Indicators Or Price

[Lightning McQueen]

Tony

I'm sure there are a lot of readers interested in your analysis and the reason that you have not had much response yet is because there is a lot to read and 23 charts to observe. I myself have printed it off to read it over the weekend. I also think that readers did not want to interrupt the flow of the postings, so please do continue and I'm sure you will be getting responses/questions in due course.

Charlton

Not forgetting that some members may also be busy at this time looking at bbmac's daytrading model and methology.

http://www.trade2win.com/boards/showthread.php?t=25770

Which when printed along with the Support and Resistance article runs to around 25 pages and on first glance doesn't appear all that portable on the charting platform front, none the less perseverance is deserved.

Kudos to thebramble for the immense efforts that it obviously took in writing and compiling these posts, im sure they will get their just rewards shortly.

Patience oh prickly one.

 

[Paul71]

Hi Tony (Bramble).

Talking about Gold, Why is gold leading the metals? Who needs it?

Great posts by the way.

Thanks.

 

[nine]

Lag is not caused by indicators ... its caused by the smoothing of price action (because a low pass filter has lag). Hence you start with emas and smas and then you get increasingly sophisticated smoothing: T3, Hull, Jurik where there is less lag for a given amount of smoothing.

As an example, the CCI doesn't have "lag" because the closing price generates the signal. But on the other hand, it is not smooth.

Trading price action = Trading without filters other than those in ones mind. Having said that, most still classify trading with trendlines or channels as price action trading so perhaps for those people it = trading without automatic filters.

 

[Charlton]

Tony

I have now had a chance to read through the analysis and compare to the charts. I can follow things pretty well in terms of volume, price, spreads, close on highs/lows etc. Now I am trying to determine how you derive the stop and target levels - you anticipated that this may be the area of questioning.

You have factors to determine initial stops, % of a high minus a constant (330) for the 3 targets , number of bars as a time target and then calculated probabilities arising.

So clearly the constant must be GOOG specific and I note as I type this that you say it is the last level at which major volume occurred in the context of the timeframe. I assume you are talking about end apr 2005. There are also more recent major levels in Jan 2006. How are you defining the "context of the timeframe" - is it based on the stat of the cycle we are in, or is it based on a constant such as the 200 bars you use for the highest daily range calculation.

The target percentages - are they "universal", sector-based, GOOG specific. Similar question with the number of bars.

Given the fact that you quote % probabilities of reaching the targets suggest to me some kind of standard deviation analysis, or am I wildly off the mark ?

So some pointers as to whether we can work out this information from the charts provided by Tim or whether these are derived from external analysis would be interesting.

Charlton

 

[TheBramble]

You have factors to determine initial stops, % of a high minus a constant (330) for the 3 targets , number of bars as a time target and then calculated probabilities arising.

So clearly the constant must be GOOG specific and I note as I type this that you say it is the last level at which major volume occurred in the context of the timeframe. I assume you are talking about end apr 2005. There are also more recent major levels in Jan 2006.

These are of less significance in the chosen timeframe.

How are you defining the "context of the timeframe" - is it based on the stat of the cycle we are in, or is it based on a constant such as the 200 bars you use for the highest daily range calculation.

It is based on the cycles evident within the timeframe under review.

The target percentages - are they "universal", sector-based, GOOG specific. Similar question with the number of bars.

These are all completely specific to GOOG, right now.

Given the fact that you quote % probabilities of reaching the targets suggest to me some kind of standard deviation analysis, or am I wildly off the mark ?

The probabilities are a function of both time and price level, but I can’t give you 100% on either. I could be more accurate with both individually, but as this is a composite thing, we have to necessarily suffer the lower joint probability. There’s not much point having a 90% probability of achieving the price if you don’t know how long it should take to get there – how would you know when to exit? How long do you want to tie up your funds for? And is that 90% chance of achieving 100% of the target price move or 100% chance of achieving 90% of the target price move? You need to consider that 90% chance of price move being achieved could mean anything from 0% to 100%. 90% of anything acknowledges the possibility of zero to 100.

It’s not done on SDs but purely on the data you have on the charts, all of the charts. You need to set GOOG (and any instrument) within the context of everything else that’s happening – in Bonds, Gold, Commodities, Dollar etc. You need to view previous action on GOOG against what was happening in those other sectors at that time and work a correlation. It’s all in the charts, but you need to number-crunch the base data to do the probabilities.

So some pointers as to whether we can work out this information from the charts provided by Tim or whether these are derived from external analysis would be interesting.

Charlton

See last comment. Its all there in the posted charts and virtually all of the target, stops, levels etc are basic visual TA. The probabilities are raw data based.

 

[Charlton]

It’s all in the charts, but you need to number-crunch the base data to do the probabilities.

