Yes. I post to try to be clear. To post for completeness, I choose to not work in reference to one kind of thrend or another. The reason I do this is to promote a neutral bias. I consider that the past is to the left and the future is to the right. NOW is the present and the point in time from which you judge the past and the future. Johnny K is making a strong effort to understand. It is extremely important for all people to "know how to know". What is going on here is getting things straightened out so understanding can come to pass. Making money is always possible as a consequence of change. So I am presenting stuff in response to good questions being asked by people who are definitely going to be rich. I must go to where a person is. It is not possible to support the interests of any person without going to where that person is. To expect anyone to understand where I am is an impossibility. Johnnyk is drawing his illustrations to describe what he understands. We need to deal with this to get him to the place where he begins to use charts of the market. Thus far, we have failed. I could not explain channels to him and I made the mistake of introducing more vocabulary that is not going to work to help out either. He does not know what a traverse is. Worse he assigns his definition to it which is not conventional nor correct. You find that you do not get responses. People are having a particularly hard time going to where you are. Many languages are written from differing viewpoints. They evolved over time from different cultures. A good project for children is to collect documents from many cultures and also from individuals who have accomplished a great deal within a culture. Do systems of numeration next. For making money, a very powerful thing to do is to watch the present move into the past. For you, you want to watch the present move into the future. Good luck. All charts, you will find, gradually move to the left. After a while you will begin to be conscious of more and more. For making money one thing to get straight is that straight lines work. They can be applied to learn how markets work over and over. As Old Timer has pointed out to me; trillions and trillions are made in markets by the money that is put into the market. Here I deal with questions that lead to sharing those trillions of dollars. I know that one person cannot spend the money that he is capable of making. I feel that as many people as possible should be sharing this extremely large quantity of money that is piling up. Channels work. This is a tough concept to get straight. There is no reason what so ever to agree that they work from the definition nor the simple construction technique. The bottom line is this. No one can easily explain using common vocabulary the efficacy of or as to why channels work. When a person "gets it", they move to a consciousness that is something that makes them millionaires in a short time. Here in ET, people like you chat about lettering from right to left as a task that is not something you can handle. At some point you will get to a place where you begin to think about getting rich. That will compel you to work to understand how to make money. I mentored two people today for about three hours each. they looked at arrays of screens either theirs or mine. without exception they know how channels work. They know that 1 tick of ES is worth 125 dollars and one point on ES is worth 500 dollars. They see it that way for one reason. they are dealing with 10 contracts. Some people in ET do not make 100,000 dollars a year. We are talking about 200 points or alternatively 800 ticks. If Johnnyk used today's 5 min chart on ES, he could have drawn a channel right to left traverse at 10am to note the news. On bar 7 he would have seen point 1 at the bottom and point 2 at the top. This, I have suggested, is a traverse across a channel. Point 3 forms at the bottom of bar 8. Three points define a channel. In this case it is a 4,000 dollar channel called a "tape". Tape channels are composed of bars that fully traverse the channel that contains them. Every day begins with a channel that is driven by high volume. Usually four channels occur in a day. This channel extended to the top of R. Top of R is the current IT channel top for ES in this quarter. BY 10:05 today you had, defined for you, the first channel of the day and the upper price limit it could go to. What happened? This channel worked and it stopped where the IT channel line corssed it. What is the result besides making 4,000 dollars? For you, you learned that you didn't get any answers. What all can learn is that by drawing a "right" trend line and by drawing a "left" trend line, a person gets to "see" the first trend of the day reach the top of R. More deeply, a person gets, once again, another demonstration of "channels work". Bars 8, 10 and 11 yielded,respectively, points 1,2,3 of the first right to left traverse of the second trend of the day. This was a start of a 3,000 trend. Bars 13 and 14 became the "new point 3 that completed the second (always left to right) traverse. We see that Johnnyk does not know what a traverse is by now. All of his traverses have two legs (a leg is a line from a first point to another point). His look like V's and are one color and wrong. Tough for the moment. since e make money by following trends from one end to another, we are short now and going from about 46 to 40. a six point run. It takes five traverses ending at 11:00 on bar 19 of the five min chart. This is the sixth traverse failing to get to the left channel line. You get to see from volume how the pace of channels are determined. High volume gives a fast pace. Bars 7, 8, and 9 are high volume and you do PRV 7 times and note at 5 min the total volume. You "know" you are making money (4,000) continually as long as the volume holds. You pound through the IT channel line and fail to BO past it. As Tennet says it is a slam dunk and as Chenny says you can