Following chart with the additional parameters anticipates when a %B 20 (being the price) will turn even if you have not reached the 0.1 level or below-i.e. turning midway..
Example: When price reached the lower boundary of teh one deviation at 1311.72..what tells us that it would turn and not go lower looking for the 2 deviation..i.e. lower values? ANSWER:%B10 wnet back into the 10.2 BB in the indicator above....forcing %B20 to turn back up.
When %B 10 goes out of 10.2..it is a law that %B20 will turn when %B10 goes back in to the 10.2 bands..
Midaway turns anticipation is resolved within the price relative framework.
Also, when %B20 touches the 10.2 deviation above at 1309.17..that is a bottom...but that is %B20 telling you this is bottom in its own way...
Rotor: I hope you are catching this..tons of signals revealed by applying BBs on indicators ..
Re-post...a very...loooooong post...just parts of the over all picture...
...tons of signals revealed by applying %B...BBs...CCI on indicators... Tons...?...LOL... LOL...recall I said when I first ever started trading futures all I had was my hand drawn chart of BBs and the %B...then...many years later there was CCI... BTW...difference between CCI and BBs of %B is that CCI has momentum calculated in it BB and %B don't; but they are so much the same that BB=%B=CCI is close enough...and you know multicollinearity...
One of my favorite stones to work with when was into lapidary; stone has kind of like silver flakes in it...Lapis lazuli (sometimes abbreviated to lapis) is a relatively rare semi-precious stone that has been prized since antiquity for its intense blue color. Lapis lazuli ...
...for those that want a better sense of the subject...a re-post. The Philosopher's Stone The philosopher's stone (Latin: lapis philosophorum) is a legendary alchemical substance said to be capable of turning base metals (lead, for example) into gold (chrysopoeia) or silver. It was also sometimes believed to be an elixir of life, useful for rejuvenation and possibly for achieving immortality. For many centuries, it was the most sought-after goal in Western alchemy. The philosopher's stone was the central symbol of the mystical terminology of alchemy, symbolizing perfection at its finest, enlightenment, and heavenly bliss. Efforts to discover the philosopher's stone were known as the Magnum Opus.[1]
...I make the assumption that indivuals have a working knowledge of the proven technical indicators (you should have looked at recent post on "Technical Indicators") and I expect a person to be able to show a chart and back any comment they make... otherwise I have no problem cutting it down for what it is, speculation...gambling...fantasy and flat out subjective bias...I expect people to have looked at comments related to what I've called the Grail Quest with the 3/5/10 moving averages...they work...apply it to your set of tools and timeframe... Focus for now will be with the 3EMA...its job as trigger is to move/cross the 5 and 10day averages which can suggest a trend may be underway or when Market is oversold you should first see price above the 3EMA to consider a turn is underway... The indicator I call the Philosopher's Stone works...as it is related to "price" and the 3EMA(both are triggers with price being the better) so it is important you can see and understand the 3EMA's wide ranging deviation/deviant behavior...more so than the other 2 moving averages...if you understand this and apply it to the proven indicators you really don't need this indicator I call the Philosopher's Stone...