See last comment. Its all there in the posted charts and virtually all of the target, stops, levels etc are basic visual TA. The probabilities are raw data based.

Thanks for the clarification.

I will examine the charts further

Charlton

 

[TheBramble]

Picking Up on a Theme

Just posted on a Fibs related thread and it caused me to think very deeply about the term ‘temporal incontinence’ I coined over there. The thing is, what’s brain candy for one is not brain candy for another. I only feel fully qualified to discuss this because I have been (oh so) guilty of this myself. And still am from time to time.

These boards are awash, at any point in time, with people looking for all sorts of things. Short term, long term, deep, superficial, humour. All quite appropriate given the nature of these boards and no value judgement being made at all, at all.

But at any one time, there are few that are actually saying anything deeply worthwhile from a real trading perspective, and you know who you all are. The real problem is that those few over time change, for the most part, and end up either not actively participating at all or do so only infrequently or only privately. I can understand why they choose to do so, but so many lose out, it’s a shame.

I spend by far the greater portion of my time on t2w re-reading old posts – many of which no longer exist on the boards, but which I saved because of their immediate or perceived future value (i.e. I knew I knew enough to know I didn’t really understand them then, but knew I would at some point in the future) – trying to flush out the real intent of the poster, what he, or she, was really trying to tell us. Gems. I’m constantly prospecting. That’s not to say there aren’t some quality posters right now, there are and we all I’m sure appreciate their inputs.

But what puzzles me is in the recent slew of posts I’ve made, many of those that I felt would most be ‘into’ what I was doing and might gain some benefit from it and would pick up the beat, haven’t – and those that have been most active in connecting with me on these issues are those that I have learned from so much myself and most likely are the least to have needed to. But that’s the thing, these people who choose to engage with me on these various topics, and choose to in private, don’t do so purely to challenge me (which is also just fine by the way – that is in my view absolutely the most valuable method of discourse and learning), but I sense because they figure, like me, they never stop learning and there might be something by complete accident a tyro like me comes up with that they feel compelled to drill down further, to find out what I’m really rambling on about. It’s probably what makes them the people of choice I want to engage with too.

What’s the point of this post? I’m not sure. Increasingly so.

 

[rols]

What’s the point of this post? I’m not sure. Increasingly so.

Inverse Volatility Function:-
OK my earlier post had this wrong way round which is pretty much for the course really when doing anything from memory.

Hmmm. Alzheimer's as well as incontinence.

A case for Dr.Janice perhaps?

:|

 

[barjon]

..............................But what puzzles me is in the recent slew of posts I’ve made, many of those that I felt would most be ‘into’ what I was doing and might gain some benefit from it and would pick up the beat, haven’t – and those that have been most active in connecting with me on these issues are those that I have learned from so much myself and most likely are the least to have needed to. But that’s the thing, these people who choose to engage with me on these various topics, and choose to in private, don’t do so purely to challenge me (which is also just fine by the way – that is in my view absolutely the most valuable method of discourse and learning), but I sense because they figure, like me, they never stop learning and there might be something by complete accident a tyro like me comes up with that they feel compelled to drill down further, to find out what I’m really rambling on about. It’s probably what makes them the people of choice I want to engage with too..............................

.

Tony,

You clearly put in an enormous amount of work in thinking about and the constructing your posts and I guess it takes a similar amount of effort to read and digest them. I dare say many will not have the time (and some not the inclination) to give them the thorough attention they deserve as yet.

Many, like me, will have nodded in agreement but been left with little to say given that you covered every angle and scenario.

cheers

jon

 

[jacinto]

Tony,

You clearly put in an enormous amount of work in thinking about and the constructing your posts and I guess it takes a similar amount of effort to read and digest them. I dare say many will not have the time (and some not the inclination) to give them the thorough attention they deserve as yet.

Many, like me, will have nodded in agreement but been left with little to say given that you covered every angle and scenario.

cheers

jon

seconded !

 

[TheBramble]

Jon, I'm not looking for appreciation or kudos (thanks anyway), I'm just surprised that those I thought would get into it, haven't, and those that probably least need to, have.

I'm guessing that's why they least need to, because they do.

 

[firewalker99]

seconded !

Second that, I've been replying to some excellent posts of TheBramble on another thread, and although I haven't posted a lot in this thread, I have definitely bookmarked it and will read up over the weekend

 

[TheBramble]

I did the part 3 analysis 16 trading days ago.

Two days after the analysis GOOG dropped $20 into a $20 wide trading range where it's been for 15 days so far. I suggested it would need to be in any channel for 25 days for it to be a tradable channel. I also stated I thought this the least likely scenario.

