Using the ticker [background]

It is important to understand that the 0-4 databases are orientated to the buy side [90-10], yet is representative and responsible to all opportunity, and does not reflect the more normal expectations of randomness [50/50]. The former is more stable than random change that surrounds price because it contains the latter in a larger format, and its opportunity is defined in terms of tolerances, which further lends itself to a stable environment. It will provide a needed contrast to your quote page, which reflects all random price movements, and is considerably more forcing toward reactive judgment.

Being buy orientated does not means that the sell side is abandoned because selling where buying is failing is a good opportunity due to being better defined. Using such a skewed database for decisions is not foreign to trading, as all decisions have to culminate in either a buy or sell bias.

The re-start is the key fundamental related to continued success in that it clears most of the past and focuses on the new. In our program the carryover trade represents all of the past that we are going to use or consider in that it carries a positive or negative equity from the previous platform where it was the last trade.

The exit box was formed after the last entry to the platform, and will occur either above or below the carryover trade. The carryover trade is weighted by equity, and the exit box is free of past burdens, so both reasoned together offer a sound basis to define the new platform. This scenario is soon followed by more entries creating further development of the platform.

The second trade or first chance to expand the platform commitment is very important. It is a buy high entry and where it occurs [as in above/below] to the above references [carryover/exit box] is important. It is also important that the market stay above this entry for the platform to be successful.

Trade four [also a buy high] becomes an entry that represents the start of or shift towards continuation within the platform so it is also mandatory for the market to remain above it as it moves forward.

Most traders are orientated to singular trade opportunities and are used to finding them by isolating them from other random choices. It is much better to use platforms in the winnowing process, as information is much more concentrated, and offers control much deeper and broader in nature than random price changes.

The early references of the carryover trade, the exit box, and trade two are bytes of information that will fit together, and offer a strong and viable decision base. If they had random associations instead of one that is related, we would not have gained anything in the process. Referencing them as a whole or individually will serve to help you define singular trade opportunities and their management.

My earlier notes discussed some of the economic certainties related to the ticker, and I am going to discuss them in a more practical format that one needs to understand. Trades made when definitions are more nebulous give you tremendous advantage in that you can hardly ever be wrong. Trades made with more definition can make that assignment.

One must distinguish between being right and always making money, which is not the instance that I am referring too. What I mean here is that if the facts are unclear enough so that the declaration of wrong cannot be made, losses in these instances will be ordinary while gains if available will be more generous through further development. Also, more trades made early on offer more time to hold, which is fundamental to success.

Our trade two has vertical ranges that exceed all other trade numbers, and trade two being our first opportunity does not offer a lot of definition just by itself. The exit box and carryover trade offer enlightenment as allowing it [trade two] to be above /below etc. Trading the exit box offers an even less defined opportunity as it can be contrasted only to the carryover trade.

Viewing all this uncertainty from the long side makes choices of going long or short at these junctures a much easier proposition due to the bias of the database. One also has the choice to await further development as the platform still has continuing possibilities from later trades, but this approach should be limited.

Another economic consideration deals with understanding the later developing stages of the platform. This comes from the market itself realizing that it is not going to break or rally. I call this event an accelerant as it propels the market in one direction. If a platform that is mostly underwater fails to exit after 5-9 trades, participants will sense that fact and begin to push it higher. It will go for a while, but since it is internal versus external, it will end sooner than our more normal developments. [This is similar to the trapped money reference much earlier in the software development.]

Reading the tape

If you run a 0-4 program and take the ticker code and review the various outputs, it will help you understand what you will be seeing on the tape. On one of my products, it has been under sell for an entire year due to having very few re-starts because conditions for that were not met, which proves the two-sided nature of a one-sided database. One will also find that good opportunities last longer than most of our expectations.

The display of development data is unrestricted in the area that is moving to the next entry. After the entry, the data is trimmed to the area between that new area and the preceding entry. This trimming serves the purpose of taking out short-lived data that is insignificant to the structure of the platform.

The essential structures are the entries [trade numbers] made by the program that are defined by the colored brackets. They represent the allocation of capital to that product. The actual distance between these references is scaled as per 0-4 graphic and is represented by the dots in the center of the tape. [I want to point out that scaling or compressing data makes it more readable and has more rather than less value.] It is the weighting of our data [90-10] that allows for the dots to be colored code in relation to assigning the zero sums.

The colored dots and brackets extend the information forward and contain the randomness of price activity currently taking place. Most of you will be surprised at how small an impact each days activity will have upon the platform structure. The program starts by showing the acronym and the movement towards or away from the exit box.

Following a new access, the development recedes to the area between the carryover trade and the second trade---and progresses continually in that manner until the exit is reached. The last price is represented by a blue dot or chevron.

