Why do people use Volume, Range and Tic charts?

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ProfLogic

>>Sure f9 & good morning.

It is common knowledge that price moves methodically back and forth from Support and Resistance and back again. But what is important are the levels at which those Support and Resistance levels are created. These levels help traders see the strength and weakness of each of the markets oscillations so they can better see the clearer and safer entry and exit points. Trading is all about safe consistent profitable trades.

I designate 2 types of oscillations. Trend Resistance & Support (those created at extreme levels that are used to determine Trend only) and Trading Resistance & Support oscillations (those created that are not extreme). It makes is really simple, any oscillation that is not a Trending oscillation "IS" a potential Trading oscillation. Now by reading the strength of both one can safely choose the Trading opportunities that offer the clearest entry and most profit potential.<<

Are there any selfexplaining charts available - incl. MD (Market Delta?),
Ergodic etc?

Thanks.

Charly
 
Greetings,

THis thread has been very helpful,I must admit my trading career is taking some hits trying to come up with a stratregy.Jimmy Jams outline is well put together,making it work is the hard part.

Looking at a chart post mortem,its easy to see where S/R held ,and failed,and how a good trader would have handled the moves.While prices are moving,I get confused as to which way to look at the chart.

Got tagged 2 times today with stop by 1 pt on the YM,then 20 pt moves followed.Im hoping more screen time will help.

cordially Tom
 
Quote from JimmyJam:

Yeah, but I did.

Thanks for the compleat dialogue on trading ProfLogic. You've pretty much covered everything that a trader needs for their trading setup. In summation the topics covered are as follows:

1a. Chart Setup
1b. Concepts and Theory behind the chart setup and why certain configurations are better than others.
1c. How to look at and understand price action.
1d. Exact indicators used when charting.

2a. Major Trend Determination.
2b. Minor Trend Determination.
2c. How to trade with the Minor Trend.
2d. How to trade against the Minor Trend (1).
2e. Inclusive in the above section is a correct understanding of how to trade Support & Resistance.

3a. General discourse on trading which includes:
3b. Why a trader would enter a trade.
3c. Applying the methodology to multiple markets, why and how this would be optimal.

Traders are free to pick & choose and apply to their trading any and or all of the concepts expressed.

Best Regards,

Jimmy Jam

(1) When it is supported by the Major Trend.
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You pretty much have it. Just to clarify though, the only Trend that is of any significance to me is the Prime Trend (you call it major) determination. The minor oscillations in between are simply entry and exit points. You can create Minor Trends from those minor oscillations but there is the starting point for noise, over trading and over analysis in the markets.
 
Quote from Covert:

Prof-
Thanks for your input and help on this topic...very informative.

Could you expand on what goes into the decision to use tick charts or volume charts? Are there any mechanical triggers or criteria that cause you to use one or another. I have read that you would prefer volume charts, but in your spreadsheet, you seem to use both. Are there any benchmarks you would use to determine which to use, or is it just a 'feel' issue?
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I use Volume Bar charts wherever applicable. Some of the markets are pit traded so tick charts is it. Once the individual markets convert to being electronically traded you can then switch to volume bar charts. When the grains went electronic a whole new world opened up for the ag producers. It is a beautiful thing to watch. Next will be the livestock. The best is yet to come . . . FOREX!
 
Quote from Charly:

ProfLogic

>>Sure f9 & good morning.

It is common knowledge that price moves methodically back and forth from Support and Resistance and back again. But what is important are the levels at which those Support and Resistance levels are created. These levels help traders see the strength and weakness of each of the markets oscillations so they can better see the clearer and safer entry and exit points. Trading is all about safe consistent profitable trades.

I designate 2 types of oscillations. Trend Resistance & Support (those created at extreme levels that are used to determine Trend only) and Trading Resistance & Support oscillations (those created that are not extreme). It makes is really simple, any oscillation that is not a Trending oscillation "IS" a potential Trading oscillation. Now by reading the strength of both one can safely choose the Trading opportunities that offer the clearest entry and most profit potential.<<

Are there any selfexplaining charts available - incl. MD (Market Delta?),
Ergodic etc?

Thanks.

Charly
More...

Charly,

I'm not familiar with Market Delta but if you could give me a summary it would help. As far as the Ergodic goes it is simply an indicator. They all lag. It's the process of creating your trading environment that's important.
 
