Monday start up. Let synch be at 945 or so. Draw in the opening channel right line. I am keeping this staccatto so people can see important stuff. You are in short Rocket right at synch. Note the exit on rocket corresponds to BO on channel. Point 1 is in old formation. Note volume is sustained until first stall. A stall is bunch of bars same length and placed laterally. This is an odd harmonic and tells you that point 2 is coming up at a distance twice that covered at beginning of stall. You may think this is nonsense and too detailed but it will put you in a calm place. Because of confirmation of all possible aspects of indicators at the channel BO, people who are making money consistently in this lousy market, can consider entried on BO's of channels. furthermore you can use MACD away maxes of fast lines or xo's or Divergence of MACD each as a signal that is a trigger as determined according to your skills and wealth. Note that there was a hesitation at 50% on the Stoc. (This is odd harmonic signal) Note well (NB) the increase in volume coming off point 3. look for odd harmonic to follow again. this channel is a Monday channel. (Like a Friday one) Dawg sees this Mon Fri thing as a generally reduced volume. Trade 1 was rocket. Trade 2 is a slow trend trade out of BO 843 +/-. We stay with channel. The backtesting quality is improving. What is at hand is this. Generally in the financial industry there are programmers and financial analysts. Each has skiils that are knowledge based and derivative of their background, training, interest and experience. It is not common that there are overlaps sufficient to be able to have a comprehensive view. You read their stuff to see which predominates. If the financial dominates,then the testing will not work out well. Vice versa , as well. If their is experience in both. then the bias goes to the positive end of the posible spectrum. Our first three experiences led to "theres nothing new to test" under results that varied by an order of magnitude. With the channel point 1,2,3 and Our ability now to get ready to slalom comming up, the testing does get difficult but at least now we have broken across into a positive result. Usually by introducing sideling (vis a vis wash trades) things flip positive by then. Some helpful comments: Walter, Can you explain what you mean by price divergence? Thanks. Walter responds: For long entry: Stochastic indicator makes higher low and price makes lower low. Right after that stochastic will turn up and all other requirements for entering the trade are met. Today around 10:00est is the good example. For short entry: Stochastic indicator makes lower high and price makes higher high. Right after that, stoch. will turn down and other requierements are met. Example of it is Friday 3-28 from 11:10 - 11:50 est on 5 min charts. There should be example of it today around 13:00 or 15:00est. Stalls and hitches and harmonics. We will be using more stuff related to formations as time goes by. None of these details makes it harder. The fact of the matter is that all of this is just a consciousness raising activity like learning to drive a car. It will never get to a level of flight consciousness requirements. People often are locked into a modus of straight unadulterated fear. They view all additional facets and more fear adding crap. They want to avoid this at all cost. One person here who is trading on a wrong fractal wants more to do as he watches. His exits apparently are on stops set vis avis targets. He does not want ANY complications to improve what he does. This is fear turned into quasi panic. We do the opposite. We are using strict simple techniques to make money. The more money made, the more we can relax. As we relax we can view the setting in greater depth. First rockets only. Then washes. Now we add channels dutifully. I check to see if you number 1,2,3. I hope for that. It is a definitive deliberate action based on decisions. You go automatic on this. Now I am beginning to take you through the life of a channel. this is going to be a terrific process. We want to exit channels on the max profit. We need to "read" the channel travrses and catch on to "What wasn't that?" if yiu have a hitch which is a stall that is dipping; then you have less strength in a traverse. volume will be lighter too. A stall is a strong series of bars. It does not retrace like a hitch does. At first i sent you to the fractal that "taped" so you couyld not see the traverses. They just appeared as equal length bars. Now we are opening up a little so we can max out on thrends. Once we max out, we can learn to do reversals to stretch the next profit cycle. this is a two for one in profit making. you make more on the first exit and you get into the next trade at optimum. I had to do washes first to get you ready to max profits exits, max entries and BE PREPARED TO SLALOM on congestion. Knowing hitches and stalls is part of this too. Re: question for Jack I parsed this a little bit below. I will post a chart for today next. Look for the ****'s. Quote from cornholetrading: I had a question about your slow trend trade #2 coming from the channel breakout. Where are you looking for an exit? ****At max profit. Actually the market gives us the max profit. I would have initially thought that a good exit would have been around 11:15/11:20 when the stochastics made a full oscillation up thru the 80 band and then back down thru the 80 band. **** It did that three times during our accumulation of profits. We like watching it do that over and over. That is just a signal for intermediates that we are "makin bacon". For the beginner you leave as often as the first of two lines BO down and sideline to keep your rocket profits. If a rocket doesn't materialize, as a beginner you wash out at no loss. What are you looking at to keep you in the trade longer or to get you out of the trade? ****We are presently using things called channels. These trends we monitor where they can be seen as "tapes" on the slowest fractal. A tape is where the channel is filled with price lines. When you are on that fractal usually you operate as abeginner. You are using the MACD crossup and rocket reversal to get you in and then eventually you got another rocket signal on the long side. Then I assumed a good exit would be the end of that long rocket signal. *** Good do the beginner thing for a while. You would have four profitable trades today. That builds confidence using a meachanical system. Others would have made four trades too and theirs each would make several times what each of yours did. No body lost money and each way was mecahical. Experts did three more trades today. They made better entries too so they made about 4 times the high low range today. Also have you thought of putting all these pieces together into one document with chart examples so that people have a way to look over the material without looking thru 500 posts? *****It's much worse than you think--- or actually better. I am compiling this stuff four ways fairly rapidly. I also am adding this stuff to other stuff I have piled up (about 15,000 posts) and my records for many years as well. Continuing general post How it works to make a lot of money ASAP is to go through mechanical levels and assemble multiples of initial capital. To make money has less to do with the charts than the mental attitude and knowledge a person has. People come in two basic groups. They are terrific in keeping doing what they want to do. What they need to do is have successful experiences piling up on top of each other. The other group just keeps up their critiques. I have four levels of people running along here in about 8 different markets around the wtrld. They all get experience. To day you saw that on my graph Friday I typed where the price was NOT going to go on Monday. That is for your pasting convenience and so you can see happen what I typed ahead of time. I believe that people make money (learn) if I keep tuned to where they are. Those that post here I give first shake to; second shake is ET messages and I answer those on the thread if I can. Third shake is Email. There I look for stuff I can quickly tweak and get things fixed. I still have some emailerâs who won't leave 1 min. I will post a chart for the day ASAP. The attached is for equities and it appears in another thread. It is a keeper and I will follow it up with the master blank sheet.
