PPS Trading System by Curtis Arnold

[MRC & Co]

the only scam I have found usefull unfortunately depends a lot on the eyeball...

ha ha ha, some of this stuff cracks me up! Keep up the good work!

 

[Nick Radge]

ASXG,
I had PPS coded up as a scan back in 2000 or so. I don't use it as its just not good enough. I also bought cpFinder several years ago and again, its just not up to the job. The best computer is the one between your ears.

Even though I focus on 1000 charts I don't need to eyeball them everyday. Patterns take time to develop. As they start I slip them into a folder so I can keep a closer watch each day.

I wouldn't bother with Bullkowski's book. Its all on his web site. Just concentrate on the higher scoring patterns, like the high tight flag, but also be cognizant that he uses a longer term outcome (many many months) whereas I'm only interested in the next few weeks.

Another site is Dan Zanger www.chartpattern.com

What you need to grasp though is the 'secret' is not in the pattern. The pattern is simply a comfortable way to participate in the market.

 

[IFocus]

a couple of flag patterns on the skip 5min... I would and did trade the first, but have lost interest in the second.. as a flag that is... as it has climbed back up the pole too far., for mine.. but as Nick points out, it could quite easily do a KD Lang and morph from one pattern to another.. (triangle??)
Cheers
..........Kauri

The SPI this morning false break then on with the show.......


.

 

[MRC & Co]

ASXG,
I had PPS coded up as a scan back in 2000 or so. I don't use it as its just not good enough. I also bought cpFinder several years ago and again, its just not up to the job. The best computer is the one between your ears.

Even though I focus on 1000 charts I don't need to eyeball them everyday. Patterns take time to develop. As they start I slip them into a folder so I can keep a closer watch each day.

I wouldn't bother with Bullkowski's book. Its all on his web site. Just concentrate on the higher scoring patterns, like the high tight flag, but also be cognizant that he uses a longer term outcome (many many months) whereas I'm only interested in the next few weeks.

Another site is Dan Zanger www.chartpattern.com

What you need to grasp though is the 'secret' is not in the pattern. The pattern is simply a comfortable way to participate in the market.

Great insights, thanks for that Nick. I will be using the folder idea and thanks for answering the question on Bulkowskis book in relation to his website. Wondered why nobody had answered. As Im more after the short-term patterns, days/weeks, I will check out PSS thoroughly instead.

Cheers

Time to order and add it along with adaptive analysis to my pile!

 

[Kauri]

A yen flag on the hourly that I traded, with a 5 min flag mid way down the 60 min descent that I traded, and the last one on the 5 min that doesn't look right that I have stayed out of.. for better or worse.. as it is dropping nicely as I ramble on..
Cheers
...........Kauri

 

[motorway]

If the absolute value of the supply curve is greater than that of the demand curve. The result is a dampened fluctuation in
price

If the absolute value of the demand curve is
greater than that of the supply curve. The result is an expanding oscillation in price.


(Demand and Supply curves rotating)

BUT it is the response THEN that matters
In the context of the trend and position


Does demand and supply SHIFT in response

( Demand and Supply curves SHIFTING )

The pattern does not "work"

What it does is ask a Question

The response ... The answer is what works


http://chart-patterns.technicalanalysis.org.uk/Levy71.pdf

motorway

 

[motorway]

COBWEB THEORY
AND TRADING PATTERNS
A point about technical analysis that tends to
be under appreciated is that any price/time
relationship may work for a while but is likely
to break down eventually.

A realistic objective
is to expect cobweb theory to work for a while,
then reach a point of transition where it breaks
down.

At that point some new price/time relationship
takes over, reflecting a change in the
most representative paradigm of price behavior.


Traditional trading patterns are often periods
when the tenets of linear cobweb theory
apply, and on their confirmations, some new
price/time relationships come into effect.

"some new
price/time relationships (CAN) come into effect"


Trend , position , ....test ( the asking of a question )... response

confirmation or negation


"an almost unerring guide to the technical position of the market."


motorway

 

[Kauri]

Pattern and vol-wise a pitcher launches a thousand words... although the vol structure doesn't exactly tie in with some vol system guidelines it nearly always seems to be this way with the patterns I pick up.. in fact I look for it.. I thunk.
Cheers
..........Kauri

 

[BBand]

Hi MRC,
Interesting to note that you use the RSI, this is my favourite indicator (I'm a simple fella - it works for me)

Andrew Cardwell has done a lot of research into the use of the RSI, and one of the main outcomes being that it does not work between 0 -100 as is commonly promoted - this is an obsolete interpretation and does not work in todays markets.

