Getting down and dirty is where the rubber meets the road ...

Discussion in 'Strategy Development' started by charts, Mar 31, 2010.

  1. vikana

    vikana Moderator

    Moderator note: I've gotten a fair number of requests to delete the previous post by gianthorn. I think it's fair to leave it in, as it related to the credibility of JH.

    However, in return I ask that gianthorn leave this thread alone unless he/she wants to contribute and directly discuss the subject matter.
    #11     Apr 7, 2010
  2. Thanks for your patience.

    It was my intention to post regularly and in a routine that used the instrument (K200) to advance from a foundation and add all necessary building blocks.

    So far the basic elements have been introduced.

    On any visual display it is possible to annotated at least three fractals. They are nested rigorously by buiding from the ground up. Five minute bars will be used and others will post clean or annotated charts to provide the information they are using.

    To annotate, there are two concerns: the cases of adjacent bars and the nested tfractals.

    The 9 cases of adjacent bars present all the possibilities of bar relationships. This ia very informative.

    The pattern is the pragmatic trading basis for answering the three questions the trader keeps in mind to perfom the parts of MADA.

    As we see, it is difficult to understand a paradigm shift away from the CW traditions and practices. Most observers who "dop into" this paradigm are unable to use their knowledge, skills and beliefs to understand this paradigm. The OODA orientation is well explained by googling its originator, John Boyd and some of its advocates such as Greenspoon a user and Steenbarger, a therapist who repairs the users.

    Followers of thsi thread will either be OODA oriented or MADA oriented as their first recourse in trading. OODA is probability based and MADA is certainty (binary vector) based.

    As seen in the DA of OODA, a guess is made in D and A is the test of that guess. The trader does the guess and subsequent market action revels the success or failure of the guess. Based on this the OODA trader does OO and makes a new guess in D and A ,through the market action tests the viewpoint again. Ad infinitum.

    In MADA, three questions are answered lap after lap through the MADA routine inorder that the trader always "knows he knows". What may not be understood by MADA observers. is how finite sets are used to flow through the parts of MADA. Each element of MADA has a finite set. The finite sets have a one to one coresspondence. One to one means that the relationship of the fintie set elements is predetermined and unchanging. This is called certainty.

    We are concertned with the stauts of three adjacent nested fractals at all times. Their relationships are invariant in tems of time pasaage.

    In other words, all the work to create the paradugm is done scienticifically and independent of RTH's of markets. All the realtionships are determined by reason and a aytem emerges that has a fixed and permenant finite sets whose elements are in a one to one correspondence.

    In logic terms this means there is no noice or no anomalies.

    OODA does not have any of thiese aspects in its structure, process or reults.

    There is only one interconnection of OODA and MADA. they operate, in time in coincident markets.

    Any observer will go through a process as stated here in this thread by joe. Joe shows others how he observed the paradigm that began as foreign to him. He was able to see more and more dots as time passed and he was unable to connect the dots. Finally, using himself as a standard, he judged by his standard. Cool.

    What I have noticed over the last 50 years is those at inquiry proceed through the same process. As a consequence I use that path as the path for doing transference to build differentiation in the mind to be able to take the market's offer at all times.

    OODA uses probability as the basis of trading. this means that entry/exit trading emerges as the most popular form of making money. when the probability is high trades are taken when it is low, the trader stays sideleined. Over the first 10,000 hours OODA traders are either sidelined or learning from mistakes or are lucky (See traderzone's thesis).

    MADA, as a learning tool, gives the opporunity to lean the market cycles on all fractals and takes into consideration all adjacent cases of bars.

    In making money most adjacent bar cases lead to a D output called :WAIT, is sidelined or "Hold" is in a position. Whether or in or out, the trader is in the same circumstance for making money. Money is NOT being made since price is in a shadow of a prior bar's occupation of a range of price.

    For OODA, this is a high risk and low probability time. For MADA, this is a certain and no risk time. Emotionally, the conditions are opposites for the two practices. A trader who is learning makes the choice of his emotional orientation very near the beginning of the learning process. when scientists begin to consider the "growing of the mind" in trading, they will at some point discover this major fork in the road. At Expos it almost, for a while looked like it could happen. Therapists. however, depend upon income and they go to where the problems (clients) are.

    So in the pattern which has an order of events, there are internals. The effect is to string out the pattern within the container; the points of the container grow further apart in their appearance. when this is happening, it is true that the money amking is in the container and it is just taking longer for the profit segment to rune its course.

    As was pointed out, all fastals are nested and working from the fastest fractal is done to build all slower fractals. Parallelograms are used. the geometric definition is easy to find. Each kine has the same slope and a different intercept on the axis associated with the intercept.

