Discussion in 'Strategy Development' started by charts, Mar 31, 2010.
Here it is ...
There's no way this garbage is actually traded.
It looks like someone's brain on meth
(.....after 8 or 9 concussions of course.)
I'm just bringing it up ...
Thanks for starting this thread. I'll try to make several medium size posts which make just one point at a time.
Trading involves a lot of facets and it is very important that a person be very purposeful in the effort he makes.
The chart showing the short then the long patternenters the picture as a person does a routine over and over during RTH's. There are many ways to be successful in trading and most uccessful traders follow a routine.
One of the most popular it the feedback system that John Boyd created when, as a top gun, he trained fighter pilots. A person who treats traders for a living has used it as the basis of his continuing therapy. Steenbarger explains how he treats Greenspoon in his blog.
The schema of most successful CW type traders is to bet, protect their bet and hit the target of the bet. This thread is not compatible with that routine nor how a mind operates to achieve succesful trading in that regime.
Here, we will deal with an alternative and we can use the charts of the market thread introduced by Redduke. The thread contains one of those charts. Occasionally I will use examples of other than the SCT application to these charts. The other examples will serve to illustrate what is done with capital surpluses that accumulate from the SCT trading. All Pool Extraction Algorithms PEP use the same routine MADA.
The the content of this thread has appeared elsewhere in other places over the years. I have practised the same approach from the beginning of my trading in 1957. There is nothing new in trading and trading has become better and better supporteed by the electronic inovations over many many years.
The orientation that successful traders have, no matter what method they use, is to go through becoming unconsciously competent over time.
What is behind these methods that operate at this level is that the mind have been filled in an organized manner so that it is totally differentiated with respect to the method. Over the spectrum of methods, some are more able to take the market's offer than others. It is important to compare methods using the market's offer rather than comparing method to method. The advantage of method to method comparisons is that it lets the various traders know about each other's quality of trading. I like knowing what the extraction capability of other traders is.
PEP is deductively based. That is the user's mind is built through the acquisitions of skills and knowledge by conducting a scientific exercise using the Scientific Method. Principles emerge.
For trading this instrument, I am going to emphasize three zones already introduced; they acceleration, expansion and fanning. these ar terms that are foreign to CW but I will explain them in CW terminology as best I can.
The simplest explanation is that acceleration deals with the LTL; expansion dels inside the LTL and RTL and fanning focusses on the RTL. All are during the time of trends AFTER point 3.
So getting to point 3 will be taken up briefly so everyone is in the trade or is doing linked trades as part of these three phenomena.
These three topics come into the picture after a trader has some competence. My preference is to have learning traders go through a succession of knowledge and skill development whereby they maintain coherence at all times. An EMvawe pc monitoring approach is very simple especially when the person has meditation aspart of his five part life style. The other parts in clude diet, exercise, stress reduction and social support. Meditation fits into the stress reduction su routine.
PVT trading comes before SCT trading and SSR comes into the picture as the PVT streams are at their limits.
The locals (Tucson) are very capable of following this thread on SCT and they have been active PVT traders for a quarter of a year. This is about 30 trades and just over 50% profit on initial capital. An anual rate of 500% per annum) They are advanced beginners and there are 6 level to get to expert.
K200 exhibits acceleration on the five minute chart.
The five minute chart shows the trading fractal and one slower and one faster than the trading fractal. A trader trades on a fractal that has slower and faster observable fractals. This means the trader "always knows that he knows".
As shown on "The Pattern" chart of one cycle, there are six movements within the two halves of the cycle shown
Nine "internals" may occur on the five minute chart in an easily observable manner. They all have conventional wisdom names.
Many of the charts that will be put up will show thee internal occurances. I will explain how they contribute to the context of the trader.
To trade successfully using any method it is important that the trader be able to observe the future coming into the Present. The Present will be called "NOW".
Acceleration is a phenomena whereby the "volatility" of the extablished price container is exceeded. here the trader holding a position expereince making money "faster" than in the prior minutes of trading. The internal cases that can be present are limited. It is also true that price could be "translating". I consider all cases as internals simply because I view markets logically and from a deductive viewpoint.
The bar that introduces the increase in volatility of the container is called a "VE" which stands for volatility expansion.
To get this down on K200 will takes a full development of VE and how the trader makes decisions preceeding during and after a VE. Once we get into this deeply enough, I will use a parallel development for the other two themes.
looking at the K200 chart a lot of people see a "five minute fractal" and therefore would ask: "Where the heck does he see a slower and a faster one on five minute chart?"
Would you mind to enlighten them?
I think that combined with this http://www.elitetrader.com/vb/attachment.php?s=&postid=2785113
should help to explain the multiple price fractals one could find on a five (or others) minute chart.
I could never find a trading fractal merely by giving a look see.
I build, meaning annotate, a faster fractal first price move (with b2b or r2r) by using minimum three bars, then build second price move and subsequent third price move each of minimum two bars.
This effort gives me a trading fractal price move. If this move is a first price move (with B2B or R2R), I need to build two more price moves (of course on trading fractal) to have a slower fractal price move.
Then I have all the fractals I need. Slow but steady.
Separate names with a comma.