Thursday, 5 December 2013

Trading Trivia and Trivia of Life.

Did you know that the ‘tablet’ was invented in 1983 by Thomas Peterffy. Did you know that tablet was used on the options floors to show options pricing and that he added reverse colouring to his pricing to show if they were out of line with his computermodels? Green meaning they had to be bought and red meaning they had to be sold ? Did you know his firm does over 10% off all options trading worldwide and was originally know as Timber Hill ? Did you know that their brokerage arm is almost meaningless to them. Did you know Peterffy didn’t even bother to take a patent on his invention of the tablet. Also did you know that tablet had a touchscreen ?

Did you know quite a lot of traders are really skilled musicians ? Did you know music can be seen as subconscious math and playing in some band is one of the best way to train in recognising patterns. Did you know that sound in itself is in fact analog sine waves that add in subtract, just exactly in the same way that the model of timecycles works. Did you know that doing any sport or doing rehearsing in learning how to play music comes in really handy as skills later in life at it trains perservation. Did you know that the added advantage of teamsports or reading or the modern version of reading (watching films) comes in handy in dealing with complex situations. Did you see how societies ‘culture’ interlinks all these skills in some ways and pays big dollars to people that are are good at reproducing some form of them: being it poets, writers in the more visual department movieproducers, sculpturers and painters. Did you know that having a music chart top 100 (you see the word ‘chart’ lol) is in fact a way to add competition to get the latest new music in the fronline. Did you know that by now some people missed something already in the above reasoning. Did you know that people in the frontline get ‘remembered’ on the 11th of November as they often ‘die’ for taking high risks. ‘Taking high risks’ is a good skill as it tends to lead to new inventions, ‘dying from taking high risks’ however is not.

People that are good at all these things are sometimes called being ‘intellectuals’ or white colour workers, being people that work with their heads. White having the meaning of not being in the dirth with you hand like ‘black coloured people’, being people that work with their hands. Can you see how its easy for most people to get caught up in the metaphors and take them literally. Leading to things like racism. Did you know that racism also comes from the ‘us’ and ‘them’ phenomenon that is highly valued in fashion. The ‘cool’ in-crowd being the people that were highly great at adapting (I just used two metaphors: ‘highly’ and ‘great’) and embracing (you see where ‘hugs’ come from) the latest technology. Do you see also why in fashion everything like to come back into some different form, since it’s almost impossible to totally invent new things in the end. It’s more a thing of recombining things (you can see that that’s exactly what ‘girls’ learn and do when they are in front of their closet wondering what to wear that day). The recombining skill can often give surprising new effects making people to ‘reinvent’ themselves. I hope you are still following here ? lol Did you know that being ‘cool’ is something people can learn at a young age. But there is also the fact that people tend to move in alike circles since they want to feel an alikeness and know that they are overall doing well. Did you know that being excentric can be seen as one of the utter most ways of being cool. If that ‘excentric’ person is at the same time in touch with all the newest things he can be a ‘trend setter’ in fashion or any other cultural thing.

People following being ‘close’ to the ‘trend setter’ are called ‘the early adapters’ in the marketing world. Did you know that capitalism and society in itself with it’s ‘culture’ was ‘invented’ as a ‘cultural’ form of Darwinism. (Ha I just floored a few people here). In fact culture in itself can be seen as a form of Darwinism you can give to your next generation without it being in the form of litteral DNA and that it can be thaught to your children. Did you just see the complexity of a ‘cultured society‘? Did you know that taking metaphors literally leads to things like Nazism. Taking the metaphore literally of us and them leads to War. Did you know that taking metaphors literally almost always leads to bad things. It’s the ‘too much of a good thing’, while on the other hand you have the expression: ‘there can never be too much of a good thing’. Did you know that ‘WISE’ people know how to see both sides of an argument and at the same time explain it. Did you know that hypomanic people have a controlled version of two sides, leading to having a ‘fuller life’. But at the same time WISE people lead a ‘balanced life’. If you are having a ‘full life that at the same time is balanced’ you are living a more ‘fulfilling life’. Did you know leading ‘a happy life’ is all about balance. Did you know that that balance is a very personal psychological thing.

Did you know all the above here is a science called sociology and is somewhat of a ‘hobby’ of mine? Can you see how ‘hobbies’ were invented to learn skills … oops I am back to were I started lol.

