SusanaDT, yes agreed - that goes without saying, but it doesn't answer the question. What I mean is, compare like with like because good indicator traders use multiple timeframes. Going to a bigger timeframe is not always the answer - you get the same problems there but in a bigger timeframe. So I want to compare techniques directly, like for like. T/L gives no indication of the strength of an immediate break. Let's take a short from a T/L break, you could get a return to the trendline at a higher price - say in my eg the retest of the high. Did the trendline break tell you this is not the major trade? No, because PA went higher. So how much "Feel" for the direction did the T/L break give you? What if it reteste the T/L and prior high and break up? You'd have taken the short and depending on the amplitude of the return, got stopped out. How do you qualify PA when it is moving within the next up timeframe you use, so it has not signalled there yet? Give me a like for like comparison, because indicator traders use T/L's and multiple timeframes too.
Actually there's one almost pure PA trader around here who doesn't use multiples ... but I don't think anekedoten posts on these boards anymore.
Yoohoo, Well, to put it bluntly, I've never been afraid of a small loss, I'm sure you get them too. As I said before I would need to see the bigger picture before commenting on the play. Susana
I am an amateur. This is different from being a part of the financial industry. Thus, I have turned down doing business for about 50 years out of 52 years of trading. Not having people ask me to do business is a goal. I am in total agreement with you for people who are trying to make a business out of trading. In the post following yours is a list of things for me to consider. they have been considered by myself alone and with others. and the consequence of their consideration is the manually oriented journals that have run for the last few years. There is more than manual trading and trading as an amateur.
Very very nice post. The mathematics of channels is precise. There is nothing lost in terms of precision when using a family of concurrent channels. Wathematically using time and price to define channels creates parallelograms. They overlap fortunately and mathematically the optimum trade is the long diagonal of the parallelogram. Very fortunately, the long diagonal's end points form a continuous path over time. when faster fractals are c9onsidered, they nest in slower fractals and the slower fractal long diagonal becomes the carrier for the faster fractal. trading on three levels is the most useful pragmatically speaking. Channel BO trading happens after the long diagonal has come to an end and the next long diagonal has begun. As you say this is a "herd" tradition and as a parasitic trader I am front running the herd and the herd is pushing my positions. This makes for a timing offset. It is very simple to refine trading the long diagonal to have advance notice of the optimum moment before the smart money escapes before the herd. see next inquiring post that you make. Again thank you for your comment above.
MandelbrotSet, Actually he does, he calls it the Anchor chart and also uses the Daily to support areas when the Anchor is entering what he calls no mans land. I read his journal from beginning to the very end. Beautiful work. Susana
Jack, I think I understand what you are saying, but only because I have a working frame of reference that has a lot of similarities. I use extensions of proven channels, but I do very little by way of adjustment. The point I am trying to make is, I think I can understnad what you are saying, but if you get it down to clear rules, few words and lots of visual examples, then what works will be plain to all to see. Unless someone is an experienced channel trader in small timeframes, they would think you are from Mars.
The 1, 2, and 3 is to use a leading indicator of what you describe. This is best done by comparing smart money and others from a timing point of view. The advance warning does provide time for 3 to 4 partial fills of a 5 partial fill trading level that is many times the capacity of the market. Corrections have to be made for the drift of premium and especially after the drift has exceeded 4 units in the DJIA. The ordinary noise level is +/- 2 units. A level of 4.8 units is required the have a statistically significant leading signal. When the premium is low during it threemonth convergence, then you have to automatically handle the flipping of values from positive to negative. A 300 tics time of accumulation is way out of range for having any degree of sensitivity for this leading indication. Seconds or 100millisecond rep rates are the coarsest you will want to be using. For whatever volatility of the comprison of the premium to cash (the herd), there is a precursor to the signals mentioned above. how fortunate. Apply a normalized (neutrally biased) volatility compression test. The test failure is the precursor signal. An easy one to convert is the Connors-Hayward. 1. take the signal I recommend 2. this is off the table, finally. 3. a repeat of the test I mentioned will have been done many times and this always keeps you on the right side of a trade. Trading is a precise mathematically based effort. There are no descretionary things like those that you raise in your Q's. Smart money operates like dominos some is smarter than others. Here you see the first glimmer of smart money as a failure of a test. this appraoch has long been advocated by Quals. This is not a Quant thing.