Kiwi

I agree with the majority of it but the divergence is important. John says to avoid C++. If he means "don't start building platforms from scratch in C++" I totally agree because there is so much to do and so much to learn. But. Sierra Chart uses C++ as one of its two programing interfaces. And it doesn't have to be (very) hard because they provide the structures and you just do the bit in between. It is not much more difficult than easy language. Similarly one of the easy testing platforms Amibroker uses C++ for their coding but never says it so it doesn't scare one off - I can code for amibroker and then, with very minor changes use it in Sierra Chart. More extreme, esignal code is also easy to change to SC code. So, I think that many platforms use C++ like coding - the key isn't to avoid C but to avoid trying to do too much. I do like the suggestion about starting with existing code and making a small variation ... thats how I learned C (and then C++) and I've gone from changing a CCI to 1000s of lines of code (just completing a bar by bar backtester because SC's one is tick by tick and they won't have a native bar by bar until next year).

Tiki, Its easily overdone. If you make a trade because of what price is doing it is price action. That's different from making a trade because (say) the RSI turns up. Horizontal and diagonal forms of support and resistance indication (trendlines, channels, horizontal zones, mas, vwmas, vol@price, and market profile) help you to figure out where people might perceive value. Perceived value makes price action that might not be relevant in the wide open space between areas of perceived value worth trading. Eg. at the trendline you get an inside bar and then a bullish engulfing bar ... so the probability of the entry resulting in an up move rises. The pa also defines when you are wrong (stop under the beob) nicely so you can define risk reward as well as knowing probability is higher. So, if you trade because price (ticks, bars, candles, etc etc) is doing x rather than derivative (ma xover, rsi, stoch turn up) is doing y then you trade price action. The fuzzy argument tends to be around the question of this S&R vs that S&R (horizontal only is most pure )

It is an interesting question. I suspect that, if trading in a non-automated manner, most traders move from lots of indicators to few or no indicators. With automated trading, defining some visible price behaviours sufficiently well becomes nearly impossible so indicators because they simplify price or price and volume become more important again. I'm automating some things currently and I have found that I can automate (imperfectly) price pattern recognition but some elements are very difficult. I think that's why people who have moved a long way on the path still like one or two mas or maybe keltners, bollingers, or vwaps. Or perhaps they use market profile. All these tools provide an additional view of "value" and "extension from value." Those views complement Support and Resistance in providing a basis to determine when price action is meaningful. Just as a pin bar becomes relevant at S&R but not in the wide open spaces between, the same relevance may occur at VWAP, the 20 ema, or the edge of the value area. So, personally I prefer to minimize the use of indicators, but the presence of an ema or a vwap doesn't mean you're not trading price action - it just means that you get useful information from a derivative of said price action as well. However, if one wants to claim pure price action trading, then they should only have price (bars or whatever) and volume on their charts. No channels. No trendlines. Nothing else --- because a trendline is no less a derivative of price than a ma or keltner.

I agree with thales. Even though I don't use NT (I prefer Sierra Chart with Interactive Brokers) I have looked at the material and downloaded and used versions of it. It and the material were good.

Good analysis (and thanks for posting szubaark). I trade like but not the same as Al. Key things are: - being patient and waiting for the clearest trades - expecting one or two pushes out of each basing - never fighting the trend - resisting your own emotion driven reactions when you miss what is a great trade in hindsight. I would add that horizontal s&r (and thus where you expect a retracement to end) can add a lot to an ma based retracement strategy.

I suspect you need to watch it db - you might find it differs from what you expect. If not available locally copies can be found on the net pretty easily. It is an excellent lesson for anyone. I really enjoyed it.

I would give a slightly different answer to the forex question. Markets tend to behave slightly differently (so, bund trends for more pullbacks then estx for example). The explicit method here is tuned for US equity indexes. To get the most out of it in another market you would need to tune it to that market. I trade something quite like Brook's method and have traded it on HSI, then SPI, and STW, and now back to HSI. I originally started it on GBL and Eurofx during the european session. At each step it has evolved slightly ... and to my surprise the version I trade on HSI now isn't quite like it was before I traded SPI and STW. Markets change too.