Can you at the same time see why 'culture' is dynamic (remember 'fashion' and tries to promote 'new skills'. Skills being things that used to be essential to survive for mankind in the most literal way.

Did you know that traders like to live on the cutting edge of things: meaning they want to see all the latest things and find out how they work since it somehow might be usefull to integrate in their work. Did you know it has been a fact of all times that people were very sceptical of new ‘inventions’ but that traders were the one who integrated them first in their lives. Can you see why society invented money. It’s a way to promote skills. Can you see that money is definitely not ‘the cause and the root of all evil’ like some ‘religions/cultures’ like to say. If fact you could call ‘religion’ a form of ‘contra-culture’ having an us and them part in it. Can you see at the same time that this is a cultural invention of mankind and it’s as good as certain that god does not exist but just a handy artefact of giving that part of culture to the ‘next generation’. (Star Trek: the next generation lol). Can you see that advanced physics lies on the borderline of math and religion (ha, by now I must have tricked like 90% of the people out there). Physics is just a way of explaining reality in math terms. Do you see how culture tries to explore new things. Can you see how philosophy can be seen as an old way to reflect on things. But that sociology does the same thing but adds ‘culture to it’. Math is a way to see reality in binairy form.

Did you just see that you would like to have your children go to ‘Univers’ity as that gets them a 'white coloured' job.

What I just demonstrated is a skill called 'connecting the dots' in English ... 'Genius' was a word often used for people being extremely good at one thing. Being extremele 'genius' at 'several things while at the same time being able to 'connect the dots' was being called 'uomo universale'. These are the kind of people that are rememberd in 'history'. There isn't yet a new name for this relatively new skill that now is being fully recognised that is promoted in culture in our Dutch culture. A 'Leader' (be that head of a tribe or otherwise) however was always implicitely implied to be able to connect the dots. That why he actually was the leader. Ok, that’s enough for today and most people here … ROFL

You can see now why 'words' in itself, while being just 'words' are important. Marketing skills is knowing how to find right words for new products and 'promote' them at the same time. Funny I just see 'uomo universale' should be translated into 'polymath' in english. I need of a song now. The hidden math of songs gives a soothing effect to our brain cells btw, that's why people like to 'party' and sing in some ways in our culture. In the meantime I have just given in an example how the 'internet' is great at combining and giving access to several cultural skills.

Did you know that there are many ways in which videogames train children: being eye hand coordination, computersavyness, teaching of English, focus, how to deal with new situations that come up, spending focused time and effort into one thing … Did you know …

Wednesday, 4 December 2013

Daytrading 2013/12/04 + Trading Trivia

Trading Trivia:

Did you know that of yesterday they booted the former CEO at Oanda ? Both ‘The Russian Psychologist’, the ‘Antwerp Trader’ and myself saw this coming from almost day one when they started to give us ‘improved dynamical pricing’ which only meant that from that time on they were screwing us twice us hard in their spreads lol That their former head managed to ruin the reputation oanda had build up for over 10 years ? Did you know that at Oanda you can do 10.000.000 euro in one clip ? Did you know that at Oanda I can trade up to 1000 ounces in one clip, without any meaningfull (meaning like 0.03 USD) slippage on both the entry and the exit, while the futures market would give me a hard time if I tried trading over 300 ounce. There is a slight price to pay in the somewhat larger spread, that still remains trifle in the bigger scheme of things. Did you know that at oanda you probably shouldn’t be daytrading most of their CFD’s or fx for that matter since their spreads are too wide. The exceptions to that rule are DAX and XAU (gold). Did you know that Oanda is however the best firm out there to learn how to trade? That is if you don’t rely on their charts …

Did you know there is a firm here in Belgium that specialises in the most sophisticated strategies for hedge funds and institutional traders using derivatives? That even if you lived in Belgium you most likely never heard from it but it’s called FINVEX Group. But did you know the head of Keytrade Bank hadn’t heard from it either ? Did you know I had quite a few beers and laughs with the head of that firm when I was a student?

Did you know almost all professional traders use a free program called freestockcharts (fsc) to follow equities ? Did you know you can give a link with it to someone else and they’ll see exactly what you see with all the indicators and trendlines put in place, while that person could still actively manage that chart.

Did you know that no pro-trader I know has the latest O(perating)S(ystem) on his computers, unless they are forced to when buying a new pc. Like all big companies they like to stay one version behind the latest one since this lets M$ the time to get the bugs out of the software. It’s the same reason a few traders I know use Linux under the ‘Wine’-environment since once installed it tends to be more stable, as an added advantage less chances of getting a virus.

