Tasuki

Hello fellow TL traders, With all the great threads on Traders Lab, I couldn't find one on the Andrews Pitchfork, so I've decided to start one. The problem is, I know only a little bit about AP, but from what I've learned, I think they have great potential. Of course, the master of AP is Timothy Morge, and he has a ton of free info on how he uses pitchforks, but I thought it might be useful to recap some of it here on Traders Lab. [having some sort of trouble uploading my chart---I'll post this message sans chart and then try to put the chart in the next post]. See attached chart. Shown is a bearish pitchfork. To create an Andrews pitchfork, you need three pivots, a high, low, high (bearish) or a low, high, low (bullish). The pitchfork on this chart shows some classic features that Tim Morge teaches: 1) there is a nice test of the upper line, showing that the market appears to be respecting the three pivots you chose for the fork. This gives an increased probability that the fork will work. Morge says he NEVER trades a fork he's drawn unless it is successfully tested first. 2) Now that the fork has been shown to have some validity, the first target is the median line, the line in the middle. Morge says that there's an 80% probability that the median line will be reached (after a successful test of the fork), and he has some massive statistics to back up his claim. Mind you, he's a consummate master at finding just the right combination of pivots with which to draw the pitchforks. Aye, there's the rub--the "artistic" part of all this is knowing where and when and how to draw the pitchfork. 3) The idea is to place your short entry just after the test has completed, with a protective stop above the pivot at point C. The proper placement of stops is a big deal with Morge, and he has lots of useful rules for how and when to "hide" your stop behind support or resistance areas. He will move his stop (down, in the case of my bearish example on the chart) as soon as price has moved below a S/R area, but not before. 4) As price comes down toward the median line, you can (hopefully) see a region of back and forth action which Morge calls "coiling action". Pretty much it is what it sounds like---price action is coiling up and storing energy for a further move in the direction it was originally going. In other words, this is a continuation-type pattern. 5) Once price reaches the median line, it bounces off, and the wise trader will exit a large portion of his position, leaving a small portion (how much should be determined by your aggressiveness and risk/reward parameters) to see whether the price will continue to go down to the lower line--which is does in this example in rather dramatic fashion. I'm sure there are also statistics for the likelihood of reaching that lower line, but I'm not sure what the percentage is. If price does get to the lower line, the trade is over, and you should take your profits. A few pointers: 1) Morge really prefers tick or volume based charts for trading with Andrews Pitchforks, and he has lots of examples to show how they work better than time-based charts. 2) When you can find pitchforks whose lines cross each other, these are considered energy points, and they often act like magnets for price action. 3) There are three types of calculations for Andrews pitchforks: a) standard b) Schiff c) modified Schiff There's a major difference between (a) and (b), but only a minor difference between (b) and ©. 4) There's alot more to this discipline, including some really elegant explanations of why they work in the first place. 5) For further research, I'd suggest doing a search for Timothy Morge. He has, I think, two websites---one of them is http://www.medianline.com. I can't find the other one right now. He's also given many lectures on the CBOT education series, at the MoneyShow, and lots of other places. Check out this link: http://www.hotcomm.com/virmeetCID_EVENTARCHIVE.asp?CID=YMDZYQ On 02/15/06 there's a recorded event that Morge gave. Worth viewing if you're new to pitchforks. He's a very organized speaker. He also spoke on 05/03/06, 08/1606, and 06/26/07--just peruse down the list on that link. Personally, I listen to him every time he speaks. 6) The tool for drawing pitchforks is found on most charting packages. I'm using Tradestation, but I'm sure most platforms allow you to draw pitchforks. If you REALLY get into them, Morge and friends have created a plug-in for Neoticker which draws the forks for you automatically. If there are other recorded lectures of Tim Morge, please post them here if you find them (and if they're free). I'd also be very interested in hearing about other practitioners of pitchforks. The reason I've focussed so much on Tim Morge in this post is because he seems to be the only one who's mastered the use of pitchforks. If anyone knows of other experts who share their knowledge with the trading community, please let us know here at TradersLab.