The RSI works between 40 -80 for a bull market and 20 - 60 for a bear market
Price is trending up when the RSI is above 65
Price is trending down when the RSI is below 35
Between 40 -60 price is going sideways

Constance Brown and John Hayden have published variations of Cardwells work

I think you will appreciate the Constance Brown book- Technical Analysis for the Trading Professional - McGRAW HILL (I am ploughing my way through this book just now - so much info)

PS If you want to catch the breakout to a trend, one way of doing this is just scan for RSI value crossing above 65 or crossing below 35 - or derivations of it if you want to identify stocks still in a congestion phase.

How you "utilise" the RSI is up to you - it can be used in all market conditions.

Hope this is of interest. I have been using the above interpretation of the RSI for a few years now and the Constance Brown book is "adding the icing to the cake"

Peter

 

[Timmy]

Hi BBand - thanks for the heads up on the research. Is that a 14-period RSI or some other parameter for the cross 65 or 35 observation? And is that for daily charts or intra-day charts (and if so what periods?) Sorry if too many questions...

 

[BBand]

Hi Timmy,
I personnally use a 9 period RSI although Constance Brown uses a 14 period - she uses this primarily because it corelates to her method of price targets using the RSI.

I do not bother too much with price targets, so I do not see the need to change from the 9 period which I have been using, I just take what the market offers

I trade breakouts - they either work or they don't. My stop is basically my entry - so my R/R is pretty good

The RSI settings are consistent across all timeframes, as is the above 'theory"

Check it out - draw coloured lines across your RSI trace at the levels shown above, and do some backchecking. (best if you have a training mode on your software so that you do not know the future bars from the that which you are looking at)

The above works for me, its the exit that decides if or not you have a winner, please check to make sure your interpretation works for you.

The RSI can be a complete trading system if you so desire - or it can be used with Elliot wave for the longer term trade(not my cup of tea)

Peter

 

[wayneL]

The RSI works between 40 -80 for a bull market and 20 - 60 for a bear market
Price is trending up when the RSI is above 65
Price is trending down when the RSI is below 35
Between 40 -60 price is going sideways

Howz about dynamically adjusting OB and OS lines (just for fun).

 

[BBand]

Now aren't you a clever dick!

Peter

 

[MRC & Co]

Thanks for the info Peter.

Good to see changes between bull and bear markets.

So to get this straight, referring to this quote: " If you want to catch the breakout to a trend, one way of doing this is just scan for RSI value crossing above 65 or crossing below 35" - you would go long after the RSI crosses over 65 and short once below 35?

Must say, I only usually use the 70/30 rule. So once it moves above 70, I would watch for price action to indicate a pullback and vice-versa.

Now those dynamic OS & OB lines are great! Getting good at your programming ey Wayne!

However, I only use RSI very loosly. Like sentiment indicators, to get an idea of potential turnings points in the market. I will also want to see price action, along with a break through support/resistance. Never tried trading solely through the use of RSI or any indicator/MA for that matter. Always read not too, but hey, if it works for you!

 

[tech/a]

Pattern and vol-wise a pitcher launches a thousand words... although the vol structure doesn't exactly tie in with some vol system guidelines it nearly always seems to be this way with the patterns I pick up.. in fact I look for it.. I thunk.
Cheers
..........Kauri

Kauri.

Your chart and volume is one of the clearest you'll see.
The chart was like a book to read and would have been very profitable.

Have a look at the way volume tapers off on the down moves and the up moves.
Effort to sell AND to buy dries up.
When it does what happens---price reverses.

 

[Nick Radge]

As RSI is based on price, then RSI must come after price. An RSI calculated from price. RSI therefore lags price. What RSI is doing for BBand is confirming his conjecture about trend direction. But price will do this before the RSI shows it which means if you follow price you will ahead of the RSI.

Motorway,
I have been trading these patterns since 1995. I have spent countless hours, and I mean many 1000's, trying to filter patterns. My extensive research suggests its all random, but random makes money consistently. I will dismiss the supply/demand logic (because I have tested it) and its no better than anything else. I freely admit, my imagination and interpretation is limited, but I would be happy to prove you right. You have put forward a broad generalization against my 15-years of trading. I am more than happy for you to cure my randomness (although there is nothing wrong with randomness) to increase my P&L.

How about I put forward all my patterns and you tell me which one's to take basis your supply/demand logic. After 100 samples we'll compare notes?

Anyone see what I see in PEM?

 

[Kauri]

Maybe a coily forming on the 5 Min yen?? one to watch anyways...

Kauri.

Your chart and volume is one of the clearest you'll see.
The chart was like a book to read and would have been very profitable.

Have a look at the way volume tapers off on the down moves and the up moves.
Effort to sell AND to buy dries up.
When it does what happens---price reverses.

With you 100% Tech,,
Cheers
...........Kauri

 

[MRC & Co]

Coily? Is that another word for a triangle?

I see price is about to break one way or the other on PEM......

A positive divergence between price and RSI also.

 

[tech/a]

Dont know what you see but here is what I see.

Im looking long.

 

[doctorj]

Maybe a coily forming on the 5 Min yen??

Popped its head out only to be smacked back down for the moment...