Today's market- four basic trades today. There's another beginner thread running entitled" Trading with price action." It makes a portion of our current yield and blows it completely on congestion by being automatically whipsawed. Our opening trade is always going to start with synch or later in a context, if any exists, of the prior day. Tomorrow we are potentially in a real down draft. The midday was late starting and ending. The retrace on the gap down open continued for an hour more than a usual retrace. This was trade 2. It went into marginally tradable congestion. You would have to trade the congestion on the 1 min. Congestion, convergence and centering occurred. Very important: The centering BO down into a failure to BO down Our volume told us this and experts would have slalomed out of this right into the BO up into the rocket the beginners took on . The retrace went uncompleted and this is important to see. I am asking you to look about on the chart following this commentary. This is the business of not just watching your ski tips, but instead, looking over the terrain you are in as you ski along. Both afternoon trends went off stronger than the inital point 1,2,3, gave you. The market really wants to perform but it is definitely tied to the cash indexes. the cash indexes are being "bombarded" by talking heads as we all see. We are making more money per trade now. Rocket folks are feeling good about getting trends set up. We are really getting swift at seeing trends end on the right lines and we feel suspicious coming to the line and we also get confirmations of bounces and also the BO's through. For New Yorkers There are "nina's" like Hirshfield did in the theater section. They are VDU's before trend changes and for bounces off trend lines. Circle them on my chart today. They are "leading" indicators of one thing and one thing only: total price disagreement among active traders. When you see a "nina" there will be action in 5 to 10 min. Posted by jack hershey on 03-31-03 11:15 PM: Re: followup question for Jack Quote from cornholetrading: As a follow up question I wanted to find out what the intermediate traders would do if we go back to your example again about trade #2. You are assuming the trader took the reversal entry in and got in around 843/844. You get points 1 and 2, but at that time you don't know where point 3 is going to be so you don't know if there is going to be a 3 point pullback or a 5 point pullback, or a complete reversal. If the intermediate trader is not getting out when this new rocket ended like the beginner trader (around 847.50) then where do they get out in case the #3 point does not form or forms after a big pullback. Are they waiting until the stochastics goes all the way back down thru the lower bands. I think above you said the stochastics popped above the upper band 3 times before an intermediate trader would get out and that is how many times it did this until the stochastics made a move all the way down to the lower band. Hopefully this all made sense. I think everyone's views make sense. Your description of what is possible as a trend could just as easily be applied to the congestion that occurred after the end of trade 2. We need to always be sure of what is going on and also have back up protection for our capital. You are asking your Q's from the viewpoint of improving performance as we all see from the get go. The most general answer comes first then we go to more details. We look for flaws in what is going on at all times. To do this we have stepped out of the mechanical phase of trading and into the descretionary part that will elevate profits. From point 2 onward there were no flaws, so we were in the groove. This response is not an easy one to accept. I will fill in on it in a moment. Lets go back to the limited mechanical approach first. Beginners exit trade 1 rocket. They stay sidelined until the rocket of the trend appears. They exit it after point 2. Intermediates enter on the beginning of the rocket and do icebergs, meaning they stay in until 13:10 or so when the tape is broken on the 20 side. Both levels of trading were profitable. Now back to your question, the what if on point 3 and its pull back. Can you now see what I meant by no flaws at this point. It will appear to you that both beginners and intermediates are protected by mechanical means. If a person is not a beginner nor an intermediate because they have made sufficient money, then we are going to conclude that their skills in seeing sequences are better than mechanical. This allows for descretionary trading such as going in on the BO of the trend or better. Better still is, for example, seeing an inside bar after the spike down (their point 1) and, further, that the prorata volume kills the short (down trend on the P, V relation). This latter consciousness allows an entry around 842 or better. All this being where a person is, then the question you ask is going to be handled by the knowledge and skill which concludes "there are no flaws here" You can imagine how difficult this is for a person who is trading in fear or "from fear". As the person monitors, he is SOL vis a vis what is going on. It is impossible to get to an expert level without knowing the market cold. What is required to get there trading contructs or systems that allow you to "know down cold" that construct and not be exposed whenever you have money on the line. People criticize me continually and strongly from vantage point that says they do not "get it". Books do not work for learning to be an expert. ET demonstrates that to a tee. What works is repeated success, level after level of money velocity. We are dealing right here right now with something that is clearly the nub of getting committed to learning to be excellent on the level each person is now on. Your question tells us (you and I)what each of us has to understand in this situation. You need to know that trading mechanically is your current challenge. I need to be very conscious of where you are going to leap to next, once you get the breakthrough of making charts. You are very intelligent and it is clear to me your will get all 8 steps of doubling performance from wherever you started. The pace at which you do it is determined by how long you wish to remain in the place you are. Imagine what it will be like when everyone knows what each of the points 1, 2, and 3 hold hidden right now. four trades today can be stretched in profits (each and every one). I admit slaloming today between trade 2 and 3 would be pushing it. But I also say that passing on it, can also be just a choice based on other factors than "can you do it". Today was a trader's day. We see it here with quality questions on several topics and only one harranger. Your question has an answer. I believe I gave you the best rendition by staying focussed and only slipping in a little stuff on point 1 entries (I'm actually backing into the trade 1 max exit.) I will compile all this stuff for you people in a way that is really sophisticated clear and concise. For now what is important is that you get the experience of making money with more and more velocity. When experts start asking Q's, I will shoot stuff into the journal under the outline headings. Read wally and find out how he screwed up trade 2 and lost on it. Then find out why his system whiplashes in congestion, convergence and centering. How did he miss the centering bracket entry on trade 3? Why doen't he recognize failure to BO on BO's? This is same question asked two different ways. This is all price only stuff. It is good to practice some sports with one arm tied; it can sharpen you up.
Re: backtesting Quote from vorzo: ges and dawg, You make a valid point that I was aware of when I started to backtest. There may be intrabar signals during the day that may ruin your profit margin obtained taking the signals that DO show up on the historical charts. For argument's sake, let's say you trade the strategy purely mechanically, and you take all the entries. If you have 4 false intrabar signals during the day, and you have a 2 pt stop, then you would have a -$400 loss in stopped trades each day, or -$24k for 60 days/contract. Scary But, we don't actually use stops when we trade like Jack is teaching us, we do wash trades if they don't go our way, and we have other signals to validate the primary ones. My understanding is that Jack's methodology is not supposed to be traded mechanically, but instead used as training wheels to help us understand and feel the market. The only way to know for sure would be to write a code that would use consecutive 1 min data points as closing values for the 5 min bar. That way you'd have 5 intrabar points in your stoch plot that may catch an intrabar signal. And this would still be an approximation, you'd have to go to tick data points to be fully accurate. I'll think about a way to code the 1 min data points into a 5 min chart - any ideas are welcome. Fruity, I posted results for entry on bar close - return was ~ $1k/mornings, so about $2k/60 full days, or about 0.75/day. Bummer. Nice dialogue on this stuff. And thanks for the effort too. the points you bring out on the discretionary aspects of the mechanical set up are really very important part of transitions. A major easily programmable facet would be to consider the 50 % line. If there is sufficient strength to not have a hitch or stall (no harmonics) on transitions to entries, then I say first op in the sequence is a go; if not, not. This precursor eliminates the fractal change course of action for a cure. We should try for a rocket and wash combo as a baseline for making improvements using just one contract. Then add icebergs. Then add point 1,2,3 stuff. Once we get there, and I see people making money (meaning exercising belief as actions), I will get more keen on the doubling profits routine. I think back testing can be more broadly understood at some point and these dialogue is very constructive. It is hard to discuss stuff until a basic minimum quality shows up. Is everyone exponential rather than arithmetic at this point? Re: Trades 3-31 Quote from vorzo: ES03M simulated. #1 rocket Short 847.75 @ 9:47 Cover 843.00 @ 10:08 +4.75 Entry after synch was over, rocket signals all there. PMI was reported at 10:00 but decided to ignore the knee-jerk reaction. Then a sequence: 1 min MACD divergence -> 5 min MACD convergence so I got out. MACD crossed at 10:15 and fast line left the area at 10:19, so using the sequence gave me a better exit price in this case. Nice setup for a MACD reversal intermediate. #2 rocket Long 847.75 @ 10:56 Sell 847.25 @ 11:10 -0.50 Channel already in place with a point 3 at 10:16, entry on rocket signals. Exit on following sequence: 1 min MACD cross down (11:05) -> 1 min MACD divergence, then below zero -> fast line leaves 80 -> right side of channel tested. Besides volume vas VDU. Could've gotten a better exit if I had waited 2 more min but didn't want a bigger loss as rocket failed. #3 rocket Long 852.75 @14:39 Sell 855.25 @15:08 +2.50 Entry on rocket signal, volume surge after dry-up period. Exit sequence: 1 min MACD cross below 0 -> 5 min MACD flat -> fast line out. Besides, high retest was on low volume - 5 min up bar at 15:50. I was tempted to exit 1 min after the 1 min MACD crossed down, at 14:58, and price tested the away side of the channel with the slow uptrend since morning, as I had it drawn (I failed to recognize the lateral channel - Jack thanks for posting the charts they help a lot). This exit would've given me 0.50 more but the rocket signal was till on so I stayed in. #4 rocket Short 850.25 @ 15:39 Cover 846.00 @ 16:00 +3.25 Entry on rocket signal and increasing volume. 1 min MACD crossed up at 15:46 but on low volume and 5 min MACD still looked good, so I stayed in. Sold on cash mkt close, at 16:00. Whoever stayed in 5 more min scored 2 more points. Total 10 points - awesome day. Nice report and terrific trading. I can see you are beginning to groove (integrate the whole nine yards). This is terrific.
