar.

Only now is when I look for the Price Failure (PF) bar on the Entry Chart(N-1). I believe this is a "Perfect" Long trade as defined.

I also am starting to think that waiting for the Histogram(N) to start rising would be safer as not waiting seems to often enter early and stop out.

.
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Quote from ProfLogic:
The target is the Breach but your exit is an oscillation on yourTrading Decision chart of the Histogram of ERG that is either a failure or contains Divergence or Convergence.

ProfLogic, did you mean a slope change in either Histogram(N) or ERG(N)? or did you mean only the Histogram(N) of the erg?

oops, I asked more than one question in a post. I pulled one out and will put in a separate post!

Thanks!

LostTrader · Apr 21, 2009

Quote from ProfLogic:
The target is the Breach but your exit is an oscillation on yourTrading Decision chart of the Histogram of ERG that is either a failure or contains Divergence or Convergence.

ProfLogic, to make sure I understand the terms being used:

A failure in this context means a PPF LH, Match =H, or BreachPPF, correct? Which is any price before reaching a new HH.
Divergence is when (Long) the Hist or ERG peaks are getting lower while price is getting higher.
What is convergence? Because if it is simply lack of divergence (i.e., Hist / ERG also peaking higher with price) then why ?

Thanks!

ProfLogic · Apr 21, 2009

Quote from LostTrader:

Well, as long as we are making assumptions, here is my current view:
Given three fractally related charts, assuming that N represents the exponent of the Trading chart fractal (middle one at 7**N Volume), then

the Strength(N+1) ERG is rising. The rules on p10 say Histogram, but a later post said ERG required, Histogram optional.

A PPF HL label appears on the Trading Chart(N) which was immediately preceded by a Breach HH label. The Histogram(N) is below the PrimeSupport threshold (i.e., < -10), and the ERG(N-1) is both below the PrimeSupport threshold and rising.
I also remember a later post that speaks of requiring these in a sequence, while now I am looking for all these checks in one fell swoop.

Only now is when I look for the Price Failure (PF) bar on the Entry Chart(N-1). I believe this is a "Perfect" Long trade as defined.

I also am starting to think that waiting for the Histogram(N) to start rising would be safer as not waiting seems to often enter early and stop out.

.
.

ProfLogic, did you mean a slope change in either Histogram(N) or ERG(N)? or did you mean only the Histogram(N) of the erg?

oops, I asked more than one question in a post. I pulled one out and will put in a separate post!

Thanks!

When I say "oscillation" of the ERG or Histogram, I mean color change.

Faris · Apr 21, 2009

Quote from ProfLogic:

I need to upgrade my MultiCharts because I'm getting some data accumulation errors that the newer version will fix. My stock charts, some are using 40,353,607 CVB Charts and it's feaking the Beta 2 version out.

I'll load some stock charts but it might be tomorrow. Sorry.

Prof

I understand your a busy person but any chance in posting those stock charts?

Thanks

ProfLogic · Apr 21, 2009

Quote from LostTrader:

ProfLogic, to make sure I understand the terms being used:

A failure in this context means a PPF LH, Match =H, or BreachPPF, correct? Which is any price before reaching a new HH.
Divergence is when (Long) the Hist or ERG peaks are getting lower while price is getting higher.
What is convergence? Because if it is simply lack of divergence (i.e., Hist / ERG also peaking higher with price) then why ?

Thanks!

Which is any price/indicator oscillation creating a PPF, Breach PPF or Match PPF.

Divergenge is where price is making a HH and the reflecting indicator (ERG or Histogram) is making a LH or where price is making a HL and the reflecting indicator (ERG or Histogram) is making a LL
&
Convergence is where price is making a LH and the reflecting indicator (ERG or Histogram) is making a HH or where price is making a LL and the reflecting indicator (ERG or Histogram) is making a HL.

ProfLogic · Apr 21, 2009

Quote from Faris:

Prof

I understand your a busy person but any chance in posting those stock charts?

Thanks

I've been dealing with a data issue that I'm finishing up with today. I'll post them later tonight or tomorrow . . . promise.

LostTrader · Apr 21, 2009

Quote from ProfLogic:
Divergence is where price is making a HH and the reflecting indicator (ERG or Histogram) is making a LH or where price is making a HL and the reflecting indicator (ERG or Histogram) is making a LL
&
Convergence is where price is making a LH and the reflecting indicator (ERG or Histogram) is making a HH or where price is making a LL and the reflecting indicator (ERG or Histogram) is making a HL.

Ahh! for some reason, I had learned to call both of these "divergence" as negative & positive divergences. . .

Thanks !

mephistoII · Apr 21, 2009

Quote from LostTrader:

Ahh! for some reason, I had learned to call both of these "divergence" as negative & positive divergences. . .

Thanks !

I've also seen the term "hidden divergence" used when explaining the conditions of convergence.

ProfLogic · Apr 22, 2009

Quote from mephistoII:

I've also seen the term "hidden divergence" used when explaining the conditions of convergence.

Me two but it makes more sense to call them "Divergence and Convergence"

oraclewizard77 · Apr 22, 2009

This is a question for both Proflogic and LostTrader.

Per my conversation with Proflogic, we talked about that right now I was using 2401 as my "trading decision" chart.

My question is that in NinjaTrader, when I have the 2401 set for trending, it will give say for example if I am looking to go long, a PPF LH in the trending mode, and at same point in time a Breach LL in trading mode.

1) If 2401 is my "trading decision" chart should I always leave it in "trading mode", and have a slower chart left in "trending mode"? Or should I switch back and forth for the 2401 between trending and trading to help me determine if I want to take a trade?

2) I kind of like switching 2401 back and forth because if I have it in the trending mode I can see price movements better to determine what price is doing, and if I see something I like I can switch to trading mode to narrow down the focus, but I am not sure if this is how some people are using these modes, or are they always keeping 2401 in trending mode, and switching a faster chart to trading mode to take the trigger trade?