Fractal nature of stock market...

LOL

You are the prime example of one dimensional thinking that is willfully ignorant. Of course constant volume bars work very well but do they reveal everything - you just gotta be kidding. That defies logic.

I love the way your tell everyone else what they have not researched while it is patently obvious that if you remain on your line of thought presumption gets the better of you.

Your non grasp on time is your weak point and you preach it constantly. Time drives the market in every dimension. In its simplest form it is the most common trigger point for trade decisions with the biggest hitters taking the 1, 4 and daily bars.

However it is only when multi dimensional thinking evolves to the point where space time is seen that you can make sense of it.

By the way, I have been using constant volume charts with space time for over a decade but if I restricted myself to that view I'd feel partially blind. I use volume well below the 1 min level as well as on much bigger views. I also use multi dimensional volume but I have not touched on that here although I hope I have alluded to it.

Here is an example you posted to show how time is worthless compared to volume. The trend lines are mine and show how inadequate volume is as a single view but you missed the information provided by time. The trend lines are only a small part of the time information provided by a time chart but the other dimensions on linear time also escape you.

The bottom chart minus the lines is your volume chart. The top one is a time chart minus the lines that you present to prove your point.

The real point is the time chart is vacant of any understanding of the two dimensions of time and the volume chart is also missing time and its relationship to any other dimensions.

The highest high and the lowest low were pre warned screamers on time while volume gave no pre warning. But this two dimensional view is still lacking a huge amount of information.

Apart from your constant presumption I too enjoy your charts because you give a fair representation of volume but without a better understanding of time your volume trading will always be underpowered.

Your frustration with time drove you to look for a better answer and into volume as the better way. However you failed to break the code for linear time and now you dismiss it. If you cracked it you would empower your volume reading.

The attached copy of your chart demonstration only hints at what you are missing. The fact is you posted it to show what time time misses while it is you who is missing what time is presenting. Please consider this more of a critique than a criticism. All you are presenting is a simple volume chart but there is so much more to explore in volume that must be missed by using this single view let alone what you miss by disregarding time.

 

X,

You’ve given me some food for thought


Thank You
RN

 

Thanks RN, as have you given me food for thought.

Attached is a simple vibration chart using linear time. The prior move subdivides into thirds and is projected to the high.

When the angles intersect the horizontals they project the future potential reversal or impulse on time and price.

The top of the market was easy to see in linear time but it matched up on space time way in advance. To be honest I didn't post the top to see if any others would.

I did ask in the TA Works thread if the bounce up was an opportunity to catch the next leg down if you missed the top, but I should have posted in the knitting thread.

Because time and volume move around price in all dimensions, you have to use a multidimensional view to avoid having the wool pulled over your eyes.

But even linear time is not what it seems because it is made up of multiple cycles that harmonize and conflict with each other in every time frame. Then various time frames conflict and harmonize with each other.

I know from your work some of this is ground you have walked on. It is the effect these cycles have on each other that cause trend lines to bend although few would know what I mean and just find it best to give a long trend line a minor adjustment when a slight penetration turned out not to be a signal.

But once you grasp the concept of Space and Space Time you can see that trend lines don't need to start with a price point because price is not the controlling factor. Price obeys Time and Space and not the other way round.

This is why constant volume charts cannot give a time and price projection and if used alone become a limiting factor irrespective of their own merits.

Volume obeys Time and Space Time A very obvious example is a news release. The volume trader like everyone else recognizes there is a time for a volume kick. But the market signals many other Times when Volume will kick and a single view will not only miss many of them, it will convince the trader it is a random event and impossible to predict.

 

One dimensional? Over the last 15 years I've researched literally thousands of symbols, hundreds of years of data and every chart environment available to come to the conclusions I have. I never dismissed anything because my goal to to find what worked so it would enhance my trading not what was going to create the best talking points that conformed with the "status quo".

If you or anyone else notices, when someone introduces something I have already found deficient, I am critical. When someone introduces something I have no knowledge of, I ask a lot of questions because I truly want to know how I personally can duplicate the process to validate it.

