They are truly all over the place and you cannot go anywhere in ANY financially traded market t escape them! There everywhere - so people might as well do everything they can to learn about them, because no financially traded market can exist without them. I’m just amazed that in all these years of financially traded markets, you don’t see the “experts” talking about them, writing books about them, holding seminars around the world about them, or teaching them in colleges and universities around the world. I’m amazed that the “experts” don’t seem to have a clue about their existence. That fact just blows my mind, given the
structural importance of TCDs to ANY tradable financial market.
You would think that long before I came along six (6) years ago in this business, somebody would have discovered them just like they discovered all the other “conventional” technical indicators out there that are about 30+ years old.
There are “other”, more advanced delta structures that I will be working on at some point down the road as well. They are called: Transequential Non-Contiguous Deltas, or
TNCD. Those will be broken down into Long and Short categories just like their parent TCDs, but they will “extend” across multiple time-frames simultaneously. So, instead of the previous bar to current bar delta connections that now make up the baseline TCDs, these will be in the form of:
”Any Bar X to Any Bar Y to Any Bar Z, etc., type delta connections. No limit to the number permutations, but once the pattern(s) is located that yields the highest density probability resulting in the best trades historically, I will be able to get rid of all the other less than optimal indicators which remove much of the burden from the CPU and Excel.
Basically, a full-out assault on as many delta-point combinations as possible. Of course, these will be huge (massive) real-time calculations of all the possible combinations. Don’t know how Excel will like that however because right now, the screen jumps slightly with every re-calculation that comes from every real-time tic from the market – and I have a new dual processor system already! So, it should prove to be interesting to see how many real-time calculations Excel can actually handle while crunching the numbers on the new
TNCD constructs.
So, yes - they are everywhere!
Avoiding them is like trying to avoid breathing air - simply nuts.
Seeing "B" is the key. That when the “next” TCD that “needs” to get Filled starts to come into focus. Barring adverse news, they tend to run in a very normalized pattern. Almost as if they were so systemic that only news could remove their “normalized” behavior.
Take a look at the Daily EURUSD Chart below. Note – this is not a basic “price chart”. You can see the High’s and Low’s built into the chart along with some other things that I cannot discuss and a very simplistic linear regression on the high and low in blue. (I cannot talk about the other symbols on the chart, please.)
Notice positions number 24 through 8 running from left to right. The low price at position number 24 (24 sessions ago) was $1.2266 and the high price at position number 8 was $1.2974. 16 glorious days for “trend traders”. They laughed all the way to the bank during this period as the historical trend now shows.
Now, notice positions number 8 through 1. A completely different story. Much of the money that “trend traders” made during the glorious initial Bull run (initiated by the Annual TCD Long from January 1st, 2006
) was lost
”if” they continues to try to enter the market as most trend traders do – too far near the top of an expiring
Daily TCD Long. Each time (go read the boards) these guys entered Long over the past 8 days thinking that the “Bull Market” was in a continuation phase and they got burned on most of their Day trades.
Then they start waiting for the much talked about “Dip”, before re-entering Long back into the “trend”. Having no way to measure those “Dips” and not understanding that they are more than merely “Dips” in price, they really don’t have a good way to measure their re-entry. So, (go look at that boards to verify this fact) many of them have decided to sit on the sidelines and wait for the “trend” to continue. This ALWAYS keeps the “trend trader” several steps behind the “TCD trader”.
They call it getting “whipsawed” (go read the boards and see what people are complaining about now regarding the EURUSD) while a TCD trader calls it normal and routine behavior – just another day at the office.
Take a look at how almost
immediately like hitting a brick wall at 1,000 mph, then Daily TCDs took over as finally the Weekly TCD Short kicked in going against the Monthly and Annual TCD Long. That’s why you don’t see a tremendous plung to the downside here. The Monthly Trailing TCD Long is 126.19% and it has a corresponding Retention TCD of 100.41%. However, its corresponding Projected TCD is now 89.10% to the
Short side enabling these Daily LocBindVars to “unlock” and do their thing. The Grand Parent of them all is the Annual TCD and it has a Trailing TCD Long of only 75.06% and a corresponding Projected TCD of 54.79%.
So, you can see the Annual TCD is “projecting” Long after having come off of its 2005 fill to the Short side of 104.88% and it now has a Retention TCD Long of 64.47% (real-time). All of this points to the Dominant TCD still being Long, but with increasing strength in the Subordinate TCD to the Short side for the time being. This is what allows the Daily LocBind variable to “unlock” over the past 10 days where it was not unlocking during the initiation of the Annual TCD Long move from January 1st.
That is a lot of information to absorb at one time, but once you are able to speak this language fluently, it will make market behavior far easier to understand and it will show you when and where you should be placing your Day trade entries for maximum bang for the buck. It took me six (6) years to be able to speak the language fluently, so don’t be too worried if it takes you a several months.
