trading channels

Repost.
I posted this yesterday as the thread was beginning. Then I deleted it since there was little commentary on the critical thinking of trading markets using information from the markets.

the original post:

The reason channels work is because of the granularity of the markets.

Their form of a parallelogram is incidental.

The channels derive from the deductive application of the null hypothesis to the granularity of the markets. The conclusions reached eliminate both noise and the prospect of anomalies in market analysis.

The discrete differences in values of data points and time rather than continuous functional notation leads pointedly to finite mathematics AND the non probabilistic fork of information theory ONLY.

Neither prices, volume, nor times, as variables, form continuums in any what whatsoever. A person either gets this or does not get this. There is no middle ground.

As a consequence of this and nothing else, there is no other way to form a region and bound it with anything other than a parallelogram. There are geometric subsets of the generic parallelogram.

Parametrically, money is made by both considering the width by the non-stationarity principle and the single pattern contained in a parallelogram and of which the parallelogram is built whereby market functions are defined in left/right terminology.

For example, the are few questions requiring answers to have total functional certainty at any time. All answers derive from the geometry of the parallelogram and the fractal upon which it is displayed. All parallelograms are in a nested family that is built according to and from the precise granularity of the market in terms of it's three granular variables: volume, price and time. Volume leads price in terms of time.
 
Quote from jack hershey:

Repost.
I posted this yesterday as the thread was beginning. Then I deleted it since there was little commentary on the critical thinking of trading markets using information from the markets.

the original post:

The reason channels work is because of the granularity of the markets.

Their form of a parallelogram is incidental.

The channels derive from the deductive application of the null hypothesis to the granularity of the markets. The conclusions reached eliminate both noise and the prospect of anomalies in market analysis.

The discrete differences in values of data points and time rather than continuous functional notation leads pointedly to finite mathematics AND the non probabilistic fork of information theory ONLY.

Neither prices, volume, nor times, as variables, form continuums in any what whatsoever. A person either gets this or does not get this. There is no middle ground.

As a consequence of this and nothing else, there is no other way to form a region and bound it with anything other than a parallelogram. There are geometric subsets of the generic parallelogram.

Parametrically, money is made by both considering the width by the non-stationarity principle and the single pattern contained in a parallelogram and of which the parallelogram is built whereby market functions are defined in left/right terminology.

For example, the are few questions requiring answers to have total functional certainty at any time. All answers derive from the geometry of the parallelogram and the fractal upon which it is displayed. All parallelograms are in a nested family that is built according to and from the precise granularity of the market in terms of it's three granular variables: volume, price and time. Volume leads price in terms of time.
More...

I am going to spend some time amplifying on this statement to emphasize the power of being able to think critical to gain advantage as a retional trader.

It is not possible for everyone to understand and trade markets. It depends proimarily or just who a person is and how he got to be the way he is.

A tick, a single contract or share or instrument and a moment in time for a transaction define the granularity of the given market. Over time these things have changed. In fact instruments are being invented all the time. you can consider the recent destruction of our economy as a facet involved in the creation of instruments that lack integrity because of the nature and character of their inventors.

The granularity of the markets creates the form of displays where electronic means are used to provide for observation. A mature expert trader creates adjuncts to facilitate the use of market information.

Information theory is the controlling agent for market work or effort.

Doing a routine in the context of information theory drives most successful trading approaches.

On the otherhand the CW has come into being as a consequence of the goals and aims of the financial industry.

A person chooses how to participate in this mileux. Almost all posts in this thread are pragmatic expressions of people trying to be successful in trading. Thus the basis or character and qualifications of these posts is also presented for consideration.

I have presented the seed of market study and operation and what follows is the power that is engendered from this seed.

If you cannot follow my commentary do not worrry about it. I deal in language and terminology that is scientific and based upon the logic of critical thinking.

Pragmatically, I trade on my knowledge and skills which are instilled as a consequence of building my mind to partner with the market in a partnership contract. So I just continually take the market's offer by "Knowing that I Know" at all times.

Below is a simple list that comes from the critical thinking in the manner described in the bold print.

1. channels are just parallelograms for price and annotations for volume that show the three moves of a trend.

