Market Dynamics 2007
- Thread starter Frank D
- Start date
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,400
- Reactions
- 6,317
Frank.
I've not studied your method--but From what I gather you work in 3s
3 Yearly/quarterly/weekly/days/hrs/etc. Both the previous highs and the lows.
You then project forward or backward X (whats X?---A fib number?) and place a 50% line (from one level to the next) which needs to be achieved and held to verify the target--or more so the timeframe.
Comments?
I've not studied your method--but From what I gather you work in 3s
3 Yearly/quarterly/weekly/days/hrs/etc. Both the previous highs and the lows.
You then project forward or backward X (whats X?---A fib number?) and place a 50% line (from one level to the next) which needs to be achieved and held to verify the target--or more so the timeframe.
Comments?
Hello Frank,
I salute your ongoing efforts over the years to understand the market and devise effective ways to profit from it, and recognise the considerable effort you have taken to try to understand market dynamics, and your detailed work with technical analysis that addresses both price and time.
I’ve been following your posts both here and on RC for quite some time now, and I keep seeing comments using the term “Random” that sometimes appears to me to be contradictory, and either I am misreading the assigned meanings, or there is potentially an area of your thinking that may yield new perspectives if you address the flaws in some of the theoretical positions you are venturing. I would appreciate your fleshing out of some issues I will address below to clarify your stance.
Firstly, I don’t agree that the markets are random as a blanket concept. I certainly do agree with Mark Douglas’ “probabilistic” concepts that “There is a random distribution between wins and losses for any given set of variables that define and edge”, and that “Every moment in the market is unique”.
Essentially Douglas’ rationale is that to “be the casino” involves the idea that if you enter every opportunity that fulfils your system criteria for an entry that there will be a random outcome, but overall should yield a positive expectancy.
I suspect that this concept of random distribution of wins and losses is what you are trying to get across when you talk about markets being “random”. Perhaps what you really mean is that every time your system identifies an entry, that you must establish rules that encompass a failure criteria in order to limit losses, as a component of your system, and as a corollary of building a positive expectancy.
However, if you are suggesting that markets overall are “random”, then I don’t agree at all with your perspective, certainly not from a technical analysis viewpoint since market patterns and some degree of predictability is the bulwark of what technical analysis is based on – that markets are not random, and that observable patterns have probabilities that can be estimated sufficiently to generate a positive expectancy. In simple terms: that people can look at charts and recognise a tradeable pattern that tends to yield an outcome sufficiently enough to consistently make money from trading it.
So when it comes to the “random walk” schools, or even the schools of thought that waves or cycles don’t exist, then I disagree. I don’t believe markets are random at all. Far from it, I believe they are much more ordered than most people think. Consider chaos theory, and the inherent order that emanates from the seemingly random quantum world as a metaphor. I think markets are similar, they can appear random, but if you widen your view a few degrees, there are patterns that repeat themselves (you even say this in post 16).
Where we agree is about assessing probabilities, and how markets unfold is not guaranteed – I’d describe this in Mark Douglas’ terms as “every moment in the market is unique”, and “anything can happen”. Hence there is a degree of uncertainty in any technical analysis system since it is only dealing with information limited to the chart, which necessarily means that the information is finite, hence incomplete. So, it seems likely that probabilities will necessarily fluctuate for a variety of reasons for a specific technical analysis pattern.
Secondly, I would argue that support and resistance may not be dynamic in the way you are describing it, (of course this depends on how you define support and resistance) since these concepts can be a lot more involved than using trend lines and horizontal lines from key pivot points, or price increments based on ranges between key pivot points.
Sure, “price” is certainly dynamic, but the other key axis of “time” in market terms I would argue is not, although it probably is dynamic in a sense if you accept Einstein’s version of relativity, but this is an entirely different issue since the way we deal with time in markets means that it is not really effected significantly by relativity.
Horizontal support and resistance levels are actually static based on pivot highs and lows, and the method of gradation within retracement ranges or extensions of these increments. But these levels are theoretical, and markets can move through these, or bounce on or near them. What in effect a technical analyst I would argue is trying to do by setting horizontal levels of support and resistance is to estimate where the underlying is likely to change trend in a specified time frame in order to assign probabilities for entries and exits.
As Mark Douglas says “anything can happen”, and “every moment in the market is unique”, but price levels can and do offer support and resistance in price in a fairly static manner. What is dynamic is the price movement in these ranges, and time in essence is part of that dynamic process, so perhaps it is time in this context that should be factored into the equation (I know you claim to deal in time but this is unclear to me).
To some extent I believe the concept of support and resistance can be extended to increments in time as well, and incorporated into a dynamic model, but it is dynamic in terms of price movement, not the horizontal levels once an effective criterion is established to determine these levels.
Cycles on the other hand may well be dynamic (and I think they are - but this too is a whole issue in itself that demands a much wider discussion), but this involves a consideration of the relationship of price and time. What is constant in trading terms are increments in price and in time. Price moves in fixed price increments through time.
