Bootcamp chart day 10.
Technical Strategy
- Thread starter Tums
- Start date
Thanks for all the follow-up posts, Jack. Working at a walk-in clinic this morning, but after taking the rest of yesterday off, clearing my head, and just enjoying the day, I'm eager to get started on drills tonight.
I followed your suggestion and have (temporarily) taken Mandelbrot off ignore. His posts provided some amusement, although I do feel obliged to thank him for the offer to help.
I fully agree with Jack that an average college student, with no prior knowledge or preconceptions about the market could have reached (and exceeded) the point we've laboured so long and hard to arrive at, in just a day, within an immersive environment and with hands-on tutelage.
Tabula rasa, or blank slate. That would be the ideal surface on which to etch these enduring truths about the market. They could quickly become internalized, success would build upon success, and a cycle of positive reinforcement would ensue. Even someone with no existing altruistic intentions, once aware of the virtually infinite flow of capital, and the ease with which it can be extracted, in my opinion, could not help but turn his mind to selfless causes. Once someone is at the stage at which they can see all that is on offer, limiting beliefs will cascade like toppling dominoes, and thoughts will inevitably turn to a higher purpose.
In my case, an innate stubbornness, intellectual apathy and deeply ingrained 'cross-wiring' have impeded this process. In reference to one of your (Mandelbrot) posts, I do have an eidetic memory, but that's irrelevant, perhaps even a hindrance.
How have I come by some of these ingrained beliefs, these roadblocks on the path to SCT? I have had the privilege of working with two exceptional traders. The first was a respected fund manager, managing $500 million in assets. Over the years, he had taught technical analysis to scores of institutional traders. His TA staples were volume and pivots, although he also used channels, candle patterns, long term simple moving averages, and fibonacci levels. We worked with options, mostly diagonal 'calendar' spreads, tweaking deltas on monthly roll-outs. I was trading with a modest (30K) account at that point. Things went well until June 2006, at which point I was 95% invested, with excessive delta.
The second trader, a friend of mine, mostly trades through a personal account, but has averaged a 7-figure annualized return for some time now. His TA consists of volume, horizontal support/resistance and (for ES) YM charts and Depth Of Market.
Funny enough, greed is not a place either of these guys choose to dwell. The first is heavily involved in charitable causes, and the overriding passion of the second is setting up a money-management firm with a difference, one which will educate the masses in prudent personal finance and offer an alternative lending paradigm, at a significant initial loss if need be. His priorities are helping family, community, and nation, in that order.
Their performance, which would be considered remarkable by normal standards, pales in comparison to the potential offered by SCT in the hands of a capable operator.
Mandel, even though you will promptly be returned to my ignore list as a non-contributor, I encourage you to remain updated with this thread. Perhaps there is a glimmer of hope, even for a vested cynic. As you can see, Iâve been completely candid and transparent so far, and intend to continue in the same vein. I will post real-time charts, logs, and blotters as need be. Basic arithmetic will show that I was down about twenty points yesterday⦠an unfathomable loss for some, but a mere drop in the ocean compared to the possibilities.
I would encourage any skeptic to check in on this thread from time to time. Iâve been far from a model student, but am persevering, and enjoying every step of the process, even yesterdayâs necessary wake-up call. Perhaps Iâll succeed in my journey. Perhaps a few curious observers will follow suit. And perhaps, just perhaps, this will be the thread to lay all the intrigue, dissent, and controversy to rest, once and for all.
I followed your suggestion and have (temporarily) taken Mandelbrot off ignore. His posts provided some amusement, although I do feel obliged to thank him for the offer to help.
I fully agree with Jack that an average college student, with no prior knowledge or preconceptions about the market could have reached (and exceeded) the point we've laboured so long and hard to arrive at, in just a day, within an immersive environment and with hands-on tutelage.
