Phenomenology in Trading

Phenomenology is a philosophy of experience. For phenomenology the ultimate source of all meaning and value is the lived experience of human beings. All philosophical systems, scientific theories, or aesthetic judgments have the status of abstractions from the ebb and flow of the lived world. In short, where science dissects, reduces and serves a very specific purpose, Phenomenology, tries capturing the truth and a holistic picture of experience. Example: In 1815 the metronome got patented, a scientific machine trying to harness precise time and translating prior score comments by the composer into a more fixed interpretation of the score: Grave – slow and solemn (20–40 BPM)

Lento – slowly (40–45 BPM)

Largo – broadly (45–50 BPM)

Adagio – slow and stately (literally, “at ease”) (55–65 BPM)

Adagietto – rather slow (65–69 BPM)

Andante – at a walking pace (73–77 BPM)

Moderato – moderately (86–97 BPM)

Allegretto – moderately fast (98–109 BPM)

Allegro – fast, quickly and bright (109–132 BPM)

Vivace – lively and fast (132–140 BPM)

Presto – extremely fast (168–177 BPM)

Prestissimo – even faster than Presto (178 BPM and over) leaving entirely out that these descriptions were not just advise for tempo but also feeling or interpretation, which resulted that many composers had prior to the metronome added not only in Italian but their own languages descriptions on how the piece should feel when played. In opposition Phenomenology is very precise in its observation that the pause between two notes (silence), allows for more clarity (a piece slower played, notes individually perceived:

And a faster pace with notes overlapping creating harmonies reducing refinement:

and as such there being an ideal tempo at all times for the composers intent of the score that allows the perfect balance of the notes arrangement:

In short, while a metronome might be a great helper for a novice to keep time it is not a time keeper to play a score. Or as Brahms put it:“good friends have talked me into putting [metronome marks] there, for I myself have never believed that my blood and a mechanical instrument go well together.” https://guarnerihall.org/a-brief-history-of-the-mechanical-metronome/ In the trading world there are many such misconceptions that the scientific filter on how to look at the markets has brought about, leaving out a much broader and more accurate way on how to read charts One example would be the widely used candlestick representation for price movement which was brought to the West by Steve Nison 1989 with a strong focus on pattern interpretation. Yet Munehisa Homma who invented the candlesticks in the 18th century did so since he noticed emotional behavior amongst grain traders. We also exclude much in classical TA since anyone contributing always wanted to add a personal spin on things versus truly exploring principles(=ultimate truths) As such rules were established like oscillators only working in sideways markets and indicators only being helpful in directional markets While this has merit if one comes from another limitation of only looking at a very crude time segmentation (annual, quarterly,monthly, weekly, daily, 4h, 1h, 30 min, 15min, 5 min, 1 min) if rather coming from a perspective of analyzing turning points from a prismatic perspective in time and or using renko or tick charts (leaving out time/watching from a transactional perspective) allows for a much broader and more principle based perspective at the markets: Examples: Just like our example of time in music, a zooming in to close on charts from a vertical perspective, destroys aspect ratios and as such makes identification of trend impossible. A zooming in horizontally as well destroys the value of reading individual candle stick presentation in detail:

In the following example we illustrate that a table top formation in the CCI is a prime high hit rate anticipatory/leading indicator on the CCI (momentum oscillator), alerting to a high probability of a turning point. In the left scenario we get a stacked odd of a wide range double top with a runner profit of nearly 25%. In the right scenario we get a near 3% financing target filled and the rest of the position stopped out at breakeven. If viewed through the classical technical analysis tool the application of an oscillator in a directional environment (the example to the right) is a miss-use of the technical tool. Viewed principle based through the application of a Quad exit strategy both trades are merely different in profitability but the oscillator did the job each time very well in a principle based manner. It warned early for a possible turning point to be coming up:

In the following example we illustrate that the point at what time we choose to take the strongest value from a candle, in this example bitcoin and its 24hour cycle is arbitrary at best. We even have picked a time for candle completion outside typical exchange hours, meaning at times with low transactions and low volume.

We made 8 screenshots throughout the same day to illustrate that only a more redefined way of looking at time can tell the story of the emotional states of the trades participation and their struggles in diversity of opinions(bulls/bears) At each point in time we have a difference in bull/bear dominance and as such valuable data points on how to think in terms of risk for our possible next market play:

a look towards a lower time frame instead (60 minute), shows much more clearer the market dynamic of that day:

n our final example we aim to illustrate that the ignorance through a filtered view can limit truthful market perception substantially. While classical TA through a lack of understanding eliminates a divergence aspect caught by an oscillator, a phenomenology approach provides valuable data on how to maneuver through markets with much more accuracy and stacked edges foresight probability. In this case the CCI shows a divergence in a directional market towards price:

While classical TA dismisses such a finding as a rule violation our methodology that's based on our beauty principle guides clearly through the markets possible turning point and measures its probability of success and even more provides for low risk entry points to possibly participate in the markets given opportunity. One element requiring further investigation of the rotation through the expected sideways zone prior to a decline on a smaller time frame:

While the daily chart provided no clue on the probability of the success of the divergence between the oscillator and the chart price readings, the smaller time frame allowed for measurable clarity of the likelihood of a successful retracement. Moreover it lead to our next low risk long entry after this short rotation (entries are exits and exits are entries):

All charts above were posted in real time in our live educational channel and are just one brief glance on how we view markets slightly differently than most. We mean to illustrate that for a market interpretation mainly focused on dissection and application of flawed classical TA is not enough to reach outstanding performances and that a phenomenology approach that allows for far more angels to show the market under various lights is the safer bet to get quicker to meaningful results and truth versus ego serving tools.

Once we shifted market interpretation views towards principles we got quickly to a much clearer understanding on how markets work and in particular the discovery of various principles that allow for meaningful edges in regards to timing of markets.