See it now

frugi said:
A-line = flattering style of skirt, assuming you have the shape for it
Align = to adjust (parts of a mechanism, for example) to produce a proper relationship or orientation

Wretched pedant I am ... I do apologise. :D

Great thread, keep on clonin' :)
that was an earlier version : :cheesy:
 
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Further reduction of the blind spots

Frugi,

frugi said:
Nice sig ^ :)
But don't forget effort (volume). I know you wouldn't for a nanosecond. :)

Thanks for highlighting the importance of the market variable called volume.
I have therefore obediently :) included volume to my "sign".

That said, Im convinced that even within my economic set of variables/no indicator approach, there is substantial room for more lateral improvement. I learn every day. In general the aim is to exploit your target market effectively with the aid of the presentation, interpretation and use of selected market-variables. So this is a matter of the highest importance.

Currently I use 5 charts and 2 order books.
To be more precise:

4 price and volume charts
on these charts price and volume is presented in standard fixed time chunks.
Volume helps me to asses the context in 2 ways:
a-history of my trading vehicle(2 charts);
b-real-time correlation/divergence/momentum between trading vehicle and 1 index(2 charts).

1 price only chart
real-time chart of price presented in fixed price chunks. I use this chart to open a new position and also to partly place (trail)stops.

2 order books
liquidity, size, momentum dynamics of trading vehicel/index.

regards

PS: thanks for your mail, I was half way reading it ;)
 
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preparation 21april06

SR
R3=40.5
R2=3881
R1=3840
S1=3785
S2=3750
S3=3710

Economic news
It has been a heavy week of earnings announcements and these will add flavor to the equity market yet again as the week draws to a close. The economic news was completed yesterday and market players will be paying more attention to gold and oil price fluctuations today.
 

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Use of models according to the dutch central bank

Section 3:74 Use of models {a7p4§31}

If an institution uses statistical models and other mechanical methods to assign .....(risk)
exposures....., then it:

a. shall demonstrate that the model has good predictive power and that capital requirements are not distorted as a result of its use. The input variables shall form a reasonable and effective basis for the resulting predictions. The model shall not have material biases;

b. shall have in place a process for letting data inputs into the model which includes an
assessment of the accuracy, completeness and appropriateness of the data;

c. shall demonstrate that the data used to build the model is representative of the population of
the institution’s actual ...exposures;

d. shall have a regular cycle of model validation that includes monitoring of model performance
and stability, review of model specification, and testing of model outputs against outcomes;

e. shall complement the statistical model by human judgement and human oversight to review
model-based assignments and to ensure that the models are used appropriately. Review procedures shall aim at finding and limiting errors associated with model weaknesses. Human judgements shall take into account all relevant information not considered by the model. The institution shall document how human judgement and model results are to be combined.
 
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Classifying opportunity according to the dutch central bank

Section 3:73 .....classifying grades of exposure { a7p4§18-§19&§26}

1. An institution shall have specific definitions, processes and criteria for assigning grades
of exposures .....within a rating system.

2. The definitions and criteria of the grades shall be sufficiently detailed to allow those
charged with assigning ratings to consistently assign ... exposures posing similar risk to the same class or group.

3. The documentation of the rating process shall allow third parties to understand the
assignments exposures to grades or pools, to replicate grade and pool assignments and to evaluate the appropriateness of the assignments to a class or group.

4. The criteria for the classes and groups shall also be consistent with the institution’s internal
(exposure acceptance) and its policies for handling troubled .... exposures.

5. An institution shall take all relevant information into account in assigning exposures to grades. Information shall be current and shall enable the institution to forecast the future performance of the exposure. The less information an institution has, the more
conservative shall be its assignments of exposures ....... If an institution uses an external rating as a primary factor determining an internal rating assignment, the institution shall ensure that it considers other relevant information.

6. For exposure grade assignments, institutions shall document the situations in which human
judgement may override the inputs or outputs of the assignment process and the personnel that are responsible for approving these overrides. Institutions shall document these overrides and the personnel responsible. Institutions shall analyse the performance of the exposures whose assignments have been overridden. This analysis shall include assessment of the performance of exposures whose rating has been overridden by a particular person, accounting for all the responsible personnel.
 