If you mean that as time progresses that the areas we are looking for support and resistance shift if a trend reversal has occurred I would agree with, since a new pivot point may yield new price increments. But this is only dynamic in that the price action has revealed new ranges of support and resistance, but the earlier pivot points are still static.
Major highs and lows seem to still offer support/resistance even years later. Certainly they can be broken, but often an underlying will pull away from significant price points before breaking through them, and often this is where false breaks can occur, revealing a zone of support/resistance. I think your model tends to reflect this, but if you see the horizontal levels as shifting, I suspect that your model is not reflecting the support and resistance in time and how it has an impact on the underlying, and for that matter pattern of trend, wave structure, and time cycles.
I think concepts like the pattern of trend and wave structure are vital to understanding markets in my view, but underpinning this is the key concept of counter trends. I’m not sure how much you really grasp these foundations from your commentary which certainly recognises time as a key element, but in a way that doesn’t seem to suggest that analysis of pattern is central.
Hence your comments in post 25 about the shortcomings of calling tops and bottoms (which I would agree with), and essentially forecasting begs the question. If you really have a grasp on how markets trend, why can you not project precise time and price points in the future, and call these in advance using the AMT model?
In addition, I would have thought the comment about markets being random is antithetical to the core concept of ordered market trends, patterns of trend, wave structure and counter trends. – I don’t logically see how you can believe in random markets in terms of the random walk schools and yet think you can make effective estimations of support and resistance into the future, essentially forecasting/predicting. Can you clear this up for me please since on the face value this seems to be a contradictory stance?
Also, concepts that I think have a bearing on explaining market behaviour are George Soros’ “Dynamic disequilibrium”, and “reflexivity”. This deals with the psychological disconnect with the market fundaments (reality if you will), and effectively explains the concept from the perspective that the market is always “WRONG”. Soros is not from the random walk schools, and would certainly not see the market as “random” having profited from a range of market events such as the collapse of the REITs and shorting the UK sterling when German national imperatives drove their interest rate policy up forcing the UK currency down. These events were not random.
Another example of market psychology in action would be the South Sea bubble around 1720, which illustrates key aspects of boom and bust, which I would argue are just as relevant today as they were then conceptually. This kind of pattern is not random, and if you know what to look for, have key patterns that are repeated throughout market history, but this requires a detailed study of the way markets trend, and in particular the pattern of trend, and specifically the study of counter trends and market cycles.
I look forward to your clarification of your recent comments. I hope this is food for thought from one time based trader to another.
Warm Regards
Magdoran
I salute your ongoing efforts over the years to understand the market and devise effective ways to profit from it, and recognise the considerable effort you have taken to try to understand market dynamics, and your detailed work with technical analysis that addresses both price and time.
I’ve been following your posts both here and on RC for quite some time now, and I keep seeing comments using the term “Random” that sometimes appears to me to be contradictory, and either I am misreading the assigned meanings, or there is potentially an area of your thinking that may yield new perspectives if you address the flaws in some of the theoretical positions you are venturing. I would appreciate your fleshing out of some issues I will address below to clarify your stance.
Firstly, I don’t agree that the markets are random as a blanket concept. I certainly do agree with Mark Douglas’ “probabilistic” concepts that “There is a random distribution between wins and losses for any given set of variables that define and edge”, and that “Every moment in the market is unique”.
Essentially Douglas’ rationale is that to “be the casino” involves the idea that if you enter every opportunity that fulfils your system criteria for an entry that there will be a random outcome, but overall should yield a positive expectancy.
I suspect that this concept of random distribution of wins and losses is what you are trying to get across when you talk about markets being “random”. Perhaps what you really mean is that every time your system identifies an entry, that you must establish rules that encompass a failure criteria in order to limit losses, as a component of your system, and as a corollary of building a positive expectancy.
However, if you are suggesting that markets overall are “random”, then I don’t agree at all with your perspective, certainly not from a technical analysis viewpoint since market patterns and some degree of predictability is the bulwark of what technical analysis is based on – that markets are not random, and that observable patterns have probabilities that can be estimated sufficiently to generate a positive expectancy. In simple terms: that people can look at charts and recognise a tradeable pattern that tends to yield an outcome sufficiently enough to consistently make money from trading it.
So when it comes to the “random walk” schools, or even the schools of thought that waves or cycles don’t exist, then I disagree. I don’t believe markets are random at all. Far from it, I believe they are much more ordered than most people think. Consider chaos theory, and the inherent order that emanates from the seemingly random quantum world as a metaphor. I think markets are similar, they can appear random, but if you widen your view a few degrees, there are patterns that repeat themselves (you even say this in post 16).
Where we agree is about assessing probabilities, and how markets unfold is not guaranteed – I’d describe this in Mark Douglas’ terms as “every moment in the market is unique”, and “anything can happen”. Hence there is a degree of uncertainty in any technical analysis system since it is only dealing with information limited to the chart, which necessarily means that the information is finite, hence incomplete. So, it seems likely that probabilities will necessarily fluctuate for a variety of reasons for a specific technical analysis pattern.
