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Cliff Scheller wrote:
>
> When one develops a method they believe will forecast pivot points in
> time, defining them as being a bar where the bar either side of it
> does not exceed the target bars extreme excursion in the direction of
> the pivot point, one must be careful that statistical chance does not
> nullify apparent good results. I'm not trying to be fancy with words
> here. If one takes a price series of a tradable, and tests each and
> every day for the properties of the "pivot", one will find a high
> number of bars that fit. Adding a plus-or-minus one or two bars, and
> one will find many, many bars that fit.
It is true that if you referred to a pivot as just one day that exceeds
the previous and next days extreme. But this is not the case with true
time day trading.
The proper criteria as I have defined is as follows for a time day:
1) The time day (top) must be higher or equal (exact price called a
plateau or ledge) to the previous day and higher than the tops of the
next 3 days.
2) The time day (bottom) must be lower or equal to the previous day and
lower than the next 3 days.
Now, look again at the chart that Jeff sent me today, and see for
yourself why using time days are indeed valid, and let's despense with
this statistical pivot theory that does not apply to proper time day
trading.
Please consider the chart with the following:
Starting at (1), we see it meets #2 above. The following bars do NOT
until (2) which does. So far, you with me?
>From (2), we look at each bar and note that none meet this criterial
until (3). Okay so far?
>From (3), we find (4) which meets #1 above. 3 bars later, we meet
another #1. Good, I'd take it. Now the following bars don't fall under
these guidelines until (5). Then (6) also follows #1 until (7) which is
#2. From there none until (8). Same until (9). And again until (10)
which is higher than 3 bars earlier, so the one 3 bars earlier does not
fall under the guidelines. From (10) none till (11). Then 3 bars later
another at the same price qualifies as a pivot bottom to (12).
As you can see, there are several large gaps between many of these. As
for those that only had 3 days, 2 out of 3 were double tops or bottoms,
which is a good thing.
If you carefully consider the chart, the rules I've laid out to make it
safe and profitable, you can then see that we are not dealing with
random theory here. As long as you meet the other criterial I've pointed
out, you eliminate much in the way of guesswork, since you are either in
a trade or filtered out.
No, even time days is not a STAND-ALONE method. Are you kidding? Is it a
top, or bottom? Yikes! Yet, it is extremely powerful, and wise men seek
it! Unfortunately, many either give up trying or start believing it is
impossible.
Just consider that the MAJORITY of futures/stock traders use more
indicator type analysis than any other method on the technical side
(fundamentalist are a large group as well). A much smaller minority use
rythmetic/harmonic/natural mathematical indications of the market as a
timing tool. One group enters usually early or late by waiting for lines
to cross, the other mathematically figures out when this should happen
just like Nasa can mathematically calculate the trajectory of a
satellite down to the millisecond.
New traders always follows the majority. They don't want to be thought
of as foolish, or not part of the trader group. It takes losing their
shirt, or getting extremely confused and frustrated before they are out.
Sometimes for good. Once in awhile, some survive (very few) and learn
the not so usual way to trade. The different way to analyze. Strange was
the way I described it early on. What makes it strange?
We did not go to school to learn this math. We were not taught to be
different than others.
How do the majority of traders do in trading?
You answer that question.
cheers!
:)
rick
>
> Cliff
--
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