Tabula rasa, or blank slate. That would be the ideal surface on which to etch these enduring truths about the market. They could quickly become internalized, success would build upon success, and a cycle of positive reinforcement would ensue. Even someone with no existing altruistic intentions, once aware of the virtually infinite flow of capital, and the ease with which it can be extracted, in my opinion, could not help but turn his mind to selfless causes. Once someone is at the stage at which they can see all that is on offer, limiting beliefs will cascade like toppling dominoes, and thoughts will inevitably turn to a higher purpose.
In my case, an innate stubbornness, intellectual apathy and deeply ingrained 'cross-wiring' have impeded this process. In reference to one of your (Mandelbrot) posts, I do have an eidetic memory, but that's irrelevant, perhaps even a hindrance.
How have I come by some of these ingrained beliefs, these roadblocks on the path to SCT? I have had the privilege of working with two exceptional traders. The first was a respected fund manager, managing $500 million in assets. Over the years, he had taught technical analysis to scores of institutional traders. His TA staples were volume and pivots, although he also used channels, candle patterns, long term simple moving averages, and fibonacci levels. We worked with options, mostly diagonal 'calendar' spreads, tweaking deltas on monthly roll-outs. I was trading with a modest (30K) account at that point. Things went well until June 2006, at which point I was 95% invested, with excessive delta.
The second trader, a friend of mine, mostly trades through a personal account, but has averaged a 7-figure annualized return for some time now. His TA consists of volume, horizontal support/resistance and (for ES) YM charts and Depth Of Market.
Funny enough, greed is not a place either of these guys choose to dwell. The first is heavily involved in charitable causes, and the overriding passion of the second is setting up a money-management firm with a difference, one which will educate the masses in prudent personal finance and offer an alternative lending paradigm, at a significant initial loss if need be. His priorities are helping family, community, and nation, in that order.
Their performance, which would be considered remarkable by normal standards, pales in comparison to the potential offered by SCT in the hands of a capable operator.
Mandel, even though you will promptly be returned to my ignore list as a non-contributor, I encourage you to remain updated with this thread. Perhaps there is a glimmer of hope, even for a vested cynic. As you can see, Iâve been completely candid and transparent so far, and intend to continue in the same vein. I will post real-time charts, logs, and blotters as need be. Basic arithmetic will show that I was down about twenty points yesterday⦠an unfathomable loss for some, but a mere drop in the ocean compared to the possibilities.
I would encourage any skeptic to check in on this thread from time to time. Iâve been far from a model student, but am persevering, and enjoying every step of the process, even yesterdayâs necessary wake-up call. Perhaps Iâll succeed in my journey. Perhaps a few curious observers will follow suit. And perhaps, just perhaps, this will be the thread to lay all the intrigue, dissent, and controversy to rest, once and for all.
Just tried a really interesting exercise.
Pulled up an ES chart, compressed the price scale until the whole day's price action was one horizontal line, and went back to a random day - in this case, 30th September.
Drew the volume Gaussians (including a horizontal line for the hour or so of lunchtime drift), then proceeded to create a day's worth of price action in terms of channel trendlines and zigzags to represent traverses.
Even though I'd expected some degree of correlation when I decompressed the price chart, what I saw was quite literally stunning.
Not only was it a long trending day, not only was the angle of the channel a close fit, with Gaussian peaks and troughs signaling B2R peaks and R2B troughs respectively, but the two charts even matched in terms of traverse angle, with a suitably lackluster section rising slowly with the channel RTL during the midday drift!...
It's one thing to accept something as a reality, but to actually experience it so vividly... safe to say the message hits home!
Pulled up an ES chart, compressed the price scale until the whole day's price action was one horizontal line, and went back to a random day - in this case, 30th September.
Drew the volume Gaussians (including a horizontal line for the hour or so of lunchtime drift), then proceeded to create a day's worth of price action in terms of channel trendlines and zigzags to represent traverses.
Even though I'd expected some degree of correlation when I decompressed the price chart, what I saw was quite literally stunning.
Not only was it a long trending day, not only was the angle of the channel a close fit, with Gaussian peaks and troughs signaling B2R peaks and R2B troughs respectively, but the two charts even matched in terms of traverse angle, with a suitably lackluster section rising slowly with the channel RTL during the midday drift!...
