Quote from tradingbug:
Thankyou Mak for such a great tool. I have watched it and see that the YM does lead the INDU. The adjacent YM and INDU columns really help with this and are very neat to watch.
NP!
I have given the YM/INDU relationship tries in the past but had the 6 sec lag. I am sure you know how that went. LOL.
Well, it can go either way. Grob and I are somewhat different in the path we have chosen. It is a constraint as far as my character. In undergrad I was a physicist for a short while. The pursuit ended when I realized that my personality and the field were at ends. My personality is to drill down to the bottom to find the underlying mechanism from which all the overlaying components are comprised from. In physics, it is a continual pursuit of ever deepening layers. Keeping that in mind, when I had gotten to "what influences the DOM", the whole STR/SQU mechanism fell into place as related to correlation. What I mean is that even with a six second lag, the signal is still there. It is just a matter of having the picture of the mechanism from the context of 6 sec snapshot. It is why I recommend that some of you screen record the day for debriefing. I believe it helps tremendously in pointing out how far in advance telegraphed information is being conveyed. It takes some time to adjust to this. For most of us, it is hard to identify a signal as being anything more than a few seconds too early. How many have seen and taken actions I signals that were immediately recognized as 90 seconds in advance (aside from DU/VDU)? IB's DOM has a real time rep rate that continuously snapshots regularly. The difference between snapshots is the lag. Whether you sweep on the snapshot (which is easier) or the realtime changes, it is merely a matter of associated the proper picture with the data window (snapshot vs realtime). For our purposes, it is just simpler to begin with the realtime simply because stickiness is more apparent. With lags, you can judge stickiness by noting the reoccurance of a stretch or squeeze value. Again, these are aspects we come to understand as we begin to accept the truth of the matter.
Just to make sure, is it correct that this tool is to be used only at the fine level of the sweep sheet when the path gets us there?
It really depends on the trader. You take the tool and fit in where you know it will fit. Sweeping does so happen to be a very effective way of reducing hyperactivity. I am not perfect with sweeping, but I can sweep the small number of components that I understand. However, I know how the tool can help on a wide range of levels. But this is simply because I deal with a broad level perspective that I know must be true and is confirmed by debriefing. For example, what if you trade a daily bar? I would use the tool to find the right side of the market, and keep on the right side of the market as long as it is at my entry point. Eventually, the market moves away from my entry point. This is effective because it is a fine level tool. Once the market has moved a fair distance away from my entry, i then shift back to what easy does and just monitor the active end of the bar. EASY, your post on monitoring just the flagging was super. I was ecstatic to see that someone else does the same thing. The beauuty of staying on the right side of the flagging is that you can apply this to any bar. It is also a comforting thing too for me since monitoring the flagging is less hyper than monitoring the STR.SQU.
A simply connected sweep of this reduced data set would be
if FLAGGING PAIR near ENTRY PAIR => SWEEP STR.SQU
if FLAGGING PAIR is not near ENTRY PAIR => NO CHANGE (ie. DO NOT SWEEP STR.SQU)
Also, If I want to understand the logic behind the tool, is looking at the code the best way to go about it?
The logic is exactly as you understand. The tool is not a complicated logical tool, it is more of high resolution picture. You can strip away the sheet to whatever level. There is no code anywhere on the sheet. There is nothing funky going on in the sheet. It is just essentially a color-coded state machine that just turns on at non-noisy levels...
time to give it another shot. You enabler you. Thanks again.
I strongly recommend coupling the sheet with a DOM chart like in the pic I attached a few pages back regardin the NOW screen. I very swiftly sweep the NOW screen. This is why I haven't written code to furthur filter STR.SQU. The pictures I believe is where the most difficulty is encountered. Without a picture, it is often difficult to accept what is or isn't true.
REgards,
MAK
WTF!