Quote:
Originally Posted by FerdinandAlx » In my view removing price gaps is fundamentally unsound and indefensible. The method we use is based on deduction: our fundamental assumption is that markets come into being from their rules and that from those rules we can build a functional system. Part of those rules are the limited trading hours. This presents us with a problem since the p/v sequences we use to build up a picture of the market are discontinued at some point.
The removal of price gaps adresses the problem inductively since it does not follow from the market's operating rules. It attempts to present continuity in our sequences through the tinkering with price. The universal problem of induction applies here so that even if it has worked in the past there is no sound reason to assume that it will work in the future.
In my view there is no way to address this problem deductively. We cannot soundly carry over yesterday's sequences and we will simply have to wait until we see new sequence being formed. We're just forced to accept that markets do not follow ideal theory and do not contain perfect nested fractals. |
Although I've only been studying this methodology/way of looking at the markets, for a short time, this was my concern as well. I enjoy the new ways I'm being taught to look at volume but am concerned with what seems to be a disconnect from price reality at the same time.
Can you imagine considering that something has FTT (failed to traverse), when in reality it hasn't at all. It just appears that way because of the removal of the night session from the picture along with the joining of the day sessions open to the previous days session close. That just doesn't feel right.
In the end the method seems concerned with price movement only if supported by the right amount of volume, and even worse,
simply at the right time! But what if that volume begins pouring in at 8:15 cst and doesn't wait until 8:30 cst? Is price movement counted then? Perhaps CVB (constant volume bars) might be helpful for this methodology/understanding of the market. Or hows about this for an idea, simply mash the night sessions complete action together as a single bar if that helps, at least the reality/continuity of price will in someway be represented. At any rate it feels like Spydertrader is building something great, but perhaps it's still under construction
Please let me know how you deal with this.
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11-30-2009, 03:00 PM
It's understandable that you might have theoretical concerns and ideas how to solve them. It is also conceivable that this method can be improved further, even further than its expert level. My advice is to not waste your time with either of them. Study carefully all of Spydertrader's posts in this thread; start to apply what you understand; continue re-reading the same posts, open to learn more; correct your misunderstandings; practice; ... repeat this loop, gradually improving, until you get it. Ask pertinent questions in this thread, but take any advice with a grain of salt: you may not fully understand that advice, or it may come from a person who doesn't know that he's giving bad advice. Without any fixes or improvements, this method should allow you to become constantly profitable, and compounding will take care of making you wealthy. Good luck! 
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