It's not just the slippage on trades. The Tradestation platform is starting to exhibit problems again, just like it did about this time last year. Here's a message that pops up when you enter the platform: "Information regarding gaps in some historical index data in TradeStation--- Certain indices, such as $ADV, $TVOL, $TICK, and other statistical indices, do not currently have complete historical data in TradeStation. We are working to fill any gaps that may exist in these symbols and will send a notification once this process is complete." Yesterday if you called them on the phone the first thing you heard was that Options data was not up to date, and today, my ES charts crashed twice on Tradestation (the data just stopped coming in), and my friend on the east coast had the same thing happen--but at different times during the day. I'm starting to look very carefully at the possibility of re-coding all my beautiful Tradestation indicators (which I've hand-crafted over many years) into eSignal or Ninjatrader. I hate to leave Tradestation because of all the work I've put into my indicators, and workspaces and desktops. Yeesh, it would be a complete drag to move, but unreliable data is just no acceptable.

James, it would certainly be worth asking Ben at TradersAudio.

Curious what you find out here. What sort of "BS fees" are there that TS charges you for? Thanks, Taz

For me, the most disturbing part of Tradeguider's marketing strategy is the fact that Gavin has quite insightfully figured out that Asia is the new "main event", where their up-and-coming prosperity is breeding a massive population of inexperienced traders who swallow Gavin's sales pitch hook line and sinker. In my estimation, the folks at TG see no economic reason to upgrade their software (I found it intolerably buggy when I tried it), because they have literally millions of potential customers throughout Asia who are as gullible as they are inexperienced. Why bother upgrading the software when you can just swell your ranks with newbies from other countries? I really feel for the Asian traders who are being taken for suckers.

I have a statistics question regarding MP. If you read appendix 1 of Dalton's book (MoM), he gives the method for calculating the value area. To my surprise, there's nothing statistical about it at all. His claims of the VA being "roughly" within one standard deviation are completely bogus. He has no clue what the standard deviation is, because there's no calculation of variance whatsoever. He's simply adding up numbers. I've spoken to traders who use MP and they seem completely unconcerned about this charade. I know from statistics class that amateur approximations of statistical metrics are often wildly inaccurate. Why in heaven's name, with all the computing power we have, doesn't someone use REAL statistics to compute the value area? And why am I the only one who seems to think this would be a good idea?

I'm just reading Mind Over Markets now, but I got the impression that Dalton is trying to use cues from the Market Profile itself to determine market direction, not market internals. I'm sure they will work too, but I'd love to hear how one can use the principles of MP itself to determine market direction. For example, I've just been reading about TPO count, and the Rotation Factor (you can tell I haven't gotten too far in the book yet). I thought these (and doubtless many other) methods were part and parcel of the tools that MP traders use. Am I reading this correctly?

Thanks, thrunner. You know, the funny thing is, they were giving me the runaround, telling me first that they didn't have a problem, then they switched to saying that they couldn't fix the problem...then I threatened to take the issue to the NFA, and all of a sudden, their demeanor changed. It was as if I'd just brought into the conversation a very hungry Bengal tiger. Their very next words were, "Excuse me, let me see what we can do to fix this." I waited for five minutes on the phone, and someone in authority came on the phone, apologized, promised to have the problem fixed as soon as possible, and indeed, I found that this morning when I fired up my Tradestation, all the issues with data feed that I'd been complaining about had been magically resolved. I should add that I had caught them dead to rights, and I had previously emailed them the proof they needed, so it was not like they could squirm out of it. They just didn't want to bother fixing their computer glitch, but the mere mention of "NFA" changed their minds, and in a hurry.

