Technical Strategy

Here's another look at Friday's chart. As outlined, the 2-thickness orange and green traverses represent 'sub-fractal' or 'faster-fractal' traverses, and the goal is to nail every reversal with efficiency and certainty. They must be recognized, correctly annotated, and their endings must be anticipated. The gaussians and pulsing rhythm of the sequences are the guide.

Looking at the chart, imagine two traders. The first is sharp, highly-skilled and operating in the zone; he nails each reversal to the tic. The second recognizes the reversals, but is late in both thought and action, always reversing at the close of the bar that breaks the RTL. Let's assume both enter at the close of bar 2, and exit at the close of bar 81.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2219641>
 

Attachments

Here are the results of the two traders - lets call them A and B. The bottom number represents a multiple of the 40.5 range.

Reversals are marked on the chart.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2219644>

It's interesting to note that trader B can be outperformed by using only the ES chart. So the YM must be used for it's intended purpose, providing a 'leading shadow' that enables earlier reversals. While it won't enable the surgical precision of trader A, it should enable a marked improvement over merely reversing every time the RTL is broken.

Not to diminish the efforts of trader B. - after all, it's better to arrive late to the party than turn up at the wrong address - but to achieve clarity with regards to the end point shines a light on the process.
 

Attachments

Now that I've clarified the fractal on which I need to operate, the goal is it's consistent recognition and accurate annotation while maintaining big-picture awareness. Familiarity should, after a while, enable feeling things out, and utilizing the ES and YM more cohesively.

The goal is acting with certainty, 'knowing that you know', and in a state of relaxed and heightened awareness. From time to time, that inimitable certainty may not arrive until the trend-line breakout, but it is reassuring to know that even if the reversal is conducted at what is surely the latest possible reasonable point, the net result will still be a profitable one, albeit far short of the potential on offer.

With the above safety net in mind, a greater sensitivity to the market's tells and the end effects of traverses can be fostered. When this is comfortably in hand, the sequential addition of the DOM and stretch-squeeze will enable earlier certainty, more precise reversals and a closer impersonation of Trader A.

The final step will be the introduction of tic charts and a notable increase in the frequency of reversals.
 
Technology update

I've received delivery of the Linksys Wireless-N ADSL2+ (wireless router/hardware firewall), which will form the hub of the home-office network (two PCs, one laptop).

Seems they tried to deliver the Emwave PC Stress Relief System (which would run on the laptop) while I was out this morning. The earliest it will be available for collection from the depot will be Monday, so I can pick it up en-route to the 'Speed Awareness Workshop'...
 
Speaking of a 'a state of relaxed and heightened awareness', popularly known as The Zone (aka Flow), I thought it would be interesting to include this slide, from a presentation by the psychologist and lecturer Mihaly Csikszentmihalyi:

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2220647>

In conjunction with Jack's earlier statement that the pitfalls of CW are merely the opportunities of level 1 SCT, some interesting conclusions can be drawn.

One would be that the reason worry and anxiety manifest are that the trader has unwittingly strayed into trading too fine a resolution for their current skill level.
 

Attachments

emWave PC Stress Relief System

Picked it up this morning. Couldn't get it to work on my archaic laptop so installed it on the desktop and had a quick run-through of the various features. I still haven't read up on the meaning, significance, evidence etc so there's definitely some due diligence needed in order to fully understand and appreciate my new tool.

The combination of breathing exercises, new-age music and visualizations reminded me of a holistic massage course I took a few years back. Curiously, when my eyes were closed, I couldn't always tell if I was in the green or the red.

I've attached the summary of my first attempts (lowest difficulty setting). Possible confounding factors included four hours sleep, no breakfast, a mochacinno and a three hour Speed Awareness Workshop - as an alternative to 3 points on my license.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2221588>
 

Attachments

Preflight

Simultaneous completion of the sub-fractal traverse, ES 5-min level traverse and channel, and initiation of their short counterparts.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2221597>
 

Attachments

You must log in or register to reply here.
Back
Top