What I suggested about that wedge formation (uptrendline and downtrendline); you can know which line it is that you should be watching and expect it to be tested...you are able to do the same with the Philosopher's Stone Indicator...in this case it is always showing a specific "PRICE" that if triggered you can expect action...such as further price movement and added confirmation of price direction...bias...I know this price down to the penny...I can know within 2 points either side of this price if it is a real or false signal...I've used it often enough to limit it to +/- 1.5 points either side...so I can work it the same way I worked 1255 the past 10 days...(no 1255 isn't/wasn't part of the indicator; it was just a significant level that I recognized within the recent price range). The indicator works mostly as a confirmation of signals along with CCI/Stochastics but also can be an early indicator depending on market momentum...one unique quality is that with it ...it will help define a back test or if price is intending to put in a lower low or higher high(rather than just a back test)...so in that case it is a leading indicator...because other technical indicators would not have had enough time to adjust/respond...the PhiloIndicator can. This indicator works in all types of Markets: range bound...trending...mean revision... If I showed it to you and having explained its capabilities above...you would understand it immediately and think you already knew it...and it is not new; so you may have seen it somewhere...but I doubt it...and the way this indicator is defined is nowhere near the usefullness that I have just described...as it relates to one part of the Grail indicators and to "price"... It is a real indicator...and no... I'm not going to show it...LOL...LOL...one day maybe. People need to understand the proven indicators first and I expect people to understand the indicators I've already given and continue to prove their usefullness in real time...the Bollinger Bands...CCI...TimeFrames...moving averages... ?///////////////...are you sure, you'd like to know more?.../////////////////////////? Take a look at these charts as you continue to understand the 3EMA...and I may add a few more comments...because...I mainly want you to know that the PhiloIndicator would have kept you on the right side of the trend; like the recent strong trend in gold/silver/oil...I mean kept you in the trade for the whole trend even if some of the other proven indicators had signaled and even if other timeframes had given signals... so in my book...this is one good indicator... SPX with one deviation Band and the 3 and 5 EMA...notice how frequently the crossover signals are happening at/near the one deviation...people need to pay attention to this band also...not just the standard set of BB 20,2... Gold and its trending action... Silver poor mans gold... Oil...liquid gold... /////////////////////////////////////////////////////////////// ...could be its on the longer term timeframe... (chart may not work...no big deal...focus on the part about "Market Timing"...) The two red lines are the 2 scenarios of the December 2010 gold prognosis as published in the "Amanita Investor's Guide", the black line are the prices. We are closely tracking the more bullish scenario, which suggested lows in January & May.
In light of annual advances of 40-100% in gold & silver I'd like to discuss strategic questions which have been stressed in the protected area for years. Market timing is only useful when markets are not rising more than 15-25%. In monster bull markets rising more than 25% you will lag behind buy-and-hold with a probability bordering on certainty. The more aggressive (e.g. including selling short), the higher the losses compared to buy-and-hold - and possibly even entailing absolute (nominal) losses. The only exception are those who have found the Philosopher's Stone, which means triple-digit gains year after year. As always it's crucial to define realistic goals, with pole vaulting is a good metaphor: setting the bar too high may mean losing everything.
Therefore nominal price action is by far the most important factor in determining the right market strategy. It's bizarre but this factor is of paramount significance, yet almost never discussed.
bear market: annual loss of at least 10-20% odds of outperforming buy-and-hold 80%
sideways market: +/-5% odds of outperforming buy-and-hold 20-50%
hyperinflations: annual advance hundreds to millions of percentage point odds of outperforming buy-and-hold 0%
Current example according to the rating agency "Timer Digest" on 8/29/11: of the 100+ market timers only 8 could significantly beat the benchmark S&P 500 (annual advance +12.4%): this translates into odds of P<8%. Behavioral science tells us that a cardinal problem of the human psyche & thus of market participants is to over-estimate one's capabilities. According to studies only depressives are realistic in their self-assessment - and I suppose spiritually advanced people who no longer need to inflate their egos. The problem of hubris is that it leads to way too optimistic targets & thus too risky actions, deteriorating performance.
...more if you're still here...repost...
///////////////////////////////////////////////////////////// I'm looking at the most noisy timeframes and comparing to the 15minute chart which can be traded exclusive... What I found years ago with the intraday charts is 5minute and earlier are their own cycle..."5 minute runs circles around the 10/15/30/60minute TimeFrame group...then daily is a cycle...and weekly is its own cycle... And then I've used the 5minute TICK/TRIN chart for signals when 30 minute exclusive is overbought/oversold...recently the 5minute EURO/dollar has been the choice of indicators..."I assess the 30/60minute with the stochastic overbought/oversold signal... I've also been following this one minute VIX/S&P where they converge and cross=confirms change in...?...trend...?...cycle...intraday...daily when trigger=on the move and weekly when on the move...this one minute VIX/S&P is where Chaos/noise are creating patterns...=structure out of chaos to answers Rotors question if had figured out chaos... Results is the moving average on the daily CCI is showing the cycle "direction" =get direction and you have the trade...plus figure out which timeframe is the primary cycle at work...just the noisy intraday TimeFames...the daily...or the weekly... ...but its the average on the CCI that tells the cycle bias and it is reflecting the weekly cycle when that is on the move...which adds to ..."...the best trade is with the daily bias..."... The moving averages on the VIX and S&P charts show the cyclces...7MA and Bollinger 21,2 may be better choice... ...this is daily signal(sometimes early) with moving average crossover of CCI...
