Futures Indexes System and Tool Box

Discussion in 'Journals' started by bubba7, Jun 28, 2003.

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  1. bubba7


    Futures Indexes System and Tool Box

    This post lays out, as an overview, the components of a system that includes: the structure, process and results. I also break out the tool box required to build wealth. This is primarily set up for intraday trading.

    I will fill in details as I am able.

    Think of the futures indexes markets as a set of markets that basically run the same way and vary in size and activity. These markets are tied to the cash markets as well. The markets also have horizons and accordingly roll over. They serve four constituencies and intraday trading is one of the least important. This means that what day traders do is not statistically important from my viewpoint.

    The structure of the system is determined externally by the markets and the rules of operation of the market. I recommend that you face this using a personal structure which contains several elements: your interface with it; your approach; and your capital.

    The approach here contains elements that are structural and I will prescribe them and suggest how to make money by: analysis, monitoring, and trading. There are many externalities so I also address these in a limited manner. I am welding a personal human relationship to a process for building wealth.

    ET does not support the above efficiently and that is just fine. Your job is to get as much as you can out of this. I will introduce the elements as new topics to give us a generation breakdown. Addendums to topics then will have Re: ID’s. That is the best I can do here. If I do subordinate stuff there will be a RE: Re:. General comments will be done as new posts so they will appear as new topics even though they are just comments.

    The list below is a construct that I will try to achieve. Since posts are serial, you will have to print them and do the organization. I will try to note the order and page of the journal on each post. You may want to keep a chron set of prints too. I know this house keeping is burdensome. I ask that no posts be made in this journal. I am dumping my incomings frequently now to keep a path open from you to me.

    I do regard myself as a support to others and I am returning what was given to me. I generally operate where the person I support finds himself. This is different; it is just a reference place for information and as such it is not very useful.

    The wealth it builds is limited. It will enable you to make about 50 times the money velocity of equities trading as out lined in the Catchup journal. The Catchup journal operates at about 10% every 6 to 8 days for each stream of capital running. This net value is 50% of the potential value and 50% of the potential use of time available.



    a. price
    b. volume
    c. MACD (5,13,6)
    d. STOC (14,1,3)
    e. Stop log


    a. Signals
    b. Sequences

    Market Matrix

    Tool Box

    a. Continuation Drawer
    b. Change Drawer

    Making money strategy
  2. bubba7


    Post 2, page 1. header sheet

    you need a real time data feed for the index you trade.
  3. bubba7


    POST 3, PAGE1 Header Page

    On your real time display chart set up from top to bottom:
    price. volume, MACD (5,13,6)
    STOC (14,1,3)
  4. bubba7


    post 4, page 1 header page

    The basis of making money is knowing what is going on and making decisions. We use signals to get timing down and sequences to eliminate risk in trades.
  5. bubba7


    post 5, page1 HEADER PAGE

    The market has an operating point at all times. The key aspect of this is how the operating point moves in real time. My contentionis that on any devised matrix, the operating point moves from cell to cell and does not jump around.

    Therefore, we may look at the operating point and the adjacent cells as a moment to moment universe centering upon the operating point and the adjacent eight cells just like a tic tac toe board superimposed on the universe of cells like a ouiji gismo.
  6. bubba7


    post 6 page 2 HEADER PAGE

    The Market operates in one of two possible modes at any time. Therefore two independant strategies are required for efficient wealth building continuaqlly during the operation of the market. The market is a continuums of a vaste variety of "set ups"; two major strategies handle all of these.

    You will find a tool box here for doing each strategy. Either one drawer or the other may be open at any given time. The Two drawers are named for the respective strategies; they are: continuation and change.
  7. bubba7


    psot 7 , page 2. Header page

    The making of money is almost like a religion in ET. As capital is applied people become wealthy. I have found that people who are not rich, think differently and emotionally about money differently than, we who have experienced wealth, power and all it brings.

    As I determine the wealth of a person by the place he lives emotionally, I construct a path that eliminates as many of the mine field he must pass through. I want this done by the person ASAP.

    Making money for oneself is one thing; enabling others is something else. I am an amateur who has limited POA's of others within the limitations of NFA 208 E part a. To date, I have never made more than 1.7 million dollars net in one day. One that date I left at least 200,000 dollars on the table because of my personal limitations. I don't do that any more.
  8. bubba7


    post 8, page 2 Header page.

    My brief comments on the header pages are to encourage you and remind you of where I am coming from and, more important, where you might choose to go.

    The fun of building wealth has more to do with how you feel in your life than the wealth you build. Weeding out stuff is not the primary goal but each time you let go of something not productive, you do gain the energy from that for application to something on a higher level.
  9. bubba7


    post 9, page 2 Significant Reference

    Here is a post of PTR that is a very good expression of a wholistic viewpoint:

    Senior Member

    Registered: Jan 2003
    Posts: 173

    06-24-03 07:58 PM
    Re: general comment.

