Wow. Thx for that link Nik. Thought I had read all Jacks posts but I guess I missed that one. What an outstanding post. Too bad there is not a link to it on the first page of this journal. Mak said the same thing to BM a few posts back when he suggested just trading extreme volume. I also suggested using a fixed range to cnms as I dont see how you can judge pace unless your charts always look the same and judging pace is what its all about.
Spydertrader's Jack Hershey Futures Trading Journal
- Thread starter Spydertrader
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Been trying to internalize spy's formations more, the stuff I leave off on my charts... So I made a video version of his chart, with identical annotations... Check it out:
Ignore the sim trading window as I can see the future on Spy's chart in my other monitor! :-D That part was just for fun.
right click, save as: link
Ignore the sim trading window as I can see the future on Spy's chart in my other monitor! :-D That part was just for fun.
right click, save as: link
"What if you go on "automatic" at some point? Why? How? when you do you have divorced yourself very far from "money". You are monitoring and in a "groove" with one basic understanding: pace has an inverse relationship with risk.
You have learned that risk varies continually during the market's operation and it is least when price is changing most rapidly." -JH
In my opinion, you should think in terms of "change / continuation" at your chart resolution level, training your brain, while taking the appropriate trades at coarse level.
To me, thinking in terms of "change / continuation" at coarse level doesn't make sense.
When you think at coarse level it's better to think in terms of "entry / exit". At this level you have to both enter and exit conservatively. In order to minimize risk you should try to trade only during the maximum velocity parts of the price cycle, when the prv exceeds a medium pace: enter late and exit early.
Please notice that Jack always advises to be extremely risk averse, and to go to the next step (monitoring resolution and trade size) only after sustained success, confirmed by the size of your account increase.
To me, thinking in terms of "change / continuation" at coarse level doesn't make sense.
When you think at coarse level it's better to think in terms of "entry / exit". At this level you have to both enter and exit conservatively. In order to minimize risk you should try to trade only during the maximum velocity parts of the price cycle, when the prv exceeds a medium pace: enter late and exit early.
Please notice that Jack always advises to be extremely risk averse, and to go to the next step (monitoring resolution and trade size) only after sustained success, confirmed by the size of your account increase.
Quote from Mr_Black:
This is a chart made to show how I spot change signal on Coarse Level....... comments are welcome.....
Reading makosgu's posts of two and a half years ago should give confidence to those of us that feel a little disoriented or even hopeless at this stage of our journey. His will to absorb the information, to overcome his misunderstandings, to recognize that it's up to him to make the effort to get it, and not Jack's task to taylor his discourse to each pupil's needs payed off handsomely eventually. Nice lesson ... 
Quote from nkhoi:
just figure out what the bottom post means, post dated 03-19-05, I am so slow it's beyond scary.
http://elitetrader.com/vb/showthread.php?s=&threadid=46628&perpage=6&pagenumber=4
Quote from cnms2:
Reading makosgu's posts of two and a half years ago should give confidence to those of us that feel a little disoriented or even hopeless at this stage of our journey. His will to absorb the information, to overcome his misunderstandings, to recognize that it's up to him to make the effort to get it, and not Jack's task to taylor his discourse to each pupil's needs payed off handsomely eventually. Nice lesson ...
From Jack's post on that page: GOLDEN!!!
03-19-05 05:43 PM
What I was suggesting is that a person who is starting out goes through a process of learning.
Because a person does not know very much at the beginning, he must trade only when risk is very low. That is the time when the pace of the market is very high.
You asked for some references on a range of items. Probably at this point I should construct a power point type synopsis of the whole nine yards and annotate it with about 150 major references like chapters of specific books.
a beginner does the following:
1. Trades only low risk fastest paced trends. There are three to four of these a day. To do this he watches all day and annotates but only traes fast pace trends.
To do this he needs to know very little:
a. What fast pace means.
b. To enter late as pace picks up.
c. To leave erly as pace begins to slow.
2. A beginner knows he is successful at this because he has increased, through trades, his intial capital three times.
3. A beginner has to practise severe risk management regarding capital. He does two things:
a. Never trades more than 1 contract.
b. When he has three times his initial capital he takes it out.
