The Stochastic Indicator

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You follow the fast pace and stay on "change".

As you sit there you get to understand that smart money went long on open bracket entries.

Time passes. You C&R with double contracts.

You go long at 1.2 above 990 flat. This is the stall starting at 10:27.

When the rockets start on the 1 min you go back to the 5 min chart and you resume a "continuation modus" Do C&R to exit nd not reverse.

beginners and intermediates enter on 5 min rocket as the exprets resume their "continuation modus".


Experts use the MACD, the channel BO and the STOC 5,2,3 to slalom.

Icebergers are in on the long (go out on the R level if you wish)

And beginners had one trade today.


Because the last week has been really terrific, I will try to get this edited soon.

Reflect on how you CAN monitor correctly. How you Keep your trading log prepared in advance and how the stop long telegraphs the stuff to us.


I have tried very hard to keep you from being ancy all the time. Ancy people do hang out on the 1 min too much. today we used it beautifully. If you are there more than I am, then you have no excuses lol.

There are other posts here by guys who say they made all the right moves. We got nailed on a smart money bracket run up, but we played very well (reversed on market C&Rwhich rarely will happen-- we will usually have time to enter stops after we get taken in--we were prepared.) and did a good steady job of pulling it in.
 
Quote from bundlemaker:

Jack,

The process you have been using for entry the past 2 days (ie. wait for sync, figure out the centering value, calculate offset based on log, place bracketing orders), is the process for sideways days only, or is this actually the way experts will be entering for the earliest possible entry on all days.

Also then, that eearly in the day, you'll be using stop log values at least partially from the prior day, is that correct.

Thx
More...

your comments are precisely correct and very well stated and the most cogent that could be made.

i am focusing on the experts here. the beginners and intermediats are just making money every day and piling it up. they do not go and be an expert very often. today is the reason why they do not. My guess is that there were people all over the place getting whipsawed at least three times.

the reason for going plateau to plateau is that you can always be making money. this is a very sound concept. People who just junmp in and allow themselaves to do anything at any time get crucified by being in the market just once in a while when it is all foggy to them. At that time they lose irrepairbly. It is not possible to erase NLP pictures that these people get by screwing up. The imprinting is almost indellible.

great post!!!!.
 
This AM i posted on smart money and stops. here is some depth on the phenomena Source- thread (toadr) today on emini article, this is on page 2):


"The episodes in question occurred on July 3 in the mini-size Dow futures, and on July 14 in the E-mini S&P futures.

During both sessions, major stock proxies suffered intraday setbacks amid rumors of erroneous trades. Market participants speculated that a gaffe occurred akin to last October, when a Bear Stearns trader mistakenly placed an order to sell $4 billion worth of S&P securities vs. the intended $4 million sale.


In actuality, neither episode this month was the result of error.

The July 14 incident was caused by the "cascading effect" of a series of simultaneously executed stop orders, according to CME spokeswoman Maryellen Thielen. This created an order imbalance that caused the E-Mini S&P futures to fall from 1000 to 990.50 in four seconds.

"There were no errors," she declared. Still, something went awry that afternoon, as the Merc canceled, or "busted," E-mini trades below 996, as reported here.

The exchange plans to introduce "stops logic" technology this fall designed to "rectify price movements exacerbated by stop orders," Thielen said. She was unable to provide further detail.

In sum, the CME's July 14 episode seems to have been caused by an unfortunate confluence of events. Conversely, the July 3 incident involving the CBOT's mini-sized Dow futures appears the result of an intentional effort to unsettle the markets"
 
I swiped this from another thread:

Re: Re: Re: Trading INVERSLY


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Quote from ptt:



bubba7 (Jack Hershey, I assume),

you say to enter only winning trades, and yet the method you promote for beginners is a breakout method where many (maybe most?) of the trades fail quickly.

your answer to that is to do wash trades, I agree completely and that is the essence of cut losers short, and let winngers run. however, it is not that easy for beginners to do wash trades.

I do like the idea of sequences that you promote.

what is 'OT'?
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There are actually three levels of trading going on. Each is risk limiting and money made is the criteria for advancing from one plateau to another.

The "rockets" beginners DO, are specifically calibrated as strong established trend trades. They end usually at S or R and after that there is no money to be made by beginners.

Intermediates trade rockets or if a rocket fails immediately they stay in the slower paced trend and set the point 1,2,3 channel and ride it to its end. These ends are variously designated by a flaws.

Beginners do have their wash flat exits cut out for them. there is no way to avoid requiring a new trader to not to learn to wash. I think it is like learning to do sacrifice bunts to move a bae runner along. Of course, the washing is a learning experience primarily for doing expert slalom stuff later on.