Secondly, I would argue that support and resistance may not be dynamic in the way you are describing it, (of course this depends on how you define support and resistance) since these concepts can be a lot more involved than using trend lines and horizontal lines from key pivot points, or price increments based on ranges between key pivot points.
Sure, “price” is certainly dynamic, but the other key axis of “time” in market terms I would argue is not, although it probably is dynamic in a sense if you accept Einstein’s version of relativity, but this is an entirely different issue since the way we deal with time in markets means that it is not really effected significantly by relativity.
Horizontal support and resistance levels are actually static based on pivot highs and lows, and the method of gradation within retracement ranges or extensions of these increments. But these levels are theoretical, and markets can move through these, or bounce on or near them. What in effect a technical analyst I would argue is trying to do by setting horizontal levels of support and resistance is to estimate where the underlying is likely to change trend in a specified time frame in order to assign probabilities for entries and exits.
As Mark Douglas says “anything can happen”, and “every moment in the market is unique”, but price levels can and do offer support and resistance in price in a fairly static manner. What is dynamic is the price movement in these ranges, and time in essence is part of that dynamic process, so perhaps it is time in this context that should be factored into the equation (I know you claim to deal in time but this is unclear to me).
To some extent I believe the concept of support and resistance can be extended to increments in time as well, and incorporated into a dynamic model, but it is dynamic in terms of price movement, not the horizontal levels once an effective criterion is established to determine these levels.
Cycles on the other hand may well be dynamic (and I think they are - but this too is a whole issue in itself that demands a much wider discussion), but this involves a consideration of the relationship of price and time. What is constant in trading terms are increments in price and in time. Price moves in fixed price increments through time.
If you mean that as time progresses that the areas we are looking for support and resistance shift if a trend reversal has occurred I would agree with, since a new pivot point may yield new price increments. But this is only dynamic in that the price action has revealed new ranges of support and resistance, but the earlier pivot points are still static.
Major highs and lows seem to still offer support/resistance even years later. Certainly they can be broken, but often an underlying will pull away from significant price points before breaking through them, and often this is where false breaks can occur, revealing a zone of support/resistance. I think your model tends to reflect this, but if you see the horizontal levels as shifting, I suspect that your model is not reflecting the support and resistance in time and how it has an impact on the underlying, and for that matter pattern of trend, wave structure, and time cycles.
I think concepts like the pattern of trend and wave structure are vital to understanding markets in my view, but underpinning this is the key concept of counter trends. I’m not sure how much you really grasp these foundations from your commentary which certainly recognises time as a key element, but in a way that doesn’t seem to suggest that analysis of pattern is central.
Hence your comments in post 25 about the shortcomings of calling tops and bottoms (which I would agree with), and essentially forecasting begs the question. If you really have a grasp on how markets trend, why can you not project precise time and price points in the future, and call these in advance using the AMT model?
In addition, I would have thought the comment about markets being random is antithetical to the core concept of ordered market trends, patterns of trend, wave structure and counter trends. – I don’t logically see how you can believe in random markets in terms of the random walk schools and yet think you can make effective estimations of support and resistance into the future, essentially forecasting/predicting. Can you clear this up for me please since on the face value this seems to be a contradictory stance?
Also, concepts that I think have a bearing on explaining market behaviour are George Soros’ “Dynamic disequilibrium”, and “reflexivity”. This deals with the psychological disconnect with the market fundaments (reality if you will), and effectively explains the concept from the perspective that the market is always “WRONG”. Soros is not from the random walk schools, and would certainly not see the market as “random” having profited from a range of market events such as the collapse of the REITs and shorting the UK sterling when German national imperatives drove their interest rate policy up forcing the UK currency down. These events were not random.
Another example of market psychology in action would be the South Sea bubble around 1720, which illustrates key aspects of boom and bust, which I would argue are just as relevant today as they were then conceptually. This kind of pattern is not random, and if you know what to look for, have key patterns that are repeated throughout market history, but this requires a detailed study of the way markets trend, and in particular the pattern of trend, and specifically the study of counter trends and market cycles.
I look forward to your clarification of your recent comments. I hope this is food for thought from one time based trader to another.
Warm Regards
Magdoran
Take the entire range of the past 3 periods, calculate the .618 of the
range and apply .618 of the range either side of the dynamic 50% level.
Don't focus on anything below weekly patterns.
Daily you want to be working with 5 periods for day patterns, 5 day
fits
into the trading week (1 bar)
Ideal trading set-ups are looking at the AMT model, define it's trend based
on either side of the 50% level, then focus on your weekly patterns.
For example, looking for weekly patterns that close on Friday lows and
then looking for entries once the new week begins.
Most rallies or reversals begin as the new 'week' begins, then
the expectation is price will move in a 5 day pattern away from open, or
1 weekly bar.
Post #8 in this thread gives more detail
Magdoran,
Someone already asked me this question in another thread about 'Random' and this was my reply.....
For example, say you had your system that has performed over the
past few years @60%, so every time you entered a trade you expected
to win 60% of the time, however the sequence of wins and losses
are random.