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april240406

SR
R3=3880
R2=3840
R1=3790
S1=3700
S2=3635
S3=3600

Economic news
This promises to be a busy week, but no indicators are on the docket today. Earnings announcements are driving the equity market these days.
 

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SR
R3=3880
R2=3840
R1=3750
S1=3710
S2=3680
S3=3600



Economic news
ICSC-UBS Store Sales 7:45 ET
Redbook 8:55 ET
Bank of Canada Announcement 9:00 ET
Consumer Confidence 10:00 ET
Existing Home Sales 10:00 ET
 

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thursday 270406

SR
R3=3880
R2=3840
R1=3760
S1=3680
S2=3625
S3=3600



Economic news
MBA Purchase Applications 7:00 ET
Durable Goods Orders 8:30 ET
New Home Sales 10:00 ET
EIA Petroleum Status Report 10:30 ET
 

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General result of Girsanov's theorem

This analysis shows that when we move from the real world to the risk neutral world
the expected return on the stock changes, but its volatility remains the same (at least in the limits as delta t tends to zero)

John C. Hull, Options, Futures and other Derivatives page 254 (6 edition)
 
fri28 april 06

SR
R3=3880
R2=3840
R1=3820
S1=3680
S2=3625
S3=3600


Economic news
Jobless Claims 8:30 ET
Help Wanted Index 10:00 ET
EIA Natural Gas Report 10:30 ET
 

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fear of bigg loss and hope for bigg profit

Edwin Lefevre
It was the same with all. They would not take a small loss at first but had held on, in the hope of a recovery that would "let them out even." And prices had sunk and sunk until the loss was so great that it seemed only proper to hold on, if need be a year, for sooner or later prices must come back. But the break "shook them out," and prices just went so much lower because so many people had to sell, whether they would or not. The spectator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you, you hope that every day will be the last day -- and you lose more than you should had you not listened to hope -- to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out -- too soon. Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.
 
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I know my worst case

Tony Saliba
I realized that this chipping away approach was what I should be doing, not putting myself at big risk, trying to collect a ton of dough. I always define my risk, and I don't have to worry about it. No matter what happens, I know my worst case. My loss is always limited.
 
SR
R3=3880
R2=3830
R1=3820
S1=3710
S2=3680
S3=3630


Economic news
Personal Income and Outlays 8:30 ET
Construction Spending 10:00 ET
ISM Mfg Index 10:00 ET
 

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2-5-2006

SR
R3=3810
R2=3775
R1=3750
S1=3700
S2=3685
S3=3630

Economic news
Challenger Job-Cut Report7:30ET
ICSC-UBS Store Sales 7:45ET
Redbook 8:55ET
Pending Home Sales Index10:00ET
 

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http://wallstreetwindow.com/weinstein.htm

"Stocks form bottoms when the current news is terrible and top out when the public is ecstatic about glowing earnings reports, stock splits, and so on. It’s therefore not surprising that typical traders and investors buy near the top, when the news is great, and then dump their stock for big losses, near the low, when the media are reporting ghastly news. It’s not luck (good or bad) that causes consistent losses for the public and consistent profits for the real professionals, but the rules by which the two groups are playing. It’s really no different from a professional poker player who understands the odds and refuses to pull to an inside straight, while the amateur lets his hunches and feelings lead him into losses."

Weinstein’s breaks a stock’s life cycle up into 4 phases:

1 – Share Accumulation / Basing

2 – Mark Up / Rising Prices

3 – Share Distribution / Topping

4 – Share Liquidation / Declining Prices

Each of these four phases is characterized by a distinct pattern caused by the free market forces of supply and demand. In some phases, buyers have the upper hand and in other phases, sellers do.

As an investor, you do not want to own a stock that is in liquidation. Nor do you want to buy a stock that is topping out. By understanding the life cycle of stock chart patterns you will be able to know when it is best to buy a stock and when you should sell it.