April Summary In April we learned another level of trading getting all the way to using the twin strategies of âcontinuationâ and âchangeâ. Wealthlab was used to back test inter-bar entries on the 5 min fractal. This was done by using the 1 min fractal and changing the indicators readings to simulate what the 5 min readings would have been. This section is in two parts and highlighted with a title. One of the participants completed tripling their initial capital. It took the 2 months that was estimated. In that period two weeks of difficulty were encountered. The causal factor and losses were primarily cuased by trading in a flat market. If you research and order rank H/L range for trading days of 2003 YTD, you will find these times near the top along with the starting period of the thread. There was a gap in my posting because I was going through CERT training. This made the posts richer as people processed questions as a group. In this period one distaff person made some really strong advisarial posts. I left these in to illustrate how a person may go through a process or a kind of reasoning to conclude what he did. His viewpoint was responded top by the group which used performance as a counter to his viewpoint. First April trades 10:21 L @854.000 10:35 X @852.25 Entered on a Long Rocket -1.75 10:35 S @ 852.75 10:50 X @847.75 Reversed Short on the Failed Rocket - exited when prices approached the bottom of the 15M Channel - +4.5 points +2.75 on the day Fractals Today you have first chance to speed up fractal. Starting on the 5 is normal. You do glance at the 1 min for synch on DJXX. On 1 min (scale of two points) you see centering between 9:45 and 10:00. The false BO down is a non entry (Stoc fast line flaw) and you pick up two rockets ("entwined" keeps you in until 10:22 or so where the BO on the channel occurs. The short trade from 1 min ends with channel BO too. 4-1 trades ES03M simulated #1 rocket Long 851.00 10:06 Sell 852.25 10:34 +1.25 Entry only at 10:06 as waited for slow line to climb higher because of 10:00 report move. Sequence 1 min MACD cross up -> divergence -> 5 min MACD above 0 -> fast line in. Exit sequence: 10:24 1 min MACD crossed down -> 10:25 5 min MACD convergence -> 10:28 point 3 in channel ->1 min MACD below 0 then entwine at 0 -> fast line out/channel broken -> exit #2 MACD reversal Short 852.00 10:34 Cover 848.25 10:51 +3.75 Entry: reversal out of long trade but a few seconds later after closing rocket trade. 5 min MACD cross down shortly after. 10:25 hitch in stochs around 50 area; 10:45 1 min MACD cross up but moves down were on high volume, and corrections on low volume. Exit sequence: 10:51 1 min MACD cross up, volume declining on 5 min down bar, price at support -> chickened out. Should've waited for point 3 at 10:57. Fast line got below 20 at 10:49 but this rocket never took off. Possible reversal out of failed rocket but stayed out as volume dried up. Questions on 1 min fractal Re: Jack Why would you move to a 1 min chart today? *****When you see a 5 min bar showing a length like you did after centering, you have prima facia that something is up. A while back when our interest rates affected economy (before economy went global( Greensapn announcements and news affected markets. To take the Greenspan ride you had to be on fast fractal. *****Today we are seeing a nice mini Greenspan. The chron on the bar is best understood by looking at the way the BO's happen in detail. You go inside the bar to look; this means speeding up monitoring to the "pace" of the trading. Five points a minute is a good money velocity. We go to that place. Our approach works on any market pace (fractal). We will go through many stages of money velocity. *** There are people here who say the money velocity is always low year after year; they have not had any advantages in trading as yet. Now that we can pull down 10 points on a day like yesterday and 20 points in a week, we are beginning to look at making money. Today the first two trades were at a rate of 10 points per hour. ****Since we are going to go through 8 doublings of money velocity, we have to consider all fractals for trading. I strongly keep people off the one min initially to get them to trade on the proper fractal. we glance "ahead" occasionally. You will see people here doing 100 trades a day and making nothing. They are also flat out risk wise and will screw it up royally on a day like today. *** read the thread "Market loves Bad Econ..blah blah in Trading forum. Eqt Trader, dg....green..bung... they were on the wrong (too slow) fractal. You have to consider ignorance and stupidity as differing things. If either is there though, you get bad consequences. Watch the butterfly boys when market pace changes. In all the cases there is no volume factor. Today the volume on the BO bar drove you to 1 min immediately. You pop into the 1 min and your set up for trading is immediately transferred and in play using the same mechanical rules. We will see later when everyone is grooving how descretionary compliments the mechanical. *** Soon money velocity will be a guide for you. Right now we are moving from 2 1/2 point days to 8 times that in 5 days and on to 4 times that in a day and this am to 2 times that in each of two trends in an hour. ****Right now we are riding on the five min. Intermediates could enter on a centering BO and beginners on a rocket during the sceond traverse of the intermediate trend. These 2 1/2 pointer multiples are being acked up continually. By entwine do you mean that below the 20 or above the 80 band that the stochastics fast line and slow line are crossing each yet not breaking the 20 and 80 band? ***"Entwining" seen as one thing as you describe it. It gives you permission to "stay in the trade". What entwining is in terms of maths is this: It is a volatility measure. The volatility is seen as fast line rapid change. That is the market is popping off bursts of trading. Think of cooking pop corn. Hear it. ****You are filling your money bag with money in bursts continually. Let all the pop corm pop for you; who wants to eat un-popped pop corn. If you read this aloud, you will be "fixed" on "entwining". *** If you smoke women's cigarettes "Hang in there, baby" is what entwining is all about. Okay the tape on 20/80 is working just fine. We stayed out of the "short" viewpoint that prevailed on ET this am. We had some 1 min action for the first time. Now back on the 5 min we are just raking it in continually as channeled intermediates and rocket beginners. The channel gained strength. We have seen three stronger channels in the last two days. Calibrate yourselves for this; it definitely leads to making money faster. *****Be on look out for trend endings. Then congestion, convergence and centering for pm Quote from cornholetrading: What is a centering BO out and what does this trade setup look like? Can you take me thru the steps of this centering BO trade? A couple of things. I don't have an annotated chart and as of right now don't know how to capture and attach one if I did. I have been following along and taking pieces of your method and seeing if they can be applied to what I am doing now or improve upon what I am doing now. I have found some good synergy between what I look at and what you have been teaching. They are complimenting each other. Okay here is one for NQ. Look at the two pennants. They are centering examples. In ES we have lateral channels that do congestion (a parallel lateral channel), then convergence (a truncated cone of price bars), then the pennant for centering. Volume keeps shrinking through this. That is the set up for P, V. I do not know your indicators so.. For the attachment I put in stuff for indicators. They go to neutral (MACD) or 50% STOC). To make money is easy it turns out. There are three levels of ease. 1. No prep and high risk 2. Some prep and risk 3. No risk bracket entry. On a bracket you do off set from centering value. The offset is determined by adding stop log offset and scalp. You avoid failure to BO event. You go in after the failure to BO is over and the actual real BO occurs. Other approaches. If you are an expert you look for the VDU. When they occur you jump on the BO from the VDU bar. The entry is market and is usually close to the BO on prior bar. It you get into a failure to BO, as an intermediate or expert you simply wash out. If you are able to slalom, and it is a failure to BO, then you slalom by immediate reversal (tack into the trend) and take it from there. The centering BO is a sure money maker but you have to have skills. You can see about 7 trades of 2 1/2 on this chart today. That's 17 plus NQ points on a capitalization of under 2000 bucks. If you watch NQ you see a lot of folk run with 5 contracts. 87 1/2 points a day is how it goes using BO's from centering coming off the neutral or the 50%. I pointed out the midday trades which are the hardest. You need to be equipped to monitor for making money. After than it is a good idea to annotate a little to keep focused.
