A person makes what he wants to make. That includes a person who isn't making anything. To say trading is about making money is not the whole story of course. There are many ways to make money other than participating in the financial markets. This goes along with a comment that was made earlier about the use of time. What causes a person to spend the bulk of his productive life participating in the markets and having his mind constantly directed to improve what he is doing? It is not about the money. What it is about I cannot say for sure, but I feel an inner harmony when I acknowledge that I was meant to do this. The idea of going to ever-more micro monitoring levels to improve the use of time doesn't strike a chord within me at present. That could change of course. I do consider my choice of where I currently operate in the market as a blending of the opportunities I see and what I am able to handle. The choice has led me to operating intraday and arbitrarily to the 5 minute bars. I do see that also sufficient are other bar durations (3, 4, 6, . . . , 10), and perhaps bars not derived from time would serve too, although admittedly that is not an area I have explored. In any event, within the context of where I've chosen to operate, there are places and times where I am called to take action. By "take action" I mean giving an order to my execution software. We know we are always "doing" in between actions. We have put the pathway as G(M)-->A-->D-->A. If I were to put in a few simple words my "method" without concern for precision, I would say that I monitor the current price bar in relation to the prior bar or prior 2-3 bars and draw rays or follow rays already drawn and projected from prior ends of bars; count volume and compare to the prior volume and volume benchmarks; all within a larger context known before the beginning of the day. Where does the micro-monitoring fit in? For me, only when looking within the current price bar is useful. When is it useful? When I know I may be called upon to act. I will know that I may need to act without micro-monitoring. What I know always is where I operate. What I also know is what the usual duration is between actions. Micro-monitoring does not affect the usual duration. None of the above comments are about SCT or RHR or "always-in" trading. There is the idea that improving is an iterative process of doing things more effectively and efficiently in terms of using one's time to extract all that is available in the market as measured by the number of points made relative to the H/L range using maximum trade size without liquidity issues. For shorthand we call it "SCT". To seamlessly go from one money-making action to another we add micro-monitoring: squeeze, neutral, stretch; two pair and spike; time and sales prints; DOM activity. These are all added to our GADA pathway. We gather more and have more to analyze. GADA is an intellectual pathway. It (SCT) is an expansion of what intellectually we are able to handle. We extract more the more we can handle. For me, GADA doesn't tell the whole picture. We all admit as much when we say we have to "manage" our emotions to succeed. It has been said that gathering data (monitoring) is sensing and with sensing comes emotions. We are to be aware of our emotions and to replace the ones that are not beneficial with the ones we want. No doubt that statement is as helpful as the trading maxim: "let your profits run and cut your losses short." Not much trading experience is required to recognize the truth of that maxim; but recognition is the beginning of the journey and not the end. My point is there is a concurrent and separate pathway to GADA. Both pathways begin at the same place--monitoring, or more specifically, Sensing, SADA. Sensing gives us color, size (length/width), movement (direction and how fast), shape (patterns), etc. The "A" after the "S" in SADA takes us intellectually to understand something from what we sense. There is a whirlwind of questions that pop up and we think the lack of answers to them is the cause of why our results fall short from what we intellectually know about what we do. It is a constant nagging feeling of missing something. What is the other, non-intellectual, pathway from Sensing? The analog to the second "A" in SADA is "E", Emote or Emoting. The pathway continues and eventually connects to the intellectual pathway prior to taking action. What lies along this non-intellectual pathway is a mystery to me. That it exists is a feeling that is unshakeable as the feeling I am here now typing on this keyboard. No "cogito ergo sum" revelation is necessary. To say that trading is not entirely an intellectual activity is an understatement. The same can be said about anything that people do. For me, SCT doesn't change what trading is, which is to apply who I am to do the work I am meant to do. It is about bringing out into this physical world something from the non-physical world. It is a mysterious process that goes beyond trading and making money. It cannot be conveyed to another yet everyone has access to it. One can know it, however, only by using it to bring forth a result. Without the result, it is all just intellectual speculation; no doubt interesting but about as useful and as worthy as a game of chess.
