As always, thank you. I will review this thoroughly (as well as earlier posts) and work through the log as you've suggested. Your time is appreciated!
SCTlearning from scratch
- Thread starter jack hershey
- Start date
As always, thank you. I will review this thoroughly (as well as earlier posts) and work through the log as you've suggested. Your time is appreciated!
An avocation of mine is reading classic market related texts (Iâm currently wading through John W. Schulz ⦠I wish the guy would have taken a few more opportunities to segment his continuing narrative, LOL).
Several times over the years you have made references to Dodd and Granville and you have credited them, if I understand you correctly, as the source for the completeness of the algorithm you created.
These two names donât appear on your three part timeline for trend monitoring and analysis, circa 2010. Where, exactly, do they fit on the timeline and could you please cite the relevant sources?
-river
the card with holding through internals and some more explanation on bar legs would be great.
also if i can ask for some guidance regarding Dry Up volume:
it seems the last couple of weeks volume has been significantly lacking throughout the day, this manifests itself in a ton of lengthy laterals and some vol/price spikes with no follow through.i look at dry up levels as the bottom 30% of volume bars in the last 20 days(and i recalculate every day with 10% being VDU , 20% being DU,20% low,20% medium,20%high,10% extreme)
.some days volume is high and the moves are very pronounced that it's a piece of cake to make a ton of money(see 4/28) but at these times of dry up volume it is very hard for me to distinguish dominant volume from non dominant volume.
i have tried not trading at all in those times but then there is a big volume spike at some point and i go in only to see volume drying up again.
i understand this might be a little departure from the main topic but since we are talking about volume leading price as a theme it might be helpfull.
thank you.
My time line stopped when I entered the trading world.
chronologically a lot of people worked more or less independently during the time period you mention. Sort of like islands that had no interisland communications.
As the decades go by Wall St. and Main St. both discover things going on that are out of the range of their perspectives. It is a continuing climate of "NOT knowing that they could know".
In 1959, time ran an article in its financial section about the earnings of an amateur. this caused the American Research Council to publish a "proof" of the type Wall St and assorted "airheads " are always demanding. Later a more public edition was created. I have the original "to the trade" first edition. your reference is "How I made 2,000,000 in the Stock Market" by Nicolas Darvas, 1960. The book begins in 1952.
In 1958, Granville began to work as a broker, Soon he was doing a newsletter and 12 years later his first book "the bible" came out. In 1976, he rewrote it into the "new" edition. He stated, implicitly, how market variables worked in cycles.
Starting in October of 1962, WJO'N began to trade withh 500 bucks and 27 months later and up 20 fold he cashed in his stocks and began his IBD empire.
In those times, everything was done by hand and the WSJ had a last page with the the NYSE on one side and the ASE on part of the other. I saved them and racked the pages by the quarter between two laths using wing nuts. (I could back plot a stock in no time that way.)
All of this was well before the PC. I did punched cards daily since I had IBM mainframes at my disposal. They were so crummy; I switched to doing bronwnlines and blueprints. Later, I printed blank chart(11x17)s in 500 unit lots using a local print shop.
At this time different people used different market cycles.
This was in the vacuum tube era of mainframes. About 17 instructions had been invented by 5 years into my trading career.
I was trading a 6 to 8 day trend where a range was 20%. So I rotated money through stocks in streams.
The head winds were extreme at that time. Brokers and relatives took exception to my trading behavior. As you read darvas, WJO'N and Granville, you see a whole NEW ballgame was coming into the picture. No one liked it and no one believed it.
On each isolated island, each person could see the markets provided a way to make money from the flow of information. Darvas explains best how he interacted with those on Wall St. He regarded them as bullshitters to the core. All he wanted were telegrams that contained information. Granville was analyzing the market from the viepoint of the variables and corrolations. WJO"N saw the business opportunity of supplying valid related information.
The adult srvice providers to the Poughkeepsie YMCA met for work weekends and inevitably, they all became traders. Poughkeepsie became a behive and MLPFB's office drew SE attention as we all had "criminal profiles". You know, all engineers doing what cannot be done in terms of making money (technically).
Granville wrote the news, Darvas did the dancing and make tons of money trading using dancing money. WJO'N built and empire. and finally the SEC determined I "couldn't know that many different people".
From the late 50's smart trading began. information delivery systems were created. A few decades later the PC was invented.
For me, I just trucked along building tools. A blank graph sheet taught me the V to P relationship. So I saw "the Pattern". I created "scoring" with three variables to clock the progreass of the market cycles. I used the charts to do the geometry of the markets. so I could "frontrun" smart money and be pushed.
