You're welcome. The author of that article has also written a book called "Iceberg Risk" that is worth reading.
Deep, lol. When the subject matter is this rugged a golf cart just won't do! I, too, appreciated the style with which that article was written. Sort of connect the dots in three dimensions. Let's see...if I can fog a little inspiration in here...we know the volatility is a measure of standard deviation divided by the mean. If we're trying to find a way to visualize volatility in a chart we can find the difference in two separate measures of the volatility, this gives us a visual cue. By using a 1 or -1 to describe the existence of a threshold value moving price either up or down we can create a nice impulse pattern on our chart coincident with and sometimes slightly preceding our movement of price. We can then use this to confirm our deductions regarding volume moving price. I thought makosgu has done a fine job of bringing his description forward. Whether it is necessary to actually take the step of developing the method into a tick-based decision tool is a question of operational moment. What time frame is he comfortable making decisions from within?
Hey Kastro I mostly trade on probability I use 2 type of system 1) if the market is higher i see which stock are weak and which are strong and what level they are approaching so i can either shot the weak one or do the opposite when the market is lower and how low it is and which stock are strong and which will come up 0.10 cent to .20 fast but it go wrong but the probability is higher 2) the second probability i use is numerology for E.G if intc is 25.00 and depend on the market if intc does not brake 25.00 or it goes under a few cent and then come right back and goes to 25.09 every thing is probability and no one can predict anything %100 you only have a find a system which works for you
I read some chapter drafts from the book (or what lead to the book) a while back, Osband is more concerned with the measure of Risk and the misconceptions in portoflio constuction. I'll see if I can dig these up, I think there we like 7 or 8 PDFs he posted prior to the book's publication. But we are now mu-eueing...err... I meant drifting D) away from the topic...
to trade you must gain an appreciation for the dancing of the spheres as the market path unwinds...I'm tired and at peace, goodnight.
Either 15M or 30M these past few weeks. The 5M is just for quickies (ie. lack of extended periods of time to monitor things)... Admittedly tho, on the 15M/30M, it is a matter of monitoring the projected volume at discrete time intervals to ensure that the projection is increasing in magnitude wrt to the previously calculated projection; all within the same developing bar mind you... I find tick-based decisions to only be important only at the point when I enter the market and/or when it retraces back to my entry point since it is time to get on the proper side of the action. Thereafter, it is just a matter of watching the market move away. As the market moves away, I begin to relax and move to cruder monitoring (ie. just watching the bar's volatility lengthen in the direction that is simultaneous extending away from my entry and hence extending profits). Profit extension is the objective. Doing this continually is the goal... MAK!