Today's Action by Intelligent/Predictive Agents

[Today's Action by Intelligent/Predictive Agents]

Fair enough. In order to conclude the last discussion and try to move on:

 

1. I also like the intellectual and theoretical discussion so I agree with you

2. I didn' use any timeframe and a lookback period for the charts. I didn't cherry pick the charts I use YOUR example and could have chosen at least 140 other indicators with the +/- the same results.

3. I was using the stochastic as an example just to generate the real discussion because it stuck me when I saw that the Inteligent and Predictive agents charts seemed to be less INTELLIGENT AND PREDICTIVE than a basic canned indicator.

4. I also 100% prefer not to argue about intensity versus a stochastic. But i do wanted to discuss the usefulness if any of the "Inteligent and Predictive agents" In the context of the OP.

 

So i leave still the questions open. What are the main difference/benefits/shortcomings (not in the way is calculated...) in performance using or reading this "intensity indicator" over any other indicator. Is it just a lot of mumbojumbo to make it things more complicate than they are?

 

Please don't get personal but get technical. At least for small trader like me, trading is a dynamic process that need to keep the edge often according to market circumstance. so I am interesting in intelligent ideas that can lead to something constructive so I am not interesting in my indicator is better than yours or if you make money with this or that.

 

I am simply challenging the basic assumptions and the real reasons behind this indicator. If you have good arguments please use them otherwise...

 

ecubru

 

 

So lets do discuss INTELLIGENT AND PREDICTIVE discussion

 

Your short signal was after the high. This thread is about "Intelligent & Predictive Agents". A stochastic cannot be predictive because it lags price.

 

No matter what chart I post, it will be possible to find a timeframe and a lookback period that will give a signal with stochastic. But that doesn't mean one can be profitable trading it. So I prefer not to argue about intensity versus a stochastic. If someone can make money with stochastic then I'm happy for them. I can't.

 

I don't want to convince anyone that trade intensity is the only way to trade. I find it useful as a warning of potential turning points and I'm simply sharing what I see. I find it very interesting from an intellectual point of view. Why it's happening, who is responsible, and what is their motive I find very fascinating but not necessary to make money with it.

[Today's Action by Intelligent/Predictive Agents]

LOL....

 

Without wanting to start a fruitless discussion. That's exactly my point...what do you gain in practice with that information. "Yes soon will turn around to the short side" so what? by then even if you blindly and naively trade any stochastic signal you will have not only take the long (your "short" alarm) but also catch the perfect entry on the reversal short (the trade short you suppose to take after your alarm).

 

My point is that you are trying to catch a big fish with a small boat based on apparently "rational and logical" assumptions that big players do this or that. In other words it seem to me that this "early" or sometimes not early, as somebody mentioned before, warning signals you are talking about are completely dislocating from practice and common sense. If you are going to use such a small timeframe you get better bang for buck if you trade a very basic stochastic (btw, this is a shame for any "new" trading indicator to perform worst and give less info than a simple stochastic).

 

Obviously if you want to catch a larger swing (as apparently you do) and if you use common sense you just use a longer timeframe.

 

Same day, with the same very basic stochastic but using a longer timeframe. I guess that was the short you wanted to take from your tiny micro chart...

 

ecubru

 

 

 

My first signal was a short and yours was a long.

[Today's Action by Intelligent/Predictive Agents]

IMHO,the logic behind this "trade intensity" is not necessarily flawed, but what it is flawed is the way is being use.

 

If you are small trader, it's not important why or who, the key issue is WHEN. Over focusing in the reasons and the assumptions will only delay the process of understanding that you CANT tame the market. The only thing you can aim is to reduce risk and increase odds. The rest is a game you CANT play without Real Capital. Information, Direct Access to Markets and advanced technology (in terms of execution and algos).

 

I find very interesting all this academic discussion and I am not against all this nice theoretical assumptions but again in practice the use of "trade" intensity" indicator is as good or bad (i will dare to say worst) than using a very basic slow stochastic on overbought/sold areas, especially if you are going to aim for 1or 2 points (you don't even need volume for that, the noise will be enough). At least the latter apart from theoretically give you "exhaustion" areas can also give you a trigger... At end the key if you are going to introduce an indicator (regardless of how sound are the assumption behind it) it has at least have to give you something "new" than can be translated in practice in real improvements on your trades ...again its WHEN not why or who.

 

Same chart with your same areas with a basic stochastic...

 

ecubru

 

If I understand correctly, you & the other guy are saying the logic behind the trade intensity is flawed. I've seen examples of trade intensity preceding market turns and I'm trying to understand the theory behind it and match that up with the arguments presented here (both for and against).

 

Here is an example today. I wasn't trading at this time but It was the first example I found after the open. This is my own TI indicator.

 

 

I'm curious if we can come up with some kind of explanation. I did not change any of my settings for this example, I've been using the same settings for weeks now. I will admit that mine does not always signal turning points in the same minute as the turn, but it worked very well in the first hour today. In general if I'm not trading the signals seem to work better.

[Today's Action by Intelligent/Predictive Agents]

Good post and I read your reply and links in detail.