Today (thursday) the pm (13:00 on) is the classic differentiator of beginners and intermediates. The BO on the midday took both in on the MACD and STOC and volume signals. The beginners left the short before 15:00 at point 2; and the intermediates stayed
in patiently striving for point 3 and following the retrace signals. After point 3 the intermediates had a ball and then, at point 3, the beginners popped in again short on the rocket. They both rode the entwine to the end of the day.

Working by plateaux is really the only way to fast track to expert and seamless continuous trading ahead of the herd. Staying out of the market is the hardest thing to learn of all. Beginners and intermediates only trade continuation strategies so far. Experts use both strategies (continuation and change) because they know market paces and they have a set of "blocker" indicators called flaws. Fast pace and flaws give experts the signal to use the change strategy which is based on reversals. All slaloming is done in that modus.

It all becomes KISS as a person operates as an expert. In there almost all the time, being in the correct strategy, and just noticing when "flaws' pop up and reading the other side of the flaw card to take action. On 5 ES mini's it can average 1,000 bucks an hour. Translates to up to 3x daily H/L range per day.
 
I've been trying some wash trades during some of the slower moments in these deep summer days.

It's somewhat akin to swinging out on a long vine over a swimming hole; if you let go (exit the trade) too soon, you're going to get all wet. But if you just hang on, eventually the vine/trade will take you back to where you started.

I want to get really good at swinging on vines...
 
Some apparently have learned something from it or at least so they claim. I am finding rather hard to follow Jack's teachings so perhaps Jack's disciples would be kind enough to expound on Jack's teachings for the rest of the ET community and myself in particular. That might even be a good proof that what Jack teaches makes sense and can be understood. As you may find out from the latest poll in the chit-chat there are some doubts about it. I have no particular opinion one way or another, however a friend of mine who is very good trader (and a frequent poster to this board with over 1000 posts to his account currently taking a break from trading in another part of the world) says that if you cannot say something in a way everyone understands then you most likely do not understand it yourself.
 
I still don't understand how you get out of bad trades without losing money. You don't know it is a bad trade until it goes against you. Hershites must have ESP or something like that. Heck, they have transcended the English language, so why not?

You also have to bear in mind that(according to Jack) it is normal for 4 out of 5 or 80% of people to think you are a loon, so the results of that poll, 3/4 or 75% are actually quite positive.
 
Jack,


I was following your stop log today, am having a hard time. It is easy for me to make mistakes interpreting. You cover alot of ground in only a few sentences.


- Sync occurred approximately 9:45 where price centered at 992.1 and using +/- 3.2 offset for brackets. Fractional notation used is in units of ticks, or in the case of ES, .25 multiples. Hence, .1 = .25, .2 = .50, .3 = .75 etc. So, center 992.1(992.25) +/- 3.2(3.50) pts creating a bracket pair 995.3(995.75) and 988.3(988.75) respectively. Is this correct ?


- The +/- offset 3.2(3.50) times 2, or 7 point bracket spread came from yesterdays' trading range. Specifically, 7/30 11:05 high 991.00 minus 7/30 11:30 low 884.00 as shown on your pic. This is to get an estimate of what is needed to avoid entering a position before a valid break out occurs. Is this correct ?


- As soon as one of the stops is hit, the remaining trailing stop is updated, C&R. In this example, a 2.3 offset is used. The offset is added/subtracted to the stop hit to cancel and replace the remaining trailing stop. It is not added/subtracted to the remaining trailing stop to calculate the new value. Is this correct ?


In this example, if we go in long at 995.3(995.75) the new trailing stop is updated to 995.3(995.75) minus 2.3(2.75) resulting in 993, minus an additional tick to get off an even number, an antisclaper device. Okay 992.3(992.75) then. If we go in short at 988.3(988.75) the new trailing stop is updated to 988.3(988.75) plus 2.3(2.75) resulting in 991.2(991.50). Is this correct ?


I can not figure out where the 2.3 offset comes from. From your pic, annotation "Four back dist. then add 1/2 bar". Referencing your pics' green lines, 4 back 11:35 1) low 984.75 2) 11:45 low 985.75 3) 12:00 low 986.50 4) 12:10 low 986.75 gives me a 2.0 spread plus "add 1/2 bar" or .2 (.50) equals 2.2(2.50) not 2.3(2.75). My math does not add up nor am I sure I am looking at the right place. Any help here would be appreciated.


When break out occurs at 9:59 (economic numbers leaked early -haha) pace picked up fast. Hence, you state get ready to go 2 back instead of 4 if entered. So, cut 2.3 in half to 1.2. If enter long the new trailing stop would be updated to 995.3(995.75)minus 1.2(1.50) resulting in 994.1(994.25). If enter short the new trailing stop would be updated to 988.3(988.75) plus 1.2(1.50) resulting in 990.1(990.25). Is this correct ? I seem to be off by a tick from your value of 990.2 ?




This is such a great thread, am learning alot, thanks for everyones' contributions.......

(kewl)
 
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