Did you know that my eight dimension is more like eight dimension and a half since it’s extremely time and context-specific without it being a full ninth dimension … Did you know I most likely havn’t solved my eight dimension totally at this point in time … since it needs extreme place, time and contextspecific stuff it's having weird rules with exceptions to it making it a full ninth dimension ... did you know that I got turn my brain in all sort kinda of strange knots to find how this ninth dimension works ...

Did you know I use no stops so I got to resolve to ‘puking it out’ when I am wrong in a trade … did you know that it’s extremely hard to know or see if I missed something somewhere in my ‘system’ or that it could have been that I just had somekind of early signal and it might be the market is just doing a ‘weird dance’ … Did you know I don't resolve to statistics in my method ... so it's got to be 'perfect' ...did you know the charts almost always look at their best at tops, and look awfull around bottoms ...

Did you know ... I had a good time last night and discovered this song on facebook ... and it's in fact a quadruple mash-up of two 'old songs', with some new lyrics and something only musicians will hear in the background ...

Did you know crypto-encurrencies actually are a bubble and that I only managed to find the truth about it last night when I came home ? Did you know that a friend 'Analyst turned Fundmanager' managed to put the final nail in the coffin by showing me a simple website of cross-cryptocurrencies ... ? I subconsciously suspected such a thing, but couldn't find the reason behind it, untill a friend who is in politics started to make jokes about the cryptocurrencies. That nailed it too for me ...

Did you know you need a lot of confidence for trading ? Did you know however overconfidence can hurt at the same time ? Did you know that at the same time confidence is essential in developing your own system ? Did you know that developing your own system is an essential part in trading ? Did you know that only through developing your own system you can find something you will really trust ? Did you know that all the above may sound easy, but is far from simple ... Good trading is simple for most people, but not easy ... Most used setups by a lot of people are far from rocket-science but it's the way they manage their trading that is essential and the confidence they got in their system to sit things out for the long run ...

Did you know ...


Not exactly a day in paradise here. Managed to nicely pick the top, then did something stupid as my rules were once again not totally well defined into the last detail. I caught on quickly to that, while doing a negative scalp. From that moment on it went down down down as I thought it would (even took a small nap there lol). At the bottom I saw the buying clearly … however there was nothing in my rules to make me go long there. So I kept on sitting short until it got all the way back to where I had entered my short. Talking about a monsterpuke. Some slight new rule quickly changed my point of view of that situation. Problem solved …

Since from that moment it was clear this could only be a long I went long at the same time. Then this turned into a ‘feels like a top-environment here’ … so I was frantically looking for some short signal. All the more since I knew that my cover and reverse pukething was something you typically do at tops and bottoms. And hey, about five minutes later we got something that came close to an ‘almost sell signal but not quite’ and it started to go down in a relentless fashion. Apparently algo’s must have picked something up too at that ‘feels like a top’ top. I said to myself however: no signal, I am not going to puke again here without ample proof. If that last case happens I am going to change my rules somewhat. While having no idea how I was actually going to do that yet …

About 10 minutes later the monster selloff started to die and I was glad I didn’t puke it out, since the whole move down swiftly reversed and we went higher in a move that would have never given me a long signal. I rate myself triple A there for not having given in to my ‘feelings’ and just having followed my system.

A bit later I went short on an ‘almost signal’ but not quite. Once again it was a matter of not having totally clearly defined my rules regarding this situation. About an hour later it became clear I was wrong. So that was my third puke of the day.

And as such things happen that was the exact top. Giving me a valid sell signal this time for another negative scalp.

Reading the above there is probably no point in explaining that this day wasn’t exactly good for my nano-account, is there ?

Still sitting on this last short and hoping it gets some traction as soon as ‘banktraders’ (meaning traders of the hourly chart) start to chime in. At this point in time this top is rather invisible to them. There is a phrase for such a tops: ‘the tanker is slowly turning here’. Going to put a stop in and leave my position open till the close of Wall Street.



LATE UPDATE: it seems my stop has been hit in an at first sight rather surprising short squeeze, that might or might not be within my system. Going to take a bath here and investigate exactly what went on in both. This means in practice looking around the last top and the last bottom before it took off. Should be interesting.

