exploring into the unknown

exploring into the unknown

start like a painter with a blank sheet and just let things flow to you

pick a new trading instrument

in this case i picked the Russel 2000 futures:

I picked a futures contract since futures are traded by professionals and futures markets have the least impediments in regards to rules to are stacked against traders

otherwise it was a spontaneous random choice-you want the least inflow of predetermined conditions to get the maximum creative outcome

I picked a daily time frame since it allows as a good measuring tool for momentum oscillator testing and i picked an index to deal with averages versus extremes

I made these choices so we are not wondering off to exotic but will be dealing with TA that everybody is familiar with

next make sure all is set in neutral

for that i first check that the chart is clean by going to:

right click on chart:

object tree

and make sure this column is empty:

next I hit "auto" on the bottom right corner to assure for an average aspect ratio

and double check that neither logarithmic chart settings nor percentage views are accidentally chosen

(also in the bottom right corner at trading view)

we certainly can play with these features but I am making sure that i start out with a clean slate

you can of course start out with a different representation than candlesticks but in this case I picked that sort of price representation

as a next step i pick a random analysis tool-I care little what it is-the less I know about it the better, but truly just random

in our case I picked:

i check through its bells and whistles but typically do not change its settings to give it a first view

now key here is not to think to much of what it is and how it might work and least of all any rules or explanations of the creator or online research-i use this purely visual

good tool to visualize that the RUT(russel 2000) has exploitable legs:

this already gets me curious on how oscillators (good for momentum and sideways ranges) perform versus indicators (good tools to identify trend)

next observation is that the tool has no leading qualities but provides the typical late tuning point entries that i am personally less excited about but it would probably still be a useful tool in the RUT with its longer legs and smaller periods of sideways boxes:

another observation that i like about the tool is that the average takes good care in regards to the function of support and resistance:

I make a note in the section of "to do"(my homework list that this tool needs to be back-tested for this function with various settings if it is useful with an acceptable probability principle based(check various time frames and various instruments

next I pick another random tool in this case:

a quick glance immediately gets me intrigued:

Observation:

price never penetrates bands but only touches on the short side

price never penetrates bands but seems to bounce from bands at a seemingly same distance bracket

no need to get to overexcited yet since plenty of tools print after the fact and not in real time

but at this junction I would start playing with settings curve-fitting the tool towards the RUT after checking on other indices how the tool prints and if it might be principle based

than back testing starts and further tools will be checked out

at some point i would make sure to have bases covered like that i have various tools that measure various things like volume and transactions and time and price behavior and trend and sideways and momentum and range and volatility and so forth

lower grade tools after rating them will be removed and replaced

once a balance of representations is found back testing of tool pairs later triple tools will take place

i do all my work by hand and not computer models-this avoids too much curve fitting and allows for much more learning and discovering of things you were not looking for

after lengthy times of work you find a morsel once in a while and sometimes even a miracle of an edge and a new way of thinking in your mind and at best a new way of how to look at the market with an approach like this

it is this kind of hard and extra work approach that has eliminated for me rules and restrictions most classical TA technicians defend and has provided for me my low risk model and its success