Permit me to add to your list of methodologies simple understanding what the prime mover of price is BEFORE it moves, rather than ex post facto observations. Shadows cast by fire light on the cave walls, if you get the reference.
Icarus/BA_trader, I think we all are pondering your recent posts very carefully, and I particularly enjoy your and everyone's participation. Personally, being a public aspirant to some form of beginner SCT, I have two takes on Icarus' post. Addressing Stalker (and others) in regards to SCT not being necessary to making money and also the allure of SCT potentially serving as a distraction to actually ever beginning the money-making and life-affecting process. The metaphor of SCT being an intellectual game of chess, but permanently sidelining the student to never actually participating comes to mind. A real danger, I agree wholeheartedly. On the other hand, IMO, Jack would have never shared so much detail of SCT if it was solely a bar-raising effort or thought experiment (believe me, the thought has crossed my mind many times). He commented in past threads that SCT was achievable with the caveat that beliefs had to be planted corrected, and firmed, and that the MADA process had to be sealed into NLP pictures and sports memory through repeated successes. I am a bit obsessive-compulsive when trading. For me, medium and fine monitoring provides a completeness, emotionally and intellectually. It tells me that I am doing my job in a responsible manner and that I am as well versed in the truths of trading as possible. I have a method of debriefing tactical mistakes. I can micro manage my entries and exits to optimise my trades, regardless if EHE or RHR. It protects my emotional state when a trade goes against me because I have a rich framework from which to improve my timing, decision-making and action-taking process. The most important thing it does for me is allows me to believe that I am a responsible trader by attempting to partner with the market, and that I am being responsible with my and ultimately my family's money, while engaging in such a "risky" occupation. For me, the emotional aspect of trading only dominates when I don't know what's going on, or what to do next. A well thought out SCT decision tree along with trading successes continually resolves this and trading becomes much more mechanical and much less an emotional endeavor. Counter to this perception or belief is the expectation that the trading methods of SCT and its proviso of fine monitoring is a holy grail that can pick off the tops/bottoms. Jack has never made this claim, but has instead left it up to the student to discern on his own. I no longer believe this to be the case. However, I still prefer a holistic approach to trading in the form of continuous trading for the very reason stated recently... because of the optimum use of TIME in regards to money-extraction, period. If I can optimise my time using a continuous trading approach, then all that's left is to optimise money-extraction. For this I work to develop an objective decision-making/action-taking decision tree for taking best actions as the market migrates from one operating point to the next. In my view the market is either in one of three places on each trading fractal. An upchannel, downchannel or lateral channel. EHE effectively captures an up or down channel by holding the position and exiting at an optimal place using whatever level monitoring desired, coarse, medium or fine. One could make an excellent living by remaining here as you and others have stated. SCT deals with the decisions and actions that should be taken in lateral channels. Linking the decision trees for these three "modes" of market action on all of 7 fractals using all of the monitoring elements available to us is the process of SCT and optimum money-extraction per unit of time. So in the end, SCT is my way of shooting for the star and hitting the moon, and not merely an intellectual preoccupation. I would have never been as comfortable trading without my pursuit of it. Truth be told, in my trading, I alternate between EHE or RHR trading depending on what the market is providing and what my mental and emotional condition is at the time. The choice and flexibility to pick either on any given day is the potential that practising fine monitoring and SCT provides for me. In regards to SCT turning...after spending the last 4 days chewing on Mak's recent posts on STR/SQU and other fine-monitoring posts from Jack on YM leading, as being the answer to my question of "how to turn", I'm finding that even with fine monitoring, there is no default way to exact the top/bottom for the beginner SCT'er. In contrast, the idea is to hold until all instruments corroborate change (from coarse up through fine) and the market seems to have one alternative left. All of this is an effort to reverse at a well informed best guess point1 and then we MADA again until its time to determine a next best action (slalom, wash, IF2, sideline). Along the same vein is to avoid singular signal reverse impulses and instead use all monitoring aspects including a leading index to firm up the best time to change your position. I would expect this to prevent a lot of E1 errors in lieu of the singular signal approach, but the SCT student would do well to understand this aspect of SCT turning. That in the end it is a "very well informed" best guess