MARKETREE OUTLINE
Overview:
Marketree is a philosophy of how all markets work and how to take advantage of them. Based a different perspective it details the important aspects of trade selection and money management. It was designed from a structured logic-tree problem solving methodology. The major issues addressed are:
1. what market is going to move now - to where and how soon.
2. is there enough potential in a market move for our needs.
3. is the risk in proper proportion to the reward.
To insure that these questions can be answered, any methodology must satisfy the following criteria:
1. generic to all markets and time frames.
2. relates to actual market functions.
3. dependant on human behavior.
4. similar to other natural occurrences.
5. geometrically sound and quantifiable.
6. does not bias the data.
7. has predictive value.
8. uses objective manual or automated applications.
9. contains a symmetry and inter-connectivity to all parts.
What it is not:
The markets are constantly changing but with a
"dynamic consistency" to them. Each market attracting
different groups of people must be treated as such. Theories to
the contrary are just man-made conveniences and
counter-productive. Therefore the following based on fixed or
static principles from the "conventional wisdom" pool
are avoided:
1. infamous number ratios.
2. set lines or angles.
3. historically derived fixed parameters.
4. optimized rules.
5. state-of-the-art fads or mathematica.
6. over manipulation of the data.
Requirements:
The most important tools required are:
1. your eyes.
2. charts of past market activity either on paper or computer.
3. an open mind.
4. an eagerness to work and learn.
(Prior computer knowledge or market trading experience is not needed.) Charts are used because they are the best graphical representation of human logic and emotion. They help identify the effects of the different market participants. With practice of looking at the same charts that everyone has but with a different perspective, you'll gain confidence in "believing what you see, not seeing what you want to believe".
Trading or investing is like any other business. It does require work so success depends on proper preparation. All markets are nothing more than different groups of people acting together yet independently. Although they come with various trading resources, expectations and needs, never forget they want your dollars as much as you want theirs.
Process:
Evaluating a market in a general sense or composite form is just as inaccurate as judging books by their cover. They are the sum of their integral parts. Divide and conquer their various components and related functions. When analyzing any chart we find they are all made of:
1. points.
2. bars.
3. swings.
4. cycles.
5. trends.
6. directions.
7. perspectives.
The relationship of these components helps to identify the different intentions and tendencies of the various market players. The symmetry and inter-dependence between these levels (to compress or expand) gives us a valuable clue. Just like in nature, the smaller tells us where the larger is going and the larger tells us where the smaller has to go. With this information the process is now reduced to
1. find the obvious relevant facts.
2. identify the current market structure.
3. determine what will happen next.
4. anticipate the market movements.
5. evaluate a trades potential.
Placing the actual trade requires one last point, confidence and follow through. Where does the confidence come from:
1. knowing the reward and risk of the trade ahead of time.
2. being aware that the markets are strictly a numbers game.
3. having used all the clues and hints to take any advantages.
4. leaving no room for emotional intervention.
5. removing all the subjectivity possible.
6. base your reasoning on a consistent foundation of how markets work dynamically.
Summary:
Do people know how to make money from the markets? The answer should be yes ... everyone already knows how. People should buy low and sell high. They should let their profits run and cut their losses short. Go with the flow, follow the trend. This is correct, but quite difficult to define and implement without a deeper understanding.
The purpose of Marketry is to create a game plan to fill that logical gap. If you don't know how a market got to where it is now, how are you to know where it should be going next. The process and concepts employed to answer that type of question are new and different but developed in plain english.
The learning procedure is similar to a spiraling effect where each level is more detailed than the previous, yet is complete unto itself. Therefore any part can be used separately or in its entirety to take advantage of the many clues given by the market about its future intentions. Along with the knowledge of HOW something works comes the WHY it does make sense and the WHEN it can and should be used. The Marketree Philosophy will give a different perspective in understanding the movements of the markets.