    You can compare cheese to joe and see that each is making progress from a scratch beginning to the point where they are in the Present in terms of skills knowledge and expereince. Others, further along, introduce each of these people to new considerations.

    Here it is different, I am introducing building blocks that afford more amd more of the market's offer to be taken by dealing with effectiveness and efficientcy which are the measures of optimizing that emerges from a foundation that is whole; in this case an HS amd its PM.

    We are annotating fully and two bar cases are color coded automatically as a consequence of platform library use. emotionaly this is comfortable, supportive and confidence engendering. We have finite sets for each aspect of MADA.

    Lets put this to use.
    #12     Apr 10, 2010
  3. We can see in OODA and MADA there is a routine.

    Where do rules fit into these processes.

    As cheese states the objective of trading is to take the market's offer. he sees it as gyration or swings that can easily be measured as one thing "price movement" the manner inwhich profits are made.

    OODA introduces edges to take profits.

    MADA introduces answering three questions to "know that you know" at all times.

    Three fractals provide the information. One emphasizes "context" (slewer); another emphasizes "completion" (faster) and the middle one (trading) is used to practice effectiveness and efficiency leading to optimnization.

    crayola 101 of years past showed the market's offer day after day. any zig zag code will give you a line drawing version of crayola 101. chesse articulated the price actionaspect of market action.

    Here we introduce the full set of tools for getting the job done with a differentaited mind. what will be noticed by observers and practiioners is the "holes" in the mind. The places where differentiation is absent and needs to be added. there in one way to do this: DRILLS. as a corrary I will add drills upon request as attachments or referals to other places where they were introduced over the years.

    There are no OODA drills that I know of that are organized into a body for learning purpoeses. Most OODA folk speak of spending time to get something to enable OODA.

    I will fit completion, context and trading fractals into the MADA routine next.
    #13     Apr 10, 2010
  4. Waht we can do to handle the prgression of K200 is get into a daily trading modus.

    As stated by other contributors, it is possible to start with any two bars and build the three nexted fractal to obtain the "context", the trading fractal, and just how "completion" os prceeding on the fractal one faster fractal than the trading fractal.

    Answering thre three questions regarding the individual fractals and their combination gives a very reinforcing level of monitoring and makes analysis, decision making and timely action a matter of a look up process.

    As time passes sufficiency is attained for all slower levels of fractals all the way up to the enconometric level. At that level, currently, on a global basis, we are going from a point 2 to a point 3.

    By using the recent advisse givien to cheese, we understand the context to be a non dominant one for the move from point 2 to point 3. Many many measures corroberate this econometric situation condition and circum stance.

    The trader trades at a frequency well inside this non dominant periodicity. the trader builds to the level of three nested observable fractals. as this becomes firmly established, it becomes understood that there is a daya to day interrelationship. Days relate to one another as the progression of each fractal follows the pattern on that fractal. Day DO NOT startt from scratch every day. Neither do they have gaps from one day to the next. Gaps are adjusted day to day.

    Platforms are beginning to have capability to recognise the daya to day continuity and to automate degapping the last bar of the prior day and the first bar of the new day. In the history of trading these kind of milestones in platform refinement can be looked back to as aids to the knowledgable and skilled trader.

    The OO of OODA does not formally regognize many of the advances in platform support available to traders. In this thread I will take a lot of trouble to explain how we determine a trade is coming up as the nested fractals progress. Becoming effective and efficient depends greatly on what is seen and what isn't present to be seen. Trading depends more on what comes before the moment of timely action. Eliminating anxiety or fear is best done by removing the causes of such emotional negatives. the primary cause of such is the "unknown" experienced by the trader.

    Each day will begin with the three containers of the fractals being transferred to the beginning of the daily chart. The space used for this is the future. The future is annotated always. Volume and price fill in their respective containers on all three levels.

    Platforms move the displays from right to left as time passes. I request that all charts posted have space for the annotations of the future. Al formations, movements and shapes are in proportion,dimensionally speaking. It is a good idea to always have their envelopes in place and to use a scale on displays that is unchanging. This gives us a mental "calibration" as we "read" the displays to answer all the aspects of the three questions.

    When I comment on an illustration I will use the three questions and the parts of MADA in their order. This will give repeated snapshots of "knowing that you know". Q and A will center on "filling the voids" with respect to full differentiation.

    As you see cheese is not asking questions but others are informing him. My goal will be to provide tried and true drills that lead a person to complete his mind's differentiation.

    we now have a way to take slice after slice of RTH's for K200. depending upon the part of the world you live in RTH's for K200 occur at differnt times of the day. In Tucson, the US market represent part time trading since they are between breakfast and lunch here. In NYC, people who trade consider it a fullday's work since it is after their breakfast, through lunch and most of afternoon. In NYC, the day begins in a leisurely manner so to speak.

