Analysis 12th Jan

I am travelling at the moment with my laptop which has a camera so I thought i'd add video to this analysis. Progressing with our ideas I've found that in bouncing back and forth between in interpretations generates a feeling or intuition about the setup as a whole. Being driven to figure out the mechanisms behind our thinking is just as interesting to me as using the ideas to make trading decisions. Although this is a trading blog and I should be more concerned with using the ideas I find my thinking naturally demands answers to the deeper questions. Why criticality works? What am I estimating when I compare the strength of each interpretation to each other? What are financial markets really when trading success doesn't require us to know what the system itself actually is. That we are tracking price movements appears to be irrelevant for the success or validity of these ideas.

Some of the broader philosophical questions are touched upon, mostly to give me some framework for my conclusions. Again a lot of our recent ideas have progressed a few more steps, although they might be difficult to see. Our three analysed pairs will provide necessary feedback for us to continue trying to understand criticality in financial markets.

Good Trading.

Criticality

No analysis today. This video is a stream of consciousness talking out my ideas to myself that I am currently processing.

We discuss our momentum and volatility ideas as they continue their development into the field of criticality. The notion of criticality I've come to realize is how structure and momentum together create the system we call 'financial markets'. This system oscillating between disorder and order sometimes stabilizes in the middle at 'criticality' where a lot of interesting activity occurs, including fractalization. So much of our already developed strategy involves finding, measuring and trading price close to this line. Where previously we were a market participant, although we felt some degree removed or transcended from the herd now it appears we have moved further as we acquire a more conscious understanding of our place within the system and therefore an understanding of what we are and what the system is.

As mentioned towards the end there is a beautiful idea buried in here that consciousness itself is fundamentally the edge in all trading strategies. It appears to be something else, something specific and measurable but across all the strategies that work, and along the spectrum of strategies that are better and worse it is consciousness in the end that is the only edge that actually exists. All these specific versions are expressions of consciousness. Of course this is just speculation. It's a beautiful way of understanding how the pieces fit together it does not mean this is how they actually do.

Good Trading.

Momentum Vs Structure

We continue to explore momentum and structure and how their properties both at times oppose and align. The broad averages and trends inherent in structure are slow to change, slow to update, which contrasts against the quickly changing nature of momentum: price never reaches equality, interpretation exists for more than a single wave. Equality found in structure averages together many waves essentially ignoring momentum until its large enough to move the trend or averages. The difference between these interpretations and the trading strategies creates a new opportunity for us to exploit.

Good Trading