Quote from TSGannGalt:
I'd like to add a topic because it seems relevant...
Can't non-trend = noise, within some degree of "whatever"?
Isn't the one of the point of TA to reduce noise to trade some "move"?
You make a stellar and beautiful point.
Signal to noise ratio is a deep and consistent guide for risk where market pace no longer allows you to "sense" risk.
Look also in some threads for tha allied subject of volatility compression as a leading indicator.
Lets go exploring a little. Look from farenough "outside" that you can see the market piping along in the contrext of its harmonics and the S and R boundaries for the last significant while (think with a phosophy of History that is symmetric. Danto , Columbia U. )).
Fast pace (lowest risk) transports price so well that noise is trivial.
Approaching boundaries is where trendlines grow more and more significantly closer to the boundary (the distance to the boundary actually becomes less than the volatility of the trend).
This is the beginning of volatility compression (nickel is just getting his first wake up call on this in this thread). DBphoenix could never bound trends and onlt deployed trendlines.
Compression starts when the left channel line bashes into the boundary of the market (the S/R thing).
Momentum measures all declne and what begins to stand out is "noise.
This is the time when random walk and chaos seem to do better if a macro consideration of a "market" is going on.
We successinvely notice the lower frequencies are booted one harmonic after another.
We have noise and non trending and the lateral goes through three stages: congestion (slalom trading gaussians of volume); convergence (an asymmetri pennant that will soon fail the behave ( by not following the rule assigned to it normally when no volatility shift and momentum shift influence it); and centering ( maximum noise to signal ratio (signal to noise is turned upside down to measure risk at the point)
The Gaussian has gone to DU and flaked out a while and whne it reemerges it has like the faults reversed its polarity.
The initation of compression when the channel is first truncated is the initial profit taking point (exit on the left side which equals S or R) and then as risk increases sufficiently slaloming stops. You can calibrate the the risk to know when to quit by how high the low the signal to noise ratio is (work upside down and judge the max noise to sig ratio)).
This gives you all you need to have annotaed for sidelining in a given market based upon noise. this also is a leading indicator of FBO's and it also allows you to delineate between reversals (descending noise) and retraces (increasing noise)..
There is one other place this stuff happens. Away from the S and R. Way way from S and R. Here on this market operating point, you get to deal with whether a market is functional. Markets do not always behave and function. They are "open" but they are shut down.
Once you can handle the boundaries of an operating market, you then get to be able to handle knowing when a market shuts down. This high risk land where the big guys get new ones reamed because of two propensities: not sidelining before they cannot sideline (they are too smart to) and having to sit in the market when the market is shut down. One a dynamic transition the other a mistaken setting situation. Proflogic has both of these really aced. Another guy (can't remember handle) who made seven points here shows he could handle it in the future in a thread on indicators.
Low volume is what shuts down markets more than closing bells. Supreme risk is at hand when a market shuts down. Noise is rampant. All of the above applies except their is no channel truncation; instead congestion reigns then convergence and finally centering. Obviously skilled traders handle congestion be rythmically slaloming as long as it is worth it (well into convergence).
Now the other half.....LOL..
Knowing noise....you know its retiremnet and when to come out and play again. Pop in note well FBO, retrace and reversal stuff and by that time you have your very well extended channel, lower risk and only incidental noise. And definitely not a non trending situation.
I always used to think of noise and db's when I read dbphoenix. did you hear any supply and demand here??
... but it's about time we have some constructive "opinions" to make this thread more "fun"