GOOG_HIGH is now established at 558.58 which makes the GOOG-HIGH-330 value 228.55 for all the other calcs.

The critical 510 level has just been breached. I’m plumping for a plummet rather than an exhaustion rally.

Timsk’s trading timeframe was/is daily so none of this micro-view is of any interest to him at the moment. But it’s worth keeping an eye on and well on target for the end of September timeframe I proposed back then.

 

[TheBramble]

Be interesting to see how GOOG pans out today. I don't feel it has established a channel of sufficient length to qualify, but I'll take whatever is offered.

With the current market appearing to offer a little strength in the recent context, GOOG isn't reflecting that strength itself. Decreasing to non-existent volume on the minor rallies and increasing volume of the down swings.

Today gapped up but has tested yesterday’s close and found diminished support there.

We’re not trading this intraday as Timsk asked for an analysis of a Dailies position. However, with the channel a little immature and the previous relative strength of this stock now showing the strain in an apparently somewhat more upbeat market (today anyway), my highest probability is still for the plummet in price.

The only changes I would suggest to that scenario is the breakdown needs to be straight through the 480 level (the key 510 level has already been breached) and the initial stop be placed at 493. (I did state at the time of the initial analysis that the initial stop was good for that point in time only).

Target levels and times still hold.

 

[TheBramble]

Weakening

Although the channel is not totally well formed, the test today of the underside of the 500-520 channel showed low volume and therefore the lack of effort needed to break through and back up into the channel.

The 480 level is important and we need to assess behaviours around this level.

I'm still advocating a break down through the 480 level to signify a plummet.

With a 1st target of 447 (see GOOG_HIGH calcs in posts above) and an initial stop of 493 this would represent a R:R of almost 1:3 - just about useful.

With a 2nd target of 374 (8 bars after break) and a 3rd at 326 (13 bars after break) these represent major risk free partial positions in the event of this scenario (plummet) unfolding.

 

[TheBramble]

Interesting battle playing out at the moment.

I don’t trade this stock as I mentioned previously, but am now fascinated with it after having spent a little time getting to know it,

The push through that pivotal (arf!) 500 line just now was definitive and there seems a lack of willingness to take it down too much, or perhaps more to the point, to allow it to come down too much. However, whether the 500 line will hold by EOD is another question.

Personally, I’d get a great deal more satisfaction in seeing it go back into the $20 channel for a few more days, just for completeness. LOL.

I’ll take my cue from what happens around the 500 line today.

 

[TheBramble]

Google Get's Back into its Box - Good Boy Google!

...or does it?

Sure it's an up day (+$8.69) and the pre-lunch push certainly hoisted the pennant (check it out) and also flagged (pun pun pun) pro interest (note the volume - that is informed buying), but if it was a Supply side test, either it didn't work (unlikely) or there ain't Supply available at that level. Which is good news if you're looking to mark up. Are they yet?

The push through the 500 level around 10:30 didn't take too much effort. Wonder why? It then diggered around $2 until another bigger push requiring much more effort took it to just a tad above $506. There’s no historical or recent 'dent' there so it's a plastic level and one I feel it was designed to test Supply above the 500 mark.

Taking out the local minima and maxima is the name of the game if you're to accumulate on the ebb and distribute on the flow.

Note the diminishing volume and the closing toward the lows on the 5 min.

On the daily chart you can see the tussle at the 500 level more clearly. It hasn’t quite got back in the box like a good boy, it’s closing toward the lows and the 500 may now be our new Resistance.

My money (not literally) still on the plummet scenario, and the exhaustion rally falling to the back of the field. Sideways drift unlikely as all the bad news ain't out yet. So a more leisurely meander South might be a possibility, but still not close to my current, and long-standing favourite; the Plummet.

 

[TheBramble]

One More Day

Just one more day (today) operating the box and GOOG qualifies the minimum 25 period box setup I was suggesting a while back. It has breached and re-entered the bottom of this trading range and established the 480 level as the key break level.

I’m looking for at least one more touch to or above the 520 top-of-channel before and definitive down move.

Any break and successful re-test of the top of the channel will need to be on high volume and with a close toward the top of the bar for me to change my view on general direction.

 

[TheBramble]

Shakeout Friday?

?

Nope. They're falling all around and the volume on GOOG doesn't stack up, but it's still there.

I'm still waiting for the plummet through 480.

 

[PaddyMcTaff]

Hi Bramble

I dont post on here v much as I am still v early in my learning and dont want to be one of those people who argues or critisises points others have made based just on what I have heard or read elsewhere. I just wanted to say how much I appreciate how much you have done on this thread (and elsewhere) and despite much of it being way above my current level of understanding I have found it fascinating and have saved all of it to come back to (time and time again im sure). Please continue..