take it to the bank. actually what is said with athority is that "channels work". After another 3,000 dollars you see the second channel end and give you point 1 of the first traverse of the next channel. This was an 11 point H/L spread day. So far you have two trends worth 14 points. It looks like an "M" day. To nail three times the H/L range (choose a daily goal like whatever) a person has some work left to do. 33 - 14 is 19 points and only two trends left in which to get the job done. For four trends we go up down up down. the last trend was from 44 to 35 so that one gets a lot out of the way. Call it another 4,000 dollars. We need to eak out about 11 points with the up trend that went through midday. I used bottoms of bars 16 and 26 to get point 1 and new point 3. Top of bar 20 was point 2 just at the end of thetwo bar "tape" that began the first traverse of the channel. we hit the left side of the channel 4 consecutive times after the first time to set point 2. This is an example of channels work. The channel is 3 points wide. All the cycles of traverses are shown on the 5,2,3 STOC. BY bar 55 the midday is over on the vomue breakout and the "long" is over on a failure to traverse on the 11 th traverse (count them on the STOC also to find 11 there. this brings up whether of not 11 points could be made on the third channel of the day. It is a "c" channel. Low volume is "c": slow paced and long. "a" is fast paced; and B is medium. We had one fast, two mediums and one slow. Slow makes a lot of money. For a given price you may be making money at that price 4, 5, ,6, ,7 times. Thee was a long thread on averge points per day fior Elite traders. The vote seemed to indicate that 1 point a day works on the average per copntract. If wee see the channel thing works 4 out of four times. and there are four channels we see more can be made. so far for three channels we are looking at 22 points where a point is 500 dollars. We have channels down we have traverses down and we have 11 points that have to be made in the "c" slow paced channel. The 11 traverses help since the channel is so slow. Can we use the 3 point width to make 11 points with 11 opportunities. Can we be 33% efficient? Well we have to get two pairs and spikes straight to do that. If we do , then we make more than 11 points in 11 tries. 33 points at 500 a point is one day of 22 days a month or 250 days a year. 75 hundred points a year at 500 bucks a point. QED. Now let's learn channels, traverses and failure to traverse. Add to that slow channel pace trading that requires getting to be able to exit and enter traverses to make money using the same prices over and over and over. So far I type and it is nopt understood. you say and draw pictures to prove that you do not get it or you post about which direction people letter in. to day was a day that made over 15,000 dollars when a contract point isworth 500 bucks. That is, if you are trading 10 contracts in ES. ! contract only makes 1,500 dollars. Why did the last channel (short) not go any lower. Why? Bar 64. That is the 64 dollar Q.
In the late 50's IBM worked on people's orientations. (See THINK, the IBM house organ). It was determined that orientation affected performance.... You are demonstrating in your verbage a particular orientation and "attitude". This parallels Trend Fader but is not like his situation because it is a retreivable condition which is not retreivable (repeated failure). You have a vertical orientation. Tough situation for acheiving a neutral bias for making money. What we are going for here is to be neutral and to be able to really get down making money. To extend the conversation, please reflect upon two contributirs here. AMTSWA and powergirl. ET has a vast majority of people who are genuinely trapped. what traps people is their belief system. Getting "untrapped" required making an effort to get beliefs to come in harmony with making money effectively and efficiently. How did Harry trader get trapped by "production" type analysis. Well, apparently, that is his expertise. How did Nitro get to be a "guardian"? By frequent and vast repetition of myths that became beliefs to the exclusion of reason. "Stuckville". How can a person convert fixed supply and variable demand into a symmetric process which is driven by an asymmetric . formulation? AMTSWA demonstrated trading within trading. He did not lock in losses but insted kept temporary losses fluid until the market moved to make those positions favorable. And meanwhile he continued to take profits up to but within that boundary in a non segmented account. At first, as judged by the posts, no one had a clue as to his trading strategy. Naturally he was pulling down "unbelievable" nets from his prints. Powr girl treated differing fractals as different investments. she traded with a segmented account just as though each fractal was a different risk element just as an equities portfolio is maintained by lookoing at each equitiy as having a separate FA (fundamental analysis) risk construct. Thus she could be long and short in ES simultaneously in spearate independant account segments. the holding did not cancel each other out all because they were not netable ever. In effect she did as did AMTSWA, she never locked in presumed losses while they were unfavorable. The topic is thinking, the intellect and not screwing it up with "attitude" and biases. If a person cannot rise above "attitude"and bias, they wind up dealing is a very tough neurological turf. Humans protect themselves. Humans do what is necessary to affect "preservation". they can get to "fight or flee" in many settings. Money is one of those. As an abstract concept in a complex habitat, it gets quite "natural" to "preserve". Repeated failure falls into the "preservation" genre. Biologically the human body goes to work. Failure is a psychological concern. The emotions of humans are there to help humans. They show up to do their job. After much abuse, they get "screwed" like nothing else there is. Some ET people do nothing but one thing. What are they "preserving"? When the going gets tough, the tough tax their immunity systems. What if a person over taxes his immunity protection system. How can a person stop the affects of abuse? Naturally, he supplies stuff that "blocks" the abuse. What if he exceeds his capability to supply stuff for blocking? It turns out the human body is terrific for trying harder and as it does it wrecks itself. Abuse is stopped by blocking receptors. Not getting data certainly is not a hot idea for preventing more failure. Waggie entreats a wide spectrum of rapid fire observations (all disassociated separate unrelated factors and facts) with comments like "what's up dawg?" (See Aerican Idol not ET handles). He can't get objectivity and reason to prevail for that person. This guy waggie addresses can no long get data. He can't connect stuff with each other. He can't do reasoning mental cycles to draw conclusions. There is a pervasive receptor difficulty in place to protect the person. PNI the Aids of trading. thus to get with it to make money a person has to use his potential to learn. He also has to "know how to know". He needs to maintain superior health in both the pysiological and psychological sectors. "Taking a break" is a common ET suggestion often learned by experience (and it is stated thusly). What all of this comes down to is getting a "belief system", enhancing it, building upon success and above all preventing repeated failure. It is extremely important to come to the place where "channels work". "Up and down" is not important compared to "left and right". When to act is a left and right issue. Timing is what makes money. When is a left right issue. If a person must insist on equating poker with making money, then that person must determine that "when to bet" is much more important than anything else. It is a sequential issue. Channels are the envelope of making money and the job is to have sufficient and excellent beliefs of when (how) markets work. JohnnyK will ace this as usual. Right now I need to continue to be redundant. It is not a 2x4 thing but it is more a polishing process that leads to having facility. If a person does 100 charts with every channel and every traverse and avery failure to traverse and with every 2 pair and spike, they are going to understand the consequences of producing 7500 points a year with 10 contracts of capital. Throwing peptides at receptors is a very dumb idea as an alternative because of poor beliefs, bias and "attitude".
Hi Jack, It was the above two quotes from a couple of pages back that threw me off regarding traverses. I now revert to my previous understanding of traverses, which was correct, and regard these two references above as containing inadvertant typographical errors. This is understandable considering the volume of information you are sharing. This is an argument in favor of redundancy, which is appreciated. At least you know I am paying attention. I just did not know how you came up with right and left channels. Left being the past, and right being the future explains it very succinctly. Below we will find a corrected whiteboard submission which is self-explanatory. Sorry about the psuedo chart thing. I will definitely move to real charts soon. Below find a real chart of todays E Mini 5 minute for a visual reference enhancing Jack's written dialogue. I will try to place lines on it when I have a moment.
I think Jack was refering to your chart about the three traverses make up the first traverse, If I had your picture I would edit it as top left of chart point one,,,last 2 point 2,,,,last 3 point 3. I attached a chart hope it works
Thank you for the both the time and the lengthy replies you gave. Today I spent time drawing channels on hard copy and on screen as the Dow developed today. I have in the past looked at A days, V days, W days, M days and N days but concentrating on 4 mini-trends or channels as you suggest is a better focus. More than that it is a comfortable belief. I followed your review of Tuesday per the bars and trends/channels for that day as you described the days sequence. I claim only a simplistic understanding so far. But I find the potential of successively making points now opening before my eyes; it would be very exciting to actually achieve that on a sequential through the day trading basis. Reading volume to identify when a channel is starting/ending is also receiving my attention. Today Wednesday 04/28 was interesting to try and assess. But in reading volume I am still seeking more answers and further guidance. Thanks again.
Thanks you guys. I needed to verify Right vs Left in order to keep up with Jack's narratives. Past and future doesn't work for me since the Left can also be in the future, depending on where you are now. For my personal reference, the Right side is always the odd numbers/points 1 and 3, while Left is the corresponding parallel touching point 2(s). In liue of a contribution, I will just reference a post Jack made elsewhere today that closely parallels this thread at this point. The following link (picture) demos Jack's view of Long Term (LT) and Intermediate Term (IT) trends using the 60 minute fractal. http://www.elitetrader.com/vb/attachment.php?postid=486072 And here is the thread page: http://www.elitetrader.com/vb/showthread.php?s=&postid=486072#post486072 JohnnyK
Today (Mon May 3) was a toughie to work out from the outset and apply the channels (INDU). There was couple of sharp run-ups in the first hour, not unexpected, and then still difficult to work out the slower paced stuff into channels. I do not have a belief problem about channels. I follow the teaching. Where my perception lacks I blame myself as not yet sufficiently experienced. By applying today the MAC D histogram on the 5 minute bars it does sort out the directions of price albeit that it might be viewed as a little brutal and blunt as an indicator.