Superb discussion P1 and Jack. It is always buoying to hear someone with some time in the markets (your time goes without saying, Jack) to remark that a particular day was a slog. I have a couple of questions for you two, or anyone else, relating to a couple of comments. The first is something Jack said: JH: In the late ))'s it will go away. If you look closely there are five flapper modes. And the more sensitive you are to them the easier it is to carve the turns. We look at the cause of flapping with an amplifier of sorts in the form of several other tools, about seven in number, all of which amplify the flapping so they are like mogels to ski about, over and around. What are ))'s? You seem to be saying that you apply the seven amplifiers to each of the five modes of flapping? Correct? From my reading of your many posts I chanced across this selection from "The Holy Grail" thread which I quote in part: http://www.elitetrader.com/vb/showthread.php?s=&postid=1179608&highlight=sct#post1179608 As you can see projecting channels is done with the first two bars of the channel and they are determine as an end effect is signaled. All end effect signals come directly from an annotated LEADING indicator of the ES and are not part of the ES indicators nor ES annotation. The set of leading indicators include: 1. The YM price formations (2 min) 2. the Gaussians on the volume of YM (2 min) 3. The PRV bouncing ball on the YM and ES volume 4. the strech/squeeze graphic for the DIA cash as offset from the YM futures index (instntaneous with a persistant screen record. 5. The DOM shown as a button on five levels for both bid and ask. continuous feed) 6. the tick chart of ES and tick volume (5 min delineations) 7. the leading tick chart and tick volume of YM relative to ES (2 min delineations) If these are the seven amplifiers then the five "flapper" modes could be: FTT, RTL-FBO, LTL bounce associated with a change in the direction of price and BO, formation FBO associated with a continuation in the direction of price. Is this correct or are you thinking of something else? The other question has to do with point1's comment: P1: Note also the 12:10 FTT / outside bar which was, I guess, the smart money trying to be discreet. What do you mean by this statement? TIA lj
Feeling fresh as I do after 5 hours sleep (see post times), I can share with you that the A/D switch in Nikkei is none too subtle - when they come in they come in and it often shows as an impulse, with a period of damping to follow (don't wait too long). I guess you had to be there to see the way that bar formed - it was a turnover as they say in rugby. Then look what happened. The ))'s is the current decade. The clue is on your keyboard.
Thanks for sharing P1. Yeh I've been wondering exactly how you trade the hours that you do. Probably not with the assistance of Belgian beer. There was a guy by the name of Ben Ginter up here in this neck of the woods whose claim to fame was a 13% (gnarly yeast for that %age) biere. Great sales for a few years then he went (or some say was put) out of business. Have been thinking about your dimensionality question and will try to post something this weekend. "Hz" is a commonality and perhaps there are operations other than addition. As Jack and many others have said, it's all A and D but so far as I know he was the first one to try and quantitate sentiment in anything more than a superfical way. There are some great exchanges in the older ET literature betwixt him and dbphoenix who used to go nutz when JH would talk about A and D. db was (and is) a very "macro" kind o' guy and I think that was part of the problem. lj
Does anyone have this new book: http://traderspress.com/detail.php?PKey=581 (Understanding MACD) from TradersPress? I was wondering about its usefullness..
Good AM pointone, Got to be an EE thing (ho,ho). The mists are swirling about here in the Pacific NW which rather accurately describes the present state of my resolution of the PVAD wave thingy. Your point re dimensionality is reasonable and by implication I take it that if you are correct, one should question whether the deconvolution of the "market wave" can be realized by simply adding together wave forms of different amplitudes, frequencies and phase angles. As well you know any wave form curve can be deconstructed using some combination of sine and cosine functions (the latter being transformed into the former by a phase angle shift of 90 degrees). At the end of such an exercise one is left asking oneself, "So what?" Is this a meaningful deconvolution or just a paper construct and my answer to this is a very profound, "Me not know, right now." What I believe to be true, is that any and all "probes" of the market can be derived from three observables: (P)rice, (V)olume and (t)ime. We are constrained to considering only the right half of a sphere bounding these variables by the simple fact that we cannot set a developing price action back in time. The right boundary separates the present from the future. As I've said above, I do not know exactly how the PVAD components interact with each other and how well what has been defined as sentiment [(A)ccumulation/(D)istribution] reflects the present or future intentions of the players. These are nontrivial matters, as we all know, not only because of the many different types of players in the market but also for the different reasons why a given player may buy (to go long or to "cover") or sell (to go short or to "cover") and as well the motivation of the player for any of these actions. I could go on a bit further but I think that what I've said is enough crap for today and probably a few days to come. As I've said before what we do have right now is a very good way of looking at the market in the sense that it will allow us to make money if we understand and use it correctly. What "it" is, is of course, JHT(Jack Hershey Theory). There is also JHMethod and that is where Jack and I part company. He strongly believes in his protocol and I simply believe that it ain't the only way to do it. We have different biases and different disciplines that we bring to the market. Experimental spectroscopists do not look at waves in the same way as theoretical spectroscopists or EE's and CE's. As Mr. Wolf remarked in "Pulp Fiction" we should not spend time congratulating ourselves on how smart we are and what a good job we've done, before the task is completed (or words to that effect). So what I think pointone is that, for a starter, maybe waves also interact mutiplicatively. That's what I'm going to be mucking about with for a while and to that end I've bundled together a few web sites in a Word attachment that I am referencing, and which you, or anyone else, might find useful for whatever you might be thinking of doing with respect to the A/D conundrum. As an aside, I thought you gave the edgiest response to Ferd's hypothetical and most particularly with respect to your lucid depiction of the difference between "reacting" and "anticipating". It brought tears to my eyes as I fondly remembered the feeling of a fruitless pursuit. Have a relaxing President's day, lj (Larry) PS: The lead link evokes a thought that springs to mind whenever I perceive that my personal puffiness is getting out of hand.
FWIW and for purposes of clarification, when I spoke of a difference of opinion betwixt JH and myself, it was to do with the method of learning his method of trading as opposed to his method of trading per se. If I am wrong, as mentioned elsewhere, my P/L will show it and I will post the consequences of my errant ways. Thank you Jack for leading the way by having the huevos to think, so brilliantly, way outside the box. Fack the box. lj
In case you are still interested, here is an annotated chart for discussion. Note how you can ignore the 50 xo when you anticipate a channel P3 (context) and you are already correctly positioned from the prior FTT (P1 normally). Note volume after every FTT and every P3. Note MACD histogram. I cut off the chart before the end of day rally - that was just a bonus for all the hard work. Perhaps you know all this already. No comments on last week's contributions?
Great chart. You seem to be "in tune" with the market . On you first short, did you wait until you had increasing red on volume before you entered or was it the macd crossing zero? Once again, great trading.