by Taylor » Fri Nov 17, 2023 8:16 pm
Hey Strange,
I think the best way I can explain it is as follows: Bad bars (without congestion) are not ALWAYS an indication of a lack of momentum. It can simply be a limitation of our period of sampling as you said. However, it can be extremely difficult/impossible to correctly interpret strong momentum WITHOUT a good signal bar and setup bar. The 2 charts are sampling the market at different times, so we may just catch the right sampling period on one chart but not the other. We know characteristically how to view bars in a certain way that is favorable or unfavorable, so we must adhere to this fact in my opinion. I will say that the stronger the consensus of momentum, the higher likelihood a good bar aligns on multiple charts, especially if that consensus of momentum is sustained for a quantity much higher than our bar sampling size (2000 ticks).
I like to think about the multi chart offset sampling like this:
A helicopter does a mile loop and ends where it starts after 1 minute. You KNOW the starting point and you have 2 radars that sample every minute. Your first radar samples right before it started the loop and then after one minute, it samples again. Guess what, the helicopter didn't move according to the first radar.
Your second radar is offset by 30 seconds. So after 30 seconds, it samples and sees that the helicopter moved.
The helicopter moved regardless of if the radars detected that or not. Some radars will know it did, some wont. It is all relative to your sampling time.
Prices move independent of any chart, we just hope our sampling time aligns for us to see what we KNOW is a good indication of momentum. However, this is fundamentally WHY we use tick charts rather than time charts. Tick charts increase the likelihood of capturing good momentum in a way that we can interpret it correctly with our bars. It is not perfect, but they fundamentally have a higher probability than time charts of capturing it. However, you still have to correctly read the context to know when it is a good trade or not, as you know. Hope this helps. The Big Swiss articles that Eric wrote can probably help you understand this even more if you have not read them.
Hey Strange,
I think the best way I can explain it is as follows: Bad bars (without congestion) are not ALWAYS an indication of a lack of momentum. It can simply be a limitation of our period of sampling as you said. However, it can be extremely difficult/impossible to correctly interpret strong momentum WITHOUT a good signal bar and setup bar. The 2 charts are sampling the market at different times, so we may just catch the right sampling period on one chart but not the other. We know characteristically how to view bars in a certain way that is favorable or unfavorable, so we must adhere to this fact in my opinion. I will say that the stronger the consensus of momentum, the higher likelihood a good bar aligns on multiple charts, especially if that consensus of momentum is sustained for a quantity much higher than our bar sampling size (2000 ticks).
I like to think about the multi chart offset sampling like this:
A helicopter does a mile loop and ends where it starts after 1 minute. You KNOW the starting point and you have 2 radars that sample every minute. Your first radar samples right before it started the loop and then after one minute, it samples again. Guess what, the helicopter didn't move according to the first radar.
Your second radar is offset by 30 seconds. So after 30 seconds, it samples and sees that the helicopter moved.
The helicopter moved regardless of if the radars detected that or not. Some radars will know it did, some wont. It is all relative to your sampling time.
Prices move independent of any chart, we just hope our sampling time aligns for us to see what we KNOW is a good indication of momentum. However, this is fundamentally WHY we use tick charts rather than time charts. Tick charts increase the likelihood of capturing good momentum in a way that we can interpret it correctly with our bars. It is not perfect, but they fundamentally have a higher probability than time charts of capturing it. However, you still have to correctly read the context to know when it is a good trade or not, as you know. Hope this helps. The Big Swiss articles that Eric wrote can probably help you understand this even more if you have not read them.