It's one thing to accept something as a reality, but to actually experience it so vividly... safe to say the message hits home!
Spydertrader has created a phenomenal body of work on this forum, and shone a guiding beacon for thousands of aspirants in the process. Before this bootcamp, I had familiarized myself with what I considered the most relevant sections for starting commodities trading with the approach, namely the latter part of the Equities II journal, and the start of the Futures journal.
Two entry techniques were espoused: entering on an FTT, and holding until either a FBO (failed break-out) or an FTT in the opposite direction, and entering on a point 3 (the famous 'rocket' trade popularized by Easyrider) and holding until a break of the RTL (right trend line). Furthermore, the Channels document also suggested Entering and Exiting as a beginner, rather than Seamless Continuous trading. This would then segue to Entering/Reversing, and finally Reversing/Reversing, as the trader scaled successive skill levels.
With that as my introduction to SCT, I found it difficult to reconcile the 'always-in' approach Jack has been mandating here.
Until I realized it all comes down to the learning curve. With the traditional approach, you're effectively creating two additional barriers, which, from a psychological standpoint, may become increasingly difficult to surmount as time goes on, rendering the ultimate goal, SCT, an elusive and ever-moving target.
This was confirmed by posts from SCT veterans, some of whom reported difficulty in adjusting to the continuous mindset, long after they were consistent and profitable.
Imagine as a child, dreaming to race Formula One cars on the global circuit. You're thrilled when you're old enough for lessons. You're ecstatic when you get your first car, an automatic. You find some automatic race meets, and drive the pants off the rest of the pack. Your confidence grows. You start to envision yourself standing on that podium, popping the champagne. Then, at long last, you're sitting in that cramped driver's seat, hot and sticky and smiling away as you stare at the stick-shift. You lurch to a start, accelerate and jolt to a halt. Six more times, the scene replays, until you blow the clutch. Cursing under your breath, you leave the car to the mechanics and slide into your trusty automatic. Six months later, youâve finally got the hang of it. Full of swagger, your eyes still on the prize, you enter your first real race meet⦠and are blown away by the real drivers.
It all comes down to hard-wiring. Start from an âalways-inâ perspective, and two of the big learning plateaus simply disappear. âAlways-inâ becomes the norm. As skills and finesse are added, you trade progressively shorter diagonals, until, before you know it, youâre operating on the fabled sports memory and carving sharper turns than Kimi Raikkonen.
And the biggest expedient to achieving the âalways-inâ mentality?... a quick and confident entry, near the open of the day. The long hold then becomes relaxing and comfortable as price need never move into negative territory, and the inexorable slide from <strike>point 1 to 2</strike> point 2 to 3 merely nibbles at early profits before price launches left, left and away!
edit: strike = correction
Two entry techniques were espoused: entering on an FTT, and holding until either a FBO (failed break-out) or an FTT in the opposite direction, and entering on a point 3 (the famous 'rocket' trade popularized by Easyrider) and holding until a break of the RTL (right trend line). Furthermore, the Channels document also suggested Entering and Exiting as a beginner, rather than Seamless Continuous trading. This would then segue to Entering/Reversing, and finally Reversing/Reversing, as the trader scaled successive skill levels.
With that as my introduction to SCT, I found it difficult to reconcile the 'always-in' approach Jack has been mandating here.
Until I realized it all comes down to the learning curve. With the traditional approach, you're effectively creating two additional barriers, which, from a psychological standpoint, may become increasingly difficult to surmount as time goes on, rendering the ultimate goal, SCT, an elusive and ever-moving target.
This was confirmed by posts from SCT veterans, some of whom reported difficulty in adjusting to the continuous mindset, long after they were consistent and profitable.
Imagine as a child, dreaming to race Formula One cars on the global circuit. You're thrilled when you're old enough for lessons. You're ecstatic when you get your first car, an automatic. You find some automatic race meets, and drive the pants off the rest of the pack. Your confidence grows. You start to envision yourself standing on that podium, popping the champagne. Then, at long last, you're sitting in that cramped driver's seat, hot and sticky and smiling away as you stare at the stick-shift. You lurch to a start, accelerate and jolt to a halt. Six more times, the scene replays, until you blow the clutch. Cursing under your breath, you leave the car to the mechanics and slide into your trusty automatic. Six months later, youâve finally got the hang of it. Full of swagger, your eyes still on the prize, you enter your first real race meet⦠and are blown away by the real drivers.
