Market-generated data (or price data) contains intricate information that reflects behaviors and attitudes of participants, defining a markets’ ‘personality’. Capital markets (or specific asset markets) therefore are largely a psycho-social phenomena, an ecosystem – and though perceived as complex, irrational systems – may express orderly and rational attributes that can be data-mined. This site describes a systematic method to trading derived from meaningful aspects of price data that are correlated with short term trend change or trend initiator days. The market-generated language as derived from the interpretation of meaningful price information can be broken down into concepts:
Trading ‘Time’:
Market movements are governed through a hierarchy of time: whereby, larger time-periods (quarterly, monthly, weekly) are more meaningful and impactful on price than shorter time frames (daily, hourly, intraday) and therefore have stronger influencing factors over the directional bias of the market. Once a trend is set in motion on a monthly basis, there may be a propensity for continuation into the future. Human beings are affected and influenced by psychological time – past and future – so too are markets. Markets exhibit memory or dependence and they will tend along a path of least resistance defined by larger trading time periods up until short term changes of such magnitude begin developing counter to the prevailing bias, leading to condition-changes in weekly and monthly time periods, that alter the overall characteristics of the market. The MST philosophy is designed to capture shorter term ‘moments’ in price behavior that correlate to statistical qualities that may alter larger imbedded trends (weekly, monthly) or longer trading time periods.
Market Conditions:
Markets are always developing and these characteristics can be classified according to direction and volatility, and can be guided by indicators that may be used in a variety of interchangeable ways to evaluate the strength or weakness of these classifications, which can feedback into a change in the relative condition of the market. Markets may be very active, oscillating in fast sinusoidal and seemingly illogical wave patterns. At other times, markets lay dormant in a range-bound way, or they may slowly creep and persist in trends. They may fluctuate in rapid, violent movements, associated with trends and non-trending conditions. By evaluating market activity through integrative trading time frames or integrative market structures, meaningful market activity or movement can be classified.
Fractals:
Borrowing from Benoit Mandelbrot, the market can be described as having a ‘fractal’ nature: market activity originates from the minutiae of the intraday level, cascading and expanding into larger levels (hours, days, weeks) as a continuum. Each time frame, therefore, has meaningful and potential moments, that may influence other adjacently larger trading time periods. The market time-frame that any one trader chooses, as reflected by style and personality, may be more meaningfully assessed by anchoring to longer-time frame reference points in relation to shorter-term directional biases. Trading opportunities may be discovered, risk defined, by leveraging important reference points in the context of price development by integrating ‘time’ into your procedure.
Futures Trading 