You don’t know over 20 trades if your trades end up being; win/loss
win/loss win/win, or you have 12 wins in a row followed by 8 losses. It is
a random occurrence.
The only thing you do know is that if you follow your stop loss rules
you should know that every time you get stopped out your loss is XX
amount.
However, you won’t know how much your wins are going to be, even
though your system runs at 60% you never know how much money you
are going to make every time you trade. Again profits are a random
outcome because exit zones might or might not be reached
Everything we do in the market falls under ‘randomness’
You trade with ‘probability’ i.e systems; an expectation to which something
is likely to happen, or in some cases drawing conclusions about the
likelihood of potential events occuring, but it’s characterized by
randomness or uncertainty. More precisely, probability is used for
modelling patterns under the same circumstances producing different
results.
Random variables or in this case ‘price patterns’ then become a
random expectations, it does not describe the actual outcome of
the pattern, but rather describes the possible,
as-yet-undetermined outcomes in terms of real numbers.
(posted 17th April)
It's not about market patterns it's about trading in real terms.
Mag posts....
"Hence your comments in post 25 about the shortcomings of calling
tops and bottoms (which I would agree with), and essentially
forecasting begs the question. If you really have a grasp on how
markets trend, why can you not project precise time and price points in
the future, and call these in advance using the AMT model?"
I though I already did this in this thread, did I not show you where the
most likely movement in the market was going for 4 markets from
March support lows into April highs.
And regardless of any view, I want real numbers when trading not
theory. AMT model is theory, it's what I do with the AMT model based
on systems or trading set-ups that makes me money and protects my
capital.
I'll be a keen observer if you want to start a geometry thread, start your
own and getdown and dirty of what your going to be doing each day
and how you are going to trade and how timing dates are part of the
plan, stops etc.
It's fine to have a model of expectation that between this 'DATE' and
the next DATE, but it's what you do in between that i'm interested in. I'm
always keen to learn new things that might help in my own trading.
Anything that helps in 'filtering techniques' I'd be happy to learn.
BTW, I worked with geometry in the 90's, problem was it didn't give me
those filtering techniques I wanted on a daily basis along with EW and MP.
I just hope this thread doesn't get hijacked by 'disillusional theory'
from others, there are other forums around that cater for discussions
that turn into arguments about probability, trading and concepts.
Frank Dilernia
SPI Update
Re-entered 6220 partial exit 6235
still long 6193 holding....
Last post taking a break....
range and apply .618 of the range either side of the dynamic 50% level.
Don't focus on anything below weekly patterns.
Daily you want to be working with 5 periods for day patterns, 5 day
fits
into the trading week (1 bar)
Ideal trading set-ups are looking at the AMT model, define it's trend based
on either side of the 50% level, then focus on your weekly patterns.
For example, looking for weekly patterns that close on Friday lows and
then looking for entries once the new week begins.
Most rallies or reversals begin as the new 'week' begins, then
the expectation is price will move in a 5 day pattern away from open, or
1 weekly bar.
Post #8 in this thread gives more detail
Magdoran,
Someone already asked me this question in another thread about 'Random' and this was my reply.....
For example, say you had your system that has performed over the
past few years @60%, so every time you entered a trade you expected
to win 60% of the time, however the sequence of wins and losses
are random.
You don’t know over 20 trades if your trades end up being; win/loss
win/loss win/win, or you have 12 wins in a row followed by 8 losses. It is
a random occurrence.
The only thing you do know is that if you follow your stop loss rules
you should know that every time you get stopped out your loss is XX
amount.
However, you won’t know how much your wins are going to be, even
though your system runs at 60% you never know how much money you
are going to make every time you trade. Again profits are a random
outcome because exit zones might or might not be reached
Everything we do in the market falls under ‘randomness’
You trade with ‘probability’ i.e systems; an expectation to which something
is likely to happen, or in some cases drawing conclusions about the
likelihood of potential events occuring, but it’s characterized by
randomness or uncertainty. More precisely, probability is used for
modelling patterns under the same circumstances producing different
results.
Random variables or in this case ‘price patterns’ then become a
random expectations, it does not describe the actual outcome of
the pattern, but rather describes the possible,
as-yet-undetermined outcomes in terms of real numbers.
(posted 17th April)
It's not about market patterns it's about trading in real terms.
Mag posts....
"Hence your comments in post 25 about the shortcomings of calling
tops and bottoms (which I would agree with), and essentially
forecasting begs the question. If you really have a grasp on how
markets trend, why can you not project precise time and price points in
the future, and call these in advance using the AMT model?"
I though I already did this in this thread, did I not show you where the
most likely movement in the market was going for 4 markets from
March support lows into April highs.
And regardless of any view, I want real numbers when trading not
theory. AMT model is theory, it's what I do with the AMT model based
on systems or trading set-ups that makes me money and protects my
capital.
I'll be a keen observer if you want to start a geometry thread, start your
own and getdown and dirty of what your going to be doing each day
and how you are going to trade and how timing dates are part of the
plan, stops etc.
