Quote from Vienna:
Jack,
I can't resist:
-Proflogic's support and resistance points are defined by oscillations, Minor or Prime... so basically, (invisible) horizontal lines on the chart...
Failure and therefore trading direction is defined by how price reacts at these horizontal levels, verified by an indicator.
-In your method, failure (the FTT), as I (incompletely) understand it, is defined by the reaction of price relative to a slanted line (or a pair of slanted lines, a channel), basically a decision making boundary. You see price moving in channels, and trade the failure to Traverse such a channel (the FTT).
Do you think that PL's charts shown would benefit from overlaying channels unto them? Meaning, in your opinion, would a reversal (defined as "Physical price failure" by Proflogic) gain in strength if it also failed in regards to what you call the "Right line"?
This is not an attempt to dilute either method by making it more complex, just a thought that occurred to me...
Thanks.
The ergodic indicator PL uses takes into account the limiting (extent of travel) aspects of channels.
PL chooses a trading frequency from this that harvests profits form price change at the limits of price change.
This is a clean, unvarnished, type of high performance trading.
I would not think of his limits as being horizontal or tipped exclusively. They are synchronized to the climate of the market and designed to be "universal".
Both methods are not tied to the "trendline" or the DOW trend, historically speaking.
The type of trading characterized as trading TL BO's performs at a very much lower level of the potential of the markets. And often "protection", as used by this sort of trader, uses stops that are below the TL. I use stops for position trading for mentoring beginners. See category 8 and 9 of the document that reviews 12 methods three ways.
All MA strategies are less effective as well. They do not even catch BO's of TL's.
Here in both methods the major aspect that is there that improves performance is the fact that well before the TL would be reached, a definitive signal has been given. We both name it by our vocabularies since it is not common in conventional parlance.
This is an aspect of front running that you see here. It also affords the trader the opportunity to trade from a neutral bias which is important for harvesting profits.
Over the next while in trading, we all will be seeing some methods come to a close. Some of these methods being retired (See, especially Don Bright's post on how he keep his professionals hard at work getting the job done by making iterative refinements) do have potential "Phoenix" characteristics meaing they are capable of being adjusted to begin to perform once more.
To cite just one key type of adjustment, MACD as designed (12, 26, 9), bridges and "soaks" in contemporary trading cycles. Here the defaults have to be "tuned" to the PC era. PL has made his indicator "universal and so internally it adjusts for "PC" type inovations in market operations.
Bridging means it floats on rows of price waves instead of riding up and down sucessive waves.
Soaking means that it doesnot recognize the effects of signal to noice ratios.
See the SPM thread for to concrete examples of these two failures. The performance is low as a consequence. A repair is made to the operation by adding another subsystem to help. Unfortunately, the strategy deployed also misses four key flags.
Going from 1/8th's to pennies was another financial market inovation that affected trading.
The advent of emini's is another.
EFT's affect the markets as well.
Liquity as shown by market growth also affects trading.
I feel that PL has a way of taking these things into account. To refine for four years in the way he did, is a statement in itself.
SCT devolves into a KISS operation ulimately. The difficulty most people encounter with SCT is taking shortcuts of their invention.
It is hard to explain, simply, but people do have an incredible capability as a consequence of their phsyiological and psychological equipment. they trck thmselves often into thinking that skipping steps in development stilll allows them to get to where they think they are going.
Growth and personal building of knowledge, skills and experience is not something to shortcut or invent around.
The human system is quite capable of trading with expertise if given half a chance.
A path that has survived for 3,000 years exhibits a trait that is applicable here. A student will arrive at questions; the questions are always in the same order.
For traders at inquery, this is true as well.
The first fork in the path is to the and of shortcuts.
The second fork is to th land of invention.
Those two avoided, a persn uses reason to perfect trading and acheive extracting the potential of the markets.
These things are all choices made personally.
Continuation of trends and endings of trends is where the rubber meets the road.
Pring in a Q and A could not visualize trends overlapping. That is what these pages are about.
Read the Seykota quotes and fill in the remaining commentary to make it coplete. Omissions count. If he doesn't or you don't you come to the wrong conclusions for making money.