Finally, the PC made it easy to be "explicit" and use science and math to completely define the system of operation of the markets.
The above contributors, were people who actually lived through using market information to be definitive. They worked on how the market works and what is needed to get and use the market information.
The SEC found out I could trade any instrument and I couldn't know all those people as the way it worked. But the SEC never got around to understanding how the system of operation of the markets works. In this thread I put up all the pieces and how all the pieces work together as a system. I post my daily routine and I do not post my prints since no one can read them as yet.
I appreciate the detail on Granville. (I had misinterpreted your previous references to "Dodd and Granville" as occuring somewhere on your timeline in the 1930's.) Is the "Dodd" you refer to David Dodd of "Security Analysis"?
Once again, thank you for sharing your contributions.
Your timeline mentioned above is quite robust due in no small part to an abunance of published material by the respective contributors. The only market related material you have published, as best as I can determine, are the booklets "Building Minds for Building Wealth" and "Channels for Building Wealth". Have you considered a formal publication of your understanding of the system of operation of the markets?
-river
Hi:
You bring up many sensible points. And I will answer your concerns with a littany of solutions that I use.
The set of rainbow rays you use on the independent variable is a very helpful tool. I feel it is what replaces risk manangement in CW type trading. Let me explain. The analysis of the independent variable lead to a daily cycle understanding. the math of the daily curve of volume, roughly, resembles a catenary. Part of a 4th degree polynomial also is a good descriptor.
Over fifty years ago all of this was determined. Markets do not change over time it turns out. As river enquireded, at that time many independent islands of discovery were occurring. Later, Harris categorized a set of about 32 ways inwhich people used money to make money inmarkets. Different types of people get benefits form understanding this assortment of mentalities. Our category is usally described as parasitic technical frontrunners of traditional investors (big money, etc).
By analyzing volume, we parasites get a lot of advantages. Two of them are when money can be made with high velocity and when there is no money making opportunity. Granville implicitely stated how the detection system could be used in volume which leads price. It is common in system variables for the independent variable to cause the dependent variable to perform. "Frontrunning" in market industry and regulator parlance is most often associated with "insider information" and usually not thought of in terms of "advantage" over others. By using the independent variable's leading characteristic a person gains an advantage.
PVT is built of this advantage. Stocks cycle. as they cycle in a paradigm, A person can use the advantage to "frontrun" the slower less mentally astute investors and all regulators. In stocks the independent variable is telegraphed about 1 and 1/2 hours a head of the dependent variable. consider Prica Action traders; they are not nimble nor to they consider the leading indicator of price. In ET a leading dependent variable PA person, notes that the learning non PA trading follow their leaders and continually "whine" about never getting anything straight as do PA type traders.
By knowing Granville's admonitions, a person can "frontrun". An instrument remains dead in the water for long periods of time. This is when the intermediate term is inactive. By knowing this a person does not put money into such an instrument.
When it comes time to participate in a given instrument, then and only then deos a person begin to participate. Mt volume terms for this is BreakOut. Te portion of volume that is found associated with the dead period is the first two levels of volume: DU and VDU. This level takes a whole day to reach 25% of the 65 day average volume.
When an instrument is going to become dynamic, it is baest to frontrun the CW type people. the reason is this: these people are the ones whose behavior helps experts make money. The CW type people "push" the expert traders. CW persons never become expert. they can't because they study and use only the dependent variable.
when a dynemaic part of a cycle begins, I refer to it as "first rising volume". The DU and VDU volume is accomplished in the early am of RTH. that is, 0.25% of the 65 day average is clocked in the first 1 and 1/2 hours of the day.
FRV is about 65% of the 65 day average.
as expected the exit of a profit taking segment is also "anticipated by using volume. Peaking volume drops below 180% of the 65 day average and an expert gets out.
Of course to make matters much better, the expert also enhances this timing by doing crossover trading by using the PM of the HS of the paradigm. the PM is velocity. So a crossove of velocities dictates leaving an OWNED instrument to go into a "ripe" new instrument.
The consequence is a trading money velocity of capital growth of about 7 doublings in a year. read WJO'N to understand this money velocity; he created 20 times his initial capital within 27 months by compounding his position trading profit segments in around 1962 on ward. Darvas wrote his book for publication in 1960.
So the same magic applies intraday. It is equally unbelievable to a person who is a CW type.
