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Martin Pring's Four-Seasons model for prices and indicators Topic Rating:
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Al_Gorithm
Posted : Thursday, April 26, 2018 9:15:19 AM

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Happy Thursday Bruce!

Your mission, should you decide to accept it ...

Love the "Elder Impulse System implemented as a sort of OHLC Bar with a colored body like a candle."

The only issue I have with it (ie, with Elder, not you :) is that Blue after Green and Blue after Red is really two different things. I understand why Elder does it this way, but ...

Over the weekend I decided to take this a step further. I believe it was Martin Pring who came up with the model of seasons for prices. It comes closer to what I'm trying to do here, so...

Let's review. The conditions for Elder's Impulse colors are ...

Pring's model adds the relationship of the MACD-Histogram to its centerline (ie, above or below). I believe this improves on Elder's Impulse colors since even though he categorizes Blue as Neutral, it can be Bullish or Bearish depending on whether it follows Green or Red, respectively.

If that doesn't make sense, that's why I doodle on napkins. :)

Here's the same chart, but with Pring's Seasons added ...

Can you create a "sort of OHLC Bar with a colored body like a candle" with the four colors representing Spring, Summer, Fall, and Winter?

And finally, ...

If you have time, can you create a second version where the color extends from the High to the Low instead of the Open to the Close? In the Open/Close original version the color can be hard to see when there are Doji's.

really appreciate all the help.!

Bruce_L
Posted : Thursday, April 26, 2018 2:03:35 PM


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I might be missing something, but aren't there actually more combinations than this?

EMA Rising Rising Rising Rising Falling Falling Falling Falling
MACD-H Rising Rising Falling Falling Rising Rising Falling Falling
Centerline Above 0 Below 0 Above 0 Below 0 Above 0 Below 0 Above 0 Below 0


-Bruce
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Al_Gorithm
Posted : Friday, April 27, 2018 9:38:04 AM

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Bruce, give me a few minutes. Just moved into a new place and was offline most of yesterday. Let me get some more coffee, and once it kicks in I'll go over all the combinations on a napkin. :)

Al_Gorithm
Posted : Friday, April 27, 2018 10:53:27 AM

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LOL. Great minds think alike!! :)

Just finished doodling on my napkin, cleaning it up in Excel.
Give me a few minutes. Stay tuned.

Al_Gorithm
Posted : Friday, April 27, 2018 11:12:53 AM

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I may get some of the lingo wrong (due to a misspent youth - was bored in school), but ...

Before I looked at your combinations I put away my laptop and grabbed some coffee, a napkin, and a marker ...

The way I see it there are 3 variables, each having 2 possible outcomes, so the number of combinations is 2 x 2 x 2 = 8.

Back when I was learning prgramming languages and tried to code a nasty nested IF-THEN I would draw up a decision logic table with all possible combinations. (If you do it right, the nested IF-THENs almost write themselves.)

Anyways, once I finished it I opened my laptop again and read your response ... and my table is EXACTLY the same as yours. You can't make this stuff up. Like I said, great minds ...

Gotta run an errand before Noon Chicago time. I'll try and get back to you this afternoon on the other four combinations. I know it's Friday but maybe we can bang this out today. If not, Monday's fine. Appriciate the help. Nice catch.

Stay tuned.

Bruce_L
Posted : Friday, April 27, 2018 11:34:09 AM


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I actually probably won't be here this afternoon. I have an appointment. I will take a look at it over the weekend however and should be able to post something on Monday.



-Bruce
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Al_Gorithm
Posted : Friday, April 27, 2018 4:01:07 PM

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Bruce, thanks for the heads-up. Been awhile since I moved and I forgot how much $#%&*! is involved.

Still unpacking, running errands, etc. Will start fresh in the morning with a pot of coffee and go through all eight combinations on my trusty napkin. Want to get this right the first time so we don't have to do it over. Don't want you working over the weekend ... Monday is fine.

Looking forward to trading in my rowboat for a yacht. ;)

Stay tuned. Thanks!

Al_Gorithm
Posted : Saturday, April 28, 2018 12:32:28 PM

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Hi Bruce,

After a good night's sleep and some fresh hot coffee this morning, I realize where I (temporarily) went off the rails. Will explain tomorrow. The tease is we're not really doing Elder, or doing Pring, ... it's probably going to be an UnclePennybags-Pring-Elder-Hybrid-Mashup. :)

I'm still working on the decision logic table. It's interesting that we both came up with the columns/combinations in the same order (great minds, ... ).

But for purposes of the model, I'm reordering the column combinations so the seasons flow more naturally and the table is easier for folks to read.

Once the table is right, you should be able to write the PCFs and I can pick the colors. 

