quicky follow up on GROW. I go down to the five sometimes. Here you can see the FTT on bar 3 and the "second chance" formed a couple of bars latter. When grow got within a couple of the top of the "unusual volume" I felt that sustaining that volume for any length of time today wasn't going to happen. So Liz phoned our "trainee" and he did the usual "tried to get the best price".... Our net for the two periods (Monday and Tuesday) was less than 6%. It is important to bank profits steadily and continually. the local broker in St Joe Mo. is dealing with third generation folks now and Liz's account is as they say "unusual". And now we have our third account exec since they feel he is the one in the office who can handle an account like hers even though "I can't fugure out what you're doing there but I can handle it". he looked at GROW for a while to "get the best price I could"...... We did know to call "going into the peak" as we saw it but The phone calling is a pleasant throwback for us. GROW now is back in the tenured stock pile (previously traded) and that is that. Iff you are short on time for doing your trading plans, do as I do. I review on Sunday what I feel is coming up for the week. I note on the DAS the day of the possible entry and as the week plays out things jockey around a little. Trendlines are very important for this and so are the indicators. It is just a set of sequences that have signals and you put them in order for the week coming up and just use NOW as where you do the routine. As a historical note; I did classes for Liz her Brother, her step son and her boyfriend. They were Saturday morning from breakfast (my fee) until noon at my architecture studio in the siting room or at the screens. Liz's first month of money trading after the classes ran at 30,000 net on 100,000. This is not 2.5% a day which the market offers as the personal potential there for you BUT it is a good portion of that. Here in Tucson we have some people doing or about to begin the OOM thing. I need it for copy for some writing. OOM stands for Order Of Magnitude and, of course the term comes from the mountains of Asia. I feel that a trading segment of 100 days is what is needed to bring out the trader in everyone. Here you start with either 10,000 or 100,000 dollars for stocks and 1 contract for ES. The plan is to add a 0 to the right side of your capital. Trendlines are part of it and, in detail , they are drawn from 2 or 3 consecutive bars. There are three layers of these usually and this comes from the different fractals involved. Tendlines give you channels; channels give you internal formations (traverse which are channels and FTT's (See spyder)); which give you turning points; which give your overlap of trendlines where price is to the left of each; etc.. As the future comes into NOW where you operate a routine, price continually remains on the right side of the market as determined by the trendline. As a person steps out of the conventional orthodox financial industry foundation, he goes toward using a paradigm based simply on extracting the potential offered by the pools of capital flowing in the markets at a point in time called NOW. Entry/exit thinking is not the modus. (in position trading it is there since only the long part of the cycle is activated; but surprisingly the whyole cycle is monitored to be sure to optimize the profit making because it is like stepping from one cycle to another in a continuing sequence as the future moves into the present. Continuation and reversal is the modus of the paradigm shift. And optimizing extraction is the iterative refinement. The ES is trading as a lagging market of INDU which is a lagging market of the YM. All the trendlines, channeals, internal formations and signals on ES are lagging with repsect to other things listed above. It is deja vu and sequential all the time. By minimizing the unknown at the time NOW it is possible tosimply use optimizing techniques in the context of NOW using the sequencing as the future moves into the present where we live. The projected trendlines into the future, their timely overlap and when mins and maxes are arriving makes for a comfortable continuing experience. The natural models, especially the phospholipids working away in, on, through the cell membrane, say it all. If you let yourself have an environment for trading, your bod will take you the rest of the way. there are many neat milestones in science and history. 1543 is a Fav (Copernicus) Darwin>>>>>Lamarck>>>>molecular bio. nature to nurture as the way it is. Once a person can understand that living things can sense their environment and behave accordingly (and pass the record forward), there is not much left to do. So for trading, you have to have the markets in your environment. Not many people in ET do. The vast majority cannot see the markets. so they do not have what I call an inner space capsule that contains the environment they need to .......SENSE. By not being able to sense the markets, a person cannot go through the change he needs to go through to be able to adapt and be part of the markets. You don't get to let your receptor and effector proteins to work on this stuff. Half the bodies energy is devoted to these guys. receptor=awareness...... effector=action.... A person can nurture himself by being able to see the markets. He WILL notice the potential at some point. Everthing follows from that.
