Analysis and Trading based on Envelopes, Waves, Cycles

Target was 137.500

Real Low was 137.483

DAX Closed Short position + 13 points

DAX Closed Long position + 29 points

DAX Closed Long position + 28 points

Sentient Trader Market Update of the S&P - 13th June:



Sixer

@parisboy - in the r4me thread are the envelopes shown in your post mortem chart 32 - 1024?

Sorry just realised they won't be envelopes - anyway question still applies please.

hi Handy148

sorry I do not understand your question. Could you show me the chart and precise your question(s)

Thanks in advance

This chart .............

https://www.forexfactory.com/attachm...1&d=1560618832
Not sure whether those bands are NIH ones or your normal octaves 32 - 1024.

Handy148 the chart shows Nih98 settings

as you know I use 3 Envelopes 32, 128, 256 Time Units based on Centered Moving Averages and Gann Octave to build the Envelopes
and determine the Short Term, Mid Term and Long Term Trends (within the Tme Frame)

using the Nih98 chart I just wanted to demonstrate to non-believers the interest to classify and hierarchize Tops and Bottoms.

my 2 cents on "Why spikes poke their head above or below a channel ? and how to deal with this fact ? "

In short Spikes poke their head above or below a channel because of Price Action Underlying Trend

This is because if you use an Envelope system to add better visibility to Price Action and for example to trade Reversals, Price Action can structurally be described as the sum of :

- the Amplitude of the Envelope which has the longest period
- plus or minus the Amplitude of the Underlying Trend

incidentally this explains why previous Tops and Bottoms are no more "useful", efficients etc , at least for a while

examples of Price Action Returning to its (Moving) Mean

in short "the Herd" go where the (Centered) Moving Averages go !

because Centered Moving Averages are "filters" showing us (unexisting and useless) Trends

and the Crowd follows the Trend, that is basic psychology (lesson 1) !

and shorter trends can not deviate very long from the direction showed by longer trends , that is the "big stick effect" (basic psychology lesson 2)

in short a Cycle is a REPETITION of a Wave - no repetition - duration (Time) , amplitude (Price) - no cycle

a Wave has 2 Swings or Price Pulse - one UP, one Down

you need Time to reach your (Target) Price

using Sing Sine Wawess to describe Price Action and its Cycles is as old as technical analysis. The Foundation for the Study of Cycles created by FD Roosevelt before 1940 and managed by Edward Dewey has produced a lot of Analysis on this suject.
You find Sinewaves in action in every financial support and on every Time Frame

hereunder some examples :

EUROYEN 1999-2023 dayly
GBPJPY weekly Feb 207-Juin 2018
DAX 24 may 2018 5 days / 5 minutes
USCAD Weekly Nov 2015 - Sept 2018

a good operational concept and tool linked to the "Return to the mean" is the 3 C's modus operandi or "saving account"

C like Compensation
C like Carry Over
C like Cancellation

sum the Price areas under and over the Center of Gravity of the Chart or the longest Centered Moving Averages .

This way you will know if the Trend is Up or Down , you will also know if the financial support you are observing has a credit (is in advance) or is indebted
(late) .

At the end of a Cycle (Wave, Price Swings) Price Action CARRY OVER the credit or the debit to the next Price Action move

Then there is a Time when Price Action HAS TO COMPENSATE to return to its mean. Then these abrupt measured move you see regularly on charts.

At the end you reach a CANCELLATION point where positions are reset to Zero.

parisboy

TMA dax 1H (not late, no repainting... just a little)
A trade
B little trade
C no trade (the slope is too steep)

we do not play against the slope

Just read the Energy gaps and pro-trend shocks paper,
Super interesting
Thanks
Have a nice w-e

Paris

I found this in your comprehensive, ''instruction'' package on another thread that you are actively involved with.....
i felt that it was missing from your thread.


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1. parisboy
2. Joined Oct 2017 | Status: Member | 2,285 Posts | Invisible

Convenience and Bullshitting.

I will try to synthetize the deep thoughts on Trading up to the roots of the Great Master Bullshitter (GBM) 33rd Level

Interview of a recent Deputy Master Bullshitter


What about Entry : you enter at your convenience
What about Exit : you exit at your convenience
What about Stop Loss : you position your Stop Loss at your convenience

What about Money Management : you manage your money as you want. Do it yourself.

What about Indicators : Indicators are useless at the exception of those I use
What about Indicators settings : Indicators settings are private, almost secret.

The Great Master Bullshitter advises family members to use the settings which are convenient to you.

What about Trends :Trends do not exist. Trends are a myth created by Market Makers
What about Supports : Supports do not exist. Supports are a myth created by Market Makers
What about Resistances : Resistances do not exist. Resistances are a myth created by Market Makers

What about Targets ? TARGETS are very important.
How Targets are defined ? Only the Great Master Bullshitter knows how to determine a target

What about Herd Mentality Zone ? Herd Mentality Zone is a nice parallelogram
How Herd Mentality Zone are defined ? you just need to draw a straight line between 2 historical points at the same level

The Great Master Bullshitter has a message for you : Do it yourself - Happy Trading

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And a second instructional procedure.....

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1. parisboy
2. Joined Oct 2017 | Status: Member | 2,285 Posts | Invisible

BS(BullShit) Detective Indicator for Lazy Traders

the Bullshitter never answer directly and precisely a Technical question

a) - on his "method" (your can infer the bullshitter has no methodology)
b) - on his indicator (only words , no details)
c) - on his EA - the bullshitter has no coding ability

the bullshitter uses mostly generalities, truisms etc that nobody can discuss or argue against

Short test to detect a bullshiter on a trading forum.

When you trade you have to adress at the minimum 3 questions :

- when and at which level to enter ?
- when and at which level to exit ?
- at which level you have to position your Stop Loss to protect your capital

I tested a guy I suspected to be a bullshitter. To be frank I was sure it was a bullshitter, I just wanted to confirm rationally the fact.

This guy had posted 1287 messages (at the time of the search)

a quick search shows :

57 times the word "entry" = 4,5 % of the messages
11 times the word "exit" < 1 % of the messages
23 times the word "stop-loss" < 2 % of the messages

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Couple of days late Paris....but...