Hello, From time to time, all brokers screw up. I've been told that there are official channels through which individual traders can lodge complaints about brokers' malfeasance, but I'm not sure what those channels are. I am starting this thread in order to ask our Traders Lab community if they know what to do when a broker messes up. If you know for sure what to do, please reply here. I decided to start this thread because Tradestation has been charging customers inappropriately for data services which the customers don't actually recieve, in direct contradiction to their own rules. This is not as seroius as complaints about trading violations, so I'm not sure if: a) this is the sort of problem one should complain about, or, b) to whom does one complain about such a violation? In a sense, charging customers for data they don't receive is just as much a monetary issue as not filling a buy stop order, but I think that these two issues are percieved differently. So, my questions to anyone who knows would be: 1) to whom would one complain for direct trading errors (e.g. stop orders not being hit)? 2) would the appropriate authority be different for stocks vs. futures vs. options vs. Forex? 3) are complaints about data feed errors directed to the same authorities or should one complain to some other authority (and whom would that be?). If there are other issues I've left out here, please address them here. Knowing where and when and to whom one should complain is a serious issue, and Traders Lab should (IMHO) have this information available for its members. Good (and error-free) Trading to you all, Taz

Hinting, sensing, keen intuition??? What do these terms mean? What are you seeing in the TPO profile when something "hints" at range extension?

I think you've got the right approach ranj. You may notice that the overnight Globex trading is very strong, at least so far. We'll see what it looks like in the morning, but so far it looks like we may get a nice gap up by the AM. The question is, will it hold, and my best guess, looking at the market overall, is that we'll get a dead-cat bounce and then drop another 10%. If you look at the sectors that are doing well (consumer staples, healthcare, utilities) compared to the sectors that are tanking (tech, transportation, financials, housing and consumer discretionary), it's clear that the professionals are putting their money into defensive sectors because they think the market's got more downside.

With the Dow down 238 points at the close, it is unlikely that the professional money was bullish. Rather, I think my interperetation was correct, namely, that yesterday's action was a failed test, and that there was more supply below. From my perspective, the professionals brought the price down yesterday to see whether there was supply down below. Finding that there was, they let the bottom fall out today (especially obvious in this afternoon's session). This seems pretty obvious now, but this raises interesting questions about multiple viewpoints, all potentially valid, with VSA. So, the bottom line is, Are all the sellers washed out now? Well, hard to say, but what I'm looking for before going long is a low volume test bar, or better yet a no supply bar on very low volume. Such a bar may not show up for a while, but until it does, I'd be shy about going long.

James, no trouble here Video and audio crystal clear. Maybe try rebooting? Sometimes that clears video/audio problems. Are you using wmplayer to view it? If you're using something else, that could also be a problem. Hope you get it figured out---Sebastian was brilliant, as always.

gassah, can you please tell me which page this quote appears on?

Just curious what's in those Premium forums. Maybe the management should give sneak preview, or a free day, or something like that. Personally, TradersLab is so full of info that I can hardly keep up with the free stuff, but I'm still curious. Anybody care to spill the beans and give an inkling of what's in those Premium forums?

See attached chart. On this forum several people have asked for realtime trades with VSA, which is still beyond me (not good enough at VSA), but I think it would be really useful to post after-the-close charts of daily or weekly charts of the major indices and predict where we think the market is going, or at least show what we think might be valid VSA indicators. So, for example, I've attached a daily chart of the Dow Industrials, and applied what I hope to be a correct analysis vis VSA. Namely, we have tested lower prices on higher volume. That would suggest to me that there's still more supply down below. Given the fact that we are sitting at support from last November as well as last August, and given the fact that we are still very oversold, we may get an upward bounce at this point, but I think this VSA interpretation suggests that we are not yet ready for a sustained, tradable up-move (unless you're trading intraday, perhaps). Anyway, this is my best guess, given what I know of VSA so far.

OAC, I don't see that right away. Please give us an example or two. Thanks!

Same Wolfe Wave, but here on a 5 minute chart. The pattern's not as pretty as it is on a 466 tick chart, but here (on the 5' chart) you can more easily see why this WW worked so well---see notes on chart.

