BlowFish

If you are looking to buy and price is currently below your buy price use a stop limit (it might not fill if price gaps through your entry price). If price is below your entry price and you want a guaranteed fill use a stop order (but you might get slipage).If price is currently above your trigger use a limit order at your required entry price (you might get price improvement).

You trade on the moon....ahh it all makes perfect sense now. You don't have a cat called Schrödinger do you?

Great stuff. I am not sure where to start, I have a couple of observations and questions. Just for fun lets start from the end with practical application and work backwards:). Having accepted the validity of some of the core concepts you present in this model that does not seem inappropriate. You write :- The author is confident that this theory can be applicable in all markets where T&S and volume information is dispersed. and If one decides to undertake research based on the above-mentioned theory, please note that one cannot split ‘bid’ and ‘ask’ as is proposed/done in the industry today in order to measure all of this theory’s parameters. This seems to strongly suggest to me that you are not using nay of the established algorithms (based on where a trade transacted compared to best bid/ask) to gauge 'net inventory from providers' and 'net orderflow from takers'? (as an aside shouldn't that be NIP and NOT? I have obviously not identified the acronyms correctly ). Put another way am I right in thinking you do not require quote data for the algorithms you use to classify trades? Cheers.

Not so much deep thinking you just need degree level maths to follow along! Ideally electronic engineering or some discipline that has a strong maths foundation. That or be prepared to put some time and effort learning. His background is signal processing and he applies techniques from that field to financial data series. You are right about the code snipets they are just tools, I wouldn't have a clue how to start using this particular one! Having said that his books do give some ideas how to combine them into trading systems. The key to his stuff is separating the cyclical component (non trending or stationary) from the trending component. Last time I looked he pretty much always used a Hilbert transform for this. Fwiw the systems he sells seem pretty robust over the years they are consistently in the top 10 at futures truth.

Funky looking charts! Nice. I always have been interested in how to visualise stuff and thought Ehlers spectrum charts (or whatever he calss them) quite novel. Edit found this PDF that might cast some light. CoronaCharts.pdf

They are an interesting structure. The Wolf Wave thread hear on TL may be of passing interest (also written about in a chapter of Raschke and Connors Street Smarts). That particular chapter can be found on the interwebz for download. These deal with wedges and projecting a target through a couple of points in the wedges. The temptation of course is to try and consider too many patterns/structures and end up confusing oneself. Having said that I am sure it is possible to put together a couple of simple robust strategies ased on wedges. I guess the important thing is to note the loss of momentum and narrowing of range. Edit: Actually when TT first introduced the 'falling wedge after a declining market' (way back when he had Elliot for weekend reading) I thought I should dust off Edwards & Magee, that is my recollection of first being introduced to them.

Been away for a bit and was tempted to simply skip the 25+(!) pages in the last few days. This little exchange between Marko and TT made me glad I didn't. Simple observations like this have quite profound implications Conventional wisdom would have you avoid shorting an up sloping channel. This used to be a favourite trade and one that I would even short into the up momentum just outside the channel (it will often prod out before moving back just as fast) provided there was somewhere sensible to place a stop.

Been a bit irregular visiting TL. Thanks for your reply to my question a few posts back.

Great series of posts. I didn't stumble upon it until III MP (which is right on the money imho). Anyway......... Effort and result, cause and effect are not really parameters of the system. It could be argued cause is external to the system and that effort is an internal variable that is constructed from inputs. It could also be argued that result/effect is the output (as measured by price change) . Terms like "composite operator" and "smart money" are hooey and cloud something that is a reasonable model for market behaviour. The model does not need to know who is buying or why. Actually there are many types of participant with a variety of objectives and modus operanti. They are external to the system all the system needs to know is that they are buying or selling.

rxs005, there has been lots of good advice. One thing I did not see mentioned was your plan. I wonder if that is 'solid enough'? You should have built some sort of confidence through sim if you where doing it consistently. If your plan allows too much discretion it is hard to build confidence in it (the plan). You will tend to equate outcomes with your analytical abilities if the plan is not well defined.

Ego is one of the big obstacles to trading (executing) well. Whether men or women tend to have bigger ego's is probably not relevant to this particular discussion.

Might I ask how you tend to determine trend? In any case you seem to have a good eye for it. From your posts I can see you have avoided a few fades that would not have worked out.

Strictly speaking the channels should converge i.e. it should be a wedge type construct. In fact historically Wolfes discoveries came from his exhaustive study of the "rising wedge" after meeting John Magee (Edwards& Magee).

Probably better of starting your own thread rather than just jumping into a random one that you have not even taken the trouble to ascertain what it is about.

Actually thats not a bad solution Sep34. I simply make sure I have important data on an external drive and in the cloud and if disaster falls i whip out the install discs. I am a great advocate of a clean start now and then.

I re-read Market Wizards over Christmas for the first time in years. One thing that struck me was how many of the wizzes used simple 'old fashioned' trend following systems. It made me think. There are clear 'pros' to that sort of approach though of course there are 'cons' as well.

