Unless and until one understands (and I do mean fully understands) the relationship between Price and Volume in an overall sense, then thinking one can locate understanding from a 'tool set' will result in disappointment. The market operates the same way on all fractals. Time remains the only difference. Yearly, monthly, weekly, daily, 5 minute, two minute or OTR charts all show the exact same relationship between Price and Volume. Channels provide the context, and Gaussians show the way. The learning process resembles the very same dynamic of completing a puzzle. One does not know which piece provides the clarity required to see the entire picture as a whole. However, once the 'piece' falls into place, each successive puzzle piece adds more clarity. Each successive piece does not cause one to 'forget' the image coming into focus. The same is true within these many pages. I cannot know which piece creates the 'Aha!' moment across all personality types. However, I do know two things: I can describe the path that worked for me, and I can illuminate the terrain in which people currently find themselves deployed. The rest, like the goal to complete the puzzle, remains a function of time. Perhaps, those that have already made the mental transition necessary to profit can assist those who have yet to reach their destination by describing what worked for them, and what was it that 'clicked' for them. Good Journey to you all. - Spydertrader
While I haven't made it to profitability, I do believe I'm in a new place. It's a place of what an engineer would call unstable equilibrium. That simply means I'm just as prone to fall into incorrect habits as doing it right. I thought that sharing my view from this position might enable others to sense when they moving in the correct direction. Over the past week or so, I've spoke to several others who confirm what I am about to say. You MUST distingquish between the emotion of fear (predictions) and the emotion of discomfort (anticapation). I've posted on this several times before, and now, more than ever, see the importance of catching oneself predicting. Have any of you felt like you made real progress, perhaps a huge aha, perhaps just a serene feeling about trading? Only to have a miserable experience next? That vacillation comes from flopping between prediction and anticpipation. In practical words, all I can say is you just have to be more in tune with your emotional state. Spyder is constantly pointing out how others see his trading behavior as calm and cool. Now, here is what you do: do NOT try and emulated that state. It won't happen, because emotions are signals or cues. You need to adjust your behaviour and THEN notice how you feel. THe emotions are signals to tell you if you're on the right track. Again, don't try and will your way into the same state that Spyder has describe. Try different behaviors until you find yourself in the state desired.
Excellent post bundle! Here are my thoughts: We are learning to anticipate and not predict. What is the difference? We anticipate and 'know' what comes next. For example: a pt 2 must follow a pt 1, just as a pt 3 must follow pt 2. Another example: a BO comes after a FTT, just as a FBO does. These are examples of knowing what comes next. Well what about prediction? Example: predicting the 'price' the pt 1 or pt 3 will be and how long the price trend will continue. At a pt 3 in an up channel with PRV increasing black during lunchtime, we are long, but for how long? Who knows and who cares? It could be for one tick. The price our long trade is executed will be different for the different level of traders - beginners, intermediates and experts. The beginner trader will have a larger price 'zone' than an expert. It is not our job as traders to 'know' the price of the action points, this is the market's job. Our job is to answer continuation or change by monitoring and analyzing, once answered, act. Remember the confirmation of these action points comes later and waiting for confirmation is not the way to trade. Any tool other than the ES chart enables more precision at the action points. For a beginner trader we have the coarsest tool which allows for a large price zone on trade execution and also a larger price zone for potential profit, which helps offset the large execution zone. The coarsest tool also allows for the greatest time to do our MADA. Moving down the ârabbit holeâ requires a shorter time to get the MADA done. The point of staying at the forest until it is mastered is not just for annotating the ES chart, it is to master MADA before the need to speed up. MADA is designed to keep us out of prediction. MADA along with proper anticipation allows us to âknowâ what must come next and not predict it. It is a âseparateâ four part process, each step requires different skills and the steps cannot be done together nor can the process be cut short (i.e. just doing M and A) For example: today's ES 0935 bar is a double top, signal to be short - where did you go short? If you shorted at 0936 at the bar's low would you exit or reverse at the bar's high, 1.5 pts away? Staying short for the next 2.5 hours would have netted at least 10pts. The point is: a 1.5pt price move against at the beginner level signaled change or continuation? Neither; price alone is not a signal, you need more context than just a price move. -Mike
That's great to hear bundle. As far as profits go, remember trade execution will come later in the syllabus. It is a completely different skill set to learn when the time is right. Great explanation of prediction vs. anticipation. -Mike
Wow, its deja vu all over again. Check out this post and note the date. -Mike Original post here: http://www.elitetrader.com/vb/showthread.php?s=&postid=865288#post865288 icarus618 Registered: Mar 2001 Posts: 476 10-11-05 06:20 PM A comment regarding the last few posts. Knowing the context is a necessary element of being in a place of anticipation. "Anticipation" is not the vague word that you see confused with "prediction" and debated on ET from time to time. Anticipation is a place of knowing where you are and thus knowing the finite set of upcoming possibilities. As Jack says, we know what to look for. It is a binary thing; the market gives it to you or it doesn't. Either way, the set of possibilities has narrowed for you as you continue to do the binary thing of knowing what to look for. For me, not all monitoring paths are the same but they all lead to the same place. The name of that place is BO. So what am I driving at? Daily preparation is a key part of being in a place of anticipation. We do our trading intraday and much of our attention is on drawing the lines ASAP on trading channels and their traverses but we do not limit our context to intraday market activity only. Jack says to know 4 for sure at all times--LT, IT, ST, intraday. The influence of the larger context is greater at times than at other times. Discerning that influence is a skill that makes getting the job done a deja vu experience.
That's what's happening here. I was papertrading with good profits every day and hardly any losing trade. Then it suddenly all stopped and I am still trying to analyse why. Maybe I was too confident or predicting. I think it started after a few losing trades. Maybe I need to go more back to the basics. regards, Ivo
I have recently added some posts, that were meant to be in healthy discussion, to the section of syllabus we are in. Honestly, nothing more. I look forward to sharing thoughts, as the journal continues this year.
Indeed, just to be clear, I'm not even trading at this point, not even simming. When I don't have to consciously think whether it's continuation or change at end of bar, that's when you know for sure it's time to click the buttons (IMHO). At least that's my standard at this time.
I have a question about todays' 14:00 bar, it WAS a increasing black break out of lateral, and then plunged down at same or even higher speed, the bar closed deep in red. can anyone describe the SS/DOM/TIC at that reversal moment: what you see, what you think and what did you do at what time if you were trading? Thank you. my status: drawing level, try to understand the finer resolution tool and it's use at those critical moment. Eric