You said it the same way I understand it. Hey. I'm no expert but what he said (which I mimicked) seems to fit the charts. Look and see for yourself. JAck teaches on that site, and I see it on the charts, that sometime the market blows totally through the LTL on big volume. It would be kind of silly to sell right at the LTL and watch all that money on the table go past you. Worse yet if you're playing always in, you have sweat being upside down during that big move. I like his plan better to stick with the trade as long as volume is continuing to grow and "let your profits run", then finally reverse when either the volume slows a little bit or prices reverse some. Yes, I'm fairly sure on that point. However, how could you judge that by looking at price alone? I don't see how. The PV relationship is critical there. I'm not going to sweat it right now. Please give me a few days to the trend processing perfected and then we can tackle volume. Because I haven't tested anything I'm saying here it's just from reading Jack and eyeballing the charts. Sincerely, Wayne
Apparently the operative word "but" in the sentence is what's causing confusion. By no means am I saying that you should get out of a trade on just volume or price action alone. Simply put, I understood your sentence to mean price was moving against the trend (change) BUT volume was contrary in that it said continue. Either way, it appears you have things in hand. Best of luck. -Au
In "Think" (IBM, 1957) there was a discussion on people and their way of perceiving (sensing). Vertical and horizontal are the choices. To maintain a neutral bias it is best to work in a horizontal orientation. You can check a person's orientation by reading what they write or how they describe things. So that is why the lines of boundaries are named the way they are. At some point more differentiation will occur and we will build three levels of price movement boundaries (envelopes that are nested). Moving to a horizontal orientation there is a mental cohoice of looking from the future into the present or looking from the present into the future. PA bettors look one way and we who do not bet, look the other way. Going horizontal to be neutral is a hard step for some. Looking into the present from the future is very hard as you can see from all the betting being done. We will see that "building" can go in either of two directions: analysis or synthesis. People communicate from these points of view too. Knowledge and technique are paired for making money. What and why are in the locus of knowledge and the how and when relate to technique. I presume that the B. P. A. will nail the knowledge in a series of steps and the B. P. R. will nail the technique (skill levels) in a series of steps. There is a tweak or caveat about how certainty and sufficiency connect to each other to have this happen. I am studying up on how confusion can contribute, I havn't gotten involved in that too much. For both certainty and sufficiency I don't feel it is possible to skip steps when going from the general to the intimate. Just drilling down and just using the intimate doesn't happen to work out. The sweeps chart shows a little about this as it STOPS the drilling by using the MODE blocker (stops the drilling down when sufficiency is there to get certainty) called Continue. Trading does not deal in opposites but instead it deals with orthogonals. End effects are called Change (which is a descriptor of Sentiment change)(directional flow change).
Jack, Recently you posted the following, although I cannot find reference to it currently?: Are these reference illustrations publically available? If so, can you point me to their location? Thanks for any insight.