It's fine to have a model of expectation that between this 'DATE' and
the next DATE, but it's what you do in between that i'm interested in. I'm
always keen to learn new things that might help in my own trading.
Anything that helps in 'filtering techniques' I'd be happy to learn.
BTW, I worked with geometry in the 90's, problem was it didn't give me
those filtering techniques I wanted on a daily basis along with EW and MP.
I just hope this thread doesn't get hijacked by 'disillusional theory'
from others, there are other forums around that cater for discussions
that turn into arguments about probability, trading and concepts.
Frank Dilernia
SPI Update
Re-entered 6220 partial exit 6235
still long 6193 holding....
Last post taking a break....
Hey Frank,
Let me say at the outset that I fully respect the developments you are making, and are supportive of your efforts. The style I use is radically different to yours, and just so I’m very clear on this, I’m just interested in what you’re doing since certain posters hold your work in high esteem, and if you understand my personality, I am a seeker of knowledge, hence you have my curiosity (Yogi knows all about this too, I ask him some hard questions too sometimes… and sometimes I learn a lot from both what he says, and from what he doesn’t!).
What you say makes a lot of sense if you’re focus is for very short term trades, intraday, or for under a week. I have a suspicion that there is a correlation with the count back lines that Coyotte was experimenting on past threads. In fact I suspect that there may be a correlation with swing charts too in part of the logic, although you have obviously incorporated some clever proprietary systems/algorithms into your approach.
Also, to some extent there is a lot of “noise” in this time frame, hence I’d I agree, it can seem random at times. I’d also agree about your observations of geometric styles. I have found the geometric styles more suitable to longer term position/swing trading, hence you may be in a trade for 48 odd days sometimes. However it is possible to pick precise points in time and price to trade briefly off support/resistance for very short trades at times, in specific situations.
Now in regard to your forecasting you responded with the following comment:
The answer for me is no, I only see entry and exit criteria as the price action pans out, not long term points in time and price well before the event from the perspective of the precision I am used to. I just don’t see it. I don’t see an exact price level and an exact time quoted. Perhaps I’m just not getting it. Hence my question. (I’m not trying to be obtuse here, this is a genuine question).
I must agree with some of the other posters like “dodgers” that your charts are somewhat confusing, but that’s partly because I don’t fully understand what you’re doing here… but hey, that’s ok because what you are doing is quite involved, and I’m sure it’s valid, but just difficult for the uninitiated.
Same goes for my style as well - People wonder what the hell I’m seeing too… I’m sure this has taken you years to figure out, easy if you’ve done the hard yards, not easy to see if you haven’t. I must admit, I am struggling trying to decipher your chart, and I have tried to believe me. Hence you may well have indicated valuable trading information, and I’ve missed it. I have tried, but can’t see it, sorry. Would love for you to spell it out, maybe I’m missing something really simple in your charts…
But let’s look at your post on the 27th of February 2007 – post 2 on this thread. The commentary here is ambiguous. Your analysis saw “50%” support coming in, but also noting that “this could be the first sign that change of trend is about to happen”, but the gist was you were waiting for an indication.
Then you said
I do not see any indication that you thought a top was in, or that a strong correction was imminent. The following day after the major move down you then said:
Your next post was on 22/03/2007 over a month later, hence I’m confused about where the prediction was here. Would you accept that what was posted here only hinted at the possibility (maybe a 50/50 suspicion) of a change in trend on the 27/02/2007, but this was at best ambiguous?
Also, in your SPI chart the price action actually penetrates and closes below the 50% level on the 14th of March. Wouldn’t this have signaled a short? Same with the low on the 6th of March? Or am I missing something? See the chart and quote below:
“The model of expectation based on the AMT model is... whenever a change of trend occurs with the break of 3-month 50% level; it's the start a two-month wave towards the 3 monthly dynamic lows for each preceding month. The trend of any market or stock is SIMPLY define by trading the side of the dynamic monthly 50% levels.”
SPI…..
My other comments were on a broader technical analysis theoretical level in part about how support and resistance concepts work. This is a highly theoretical discussion about the nature of how markets trend, and how effective analysis can be conducted which incorporates support and resistance concepts (of course it’s possible to consider a style where this hypothesis is negated…). I am suggesting an alternative interpretation to your dynamic version of support and resistance.
Already doing this Frank in various technical threads for years. Even you made some comments on my approach over on RC a few years ago, remember? But that’s not why I commented. I genuinely want to understand what you are doing, and how effective it is, that’s all. I don’t expect to get the IP, that’s yours. I like part of what you’ve demonstrated, but I’m struggling to understand the limitations and how you determine trades with your charts since I can’t really read them properly yet (I have read a lot of your AMT materials). I figure if I don’t get it, maybe others don’t either.
Sorry if I seem to be giving you a hard time here, that’s not my intention. But I am curious, and would appreciate your help to sort some of these questions out.
Best Regards
Magdoran
P.S. I do hope you weren’t referring to me as being a person venturing a “disillusory theory” were you? If you remember on RC you were quite rigorous with your questions on my approaches a couple of years back, but I think you were genuinely interested, as am I now. Mag
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,400
- Reactions
- 6,317
Moggi can you enter in discussions on another sister thread.