1. Only have one broker (trying to figure out if your position is open/closed/bracketed and then adjusting for that with another broker is a NIGHTMARE). 2. Tape the phone number up and keep a copy in your car. No backup computers. Not even a phone (we are now 100% internet with cable only). If, as happens once a year the pc or internet goes down and I don't know whats going on I call IB and get them to cancel everything thats not long term and protected. 3. I do keep backup pc images though and can restore operation in 30 minutes on my main or one of my children's pcs. If PC reliability was a problem or the internet or power were unreliable I'd do something different but I've had 1 pc failure, 1 power failure, and about 4 internet failures over 10 minutes in the last 5 years. One of the internet failures was a flood which killed the suburb for all providers for 3 days. Also had IB's servers go down once in that period and had to shut down once for a Typhoon in HK (so the exchange was closed). So, if your PC, power, and internet are reliable ... backup is a cellphone with your brokers number on hotkey

Midknight just reminded me that tomorrow (1 July) is a holiday for the HSI. For anyone who's forgotten

LOL. Aint that the way. :crap: My day (Tuesday) starts in 1.5 hours ... and I've just had GOOD NEWS. Torchwood will show in Australia only a couple of hours after it plays in the UK. Life is good. The world is fair. I think that even the markets will be kind on this last Tuesday of 2008/09. Happy New Financial Year everyone

Good point Blowfish, Sometimes you just have a day that doesn't suit your strategy. Today, by my definition of trend HSI had 9 trends ... 9 ... and you can guess that when I say my strategy is a little like Brooks and I only do the trend trades it was a tough day. On the other hand Midknight is (from my definition of trend) mainly a countertrend trader and he had a fantastic day today. So its not that you need more than setups ... you just have to accept that some days won't suit some setups. Such is life. Tomorrow is another day.

Yes, your statement does make sense. What I was trying to suggest and I think you have expanded on is that the naive interpretation of supply and demand is dangerous. When prices are pulled up to achieve better short fills it looks like demand ... and in a sense it is - at that precise time. The problem is that the long term actors are simply building positions. Some of my best trades (and virtually the only time I hold for long) come when I start to suspect the activity, profit from it in the short term, and then join the main thrust that comes when the maximum number of fools have joined the short term move. Price can not move with zero volume - because a new last price is not printed until a trade occurs - but at times significant moves are started without a conventional volume signature and interpreting volume is an art best practiced with a view to the next longer term context rather than as a bar by bar science. note: I am certain that db meant that price can not move without volume in the post above.

The statement that Spyder made was: Volume leads Price. Always. Always? Like: every time; never wrong; always??? There is plentiful evidence (see papers and searches quoted) that this is incorrect. An excel table is a collection of (perhaps good) data and isn't evidence that would prove the assertion even in a weak form. It could be a useful test of one working on a strategy but how can it prove that volume always leads price. Then Spyder falls into the trap of claiming that 'his work' is somehow better than 'my research.' Imagine how much stronger the argument might be if one had to do a little physical labour, maybe digging a ditch or even a grave would make the argument stronger? Spyder, you have made a strong assertion and then you attempt to make it look like you are simply encouraging people to look for themselves. Come on. You are beginning to make as much sense as your mentor. This really is one post too many or three or four - I wouldn't be surprised or even disappointed if Brownsfan removed it. Perhaps, recognizing that you believe it to be true and many others don't we can move on to something more interesting.

It is unsubstantiated to anyone lacking a "religious" view of it until someone provides "grounds sufficient to produce complete certainty." Its not about me. Its about the statement you made and have not supported. The table above provides no proof of anything - not even a suggestion of statistical analysis. Repeating that quote from someone who actually did the work: "We test for Granger-causality between trading volume and price volatility. We modify the standard regression procedure in several ways. We take the first difference of the logarithmic transformation of each series to account for potential nonstationarity in the data. We isolate the time series structure of each series and test for causality using pre-whitened residuals to eliminate problems associated with autocorrelation in the data. Finally we test for causality in both mean and variance to account for the presence of time varying variance (ARCH) in both series. Our results provide strong evidence that price changes lead (cause) volume in the Granger-causality sense. There is no evidence that volume causes volatility." I will leave you with that. If others are satisfied with your statement then fine - it takes all kinds to create a decent market.

