Quote from accutrader:
Hi Jack:
Thank you for taking time to reply. However, I am not familar with your terms. What do the following mean:
FTT (Failure To traverse)
RTL (Right Trend Line)
BO (Break Out)
B2B see below.
2R
2B
I learned all of these from mark brown and as he pointed out, I get paid to post. So thank you for your question.
The Pool Extraction Paradigm (PEP) has two hypotheses (HS) and they are measured bt a parametric set(PM).
What happpens is that the granularity of information (ticks, contracts, and print time) dictates that 9 cases of adjacency determine the foundation and building blocks of a system. To measure these, binary vectors are used as the parametric measure. this means the Hypotheses set is used to build logic just like that used in digital computers as hard or software. In all binary systems there is no uncertainty since there are only one of two answers possible.
People use drills to build their minds and trade with unconscious competence by following the binary logic orientation.
The tricky part was how the market dictated the hypotheses and their measure.
The resulting glossary is like a foreign language to most and most cannot understand that using CW to test a paradigm that is not in CW language cannot be done. CW works on betting, risk control and money management. The character of CW trading is measured by segements of scales (See TZ for his list) that do not contain the range of values used by this paradigm and its trading. CW people, therefore, conclude that what the system does is not possible. they prove to themselves that what we do, doesn't work. This level of logic the CW people use is irrational by the standards of those who use logic (Carnap).
It turns out by market granularity that the envelopes of price movement can be defined. The container is a parallelogram. To get to this conclusion logic is used and a caveat is that there is no noise and no anomaties in the binary logic used in PEP and its four applications.
A parallelogram is determined by the pattern which is described in shorthand using B for Black and R for Red. Point 1, 2 and 3 in geometry applied to a two variable orthogonal matirx (chart to most) gives lines of slopes described by a linear equation. The m's sign in the linear equation determines the B or R with one caveat, 0 slope is colored by market sentiment which is defined by the leading indicator of price. Technically, the sign of m precipitates from the parametric measurement of the volume as stated just above.
I learned all of this from mark brown at age 24 about 53 years ago.
So B2B means Black 2 Black and that is a description of the price and volume move from point 1 to point 2 of the parallelogram that forms the analytical container used for decision making to continually extract money from the markets. Point 1 is beginning of B @ a peak in volume. The volume reaches a trough at 2, the BO of the RTL. So the trader "reads" this as increasing price and decreasing volume. A more general term is used for price;from H1 (Hypothesis 1) the term is continuing. The trough of volume coincides with the BO of the RTL. Price is B as it goes frther outside the old trend to a point 2 where volume is increasing to its peak.
we trde this as one profit segment from point 1 to point 2. The eact timing of everything is always known and the values are also known in advance. This is all accomplished by using panes set up for those purposes. Nothing (nada) is left to chance or guessing anything.
The general concept involved is that by using a binary logic system, you always know that you know since there are only two possible answers and one of them is always present for you to see and add the mind's inference to and get "perception". You can see this is not possible for you because you do not have the inferrence to call upon from your mind.
we upped the ante with the binary concept by using vectors. Above you see three of the four so far: increasing, decreasing, continuing.
At point 2 of the parallelogram we have reached the end of B2B. volume has gone through two moves defined by P, T, P where going from P to T is decreasing volume and going from T to P is increasing volume.
2R comes next after B2B. 2R is going short from point 2 to point 3 all on decreasing volume running from a P to a T. This is a one to one correspondence of P and V. At point 3 a line is drawn to point 1 and it is extended into the futre to the right. as statd a parallelogram is drawn using point 2 where a line segment originates and goes into the future.
Price fills the parallelogram with the last move of the trnd: 2B. 2B is a long move and volume goes from trough to peak. The point is between the two lines drawn and it is called FTT because price did not get a cross to the LTL (the parallel line drawn from point 2.
A person versed in the PEP and its applications takes three trades as you see. If it is the beginning of a day he has traded much more price movement than the ATR.
What is next For him is to trade the R2R 2B 2R which follows the long trend's three moves. You can reread theabove "long" description" and replace it with the descrription for the short R2R 2B 2R. Writing it out word for word will be helpful to your inference of your mind.
Suppose this post made sense to you. for example it has made sense to four generations of people so far (my definition of the four generations in the last 53 years). At EOP my ponytail made me a person of a particular generation. My pin striped suits I wore and my Hickey Freeman tweeds made me parts of two other generations at EOP. The bronze plaques on the present buildings on the leased land of our pre-colonial dairy farm adjacent to Wall street made me a member of another generation.
You can look at the S&P chart of the Bull retrace elsewhere to see the RTL's of three levels of parallelograms that make up the nested fractal of the PEP system.
By building your mind in a given system (this one is based on science and deduction and the null hypothsis approach), you obtain inference. Collectively the inference of the system is known as differentiation. When you acquire differentiation you arrive at trading described as unconscious competence. This is a place where you feel support, comfort and confidence. Unconscious competence is a knowledge and skill combo that is just like how you drive a car. Driving through the B2B taking profits; driving through 2r; taking profits; driving through 2B; taking profits is how every day opens with the first three trades. The next three follow suit, profit, profit, profit. Wash and rinse as they say.
CW trading doesn't allow this and 4 out of 5 reject this post as a possiblilty. So people just skim it or pass up on reding it. some ignore it. most reject what they read by applying their beliefs which are not compatible. Without any inference, it is not even redable. mostly I post in CW language to make points.
Most people will say but this doesn't always happen. It doesn't happen on a trending day!!!! they say.
A system always happens. All systems are built from the ground up. In markets, the data flow dictates the system and its content. CW pleasantly ignores this concept and goes its own way using tools that come from academia and the business of the FI. Making money from commissions and fees provided by clients. Fiancial advisors do not extract capital from the markets. The PEP does orient to taking the market's offer.
As you see, there is the concept of market dominance and non dominance in the three moves of the parallelogram that is the trend envelope. you also found out trends over lap during a brief non dominant perios after the FTT and up to the BO of the RTL.
You also found out the difference between a retrace (point 2 to point 3) and a reversal (point 1 to point 2). Most CW traders will never figure out the difference which is available for differentiation with in a few seconds of either's beginning.
Don't worry if you do not understand this. The mind has the potential to trade to take the offer continually but it has to be built first to be able to do that. I was just kidding about markbrown. I didn't learn anything from him. Once I kidded him about getting pad to post here; I think he didn't get the humor as yet. Maybe someday.
Any New Yorkers old enough to remember when the fence was taken down around the treasury building??? That was fun time, especially the plays on Wednesdays at lunch time. Remember the first one? 1, 2, 3, 4 Dump the Tea and Start the War........ the music sessions were more popular..... It was after Whoopi gave the check to the nuns....lol
Good luck to you.