2. granularity of markets dictates that only one pattern can exist in markets.

3. trends overlap

4. trends occur concurrently on all fractals.

5. all fractals are nestd.

6. There is a fixed, rigorous relationship of fractals that is determined geometrically by the boundaries of price movement. (3:1 in movements).

7. all fractals are "built" using the granularity of the market for volume, price and time. All are dictated by market data.

8. Where "adjacency" is introduced in via any dimension, there are finite cases to consider.

9. finite cases dictate that finite math must be used to do market analysis and decision making.

10. finite mathe NEVER includes "prediction" and is only concerned with supplied data. All data comes from the prensent and becomes historical as the future moves into the Present.

11. the Present is the only place where market data comes from.

So I use data from the whole range of data available. All the manifested scientific based data records are interlocking and interrelated. For simple pragmatic reasons the extreme near term values of the variables can be determined with sufficiency to be able to always take the markets offer within the limitations of the market's capacity and liquidity.
 
So all of the relvant information related to the above have been presented over time in various places. A 53 year span was involved.

since the invention of the mainframe and the PC, it has been possible to state, then encode the logic for handling the market's information as that information became available. Before the electronic era an electro/mechanical system made it possible and before that news media made it possible.

I have traded since the invention of the telephone and the tickertape and the existance of brokerage firms that handled accounts.

In a nutshell, at the beiginning I had to process data manually and on the fractals available.

during this interval to the present nothing has changed regarding market operation nor its scientific analysis.

Over time the feedback system called OODA came to dominate trading in markets. Unfortunately for its usrers the results that are conventionally believed have come to hold sway as the "facts" of what is possible. there also exists a strong opinion that people can prove something doesn't work. Both of these limitations can become embedded in the minds of people and the processing of electronic market efforts.

herefore, a trader HAS to make use of thsi additional information to trade "parasitically" to this huge mass of decisionmakers using the OODA regime.

An example here is the post of rabbitone. His well developed viewpoint is done using a substitute for finite mathematics and the non propabulistic portion of information theory. the basis of his orientation is that statisitics is refined to the point where it can producxe the desired results. This level of results is often cited as the standard for comparision. some people extrapolate to the point that they believe the standard is what is possible and nothing further is possible. Of course, this is the problem that these people have and it is a limitation that they choose to control their functionality.
 
What is it like to have the tools that critical thinking in a scientific manner provide?

Look at the list above and consider the value of each component for building a sytem of trading.

Next consider where that system operates.

the model for trading comes down to taking the market's offer as the offer unfolds.

I see it as having a display system that covers the bases and affords all of the profit segments to be taken.

What backs up the system is the mind. We spent years and failed to make this point in the eyes and minds of many people.. fortunately over the last 50 years great strides have been made coming to understand how the mind works and its almost unlimited capability.

I trade like most people drive cars or ski black diamond trails or do glider acrobatics with a zero ground clearance. the fundamental reason is my mind is differentiated and I trade with unconscious competence. My feelings are of support, comfort and confidence.

The formula for this consequence is that for what I sense, there is a corresponding one to one available inference. the sum of sensing and inference is named "perception".

the posts here in thsi thread are expression of many people who have no perception since they have no inference and prehaps their screens lack the ability to display what the market is doing.

Maybe it is possible by knowing these disadvantages to go through the process of getting from a to b.

I have worked continually with platform people directly or indirectly for longer than most people have traded. To sketch out the logic (a simple display that had many lites and scribed arrows between the lites) and wait 18 years to hand it to someone was an event in my life. While waiting I just used my inference as a substitute. Nothing has changed.

How does a person lay the foundation and place the building blocks to have a display, read the display, use inference to form perception and take the market's offer continually? This is done by building the mind's inference. The pragmatic effort is to do drills.

The 10,000 hours myth is priceless.

The missing bridge for most people is that they do not have the ability to do drills, find thedrils to do, or the commitment to build their minds.

Probably the problem is even more simple. Most people do not know how to learn nor do they know how the mind works.

Obviously, one of my avocations is controlling others and driving them to an OCD state. It is like being a stand up comic and making the people who paid admission laugh when called upon.