Trading by making the shift from entry and exit to hold and reverse. Trendlines projected into the future also provide the other three lines needed: the left channel line, the vertical line in the future marking the end of the trade and THE DIAGONAL LINE that forms the path from the beginning of price movement to the end of price movement. You hold along the diagonal and you reverse as the end of profit accumulation occurs. Spyder,would you be kind enough to show me a a simple chart of these principles..thanks
I don't use the vertical line marking my anticipated end to that particular trade (time stop), but I have included the other lines I use. Attached, please find a daily chart of ASCA, but the same process works for any chart on any timeframe. I hope you find the following useful. - Spydertrader <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1266953>
Spyder, I am not intimately familiar with the details of your protocol so excuse these questions if they merely are reflective of my ignorance. To what extent does a large opening gap affect your assessment of the fidelity of your parameters in so far as an equity is concerned or is this simply something you would screen out? If you don't screen it out then do you take into consideration what the premarket price action of the stock has been? TIA lj
The following clarification assumes one trades (always) in the direction of the dominant trend. If the large gap occurs in the same direction of the dominant trend (in the case of ASCA above - up), then the trend remains valid. If by doing so the gap breaks through the left side of the smaller (thin green lines) channels, then one simply adds an 'increased volatility' trend line to the upside and continue on - anticipating a traverse of the entire (larger) trend channel. On the other hand, a gap in the opposite direction of the dominant trend often invalidates the trendline analysis up to that point. As such, one needs to allow the new paradigm to take shape (new trend formation) before jumping in with both feet. You can locate the entire methodology I use to trade equities (and more recently futures), in my two Journals. Journal I focuses on 'Beginner Level' Methodology, and Journal II reinforces the Beginner Methods, while adding on, Intermediate Level Methods. Good Trading to you. - Spydertrader
Spyder, Thank you for your reply. Another question. In the chart of ASCA (above) it is clear that after the gap of 10/5 the trendline was reset, a not unreasonable thing to have happen. However you could not draw that new trend line until much later (11/2). So what did you use as a trend line between 10/5 and 11/2 and why did you pick the high wave candle on 10/3 as the starting point for the new trend line? I have attached a Prophet chart with a couple of "Sperandeo" trend lines drawn before the gap which could have served as the right border of a channel but I don't know if they were what you would have used. If you have covered this sort of thing in your "Methods" please disregard the question. TIA, lj
Numerous resources exist around the web and on ET explaining trend line analysis. Using a 'Point Three' formation, points one and three represent the right side of the trendline. Point two creates the parallel left trend line. One starts with locating points one and three, drawing a line, then cloning that line to form the parallel line intersecting point two. The trendlines to which you refer represent the dominant trend at this point in time for this particular equity. One can draw in any set of trendlines one needs. However, I only use the trendlines which tell me that I need to know, and I delete the others. For a complete guide to trendlines, search Google for "Point Three Formations", Read Jack Hershey's Building Channels for Building Wealth document, or begin reading the Journals. Good trading to you. - Spydertrader
Spyder, Thank you for your response. Yes I would agree that trend lines and all that goes with them are variable feasts. I am well aware of a number of protocols for drawing trend lines, constructing channels, etc., but my question was concerned with how your methodology dealt with the time interval between 10/5 and 11/2. If what you are saying is that this sort of problem (and it would seem to me that it is a nontrivial problem) is dealt with in your Journals - cool - say no more. TIA lj
I have included the ASCA chart and I have broken it a few charts to attempt to illustrate how I would have drawn the channels over time using Jack's methods. I have drawn the charts following the methods outlined by Jack in various documents. I am new to this, so I might have made some mistakes. Hope it helps. And if any one sees any blantant mistakes please let me know. <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1267695">