4-1-03 Trades missed the morning had to bring car to get fixed. tried to push things and wound up basically flat on the day. 1. rocket end--->macd xo reversal 1:05 macd xo after a rocket. short @ 855.00. mkt flat lines and i exited @ 856.50 with volume drying up and drifting upwards. short @ 855.00 1:05 cover @ 856.25 1:30 day: -1.25 11 days: 29.25 2. rocket end--->macd xo reversal 1:55 had good stoch for rocket, but macd never kicked in so i did not enter the long rocket, but was looking for a reversal if it appeared. 2:15 macd xo and stoch left long zone, but still within trend channel so i waited. 2:35 broke my trend channel and short was taken @ 858.00. turns into a short rocket at 3:00. 3:15 and 3:20 lower volume counter trend bars and 3:25 DURING the bar it broke my trend line, stoch left zone and macd xo and i exited @ 857.50. The bar continued and mkt reversed and those exit signals disappeared. Too quick on the tigger finger. short @ 858.00 2:35 cover @ 857.50 3:25 +.50 day: -0.75 11 days: +29.75 3. rocket end--->macd xo reversal rocket ends, macd xo and channel break at 3:40. Long @ 856.50 held until close exit @ 857.75. day: +0.50 11 days: +31.00 The chart I show how to keep decisions mechanical on point 3. No flaws drive this. By letting beginners do rockets and also keep in channel trades we can pick up a few extra points staying in the whole trade. The experts and intermediates can do pennant BO's according to their risk level too. I showed a NQ for this. NQ is smoother than ES and knocks down money all along the way also. Look for those VDU's daily. You will usually see the related price bar is an inside bar. Note it well. Use the inside bar top and bottom for a trigger to enter at market going the way the BO is happening. This is a simple do-it-yourself bracket. As you see the volume hitting 3 to 4 times VDU, you get comfortable with the idea that there will not be a "failure to BO". If there is we tack to the opposite trend with a reverse, take the nickel and run with the reversal. Quote from vorzo: Jack, The stuff about VDU BO/reversal on failure is great, thanks. And so is the moving of point 3 if there are no flaws - I've done it a few times and I was wondering it agrees with the methodology. And so is the money velocity. Can't wait to see it all put together in that journal. I have a few questions: 1. the entry on VDU BO apply to all market periods or just to the DU? My understanding is that you use it whenever it occurs after a centering, outside of a rocket or iceberg - am I correct? I've marked the other VDU-BO on the NQ chart in green - did I get it right? ****See attachment 2. what are your VDU, DU, BO and unsustainable volume levels for NQ? *****See attachment. You can do it as a rolling thing. Dawg posts talk about how days are different vis a vis volume. 3. Today I started to keep a stop log while I was in the trades. I reread your posts from pages 79-81 of the thread but it's still unclear to me, say in a short trade, whether: - you record the highs of every 1-min bar and then as it retraces you erase the ones that were taken out, or if -you only record the highs made after a retracement. Then, my understanding is that you use the stops only in slow trend trades. Or do they apply to rockets as well? ******Use a stop log all the time. We will be getting in the groove on price formations for a variety of market paces. This does not make things difficult nor complex. All of this is on the level of learning to drive a car which is a lethal weapon at times. 4. today's ES chart - on the last channel, I noticed that you didn't move the point 3 to the high of 13:25 bar - can you please explain? ****I do not understand this comment. There is a thin blue line on bottom of point 3 bar. Also, on the intermediate iceberg trade, the channel is broken at 14:35 yet you stay in till 15:50 when stoch shows up on 20 tape. ** See blue then green line. We did two exits. End of trends Have we put in enough time to see that the last traverse in a trend is a flaw. The last traverse doesn't make it to the left trend line. I call this a "failure to traverse." Failures to BO are getting to be understood. They happen, in trends, to be considered with regard to the right line. Another occurance is at the end of a lateral trend which is composed of a congestion, convergence and centering. Price formations also give us BO's as they end. Use the formation end point signal and take it as an opportunity for a BO. Our commonest one's are Pennants (flags) and they have propensities to go in specific directions. Everything needs a sustained volume to succeed as a BO. "Failures" do not have the "push" of sufficient volume; that is why they fail. When a trend is coming to an end, we look at the traverse going along as it accumulates more profits. We notice that the stop log poops out vis a vis entries; You are not getting any new type entries. You also notice that the "traverse fails". This is an early warning system. As you wish, you go to a more confident orientation (this may be considered riskier at first). You do this be moving your decision point on sequences to earlier signals than you currently use. If you are composing sequences that are getting filled out on several levels and are multi indicator based, (Here I am chatting about how people take their existing approaches and compliment them with additional stuff). You get to a point where they are comprehensive. Then you can adjust your performance (money velocity) to continually enhance it. This is a measure of how chicken you are. Safety comes in several forms. NLP are very safe because they are familiar. But familiarity comes from experience and surviving. You can read posts here by people. Some are classic in how they exhibit "staying in a safe place" as caused by the experience of "fear" in other places. I am building sequences of signals for you. As you experience success, you "see" possibilities; I try to put these possibilities next door to your successes. I am recommending here that as you collateralize your methodology with this stuff. Always be considering moving your decision points to more profitable places to operate. Today I am focusing on the profit level shifting from rocket to trend following to using "leading" signals. Leading signals are such that it appears you are "trading" a trend by leading the trend. We will always work to be "pushed". Consider every "failure to traverse" as point 1. Do a reverse at point 1. This extents the current trend to the max and puts you in the next trend. If you find the next trend to be congestion then "slalom" it by just setting up the lateral channel congestion and swing trade it on the 1 min bars. 4-02-03 Trades general: i definitely have trouble trading the larger gap opening b/c the indicators seem to get out of whack due to gap...middle of the day totally sucked 1. long rocket mkt opens up a lot and all indicators say long...wait for 15m high and buy the break @ 875.25. at 10:20 we had what i thought was a lower volume inside bar and when its low was taken out i exited...market contiued to climb much much higher...clearly a mistake...i was looking to get back in at my bottom trendline, but it never happened. damn. really blew that trade. long @ 875.25 sell @ 876.25 +1.00 day: +1.00 12 days: +32.00 2. short rocket 3:40 s(14.29, 22.31) macd hist -0.56 short on the low break 878.75. mkt reverses on increasing up volume...trend line broken...exit @ 881.00 short @ 878.75 cover @ 881.00 -2.25 day: -1.25 12 days: +29.75 after blowing that first trade i was pretty pissed at myself and had a hard time focusing again...especially as the mkt just kept grinding higher...then late day short rocket that reversed right after entry really topped off a fantastic day. crap. crap. somedays feels like i am close and just miss it and turns into a crappy day.