reversal, but that the goal is to be "well informed'. Afterwards, the market will always do what it will, and may require another action. I would think, with experience this element of timing the turn improves over time as you get better "hearing the music", which is where phrases such as "optimising", "improving efficiency", "extracting the maximum" come to mind. Finally, one should note that after all of this work is done to corroborate change, there is still the need for Additional Protective Action and wash skills. So what does all this mean in the context of recent posts? Well, to me the point is to demystify SCT for current and future students and elaborate on the full spectrum of trading approaches available to students of Jack's methodologies. IMO, Icarus represents one end of the spectrum and Mak and others (self included) represent views on the extreme end of the spectrum. Both views are compatible IMO and posts along both extremes are welcomed as far as I'm concerned. I will make the following statement based on my own observation in an attempt to further demystify SCT, and encourage anyone to offer opposing or supporting views. No single or collective SCT monitoring elements will enable you to pick the exact top/bottom every single time without some adjustment of your position (referred to as tacking). You may pick the top for the moment, but after this action, the market will do what it will, and may require another action. It is the trader's responsibility to anticipate this and prepare yourself emotionally and tactically for this regular occurrence and need to trim and tack.
A superior post icarus. Your thoughts are by far more cogent than mine. I had to read your posts several times over just to really get it. Thank you, MAK!
Top notch posts! mgin - in a way you are just describing the fractal nature of markets. The quesiton becomes: what "term" are you trying to capture ALL of the movements on? If you try to capture all of the TRAVERSES of the roughly 4 intraday trends (the trends that make the ST) - you are (IMO) SCT'ing... doing the 20-30 actions. Personally I go for all of the TRAVERSES of the ST trend. Which means I am making roughly 4 trades a day... often less.
The equation we care about is: (% return on capital)/hour Equities take the $/hour cake because capital can be very very large relative to futures. Futures cap out at 40K. Equities cap out at millions. The path is futures => futures + equities => equities only. When you are stocks only you have a LOT of free time and a lot of capital. Then you can go and make an impact... or do what hypo would do - wine and women. Either way the money flows thru your community.
You've made some fine comments. I do not mind my comments being placed at an extreme of a spectrum by a person who contrasts what I say with what is said by others in order to get a better understanding of what is being discussed. I want my thoughts to be intelligible to others and bounding them in a form no doubt helps to do that. My last few comments primarily deal with my belief that achieving a result by actual doing involves things that can't be transmitted through words by one person to another. I believe learning to trade is a stumblin', fumblin', falling down, picking oneself up, and rumbling to get to the goal experience and not a tidy, neat, avoiding-wrinkles-in-one's-clothes process. That is not a statement about "losing" being required to learn. I also believe there is a mysteriously helpful power that is called upon by focusing on a clear result, no matter how small, and a charge of energy that comes from achieving it. I make this statement through experience and not by intellectual proof. With regard to my views about SCT, the last few comments I have made in reference to SCT are with learning to trade from a scratch place in mind. I do make those comments after having had some time to think about learning to learn to trade. I regard the idea of SCT as facilitating a natural progression of what I do. The progression is simply to play all traverses, even and odd, of the operating trend. It matters little to me whether a reversal order is used or a simple exit and entry in the other direction. There is always a traverse and it is tradeable even though at times the even traverse may result in no gain or even a slight loss. SCT incorporates the fine elements of monitoring. It is for precision timing of actions. Let's consider a few things simply. In decreasing level of fineness, I would order the SCT elements as follows: sq/neut/str; BBid/BAsk quantity changes; time and sales activity (pinwheeling, staccato, which side of Bid/Ask); two pair and spike; DOM quantities and ratios. I do not include IF1, IF2, APA in the list because I consider them coarse monitoring elements, albeit finer coarse. Now what are these items for? To carve the ends of traverses, are they not? I will note that of the elements listed, only two are "action" elements, i.e., "hit T when X happens", and with regard to carving the exact turn, hitting T occurs at minimum 2 ticks and likely not more than 3 ticks after the end of traverse occurs. I pose the following question to myself and others here who may be interested: How good a job in carving the ends of traverses do the SCT monitoring items do for us in comparison to just using the "finer" elements of coarse monitoring, such as IF2, APA, and sides of channels, to take action?