Phase One – Accumulation / Basing

During the accumulation or basing phase, shares of a stock are transferred from weak hands to strong hands. This phase usually happens after a long decline or a lengthy advance. The stock trades in a very narrow range and appears to be dead money to the average investor.

They are correct to a certain degree, because - during this phase - the forces of supply and demand are roughly equal. Although there is no big buying excitement, there are no waves of sellers either. During this time, the average investor often sells out of fear that the stock will drop further or he/she sells because of impatience.

The stock market discounts the future. The market does not move based on today’s news, but on perceptions on what the future of the economy and business prospects will be. This is true with individual stocks also. The smart money, insiders and institutions, are the first to realize that a company’s prospects are brightening. Towards the end of the basing phase they begin to heavily accumulate the company’s stock. Often, although not always, the stock’s trading volume will pick up towards the end of this phase and large 'big block' purchases will take place.

A trading range defines the price action in a base. Stocks that are basing bounce between a specific high and low price zone. Sellers often wait for the stock to go to the top of its range before they sell. By doing this they create an area of resistance, a price level the stock cannot trade through. When it reaches resistance it repeatedly falls back down. The more often it does this, the stronger the resistance. The basing phase lasts as long as resistance holds and the stock remains stuck in its trading range. As a general rule the longer this phase lasts the longer the second phase will last.

Phase Two – Mark Up / Rising Prices

If the smart money continues to accumulate shares they will eventually run out of sellers to buy from. At this point, resistance gets taken out and the stock price clears its base. Bulls get the upper hand with the stock, not because there are suddenly more buyers interested in the stock, but because the sellers have disappeared.

Often - at the moment the stock breaks out of its basing phase - the fundamentals of a company are poor. However, even though this is the best time to buy a stock most analysts will be down on the stock and consequently your stockbroker will probably try to talk you out of buying.

But remember, the smart money buyers and stock prices themselves, are anticipating a positive future. You are always better off following their lead than the opinions of Wall Street analysts and most stockbrokers.

As demand outpaces supply, institutions and insiders will compete with one another to buy the stock. Their psychology begins to change. During the basing phase they bought on dips, now they do not mind buying as the stock price advances.

As the advance continues, eventually word gets out that the fundamentals of the company are improving or some positive development concerning the company becomes common knowledge. As this happens, the average investor and the general public becomes interested in the stock and begin to buy too. Analysts begin to put the stock on their recommendation lists.

Phase Three - Share Distribution / Topping

Eventually the stock gets ahead of itself and stops advancing. Perhaps the growth prospects for the company no longer look so grand. Or the stock has simply reached a high valuation. Whatever the case may be, at this point insiders and institutions decide that it is time to sell and take profits.

They find plenty of willing buyers. In fact the news is often so good about the company that people are willing to pay any price for the stock. They saw it climb during its stage of rising prices and believe that it will keep going up. Analysts say it will and so do their brokers. Almost everyone is positive about the company.

Everyone that is, but the smart money sellers who know better. Although they carefully sell into rallies so as not to cause the stock price to collapse, the stock begins to flatten out and move sideways as it bounces off of new resistance and support levels. It trades in a range, just like it did during the basing phase, but with greater volatility and price swings. In this phase, though, the smart money is distributing their shares instead of accumulating them from other people.

This phase lasts as long as the selling and buying pressure remain equal. Once the buyers become exhausted the stock will break below its trading range and begin its liquidation phase, which is characterized by sharply falling prices.

Phase Four - Liquidation / Falling Prices

While a stock is being distributed and is topping out after a lengthy price advance, big players sell into rallies while the remaining true believers try to buy dips. After the demand for the stock becomes exhausted, sellers overtake buyers and no longer wait to unload their shares on rallies.

Despite the falling prices at the beginning of this stage the average investor remains bullish about the stock and believes the pullback is nothing but a temporary correction. The good news and business fundamentals have likely just reached their peak and the stock is still considered a hot issue by most analysts and stockbrokers. Buyers mistakenly believe that the stock is now cheap because it has dropped and become obsessed with trying to guess the bottom, thinking that the stock will return to its lofty price highs.