It isn't comic and laughter isn't the result. By demonstrating the learning process and how important building a differentiated mind is, there are consequences to many people.

for one such group tranference occurs.

for another group, they pass on doing the work.

for another group they subconsciously get it (see recent post on a person who does this and documents his thinking process) and they react. Not segmenting this group is practical, but suffice to say it has a spextrum od reactions. Most are along the lines of disagreement; some advance to anger; others go to the OCD levels. Cyberwise it has to be called "advertising" since hits are the standard of cybrspace and the circus owners got it straight: "I dont care what you say as long as you say it".

All of these foils make it possible to make the point of the process of building the mind to a differentiated state where trading is done with unconscious competence.
 
I post occassionally to comment to person asking about their future careers in trading. For some people, they have crossed the point of no return. This makes it impossible for them to be successful in trading.

They have simply made a succession of decisions to acquire beliefs that preclude successful trading.

the reason for this irreversable status is that the mind cannot be erased. some things can be erased using a defined process but their has to be a serious focus on completing the process. Falling out of love is one of the best known erasing processes. Usually it is accompanied by its opposite as a fulltime motivational aspect.

the granularity of the markets is where it all begins for a person who is going to fast track to expertese. The person uses the market's components to lay a foundation and then keeps doing productive drills to build his mind.

four stages are often mentioned they deal with the opposites of consciousness and competence whee both caes are taken in pairs to show a succession in four steps from unconscious incompetence to unconscios competence. The intervening steps are conscious incompetence and conscious competence. Anyone can read any post and classify the poster at the appropriate level.

Here is a great example that was judged of sufficientquality of publication. It had sveral authors.

Only two P, V charts are presented in this 70 some page disaster. Think of those who have read it and who have made decisions based on the "information" they thought they were receiving. They fucked themselves royally. Look at the charts and see what cases are depicted. Do research on 400,000 cases in the real world. Determine the probability of what was shown in those two charts. Now take the time to figure out how to represent what is a possible powerful representation of reality.

These people were published and what they focussed on occurred about 7 times in five years on averagefor all things they thought up.

To build inference in the mind using the means to do it is done using real information over and over in the same manner (drills). To not use the granularity of the market as a basis is going to lead to failure. Anyone can conduct a poll using a stratified random sample and see the correlation between success and how the person approached learning to trade.

Transference of an approach is achieved by building a differentiated mind with respect to the markets and NOT with respect to a set of rules. How to affect tranference of how the market works is done by using drills which articulate the fooundation and building blocks of how granularity of the market establishes the way market follow an order of events and shown bt nested fractals begining with the units of granularity of the markets.

For all market with a sufficient liquidity, the inference of the differentiated mind works as applied to those markets. There is no noise nor any anomalies.
 
the issue of mentoring is resolved by looking at the learner from the perspective of his mind and his ability to do the "work". "Wordk" just means going through the process of getting differentiated so there is a complete inference that is avaialbel in real time so that perception occurs as the sum of sensing (10%) and inference (90%).

It is not a case of having a person learn to just draw parallelograms on three concurrent levels for price and to annotate on volume on the corresponding levels.

It is more about dealing with the HS and PM and using the granularity to "build" how the market operates. Naturally, haviing a great platform makes this easier. Strickly speaking having a lot of other tooling displayed does mean that you always know you know in advance. That is using a crutch when it comes to building infrence leading to a differentiated mind.

By using just the V and P in a time context, it is possible to fast track building the mind.

Locals here are doing stock trades as posted. The progress since January does not include taking trades that do not work. It is easy for people to see their progress. They work as a team and rotate responsibilities. their is a very high level of interaction and it is synergisitc. The greatest side effect is that people can put themselves in the place of others and work through their drills and trading efforts. By now mostly everyone has experienced the commone happenings as a trader begins his learning and mind building process. By recording in video all the common sessions there is a "lookback" resourse being built as well. They will be "produced" in segments so a person can dial into them topic by topic.

At this point the pattern that builds the parallelogram is second nature to the locals and they see it on the three levels they use for either stocks or for the ES or YM or the OTR's of each and for the panes that are used for the contstruction of the S/S and its companions the T&S, the DOM and its stalagtites. No one is in the dark.