My grasp of time is anything but weak. In all of those years of personal research, time was the first mountain I had to climb since the only charts available to us in the beginning were time and daily charts. This is where I found that price charts had to be broken down to their smallest part (share or contract) to be able to find the natural cycles that each symbols price action created.

Howard Arrington at Ensign, under my request began developing Constant Volume Bars in 2003 not a decade ago. No other charting software even had the capability of creating them before that because the information wasn't contained in the data provided from the markets.

Time is perfectly cyclic but natural price cycles are timeless.

I agree that there is a relationship between time and volume but it isn't linear. Time enhances the natural cyclic oscillations by providing needed momentum to push or pull price to the next natural cyclic top or bottom but only during RTH. The cycles outside RTH prove their consistency but simply contain less strength or momentum. The momentum (enhanced in time) is worthless if the wheels aren't round Cyclic), Xspurt. the markets are traded "IN" time not "BY" time.

I never became frustrated with time. I had to find a way to eliminate it's view from a chart because it did not depict a natural cycle.

I once sat with 4 gentleman and a lady, all in their 70's and 80's in Chicago in the mid 90's. I was introduced to the group by the only member that lived outside the area and who was a doctor. These individuals were all highly profitable investors. Collectively these 5 individuals made up of over 200 years of market experience, 3 Phd's and ran some of the largest companies in the Chicago area. They all viewed the markets in the same way, as a purely cyclic play. The only frustration they shared was the fact that they couldn't pin point the specific cycle for each of the markets they traded. Those cycles varied in their length and width on each and every cycle but none-the-less they were cyclic. They teased me about finding a solution to the problem that had eluded them. When I finally had a constant volume bar chart in my hands and something to truly show for my efforts all but two of them had passed. I called the two up and we got together so I could show them what I had. What I showed them was what eluded them for their entire lives, that was that there was no consistency to the length or width of the natural cycle of any market's chart. The consistency was the cycle itself. The key was to pin point and validate the cycle top and cycle bottom of each oscillation and to constantly compare them to all previous cycles to denote; specific chart price direction, specific chart price strength and specific chart trend.

Continue your research of time. Good luck to what you find and I hope you share your validated results as I have.

 

Yeah Prof L, like I said I think I understand your approach and so as you said earlier in this thread...

“Order from chaos on a chart is achieved by elimminating the variables.”

This is where I disagree and we part paths but this is what almost everyone does when faced with the problems of time. Look, it doesn't really matter what you or I do so long as we make it work, but when you think you have the answer by eliminating the data that you can't make work and then tell everyone else they are wrong and you are right, it is a bit strange.

To presume that I (or everyone else on ET) has never researched the subject other than you and then you tell me I should defer to you, well let's say it is a bit inflated. Perhaps it is because of your shorter period of investigation compared to me? I have spent more than half as much time as you have on the subject, so perhaps I should ask you to defer to me lol?

That is why it would be utterly worthless for me to talk to successful corporate board members with thousands of years combined investment experience because their genius does not lie in the markets: it lies in their corporations they run and that is why they were not traders. Their experience of running a company removes them from the vital experience of trading and so their experience becomes down to EoD trading. It's a world away from the hot seat of trading 15 hrs a day every day for years at a small time frame. The fact that you mention successful amateur investors as being unable to crack cyclical problems is strange as even most full time traders can't crack this one.

When you say, “ This is where I found that price charts had to be broken down to their smallest part (share or contract) to be able to find the natural cycles that each symbols price action created.” , I take it you are referring to the volume traded with time excluded?

This is not an investigation on time cycles: it is eliminating it as an uncomfortable variable whereas Elders MESA approach was to identify the current dominant time cycle while Hurst saw multiple cycles provided the answer. While time is cyclical it certainly is not “perfectly cyclical” for the only way that could exist would be as a perfect sine wave. It is the interweaving of these cycles that mean the markets are traded in time and space time.