    This is the first day I have not been bedridden in a while and the Masters is on, so most people are watching that.

    We are set to go on K200 as another application of SCT. MADA gives us a routine, and the finite sets in a one to one relationship. We have known from the other thread that the display contains the three fractals that provide the context, trades, and the completion. We also have the ability for the nine cases to be kept track of. Initially, I spoke of the acceleration regarding the LTL, the expansion between the LTL and the RTL and the fanning of the RTL. All three of these things affect the progression of the nested fractals.

    SCT is rules based. SCT does NOT begin with rules. Rules are applied according to context and the "completion process" of the pattern. I have referred to this aspect of the paradigm as "steer and focus". The Sweeps Chart has explained this for many many years. Many traders have completed the tranference and as a consequnce, they are fully differentiated. This thread just shows a new application of a paradigm by using the reults of transference. That means it is a free standing reference for anyone assessing PEP or its applications.

    Trading to make money is a matter of timng. "knowing that you know" means you are in a mode of "anticipation" always. It is a pleasant place where the emotional context is support, comfort and confidence.

    The structural component of this style of trading is the mathematics involved. the market dictates what type of maths must be used to attain certainty through sufficiency at all times. The measure is the binary vector. This means we are always dealing with one of two directions for the variables at all times. This means price either "contines" its trend or it "changes" its trend. Very pleasantly, the two conditions are NOT opposites. Profits ar made during "continuation" and trades are executed in the window space called "change" The action for continuation is "hold; the action taken in the window of change is "reversal"

    In terms of OODA, continuation is the time of a sucessful or wrong bet. The OODA trader places the bet in D and watches the test of the bet in A. Subsequently he or his "protection" ends the test period. As is seen there are standards for prudence in OODA. 2% of capital is often considered the maximum bet and it is measured in terms of the end of the test for failure and goes unmeasured if and when a success is under way. success is usually terminated by "hitting a target" chosen diectly or indirectly by the trader and NOT usually by the market.

    For MADA, the correct side of the market is the basis of the hold AND the reversal.

    In MADA, analysis focusses on three questions and they, in turn, answer the following D and A. All questions regarding knowing that you know are in the form of binary vectors.

    In any trade for K200, we will always know the corect side of the market, the sentiment of the trade, whether it is dominant or non dominat and where we are in the pattern for each of the three fractals. In information theory, this is known as sufficiency. this is aninterlocking systemmic approach and using it also answers another set of anticipatory questions. the most important is "What am I being instructed to do next? The answer is invariably: "Apply these rules at this time".

    The rules are liumited to doing the process of MADA; they have nothing to do with any behavioral actions on a trading platform.

    So that makes this thread's subject how to build the brifge so you always know what to do next simply because your mind tells you.

    What I am being told to do is to annotate Friday and get the carry over ready for Monday. the K200 market precededs the NYC and Chicago markets.
    #14     Apr 10, 2010
  5. Hi Jack,

    would you mind to switch to a more "common"/accessible product? Maybe something like Pork Bellies? Bonds? Crude Oil? Eurostox? FDAX? Yen? I'm asking because I have no access to the K200. :)

    You wrote: "...Each day will begin with the three containers of the fractals being transferred to the beginning of the daily chart. ..."

    Somebody new to this would open their chart and unfortunately not have those three containers on their chart. How would they go from two bars and nine cases to the three containers of the fractals? Where should they start with their two bars? Should they simply start with the first two bars that their chart displays and from there see how they can get those three containers? Should they start at the first bar of a day they choose as a starting point?

    #15     Apr 11, 2010
  6. charts


    Come on ... :)

    If you're on the first day you have access to data for an instrument, practice annotating until you accumulate experience with that instrument. If you just don't have yesterday's data, start annotating price and volume, building containers on each observable fractal. When you form an opinion you can start trading ...
    #16     Apr 11, 2010
  7. SK0


    My view

    #17     Apr 12, 2010
  8. Sorry I wasn't available to pick up the thread at the beginning of the week.

    My intention was to establish the carry over on the intrument so three fractals were available for the start of Monday's trading which was over by the start of the US markets Monday am.

    When a person is new to an intrument they begin by annotationg a chart in hindsight. The question being answered is your question:

    "How would they go from two bars and nine cases to the three containers of the fractals?"

    Youir next questions are the answer to the first question.