////////////////////////////////// The Grail goes on...take a look...one standard deviation is all that matters...outside of the One standard deviation...interesting...notice when the mid line of the 20.1 rides on the mid line of the 50.1....says it all
there is other stuff on these parameters that tells more of the story...only for the brave...do not try this at home..without a tutor..lol (Ziko)
***noting the setting for moving averages... ///////////////////////////////////////// First part here comes from TradingMarkets.com.... Madness of Crowds...as a stock market trader I have to assess the situation...with an objective assessment/evaluation without becoming caught up in the crowd behavior...if I can’t do this I have to accept the fact that I’m just a member of the crowd with an opinion I’m not likely to let go even though an objective assessment would show the market trend has changed. Majority of humans like to ape others.(ape being an appropriate word for this world; since lessthanHuman history reflects the animal in us) And we animals will parrot (repeat) others. Thinking out of the box is definitely out of the norm but is the needed task. WE (always) feel safer to conform to society (crowd); and the ape we will continue to swing between rational - irrational decision in financial matters from tulip mania till present days bubbles ...and a peaceful protest demonstration suddenly shifts into a street riot... Conclusion after many years of observation and testing...10,000hours to be exact... You should come to the conclusion that PRICE is a product of Rational plus Irrational EXPECTATION. We are slaves to our rational mindset. We are looking for reasons to rationalize our decisions when we are holding on to financial losses.(we=media, analysts, fund managers, govt. spokesman and the person on the street) Have we changed throughout the many decades of Market and traders being a reflection of the crowd...? ....No.
22 Rules of Trading
I was looking over some old posts at the old website this morning and rediscovered this little gem offering the 22 Rules Of Trading according to Dennis Gartman:
Never, under any circumstance add to a losing position! Nothing more need be said. To do otherwise will eventually and absolutely lead to ruin!
Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.
Capital comes in two varieties: mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.
The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is “low.” Nor can we know what price is “high.” Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed “cheap” many times along the way.
In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.
Markets can remain illogical longer than you or I can remain solvent. Illogic often reigns and markets are enormously inefficient despite what the academics believe.
Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds… they shall carry us higher than shall lesser ones.
Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect “gaps” in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.
Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In “good times,” even errors are profitable; in “bad times” even the most well researched trades go awry. This is the nature of trading; accept it.
To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market’s technicals. When we do, then, and only then, can we or should we, trade.
Respect “outside reversals” after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more “weekly” and “monthly,” reversals.
Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.
Respect and embrace the very normal 50-62% retracements that take prices back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than not, retracements happen… just as we are about to give up hope that they shall not.
An understanding of mass psychology is often more important than an understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.
Establish initial positions on strength in bull markets and on weakness in bear markets. The first “addition” should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.
Bear markets are more violent than are bull markets and so also are their retracements.
Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are “right” only 30% of the time, as long as our losses are small and our profits are large.
The market is the sum total of the wisdom and the ignorance of all of those who deal in it and we dare not argue with the market’s wisdom. If we learn nothing more than this we’ve learned much indeed.
Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.
The hard trade is the right trade: If it is easy to sell, don’t; and if it is easy to buy, don’t. Do the trade that is hard to do and that which the crowd finds objectionable.
There is never one c...ockroach!