Keeping this thread clear for Frank's commentary and charts.
Thanks
Appreciated.
Keeping this thread clear for Frank's commentary and charts.
Thanks
Appreciated.
- Joined
- 23 October 2005
- Posts
- 859
- Reactions
- 0
That's fair enough request tech/a, but I feel Moggi has raised some valid points here too. I too am interested in Franks methodology, would love see him elaborate a little on the basics his system so we can get a gist of understanding what Frank is trying to convey.
Cheers
- Joined
- 17 January 2007
- Posts
- 2,986
- Reactions
- 32
Tech/a can you enter in discussions on another sister thread.
Keeping this thread clear for all those who are also interested in Franks commentary and charts, and those who ask questions about them.
Thanks
Appreciated
Keeping this thread clear for all those who are also interested in Franks commentary and charts, and those who ask questions about them.
Thanks
Appreciated
Now why is it the second that you start to ask legitimate and specific questions about AMT, on topic, that the “cheerleader” who extols the virtue of AMT comes out saying to post comments on a “sister thread”?
What sister thread? What are they afraid of? A bit of scrutiny?
It is interesting to see a person who reserves the right for themselves to question others in detail in whatever circumstances they like suddenly decides to reverse this thinking when it suits them. It’s also interesting to see someone promote a biased view and then attempt to silence any kind of in depth analysis that might be relevant to everyone else looking at an approach. Does this not seem unreasonable?
Let’s see some consistency here. It’s not Ok to have one rule for one poster and another for everyone else. Also, why is asking detailed questions suddenly an anathema when the “cheerleader” does this all the time?
I’m just asking questions here for clarification, and in response to specific comments made on this thread, especially some that were quite pointed about forecasting. If you’re going to raise these kinds of points on a thread, it’s fair enough for others to question those positions, wouldn’t you agree?
Magdoran
What sister thread? What are they afraid of? A bit of scrutiny?
It is interesting to see a person who reserves the right for themselves to question others in detail in whatever circumstances they like suddenly decides to reverse this thinking when it suits them. It’s also interesting to see someone promote a biased view and then attempt to silence any kind of in depth analysis that might be relevant to everyone else looking at an approach. Does this not seem unreasonable?
Let’s see some consistency here. It’s not Ok to have one rule for one poster and another for everyone else. Also, why is asking detailed questions suddenly an anathema when the “cheerleader” does this all the time?
I’m just asking questions here for clarification, and in response to specific comments made on this thread, especially some that were quite pointed about forecasting. If you’re going to raise these kinds of points on a thread, it’s fair enough for others to question those positions, wouldn’t you agree?
Magdoran
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 25,578
- Reactions
- 12,705
Mod comment: As always, valid questions/debate on method is always welcomed at ASF. If a method is robust it will stand up to scrutiny as I'm certain the methods discussed herein will.
As far as personal attacks; let's just not go there folks.
Thanks
As far as personal attacks; let's just not go there folks.
Thanks
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,400
- Reactions
- 6,317
To keep this thread "tidy" and easy to read.
The one you start.
Nothing
Search for understanding I thought.
Pointless ramblings---Just keep the thread clean.
Pointless ramblings---Just keep the thread clean
Absolutely I have raised a few questions and observations myself. And will continue to do so.
Ive started one up--was pretty easy.
wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 25,578
- Reactions
- 12,705
AMT model
A generic Mathematical model applied to all stocks and
derivatives.
Core Theory: the rotation of price towards central
zones (50%) and the extension of price as Time moves forward.
Non-linear model and theory.
This model is designed to define probable ‘market paths’ and
Market Risk by simply using a ‘model of expectation’ that
whilst price is above or below the 50% there is a expectant
path that price will follow based on weekly, monthly, Quarterly
and Yearly timeframes.
Model of expectations:
Support and resistance moves with each new timeframe, what exists
in one timeframe will not exist in the next.
Support and resistance as per defined by the AMT model is
dynamic not static.
Short term:
If price falls under and closes below the 3-month 50% level based
on the lower timeframe i.e weekly the expectation is it will
follow a 2-month wave based on the AMT model.
A 2-month wave is NOT 60 days, it’s based on the higher
timeframe (monthly), the current month expected price move into
the following month based on the AMT model and market dynamics.
Apply AMT model.
Why?
I want to define most probable paths on timeframes starting from
the Primary into the daily.
When it comes to technical analysis the first plan is to
always determine the Primary Trend and then consider the
multiple higher timeframes. Without an understanding of this
most will struggle. Without the concept of ‘Direction’ and
‘Time’ you are guaranteed to fail, because Time effectively
defines the dynamics of the market and allows us to have a
better understanding of where Price is likely to go.
Next part of the plan is combining both Time and Price, because
with all trends price has a natural flow that rotates
between central zones and extends onward as Time moves forward.