Apr 2 Couldn't trade in the morning but got in at noon, on the BO after VDU at 12:05. Exit as price hit the away side of channel I drew. Turns out the good exit should've been at 12:13, after volume peaked on 1 min chart and MACD crossed down. +1.00 Week +16.00 Nasdaq stocks Jack Hershey, thnks for the wealth of info you have been providing in this forum. I am trying to use your methods trading nasdaq stocks and was wondering what things would apply. I am not using +/- .4 for nasdaq stocks because i find it rarely gets to be that divergent. Could you give me a better MACD level for nadaq stocks. I am thinking of trying +/- .05. Thnx in advance. you are correct about the lower values for MACD. Use the 30 minute chart and just calibrate it to be very similar to the stuff we are doing. 1/10 of the 0.4 is a logical choice. Your 0.05 comes close to that. hi dawg I have attached your chart for yesterday. you may want to consider your early exits. The first and second point 3 of the first trend tell the story. I suggested that unless a flaw shows up, use that as a criteria for staying in. For weeks your exits have not pulled down all the profits because you leave early. From your chart it looks like you do not use the point 1,2,3 thing. I was pushing that with you because you are watching the MACD, Vol ,etc at the time period after point 2. Putting myself in your place it looks like you think trends are very short in duration instead of the four chunks I point out. I am calling them chunks instead of bits because I want to make your see BIG. Four in a day average. Two or three in the PM and two in the morning. The H/L for the day comes from at least two trends. So you can count on making more than the H/L for every day in a short time. Focus on what is going on after point 2. Look for a flaw in the trend. The only one that will come up is going across the tape on the STOC4,1,3. If it doesn't happen, then watch volume decrease to tell you the traverse from point 2 to the up coming point 3 is price fighting the system and trend that is forming. Relax breath deeply. The time between point 2 and point 3 is a "reaction time vis a vis the new trend. At point 3 you see volume pick up to start the traverse from the right line to the left line. It will hit the left line. Relax. That tells you that the trend is under way. Again as before the volume falls off indicating that the trend is okay as the price heads for the right line. Chunk it for a while. Stay in the trend and just reverse when the traverse to the left peaks and volume falls off. NOTE the volume fall off is during the opposite traverse.!!!! If you do this under your normal level of panic all turns out okay. You are really pulling down the bucks. Today is a sideline day for everyone. It is just centering now to give us a shot at one trade this pm. Jacks thanks for the comments and suggestions...i will work on what you suggested. Gonna print it out and keep it next to me. I completely agree i am too quick on the trigger...old bad habits die hard. dawg Don't be so hard on yourself...this is a learning process. We are all learning from your posts here...I personally would like to thank you. Your professional attitude is refreshing.....keep up the good work...Jack will teach you the ropes because you are one of the workable ones. When Jack is done with you...will you buy me a car? My comments: Everyone has a break through in trading. This will be yours. Here is the general drift that I try for. 1. Safe high velocity rockets. 2. Washing on ice bergs for beginners. For intermediates staying with the iceberg. 3. Seeing rockets end in congestion ,convergence and centering. 4. Seeing BO's out of centering. (Pennants too). 5. Experts slalom through congestion. (Advanced wash trading) 6. Setting up trends using point 1,2,3. Looking for second point 3. 7. Stop logs using price formations. 8. C &R ing with market periodicity (between two peaks or two troughs). Tightening stops when pace quickens. 9. Seeing BO on trends for exits before stops. 10. Seeing new trend begin inside old channel. Point 1. (Failure to traverse) 11. Seeing point 1 as reversal for maxing trend run of profits. (If reverse into congestion, then trade out as in 5. 12. VDU inside bar combo. You can see how you can let go of habits as time passes. Just go to adjacent activity near where the bad habit hits. Yours is setting up point 3. If you write in point 2 and sweat through getting a no flaw point 3, then you will be killer trading. Profits do not creep up, they are like a postage stamp graph. Once we get to multiple contracts, then the cash flow really comes along with no new learning required. 4-03-03 Trades 1. short short out of a bull flag, when vol picked up and trend line broken @ 11:30. turns into a potential rocket that fizzels and exit when trend is broken at 11:55 short @ 877.25 11:31 cover @ 878.00 11:59 -0.75 day: -0.75 13 days: +31.25 2. short uptrend from 1:00 to approx. 2:50. This uptrend never gave a good rocket signal (no macd above 0.4)so i stayed sidelined. 2:30 macd xo, 2:50 stoch leaves zone, 2:55 trend line broken. short @ 882.50 held until close as trade turns into a rocket. short @ 882.50 2:58 cover @ 874.75 4:00 +7.75 day: +7.00 13 days: +38.25 Dawg Congrats on trade 2. Your entry could of been a tad earlier but you did good. You based your entry on the channel break and used the the stoch 14,1,3 as a confidece giver. very interesting. electric yeah, i was torn/uncertain of weather it was more of a pt 3 than a short signal/trend line break...so i waited for the stoch to leave zone. once the mini vol/price spike down occured i felt good about trade. dawg Be careful with that one min.....it should be a sync confirmation and maybe an entry, exit improver...but thats all.....Ask Jack if you should draw channels on it. Actually I will be very interested to hear from Jack on the use of the 1 min. I am still struggling with volume readings. electric i draw them in so i am looking at the same trendlines on my 5m and 1m...i just try and make use of the 1m for stops(or try not there yet)...i don't use it much b/c i get confused...like where i noted on the graph. i am looking at the 5m 90% of the time. also was trying to get a feel fro the volume drying up when approaching the uptrend line and when it failed to reach the away side, how did it act when it touched the uptrend line again. wash trades 3 trades so far today based on intrabar signals on 5 min chart: 09:50 Long 881.75 exit 09:53 879.75 -2 10:17 Short 874.50 exit 10:20 875.50 -1 10:28 Short 873.50 exit 10:29 875.50 -2 In the first case, both 14,1,3 stoch lines were above 80, macd histogram > 0.4 and macd >1. In the two short trades, both 14,1,3 stoch lines were below 20, macd histogram < -0.4 and macd < -1. From the attached chart, it is clear that these were all false signals as they no longer existed after each bar closed. The opportunity to wash out at zero loss didn't present itself. Any comments would be welcome.
DKM Perhaps it would be best if you used Quote.com's 'All sessions' charts. It looks like the opening gap is skewing the stochastic indicator. Hope this helps. wash trades 3 trades so far today based on intrabar signals on 5 min chart: 09:50 Long 881.75 exit 09:53 879.75 -2 10:17 Short 874.50 exit 10:20 875.50 -1 10:28 Short 873.50 exit 10:29 875.50 -2 In the first case, both 14,1,3 stoch lines were above 80, macd histogram > 0.4 and macd >1. In the two short trades, both 14,1,3 stoch lines were below 20, macd histogram < -0.4 and macd < -1. From the attached chart, it is clear that these were all false signals as they no longer existed after each bar closed. The opportunity to wash out at zero loss didn't present itself. Any comments would be welcome. a response Hello dkm, Very good post. And point well taken. If I use just the indicators âhistogramâ and âstocâ as my only set of signals and in a mechanical way, there are days when they work like clockwork. And there are days when I get burned. If I may put in my two cents here. This reply is not meant to be condescending as Iâm sure what I post is obvious to you (Also I have benefited greatly from your postings and work elsewhere and look forward to learning with and from you in the future). What helps me is to view the whole terrain. Which means expanding my indicator set. But isnât that what this approach is all about? (1st level stoc/histogram, 2nd level points/trends/channels, 3rd level 1 min vol dus, b.o.(p,m,v), etc etc etc) Yesterday closed down as a rocket. Today opened gap up. That gives me consideration to pause. Better be a strong bounce to continue? Sync occurred early 9:35am (or at least cash/futs moving in tandem). 