Spydertrader's Jack Hershey Futures Trading Journal
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DKM - RE: Your Monitoring Notes
Are you making consistent successful realtime trades?
I ask this question because I was having trouble integrating the YM graphs with my ES trades and now trade just from the ES chart and ES Volume. When I was using the YM I was making trading decisions based on my false interpretation of the YM chart.
I do understand that the YM is supposed to be used at
"critical points" but identifying the "critical points" was sometimes difficult for me.
In your log notes there is alot that you are aware of and was wondering how you trade/handle the conflicting signals that OCCUR everday.
Thanks for posting your log !
Are you making consistent successful realtime trades?
I ask this question because I was having trouble integrating the YM graphs with my ES trades and now trade just from the ES chart and ES Volume. When I was using the YM I was making trading decisions based on my false interpretation of the YM chart.
I do understand that the YM is supposed to be used at
"critical points" but identifying the "critical points" was sometimes difficult for me.
In your log notes there is alot that you are aware of and was wondering how you trade/handle the conflicting signals that OCCUR everday.
Thanks for posting your log !
The entire methodology (with rare exception) describes a binary system. Interpretation has no place in a binary system. Should you find yourself using interpretation, then you,
A. Find yourself using an incorrect mind set, or
B. Have attempted to use an incorrect tool to obtain the correct piece of data.
Start with, critical points = Left Left Trend Line or Right Trend Line
The exercise which causes one to, 'be aware of a lot' results from "sweeping the data sets" as frequently (or as infrequently) as required by the current market context (and one's current Level of Resolution). In other words, one moves onto the next tool when a previous tool provides no information or signal. One stops seeking additional information once one locates a sufficient data set. In such an environment, one cannot receive conflicting signals.
It is important to differentiate between, missing a signal given by the market, and not having the ability to see a signal (due to not using a tool, or trading from a more coarse Resolution Level). If one trades using the YM and the ES (Price and Volume) only, and one does not use STR / SQU for signals, then a trader should find no concern over not seeing a Squeeze or a Stretch off the tool not used. However, if a trader does use the STR / SQU and failed to look over at the tool when both the YM and the ES sat on their respective left trend lines, then the trader has an entirely different obstacle to their success. By the same token, a Forest Level TRader (only Point Threes) checking out the STR / SQU while ES Price and Volume sit mid channel, has also not followed directions as prescribed. Such a trader would most definitely receive an erroneous signal, and therefore determine, the market provides conflicting signals throughout the day.
The entire Journal has focused around the premise that the market is always right. As learning traders, we must strive to obtain a symbiotic relationship with this market - whereby the market speaks, and we listen. In such an environment as this, one must avoid falling into the trap of 'interpretation' and simply learn to differentiate between continuation and change. While the path to understanding the often subtle differences between the two market modes may be filled with challenges, the overall premise remains one of simplicity. If one mode exists, in this binary paradigm, the other market mode cannot co-exist at the same point in time. In other words, if I flip a coin and it comes up 'heads,' it cannot also at the same time, be 'tails.' Even if the coin landed on its side, you'd have neither heads nor tails.
Good Trading to you all.
- Spydertrader
I am only monitoring at the moment, although I do make a note of the bid/ask at the time of the decision. I plan to move on to the simulator as soon as it is appropriate and I will include my trades at that point. When I am able to produce consistent profits on the sim, I will move on to real trades. I now appreciate that I started trading on the sim far too early. Poor results highlighted my need for a greater understanding of the tools and the methodology presented so far. My return to monitoring has improved my awareness significantly. I hope that you are finding the notes useful.
From another thread ....
My orientation is to get my reversal at the best time so I am doing market orders twice as large as my position of holding.
The wall becomes important as you do more trades a day. At first few trades are done to simply eminate risk. (4 to & a day). Then are you trade the traverses of the ealrier leg only trading, you get to 15 or so trades a day.
The wal is appearing more than 15 times a day BUT if you are just doing turns at the end of trend traveres , you only use the wall then.
It value is about 2 tickis more at each end of a traverse. since 15 are on the able and reversing is done, this adds up to an additional 15 points a day.
Now let's bag though additional 15 points. Market orders are used.
because I sweep data sets, I use an additional picture of the DOM and it is easy to also add the Wall to the price chart.
The Wall showing on the price chart is very relaxing. Price is approaching it and your price annotations for the coming end of the traverse are there as well. It is a nice picture since you see the reversal coming up in advance.