Jack, please help with some B.P.A. related questions. Terminology is critical in this process. 1. What boundaries? Are you referring to channel lines? 2. In referring to price movement boundaries you call them "envelopes that are nested" parenthetically. What are envelopes? Is that also another term for channels? So I interpret this as you explaining why the channel lines are named left and right rather than top and bottom. If so, fine. If not, please clarify. Which way, please? [edit: Okay, got it. You start with the future and work to the present.] I will attempt to break down what you say. Please correct me as needed. By vertical, you refer to the mindset of looking at price moving as going up and down, right? By horizontal, you refer to the idea of looking at price as moving from left to right in time. Frankly, if that's what you mean, then I agree. It felt like an epiphany finally grasping what you write about how you can plan out several trades in advance. Is that thinking horizontally? Thinking from the future to the present? Hopefully, I'm making headway and getting into the groove of how you perceive the market. Perception is everything! It seems that concept relates to the pace of the market. You talk about the human nature of it operating faster and gradually slowing till lunch, then quickening again right after lunch, then decelerating till a big final burst in the afternoon due to automated risk management. It's clear that if a person or ATS can get into the "rhythm" of the market, then the TIME to reverse can be "felt" or planned irregardless of the price level. In fact, you talk about trading with the price bars completely OFF the screen just by watching pace and volume indicators. It's absolutely genius. Jack, THAT is the true essence of your trading skill. I think you're the first to even come close to describing the "knack" for trading that people develop with experience. Many others can't seem to express why they can trade almost automatically at the right moment. It will be a challenge for YOU and for ME both to reach the goal. That is, of course, for me to understand and automate your perception. It seems however, that we need to first stick to getting the channel states sorted out, right? Is that the first step? Yes. Precisely! I won't bore with all the steps. One critical step is to agree on specific terminology. It helped IMMENSELY that you have a glossary of terms on that website. One example, in my question earlier, if envelopes and boundaries actually refer to channels and channel lines, then it can help for both of us to remain extremely consistent in the terminology. Your point about "confusion" below, demonstrates this point, I think. Of course, if you need to use various synonyms because you feel that's necessary to convey accurate meaning. Fine. We simply need to clarify if they're exact synonyms or some technical nuance exists between meanings. Frankly, it will be less work for everyone if we stick to the same term when we're talking about the same thing. That's funny. I thought confusion was you're idea. Maybe you used a different word. Therein lies the need for both of us to make sure we use the same terminology. Here's your bit of wisdom I was refering to: On the site traderuniverse.com you talk about beginners needing to trade during market conditions or setups they understand. You recommend sidelining if you feel you don't understand what's happening. I think you wrote something like, "you must know what's going on at all times". I call that situation that prompts sidelining "Confused". For an ATS, it's necessary to handle confusion explicitly since that "gate" to trading for humans is based on intuition which, sadly, computers can't seem to must up even an ounce of that amazing stuff. Frankly, Jack, a number of points will come up where you do things on pure intuition and experience. For you, it's like driving a car. We think of it as simple, eyes on the road, steering wheel, pedals--but the reality is that there's a myriad details our brains is processing in parallel at all times. The real challenge will be in finding clear definition for human intuition. Again, confusion was your idea. We just need to agree on the term to use for it. Have a better suggestion? That makes complete sense. That's the holistic aspect of you trading you discuss. So it sounds like you agree on getting the channeling working correctly first. Again, correct anything I misunderstand, please. That's your role--to constantly correct till I get it right. Can you please give an example of CW (conventional wisdom) of opposites and contrast it with the related orthogonal concept? Wow, this is super exciting. I'm glad you are participating in the B.P.A. One final note is your excellent assumption at the difference in BPA and BPR of knowledge before technique. BPA and BPR can be done iteratively just as you discuss iterative refinement. So we get a part of the knowledge and apply that. Then add some more, and apply that, etc. Everything you said in your discussion applies here about needing to get a "belief" in the channels by making some profits. That reinforces and builds on the belief. While as a developer of an ATS I won't have to deal with the human issues of live trading pressure, I do have to deal with maintaining enthusiasm for doing all this work. Any amount of financial reward, however small at first will build steam and enthusiasm to stick to it. In most ways, you should treat me as you do any newbie, avid learner of your methods. For example, I plan for for the ATS to generate a LOG exactly like the type of log you keep your self of it's MADA decisions. That way I can post the log and the chart each day or whenever we agree and scrutinize it using terms and methods familiar to yourself. I'll post my chart, but eventually I want to make it look exactly as you're comfortable with seeing. Of course, only difference is that the ATS chart gets completely generated by computer including all the annotations, lines, notes, etc. Finally, do you feel comfortable so far with this approach I'm taking after reading that website? Do we continue with just getting the channels correctly automated to start some small profits on a test account and go from there? I expect to be at that point of handling channels within a week to 2 weeks at the outside. Then we move to step two. And that will be logical as it can help resolve the flaws or confusion points of the channeling algorithm. Sincerely, Wayne
