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Hi Bill,
You are right I did not understand that you were only talking about
time axis.
I have no theory that says it is a study with an edge. I can only
come up with why you might be fooled into thinking it is.
First of all the right hand (starting) example you posted did not look
to be drawn from the correct lower right hand point. These are daily
bars (I usually work in minute bars), but if you mark every bar that
could be considered a CIT bar, you will find that there are a lot of
them. If you plot every possible 3 point setup, you will also find
that there are a lot of them, of which you only picked 3. Now if you
look at the probabilities of pointing to a CIT bar, you might find
that any random selection has about a 25% chance of hitting one
(eyeball guess). The eye/brain has the wonderful capacity to filter
out all the choices that don't fit the desired pattern.
I took a one minute ES chart and plotted as many as I could for the
last couple of days. I found just one that hit a CIT bar. I would
not bet a dime on these odds.
The theory I previously outlined to you has some logic to it, and it
does have a statistical bias based on human behavior.
However, I encourage you to test it out for your self. There may be
something I am missing.
No need for an AFL, just hand draw 20, then pick what price you would
propose buying (like the open) and selling (like the close 2 or 3 bars
later) at and see how it works. Fill out every case, without seeing
into the future where they cross and then see how many are right. If
you can not get about 75% right, you will have a hard time making
money with this setup.
Best regards,
Dennis
On Jun 28, 2008, at 10:21 PM, bilbo0211 wrote:
> Hi Dennis,
>
> I think you missed the point of the CIT indicators. This is strictly a
> time based indicator it is not a S/R point. It points to a specific
> bar on which the trend should change direction.
>
> The point where the 'trend' lines cross is usually not very close to
> the price. It usually points to the exact bar where price changes
> trend.
>
> That is why I said "it must be tapping into some underlying market
> symmetry or cycle".
>
> Look at the 3 examples drawn on the current NDX daily chart pointing
> exactly to 3 pivot high bars (black lines) on the file I just posted
> in the files section (changeInTrend1.png).
>
> Bill
>
>
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