To be precise, it is handy to also have the DOM stalactites showning. these ten values can be seen at a glance and the wall sticks out like a sore thumb. On my stalactites it is the only full length stalactite. It sets the magntude of people that are trying and planning on getting fills at specifc prices.
Think of all the people who picked a price and it is the largest set of orders at any price on the DOM. There are usually several large oredrs involved. You may be aware that some people do not get fills and then the market "goes against them" and they often do not even make a profit later on since the market has moved on.
Insert is way ahead of me on this with his supperior ways of trading and he is, of course, reading this to prove he is better. Good work insert.
The wall is caused by an overlaod of limit orders at the same place. So it is persistently there and insurpassable. At the same time, you will notice that the ratio of DOM sides is changing and the side opposite the wall total is not as large as the wall side.
Notice how the Best level opposite the wall gets eaten way.
I reverse at this time to let price walk my position away from the wall as the next traverse begins in the opposite direction.
If you are watching the Stretch/Squeeze you will see that this leading signal has occurred as well and it is showing the smart money is walking away from the wall too.
The combination of price annotations (channels on three levels), the wall on price chart, and the stalactites makes reversals fairly efficient. You also have the YM leading the ES on turns.
By adding shells of data to the core data, trading first becomes effective (making the turns on market orders), then as experience gives you skills you get to be efficient.
It is effective to do 15 trades a day on traverses by reversing with market orders. then you use S/S and Walls to become efficient by picking off 2 ticks more at the end of each traverse. 2 ticks plus 2 ticks is a point each on fifteen reversals a day.
If the contract margin is 500 dollars, then 15 points per unit of capital day means that you can double down within the day about two thirds through the day. This is a good situation since the settlement is about 1:15 everyday for Mutual funds and quant driven money which we front run. So it means that the daily value is 20 points or so a day.
The thread is about people who make the wall for those of us who use the wall to make money. FIFO, etc.,is a topic that does not occur to me in any way. Why would I want to be in a line 1 tick away from where price changes on turns? I only show on T&S taking a trade opposite the minority who are being eaten away as their limit orders on the wrong side of the market take them to the sidelines on market fills of people going my way on the right side of the market.
Long ago when rotary dials held sway, there was less info. I luckily has a bunch of coattailers following me. It feels the same today as the wall deflects the price direction on a turn. a lot of people come in as shown by the DOM being eaten after the turn from the wall.
My orientation is to get my reversal at the best time so I am doing market orders twice as large as my position of holding.
The wall becomes important as you do more trades a day. At first few trades are done to simply eminate risk. (4 to & a day). Then are you trade the traverses of the ealrier leg only trading, you get to 15 or so trades a day.
The wal is appearing more than 15 times a day BUT if you are just doing turns at the end of trend traveres , you only use the wall then.
It value is about 2 tickis more at each end of a traverse. since 15 are on the able and reversing is done, this adds up to an additional 15 points a day.
Now let's bag though additional 15 points. Market orders are used.
because I sweep data sets, I use an additional picture of the DOM and it is easy to also add the Wall to the price chart.
The Wall showing on the price chart is very relaxing. Price is approaching it and your price annotations for the coming end of the traverse are there as well. It is a nice picture since you see the reversal coming up in advance.
To be precise, it is handy to also have the DOM stalactites showning. these ten values can be seen at a glance and the wall sticks out like a sore thumb. On my stalactites it is the only full length stalactite. It sets the magntude of people that are trying and planning on getting fills at specifc prices.
Think of all the people who picked a price and it is the largest set of orders at any price on the DOM. There are usually several large oredrs involved. You may be aware that some people do not get fills and then the market "goes against them" and they often do not even make a profit later on since the market has moved on.
Insert is way ahead of me on this with his supperior ways of trading and he is, of course, reading this to prove he is better. Good work insert.
The wall is caused by an overlaod of limit orders at the same place. So it is persistently there and insurpassable. At the same time, you will notice that the ratio of DOM sides is changing and the side opposite the wall total is not as large as the wall side.
Notice how the Best level opposite the wall gets eaten way.
I reverse at this time to let price walk my position away from the wall as the next traverse begins in the opposite direction.
If you are watching the Stretch/Squeeze you will see that this leading signal has occurred as well and it is showing the smart money is walking away from the wall too.
The combination of price annotations (channels on three levels), the wall on price chart, and the stalactites makes reversals fairly efficient. You also have the YM leading the ES on turns.