Another little quote from someone who actually did the work: "We test for Granger-causality between trading volume and price volatility. We modify the standard regression procedure in several ways. We take the first difference of the logarithmic transformation of each series to account for potential nonstationarity in the data. We isolate the time series structure of each series and test for causality using pre-whitened residuals to eliminate problems associated with autocorrelation in the data. Finally we test for causality in both mean and variance to account for the presence of time varying variance (ARCH) in both series. Our results provide strong evidence that price changes lead (cause) volume in the Granger-causality sense. There is no evidence that volume causes volatility."

Opinion: a belief or judgment that rests on grounds insufficient to produce complete certainty. How is your absolute statement on this page anything but an unsubstantiated opinion. I refer in particular to the confident assertion: "Volume leads Price. Always."

One example only proves that one can find one example. Sadly this is something that many beginners and not so new traders fall into, in some cases repeatedly. The statement was that "volume leads price. always." And one example simply demonstrated that "volume led price. this once." Quite a number of studies have been done in this area and they do not support the view that volume leads price always; in fact they call into question the more moderate view that volume leads price most of the time. To quote from one of the many such: "Lead-lag relationships were found in about 15% of the usable data sets. Price variability leads volume slightly more frequently than volume leads price variability. Hence, a small number of lead-lag relationships do exist between price variability and volume, and the results are invariant with respect to the price variability measure or volume measure employed. The number of times volume leads price variability and vice-versa are nearly identical." More information is available for ones education, should one really feel the desperate need at: ScienceDirect - Search Results: Lead-lag relationships between trading volume price New evidence

One of the wonderful things about the markets is their ability to inspire absolutist statements. Volume leads Price. Always. Well, probably not grammatically a statement but you know what I mean. An even more wonderful thing about the markets is their ability to demonstrate that nothing is ever "Always" true. Ever. Just when one least expects it.

I found this post on "Re: Open and Free Discussion on Volume" interesting and have nominated it accordingly for "Topic Of The Month June, 2009"

There are some excellent posts in this thread and I'm not really going to add much to it. I liked a statement made by edabreau in another thread "That is probably one of the most crucial events of all. When I finally knew that I was not trading the price action, but trading my trade setups and rules." I find that this is an important point. If you think you are trading "price action" or "indicator action" or whatever you are much more inclined to beat yourself up as the market moves in its merry way and you are not profiting because you are not "in." When you truly believe that you trade your tested setups and rules then, like when you truly believe that you can't tell whether this trade will win or lose, your trading will become much easier.

I found this post on "Re: How Do You Start Trading?" interesting and have nominated it accordingly for "Topic Of The Month June, 2009"

Sierra Chart does this as standard with Interactive Brokers and some of the other brokers they support. You can set up multiple bracket for complex strategies. These orders can be adjusted after activation by your own modules.

All these comments work with some tradables some of the time. Price will lift at times and lift at ask not because of "true" demand but because those who intend to sell large volumes don't want to sell it at current prices or at the current time. This can go on for hours. I fall into that group, partly because of what I trade, that finds that volume "as an indicator" is frequently useless. So is market delta. For any strategy the user needs to test it themselves for the thing they plan to trade and they need to test it in a wide range of situations.

My pick. Interactive Brokers with Sierra Chart. Works really well. If I was big on the Dom I'd go with Ninja for entry (although SC has a dom, Ray's is prettier) but I finally decided last year that I the fakeouts outweighed the valid info I was getting from it. Less info flicking back and forth = less stress. Goodbye Ninja dom and goodbye SC dom. 6 months later I can happily confirm it was good riddance. Anyway, Sierra Chart as front end and just enter/bracket/exit on the chart

Thats an interesting statement STJ. Years back I used to trade Eurofx futures on a 5 minute and 1 minute chart. Knowing the potential that volume has in Index futures and particularly in stocks I spent a lot of time qualifying volume price relationships in eurusd futures. In the end I came up with one good correlation but it was an indicator of manipulation. I'm pretty sure that what was happening was that the futures were being manipulated so that profits could be gained in the (much bigger) cash market as the two markets have difficulty at certain times of the day deciding which is the tail and which is the dog. Based on that (isolated really) observation I'd ask how much light volume in the futures will shed on the stochastic darkness of the cash market. I must have another look at futures and see if the intervening 3-4 years has changed my perception of price volume relationships so that I can see something different. Whatever, if you apply volume price relationships to anything qualify it very carefully looking for both type I and II errors.