ProfLogic,

After reviewing your postings one question I have is 'how do you use the +10 and -10 'extreme levels'? Are these levels helpful in identifying the minor trend or the Prime trend only?

Thank you again for the thread.
 
Quote from Thom64:

Greetings,

THis thread has been very helpful,I must admit my trading career is taking some hits trying to come up with a stratregy.Jimmy Jams outline is well put together,making it work is the hard part.

Looking at a chart post mortem,its easy to see where S/R held ,and failed,and how a good trader would have handled the moves.While prices are moving,I get confused as to which way to look at the chart.

Got tagged 2 times today with stop by 1 pt on the YM,then 20 pt moves followed.Im hoping more screen time will help.

cordially Tom
More...

Learning something new takes practice. You won't learn anything well with screen time to solidify what you are seeing.

I'm posting a chart for the YM with, what I see, as the only 3 clearly simple trades for today. One short from about 12145 with the exit around 12110. This trade was in the continuation of the countertrend move down from Primary Rresistance of 12385. This should have been good for 30 points or so. The next trade is long on the confirming oscillation at 12116 with an Early Entry Exit about 12130. Quick trade but should have netted you about 5 to 8 points. The last was from a Minor Confirmation of the Prime Confirming Bottom putting you long again about 12135. You would have stayed with this trade until we had an oscillation failure at about 3:48 pm EST at about 12165 for a net of about another 30 points. All together about 65 points for the day or about $650 per contract; one countertrend trade & 2 trend trades.

Now I know there were a lot of other swings in the market today but MY feeling is that I would rather be consistently profitable each and every day then chase the market and make a bunch one day and give it all back the next. I have people make fun for that philosophy but I would rather make less trades and more money any day. To each their own though.

The chart I posted ia split into two sections. The top is price in Volume Bars (343 Volume Bar Chart). The price & HH/LL labels on the oscillations are computer generated in real time. The lines connecting them just shows you visually the movement of price between each Support & Resistance point. These too are computer generated in real time. The arrows and labels I put in manually to show you the entry and exit points. Now remember, this is the TREND CHART. The specific entry and exits come off the next fastest chart and in this case it would be the 49 Volume Bar Chart. It is just easier to show it all to you on one chart.

The lower section is the Ergodic. The red and blue line is the Up & Down Momentum of this particular indicator. I like to think of the Ergodic as showing me the overall strength or weakness of the market. The histogram is sea green and is the slope of the Ergodic. I like to think of the histogram as showing me the immediate direction of price. The price & HH/LL labels here as well are computer generated in real time as is the trend lines on the ERG. The convergence labels are mine for the purpose of clarifying the entries again.

The process is really simple but takes screen time to get yourself confident with reading the oscillations. The more bad habits you have the longer it will take you to just trust what you see. I tell traders not to believe anything that anyone tells you unless you can verify it for yourself by seeing "it" (whatever it is you are looking at) take place 100 times without fail. To be honest with you though most traders do not possess the patience to learn to trade this way because they want immediate gratification.
 

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Quote from ramora:

ProfLogic,

After reviewing your postings one question I have is 'how do you use the +10 and -10 'extreme levels'? Are these levels helpful in identifying the minor trend or the Prime trend only?

Thank you again for the thread.
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Yes, that is there only purpose. PRIME TREND OSCILLATIONS. Above +10 is where a Prime Price Resistance Oscillation WILL be created. Below -10 is where a Prime Price Support Oscillation WILL be created. There is no minor trend just minor oscillations when you trade using this. If you try to determine minor trend you will over trade your charts. Minor Trends are noisy.
 
Quote from ProfLogic:

I use one indicator to determine those extreme levels. I used to use the Stochastics but it was way to noisy and was range bound. If you have used it you know that in extreme up moves or down moves in any market the Stochastics will literally stick on the top or bottom of its range. The range was a little better using the MACD but the noise factor was awful. The key here is to eliminates much of the noise (confusion) as possible. After many years of research I settled on the Ergodic because it was really really smooth and wasn't range bound. The Ergodic's range is (+)100 and (-)100 but my extreme levels are (+)10 and (-)10. Plenty of room to breath. With some tweaking of the specific parameters of the Ergodic I got it to reflect the movement of price pretty well. We all know that indictors lag and that is fine. I don't trade from what the indicator is showing me, I trade what price is showing me AFTER the indicator has confirmed it. [/B]
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Does not the "CCI" reflect the movement of price closely also without the range bound?
 
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