I went to see an NLP practitioner to try and improve my self discipline. Sadly I was not disciplined enough to stick with the exercises True story actually. I dunno whether I 'believe in' NLP, deep down I knew that the only person that could make the changes was me and that once I decided to make them they would simply happen. I believe it was Ekhardt that said "Every one gets what they want from the market" I think that may be true.

I guess it's partly how you define 'a trend'. BTW all trends are delimited by a 123 of similar magnitude. Not all 123's delimit trends. Maybe that is causing some confusion. Lets leave aside whether trading every single 123 provides an edge it is irrelevant as TT's approach has never been about taking them all anyway. 'Context' is every bit as important, probably more so. If it helps you could quite simply think of the trade setup as the 'context' component (where is price compared to longer term S/R) and the 123 bit simply as the trigger. As with many approaches to trading you should not be looking for triggers if the context does not support it.

Nice to see someone else mention RoR, possibly the most important metric you might consider. I thought I was the only one that bangs on about it. The primary reason to look at stats for expectancy (assuming you are profitable) is to determine the %chance of going bust with different bet sizes. RoR. The big advantage of systems that have high % winners (at the expense of reduced RR) is that they have far smoother equity curves and so a much lower chance of a bad streak wiping you it (lower RoR). This is why what I call 'old fashioned trend following systems' (e.g. the turtles) which have maybe 30% -35% winners require lots of capital to trade. Incidentally improving your % winners is (imho) possibly not an effective use of your energy (if making more money is your objective). Increasing size (obviously within your risk tolerance as calculated by RoR) will always yield far more. If you have a plan that you believe in but is not yet profitable you need to discover if it is due to being a slight flaw in the plan or flawed execution. If the former stop trading while you fix it. If you want more stability, diversification (trade more instruments, different time frames and even different methods) will help that. That's why the old school trend followers would always trade a dozen or two instruments. All you need is one or two in good trends and you can be being chopped to death in others and still be OK. having recently re-read market wizards it was interesting that a high percentage of these guys where 'old fashioned trend followers'.

Im playing catch up so TT might have answered already. Looking at the examples from the beginning of the thread you will see that TT is targeting swings of different magnitude. These seem to have a different 'look and feel' though the underlying principles are absolutely the same. With the benefit of hindsight perhaps this discussion would have been helpful earlier in the thread I can certainly see how it might be a little confusing. He said they go somewhere not to your target! Price will either take out the last swing high or the last swing low. You could have quite a long discussion about the "time frame that minimizes your participation" This is all about picking charts that allow you to see what you need to see to reach your objectives and no more.For example if you are trying to catch 1-5 day 'swing trades' looking at HH LL's on a 1 minute chart is likely to provide you with way too many potentially tradeable spots. Selecting say a 1hour or even a 4hour chart will provide the 123's that delimit those 1-5 day swings without too many abortive trades in between. It minimises your participation except where you should be participating. Don't diddle in the middle!

You might be surprised. Geographical location (and the ceiling of the speed of light through glass) is going to be one of your biggest limiting factors. UB is located in Las Vegas and does OK. Of course data feed and execution engine are important too. I believe that he uses tradestation for data albeit with custom .dll's. Using Zenfire or TT will immediately put you on a better footing there too. This is exactly why in another thread I pointed out why it was dangerous to use Hyperbole. People come away with completely the wrong idea idea about what is and what is not possible. It's a shame as in my view it diminishes what are thought provoking posts.

Might I ask what you use to guage order flow? Some sort of marketdelta indicator?

Great post. The 'sequence' of your thought process comes through very clearly as PA unfolds. I am not sure I completely got your b24x rule. Would you mind expanding that a little? Look forward to it

I might have marked it as you had too, I don't think it is 'wrong'. You might want to read TT's posts a couple of pages back about magnitude and scale of 123's. The ones that you and I might have marked are slightly smaller magnitude. Some people (particularly if detecting SH's SL's programaticaly) might want to see a 3 bar high or even more. Some might want to have a couple of bars to the left and right of the swing bar. The other obvious way to quantify is by magnitude in price, so for example you might want to see price pull back a good 5 or 10 ticks. You can make a science of this but it's probably enough to simply be a bit more aware of scale. Another interesting thing you said is about hindsight. Well as you might tell from my comments above you need some sort of confirmation (in price or time) that a high or low has occurred. You wont know that the high ticjk is in fact the high tick the moment it occurs, it requires subsequent lower ticks. It is up to you to decide what is an adequate pullback to say "ahh that was a minor SH". This depends on your objectives (what size moves you are planning to capture). I dunno if it might help but most charts have HH LL indicators or a zigzag indicator would do. I am not suggesting using such long term but it might help train your eye. It also will let you objectively see what effect changing the parameters for a swing has.

MP guys seem to fall into one of two camps, the purists who would not dream of anything but a profile chart made up of 30min TPO's and the young maverick that use *gasp* volume *shock* and other new fangled thangs. Glad your a maverick