Here is what i did: 11:05 bar stoch(15.79, 21.14) macd hist -0.5 low of bar 865.00 ---->SHORT SIGNAL (below 25 on 14,1,3) with the low of day right below 864.50 and today had been a range day so far. I waited until the low of day was broken. Short @ 864.25 11:11 Cover @ 861.25 12:01 +3.00 from 11:40 to 12:00 volume decreased significantly 5m macd xo at 11:55. with the minisucle vol and xo i exited BEFORE the stoch crossed back above 25.
Okay Right after entry we focus on volume. We do a prorata continuing assessment to determing if it is sustained, increasing of decreasing. It has to keep rolling along to continue the price action. If it doesn't then a failure will occur. You go to the 1 min as well. This lets you see the signal to noise ratio on the vilume. Youcan divide volume here on this fratal into a base value (the noise) and the variable part (signal). Think of it as a carrier (noise) and a signal (variation). If the signal is not susained and persent and being enhanced, then you are potentially into a flawed situation. Yesterday in that detailed post I mentioned I tried to introduce the notion that there can be an expectation that the people playing have roles where subgroups of them are furthermore identifyable. I, for simpilicity of ID's use a harmonic identification. The people who swarm into things often look like accumulators. We have had the experience here with situations where there are strong urges to exit (these are not based on market stuff but relate to past experience with money in markets and particularly loosing money after having "made" it)). We stem this by focussing on what is right and developing (the point1,2,3 of trend formation). Accumulator swarms turn into distribution swarms. In cycles they turn out to be triggered by a peaking of money velocity. The money is being made ever faster and they get anxious. Anxiousness leads to action. If you look at the scoring chart you see that A/D has twice the frquency of volume. Volume in turn is twice the frequency of price. In a potential failure situation, we track volume. You can reinforce this with the flipping of A/D that shows up as a harmonic on the price. It is best detected as a money velocity change. For those who like maths. The harmonic is an odd one (third) and very prevelant (good amplitude) and without an offsetting phase angle. For varying market paces it shows up in a variety of formations. I have then sorted out on a matrix and related to the fractal level as well. You will get all of this to KISS. Let me build a record though. All the above gets you out. It also keeps you in with confidence. Both of these things turn you into slalom players soon enough during congestion. We are out by now if the volume didn't sustain and increase. If you are an expert ( making 150 to 250 K a year per contract), you can play congestion opposing the whiplash of others who are paying you. you chicken out when convergence switches from an odd harmonic over lay to an even overlay. This is when mechanical trading stops giving up losses. there is a post going on here about a system that is nearly chaotic that retruns alittle bit. It is in the market about 1 1/4% of the time. Imagine it as one that works aftr I tune it up. What I would finally deal with in it would be when to shut it down as a consequence of a turnip or rock issue (getting blood out of either). There are limits where you just get into fibrulation. This is where the harmonic goes to even (second)and then volatility indicators have to kick in to make the trading signal measurements. The shift is from triangular wave forms to square waves. From convergence to centering. The volume get so low that you almost do not have a signal riding the carrier. thus you just get two levels of volatility to use as signals. What is buried in all of this is the BO for the next trend. Centering ends with a loss of noise. Hard to imagine but the people are sitting there and they are in dissagreement and thus frozen from participation. I use set of equations (Boolean) to track all of this stuff. The "landing" of trends is the practical place but the "centering" is also a volume driven price phenomena. When volume goes below DU (dry up) you are dealing with noise phenomena. This stuff is priceless in value for really killing the market. The reason is quite simple. The market is not being made and anything that hits it is going to be seismic. We will use this at the expert level to prep for the pm start ups coming out of 13:15. Ifsome good slalom people begin to post I will ease into it. Summary. We learn to wash to save bucks on prior profits. Volume is the simple key. It has to sustain the entry; if it flags as the micro trend begins we see this as a prorata measurement and by popping over to the 1 min. Market exit. BE sure if you previously had anxiety at point 3 times, to stay relaxed on this just like you have become relaxed while setting each of the points3's for trends. watch the MACD and the Stoc on this volume assessment; they correlate quite well. Some experts can tack here (do a reversal) by seeing on the 1 min what's upbut don't if you see a slalom.
Notice at the 7:45/7:50 5min bar there was triple confirmation of the fast line crossing the slow line down on all 3 stochastic indicators...14,1,3......10,2,3.......5,2,3.....I take this as a strong short entry synch. Then for confidence to stay in ....look at that 5,13,6 macd crossdown on the 5 min. Michael B.
Jack, Why don't you or one of your "expert" students post a few months of statements showing returns of the magniture that you speak of. -bbc
To make 150K to 250K a year per contract you would have to trade all possible 250 trading days in the year (including around the holidays, etc.) and average between 12 - 20 pts per day in the ES. I'm impressed.
Big oops. I had my MacD set at 5,13,3 instead of 5,13,6. That made the difference. Sorry about that. g
When this method was backtested it showed over a multiyear period a loss of $20-25K. Now, when markets are choppier than they have been in the past we are to believe that the system is profitable, and not just profitable but can be profitable to the tune of $150- $250 per contract per year? Now after 70 pages of palaver I see no demonstration of that claim. Different students are now trying different things so that it is only natural that on any one day at least one student has a good result. The other students then try to modify what they are doing in the hope of duplicating that random success. How about a perpetual motion machine?
It's not surprising that out of all the people who started on this thread one might have 3 weeks of profits. Haven't heard from all those who were here originally. Flipping coins would also have some with 3 weeks of profits, some with 3 weeks of losses.