In fact, the longer and greater the price advance in stage two the more popular the stock will remain during the beginning of the stage four decline. However, buyers in stage four become bagholders for the smart money sellers.

Stage four begins with the average investor full of hope, then holding in disbelief, and finally selling near the bottom in outright panic.

Most people think that stocks bottom when prices get so cheap that institutions and big money start to buy and that tops happen when all of a sudden people start to sell. Things don't exactly work like that.

Stock market Phase 4 declines end, not when big money buyers come in to support the stock, but when every last bagholder has sold in a panic. Basically, since there are no more sellers left, the stock begins to hold its ground - and thus the cycle repeats itself starting over with Phase One - Accumulation / Basing.

This why you get a final wave of panic selling. All the average investors who bought on hope throw in the towel in a final burst of panic. And since there is no one left to sell, and likely not many buyers interested - you get the sideways basing action that is characteristic of stage 1.

The most profitable time to buy into a stock is at the end of the stage one – which just happens to be the time of the heaviest insider interest. This is the most profitable chart pattern I know. It allows you to actually buy in low – with the insiders – and sell high when the general public, who knows very little, will willingly buy your shares and play the role of the greater fool.

Having this knowledge and putting it to use in the market is, in my opinion, worth more in actual $$$ than any degree you could possibly get from a University. Let's all make a resolution to put it to good use this year
 
Doug Hirschhorn

In trading, however, the market has no idea what you are good or bad at and it does not change what it does to gain an advantage over you. The best traders I have ever met have a clear and defined process. They always follow that process. Sometimes the market pays them, sometimes it takes money away from them but they keep doing their process because they know over time, their process works and will earn them substantial money.

Just make smart trades and take smart losses.

The problem is the simplicity of getting involved gives a false psychological impression that the game is “easy” as well. This is a painful lesson which traders learn early in the game and the frustrating part is coming to terms with the fact that something that looks so easy could actually be so hard to make money at. Learning how to trade is relatively easy and only takes a few months. The hard part is really learning how to think (objective) and act (disciplined) like a trader. Helping people achieve that is essentially what I do for a living.

It sounds simplistic but if traders could just see the numbers on the screen as points in a game as opposed to what I will refer to as “Tangifying” (the art of turning unrealized or realized P and L into tangible things like cars, mortgages, rent, etc.) then they would be able to turn their entire trading career around or take it to the next level. Almost every person in the world has a mental number in their head of what is “a lot of money.” The best traders I know think in terms of percentages. This helps them focus on making the right trades rather than how much was made or lost on the trade. Teaching this skill to successful traders is what allows me to help them take their game to the next level.
 

1.Job: (train to) trade objective unfolding opportunities with a tailor-made risk-tolerance regime

2. Success<Consistency<Control

3. Opportunity is a convolution of:
-(intermarket) dynamic in PV in terms of T
-P exceeds threshold
-favourable orderbook dynamic
-manifest techn. and orderbook protection

4. Risk-tolerance=[max.loss, zero]

5. Congestion can harm a tight stop system

6. I also clone useful ideas, thanx
 
Monday 8 feb

SR
R3=3880
R2=3840
R1=3820
S1=3780
S2=3770
S3=3760

Economic news
The FOMC is meeting on Wednesday and everyone is expecting a 25 basis point rate hike. But that won't prevent market players from trying to guess what the post-meeting statement will say. The first part of the week (through Wednesday) will just be killing time
 

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Chicken and/or the egg

Very pleasant Sunday evening to you all,

In case your up to a little mental work. Im trying to optimize some concepts so any out of the box view is welcome.

Whats your general take on this:
It concerns the optimal mix between fixed P candle charts and fixed T candle charts.
If you had to choose between charts with only fixed P candles instead of te usual fixed T candles:

a-which would you choose for your active intra-day trading? and why is one more useful?
b-or do you need both and why?
c-...


Regards
Super
 
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Explanation of fixed P and fixed T

fixed P= fixed 7 cents for each candle.
fixed T= fixed 3 minutes for each candle.
 
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