This relationship forms levels in the market that hinders Price
from moving in straight lines, it moves between support
and resistance. As Time moves forward support and resistance moves
along with it. Knowing where support and resistance zones lie is
a critical cog in the wheel of trading, because it’s these
levels that become part of our trading plan. The levels
are now ‘probability patterns’ with a realistic expectation that
the same pattern will repeat.
Probability is the extent to which something is likely to
happen, or in some cases used extensively in areas such
as statistics and mathematics to draw conclusions about the
likelihood of potential events occuring.
Probability theory is the mathematical study of
phenomena characterized by randomness or uncertainty.
More precisely, probability is used for modelling patterns under
the same circumstances. Random variables or in this case
‘price patterns’ then become a mathematical function that
maps outcomes of random expectations, it does not describe
the actual outcome of the pattern, but rather describes
the possible, as-yet-undetermined outcomes in terms of
real numbers.
Apply AMT model on Weekly charts.
Looking for Primary Dynamics based on Yearly timeframe (Yellow)
Looking for Secondary Dynamics based on Quarterly timeframe (green)
50% levels are major support zones, each new Quarter
provides dynamic levels of probable paths that price can
follow.
..............................................SPI Weekly chart
Model of expectation: whilst price is trading above the
50% levels of both the Primary and the quarterly 50% levels
then the expected path is for the market to move higher and
follow the dynamic model higher.
2nd part, apply AMT model to the weekly and Monthly timeframes.
Same model of expectation exists in this timeframe.
AMT model: monthly dynamics (yellow)
Weekly dynamics (green)
Expectation Market is moving higher towards the Primary
and Secondary dynamic highs in 2007
February: Trend strong until it breaks the 3-week lows #1
Sell off occurs and sells into AMT model expected support
for February and bounces #2 & 3
Expectation market will continue lower in the preceding month
March (2-month wave)
March sells off hitting AMT model support once again #4
Break of #5 and it follows the same pattern #6 #7 and #8
As it continues with the Primary and Secondary trends much higher.
What the AMT model has done is allowed me to have an expectation
of where the market is moving within the Primary and
secondary timeframes whilst defining the market using
lower timeframes.
Just by this price action, recently the waves in Price have
followed the AMT model precisely. I don’t have to
haphazardly guess the market, when it meets certain criteria I
have an expectation that price follows market dynamics.
SPI....
SPI bounced off January 50% level and proceeded into a 2-month
wave into February and we have sold off breaking the March
50% level.
For those few days whilst price was below that 50% level then
my expectation is to move down, however it didn’t, it bounced
back above the 50% level became support and it has followed a
two month wave upwards into April, which is following the
Primary timeframe higher.
Each week (green boxes) I have probable weekly paths that is
will follow, The resistance of this weeks highs won’t be there
this week and can continue towards 6393 next week.
Above is the theory and a simple dynamic model based on TIME PRICE and MATH, that functions on probability not 100% guaranteed predictability.
AMT model is not about predictions; it’s about trading
observed patterns under certain criteria.
Apply systems and I then increase my edge of knowing what to do
on shorter timeframes, different trading strategies for
different markets. I’m a buyer and holder of stocks, and I
trade short-term derivatives.
Any time the market moves down based on LONG systems. Ie
Thursday I know that there is a high probability that the next
day will rally, Friday on the SPI is an example of this. If I
take longs on close (Thursday) I’ll hedge a small parcel of Dow
on shorts just in case the market does tank.
In conclusion: I’m working with a Dynamic model using
systems that provide expectation knowing that there is a
probable path the market follows and trade accordingly with
systems.
When I write a book called AMT for dummies, as Brent Penfold told
me to call it, I’ll send it to you free of charge Magdoran
otherwise if you haven't read the book you'll never fully undersand
the Model, methodology and theory.
Frank Dilernia.
AMT model and Methodology (c) Frank Dilernia
This thread is now over, because arguments have already started.
A generic Mathematical model applied to all stocks and
derivatives.
Core Theory: the rotation of price towards central
zones (50%) and the extension of price as Time moves forward.
Non-linear model and theory.
This model is designed to define probable ‘market paths’ and
Market Risk by simply using a ‘model of expectation’ that
whilst price is above or below the 50% there is a expectant
path that price will follow based on weekly, monthly, Quarterly
and Yearly timeframes.
Model of expectations:
Support and resistance moves with each new timeframe, what exists
in one timeframe will not exist in the next.
Support and resistance as per defined by the AMT model is
dynamic not static.
Short term:
If price falls under and closes below the 3-month 50% level based
on the lower timeframe i.e weekly the expectation is it will
follow a 2-month wave based on the AMT model.
A 2-month wave is NOT 60 days, it’s based on the higher
timeframe (monthly), the current month expected price move into
the following month based on the AMT model and market dynamics.
Apply AMT model.
Why?
I want to define most probable paths on timeframes starting from
the Primary into the daily.
When it comes to technical analysis the first plan is to
always determine the Primary Trend and then consider the
multiple higher timeframes. Without an understanding of this
most will struggle. Without the concept of ‘Direction’ and
‘Time’ you are guaranteed to fail, because Time effectively
defines the dynamics of the market and allows us to have a
better understanding of where Price is likely to go.
