Herein lies the rub - can it be quantitatively defined as to what is indeed the 'correct' data? That may be exactly what I was digging for.
Spydertrader's Jack Hershey Futures Trading Journal
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Herein lies the rub - can it be quantitatively defined as to what is indeed the 'correct' data? That may be exactly what I was digging for.
What you say in that thread is of course true... But what I think a lot of people get stuck on is they see a "change" signal and don't know which fractal it applies to (forest, trees, leaves, etc). A misapplied change signal can surely make things feel a lot more like gambling than like certainty... and speaking from experience, it can lead to frenzied fits of overtrading
Most certainly. However, the correct (sufficient) data set changes for each context. This Post provides the correct 'action points' as Pr0crast pointed out previously based on one's resolution level. At the Forest level, a sufficient data set really never goes far beyond Price and Volume (on a PRV basis). since one only takes action on a Point Three or Right Trend line Break. The entire rest of the day one can either kick back and relax, or begin to learn to spot FTT's correctly. FTT's (on the Tree Level Now) involve ES Price and Volume - in addition to YM price and Volume based on our current tool set. As we move forward (and add additional tools) the sufficient data sets one needs will change based on the resolution level used to monitor continuation or change. Remaining on the Forest / Tree Resolution level (and using the finer resolution tools) allows the beginning trader to more correctly catch change closer to the exact tic, as well as, increase profits from 'flaws' as they appear.
Two 'cookbook' type items defining 'sufficient data sets' for you:
1. When price is on the ES left trend line, monitor the YM
2. During CCC, monitor PRV Levels of ES Volume.
The rest, you'll begin to see over time.
- Spydertrader
Quote from Pr0crast:
What you say in that thread is of course true... But what I think a lot of people get stuck on is they see a "change" signal and don't know which fractal it applies to (forest, trees, leaves, etc). A misapplied change signal can surely make things feel a lot more like gambling than like certainty... and speaking from experience, it can lead to frenzied fits of overtrading
Failing to monitor on the 'correct' resolution level based on one's experience most definitely contributes to feelings of frustration and often leads to over-zealous trading. Maintaining a correct vantage point, as you have pointed out, allows the trader to relax and experience the feelings of comfort. Zooming in (going to view bar to bar transitions at an area of 'action') requires one to always keep in mind the need to return to the higher resolution level as soon as the market signals continuation. Once a trader returns to their normal resolution level, the process begins again as Price approaches the next 'action point.'
- Spydertrader
Quote from mephistoII:
A short while back, Mak made a comment that kinda minimized the importance of gaussians - it seemed almost blasphemous to me, considering my areas of concentration
Once one makes it to intra-bar changes with respect to the resolution level (bugs) monitored, Gaussians no longer play as an important role. However, if one cannot 'see' the Forest or the Trees, one cannot expect to go and find bugs.
- Spydertrader
These are really some excellent explanations, Spyder - thank you so much! I intend to dissect them until only the frog juice remains.
So that there is no misunderstanding for anyone following along - I have been mumbling about differences between the data feeds of IB and Esignal, because that is where I feel I can lose sight of the Forest. If I'm seeing a bunch of black vol bars on my charts, when you have red bars, is it not feasible that I may 'draw' an incorrect gaussian formation, and thus incorrectly analyze what price is 'really' doing. As we know, a tick variation per bar can have an impact on what one 'thinks' he is seeing - colorwise, that is.
Final question - does the above paragraph smack of a flaw in my basic interpretation of the gaussians. I always try to fully analyze overall price movement within any series of bars (price/volume) before assigning a 'color'. Should I maybe throw 'colors' out the window for now, and just find a different way to personally annotate the dom and non-dom traverses within the primary channel, while observing realtime?
thanks, guys ... wish I was better equipped for conveying my ponderings
So that there is no misunderstanding for anyone following along - I have been mumbling about differences between the data feeds of IB and Esignal, because that is where I feel I can lose sight of the Forest. If I'm seeing a bunch of black vol bars on my charts, when you have red bars, is it not feasible that I may 'draw' an incorrect gaussian formation, and thus incorrectly analyze what price is 'really' doing. As we know, a tick variation per bar can have an impact on what one 'thinks' he is seeing - colorwise, that is.
Final question - does the above paragraph smack of a flaw in my basic interpretation of the gaussians. I always try to fully analyze overall price movement within any series of bars (price/volume) before assigning a 'color'. Should I maybe throw 'colors' out the window for now, and just find a different way to personally annotate the dom and non-dom traverses within the primary channel, while observing realtime?
thanks, guys ... wish I was better equipped for conveying my ponderings
Try this:
You have an increasing Red Gaussian until price fails to head any lower (within the current Forest down channel). You have an increasing Black Gaussian until price fails to head any higher (within the current Forest up channel). You have a decreasing Red Gaussian until Price fails to head lower in the current Forest up channel. You have a decreasing Black Gaussian until price fails to head higher within the current Forest down channel. At some of these change points (increasing to decreasing or decreasing to increasing), you should find FBO's. At others, you should find FTT's. If you find you have made an error with your gaussians, change them. If you find you have missed a channel due to your revised Gaussians, add it.
See what you find at the Forest Level using the above outline. later, use the same exercise for the 'Trees'.
- Spydertrader
You have an increasing Red Gaussian until price fails to head any lower (within the current Forest down channel). You have an increasing Black Gaussian until price fails to head any higher (within the current Forest up channel). You have a decreasing Red Gaussian until Price fails to head lower in the current Forest up channel. You have a decreasing Black Gaussian until price fails to head higher within the current Forest down channel. At some of these change points (increasing to decreasing or decreasing to increasing), you should find FBO's. At others, you should find FTT's. If you find you have made an error with your gaussians, change them. If you find you have missed a channel due to your revised Gaussians, add it.
See what you find at the Forest Level using the above outline. later, use the same exercise for the 'Trees'.
- Spydertrader
Mephisto and Spyder-- nice work. You just cleared up the single biggest issue that beginners have when learning gaussians.
Of all the people I have talked to, the single largest problem people have when learning gaussians is that they don't make the connection between price and volume as you have just described. One tick in either direction that alters the color of a volume bar should not put anyone's knickers in a twist, yet it always does. People get caught up in trying to decipher gaussians by looking ONLY at the volume bars. Gaussians are not arbitrary lines that are drawn based on volume bar colors and heights, they are representations of the dominant and nondominant traverses of PRICE that occur within a given operating channel. The volume bar colors and heights happen to be very closely correlated to this, but not always given the manner in which 5 minute bars don't always exactly glide with the critical points in a channel (which may happen intrabar)...
Of all the people I have talked to, the single largest problem people have when learning gaussians is that they don't make the connection between price and volume as you have just described. One tick in either direction that alters the color of a volume bar should not put anyone's knickers in a twist, yet it always does. People get caught up in trying to decipher gaussians by looking ONLY at the volume bars. Gaussians are not arbitrary lines that are drawn based on volume bar colors and heights, they are representations of the dominant and nondominant traverses of PRICE that occur within a given operating channel. The volume bar colors and heights happen to be very closely correlated to this, but not always given the manner in which 5 minute bars don't always exactly glide with the critical points in a channel (which may happen intrabar)...
Thanks again, Spyder. All this above has indeed identified some areas of my personal study in which I need to expend some extra effort. Don't imagine that's gonna hurt me none
Have a good one ...
Have a good one ...
And my thanks to you also, PrOcrast! Your always lucid discussions are, I'm sure, well received by many - and more specifically, a big help here! Cheers! ... (and green beer)
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