You say, “I never became frustrated with time. I had to find a way to eliminate it's view from a chart because it did not depict a natural cycle.” That's fair enough: it was your way to deal with a difficult issue and what you do works so credit to you. But you just eliminated one of the most powerful influences in every aspect of life and especially so in trading. It might have allowed you to isolate Volume but you certainly don't occupy the high ground, and even though you are a comparative newbie, I'll not ask you to defer to me

My own approach was to develop my own software to identify the current cycle pushing on price and its direction compared to intermediate and major cycles. It works on any time frame or volume or range chart. Time and Space are the biggest influences on the markets from what I have discovered, and I have no intention of explaining close on three decades of hard effort. My reason for posting is to stimulate others thinking and to help some avoid time wasting or myopic viewpoints.

For those who want to investigate time and cycles read Hurst, investigate MESA and Bressert and the geometry of the Spiral Log and Mandelbrot and develop your own answers. Gann was on the chase but without computers to aid him his success was potted, but he did realize the power of time to over balance price. Time is a fantastic tool, but first you have to understand the nature of time i.e. is is elastic and when any contract is bought there is a time frame and price movement that the investor hopes to trade within. This sets up endless movements in time and price as traders with different hopes enter the market and at times these cycles of hope flow together and at times they conflict because of differing expectations or tolerances.

In other words, in any time frame the traders are predisposed to different cycles. On a 1 minute chart some will have a few ticks as a target while others will have a point or several points as a target. Their tolerances are different and so conflicting or harmonious cycles are present.

With computers to aid your investigations and experiments you can achieve several decades of our fathers efforts in one year. You can do well excluding time, but you can do a lot better utilizing it. Forget linear time cycles because they will break your heart. As an aside, Robert Miner did fantastic work on Volume Cycles but unfortunately they were linear. He was top dog for a year and almost went out of business the following year.

I expected to be finished posting here, but being told I have never researched the subject and that I should defer to Prof L was too rich not to remind the dear Prof that the market has a lot to teach us all.

 

You make reference to a lot of old research by Miner, Hurst, Bressert, Mandelbrot and Gann but any past price research that doesn't take the problem solving down to a share or contract level is deficient because one isn't breaking the problem down to its smallest part before the solution process can begin. This is elementary problem solving. This is elementary logic based solution extracting.

The reference to those learned self investors was because of their personal intraday research into the markets. A few of those individuals invented mechanical tools that the investment market still uses today. These were anything but EOD traders. I respect their process but I still started from scratch to solve the problem. I chose to begin fresh instead of deferring to any of those learned individuals you listed above because they didn’t have the resources we have access to today.

I love your statement, “in any time frame the traders are predisposed to different cycles.” I love this because you simply can’t fathom an environment where time isn’t relevant nor can you even picture yourself trying to validate whether this is a possibility. This is where you and I differ. I have already researched time’s relationship, at length, because my first 9 years of watching the charts for 15 hours a day were because time or tick charts were all we had. It quickly became obvious a new tool was needed to further the process . . . constant volume bars.

I have about 5 terabyes of research information but I still continue to press on. I never stop trying to learn what the market has to teach us but I never waste time revisiting what the market has already confirmed it is not.

Time was a great tool when nothing else better existed but why utilize something that was proven to be inconsistent? I mow my 5 acres by hand using a 18” metal roll mower because it is more efficient than a 56” zero turn riding mower . . . NOT! If you can prove that natural equally balanced cycles exist and are effected, either positively or negatively consistently in specific time frames . . . I will defer to your proofs.

Seeing that my research and information has been public knowledge for over 15 years and you are unwilling to share what you say you can personally prove, we will leave the matter alone. I fully understand there are many ways to profit from these markets and there are many individuals that have accomplished that task are a variety of ways and with a variety of methods. I have no doubt that you have found a consistent way to personally profit from your chart structure . . . so have I.

You have my email address . . . you can PM me as well. It is always nice knowing who one is talking to.

