Every single line on that chart has a meaning. Notice the green carryover channel. One could have skipped it and went with lateral movement beginning on 9:50 [close of] bar. However, it would have made 10:55 [close of] increasing red volume coming from lateral BO leaving one wonder when did the red became dominant. Well it's precisely during that green RTL break. Every single fucking thing on that chart has a meaning. One Man's Rubbish Is Another Man's Gold.
Everything that JH writes just puts me to sleep or makes my stomach churn, I actually have the info on my machine, my brain can't really access it. I'm following this thread in hopes Frosty will get something up and running so I can compare my range capture to SCT. I feel that I may be surpassing it but there's no way to know so far, nobody has reported their average or typical range capture. I've seen the "up to 3x" thing tossed around a lot... if somebody that has a lot of history with SCT and trades it with real money could PM me with an idea of the typical capture it would make my day, I've wondered about this for a long time....
My guess is that you guys are running about .5 to 1.0 range and getting a bigger percentage of range on a sideways day than a trending one.
Pretty funny. This thread won't be that bad though, Frosty is very methodical. He breaks things into manageable parts and examines them carefully. There will be learning in this thread IMO. Sorry if I buggered up your thread Frosty. If you can learn then more power to you.
Susana: I accept the cruel reality that not everyone will succeed. But for those who's willing to learn, there is a possibility.
Sweet this thread should be fun. Good luck automating crazy talk. The more I learn about the markets the more ridiculous this "method" looks. 90% of the market volume is due to arbing and institutional long term orders, and Hershey is gonna beat the market by drawing channels around 3 5 minute bars. Of course he can't really do it, but we can hide that by using a lot of nonsense. But seriously I look foward to this thread. Trying to clarify the details of the style well enough to automate should pretty clearly demonstrate that it can't be traded in real time, due to ambiguity. Yes I am still bitter that I wasted 2 weeks of my life trying to decipher Hershey when i was 18 and totally new to trading. Jack acts like a benevolent guru but in reality he just wastes peoples time that are really trying to learn to trade.
There is no relationsip between baggerlord and myself, LOL. Regardless of that, how's it going Frost? You do realize that if you figure out how to make money with this stuff you will be eligible for a Nobel Peace Prize, don't you? :eek:
The automation is coming along fairly well... A few things I have learned while going through this is that many of the cases I proposed at the start of this thread don't really matter too much in the grand scheme of things... At least not if your automating the strategy... For example the tape whether you extend the tape line or not, or just generate a new tape for each 2 bar sequence that qualifies.. doesn't matter too much.. at least i'm not seeing how from an auto-trading standpoint it will make too much of a difference... I am using the turning points in the tape to help form the 123 points needed to form the channel... And from what I can see just using 2 bar sequences to form the tape produces the same channel as if extending the tape.... I think when trading using discretion then perhaps the cases I asked about at the start of this thread will make a difference since it will help the trader "see" it... but for auto trading and generating the channel drawing a new tape on each 2 bar qualifying sequence seems to work fine. With that said I have started with the auto drawing of the channels.. and here things get pretty complicated... and I have a lot more work to do and i'm sure plenty of questions to ask soon regarding the channel drawing... However, I decided to jump ahead slightly and see where this may be going as far as profitability is concerned.... I used the tape to form points 123... now i have an up or down channel... then, I made it check to see if in down channel and the tape just changed to an up tape.. go long... if in an up channel and tape just changed to a down tape go short... this is an always in strategy... And surprisingly that is actually slightly profitable strategy.... Granted that is not SCT in the slightest.. but I think its picking up on a few of the "principles" indirectly... I think what makes it be slightly profitable is its finding the FTT's... everytime its in channel and the tape reverses is not a good trade, but OCASIONALY its grabing one that would be termed an FTT in SCT.... I think once more of the SCT logic is added in.. such as distinguishing dominant/non dominant channels... looking at the position in regards to the channel when the tape switches direction.... looking at the volume going on around that switch..... exiting on a FBO after the tape changes... things like that... I think those things could greatly improve this crude mechanism and may produce a fairly decent auto trading strategy... So I do see there is some possible "light" at the end of the tunnel... And I do see that SCT or more likely a variant of that idea will be a profitable strategy