All rules are meant to be broken: The trick is knowing when and how infrequently this rule may be invoked! >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>><<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< ...although don't agree with all the rules above...just something to help assess when looking at what has been said about doubleBollingers and moving average system...may save someone a large part of that 10,000 hours of trial and error...or just because system isn't working that one time out of 10; ***you don't dump it or confuse it by adding more indicators and lines on the chart... Focus most this week has been the 3/5/10 averages daily chart in relation to one deviation band and its importance...price above/below these lines changes psychology/Bias....and crossovers confirm...and then your technical indicators come into play...and trends develop around this focus... Step into intraday timeframe and my number one chart to focus on is the 60minute with 20period moving average=the 3day moving average on the daily chart...60 minute=can be considered proxy for daily... My main focus when I've posted this chart is the Transports where I've shown=Transports often "lead"...would like this chart better if had the main sectors $WTIC...XLE..XLF...XLK...XLB...XLY...et al...GLD...SLV...on it or just another chart of sectors for focus and the BB10,2...
Then some understanding of Market internals would be of help... Starting with what Chart Pattern Trader has shown about "bullish percentage' for the different index and sectors... ***noting the setting for moving averages...
One of my personal favorite market breadth indicators is the bullish percentage index (BPI). It is a calculation that is applied to indexes (a group of stocks) rather than an individual stock. The bullish percentage index (BPI) is calculated by taking the total number of issues in an index that are generating buy signals on point & figure charts and dividing it by the total number of stocks in that particular index. Analyst John Murphy discusses the interpretation of the indicator in his book The Visual Investor: How To Spot Market Trends. Murphy's rules of interpretation for using the bullish percent index are simplistic; when the BPI is above 70%, the market is overbought, and conversely, when the indicator is below 30%, the market is oversold.
The BPI works well when plotted as a line with the five-period moving average (MA) or 10-period MA alongside it. Exponential moving averages (EMAs) can also be used. In this example we will use the S&P 500 as our underlying index beside an EMA.
The BPI of the Standard & Poor's 500 ($BPSPX) is plotted above as a line with the five-day EMA placed with it. The strategy here is simple: Sell the market when the BPI crosses below the moving average, and buy when it crosses above the respective moving average. When the BPI crosses above or below the five-day EMA, it triggers the signal to buy or sell.
extreme point RULEsss
More to the Extreme Point Rule than the one related to ADX/+Di...-Di... Started with readings of the first 10/15minutes of trading=write down the Hi/Lo...then the Hi/lo first 1/2 hour...then Hi/lo first hour... Then it went to suggesting the last 3days hi/lo as your indicator/trigger of breakout. Then it went to the rule of the hi/lo when technical indicators "signal"...
//////////////////////////////////////////////////////////////////////////////// Order of priority of buy/sell signals on this chart..
1. Trin goes first (early) 2. Tick Follows 3. %b confirms..(seiours signal) 4. VIX and slope almost simultaneously seal it last...
If order is not right...signal is not strong..and I more often disregard it.
...the test...there are many tests...on this path... The 1% envelope contains price...I can be relatively neutral here...and say nothing happens until price goes outside this zone...
You can also see that the moving averages "never triggered"...when first explaining the Grail it was stated... "I don't name any one average the grail=they all have to have "triggered"...until then "nothing" happens=never heard of it..."non-event"..." the signals and waiting for the signals...becomes the individual's frst test while on the Quest (most never get past this first trial)...if one is on the Quest...and so the saying goes..."the Market doesn't beat you...you are letting it beat you for the lack of waiting=patience...for the signals to TELL you...that's the tell...you must acquire patience and listen to the market signals...=stop listening to yourself...or the Market wins...front running and opinions before the signals is just that=front running and taking added "RISK"...some also would call it gambling...I have always stated I know nothing...and wait for the signals...don't try to do what I do...listen/wait for the signals...I obviously can handle more risk than most...don't do what I do...master the signals first...and you are at the 2nd "test"...only if you have passed the first... Following...listen...not thinking...you know...
Anyway...Back from the future... You should also see daily CCI bias remains the same but suggests =points more toward centerline... Follow the signals... Good Trades Ki...aka...Nef...rjt...theMatrix...
May next time I will edit this... Enjoy... Ki...Neph...Kiy...theMatrix
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