Quote from jack hershey:
Trend Paces.
snip.....
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There is another tape to deal with. You can determine the market pace by simply looking for the tape. Use yesterday. Go form 5 min to 1 min and see things get jumpier. Go back to 5 min , then 15 min and finally to 30 min.
***For today (Tuesday) go further up the fractal list to see the tape. Yesterday's tape is showing today as an expanded volatility tape. This widened channel gets filled if you go to slower fractals. with yestedays cahnnel lines in still (extend them for example), you can see that the price lines are slopping out on both sides and the slope is unchanged.
Got from 5 to 15 to 30 to 60 and you will get the picture. See alternating red and black lines that would fill a wider channel of the same slope.
All of this will go far to keep you in trades longer and pull down more profits.
the back testers by now will beging to know where they need to tune. Several people bought up how to tune the backtesting. You have to switch from the close value in the bar to the value at which the condition was met within the bar. I thought several people would suggest that but now from this channel stuff you see that the bar extremes tend to cause signals (like channel width etc).
what will happen is this: people will get more in the groove with "Oh yes, I know that now". Once you know something it is not a task to use it. It becomes a conscious effort automatically and you focus more and more on what you will be seeing next.
you will use sequences to know what to look for. When it occurs
(or better still, when it doesn't occur, you have a flaw that takes you either out or onto a tack (reversing and staying in) so you are sailing with the coming trend ahead of the beat.
This is going to get interesting. It is neat to adjust yourself with wash reversals to take risk out of the picture.
Trendy, get a highlighter nd a black water based marker, shorten every thing as much as you can with the black. Then highlight what you understand. Rewrite in your own words all the uncolored text.
Look at what happened to the channel you drew in. At some point you see that the price bars fill the channel like a child painting (coloring) between the lines. This is a âtapeâ at that point. This tape is a band running at a given slope as a price channel. We are always day trading off the 5 min for the time being.
The âTampa Fixâ is the process to go to the fractal that gives you a âTampa Tapeâ, i.e., a tape that fills the channel up with price bars. You sit on this fractal and trade. You use the next faster to get your stop log and you âanticipateâ there as well.
You can see the Stoc, MACD, volume and price give you identical sequences as before. So there is nothing to learn except to relax.
Yesterday this takes you through most of the day from beginning to end.
Big Point.
Also from now on make your channels interday ones when possible. We are day trading; we get out at the end of the day for one reason: our margin requirement is ½ that of position trading. There is a major reason as you all know.
We can resume our trade the next day using our prior knowledge and practices.