Each day has a daily catenary. When it is followed, you make about three times the daily range of the market. As in stock instruments, you have to make 10% and compound it seven times to double your capital. So in commodities trading, it may take a couple of days to double your capital.
Lets deal with the risk part of intraday trading using volume to provide trading signals. Use a 30 minute commodities chart to depict the dailt catenary. when the commodity is in DU or VDU, sideline, please. this removes risk. The why is this: if an instrument is dead in the water, then you cannot make any money.
I made an invention that keeps this always available to you. It is called ProRata Vulume (PRV). Add it to you platform highlting capability. get the mathe from the Hershey thread that has all the mathe for all popular platforms. what you "SEE" is a shadow of the final volume throughout the formation of that bar. this makes you have a leading indicator of a leading indicator. So you can sideline knowing nothing will be happening in the near future. Do housekeeping and logging during that time.
As you sw for making money in stocks, I created a one pager to do that. I had to because everyone said you have to say a system on one page or it is bullshit. A very huorous test, of course, but why fight city hall if it is so stupid to have that belief.
so the first solution to a concern of yours is to use the catenary shape to detect irrationality on the part of the CW financial world. The rule i this: you need these people to "push" your frontrunning of them. If they are not there, then sideline until the PRV tells you they are showing up to play for you. this is a very cool solution; this massive aggrigation of dumbies is needed to serve us.
Lets get the momnet on the five minute chart you mentioned handled. you say you see a higher volume bar beginning (you must have PRV, I figger). But then it dies soon and nothing happens.
I better post this since ET will destroy it automatically
whew!! it posted.
as I mentioned you see a possible entry on increasing volume but it dies. From now on already be in the market while waiting. you can trust tha on very low volume nothing is going to happen.
do this getting in ONLY WHEN THE 30 MIN VOLUME OVER ALL IS IN PART OF THE DAY WHERE YOU CAN BE MAKING MONEY.
stay out during midday. as midday comes to a close (bar 45) then sneak in.
YOU MUST SNEAK IN ON THE CORRET SIDE OF THE MARKET.
Assure tis by using the sentiment of the 30 min forming bar, the pink and the gold and the doji statii. this assures a nice beginning of the last part of the catenary of the day as shown on the 30 minute.
notice PA traders are fucked on all of this. Most are losers as they tell us. this is one reason why: they do not use volume for signals at the correct time when statistically siginificant signals of ANY kind may appear.
Lets say you are an intermidiatel evel trader (you are, in my opinion). then you want to secure a multiple of the daily range. The first multiple is done by 10:30 NY time. then later the size of the range may grow BUT by then you are doing one or more traverses.
Let me provide you with more neat restrictions for getting into a profit segment.
1. Only take a trade IF the three arrows line up: the signal arrow, the 5 min bar arrow; and the thirty minute bar arrow. I show these as "blobs" on my charts and inconjuction with the blue doji line every 30 minutes. Thus having theblob is a further restriction. Fine it on the Move reversal sheet (a one pager) in the correct column.
2. always for now use the BM and the rtl on the 5 min chart. As you do you get another easement. If the five min signal and the faive min sentiment are the same, the enter early re a BOT1 or a BM rev. See today's chart.for examples.
3. If a situation is exclusive of 1 and 2, then you must label it "sideline "for now. But if you have a sideline or an early exit, then after that you CAN enter any time you have 1. above on any subsequent bar (If the catenary says so ).
Just this stuff makes you a millionaire fairly soon. Have fun.
as I mentioned you see a possible entry on increasing volume but it dies. From now on already be in the market while waiting. you can trust tha on very low volume nothing is going to happen.
do this getting in ONLY WHEN THE 30 MIN VOLUME OVER ALL IS IN PART OF THE DAY WHERE YOU CAN BE MAKING MONEY.
stay out during midday. as midday comes to a close (bar 45) then sneak in.
YOU MUST SNEAK IN ON THE CORRET SIDE OF THE MARKET.
Assure tis by using the sentiment of the 30 min forming bar, the pink and the gold and the doji statii. this assures a nice beginning of the last part of the catenary of the day as shown on the 30 minute.
notice PA traders are fucked on all of this. Most are losers as they tell us. this is one reason why: they do not use volume for signals at the correct time when statistically siginificant signals of ANY kind may appear.
Lets say you are an intermidiatel evel trader (you are, in my opinion). then you want to secure a multiple of the daily range. The first multiple is done by 10:30 NY time. then later the size of the range may grow BUT by then you are doing one or more traverses.