 

“in any time frame the traders are predisposed to different cycles.” I love this because you simply can’t fathom an environment where time isn’t relevant nor can you even picture yourself trying to validate whether this is a possibility. This is where you and I differ. I have already researched time’s relationship, at length, because my first 9 years of watching the charts for 15 hours a day were because time or tick charts were all we had. It quickly became obvious a new tool was needed to further the process . . . constant volume bars.
if i may chime in
the market yields a certain amount of information and any form one might use for it's extraction will have it's trade\off
personally i use tick and vol charts. i have always wondered about using vol as an indicator as so many traders recommend it then i came across some research about a setup -which i don't use - that had a 15 percent better performance on vol charts. this told me i did not need to learn vol as an indicator because the vol charts somehow conveyed that info. at the same time those using time charts but know how to use vol as an indicator are not loosing out. they are getting the info the markets gives in different no less or more effective form

 

Prof L, you have not eliminated time. That is impossible. You are ignoring it. There is no environment where time is not relevant. If anything in life tells us of it a profound influence over all of nature it is time and next is space. These are present in volume charts.

If time was proven to be inconsistent rather than elastic space travel would be impossible, your GPS wouldn't work and our whole global communications network would close down.

But to bring it into the trading realm, there is no bell curve, no perfect sine wave, and if it was as simple as that then every simpleton would be able to see the cycles. An equally balanced cycle is impossible and that's why linear time cycles ultimately fail.

But the issue of time is not restricted to cycles: it equally impacts structure or the fractal nature of the market that we were discussing whether it be time or space time as in volume, range etc.

By eliminating time from your consideration as an unpredictable variable yet admitting space time is present in volume charts you simple miss something that glues all the dimensions together and without which we can't see the way the fractals move across the various dimensions.

It exists and works, whether you have observed it or not. As a starting point I recommend the reader observe how volume charts will totally miss screaming reversal points that a trend line on a time chart or range chart will clearly show.

Once you become convinced that looking at the effects of time and space in one dimension is blind siding you at times, try and discover how the fractals are moving from one type of chart to another. This is irrespective of the prior discussion on cycles as cycles and fractals can be very different creatures.

 

Actually the elimination of time is a reasonable simplification of trading patterns. Volume charts, I agree, will totally miss screaming reversal points...if you don't have any idea how to logically deduce what the price action is telling you.

Find me a program that can create its own trendlines and backtest profitably, you'll have something, but, till then, I've not seen an adaptive programmatic application of the trend line illustrating charting mechanisms available in any charting software package. There are tons of programs to this effect at wl4.wealth-lab.com. None of them work to this day, including every hershey equities method script published.

 

Ok, I am ignoring time as part of my decision making process because it is irrelevant to how I read a chart for price direction and strength.

Natural price cycles occur regardless of the time of day. They occur . . . when they occur. I can prove that time is irrelevant . . . in my charts, which is all that matters. I agree that if I were traveling through space or trying to move physical objects that space/time theory would be relevant but I'm not.

The issue of time isn't restricted to cycles but natural price cycles are not effected by time. Natural price cycles do not occur at specific times of the day, they simply oscillate naturally.

I am not eliminating time as an unpredictable variable. Time is a predictable entity but is does not effect the creation or continued oscillation of price. Time is simply an non-entity.

I get up every morning (time) to begin to trade. I prefer to be in front of my screens by 6:30 to 7:00 am EST (time) to take advantage of the late afternoon oscillations in the Euro FX and early morning moves in the eMini S&P since the economic meltdown. This being said, I will never have trade set-ups at the exact same time each morning. Some times, like this morning, I will have numerous perfect set-ups in both markets. Other mornings I will not have a single set-up. My set-ups consist of my charts creating an oscillation top or bottom where I can discern that the strength of my chart is moving in the same direction as the oscillation is showing the reversal. Again, these set-ups are devoid of time. They occur when they occur and they are not effected by the time of day. These set set-ups occur all day long (time) I simply prefer to get my trading out of the way as early (time) as I can each day.

I absolutely NEVER miss a "screaming reversal point" because to me every oscillation, top or bottom, is a critical decision point. I catch the reversal at the oscillation. I don't have to wait on price to reach a manually created trend line. This is why trading faster (lower volume) charts is harder because they contain more oscillations thus more decision points over a shorter period of time. Trading slower (higher volume) charts is more relaxing but one can create a speed that is comfortable for them. They aren't confined to simply watching inconsistent noisy time charts.

I agree that fractals and cycles are very different. That is why I choose the perfect consistency and useful uniqueness of the natural cycles over the general nature of fractals.