Question for Grob/Hershey...

[icarus618]

Quote from easyrider:

I had not really thought too much about horizontal channels as I am usually on the sideline before they come into effect. No right or left there is there? I was thinking overnite that the PV equation should really be PVT. Time is an essential component of the relationship, imo. Channels actually portray the time element by the slant of the trendlines. Jack is always stressing the importance of pace which is time and the longer I trade the more important this becomes. I do not want to be in the market when it is pussyfooting around.

Time is not pace. Pace is not time. Time is just a constant that is always there to allow comparing and contrasting of the market variables.

Pace is the level of market "activity" or the level of agreement on price by participants. Conveniently pace is measured by looking at the volume of transactions per unit time, most usefully on the operating fractal. See PRV. Pace also can be measured, less conveniently, by looking at the steepness of the price channel, again most usefully on the operating fractal. The best method I've come across for measuring channel steepness is Gann's squares drawn consistently. See, e.g., Don Hall's Pyrapoint.

In contrast to time strictly, time of day is useful to distinguish. The trading day can be separated into 3, maybe 4, periods. I use 3 for simplicity, with the AM period fast pace usually, the midday period med/slow-->slow/du pace, and the PM fast/med bo-->med/slow-->fast/med/slow(rarely)/du(rarer still).

For a beginner, the most useful thing about pace is that it can be connected to a person's skill level. By simply counting a person can know the risk level of participating. All of this is nothing new and has been stated over and over and over.

 

[Sprital]

This graph shows average volume and average price volatility for each 10 minute period of RTH for 3 ES contracts.

pace:

red: extrodinary
green: fast
dark blue: medium
light blue: slow
gray: DU
below gray: VDU

<IMG SRC=http://elitetrader.com/vb/attachment.php?s=&postid=989833>

 

[icarus618]

Quote from Stalker:

Ask me in a year or five
I don´t think it´s impossible, but I think people who have worked as floor traders or has managed funds or something similar has a huge advantage. With the low volume you want to know how the big guys are thinking, cause a big order can hit the tape out of no where.

Your post reminded me of a phone solicitation I received recently from a person selling "mentoring" services by ex-floor traders. My immediate question was "How did you get my number?" The next immediate question was "How are they doing?" To both questions the response was less than satisfactory.

In any case, I don't begrudge anyone from making a living, even at the expense of others who are prone to buying into myths. People need their myths, it seems, and as Plato stated long ago myths do make for an orderliness without which the system, whether it be a society, an economy, or a market, could not exist.

 

[Stalker]

I´m not as nice as you, when a sells person call I just scream something and hang up.

Do you - or someone else - has any tips on articles or threads about what different groups of investors and speculators look for and how they act during the day?

 

[icarus618]

Quote from Stalker:

I´m not as nice as you, when a sells person call I just scream something and hang up.

Do you - or someone else - has any tips on articles or threads about what different groups of investors and speculators look for and how they act during the day?

Part I, Question 2. That should cast sufficient light on the topic.

Then you can get to the money-making questions which you are neglecting in favor of asking questions, who knows why, about market fluff.

 

[Stalker]

Most of the questions concerning price, volume and channels have already been answered several times in this thread. When a question pops up in my mind now I try to answer it myself.

But I´m still interested in the fluff. When I interview someone I wanna know what he ate for breakfest, I look for the color of his socks, I wanna know the name of his dog. All kinds of fluff that won´t show in the article, but still makes the picture clearer for me.

 

[achilles28]

Hey everyone,

I'm considering going discretionary using Grobs 1-2-3 trendline entry-exit rules.


I have a few questions needing clarification though.

From my understanding:

1) bar 1 is always inside the old trend.

2) the first 2 bars of the new trend - if drawn correctly - can provide tradeable cues as to the future trends direction/slope/areas of resistance.

3) concerning the 1-2-3 trendline system; where points 1 and 3 represent the 'right side', and 2 represents the parallel left side ceiling:

Point 3 is the first point that is preceded and followed by either two lower highs or higher lows, relative to point three. In other words, point 3 forms the vertex of the V in an uptrend, or vertex of a ^ (inverted V) in a downtrend.


My questions:

1) fast trends void of any point threes cannot be 'broken' until they have at least one point 3. Correct?

My reasoning: some trends immediately start with no hesitation or pullbacks. Its during these trends, using bars 1 and 2 for direction cues proves most useful.


2) Fast trends (steep slope) even *with* a point three are usually not considered broken - even when technically they are - until after a) a second point three appears that forms a more sustainable trend slope (slower) and b) that second point 3 trendline is broken by a couple bars that close below that trendline.


What's difficult is extrapolating an objective rule set from the instructions given. Not to knock Jack at all - thank you so much for your insight - but knowing which situations to consider a trend broken and when to consider intact, is a bit elusive for now.

Can anyone help me with this? Thanks.


I trade forex by the way.

 

[cnms2]

This post might help a little:
http://www.elitetrader.com/vb/showthread.php?s=&postid=232072#post232072

Quote from achilles28:

Hey everyone,

I'm considering going discretionary using Grobs 1-2-3 trendline entry-exit rules.


I have a few questions needing clarification though.

...

What's difficult is extrapolating an objective rule set from the instructions given. Not to knock Jack at all - thank you so much for your insight - but knowing which situations to consider a trend broken and when to consider intact, is a bit elusive for now.

Can anyone help me with this? Thanks.


I trade forex by the way.

 

[achilles28]

Thanks. All i got out of that post was:

"The first and scend point 3 of the first trend tell the story.

I suggested that unless a flaw shows up, use that as a criteria for staying in."


The general rule appears to be: wait until break of second point 3 line before exiting.

My contention is that waiting for second point#3 trendline break is sometimes unnecessary for slow (low sloping) trends.

I could be completely wrong. What do you think?

 

[cnms2]

Jack recommends using different tools depending on the trader's level of expertise: MACD, STOCH, price-volume, watching a faster time frame, taping the channel, and most importantly: trading with the trend. Usually a right line brake is preceded by a failure-to-traverse that forms the new channel's point 1. I noticed that many channels end without a second point 3. I also look for larger time frames' trends and channels.

Quote from achilles28:

Thanks. All i got out of that post was:

"The first and second point 3 of the first trend tell the story.

I suggested that unless a flaw shows up, use that as a criteria for staying in."


The general rule appears to be: wait until break of second point 3 line before exiting.

My contention is that waiting for second point#3 trendline break is sometimes unnecessary for slow (low sloping) trends.

I could be completely wrong. What do you think?