I may repost my volume post from yesterday in another thread and I may repost my commentary on the volume stock trading solution.

these posts do point out the contrast of how CW based trading doe not build a differentiated mind that affords inference or the ability to trade coherently. It is fairly easy to construct a book on how most people learn to trade. It could just be about 40 chapters where each chapter focusses on the 40 steps humorously noted as the common experience. the chapters could just be filled with quotes from people struggling at each step they take. there is not thread of building the mind or acquiring inference along that path. the people who "succeed" only "succeed to the extend of the myths of CW.
 
Quote from stefan_777:

If prices were random you wouldn't have channels or trends of any kind.
More...
Prices are mostly random, and mostly unpredictable.

You can draw channels in cloud shapes.
 
Why are most traders mostly incoherent when they are risking trading?

The common state reported by research on CW traders is that they are anxious, fearful and sometimes angry. these are all components of incoherence.

Today there are electronic tools for measuring the spectrum of coherence or lack of any coherence. Before these tools there were other means that used heart and respiratory measures as well as galvanic based measures (sweat based).

Most causal readers can tell a poster's state when he posts original commentary or when he posts reactionary commentary.

I like the EMwavepc monitoring system since it has several panes of results display and it works in real time. when the boot camp thread was running, severalo illustrations of the panes were presented. They showed over days the gradual progress from incoherence to a high level of coherence.

I also use a wrist monitor occasionally that deals with pulse, BP, etc...

By examining the research over the years, it is apparent that being coherent is helpful with respect to trading effectiveness and efficiency which all leads to optimal trading.

Fourrier analysis of the heart waveform is the basis of determining coherence under any external conditions. there are a lot of classes and practises that relate to driving cars. some remedial actions in court cases now require road rage type frivers to use the EMwave pc as part of their driving regime. I have interviewed a few of these people who also had to use it under road rage problems as required by their cardiac specialists.

It was also used duing tia Chi sessions as a before and after demonstration of the efficacy of tia Chi and meditation.

Trading can be done under conditions that are close to meditation conditions. Again see the boot camp thread where that level was achieved and illustrated.

When trading as in driving a car or as in meditation where the coherence level is 80%, doing a routine is very different than the CW OODA routine. The OODA routine is trading in an incoherent state. The actions of fighter pilots in dogfights are akin to supreme efforts to survive. OODA style trading is a survival oriented trading regime.

What allows coherence and the advantages of coherence is knowing that you know. In meditation "empty" is often emphasized. This is the process of getting to a place of not considering temporal things.

In the HS and PM of PEP, almost all of the time there is no temporal consideration. H1 is in play.

The topic of this thread is defining the market's action through its variables and, in particular, their boundaries.

cgarcia, even, has a moment of light once in a while, he states. What is this time for him where he is coherent? Who knows its basis, he doesn't. BUT he does give use major clues. It is not during day trading but it is in longer time domains. For him it is between the beginning and the end of a position in a stock in a market. This is H1 in the PEP.

If a beginner simply observes the price and puts in a parallelogram of its boundairies, he get to note the three moves of a trend. All the time inbetween these four points is a condition of "meditation" for a trader when he is trading coherently.

Between each point observed and used to diagram the channel, is a faster fractal pattern that has three moves determined by the four points of the pattern. (See where the pattern was given the Konviction who has no inference for trading.)

At any time a coherent trader is going from point to point on the original diagram he made (or is making), he always has the advantage to use his ability to monitor in a routine the progress from point to point.

The most fun trip in the middle fractal of three concurrent fractals is from point 1 to point 2. Another trip that is fun is from point 2 to point 3. then there is the fun of going from point 3 to the FTT (which begins the overlap.

As a person sits through the bars of these moves he is making money and doing a non OODA routine. It is called MADA. He makes three segments of profit one profit taking for each leg of the pattern which made the parallelogram.

For example, on ES during each leg he can use YM to see the faster fractal going through its three steps as one step is accomplished on the ES.