LATE LATE UPDATE: at first (and second) glance nothing looks wrong with the way the top was set in in my eighth and ninth dimension. As this had been thoroughly tested these last few days I am very unwilling to change anything there. The enfollowing bottom however can be defined as 'strange' under my system. Since an hourly inside bar followed my logical conclusion was that there must a mistake in the way I formulated my system on the border of the fourth and fifth dimension. Something popped up though in my first dimension that could easily explain things if I was willing to rephrase what I thought was a triple confirmation. It seems my system can often suffice with double confirmation. I had seen this kinda behaviour allready pop up in my eighth and ninth dimension. In fact leaving the 'triple confirmation' and expressing it as an 'often triple confirmation' and 'sometimes double confirmation if that double is strong in itself' would make things much simpler overall. While this might seem to an outsider as dancing around a problem and finding an ad hoc solution to a problem, in fact it would make things simpler and stronger at the same time in a multi-dimensional point of view.

Remember this is just a 'model' that describes reality in 'a best possible way'. This does not really really describe reality. Losing scalps happen within my system, so it's not like it's really really 'pefect'. It should be close though. From a metaphysical/phylosophical point of view I don't really really believe in 'natural order' but I must admit that technical analysis sometimes makes you wonder. Like a true agnost and vol-trader I am willing to hedge my bets and that it might be possible that there might be 'a natural order' from a higher dimension than my brain can handle ;-).

Going back to my 'model' I would be able to leave the model of nine dimensions and go back to a model of eight dimensions. Like I subconsciously wrote this morning: my model was 8 1/2 (weeks as in the movie ;-)). Then I wrote it was nine. Now I can turn to full eight again. My system is back in line and in fact became stronger. On a sidenote: this shortsquueze got it's strenghth out of exactly this hourly inside bar. On another sidenote: trading without stops should only be done when you can actively sit in front of your pc-screen. Like they say: Stops ! Don't leave home without it !

As of Friday midnight this blog is going 'underground'. The question should not be 'Why?' but 'Which Midnight?' :-)

Tuesday, 3 December 2013

Daytrading 2013/12/03 + A tribute to the 'Irish Gambler'

As the ‘Irish Gambler’ likes to say: everything works in technical analysis … as long as you know how to use it that is …

While I am myself a hardcore ‘naked’ multi timeframe price action player, a lot of people regard trying to do this as simply stupid. They like to add additional info to their charts called indicators or like to draw lines on them. They come in a wide variety of taste. Applying them is a very personal thing.

The Irish Gambler is in fact an engineer who started trading in the late eighties of weekly charts using price action. He used to pay a small fortune on a yearly basis to get live charts arount that time. He started off as a follower of the exotic, if not esoteric principles of Gann (a trader who died according to some sources flat broke, according to other sources rich beyond beliefs; it was said he was studying charts on this deathbed; to make the myth even bigger apparently some of his writings never got published or disapeared). The principles of Gann are not only difficult to understand, they rely on drawing squares (Gann squares), circles and triangles over charts with certain specific angles (some derived from the Fibonacci sequence). Gann sees absolute order in charts and he claimed to be able to predict far into the future.

The 'Irish Gambler' later went down in timeframes later on and probably turned to religion because of that lol. Allthough he didn't quite go into detail about it, I gathered his search for settling on an all emcompassing method must have lasted for over ten years while the small timeframes almost drove him insane. Not only does the ‘Irish Gambler’ go quite wild in his timeframes (he has for example four different kinds of 4H charts each one with a ‘different hourly start’ of the candle). He also goes quite wild in other things he uses. In fact he likes to use about every trick under the sun known to mankind. He is a big fan too of trendlines and channels in his trading. He also uses something in his trading called ‘the Grid’ (not to be confused with 'Grid trading', one of the stupidest pseudo market making techniques out there) that’s a bunch of diagonal lines, along which charts tend to move. While I couldn't come up with a good link and Pyrapoint is still something else this comes visually probably closes to it. As you can read it's a rather Gann based concept. The Grid can show you possible turning points days ahead in time if used in the right way.

Regarding indicators not only does he likes to add both the standard commodity channel index indicator with a length of 14 on all his timeframes, but he adds the CCI(21) to give him a better look at things. Add to this the fact that this indicator can be used in like 10 different creative ways: you can use added horizontal lines at +200/-200 (or if you like +100/-100) indicating oversold/overbought peaks; it can be used a trending confirmation tool if it crosses the zeroline; some people like to read the chart patterns into the indicator (giving them all kinds of specific names, like 'ghost. And so on ... If you quickly glance the last document you can easily see a lot of nuances come into play with just watching this single pattern. It's a bit of the same problem the 'Antwerp trader' had been facing for a long while. The difference was however he had to find out all these nuances for himself.