Let me provide you with more neat restrictions for getting into a profit segment.
1. Only take a trade IF the three arrows line up: the signal arrow, the 5 min bar arrow; and the thirty minute bar arrow. I show these as "blobs" on my charts and inconjuction with the blue doji line every 30 minutes. Thus having theblob is a further restriction. Fine it on the Move reversal sheet (a one pager) in the correct column.
2. always for now use the BM and the rtl on the 5 min chart. As you do you get another easement. If the five min signal and the faive min sentiment are the same, the enter early re a BOT1 or a BM rev. See today's chart.for examples.
3. If a situation is exclusive of 1 and 2, then you must label it "sideline "for now. But if you have a sideline or an early exit, then after that you CAN enter any time you have 1. above on any subsequent bar (If the catenary says so ).
Just this stuff makes you a millionaire fairly soon. Have fun.
ugh.
I forgot some charts.
I forgot some charts.
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Liz and I are always tossing around what to do with me. Since I'm on morphine nowadays we don't think about anything big or spreading over a long time line. My ALP is through the roof so we know a lot of repair work is going on somewhere.
Here are some titles I was commanded to write down:
"Intro to making money"
"making money for non dummies." and a wingding named: " guidebook introduction for making money logically."
I've had a writer's agreement with McGraw-Hill for over 60 years (non exclusive)
And I have been assigned Covell's ex editor's boss at Prentice-Hall. (A five book suite).
Your focussed suggestion is much better for fitting into the slot available; something like "The System of Operation of all Markets" (including full proofs.)
A good reality check for me was looking at the copious outlining; looking at the stored text (it has to be culled by a factor of five) and checking out the illustrations.
The outlines are terrific; the text is a cut and paste then a complete electronic retype then four cycles of editing the electronic retyped text; the illustrations are a complete screwup since I counted on Genesis to redo the Trade Navigator data platform. As years have passed, I now know TN will never be properly repaired as promised. So I am SOL on all illustrations as far as overfitting automatic highlighting and annotations on properly presented market charts. I will divide the illustration requirements into two classes: the "parts list" illustrations (I have six of each for every part all done as part of my work habits.) and "market performance" illustrations. The "parts list llustrations can be handled as is; they are just graphics. I will have to do a "workaround" on the integration of the parts in actual markets since TN is still screwed up in terms of science and math, i. e., "all market system applications". All the system equations can be presented textually. Appying the equations to improperly processed data presentations (charts) doesn't work on TN because of the obvious imcompatibility caused by non relativity always being the "elephant" in the TN room.
For the reader's understanding, I know I can generate super system application drawings.. I know not to expect Pekelo and drownpruf types to understand science and math or the trading prints of such applications by experts. I know financial writers cannot deal in the science and math of the market's system of operation, either. My orientation is to address the needs of potential traders whose minds have not been irreversibly damaged by inccompatible belief systems.
There are many systems of trading that work for traders. The ystem og oeration of the market can be used by all of these people. they can come to understand how well their trading systems integrate with the market's system of operation.
To document the system all I have to do is lay the foundation, add all the building blocks and then show the structure, the proceess within the struture and the results of the process working within the structure. I keep my records according to this arrangement and my records are complete.
One of the books in the five book suite is the trader counterpart of the above book you suggest. In that exposition, I dealt with the mind's system of operation. for me computers are just extensions of the human mind. Computers perform the dog work of trading many times faster that the system of operation of the market. As a consequence computers can step in an replace the human element in trading. ATS's do this. Thus, if the system of operation of the market is placed within a computer, then superimposing the trader's strategy upon that, the result is an ATS that pipes money to the trader's account.
For me, I chatted with the Genesis staff to reach an understanding of processing data. To some extent they did fix "roll overs" for multiquarter math applied to markets and they could understand connecting RTH's to each other properly. But they apparently are not going to keep up with their competition intra RTH. As a consequence, their system of filters, functions, expressions in functions and integrating expressions using Boolean Algebra does not work at all in their incomplete system.
Well... good luck with the repair!
With the time and energy you have remaining, where would you still like to go with this thread? Which topics still need to be covered? What can those who already participated in this thread do to help?
Action... action... time is running out!
By the way... why do you insist on using TN? With all the money you made you could have hired a programmer to develop what you need... a real one, not like the ones our friend from the east hires.
Also the guys from the JH software thread could have helped with Ninjatrader, Sierra Charts, Multicharts and other applications. So what do you like about TN which none of the other platforms have?