1st attempt to close gap (60%) at 9:40am. At 9:50 sectors of market map checkered. While tech and industrial in the red others such as financial, energy, utilities are in the green or neutral. The large histogram values at the opening were due to the gap. Looking at the continuing histogram values forces me to take a look at the 1 minute chart. I see only one nice trend price bar with volume at 9:43. A potential pt#1 setup on the 1 minute. A failure for pt#3 at 9:47 and 9:50, of which have no obvious enhancing trend volume. Simultaneously NQ has a very crude fbp developing. The 1 minute macd is at a xovr point. At 10:17 a lot has just happened. The 5 minute chart has a mini tape developing for the last 5 bars . We have closed the gap and are hitting support at ~ yesterdaysâ close. On the 1 minute at 10:17 Iâm hitting my rt line of which I have been in the channel drawn since 9:50. We have closed the gap and are hitting critical support at ~ yesterdaysâ close. Is this a bit late to consider entering a position? (hitting rt line on 1 min, almost closed gap, support line coming up) That gives me consideration to pause. Even though my indicators are just starting to turn on with stoc and histogram here. Oddly enough at this point the 1 minute macd has only been entwining while the 5 min macd has been diverging. At 10:28 a lot is going on. Iâve broken out of the rt line drawn on 1 minute chart, retraced, then retesting the support level of the previous channelsâ trough. Volume does increase as I break this support level only to bounce off of yesterdaysâ close which was the loy. A nice mini ftp follows. Again, a little late for entry even though my stoc and histogram are turning on? The short answer is using only two indicators in a mechanical approach does not always work for me. And if I do use only these two then I look for signs of a strong trend. (At the very least this translates to not having a hair trigger as soon as indicator goes on) Maybe today was a day for slaloming which is well beyond me. There are nuances I am trying to learn which I have not grasped yet and may never (lol). It is easy to comment on things in hindsight and nobody hates a Monday morning football quarterback more than myself. I donât have the insight I wish I did in the heat of the moment. I still canât and donât trade live. Definitely not! And I have my own (deeply rooted) psychological barriers to overcome. Yet it is such a pleasure to go down this road, where it will lead is a total mystery to me. A response: Please note also: entering a short position at 10:17, the opportunity to wash did present itself after the retrace. Something easier said than done. Balls of steel helps More replies: Hardly, I think it depends on the risk tolerance level and what one thinks the mkt will do next. If they think it will reverse, they will see all the signs in favor of reversal and ignore the ones that tell them it's only a correction, and viceversa. It's in the eye of the beholder. FWIW, here are my trades for Thu since I have the annotated chart saved. Last night I had to do something for work which took me till after midnight so today I couldn't get up to trade. Bringing work home sucks... unless you're trading. Classic example of NOT sitting on your hands when you oughtta. Fortunately I didn't hurt myself too bad [on paper]. #1 rocket signal and volume spike on bar down on 1 min Short 9:59 877.50 Cover 10:03 877.75 rocket failed and reverse. -0.25 #2 reversal - failed rocket, 5m MACD converging Long 10:03 877.75 Sell 10:09 877.75 washed it as I was unsure of the signals. 0.00 #3 inside bar rocket signal (fast line above 80, MACD >+0.4 diverging nicely). Didn't see up volume declining on 5m before entry. Long 10:46 880.50 Sell 10:53 879.00 no rocket, channel broken. Slow execution. -1.50 #4 reversal - failed rocket, 5m MACD crossing down, 1 min already xed. Short 10:54 878.75 Cover 11:03 879.50 washed it. 5m MACD entwined at 0, recognized convergence - ftp forming. -0.25 #5 VDU breakdown, entry below low of 11:15 inside VDU bar Short 11:21 879.00 Cover 11:23 879.00 washed it as volume failed to rise above 5k. 0.00 #6 rocket signal 5 min later, this time breakdown was for real Short 11:29 878.00 Cover 11:55 877.00 5m MACD x up -> fast line out -> channel broken. +1.00 Day -1.00 (6 trades comm -1 pt.) Was looking too much at 1 min chart and missed the big picture = consolidation day, lots of chop. Also moving ahead too soon. Week +15.00 (13 trades comm -2.50 pt) Net +12.50 In reply to the comments Colin, svrz, thanks for your comments. This illustrates nicely the additional risk involved when taking signals before the close of each bar. I think I'll return to my earlier preference of waiting for the bar to close. Maybe it will help the washing... How about just following the WL script signals? ( That would be less stressful than having to "think" what the mkt will do next.) Then you'd have to put up with intrabar signals, which can chew your profit away. Mechanical is less stressful but you don't learn that much either. I've backtested for: entry on bar close, fast line 80/20 slow line 70/30 exit on bar close, fast line 75/25 protective stop 2.5 pt. Traded between 9:30-12:00 and 2:00-4:00 pm to avoid DU. Tried a few variations but this one had the best results. Results: some months are good some are bad depending on mkt - trend or range. Overall not impressive, a lot of trades are losers because of late entry - entry earlier on the bar turns them into winners. Hope this helps.
4-4-03 Trades that best describes today's trading for me. these are the kind of days that can just kill you trying to trade this method...unless you can recognize the chop factor. 1. rocket fail --->macd xo reversal 10:15 s(21.05, 20.18) macd hist -0.53 this doesn't setup on the next bar and 10:25 bar is an icreasing vol reversal bar was looking for macd xo/channel break. 10:30 macd xo and channel bo long at 876.50. 10:40, 10:45 vol decreases sig. and 10:50 bar exit @ 874.25. long @ 867.50 sell @ 874.25 -2.25 day: -2.25 14 days: 32.50 2. rocket 11:25 s(85.71, 78.36) macd hist 0.48 enter @ 878.25 held until 12:00 bar where macd xo, channel bo and stoch lkeaves zone. exit @ 877.25 long 878.25 sell @ 877.25 -1.00 day: -3.25 14 days: 31.50 3. short rocket 1:55 s(0.00, 18.73) macd hist -0.41 short on break lower @ 873.25...next bear is an icnreasing volume, bullish engulf exit when it's high is taken out 875.75....normally when we are so close to the low of day and the previous day's low i will wait for them to be broken, but on the down move vol was picking up and bars had nice price expansion...doh! short @ 873.25 cover @ 875.75 -2.50 day: -5.75 14 days: +29.75 at this point i was going to wait for the market to break the afternoon channel before entering any new trades....yeah wished i would have recognized that earlier. today was my worst point day trading so far. anyone have any thoughts on what clues there were to have a channel/chop that we experienced? __________________ dawg, With the benefit of hindsight - and the admission that I had the same kind of day you did - the only hope was the 15-minute chart. A three day relatively tight range was the clue - one that just jumped off the screen as soon as the market closed on Friday A thoughtful general comment: With all due respect, does it really make a lot of difference. If each trader is making money. One trading the market price action, the other trading the indicator. Seems to me that both are still trading the price action. Trading the indicator may be lagging the pure price action but is that really making less money in the long run? Maybe so, but maybe not. True enough, that when a stochastic hit's 100, that it doesn't mean that there is not plenty of dough to still be made on the long side, etc. Overbought often becomes more overbought and vice versa. I don't think that it's necessarily true that old traders point is being missed in each case here. While I respect old traders views, I can still keep myself out of trouble by keeping a check on the direction and slope of a stochastic. I can also use the stochastic to help me remain more confident in staying in a trade longer. (for instance: let's say that I enter short on a 5 min oscillation down and the 15 min stoch is also failling hard as well in conjuction with the 60 minute stoch falling hard - then I am more apt to sit through some 5 minute oscillations back to the upside) In this case, from a pure price action point of view = we can't get rid of this crap fast enough...... (sometimes the next day we can't buy it back fast enough......lol..) I often check the 60 minute and try to be aware that when I trade with it, that my odds of making larger gains are better. Consequently by trading against it intraday, that it would pay to use more caution, etc. Be it a crutch for deciphering price action or not. To me it's a good, quick, at glance indicator and it helps my bottom line. But with all due respect to you as well, vinigar, I'm not missing old traders point. I'm just disregarding to some degree Posted by jack hershey on 04-07-03 10:58 AM: Re: wash trades Quote from dkm: 3 trades so far today based on intrabar signals on 5 min chart: 09:50 Long 881.75 exit 09:53 879.75 -2 10:17 Short 874.50 exit 10:20 875.50 -1 10:28 Short 873.50 exit 10:29 875.50 -2 In the first case, both 14,1,3 stoch lines were above 80, macd histogram > 0.4 and macd >1. In the two short trades, both 14,1,3 stoch lines were below 20, macd histogram < -0.4 and macd < -1. From the attached chart, it is clear that these were all false signals as they no longer existed after each bar closed. The opportunity to wash out at zero loss didn't present itself. Any comments would be welcome. Thanks for posting. On page 97 there are 12 items that I have tried to cover so far. The list definitely leaves out the basis of the 12 items. So waht is the game plan underneath it all. What I have tried to do over the years is get people to a place where they can reason their way to developing an approach to make money. almost anyone can get into some groove for doing this. The consequence is that, over time almost any approach makes a lot of money simply because of how profits compound over time. The real deal is to be able to continually work at it with greater and greater performance success. You can take vorso's word for it when he suggests how trading makes more money if you do this or that. That iterative refinement viewpoint is what is called for. The challenge here is to get things in a proper perspective and then be able to prioritize. The highest priority is making money. Making it continually and with a greater money velocity as time passes. If you do something and it doesn't work as happened here. You must debrief yourself and find out why. You will either be right or wrong as to why it doesn't work. I will add a few charts for consideration after this post because I do not want the first chart or last chart to distort stuff. Going way back, I suggested that you first learn to make money when the time to do it is the easiest. So you make money and build capital that way. Concurrently while doing this first step, you actually learn a great deal about the other side of the coin. That