Overlying his charts he has both the 9 simple moving average combined with the 13 simple moving average on. The moving averages are not so important as such, but it’s a trick from him to learn how to guide your eyes and focus; I personally preferred the 9 simple moving average (remember the American private equity investor ...) I tried for second moving average the 18 sma for a long time but in the end I settled for the 27sma. Mind you, not that I ever used them in any way, but they gave me more ‘structure’ in my charts. Something which is hard to learn. Since he also uses Bollinger Bands, he got the additional 20 EMA (Exponential Moving Average, 20 being a standard often used in trading) on his chart, but also two added lines that are volatility related (in the most literal sense, since it's 2 standard deviations removed from the 20 EMA; although some people prefer the 22 EMA). Try to put that all into one head lol.

Cycles are an essential part of his trading and he has software to help them spot them better. Cycles are in fact sine waves where the half values are important turning points. Of course each timeframe has it’s own cycle. And all these cycles interact with one another. Each one adding or substracting from the total cycle that in fact shows how to market really moves. It’s that total effect that makes your head spinning when you start to see it in realtime when you go multi-timeframe. Like a lot of traders he likes to see things roll-over into higher timeframes. I don’t totally agree about this concept though as there is a concept I have noticed too (more then a few times) of reverse timeframe rolling or even intermittent timeframe rolling (at complex tops/bottoms).

The ‘Canadian Chinese Rookie’ is now just having a small heart attack while he is reading the last sentence since I explained to him that there was ample evidence in both physics and philosophy that time only moved forward lol. If he doubted that he just had to consult father and son Mednis :-)

A superficial reader probably missed it by now but technical analysis likes to use tricks from structure that is abundant in nature. A nice example would be how complex shells (like those of snails) are structured in a way that relates very much on how the Eliot Wave theory, a theory that also likes to see 'natural order' in market movements, is structured using math cycles of Fibonacci in space and time.

Furthermore he uses trendlines in plenty of rather extremely creative ways. For example one thing he uses is something called ‘emotional trendlines’ where he uses high, lows, closes and opens to form his trendlines. He also uses ‘mirror trendlines’ (a proprietary technique not to be confused with channels). Someone not used to his way of looking at things would swear they were randomnly crossing prices and candles. He draws trendlines on the 1 minute charts that could be about a month old (I am not kidding here). He also likes to add additional context in the ways of channels across timeframes where the does countertrenscalps at bottoms and tops.

He uses the total combo of this to predict exact turning points way ahead of time according to his own words. As trader he is not afraid of using the most exotic ways of analysis: for example he doesn’t shun away from using lunar cycles in his long term predictions of stock market tops and bottoms.

While the ‘Irish Gambler’ as a 'hardcore countertrend trader' is an active scalper (he does 10 to 40 trades a day most of the time, he can go long 30 seconds after he just went short). His style certainly isn't for everyone as the 'Chinese trendfollower' found out the hard way in different ways. He can however have days where he just sits for hours in a position (letting it ‘bake’ he calls it) if he sees something juicy on one of his four hour charts in the meantime playing the guitar. He used to play music on a professional level when he was younger and has done gigs with some of the greatest UK musicians.

Having someone like that in a chatroom on a daily basis can be somewhat overpowering though … The good thing though is it forces you in the end to find your own personal special blend of technical analysis. Since all this information is a bit too much it starts to give you at a times a kind of sinking feeling. At other times it just wants to make you puke ... He has a special sense of 'Irish Humour'... it's an acquired taste :-).

The best fundamental article I read so far on Bitcoin.

The best way to describe today's trading would probably be 'interesting' lol. It all started off at a rather leasurely pace with clear signals overall. That was untill we hit noon in Europe and it turned into some kinda high stakes poker game. I had gotten a bit sloppy by the slow pace so I missed the signal at the top. Still in that pace I managed to miss the reversal too. By that time I fully woke up. I then had a negative scalp which would always, under any circumstances, would have been that way. The market turned into full shitzone mode by that time. I managed to see a signal that wasn't quite there but was something hidden unless you took out a microscope. I had taken the bet it was a short signal. I did pretty well in closing that trade in a disciplined fashion. However I managed to do that at the exact top and since my mind was in 'long again'-mode I missed the rather hidden short signal. As the market didn't clear up afterwards I had to puke out a rather big loser.