Here's a WW so classic I don't even need to type in the pivot numbers.

Some friends of mine and I did a realtime test to determine whose data was the best. We kept track of how many tick bars appeared on a chart over a given length of time. In our test, eSignal gave 80 bars, Tradestation gave 60 bars and IB gave only 40. The difference, I believe, lies in the algorithms that each company uses to clean up its data and get rid of bad ticks. What we should have done is to continue the test to see whether the differences actually affected our trading. I think that's an interesting experiment to do. Maybe this is worthy of being the subject of a new thread. Several threads are skirting this issue now, including this one and the VSA thread.

Thanks OAC, zoltran, I've never been able to figure out how much "massaging" of the data goes on by data providers to get rid of bad ticks. I gather from what you've said, however, that it is extensive. My hope was to use Ninjatrader to get the magnificent Market Profile plug-in that you can buy for it. It's pricey ($230) but it's so wildly superior to anything native to Tradestation or created for Tradestation that I'd really like to have it on my charts. However, it looks like the OpenTick idea is also a bust. I wonder how much a market profile would be thrown off by bad ticks. Hmmmm. Anyway, thanks again. I guess the search continues. Taz

Well, I'm still hunting for a decent data source for Ninjatrader charts. My Tradestation idea went bust because TS would charge me twice---once for the copy of TS that I run on my main computer, and once for running Ninja with TS data on another computer. So, my latest idea is OpenTick. Their website says that they provide FREE data--this quote is from their homepage (http://www.opentick.com): "free real-time and historical market data for trading systems and trading platforms.* over ten terabytes of historical tick data for free." However, a different page (this one: http://www.opentick.com/index.php?app=content&event=market_data) shows that they charge for CME data, which is what I'd need. Still, CME emini data for $15/month is reasonable, I think. Depends on at least two factors: 1) whether it's reliable (good ticks, non-crashing) 2) whether the $15 includes back data On another thread of TradersLab (found here: http://www.traderslaboratory.com/forums/f30/non-windows-based-data-feeds-and-3042.html permalink #2 of that thread), Sparrow has kindly critiqued OpenTick, and given it I gather fairly low marks. The purpose of this thread is to ask whether anyone on TradersLab has used OpenTick for Ninjatrader, or used OpenTick for anything at all. Feedback of all types will be gratefully received. I will post a similar message on the Ninjatrader support page, but I wanted to get feedback from the folks I can trust, our own Traderslab community. And hey, if it turns out that OpenTick is a viable way to get reliable data for cheap, and Ninjatrader has charts that are free, this might be a truely winning combination. Thanks, Taz

Bert, The relationship between the cash and the futures is a fairly complex one. The "cash" simply means the $SPX index. Big hedge funds and Prop firms are able to buy and sell each and every stock in S&P 500 with huge computers and huge accounts, so in this way they can actually trade the index, or rather, the stocks within the index. Arbitrage traders look for imbalances between the cash index and the futures (full contract or emini) and they will buy the cheaper and sell the dearer. In this way, the cash and futures are always dancing close to each other and taking turns as to which one leads. A further level of complexity involves the locals in the S&P full contract pit, who can and do buy and sell the eminis to square their positions when they get caught long or short.

jj, if YOUR Tradestation didn't have that high volume bar and MINE did, that must mean that you live on the east coast (or the east coast of Canada?), because Tradestation uses different servers for the two sides of the country. If that's true, then it would confirm that one of these volume bars must be wrong, and since Sebastian had the low volume bar, I'm guessing that our western servers were the ones that were wrong for some reason. If you can post a Tradestation chart with that same region of the day (or send it to me in a private message) I'll confront Tradestation about fixing the problem. For everyone's sake who trades VSA, the data providers need to know about this (otherwise, they won't know there's a problem that needs to be fixed). As a more general message to VSA traders, it is in your own self-interest to take the time to report bad data to your data provider.:helloooo: