Hypostomus, Jack has stated explicitly that SCT as he trades it uses hard, quantitative rules. I have defined the so-called "soft-rules" to be those that require spontaneous trader decision-making based on subjective observation. These rules are inherently noisy, and as such they are stochastic and cannot be evaluated quantitatively because the decision-making is not stationary. There is nothing "soft" about dealing with outside bars. They can and will occur, and Jack's method of creating tapes and channels around those tapes must take them into account. Whether the trader prepares a mechanical model or chooses to draw trendlines in real time, having rules for the cases I illustrated is necessary. RoughTrader
We await word from an authority. But I wonder whether there is a requirement that channel boundaries have to be parallel? Do they even have to be straight lines? Shouldn't every two bars be a potential "tape?" Can a channel, as shown in case 3, be flat? If so, which channel boundary is the RTL? The LTL?
Case 3 is an illustration of a CCC occurrence. One could potentially wait for the BO of the H or L of bar 1 to form a tape with defined slope. The alternative, as I suggested in the example, is to start taping after bar 1 bar-to-bar. This would imply bar 1 is ignored. To take bar 1 into account would render the subsequent bars as inside-bars, making them congestion bars. Let's wait for Jack or others. RoughTrader
And Spydertrader has stated that there are NO hard-and-fast rules. I disagree with you that intuitive decision making is non-stationary. Innumerable psychometric experiments in the 60's proved otherwise. In general it follows a binary decision model, except that the subject is not aware of the relationship of his true confidence level to the level of risk he is encouraged by the experiment controller to take. Be that as it may, I wish you all the best. I will be a gadfly, but also a cheerleader. Been where you're going. Hope you do better than I did.
My general experience is that there is no one technical holy grail that sets itself completely apart in ideology from the vast sea of trading strategies in existence. Many different winning strats revolve around the same general "edge", and many losing strats suffer from the same general shortcomings. After a short period of study of Jack's method, the most important thing I've come away with is that it is an excellent sentiment-tracking model. It has the ability to sense changes in sentiment exceptionally quickly if the separate analysis elements come together properly on each and every bar. I don't have a difficult time seeing or believing this because, coincidentally, I have been trading a form of SCT for some time now. My method simply lacks the precision of turning point identification of even Jack's beginner-level model. Not to mention the turning points identified by the nuances of the more advanced methods. I don't believe any claim unless I see the accomplishment of the claim. But that doesn't mean EVERY claim in trading isn't worth investigating. RoughTrader
A possibility to overcome this subjectivity is to use constant volume bars, which leaves one looking at price action (or any price action indicator one prefers) since volume action would then be built-in to each bar...
Volume bars are nifty. What works for me with the YM on volume bars can be moved to AAPL by setting up volume bars of equivalent approximate time spans. AAPL works because it's short term price excursions are enough to overcome costs, most stocks would not work... I've always been shooting for something simple enough for automation and volume bars may take something away from a strategy but they are a move towards the simplicity needed for a universal strategy..
You are doing a super job. And for several reasons. The approach we are using in ET is to help people advance through about six skill and knowledge levels by proceding from a core and adding shells. Naturally, you have begun to focus on one of the independent variables. Because we are advocates of "knowing that you know", there are serious and imposing restrictions invloved in meeting the standard of excellence required to move up the acquistions line. At all times we keep things "hard" and there is no "descretion" or what is sometimes labelled "subjectivity". You understand that. A lot flows from this stance and and its requirements. I am going slowly here. As 2007 winds down, I am more and more returning to my basic job of solving problems and helping others. There are some very unfair things going on with respect to our citizenry, who without exception, have stepped forward or followed the rules for their entire lives. For me to keep my level of focus on those, like you who are working, I am going to use ignore when the opportunity arrises since I, at this point, do not care to engage in anyway with any persons who are not making bonifide contributory efforts on behalf of ours rationally seeking support and help. To that end, I am going to be telling you in this thread each person I am putting on ignore and why. You can then profit from their absense. Hypotunuse and all of his aliases are going on ignore. I made my last post to him as a matter of providing a valid viewpoint on a serious subject. He used it as fodder as usual for his personal interest in posting stuff at my expense. Here he is posting erroneous information that is a result of his way of twisting objective factual information to serve his audience and he is unable to reason rationally in many aspects. With respect to your work, ignore hypo because he is incorrect, and leading you astray. I am also putting the 22 person on ignore. He is not making rational and logical decisions and he does not have contributing orientation either. Other obvious choices for ignore I am not going to mention at this time. I hope everyone I put on ignore returns the favor. You are doing a great job. What you are surfacing is a body of consideration which is the primary set that causes failure in almost all trader efforts that are ever made and especially in edge trading. You are now able to deal with cases. And you see that several other articulate and rational people here do the same. Maintain your focus. The goal is to handle the market's offerings all the time and in a timely manner. And concurrently, you have to deal in a mathematics that tells you:"you know that you know". I am reporting to you that the journal has in its pages the total systemmatic way to go about dealing on every level all the situations that can possibly come up. As we wrap up the SCT journal on the last level of skills and knowledge, we focus on the fine level of monitoring and, in addition we keep the tools in the quiver defined and clear. The same is being done in PVT. I will keep current on this thread as best I can. You are conducting a process and you are going down the line in an excellent way of working. I will get you to ignore inputs that are off base. It will also simplify my life from here on out too.