To make things worse I got into trouble with my eight dimension (meaning my inside bars :-))for not having totally clearly expressed my rules there. And I had to go through an extensive test of my rules there ... making me puke my trades three times in a row, in the proces somewhat annihiliting my account.

My day ended with another something I hadn't enountered yet. It's now part of my rules. While it doesn't show on my chart, I am short now from 1223.62 USD with a stop at 1225.24. The idea is to leave this trade open till Wall Street close or get stopped out in the worst case (which normally shouldn't happen). Overall up by about 10% for the last two days ... but today was a 'nasty trading day' and not exactly the most pleasant of experiences.



For the record: by midnight on friday this blog will go underground.

Monday, 2 December 2013

Daytrading 2013/12/02

While untill last week I lived under the illusion my system was a triple confirmation under a five dimensional environment it turns out that wasn't quite right yet. So up comes System 3.0 which is now a triple confirmation in a six dimensional environment while having to take care of time and context.

Seems my progress is even slower than I thought: I missed one thing still ... triple confirmation in seven dimensional environment now taking care of time and context. If you were pushing things you could call this system eight dimensional, but I am settling for calling it seven dimensional.

Super great day today ... while the relentless bear somewhat helped overall, I managed to catch about every turn with my system. After the London opening all the arrows are effectively how I would have played the market with my system and how I effectively played them. There is only one micro-scalp missing (it would have been 0.30 USD). There was one reversal though were I was somewhat late since I hadn't seen this one in practice before and was in a chatroom around that time. But this a day that has been played almost to perfection.

Saturday, 30 November 2013

Having a laugh while reflecting over things ...

HOW INVESTING SHOULD BE DONE

Some people obviously don't understand how investing works ... this man does ...



THE MAN AND HIS GOLD (Fable by Aesop)

There was a miser who sold his property and bought a lump of gold. The man then buried his gold just outside the city walls, where he constantly went to visit and inspect it. One of the workmen noticed the man's behaviour and suspected the truth. Accordingly, after the man had gone away, he took the gold. When the man came back and found that the hiding place was empty, he began to cry and tear his hair. Someone saw the man's extravagant grief and asked him what was wrong. Then he said to the man, 'Enough of your grieving! Take a stone and put it where the gold was, and make believe the gold is still there: it's not as if you ever made any use of it!'

The story shows that there is no point in owning something unless you put it to good use.

BITCOIN: THE FUTURE OR FAD ?

Below you can see a Bitcoin chart. One thing is certain by now: Bitcoin will make for interesting reading in the history books. Either this will be given as a nice example of how people in the 21st century managed to get all crazy again (remember the internet craze of the year 2000 ?) on a new idea, called cryptocurrencies, that was IT-related. Proving that mass hysteria never stops where money is concerned in the proces ? In that case it will be shown as the latest version of the tulip bubble mania.

Or will this go down in history as the start of a totally new way of viewing money ? Is this the start of the way we are all going to pay in the 22nd century ? I totally have no idea which is which ... For the record: did you know that options (as in puts and calls) on Bitcoin are allready trading for well for over a year ? Some people even trade volatility on these options ... Or the fact that there is a market in cross-crypto-currencies?

Like my friend 'the Russian psychologist' I regard this as an interesting experiment.



Friday, 29 November 2013

Weekend Update: Want to fry your brain? Go multi-timeframe …

The ‘Irish Gambler’ has this big theory on price action and how it plays out in the market. It’s all PVT-related: meaning Price, Volume and Time. His theory behind it being time related is that each timeframe has it’s own players. The scalpers (mostly computer algo’s nowadays) are on the tick charts, minute charts. Since they only move small volume they can be very agile there. However big players have to resort to bigger timeframes (like hourly, 4H, daily or even weekly) since they really move the big volumes. According to him for example banks don’t play anything below the hourly charts for their proprietary trading (there is a reason why I use the hourly charts as the highest timeframe and use it for context-reading in my setup). This explains also why the last 10 minutes and the first 10 minutes of the hour are often defining moments.