One early drill in learning is to annotate both the YM and the ES to see this happen all day long day after day. By using the "cases" for the granularity, it is easy to see the legs devloping and completing.

what happens to the person doing the annotaion of volume and price using the pattern? It is like meditating. Coherence comes into the picture. The Bohr Effect leaves the picture as well. As you trade you drink your quota od water (1oz per 2 pounds of wieght per day). The rate of throughput is a function of your coherence. Some people are afraid to drink water because they have to leave their screeens.

A beginner can have lunch or a smoke or two between trades. Peeeing takes less time.

How long does it take for a person to learn and have in his mind that there is a nested fractal relationship of containers of price? Lets say you do not know this. How long will it take you to know this?

It will take an amount of time that is in relationship to how long it takes you to use this knowledge in the form of a skill. cgarcia cannot learn or ever use the nested fractal relationship. There are reasons. He has made many decisions to acquire beliefs. He has those beliefs and he get their consequences. For example, he cannot daytrade. He cannot go from the granularity of the market on up to the position trading he tries to do using his belief system. Sometimes by something he sees the clouds clear and he sees a channel somewhere. It has no basis nor foundation from building blocks in his mind. There is no inference to cover building a channel on what he trades.

so to have anything in the mind that becomes avaialbel when needed takes some effort to build the mind. 10,000 hours ought to do it.

What if a person can make use of the knowledge that fractals of channels are nested? A typical day might have an M or W shape. this means that each leg of the M or W could have three price moves visibleto the trader. (See above). This person knows that he knows when each turn of the M or W is possible and when it is NOT possible.

How does a trader feel when he knows it is NOT possible. He feels supported, comfortable and confident. A CW trader, on the other hand is feeeling anxious, fearful and angry, perhaps because under OODA he has placed a bet and is going through the resulting risk of betting.

A person who uses the knowledge of nested fractals does not do any betting. He is watching the three legs of the fasater fractal of the ppoint to point trade he is in. If he is doing the M trades for the day, each one has three moves on the next faster fractal which he is watching and annotating and logging.

Consider a trader who does more than the M trades. When traderzones posted a jug with a drunken face on it to depict his opinion of me, I posted the next days trades (17) and the end of a multiday channel within 7 minutes for the next day, in response. How could I do that successfully and then post their occurance the next day on the charts that formed? It is because I know that I know how nested fractals work based on the granularity of the markets.

This is an example of trading the next day be just going through the motions that are going to be happening and are known well ahead of time.

Look at 01SEP09. This was the date where the price could not longer get to the LTL of the Bull retrace of this Depression we are in. In terms of this parallelogram that makes up the depression we are in we are going from point 2 to point 3. Since we no longer can make it to the LTL of the parallelogram nested in the Depression parallelogram, it means the Bull retrace is finishing up its run.

What is the name for the parallelogram that follows the Bull retrace parallelogram? Just follow the Treasury Secretary's commentary to get the upcoming name.

If a person uses the nested fractals, he finds that most of his time is spent in a coherent state watching the legs of the fractal parallelograms that are "inside" the trading aprallelogram he is trading upon. Each one comes to completion. This happens all the way down to the granularity level of the market.

Almost everything a trader looks at is a leading indicator of what he is trading.

next I will repost a post in another thread. It has an illustration that the beginner, accutrader, can use for trading his approach by making use of the above posts and nested fractals. He uses a constant volatility bar approach and he is making clear its limitations regarding maintaining coherence as a trader.
 
Oh please... that's not what you said almost 7 months ago... you said the turning point was BACK THEN. And you were SPECTACULARLY WRONG:

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2776348>
Quote from jack hershey:

Look at 01SEP09. This was the date where the price could not longer get to the LTL of the Bull retrace of this Depression we are in. In terms of this parallelogram that makes up the depression we are in we are going from point 2 to point 3. Since we no longer can make it to the LTL of the parallelogram nested in the Depression parallelogram, it means the Bull retrace is finishing up its run.
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Quote from crgarcia:

Prices are mostly random, and mostly unpredictable.

You can draw channels in cloud shapes.
More...

If you don't understand the difference between a channel, trend or pattern in the market and a random channel, trend or pattern in nature, close your trading account right now, if of course you even have one.
 
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