It all comes down to hard-wiring. Start from an âalways-inâ perspective, and two of the big learning plateaus simply disappear. âAlways-inâ becomes the norm. As skills and finesse are added, you trade progressively shorter diagonals, until, before you know it, youâre operating on the fabled sports memory and carving sharper turns than Kimi Raikkonen.
And the biggest expedient to achieving the âalways-inâ mentality?... a quick and confident entry, near the open of the day. The long hold then becomes relaxing and comfortable as price need never move into negative territory, and the inexorable slide from <strike>point 1 to 2</strike> point 2 to 3 merely nibbles at early profits before price launches left, left and away!
edit: strike = correction
In view of the above realization, I've decided to focus my drill efforts on confident early entries.
I'm deviating a little from Jack's suggested script by using the market replay feature on NT, as I have most of the data for the past two weeks. By setting the right hand margin to 1100, only the last six bars of the previous day can be seen, which are informative enough, and the vast expanses of white on the screen focus my attention on the forming bars.
By watching these take shape, I can attempt to visualize the tic-landscape forming as the handle paints up and down, and try to become more sensitive to the intrabar volume changes, all of which should facilitate the confident, early entry.
What's more, I have some YM intraday data extending back a month or so. As (focussed) repetition is the mother of skill, after I've exhausted the ES data, I can go through YM days at random and after entry, fast-forward 10 bars, to see how the morning played out, how often the initial direction was correct, and when incorrect, whether there were obvious early warning signs to indicate that a change in direction was warranted.
I'm deviating a little from Jack's suggested script by using the market replay feature on NT, as I have most of the data for the past two weeks. By setting the right hand margin to 1100, only the last six bars of the previous day can be seen, which are informative enough, and the vast expanses of white on the screen focus my attention on the forming bars.
By watching these take shape, I can attempt to visualize the tic-landscape forming as the handle paints up and down, and try to become more sensitive to the intrabar volume changes, all of which should facilitate the confident, early entry.
What's more, I have some YM intraday data extending back a month or so. As (focussed) repetition is the mother of skill, after I've exhausted the ES data, I can go through YM days at random and after entry, fast-forward 10 bars, to see how the morning played out, how often the initial direction was correct, and when incorrect, whether there were obvious early warning signs to indicate that a change in direction was warranted.
Just spotted a careless error a couple of posts up.
http://elitetrader.com/vb/showthread.php?s=&postid=2131014#post2131014
Should read:
And the biggest expedient to achieving the âalways-inâ mentality?... a quick and confident entry, near the open of the day. The long hold then becomes relaxing and comfortable as price need never move into negative territory, and the inexorable slide from point 2 to 3 merely nibbles at early profits before price launches left, left and away!
http://elitetrader.com/vb/showthread.php?s=&postid=2131014#post2131014
Should read:
And the biggest expedient to achieving the âalways-inâ mentality?... a quick and confident entry, near the open of the day. The long hold then becomes relaxing and comfortable as price need never move into negative territory, and the inexorable slide from point 2 to 3 merely nibbles at early profits before price launches left, left and away!
One thing I'm finding a little confusing is annotating channel gaussians from the outset. Once you know the channel boundaries, and can see where price has bounced off the Left and Right trendlines, you can mark your gaussian peak and trough respectively, but what process do you go through before it's clear where the channel boundaries are?
Do you start annotating gaussians on the tape level, then proceed to the traverse level once you have your first confirmed traverse, and finally overlay thick red and black lines once you have a 3rd traverse and a channel point 3?
Do you start annotating gaussians on the tape level, then proceed to the traverse level once you have your first confirmed traverse, and finally overlay thick red and black lines once you have a 3rd traverse and a channel point 3?