What is important for him is how all these players interact in the market and that’s why he advises everyone to go multi-timeframe. In this way you can see how the different timeframes interact with one another. He likes to describe big moves as players from one timeframe taking over from people in another timeframe. This is basics behind the rollover and shows who the players in control at any given point in time. He likes to call it: who is ‘the Boss’?.

While this is his strength, it’s what the ‘Argentinian trader’ calls at the same time the ‘Achilles’ Heel’: if you don’t ‘see’ the ‘Boss’ you are doomed to fail with this method. While his way of looking across timeframes has been of great inspiration for my own method I totally failed at ‘seeing the Boss’ when I somehow tried in vain replicating him and I had to sort of ‘reinvent the wheel’ for myself. I can assure you one thing however if you go multi-timeframe the first things you are going to see is a lot of structure while it will be totally confusing at the same time. I you look in a focused way you are going to see something that I like to call ‘the Dance’ that takes place across the different timeframes. It’s hard to pinpoint what it really is and it has to be seen before you actually will ‘get it’.

The best explanation behind it I heard so far is the theory of timecycles where different multiple cycles are interacting with one another either reinforcing or diminishing the momentum of the total cycle.

Be carefull though with going to wild in timeframes as it’s real easy to get totally lost in all this info. It’s better to use the most common used timeframes since it makes things easier on the mind for us humans. Like the ‘Antwerp Trader’ called it this week: be prepared for a shock if you got all these timeframes open at the same time. In fact it took him over six months to get used to it. This guy uses dinapoli stochastics on all his timeframes although in a different way the ‘American private equity investor’ does. The ‘American private equity investor’ uses 50 tick, 100 tick, the 3M, 7M and 10M to structure his trading. He likes to see things rollover from one timeframe to another too for staying in. The 9 simple moving average is essential for his context reading. The ‘Antwerp Trader’ too goes real low in timeframes. 30S(econds), 1M, 2M, 3M are his preferred sparring partners. Although he reads all of this into context. In fact he build a coloured ‘heatmap’ in Ensign charting software to make him aware what’s going on in the bigger timeframes with his indicator and the ‘pressure’ it gives. He likes low timeframes to signal at almost the same time and lets things rollover from one timeframe to another to stay in his trade as long as possible. His own personal twist is that he looks for his stoch indicator to look ‘fluid’, meaning there are no hooks in his stoch indicator. He doesn’t look at moving averages whatsoever.

However for the first six months he used multi-timeframes his trading didn’t get better. In fact it got worse since his mind didn’t totally manage to adapt to things. It’s in fact the same thing that happened to me on Tuesday. I went full multi-timeframe again on small exotic timeframes and my trading went totally berserk. In cases like that it’s better to go ‘cold turkey’ for a while and slowly build things up again. He advises not to start with over three charts to get used to the feel on what’s going on. Also don’t expect too much from backtesting multi timeframes. It might be of some use but it can be best seen in realtime.

Even a one-timeframe-trader like the ‘Russian psychologist’ who uses the 5M charts (and because of that he has to be very statistical orientated) is well aware of what’s going on in the hourly and daily chart. So in fact going at least somewhat multi-timeframe is essential for any kind of trader.

Daytrading 2013/11/29 Thanksgiving part 2 System Version 2.0

I expected another rather quiet day today. It turned out to be different. JI started early around 6 AM CET and went short as I got an old signal. However just before the London open there was a nice long signal that I managed to catch by having looked the last few years at my charts. It was the hourly bar slightly going below the previous hourly bar and then viciously going up. However I had a slight problem at that point: I clearly saw this was a long but it somehow hadn't shown up on my current System despite it being rather flexible. Or so I thought.

On came a second version of my system that seemed to catch things better now. I missed a few nice signals or only got in late, but my multi-timeframe context always showed me clearly that I had missed things. The only thing I had to do was go back in time over my charts and try to explain them better. Here too that same context provided clues. So in the course of the day I evolved from a double confirmation on an eight-dimensional system to a triple confirmation system in a five dimensional context taking care of both context and time. Much simpler and overal much more to my liking and way better at explaining intermediary highs and lows. I added a few more timeframes to my setting, by they are mostly there to keep me aware that I must have missed somehow something. I had to iron out a few details in the course of the day so my account didn't really profit too much from this overall.

The chart shows the places where I should have entered on System 2.0. Despite having encountered quite some difficulties during this week I am overall pretty satisfied how things have evolved:I got a better and more detailed plan to start my next week.