This screenshot shows a channel formed that associates with the log below. The log shows every monitoring event and analysis change in state. In this format: Id#:Monitor Event -> New Analysis State Time 9:NearLTL -> RtoL 9/4/2008 7:34:23 AM 10:Inside -> TRight 9/4/2008 7:34:24 AM 11:NearRTL -> LtoR 9/4/2008 7:39:40 AM 12:Inside -> TLeft 9/4/2008 7:39:40 AM 13:NearRTL -> FTT 9/4/2008 7:39:42 AM 14:Inside -> Confused 9/4/2008 7:39:43 AM Note: For less clutter, only the LtoR, RtoL, FTT get annotated on the charts. The annotations include the id # as in the log. That's quicker to relate them together. POSITIVES: This chart shows how the ATS can correctly identify RtoL and LtoR. ISSUES: 1. It incorrectly identifies the FTT. I discussed a solution a few posts ago but got stuck fixing a bug and haven't implemented the "center" zone yet. 2. It recognizes the trend late. You can see the 1,2,3 points on the left that it used to recognize the trend. blue for lows and orange for highs. NEXT STEPS: 1. fix the FTT by introducing the "center" zone. 2. Fix a bug in the short channels. 3. Fix the RTL to give a little room on either side of the line to be considered still "AtRTL" versus outside the channel. That problem doesn't appear on this zoomed in example but on others. 4. Move next to taping (micro channels) to identify new channels earlier. 5. Handle FTTs and BOs to transition from channel to channel. Please post any questions or advice. Sincerely, Wayne <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2070613" width=800 height=600>
i don't know the method (and don't really care to) but here's an idea that might help. If the trade breaks the channel in your favor then you can hold until price reverses by closing below the previous bar low. If you examine the moves that run hard (assuming uptrend here) you will see that more times than not you will have higher highs and higher lows. Once that stops you either have the end of the trend or the beginning of a pullback. In other words you can trail a sell order along the low of the previous bar. If the current bar has a low that is higher than the previous bar after it is finished printing then you move the stop up. If not, then it gets hit. With that being said I don't necessarily think that is the place to reverse (would have to test that). If you are playing always in that's fine, but I would still have no problems going flat when price enters at extreme areas and then starting the states back at the beginning waiting for the next entry signal. -js
Hi ehorn.. If you get the time, could you talk about some of the actions from your chart? I think you mentioned end of bar actions is all the system can muster at this point. I am a bit puzzled at some of the entries/reversals. For instance, the reversal to short on Bar 17 and 73 . Could you shed some light on the system's decision to act at these points?
With regards to entries, without having any landmarks or other Monitoring inputs (i.e. >= level 2 outpus) for analysis and decision, bar 3 is a fixed entry and decision is purely Jokari with respect to the previous bar. At the time (initial development) it was decided to go this route to get the ATS "in the game" so to speak. As for the 2 bar reversals in question, they are both showing volume surges/spikes. The key (which I am still exploring) to defining and assigning a surge/spike correctly is to NOT confuse it with pace acceleration. Hope that helps clarify what is currently happening internally for entries and the 2 bars in question. I thought I would post todays print to show lack of maturity of the ATS at this point. This will be the last print of the ATS until I can establish a more mature implementation of Channel Formation Module and Price volume annotation module (i.e. 3 shells and associated components). These are just too critical to the foundation of the model to continue without and debriefs of the ATS results are clearly revealing this. I will be taking the prescribed approach of building up from level 1 through to level 3 (hopefully) I wanted to add that working through this development and asking myself questions about how to describe the algorithm and translate it to computer language has had a wonderful side effect of enriching my personal MADA skills. Seems a bit of a paradox though. From a knowledge perpective, you need to start at the outer shells and work your way down to the "intimate"... as Jack mentions. But from an ATS perspective, it seems to work the other way...?!? Not sure on this (just thinking out loud here) Either way, I will continue to learn and continue to teach the computer what I have learned. <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2072019" width=800 height=600>
This is one of those rare threads on ET that contributes real, unique value... I dabbled in automating SCT myself for awhile but put the project aside. If nothing else it's interesting as an academic exercise, but ehorn's results are definitely intriguing. Keep at it, this discussion is fascinating!