Much respect Icarus regarding your comments on mentorship and transference. And I'm glad you saw where I was going. I don't see that we disagree necessarily but that our views are compatible, so I will just add more and hopefully respond adequately to other questions posed. How good a job in carving the ends of traverses do the SCT monitoring items do for us in comparison to just using the "finer" elements of coarse monitoring, such as IF2, APA, and sides of channels, to take action? My last 3 or so posts have centered around this very question. In my relatively limited SCT trading experience, aside from providing a sense of monitoring excellence, fine monitoring may pick off a top within 2-3 ticks but that top may not translate to a trend in the other direction or any traverse continuation for that matter, and may require an APA (so that we doesn't suffer any drawdown as edgers goof off as Jack says). Txuk sent me a PM with a link to the quote below, which leads me to believe that you don't necessarily hold the traverse or channel, expecting one change action to carve off the absolute top/bottom but that you take the change action to stay on the right side of the market until you have carved off the absolute top/bottom and a trend resumes. Can the same be done with reasonable expectations using IF2, APA etc? I've said so on several occasions that I thought much of SCT can be done with coarse and medium monitoring. I've also tried encouraging more thought along SCT lines with this provisional statement and my comments on scaling. I don't know about anyone else, but this realization provided a much different perspective to me on SCT and the use of fine monitoring than before. The elusive STR/SQU and fine monitoring is about firming up your decision to change and optimising your position during the change process. The nagging feeling that something is missing is about something that doesn't exist but we do have tools to keep us on the right side until we find ourselves in a new channel where then our modus operandi again is to hold. Anyone please chime in with thoughts or another perspective as the iterative process is at work. Nwbprop's post with Jack's comments in green and caps. mgin - in a way you are just describing the fractal nature of markets. The quesiton becomes: what "term" are you trying to capture ALL of the movements on? What I said would probably apply to all fractals but I work primarily on the intraday channels and its traverses, mainly due to the holding cycle and potential of each intraday traverse and channel. At a minimum, my daily goal is to identify and enter each intraday channel successfully and in a timely manner. My next focus is holding/extracting the majority of the channel. Depending on the formation of the channel, I may scale trade the RTL traverse after pt. 3. If I've been in an intraday channel for 3 or more oscillations and start seeing STR/SQU values repeating, volume drying etc, I'll scale reverse on the LTR traverse and bracket the extreme values of the last price oscillation with a SAR. I scale one off after hitting the RTL, and hold the other if I break the RTL. I favor brackets on the resume in lieu of reversing again on the RTL because brackets are more objective. The market takes me in and it either BO or FBOs. It's not my job to tell the market to do either. It is my job to deal with whatever the market gives me at that point by taking action. It is also my job to define an action that I can accept emotionally, intellectually, financially and take quickly without second guessing. An interesting question is: is sct the way to make the most money possible in 6 1/2 hours? An interesting question indeed. Honestly, I've just taken Jack's word for it. Aside from testing the previous day's HI/LO, or ST/IT channel lines, I find the intraday price action to be relatively meaningless to trade without the application of SCT. SCT is more like gleaning, while setup trades seem more like hunting...laying back in the bush waiting for the prey. I'd rather take my tomatoes and basil now. Jack has mentioned limits for SCT, but I understand that to be per transaction limitations not including scaled entries. Factor in a reasonable scale method and SCT can mean a whole different thing from a P/L standpoint. For me, intraday SCT represents the maximum money velocity that can be accomplished with the most minimal amount of capital allowable in the markets given the intraday margin requirements ($2000-4000). There is apparently a ceiling at 20 contracts but I think that's assuming no scaling is involved. Factor in a 2 or 3 boink scale and it's a different beast altogether. It's also something that can be done in between equity cycles.