You have the basics – the baseline TCD structures and the 30 indicators that fall-out from them. With that information, you have far more than I ever had when I just started out. All I had at the start was Omega/DAPD which is very similar to ATR. You guys know a boat load more than what I knew when I started out.
I wish I had somebody around to show me what a TCD was when I first began. That would have expedited things a great deal.
The key would be in getting up to speed on "that" tool. It is a DM tool, so it is basically going to help you with finding specific patterns in raw data. The fact that you are interested in delta patterns is helped by the design of DM type packages. I worked with institutional DM back in Corporate, but I am not directly familiar with any off-the-shelf package. Keep in mind that some DM vendors claim to offer hard-hitting DM, but in reality they are offering a canned version of what "they" think DM should be about.
A good DM package will enable you to use raw data, filter on the data anyway you want and need and provide you with various connectivity options as well as a good number of logical tools that enable you to construct the algorithms that you need to do your discovery. Keep in mind that DM won't "create" technical concepts for you, but it should help you find patterns in your numeric data.
You are searching for delta patterns between price points, so that being the goal, you will need to make sure the this particular DM package can help you find a series of deltas that match a certain kind of pattern that can be replicated in your trade system development tool and turned into a viable trade signal/indicator. Of course, the basic point of using DM for this purpose will be to locate delta patterns for you. The rest will need to be developed in your selected trade system development platform. If you use a tool like this then you will need to get up to speed on how to construct the algorithms that it will use to locate the patterns you seek. Some packages require you to build those algorithms by hand while others have a functional GUI that will assist you in constructing search queries with specific logic.
Either way, you will need to tell the package what to look for such as: Find all deltas >= 30 pips using X, Y or Z as price points. It won't know what a pip means, so somewhere in the tool you will have to build a data schema that teaches the tool what $0.0030 means - ie, expanding the basic dollar formatting found in most database type tools out to four (4) decimal places, etc. You really will have to learn the tool inside and out in order to get the most benefit from it.
It is the easiest part of the system as it does not generate any signals - it only stores previous signal configurations. My back-tests are run from inside the engine but the data from each engine update is transfered into 280 BT for storage and signal accuracy tracking.
It takes the real-time signal configuration at the start of every session, snap-shots that into the 208 BT Database (another Excel sheet) and then compares the snap-shot to the actual results of that session. It then uses VBScript to push that session’s results down one row at the start/end of every trading session and starts the process of capturing the signal configurations all over again for the next session. That's it.
Once I have the signal configurations (what the Day, Swing and Outlook signal looked like at the start of the trading session) snap-shot into the 280 BT Database, I can then run any kind of analysis against those signals that I need. I simply use code in that Database that tracks whether or not the signal taken at the start of the session was good enough to strike through: 5, 10, 15, 20, 25 and 30 pips at a minimum. 30 pips is my design minimum, but my Revenue Model minimum is now only 7 pips per day.
If I get 7 pips per day, my revenue targets will be struck in the time that I established when building the Revenue Model. My target goal is $1 Billion in 3 years and I am now 0.078% of the way to that target goal in less than 1 year of full-time trading - though I am still in the final stages of tweaking and developing. So, I've accumulated about $78 million in less than one year of full-time trading, but I have many miles to go before I can turn on the auto-pilot.
That's why I use 280 BT. It simply tells me the "health" of the system. If I see that the accuracy to 30 pips starts to fall below 90% per trade, then I know I have a problem somewhere in the system. Right now, it stands at 94.24% - which is up from about 2 weeks ago. This all applies to Day Trades as I do not use Swing or Outlook trades when I am in production mode. So, 280 BT tracks ONLY Day Trade accuracy to 5 through 30 pips. Anything beyond 30 pips a day is pure gravy - especially when I only need 7 to advance the Revenue Model each day.
So, the concept here is merely tracking trade results over the past 280 days by taking snaps of the signal configuration at the start of the session and then allowing the built-in code of the 280 BT sheet to calculate whether or not the targets were struck and if so, what the resultant 280 day Accuracy Rating is after each trade. That's it!
There are other things that I use 280 BT metadata for, but that is off-topic relative to this forum. 280 BT will also be part of the future Artificial Intelligence Module as I save the 280 databases over time. So, eventually, I will end up with multiple stores of historical 280 BT databases. That data will be used to build the AI module and make the system a pure (100%) Metadata driven trading system!
However, I cannot build that system module until I have enough sets of 280 BT's stored. So, the AI module should take a couple more years to finish which should be just in time for the shift into a capital preservation mode instead of the current capital growth mode. Right now, I'm trying to grow my capital geometrically. At some point the name of the game will shift to capital preservation - only taking trades that have a system generated probability rating of 97% or higher. That will limit the number of trades that I get each month, but it will also provide a means to maximize capital preservation protocols as well.
Hope this helps.