The red dots that appear mean that buyers have lost that area, and they have [the red dots] more of a lasting impact at these early entry points [trades 1-4] than later in the platform [trade 6 and beyond]. The platform that loses the most is five and out. Usually all those trades are profitable before it turns so a red data segment at this juncture should be watched carefully. A red data segment beyond trade six has to be watched for not having exited [trapped money].

The bracketed access points represent the allocation of funds to that product and their colorings depict how the flow went and is going. You will find them very useful in understanding how the platforms were and are being built, and the relative performance related to that biased intention.

The use of one-dimensional platforms in trading is a new experience for most of you. As I stated earlier in this discussion, it rather surprising at how stable the platforms are versus daily price changes.  In fact it could be said that the platforms compress daily activity so much that the volatility associated with that product actually becomes a non-factor. Is volatility an unstable element related to trade opportunity and management, and is it needed in order for success to manifest itself?

It is so for price differentiation models, but is not so for the whole of the market, which is controlled by the allocation process. Allocation is and remains the fundamental control over markets dwarfing all other considerations. It elevates one to the highest level of understanding, but trading itself can move beyond it.

Understanding markets does not limit trading to the identical platform. Trading can be thought of as taking advantage something understood or it can be thought of as overcoming all obstacles. As you gain experience in working with the zero sums ticker, I am confident that your understanding will grow, and eventually allow you to trade pure leverage, as it is the medium that allows one to overcome.

Margin /dollar leverage or the leveraging of random access to historical or other standards, which most would assume would be the definition of leverage, are not in our definition. Our new 0-4 will be the vehicle as it presents the many different types and phases of leverage—de-leveraging—re-leveraging--- getting beyond summary statistics, getting beyond time constraints, and all the other things related to productivity. Productivity [getting output faster] overcomes so it will be the direction were headed, and one that will allow us to succeed beyond the present.

I have targeted the end of February as having completed all this automation. I will continue to put up informational dialogues on the web site as we progress, and remember you can pick any level to find your niche, and it is my responsibility to give you the entire field from which to choose, and that to me means a totally completed project.


---More on over-coming versus taking advantage of the market. Our trade two is buying high versus the last trade on a losing platform, which is buying low. The former has to be able to overcome obstacles; the later is given an advantage. The range of trade two is our largest because when you overcome you accelerate. Notice in the ticker that where trade two is lower than the carryover trade [gold brackets followed by white] there are more red dots and it takes time for the market to overcome if it can. Also, notice that it usually takes more access [trades] or allocation before it overcomes, and that when it finally does it has an almost equal acceleration.

The win to loss ratio expands favorably [the natural leverage] when overcoming obstacles i.e. larger gains versus potential loses [like a ratio of five to one] and remains equal [or one to one] when just taking advantage of a more normal market situation. Most traders have never made this important distinction because they tend to treat all trades alike when in fact they are quite different.

Also, notice that the numerical green boxes when they appear on the 0-4 graphic indicate a unsure situation as it related to market direction, and that when direction overcomes, it sustains a good move. This is an example of making a trade early, and one that overcomes. Notice when this combination arrives at trades two that it generally provides a large margin of safety versus original capital, but a very large return as well. I have always found that the less risk one assumes the greater the return because it is knowledge and skill [management] that reduces it.

Ticker code change

I sort of painted myself in a corner when I put out the first code. The market moves two directions and our ticker has only one. Our data is coded in segments and all is fine if it only goes in one direction. Our program eliminates most of any market retracements due to its bias [90-10 creates a highly ratioed data field], however when it occurs, we need to deal with it a visual communicable way.

The only element that can move back and forth is the last price indicator [blue dot or our new chevron >], and that is limited to the defined segment that it is in. Our solution is to let the current price indicator move back and forth as it does now, but also let it leap forward with a new symbol that indicates backward rertracement in a forward moving program.

For instance, [2] +++++ where the current price can be anywhere in the range of pluses, and when it needs to go back behind [2] the situation will be defined as [2]+++++>>>>> where it create a new and lower segment, and where it recovers [2]+++++>>>>>++. I think that this will add definition and make the ticker stream more useful to you. [Note that the pluses used here are represented by dots in the ticker display].

Notice the range of movement of the last price when it leaps forward –it will come from the opposite end of the newly created segment i.e. >>>>>> the last price having recovered from the bottom will be at the first >, and then move to beyond the last with a new symbol >>>>>+. If it does not recover it will continue with >.

Another issue will be a back and forth movement –recovery-non-recovery that would produce useless noise, however, I think that our scaling within the 0-4 graphic, the isolated accelerants inherent in our program, and the potential for renewed access will eliminate that possibility.