    Quote from jack hershey:

    If you think anything you are presently doing is meaningless; get that out of your head right now.

    Yes, learning the market in the beginning is a disjointed, non-linear process. If I were to generalize my evolution as a trader over the years, then it would be as follows:

    1. Learn the major areas of technical analysis. This is an ongoing process; investigate everything. Don't be dismissive of any area until you have proven it to yourself.

    2. Develop a simple working system incorporating some basic technical analysis elements; I believe this is (and it was) the hardest step. That is why this thread is so valuable - it contains a specific methodology, and you will have the framework for developing one of your own.

    3. Develop a suite of systems over several time frames: intraday scalp, intraday position, multi-day position, long-term sentiment.

    4. Develop a flowchart of system-to-system interaction, i.e., identify when your intraday system overrides your multi-day system and vice versa. If the systems are in sync, then ride them all. If the intraday signal is extremely reliable, then don't let it just hedge your multi-day system. Reverse and re-establish the higher timeframe position at the end of the day.

    5. Cross-pollinate the systems. For example, if one system is very good at identifying major support and resistance, then incorporate those levels into the lower timeframe system, perhaps using these levels as areas to take profits.

  10. bubba7


    post 10, page 3.

    Stop Log

    Most threads in ET, one way or another, speak of relationships between entries, set ups, price and stops. This system does not emphasize such relationships.

    The focus of stops here is for protection only. Protection is there for the unexpected events that occur outside of the market and then reflect into the market. The market absorbs all externalities degree by degree.

    Stop settings are determined by several factors. Here it will be done in a way that promotes a better understanding of the market by continuous monitoring and adjustment.

    A person becomes more effective as a consequence of a consciousness of the market. Monitoring stops by keeping a log is a dutiful continuous process that rewards the trader as much as any other specific activity. Later I will add a selection of comments by others about how they play the market; you will see by these what they are conscious of and what they are missing. Both factors cause in combination cause distortion. I will note the distortion effect that is hanging tem up as well.

    Make the stop log from the data on the fractal on which you trade. You may when you become expert use a faster fractal because of the time you have on your hands and how you are able to view the market by then. If you are a typical ETer, you need to slow down and smell the green; so stay on the trading fractal.

    What you record on your log is price values where the price bar formations exhibit the more important values. These you do as copiously as possible. You can back off later. When in doubt write it out. Later on you will learn that “cell blockers” related to the ouiji gismo directly relate to the micro formations that give you these values.

    From what I have said a person could go to work and get the job down. Below I will focus on why this is a necessary logging.

    We need to have a log of the facts regarding our trading. I will ask you to, in advance, list the times you are going to C&R. This is because I want you to learn discipline that you will later have automatically in your trading constitution. Now you are a grasshopper leaving little brown spots wherever you take off from. When a time comes up for C&R, you glance at the log at the last circled value this is what you use. They cost 10 for 50 cents some places.

    You log values as often as you judge proper. They go in the direction of the market and they retrace in value occasionally. Cross out the values that you first listed if they are duplicates. You now know how to log.

    Circling requires a reasoned judgment. This paragraph and the next one, alone, will double your wealth building performance. This paragraph eliminates “too tight, too loose and too stupid, all in one fell swoop. You will see people in ET who exhibit n aura of having to be right rather that make the most money. These people will have difficulty with circling because they cannot be flexible. I use circling to limber up people mentally. Usually people “get it” in 48 hours, two weeks, or six months later. “Get it” means any point whatsoever that I make and you highlight.

    The pace of the market determines the offset of the market stop. Form two groups on this. Leave if you disagree. I need, desperately, to have you know the pace of the market. I am using the stop log to bend you to this necessary monitoring task. Not taking market pace into consideration precludes putting more profits in your pocket than any thing else. Not knowing the pace is henceforth to be called “Symptom A”. Fast, medium and slow will suffice for making the first million in five years. The forth pace is “None”. You circle 4 back for slow, three back for medium and 2 back for fast. For none you will notice that you aren’t recording values in your log that are new values. You are just adding and then crossing out in waves that have already occurred.

    This brings up perfecting your efforts to do better. At this reading moment you are either sponging along or saying oh more bullshit from Hershey. The fact is that in the preface I put another person’s comment on refinement there already. It is an iterative refinement. You probably can’t log values nor can you say what the pace is. Or you can. Either way make yourself do it for about 47 years like I have.

    Here are some pace hints: Rockets are fast. Icebergs are medium or slow and CCC (congestion, convergence, centering) is “none”

    If you read this and use it to reflect on many of the ET thread issues (non symptom only ones) you see that this is the underlying screw up if something else very basic is not the root of the dilemma.

    Write here the short hand process for logging:
    #10     Jun 28, 2003
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