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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (18333)	3/11/1999 3:08:00 PM
From: Daflye	Read Replies (1) \| Respond to of 44573

Perfect sense, things are happening faster. Trading ranges are covered in days, even hours now. I can't speak from experience but it seems that a 5-6% SPX or DOW range would take weeks to cover only 2-3 years ago. Now, obviously, it's alot quicker. D

To: Chip McVickar who wrote (18333)	3/11/1999 3:47:00 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 44573

Yeah, September was hot....I had roughly an 80% win rate with the losers very negligible. There may have been 2 that lost more than 2 or 3 points tops. Then in October I tried my hand at position trading and had my worst month in recent memory. <Does the compression of these markets change "older" pattern reads?> No, because the pattern is still the general pattern. I may come up with a day in 1991, when the S&P may have been half the size of what it is today. Now if I think that that day in '91 matches up well to some day in 1999 then it is not the question of the market moving "X" points it's the question of how it acted. Maybe it Opened at the High and Closed at the Low, but that was only a 4 point move. Well if I'm convinced that that is the correct Read then I'm selling the first opportunity that I see and holding it the Short as long as I reasonably can. If I get 5 points or 50 points it's the same read. Often if you get the read correct and the day in 1993 that matches up to such and such a day in 1999 saw a huge drop (percentage wise) mid-day or so then the very least I would do is take positional trades off the table and wait. But no, the pattern is the pattern, the range of the point movement is immaterial. It's not like a fork read at all. This would also have the same relationship with respect to Compressed Time (although I understand that compressing Time accelerates E-Wave). Volatility still does not change the pattern, it just makes the turns more extreme, sometimes scary. But again, if the read is up into noon then down hard if it has Low Vol then it may be a measured, steady move into noon. With High Vol it may be erratic into Noon but still in all it would be generally up. I don't know if you follow me or not, but the general idea is to "smooth" out the bumps. Think of a chart with several moving averages on it, then remove the price data leaving just the moving averages. In the case of a market with the above pattern you would see only a picture of several lines that slowly went up into the middle of the chart and then slowly down, like a Bell Curve. In the case of a day that went straight down you would see only a series of lines cascading at an angle from left to right. Does that help?

To: Chip McVickar who wrote (18333)	3/11/1999 6:58:00 PM
From: Teresa Lo	Read Replies (1) \| Respond to of 44573

This was a big debate amongst the old grey hairs at my old brokerage firm. They swear that CNBC has compressed everything and that none of the old techniques work anymore. I do not believe it. My personal feeling is that while volatility has definitely increased over the past 10 years, the effect has also been exaggerated by the fact that prices are so high. For example, if there was a 30% volatility in the Dow when it was 1000, then you'd think that it could swing 300 points on any given day. On a Dow with a volatility of 15% at 10000, that's 1500 points. And of course, since volatility is more like 30% now and 15% back then, the point swings get so great that it appears to speed up the market more than it really is. The solution I use? In higher volatility markets, one must cut down on the size of the position. Second, in order to apply reasonable money management in terms of dollars at risk, I moved in by an order of magnitude in terms of time frame. In the old days, I could position trade off a daily chart but now I must trade off the 5 minute chart to have the same kind of risk. The good news is that it makes the same amount of dollars and one gets the added bonus of not having to carry positions overnight. As for patterns, they are still all the same...at least to me.