By adding shells of data to the core data, trading first becomes effective (making the turns on market orders), then as experience gives you skills you get to be efficient.
It is effective to do 15 trades a day on traverses by reversing with market orders. then you use S/S and Walls to become efficient by picking off 2 ticks more at the end of each traverse. 2 ticks plus 2 ticks is a point each on fifteen reversals a day.
If the contract margin is 500 dollars, then 15 points per unit of capital day means that you can double down within the day about two thirds through the day. This is a good situation since the settlement is about 1:15 everyday for Mutual funds and quant driven money which we front run. So it means that the daily value is 20 points or so a day.
The thread is about people who make the wall for those of us who use the wall to make money. FIFO, etc.,is a topic that does not occur to me in any way. Why would I want to be in a line 1 tick away from where price changes on turns? I only show on T&S taking a trade opposite the minority who are being eaten away as their limit orders on the wrong side of the market take them to the sidelines on market fills of people going my way on the right side of the market.
Long ago when rotary dials held sway, there was less info. I luckily has a bunch of coattailers following me. It feels the same today as the wall deflects the price direction on a turn. a lot of people come in as shown by the DOM being eaten after the turn from the wall.
Well, that quote of Jack's comes from another pleasant thread, typical of ET.
This is just an observation: I asked Jack a straightforward, on-topic question about harmonics a few pages back. He either does not see it or ignores it. But he does get embroiled with people who don't want to learn from him. Just an observation, that's all.
Spyder your binary post is excellent and reassuring. What are the rare exceptions where it is not binary? (I guess low volume, no signal => brackets / coin toss.)
(It's worth repeating: the finer tools do not create different signals but rather they help you finesse the signals already / about to be showing at the coarse level. This is great to know if you trade other markets without all the fine level tools.)
This is just an observation: I asked Jack a straightforward, on-topic question about harmonics a few pages back. He either does not see it or ignores it. But he does get embroiled with people who don't want to learn from him. Just an observation, that's all.
Spyder your binary post is excellent and reassuring. What are the rare exceptions where it is not binary? (I guess low volume, no signal => brackets / coin toss.)
(It's worth repeating: the finer tools do not create different signals but rather they help you finesse the signals already / about to be showing at the coarse level. This is great to know if you trade other markets without all the fine level tools.)
Quote from PointOne:
This is just an observation: I asked Jack a straightforward, on-topic question about harmonics a few pages back. He either does not see it or ignores it. But he does get embroiled with people who don't want to learn from him. Just an observation, that's all.
I spoke with Jack briefly recently with respect to the harmonics issue. He interpreted the two views not as 'seeing' things differently, but more akin to travelling different paths to the same destination. Whichever view helps the individual trader profit best is the 'view' they should use. We didn't delve into specifics at the time (other priorities held precedence), but I plan to discuss this with him at great length in the near future - not from the standpoint of 'right or wrong,' but for my own education (to 'see' the market through his eyes, rather than, my own).
With regard to Jack's penchant for involving himself in discussions with people who have little desire to learn from Jack's experience, old habits are hard to break. Jack still tosses out life preservers in the hope someone new might avoid the "95% failure rate" resulting from travelling the road of conventional orthodoxy. I believe you'll begin to see less 'embroiling' as time moves closer to the end of 2007.
First let me clarify my view here. The market very well may be binary, but my thought processes don't view it as such. For example, when Volume (compared to the previous bar) falls in the 40% to 60% range, I begin to 'think' flaw formation, but just because the volume levels fall into the 'flaw range' doesn't mean the market will wind up creating a flaw. I might be leaning (mentally) in the direction of a flaw, and may have even traded in such a direction, but I still need to ask myself the questions, "What do I need ........." in order to 'sweep' the data sets for "what must come next. In other words, I view 90% of the previous bar volume as a 90% chance (or I lean in that direction) that the market is showing FTT, and a 10% (Yes, I'm exaggerating here) Volume level as having a 10% chance (or I lean in that direction) of the market showing an FTT. The gradient part comes as Volume falls in between.
Quote from PointOne:
(It's worth repeating: the finer tools do not create different signals but rather they help you finesse the signals already / about to be showing at the coarse level. This is great to know if you trade other markets without all the fine level tools.)
Bingo. The finer tools don't create profits. The finer tools allow the trader to optimize their returns.
- Spydertrader
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