As you all know one of our focuses is on reading the structure and reactions to that structure. The market is simply a culmination of the emotions of all the market participants. This herd of emotion produces structures that can be seen and used to produce algorithms with an statistical edge.
So what is a strategy? It’s a method of “predicting” the structure using various techniques and tools. We especially like to use the average true range, volume points of control, weekly wicks, and daily pivots. With this structure laid out, we look for reactions within the structure that produces expansion, contraction or consolidation, ECC. We wrap an algorithm around this process of “looking” based on IF-THEN statements. This produces setups and triggers that show us conditions such as trend, momentum, volatility, and volume. All of that boils a strategy down to a set of conditions that produces a statistical edge.