side is the "walk carefully on the ice". When you are in the market, it is because you are walking carefully on the ice. You are not in the market saying "don't fall down on the ice". We are not always in the market. To say it in the best way, we sideline as a primary effort in making money. There is some conversation here about price and indicators. It is low grade compared to chatting about market variables, what they are and how you can enhance the signals of market variables singly and in combination by using indicators and use them as leading signals related to price. What is on the table for everyone is themselves and how they connect to making money using the market opportunity given to them. Price and volume vary with time. People and equities or contracts generate volume and price. How does a person generate three losses doing the same thing three times in a row. Mechanically. vorzo, correctly, in my opinion states that you make more money entering ASAP rather than at the close of the bar. You can bet he has looked where we are going to look in the next several posts I make here. There is no way any person at any level of expertise can improve by guessing. You will notice that I recommend a viewpoint for each and everything that goes on here and in 6 months you will look at this beginning as just a mild dose of what is what. We always need to focus on what is going on. That means "seeing" what you are seeing from where you are and NOT seeing what I see from where I am. To many people, Friday was a slow day. But that is said after Friday is over. To make money you need to know as the day unfolds piece by piece what is going on. For beginners, the two sides of the Coin are the making money side and the sideline side. Let us begin from this vantage point.
I commented further: The day begins. It is Friday. Learn that Friday and then Monday are days related to weekends. Holding capital in the market on a weekend is something significant. Holding money overnight in commodities futures indexes has a ratio of about 2:1 for margin required. This is a measure of risk. It is not wise to keep money at risk and out of your control. The day begins. We have a Thursday that was ........ For synch we see a gap (5 points) a "chop": retrace down, retrace up ,retrace down (all within 5 to 7 points). As synch occurs it is definitely like yesterday (Thursday). So we see that the prior channel is done (last trend on Thursday. We need to set points 1,2,3 (See DKM's chart for these points on page 98). As beginners we do item 6 of the list of 12. Why? To get a perspective. By 10:17 we have established that we haven't gotten off the ground no matter what skill level we have. So we take a glance at the 1 min chart. I do not want to go there unnecessarily and actually on the other hand I want to think about what "tape" is running on what bar duration (fractal). These two items can be done quickly. You see the chart on the 1 min attached and the "tape" is a (one) bar on the 30 min. These charts send you back to the 5 min. with the following feeling: ugh. Making money is not looming as the greatest "now" orientation. The other side of the coin, sidelining, looks kind of practical because getting the points 1,2,3 isn't working out for us. As an expert, you would say to yourself: "hey it looks like I need to camp on the MACD of 1 min and just slalom." At 10:17 the MACD is giving a "short" third signal to you. Two priors already. You can keep things under control by keeping the scale working for you at all times. We use a 10 point scale for making money at the beginning. If you go to the 1 min fractal it is to check out the situation more thoroughly and get a confirmation of what is up on the 5 min, or for Friday am, the 30 min "Tape". In "How to Lie With Statistics" among the ten chapters you will find one "The GEE Wizz graph". (Huff) We all trade on gee wiz graphs anyway but you can learn from this. Many people cannot stay in trades. Many people are deeply deeply affected by something they view at the moment and to the exclusion of seeing loads of other things they could be perusing. So I am corralling you into objectivity everyway I can. Some how you have to stay away from the gee wiz stuff and stay well enough oriented to take on trades and stick with them to their conclusion. So Friday started off with not even a chance of a point 1,2,3 trend lines channel being set up. It was "chop" on a gap. When you see three days back on the "tape" (30 min) you get a perspective. Experts are slaloming and beginners are doing whipsaw. dkm demonstrated this quite well. Three consecutive "mechnical" screw ups is par for a beginner. I have a record personally, four in 20 min on DJXX (before minis). What I did was very funny to my observer. And he got to see me pick off the BO after centering as well (A sane bracket entry, since I had thoroughly scoped out the scalping.) The comments of those here are helpful vis a vis the three screw ups. The market was a sideline market. One error three times. Why did DKM stop doing the trades? Well I believe he determined something was wrong. In a dichotomous key, of several levels just using typical inquiry he can get to the answer, perhaps. We all need to have debriefing approaches. A good way is to have about 10 key questions which when answered get you to the place where the problem is. So far the conclusion is, to go against vorzo's view and trade at the end of 5 min bars. This, as the chart shows, continues the losses. So that may not be a good conclusion. One strong conclusion may be to go into markets when there are no flaws. What can help is having the 5 and 1 min charts be working together. There is chat on that as a back test possibility. It is also a good idea to, without fail, line up the open properly. If you have a trend continuation, that is well and good. If you have price movement beyond congestion levels that helps too. Think about everyday. There is a H/L range. You can be picky to make, points everyday. The coin works. One side you make money in fast strong trends only and on the other hand you stay sidelined. Practicing wash trades is going to be a challenge. I admire those who have been posting and that about half their trades are successful wash trades. Thanks again for making the post dkm. Re: 1m chart jack what are the marking on the 1m referring to? are you exiting when 1m stoch get near 50%? *****Those are the three trades that occurred on Friday for dkm. Each time he went against the 1min MACD. ******The situation was that he needed to wash on trades he when into . He couldn't. Why did he go in? The day's beginning was saying gap up 5 congestion during synch of 5, and there was no point 1,2,3. ****He went in three times for his reasons. ****I suggested that a person check entries on 1 min to reinforce the 5 min signals. There were no 5 min signals and no 1 min reinforcing. 4-7-03 Trades 1. long rocket gap up. waited 15m for synch bought break of hod @ 902.25. 10:25 low volume inside bar after a high volume reversal bar...exit @ 902.75 long @ 902.25 sell @ 902.75 +0.50 day: +0.50 15 days: +30.25 2. short rocket 10:45 s(17.24, 18.39) macd hist -1.6 short on break of low @ 897.50 (also low of day)...mkt basing action from 11:00 to 11:15...popped a little exited at 897.50....tried to give trade some room...should have exited after 11:10 low volume bar high was broken...marked end of trend. short @ 897.50 cover @ 897.50 0.00 day: +0.50 15 days: +30.25 3. short rocket and bo from range 2:30 s(4.00, 13.92) macd hist -0.50 market bo down from range waited for rocket signal...short @ 891.00....holding thru first counter move was hard. vol spike @ 3:30 exited at 883 (too early) after 3:35 bar high was taken out. could have made more but negative thoughts creep in when up 8pts. short @ 891.00 cover @ 883.00 +8.00 day: +8.50 15 days: +38.25 all i can say is wow what a selloff. __________________ Posted by vorzo on 04-07-03 03:56 PM: Apr 7 trades ES03M simulated. Huge gap up and everything looked like a rocket so I switched to all sessions view. #1 rocket signal Long 9:48 901.00 Sell 10:00 901.00 rocket failed at 9:55 but held longer waiting for point 3 -> washed as 5m MACD looked like crossing down. Also cautious of long side due to gap up. 0.00 #2 rocket signal, long channel broken; fumbled execution cost me 1 pt Short 10:41 898.75 Cover 11:18 896.00 MACD 5m convergence -> channel broken -> fast line out. +2.75 #3 Was away from computer until noon (15:00 est). Rocket signal at 14:25. Bounced off right side of channel, no flaws. Short 15:28 886.00 Cover 16:08 877.25 held a few min after cash mkt close as volume was still strong fro an extra 1.75. +8.75 A hell of a trade! dawg I hope you rode it from the beginning and scored 15.00! One word on wash trades - I think the concept, as it was laid out by Jack, makes a big difference in helping you go with the flow instead of against it. Namely if the trade doesn't go your way and there are flaws you shouldn't wait for your stop to be triggered, but rather get out as close to bkeven as possible. It certainly weaned me off point stops. trading questions Posted by dkm on 04-07-03 03:56 PM: Re: Re: 1m chart Quote from jack hershey: I suggested that a person check entries on 1 min to reinforce the 5 min signals. Their were no 5 min signals and no 1 min reinforceing. Jack, Thank you very much for the detailed response. Much appreciated. To be fair, all signals were present on the 5 min at the time of entry. Macd on the 1 min was away and entwined below zero for the second trade and diverging downwards below zero on the 3rd trade. The 5 min stochastic was memoraby choppy and I guess that in itself should have been a warning. Dawg I didn't see your post, I was typing up mine. You nailed 8.00 on the last trade in REAL money I think that's awesome. It's easier to hold through retraces when it's paper money ... it'll be hard to keep the composure when I'll switch to live trades.