Next part of the plan is combining both Time and Price, because
with all trends price has a natural flow that rotates
between central zones and extends onward as Time moves forward.
This relationship forms levels in the market that hinders Price
from moving in straight lines, it moves between support
and resistance. As Time moves forward support and resistance moves
along with it. Knowing where support and resistance zones lie is
a critical cog in the wheel of trading, because it’s these
levels that become part of our trading plan. The levels
are now ‘probability patterns’ with a realistic expectation that
the same pattern will repeat.
Probability is the extent to which something is likely to
happen, or in some cases used extensively in areas such
as statistics and mathematics to draw conclusions about the
likelihood of potential events occuring.
Probability theory is the mathematical study of
phenomena characterized by randomness or uncertainty.
More precisely, probability is used for modelling patterns under
the same circumstances. Random variables or in this case
‘price patterns’ then become a mathematical function that
maps outcomes of random expectations, it does not describe
the actual outcome of the pattern, but rather describes
the possible, as-yet-undetermined outcomes in terms of
real numbers.
Apply AMT model on Weekly charts.
Looking for Primary Dynamics based on Yearly timeframe (Yellow)
Looking for Secondary Dynamics based on Quarterly timeframe (green)
50% levels are major support zones, each new Quarter
provides dynamic levels of probable paths that price can
follow.
..............................................SPI Weekly chart
Model of expectation: whilst price is trading above the
50% levels of both the Primary and the quarterly 50% levels
then the expected path is for the market to move higher and
follow the dynamic model higher.
2nd part, apply AMT model to the weekly and Monthly timeframes.
Same model of expectation exists in this timeframe.
AMT model: monthly dynamics (yellow)
Weekly dynamics (green)
Expectation Market is moving higher towards the Primary
and Secondary dynamic highs in 2007
February: Trend strong until it breaks the 3-week lows #1
Sell off occurs and sells into AMT model expected support
for February and bounces #2 & 3
Expectation market will continue lower in the preceding month
March (2-month wave)
March sells off hitting AMT model support once again #4
Break of #5 and it follows the same pattern #6 #7 and #8
As it continues with the Primary and Secondary trends much higher.
What the AMT model has done is allowed me to have an expectation
of where the market is moving within the Primary and
secondary timeframes whilst defining the market using
lower timeframes.
Just by this price action, recently the waves in Price have
followed the AMT model precisely. I don’t have to
haphazardly guess the market, when it meets certain criteria I
have an expectation that price follows market dynamics.
SPI....
SPI bounced off January 50% level and proceeded into a 2-month
wave into February and we have sold off breaking the March
50% level.
For those few days whilst price was below that 50% level then
my expectation is to move down, however it didn’t, it bounced
back above the 50% level became support and it has followed a
two month wave upwards into April, which is following the
Primary timeframe higher.
Each week (green boxes) I have probable weekly paths that is
will follow, The resistance of this weeks highs won’t be there
this week and can continue towards 6393 next week.
Above is the theory and a simple dynamic model based on TIME PRICE and MATH, that functions on probability not 100% guaranteed predictability.
AMT model is not about predictions; it’s about trading
observed patterns under certain criteria.
Apply systems and I then increase my edge of knowing what to do
on shorter timeframes, different trading strategies for
different markets. I’m a buyer and holder of stocks, and I
trade short-term derivatives.
Any time the market moves down based on LONG systems. Ie
Thursday I know that there is a high probability that the next
day will rally, Friday on the SPI is an example of this. If I
take longs on close (Thursday) I’ll hedge a small parcel of Dow
on shorts just in case the market does tank.
In conclusion: I’m working with a Dynamic model using
systems that provide expectation knowing that there is a
probable path the market follows and trade accordingly with
systems.
When I write a book called AMT for dummies, as Brent Penfold told
me to call it, I’ll send it to you free of charge Magdoran
otherwise if you haven't read the book you'll never fully undersand
the Model, methodology and theory.
Frank Dilernia.
AMT model and Methodology (c) Frank Dilernia
This thread is now over, because arguments have already started.
- Joined
- 17 August 2006
- Posts
- 7,739
- Reactions
- 8,331
Hi Frank and congrats. on a very interesting thread. I for one would not like to see the thread finish ......... way too much educational stuff here just to terminate it because there is a little conjecture of opinion/ personality clash etc.
The way I see it, all questions on this topic have been good questions, simply from the p.o.v. that the answers you have given have further explained the workings of your system ............. And that is essentially what the thread is about ............. I'm sure many others agree ............ so well done.
The way I see it, all questions on this topic have been good questions, simply from the p.o.v. that the answers you have given have further explained the workings of your system ............. And that is essentially what the thread is about ............. I'm sure many others agree ............ so well done.
- Joined
- 4 January 2005
- Posts
- 1,231
- Reactions
- 0
If you do not have Fibonacci Trader software, you will have a up hill battle trying to understand Frank's Market Dynamics, and even then setting up Fib Trader can be a mind bender.
have a great day
take care
ac
have a great day
take care
ac
