Spydertrader's Jack Hershey Futures Trading Journal

[bundlemaker]

Ezzy, I've now had enough pm's on this subject to believe it's worth posting the following for those of you trading markets with no volume data or questionable volume data.

With the proper platform, you can create a histogram of tick count. It can be surprisingly similar to actual volume, in terms of the shape of the histogram, which is really mostly what we care about.

This idea was first proposed to me by Tom Williams, who traded stocks many years ago with a syndicate. He stated, emphatically, that he PREFERRED using tick volume over "actual volume" in any market other than fully electronic. His reason was simply that exchanges (and those that control the exchanges) were prone to tinker with volume data, such was it so important to their edges.

Tick volume is simply counting up the number of times price moves from one level to another. This is particularly useful in forex, where no volume whatsoever is even reported (or can be).

 

[Ezzy]

Quote from bundlemaker:
Tick volume is simply counting up the number of times price moves from one level to another. This is particularly useful in forex, where no volume whatsoever is even reported (or can be).

I don't want to go too far off topic (here we go again ) but this does relate, in my mind, to Jack's mention of dwell time on the tick.

May be waaay off here but if he is using a timer to gauge the dwell, or pause at that point in time, something is happening (or not) there. If the Bbid and Bask are just getting hit and not moving, then it's kinda like a 2 pair. And the ticks are accumulating at that point.

Just can't see the order size going through. So then it (ticks) becomes more of a speed meter like watching the Time and Sales. You can gauge the action picking up by the number of ticks in a bar, but can't tell the guppies apart (or if the grunion are running) from the tuna.

If anyone wants to continue to discuss this either PM or maybe we could start a thread on it.

Regards - EZ

 

[ericta]

Quote from bundlemaker:

Ezzy, I've now had enough pm's on this subject to believe it's worth posting the following for those of you trading markets with no volume data or questionable volume data.

With the proper platform, you can create a histogram of tick count. It can be surprisingly similar to actual volume, in terms of the shape of the histogram, which is really mostly what we care about.

This idea was first proposed to me by Tom Williams, who traded stocks many years ago with a syndicate. He stated, emphatically, that he PREFERRED using tick volume over "actual volume" in any market other than fully electronic. His reason was simply that exchanges (and those that control the exchanges) were prone to tinker with volume data, such was it so important to their edges.

Tick volume is simply counting up the number of times price moves from one level to another. This is particularly useful in forex, where no volume whatsoever is even reported (or can be).

nice technique, thanks bundle.

 

[ericta]

Quote from PointOne:

I could but it wouldn't mean much to you because you don't use volume.

I'm going into town later, is there anything I can get for you while I'm there?

PointOne,

You are doing SCT already?! what's the longest trade you had?

BR.

 

[ericta]

Quote from guavaman:

I would pay alot of money for information on how to either:

B. Learn how to navigate the congestion to save the profits made and what ever sanity (what little there is) which remains.

Just my 2c.

short at highs, long at lows; tight stops; and I think if there's 6 ticks in between, it worth the try; 2 trades, no more.

But the key is to know/feel we are in a lateral move quick, before its p3.

BR

 

[atonix]

Quote from Tums:

Overlapping range is the red flag.


edit: new file loaded 1:30pm.

What is this slide from? I've been over so much SCT stuff, it looks familiar, but can't put my finger on it.

Thanks.

 

[cnms2]

Quote from guavaman:

I would pay alot of money for information on how to either:

A. ... or

B. Learn how to navigate the gawd awful thing [congestion] to save the profits made and what ever sanity (what little there is) which remains.

No need to spend your guava money, Jack is giving away all his knowledge ...

Here it is, with my highlights:

Quote from jack hershey:

Have we put in enough time to see that the last traverse in a trend is a flaw.

The last traverse doesn't make it to the left trend line.

I call this a "failure to traverse."

Failures to BO are getting to be understood. They happen, in trends, to be considered with regard to the right line. Another occurence is at the end of a lateral trend which is composed of a congestion, convergence and centering. Price formations also give us BO's as they end. Use the formation end point signal and take it as an opportunity for a BO. Our commonest one's are Pennants (flags) and they have propesities to go in specific directions.

Everything needs a sustained volume to succeed as a BO.

"Failures" do not have the "push" that is why they fail.

When a trend is coming to an end, we look at the traverse going along as it accumulates more profits. We notice that the stop log poops out vis a vis entries. you also notice that the "traverse fails".

This is an early warning system. As you wish, you go to a more confident orientation (this may be considered riskier at first). You do this be moving your decision point on sequences to earlier signals than you currently use.

...

Consider every "failure to traverse" as point 1. Do a reverse at point 1. This extents the current trend to the max and putss you in the next trend. If you find the next trend to be congestion then "slalom" it by just setting up the lateral channel congestion and swing trade it on the 1 min bars.
...

 

[cnms2]

One way to avoid this is to not trade retraces: get out early at first sign a retrace is starting (i.e. decreasing volume). Also, pay attention to the trend's slope, and don't trade it if its slope is slower (i.e. slower than ~45 degrees).

No need to pay me either ... Just let me know how it goes.

Quote from guavaman:

I would pay alot of money for information on how to either:

A. Avoid a congestion area where I lose every freakin cent made during the past three hours.

or

B. ...

 

[guavaman]

Quote from Tums:

Your tapes and channels are a bit sloppy. I think I mentioned this to you before.
If you pay closer attention to the tapes (the finest parallel lines you can draw), you will be more in tune with the market shifts.
pay closer attention = draw more precise lines

Tums,

Thanks for your comments. I subscribe to the Pr0crast theory of clean charts and delete what I believe to be non essential channels so I can better see the flow of the market. I used to have so many lines it got confusing for me.

With that said, am I correct that you enter/exit using tapes? I have contemplated pursuing this strategy in the past but felt I would have to make too many trades and thought I was supposed to trade PT3 channels and tapes were really just a prelude to them.

 

[cnms2]

Although I don't trade at tape level, drawing channels and gaussians bar by bar helps me to take the pulse of the market. This is my chart for the period you enquired about earlier:

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1628916>

Quote from guavaman:

Tums,

Thanks for your comments. I subscribe to the Pr0crast theory of clean charts and delete what I believe to be non essential channels so I can better see the flow of the market. I used to have so many lines it got confusing for me.

With that said, am I correct that you enter/exit using tapes? I have contemplated pursuing this strategy in the past but felt I would have to make too many trades and thought I was supposed to trade PT3 channels and tapes were really just a prelude to them.