 

However, and without wanting to have a long academic discussion, as in any theory, what is the relevance in justifying your assumptions with all this very interesting and well detailed technical models (seven different time frames, index of weighted biases, intelligent agents that range from genetically optimized neural networks, functions producted by MARS [Multivariate Adaptive Regression Splines] and CART, etc) if the exactly same results can be achieved using simply tools.

 

IMO, I am more interested in the results of a system rather than if the assumptions are technically sound (which can sound stupid in academic terms but not when you are a trader). In other words, and going back to the chart I post, a modified MACD with MAs with dynamical adjusted ATR levels (dots) in a constant volume chart for stops and profits show 100% the same results as a model with all these complex technical interrelations. I am not implying that the chart i posted or your system is good or bad, I only have this aftertaste:

 

1. if either all these technical explanations are just a way to rationalize the assumptions on your system

2. or maybe they are not useful at all (because they show the same results of basic TA indicators)

3. or maybe they are not taking advantage of their potential

4. or maybe you are 100% right and you are just defined and analyzing the key reasons behind price analysis.

 

I may overseeing something in your charts but whatever the case, as long as they show the same results as a simple system, they are only relevant from a theoretical perspective because in practice the result seems to be the same as when using a simpler system.

 

ecubru

 

ecubru;

 

The first difference between your chart and the one displayed below is that the bottom 2 sub-graphs on ours have price as NO part of their calculation. By far the most heavily weighted inputs to our trade decision making process are those that have to do with the balance, velocity and acceleration/deceleration of those trades that we classify as comming from commercial speculative trade.

 

The process of the construction of the chart shown below is:

 

The signals on the chart specifically the text that recommends precise TradePoints or No Trade are the product of several layers of processing.

 

The first layer gathers data from seven different time frames, posts it to global variables, and uses some of it to form an index of weighted biases as described in this thread.

 

Other of these variables are then passed as inputs to a set of intelligent agents that range from genetically optimized neural networks, functions producted by MARS (Multivariate Adaptive Regression Splines) and CART which is "a robust, easy-to-use decision tree that automatically sifts large, complex databases, searching for and isolating significant patterns and relationships." Both MARS and CART are products of Salford systems and some of the easiest to use tools for the development of intelligent agents that we have ever found. We have developed a tool in house that can convert the functions from MARS to Easy Language and can put a newly developed model on line and producing the Trade Points you see on the charts in a very short time. This entire process is described in this thread..

 

While price is considered, the bulk of our decision making process is based on various measures of what we call commercial speculation. We first measure our calculation of time-of-day normalized commercial presence. This tells us that at this time of day the commercial precence is some percentage of what it normally is at that same time of day over the previous 72 market days. If that percentage is less than a certain number we do mean reversion trading, if that percentage is over a certain percentage then the trend following methods shown on the chart below are shown. We also measure the percentage of time-of-day normalized commercial speculative bias in those 7 same time frames.

 

We think in terms of portfolios of both methods and time frames for each instrument we trade. Some of our indicators indicate trade and some indicate method or time frame.

 

Some of these indicators of commercial presence for both method and time frame can also be used for instrument selection. For example if the S&P is only trading at 70% of normal commercial presence then it is for sure that smart money has found at least a couple of stocks in the S&P that are trading at 200% of normal commercial presence that is where the action will be on that day in that index.

 

There are many ways to evaluate the price volume relationship, implement VSA, follow Wyckhoff or implement the Market Profile. The notes above roughly describe how we input and process the concepts and information from all of the above to output the precise TradePoints on the chart below.

 

All of the indicators on the chart below are calculated in real time and the TradePoints and text recommendations are posted at the first tick of the bar and are updated every tick. The small red dots are stops, blue are scalp profit targes the + is a recommended entry price for that bar. The recommendations are for the last bar on the chart.

 

 

Cheers

[Today's Action by Intelligent/Predictive Agents]

Urma

 

Your ideas look very impressive at first glance. However, and don't get me wrong, to what extend you are just trying to look for rational justification for taking trades. Commercial buying, retail, whatever.

 

You are just trading simple MA crossover with an "oscillator" as a filter. If your oscillator includes volume or not seems to be irrelevant in your charts because both indicators in your bottom panel will show the exact same divergences than the original price chart. In addition your TPT intensity indicator its as random or good as the very old Elders Ray indicator. In other words, every time you have a new swing you will have some peeks or valleys and when the move is overextended it will overshoot in large spikes (nothing different than a smooth stochastic in oversold/overbought will show) .

 

i don't have a clue on how to program or setup your indicators but in 10 mins and using the most traditional indicators (MA and MACD) and with a little common sense i have exactly your same charts with exactly the same results.... and yes the reversal on your 05/21 charts was clear without any volume or big comercial retail, etc info available....

 

I think a picture will be worth more than thousand words in this post...

 

ecu

 

 

 

It is an absolute fact that some technical traders can indeed "actually determine who is buying or selling - then you are kidding yourself" and it is also an absolute fact that some others can not

 

The chart below is based entirely on our determination of the balance of trade by commercial traders.

 

You will notice net commercial trade is going straight up. You will notice only blue bars and no selling signals at all.

 

The + is a recommended entry point, the red dot a stop and the blue dot a recommended scalping point.

 

The text suggests the TradePoints for entry, stop and scalp for the current bar and is updated every tick. When there is no recommended trade as when the bars are gray then "NO TRADE" is posted.

 

This chart is from today's open at 0630