    IT DOES NOT MATTER WHERE YOU START, YOU WILL ARRIVE AT THE SAME PLACE. The caps only show the importance of a principle and they do NOT represent any criticism or any negative connotation.

    All of thinking needs to be done in a way to avoid induction. Induction has no reliability.

    A chart is annotated by SKO. He is using three colors for bars. I use a yellow container whereby the second bar causes the container to appear. In SKO's chart he shows a "neutral colored bar for a second bar that is an internal relative to the first bar of the two involved. All of this provides for the nine cases.

    I usually hand 10 charts to a person who is beginning with me. I ask him to copy them 5 tomes to have 50 charts. The ten charts provide a set of bars over ten days. This is 810 bars.

    As you see SKO has several levels of fractals he built on a chart. From point 1, he proceeded to build using the fastest observable cases on the fastest opservable fractal.

    As a trader, he could enter on bar 2 when he knew that he knew. I do not recommend that to ordinary traders. They would have to WAIT until they satified the MADA routine of having three nested fractals on their display. This happened five bars from the end of the right side (or last bar).

    So a person just starting out with ten sheets of bars representing 10 days, would have to go part way through the first page to get to have the three fractals showing.

    SKO failed to do this effort. Again this is not a negative critisim it is just a comment on getting on with doing a routine.

    There is something else to deal with as well. Would SKO know that he knew where he was in the slowest fractal pattern? Probably not.

    So the posted annotated chart points out that you cannot begin on the first bar of the day with a sereis of annotations and use them for trading for that day.

    What a person must do is build annotations so he has three fractals operating in a nested manner no matter how many pars it takes to get under way. You CAN start anywhere but you have to start with the fastest fractal and you MUST have three nested fractals operating on your display.

    A casual person drawing lines on charts will not be learning purposefully until he gets into a routine that is deductively based. It is like geometry class in the second form following Algebra I in the first form. Trading requires proofs and the proffs CANNOT be inductive proofs. If a person asks for an inductive proof he has made a commitment to not be able to trade successfully (See traderzones, et al). His subsequent failure will be the consequence of an undifferentiated mind.

    I am going to critique the chart posted next.
    #18     Apr 12, 2010

  9. This chart will be critiqued.

    The critique will not forard anyone's learning unless they do drills with the suggestions made in the critique.

    Instead of makiing a critique I should post questions for SKO to answer for himself by doing drills, deductively to get the answers. We did this for over five years. Repetitive drills allow the mind to create long term memory which is then AVAILABLE to match what is being sensed.

    For the trader, consider bar 1 to open the day. An unannotated VE occurs on this bar. An expert enters and is looking for increasing volume on the second bar. He doesn't get it and reverses short at that point. I it 12 seconds into the second bar.

    The critique:

    1. Do carry over.

    2. Annotate VE's on the proper levels.

    Within the VE, the close of bar 1 happens. The trader KNOWS the next two pattern moves form this. The Hershey Hinge occurs between bar 1 and bar 2 this begins the first move. Annotate the RTL of this move. Use a coro that you associate with VE M1 and M2 so other superimposted annotations are "affected" through coloration shifts on the platform. Use width if this is not possible (,ore width).

    The critique:

    1. Annotate M1's and M2's.

    2. Make sure you "see" the BO of the M's RTL's. Log it.

    Drill take a log and go through the order of events for volume and price line by line for the three fractals this takes at least 8 columns of the log.

    Do logging for all 50 sheets you did for the P, V annotation suggested in a prior post.
    #19     Apr 12, 2010
  10. Critique:

    Notice on this chart the pattern is NOT being used. The relation of the V and P moves is 4 to 3, respectively. On the chart it is 3 to 3. This means the annotation of V and P is being done consistently and it is wrong. The consequence of NOT using the pattern is building the mind improperly. The consequence of building the mind improperly is that the "first recourse", so engendered, has to be repaired by building a NEW first recourse in front of the present first recourse.

    1. get out 10 sheets of paper and duplicate the posted "Pattern" illustration going from left to right. Use the sdame colors and line weights as seen in the illustration.

    2. stop the completion of a sheet if a scribing arror is made. Number the sheet, initial and date it and lay it aside.

    3. add another sheet to the blank pile.

    4. complete 10 sheets.


    Set up PVT trading and use 30 minute charts to trade four streams of capital based upon the pattern. For each stock to be traded in the Universe, make up a daily chart that is annotated in hindsight for the last five moves. Annotate on three fractals. The purpose of the drill is to see that the pattern is working on all traded instruments and the B2B 2R 2B is the hold period of the trade. Continue this drill for the foeseeable future since it will be where excess SCT profits are traded.
    #20     Apr 12, 2010