A lot is discovered when a person begins to be creative and have an open mind. This first chart of using BF knowledge about traders deal with events, provides a working schema for how to acquire the means of having a strategy. this can lead to a working routine and help a person get his plan into place to meet his life style and/or business goals. Having a defined characterization of three things including all events is just like a look up table in coding an ATS. If logic is used, then a person can also be informed about everything else besides events and their precursors and post cursors. Now you may, perhaps, see a consequence of using the event triad in trading. You do NOT do entry/exit style strategies in trading any longer. As you saw in the "Cash Cow" this concept was established in the first logic diagram presented. One of several persons took the cash cow to fidelity and it performed better than anything he had done before. It lacked the utilization of the event triad presented in the cash cow, however. I feel making a schematic of a system can be done from this poiint onwards. A person can operate in a hold position as long as no Event triad window is there. When the pre event appears, then the person goes to logic that affords a quality reversal. This is what BF focuses on (B) among other things. These other things are over/under reacting (A) and consistent and correlated irrationality (D). What if a person can recognize that an event is not happening? could that convince him to not do other things BD states poor traders do. What do traders do mostly when the is no event happening? they exit and enter, scale this way and that and look at thee different time line chats, ETC, ETC, ETC....Mostly they stay on the sidelines and WAIT for a set up they have sleceted. Look at the A. Lo product. What patterns occur? how often do they show up? He proves no trading/investing can be utilized if these patterns are the patterns to use. Unforunately his work is invalidated from the start since he threw out the events with the noise he "averaged out". This means the characterization of pre and post events has to be done very effectively. So far we know they are there and we know traders are not good at using pre and post event information. It is a huge step in deciding to stop using entry/exit approaches and adopt hold. reversal strategies. BF's B states the opportunity in terms of continuation and reversals. there is a plethera of study results. What are the considerations for holding and what are the considerations for rversing. I looked at these things from the perspective of the mind's operators it turns out. My mind made me do it. I was acting as a scientific problem solver. It looks to me that BF has narrowed the focus to only several fults that people acquire as they learn to fail at trading. I read fear, anxiety and anger in a lot of posts. I correlate these emotions to a position I have that when people donot know what they are doing their self preservation system goes into overdrive to get them away form trading the markets. This is a good place to go to in my opinion. sideline and get to work on problem solving. There are about 9 steps to becoming expert. None of them happen during RTH's. Trading is an exact science dictated by the markets. A trader has to obey the market's offer at all times.
The reality of trading is to deal with events and relate the events. This implies that it is a hindsight kind of thing. A. Lo uses five points to define 8 of the ten patterns and he uses data sets that have a minimum number of consecutive parts (38). To find out how the patterns help out he measures something for one day 3 days after the pattern has completed. To us this sounds like "investing" since his tabulations over 31 years in five year segments and in magnitude Cap considerations) of symbol quintiles, yield 4 to 6 happenings in a five year period. Traders operate intraday and have many events they discern each day. The ten patterns composed of five entes, a delay and a conditional result are moslty hindsight types of pattern trading. The two most significant using the franca lingua of TA "Traders" are the climax run (See O,Neill) and the FBP BO. Lo refers, respectively to them as BTOP and TBOT. They, respectively, have increasing and decreasing volume as measured (humorously speaking) by Lo. That brings us to BF's B and dealing with making money using events and timing them correctly. The pattern missed by Lo is the "trend". "trends" are best played by monitoring and anlysis in lieu of "trend following". By knowing there are pre and post aspects of events, we can get right down to the nitty gritty of using events to trade trends while trending is going on. I looked over hisotry and tabbed the results of 30 of 32 poeple who contributed 72 elemts that can be considered to do trend monitoring and analysis. They made their contributions between 1790 and 1957. My view is that the call is in on TA and trend monitoring and analysis. The call is also in on how to do decision making and taking timely action. Since there are many "orders of events" in trading, it seems possible to me that merging these into a cohesive whole is what needs to be the primary purpose of a person who is using his emotions as a signal to interatively refine his technique. OODA can morph OUT of probability information theory and into non probabilistic infrmation theory by just using the scientific method as applied to events and their order of events. ISAGA and its worldwide membership DID, over the last 60 years, morph the problem solving of the world by a reasoned processing of information theory. (International Simulation and Gaming Association). Members go through the stages of listening, presenting, panel membership and being moderators of panels. Five languages were used in sessions. The franca lingua of TA trading is the language of simulation and gaming. Quants were late to the party. BF results dictate that events can be used to deal with continuation and reversals. I explained to others in ET how Dunnigan used "traps" and "continuations" in the 50's. An ET member asked who Dunnigan was. Dunnigan put events together to form patterns AS the market operated. History is replete with folks who used the Present to "KNOW that they KNEW" just what was going on when it was going on. OODA does NOT do this. a person has to accept the idea that he can know in the Present and NOT be in the subjunctive of uncertainty. Events occur and events occur in an order of events. Dodd/Granville established this long ago. They are the two aditional members of the group of 30 I posted to help surfer "get it" regarding trend history and ideas. you can notice I rejected all of the probabilistic ideas that surfaced between 1790 and 1957. Fractals nest. Within fractals, patterns form. Patterns are formed from extremes called events. Nesting precipitates the consistent structural context of patterns within fractals. BF instructs the potential trader to assure his strategy is improving by using emotional signals to guide him in making reasonable changes in technique. The first thing to handle in this matter is getting nested fractals to work for you. If you do, then you HAVE A TRADING CONTEXT FOREVERMORE. Start with examining irrationality. for me to keep at a high level of dignity, I will not be using as examples the set of members who are irrational with regard to nesting wrongly and who destroy any chance they have of acquiring skills. A person has to "get it" that the market determines how fractals are structurally nested. The principle is that: AN ORDER OF EVENTS DETERMINES THE FRACTAL STRUCTURE. We have events. Events have an order. I stay in the market; I use no stops; and I extract the market's offer. I have three fractals going. I trade the middle fractal. Trends have boundaries and events determine the boundaries. Examine the inventors and designers of boundary systems. Look at the BF A, B, C and D and determine the shortcomings of the various technigues. Associate your techniques with those you examine. Fix your technique so you have boundaries determined by events following an order of events.