With this effort the beginner achieves several things that are many times more important than the profits. He has learned:
a. to monitor.
b. to make timely decisions.
c. to manage risk (this is impotant and very different than most all traders ever learn about risk.
d. he learns discipline of only doing what he knows something about.
e. He takes his intial capital out to definitely establish the condition that he cannot loose money in the market.
f. He learns how fast capital in the market is capable of making money (money velocity).
To proceed the best thing to do is to continue without change except for adding another contract. and go through the tripling process once more.
At this point the beginner is making much more money than the average trader. The average trader as we all know is a loosing trader who is only going to be trading for a short period of his life.
So far in chatting with you I am having difficulty with one basic matter. You confuse what I say to serve your wants. Here is an example: If I say a person can only trade fast pace at the beginning, you think that he is trading continuously. These things are mutually exclusive. Under this situation how can I get across to you things that you can build upon.
A beginner's mental state doing the above is very important to consider. He has learned:
1. to do what he knows only and that causes a continuously reinforcing series of laps to be occurring. he recognizes when to be out of the market and when he is in he is doing a sprint. Sprint, rest; sprint rest.
sprints are good for the mind. traces of synapses are getting welded. Traces are being paralleled. A cord or rope of strands of traces is coming into being and, further, there is an allowance for jumping from one trace to another to shorten the length of the path. the third time you see "bleep", you will get to understand more of how your mind works in the place it is operating.
So you are annotating "paces" and doing go/nogo as a consequence of a specific pace value that you have discovered by comparitive analysis using differentials in your mind.
What if you go on "automatic" at some point? Why? How? when you do you have divorced yourself very far from "money". You are monitoring and in a "groove" with one basic understanding: pace has an inverse relationship with risk.
You have learned that risk varies continually during the market's operation and it is least when price is changing most rapidly.
You have learned deeply to not trade when you do not understand what is going on. You have an entry/exit pair that are consistently connected and very close to oneanother in the sequence of market flow. In fact you see by now that they are adjacent in the continuum of possibilities.
What would a person do after earning triple his capital using two contracts?
Jack on stalls
"Point 1 is in old formation. Note volume is sustained until first stall. A stall is bunch of bars same length and placed laterally. This is an odd harmonic and tells you that point 2 is coming up at a distance twice that covered at beginning of stall. You may think this is nonsense and too detailed but it will put you in a calm place"
"Point 1 is in old formation. Note volume is sustained until first stall. A stall is bunch of bars same length and placed laterally. This is an odd harmonic and tells you that point 2 is coming up at a distance twice that covered at beginning of stall. You may think this is nonsense and too detailed but it will put you in a calm place"
Perhaps you didn't note that this was a YM chart. When you check the ES, the pt1 did not come in until later (ie. the XO of the YM that I have annotated in the post). These are subtleties that I am accustomed too. In other words, for me I use the previous FTT that eventually XOs as the PT1. Again, I annotate differently than how things operate here. My point in all this is that you should trust what it is that you do and not what anyone else says. Debriefing eventually builds your confidence that you in fact get the details right. If you look carefully, you see that the actual pt3 was slightly different but from the initial projections I get several things established that I am anticipating. 1. A fairly lengthy short channel, a slower pace (ie. angle of the channel), 3. a view of the next several legs, 4. a window for the next FTT. Why did I choose a short channel and not a LATERAL or PENNANT??? Because of the time of day. Why a less steep channel? Because of the time of day... But in any event, perhaps you didn't see the next two posts I posted after the initial 3 that you mention are OT...
Note what I am looking for
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1359697>
it came 6M earlier then the projection
PERSONALLY, I'll jump the gun and use P1 based on volume and then adjust for P3 if need be as you can see in the following post which followed the above post.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1359791>
I read and understood your post correctly the first time, perhaps you did not like my answer, but then again, I pulled those charts from the beginning of the thread, circa page 183... You can go back and verify for yourselves and you will see similar explanations... I won't even jump to the STR/SQU stuff because that will take too many pages to REexplain...
Regards
MAK
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