continuation.
The combo of volume, indicators, etc. will help you to be able to go back to the process of just using price annotations and volume ultimately. But first, it is a good idea to have a complete and reinforcing answer sheet.
The first 10 or so times ou do this, you become familiar with how the market operates.
Lets say I did another bar by bar annotation in ET of all the bars and every few bars during the day I posted what was coming up on the next few bars along side the annotation of the immediately prior few bars.
Every person can actually fill in his log sheet of trading mostly in advance just as you did for the drill.
What is the thing that makes this possble?
It is the interconnectedness of the chart data taking items.
And it is the fact that each individual item follows a sequence of happenings all by its self.
It is detective work. Lets read the "judge's" comments again:
"You should probably take those questions and start another thread with Jack. As big as this thread has become it has stayed surprisingly on-topic, but if you get Hershey started it will spiral out of control into an incomprehensible mess. I am not trying to be overly critical of JH (he may have the holy grail for all I know), only that I have never understood any of his posts, and they are the antithesis of "simple profitable method". Do a search and you will find plenty of his reading material to keep you busy for several lifetimes.
Be careful with all of the "tweaking", there are no magic settings and you will drive yourself crazy trying to get an indicator to signal every move perfectly. Adding extra indicators, constantly changing the parameters, and deviating from the rules will kill everything: the simplicity, the profitablility, and the method."
The first paragraph about lifetimes of reading and the spiralling out of control into........
here is the punchline: "an incomprehensible mess." Is where to to take a step back and see something.
"the incomprehensible mess" is where the money making is.
The two things: the interrelationships and the sequencing is what is the key to making money.
You can see that every little bit of every part of the incomprehensible mess is speaking to the listener. No you can't see that. You only get to see it if you look and work.
red volume means that the price is _______.
black volume means that the price is________.
increasing volume bar to bar means price is_______
So you take every item that every thing does and you make a statement that starts with the item and ends with: Means price is_____ and you fill in the blank.
We all know there are only a finite numberof combinations of these things taken five or six at a time.
what if you stop looking at markets as single items of information upon which to act? Then you are not like the judge.
The items for each source of information number the ones you see and the list for price and its annotations. About seven n number and the set ony has one item from each source.
These collective and populr sets of items are called "edges". in the trade. They are "edges" for entries only and entry edges do not have exit corresponding edges. The result is that 90% of pepople screw up as long as they have money tolose ad they learn on thing as they lose money. They learn to fail. Learning repeated failure usually lasts as long as the money a person has.
What is the price of the alternative? It is hours of work and knowing how to work.
Here is the stated comments of the judge on this subject, Technical analysis:
"Be careful with all of the "tweaking", there are no magic settings and you will drive yourself crazy trying to get an indicator to signal every move perfectly. Adding extra indicators, constantly changing the parameters, and deviating from the rules will kill everything: the simplicity, the profitablility, and the method."
I have given you the magic settings for trading the ES.
Every proper indicator signal works for all fractals as well.
Adding extra indicators is what allows you to see and reinforce the price volume relationship if you use the right default of modern times.
So we need to deviate, temporaryily from the simple rules to find out exactly when the rules are working and exactly when they are not working.
We did get that out of the way once and for all. The first part of
The drill does that for you. You did it by using check marks and horizontal ines. Okay you didn't do it you just spiralled down into an incomprehensible mess.
But you always still have the chance to do it and there is an answer sheet posted in another thread where people do this every day. Say by the end of 2008, you do do it. Then you get to look further into making money.
Lets do that right now.
Look at just the places whee the market is in chop. The Simple profitable method does not apply here. So do not use it durig this time.
If you do the chop drill first part on 10 charts for 10 different days, you have learned how to do it as the day proceeeds so you know exactly when the simple proftable method ends when it ends everydy form then on.
Chop starts. the question is whethr or not you can make a lot of money or whether there is no money to be made.
Do this Draw the lateral channel and be sure how volatile it is within no time flat. Simply draw two lateral lines at the bar ends where the check mark is for the end of simple profitable method. One line is at the chck mark the other is opposite the check mark and is as wide as the channel that ended the last trending move. This is a geometric extension laterally. Sell at the top and buy at the bottom until you can start to make check marks again (at the BO of the lateral channel which is known as a HVS (High Volatility Stall).
So you can't do it. But you can watch the chart do it day after day. As you do you get to go through the deja vu of this post.
Say you do this for four months or so. Maybe then one day you can do it all of a sudden. This is what it is like as you spiral up out of an incomprehensible mess into a place where everything is like what others are posting every day in ET, charts, annotations and trades and all. naturally i will show you the chart that has been doen this way today. I may post two of them done by different people. They are already posted in another thread like I a being told to do by the judge.
We still have to deal with the DO NOT TRADE at this time chop.
It is the chop where the lateral lines yo drew are only 5 ticks apart. That is a good limit for not trading lateral chop. BUT if the lateral lines could be tipped up or down a little then the chop is tradable even though i is only 5 ticks wide. Only trade it in the direction of the tippiness.
So now almost every inch of all charts can be traded once you get to undertand how to check and draw horizontal lines. Who teaches you the details of this and where to look? You do and it takes 10 charts of days to get started. Go back and get some days and do it.
the fast stoch gives you entry signals. The longer stochastic gives you exite signals. The MACD gives you entry and exit signals and the volume gives you entry and exit signals and the direction to go in.
The rays on the volume tellyou how much money you can make per minute. It is the market pace.
The stochs tell you the market sentiment. It is long above 50% and short below 50%. The market always has sentiment and pace.
So you can now go to the answer sheets.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=56555&perpage=6&pagenumber=731