The way to begin is to record events using the market's variables. This is the chart I began with in 1957. My orientation was to record events. BF suggests event come along one after another. BF suggests people have emotions as they sense and use their inference to obtain perception. A routine takes perceptions and links them into perspectives that are used for "betting" and finding out if the "bet" was a good "bet". I decided against betting and believed the "market was always correct". this allowed me to "Accept" what I perceived and that "acceptance" lead to Trust. Trust appeared by pancilling in the data and gaining a perspective of what the market was "telling" me.
Perception is the key to using BF constructively. Any time you sense something in P, V, you get emotional about it. If you follow the journalling on ET, you get to see what happens when a person lacks perception. Usually they do the A, B and D of BF. They have anxiety, fear and anger they tell use. BF says to make reasonable changes in technique. What BF is pointedly saying is that when you need more inference to get perception , you have to put inference in your mind by getting short term memory to become long term memory so that sensing is matched with the corresponding proper inference. when the wrong inference is matched to a sensing, then "failure" is being learned. this is the feedback loop mentiioned by several posters in this thread. Some, humorously, say to get rid of the "bad" stuff. It is too bad that the mind does not function that way and the mind does not do "removeal" just like some people do not do "windows". Un learning is not a function of the mind. Refer to my illustrations of the alternative to unlearning from years back. Always plug irrational statements you find into the irrational box. Name then and put them to use to get the process of iterative refinement in gear. How do you deal with an inference that you presently have which is screwed up? When you have FIRST RECOURSES to erroneous inference, you get an emotional message that is telling you to shape up. that erroneous first recourse is being reinforced synaptically all of the time. Mostly this unconscious reinforcement is WELL BEYOND YOUR CONTROL. Examine the out of control comments made in ET. Bf has well proven the consequences of being out of control and reinforciement of erroneous inference. Teenagers get a synaptic haircut that is programmed into growth. this is when a lot of teenagers get beyond thier less than acceptable behavior. When do potential traders get the haircut for irrational behavior? They don't. That is just the way it goes. Every learner HAS to get with proper and purposeful learning. So far this thread is just a warmup drill and few are reading it. This will not change.
I like this chart 1 because it is something that never happens. So why bother with it. It does make the point that this is never a context. The context of events for traders is happening on at least three fractals where the market determines the interfractal conext. This is NEVER going to happen for most potential traders. They are NOT GOING TO GET IT!!!!! And man oh man they are going to prove they can't get it year after year after year!!!!!! Here is chart 2 and it defines the difference between a retrace and a reversal. Of course the big question is how tdo you know you have an event when the event is happening? BF comments on this in B. BF says most traders DO NOT KNOW at any time an event is taking place. That is the built in problem in most trader's minds and they continue to reinforce this erroneous context.
We have to look at the tool that lest you know that you know an event is happening. It was made public before ET existed. PRV is the tool and it works on all fractals and we have three fractals nested. So at this point we can use the PRV independently on three fractals. our basic development of complete mental differentiation doesn't take long and it was just a matter of building it effectively and efficiently. BF is how it is done and the easy manifestation of using BF's C is to log. Log the three fractals and set up a column for logging any other pertinent order of events. Lets say 100% of potential learning traders above fifth grade do this logging and label events on their charts and include the boundaries for the monitored and analyzed trends. What would be the results of an NSF financed study done at MIT be? We will never know. You have PRV running so you know you know when an event has occurred at the time the event occurred.