Some other threads to look at There are some threads going along that you can use to compare what we are doing with their focus. The one called: What an INCREDible..... in trading shows how people do not have specific ways to understand what is going on. A couple people lucked out and others nearly got buried. We should be collecting, daily, a portion of the H/L range without fail. Compare Friday and Monday volumes. One thing there shows you that there is price movement when the volume exceeds our middle value (10 to 12K) At the lower value (5K) there is not movement. Another thing that we have in the bank is the congestion convergence and centering sequence. After centering and on rising volume, a trend is going to begin. I felt that the posts on trades were the most spectacular so far for the fundamental reason that people are able to stay in a trend and also that they can recognize, by standing far enough away and looking, that there are no flaws appearing in the trend and therefore they have absolutely no reason to not continue to make money. Going to settlement in a day trade is something that is just as important as practicing wash trades. I hope to see the daily take increase point by point continually from now on as a direct and simple consequence of the consciousness that it is okay to continue to hold as long as no flaws appear. When you read several of the current threads you can see how few actually have a clue about looking for flaws. I really feel the consciousness here is being raised by the reinforcement we are giving each other. Jack This was posted in Dawg's journal but wanted to move it over here in case Jack wanted to comment on it. Quote from dawg: Here is an idea... the channels you are drawing are really the key.. they show the turning points of the market... perhaps you should one day... try trading based on the channels alone.. w/o any other indicators except for volume? like today instead of waiting for the 'rocket' at 10:45 i would have been in much better shape (by about 3.5pts) by getting short when my uptrend channel broke instead of waiting for a rocket signal....that is the area i need to become more comfortable in...sometimes i am afraid of getting whipped or not confident enough in my trend lines...just need to keep working on it and get more comfortable. I traded with trendlines before reading some of jacks stuff and coming from my point of view much of what he has presented has been a great addition for me. I did not use any indicators before, but have found that using the indicators have been a great way to help me stay in my trades longer and usually gives me a double confirm on my trades and reversals. What I was seeing was that I was not staying in trades long enough when I traded. So the indicators give me a continued reason to stay or get out of trades. I am still trying to figure out the order of importance I want to base my trades off of. My number one is still my trendlines, but I get confused when say a MACD crosses down yet the stochastics continue to stay over bought. Right now I just use that as a indication to be alert for a possible end to the trade and reversal and then wait for the stochastics to also follow thru for confirm. Also I am still playing with the 1 min charts which I did not look at before -- only looked at the 5 min. But it makes sense to look at the 1 min when the 5 min looks like just big bars of nothing. I am still trying to figure out how to do trades if any based on the 1 min when this happens. Questions Re: wash trades ? Jack, âMany people are deeply deeply affected by something they view at the moment and to the exclusion of seeing loads of other things they could be persuing.â Guilty as charged, Big Time! Iâm trying hard to raise my awareness. From your comments if I may ask a couple questions here: âAs synch occurs it is definitely like yesterday (Thursday).â Does sync occur when cash and futures are moving in tandem with approximately the same average spread between the two as exhibited throughout the previous day? If so, in reviewing the charts a)Thursday cash/futs started to move in tandem at approximately 9:37am and b)Friday cash/futs started to move in tandem at approximately 9:35am. Is this correct ? If so, is this what you are referring to from above context? ****Yes Good description. I take a little longer to be sure but you can look back and see it is sometimes that fast. Use 1 min. âSo we take a glance at the 1 min chartâ¦â¦.. think about what "tape" is running on what bar duration (fractal)â A tape is a portion of a price bar chart that has no white space. That is to say, the width of the tape is filled with the high and lows of the price bars. Is this correct?? ****yes Yet it seems as if you are determining tape by viewing the 1 minute chart only. *****No my point was to find tape (30 min) and look at the details on the other (1 min). of which the tape is a single bar on the 30 minute. What on the 1 minute chart tells you this?? *****Nothing. You have to go out, meaning reset the duration successively until you get a long enough duration to show tape. then with tape showing you look at the indicators. the indicators will work on all fractals and if they show a rocket on 30 min tape, then it is a flawless trend that is supported by a proper level of volume. This gets rid of the hair trigger stuff. You still run stop log and stay 4 entries back on the C&R's. You are at a place where you do not get frazzled by moment to moment "noise" and you onlt see strong signal. you are making money at a given money velocity and you don't mess with the sort of give and take of price as it builds profits over time. Periodicity of an indicator? time period between peak and trough of something or other?? **** Money is made in bunches. How long a bunch of money accumulation is turns out to be half a cycle. Because we make money long and short we get two bunches per period. âAt 10:17 the MACD is giving a "short" third signal to youâ Is that because the 1 minute macd is entwining below neutral?? *** there are squences for indicators and sequences that are combinations of all that there is to be seen. A paramount thing for us all to be doing is getting these sequences straight. Take a 100 sheets of paper. On each page just write down a set of events that you see happen. Be looking at things. In about an hour after you get all the sheets done and illuminated like they do in monastories (sp), you find that you have another job to do. *****Put the pages in order; it will take three minutes. you notice that from page to page the things are happening simultaneously or they do over lap a little here and there and there are branches and several paths turn out to be possible. ****Spent 15 minutes rewriting all the pages and illuminate them too. *****What you now have is about 10,000 words describing descrete events in chains that form a wider web as you go towards the end of the pages. ****This whole set of sequences, now integrated, give you a guide. All the time youare somewhere in the pages. they only go ahead. They branch by a special phenomena. The phenomena is called "flaws". You see the darnedest thing in the world before you eyes. Alternative scenarios of possibilities for trends ending are narrowed by roadblocks so that the way it is going to end comes down to fewer and fewer choices. ****Soon I am going to start scaring people here. There are a couple here who have had the experience and several others who have found and read the experiences I have provided. ****Think about it. If everyone does the 47 minute process for 100 pages that I described above, it means we all have the Lord of the Rings script for day trading this Esmini. day by day we just choose the branches we want to follow to the end of the day. ***It is a trilogy as we all know: AM, Midday, and PM. *****What we are discovering is simply this: you can make money continually if you know what is going on.