The PCFs are, of course, the critical bit. The colors are easily adjustable by clicking and choosing edit. In my case, I plan on using four shages of green for bullish conditions and four shades of red for bearish conditions. But that's just me - other folks interested in using this can of course pick their own color scheme.

Hope you're enjoying your weekend so far. Will try to post the final decision logic table Sunday afternoon.

Stay tuned, and thanks again.

Al_Gorithm
Posted : Monday, April 30, 2018 11:54:46 AM

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Hi Bruce,

After a few iterations following a couple night's sleep and fresh pots of coffee, I think I have the model finalized. But first, let's take a step back ...

My earlier diagram of Elder's "Impulse" model is (I believe) correct ...

The source of confusion came when I was overly caffeinated and tried mashing Pring's model onto the bottom of the same chart ...

The above chart is incorrect because Pring just uses an oscillator (in this case the MACD-H) and its relationship to its centerline ... he does not use the EMA in and of itself.

The correct version of the diagram is (I believe) ...

Note the lack of color(s). Pring's model is all about the "seasons" an oscillator cycles through during its life.

Having said all that, here is my model. It's not really Elder, and not really Pring. It's sort of what I imagine would happen if Alex and Martin walked into a bar, shared a bottle of wine, and started doodling on a napkin. :)

There are 3 variables, each having 2 possibilites, for a total of 2 x 2 x 2 = 8 combinations or possible outcomes.

In lieu of cute names, let's just name the eight PCF's "One, Two, Three, ... etc.", so they match the chart specifications. 

You'll notice I reordered the columns so the model flows more intuitively from left to right.

Folks are free, of course, to choose their own colors. I was inspired by Heat Maps. With this coloring you don't even need Scans or fancy decision logic tables ... just glancing at the chart should tell you all you need to know.

As a reminder, since Doji's and almost-Doji's on the original Open/Close version make the colors hard to identify, I'd like to try a version where the color extends from High to Low (like a Range Bar) instead of Open to Close (like a candle).

Bruce, I really appreciate all your help, and will invite you to my yacht's christening. ;)

I think the following chart is correct, but you've got a great pair of eyes. If you spot an "oopsie" let me know.

 

Bruce_L
Posted : Monday, April 30, 2018 1:56:19 PM


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I have sent you a TCMail with a chart containing my interpretation of the UnclePennybags Seasons indicator.



-Bruce
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Al_Gorithm
Posted : Monday, April 30, 2018 1:58:47 PM

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Thanks, Bruce! Give me a few minutes and I'll check it out.

Cool, I finally got an indicator named after me. :)

Al_Gorithm
Posted : Monday, April 30, 2018 2:19:41 PM

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Magnifique!

I think the implementations are reversed in the TCMail attachments ... the "Body" chart looks like a Candle, and the "Candle" chart looks like a Range Bar, but I know what you meant. :)

Looks good! For my own use, I'm going to make the OHLC lines thicker, and I'll probably wind up using the "Range Bar" version, but it's nice to have both available if someone else wants to use it.

Bruce, this is awesome! Need to prep for an interview this afternoon, but after sleeping on this I will double-check my work and eyeball some real charts tomorrow.

You're the MAN!

Thanks.

Al_Gorithm
Posted : Monday, April 30, 2018 2:56:15 PM

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Bruce, one final request for today ...

My OCD side wants to order the PCFs from left to right going from least Bullish to most Bearish.

In other words, can you change the current sequence ...

  • Summer
  • Chill
  • Spring
  • Frost
  • Indian
  • Fall
  • Thaw
  • Winter

To this sequence ...

  • Frost
  • Spring
  • Chill
  • Summer
  • Indian
  • Fall
  • Thaw
  • Winter

I tried doing it on my own, but I mucked it up. :)

Thanks!

Bruce_L
Posted : Monday, April 30, 2018 3:05:29 PM


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The OCD side of me can't do it since it obviously needs to be ordered most bullish to most bearish since they are opposite ends of the spectrum.

That said, I guess I can make up a completely "wrong" version for you anyway.



-Bruce
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Al_Gorithm
Posted : Monday, April 30, 2018 3:13:05 PM

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I think I've had too much coffee today, because I had to read that first line several times. :)

The good news is that I still have the first TCMail, and a layout saved, so I'll have it when I understand what you mean, and I decide I like your way better. I think I know where you're headed, but if you think of one season flowing into the next, and one year flowing into the next, your way we're going to go from the most bearish to the most bullish when you turn the calendar and flip from the right edge of the chart back over to the left edge, if you know what I mean.

And if you don't, I obviously have had too much coffee. ;)

For now, the "wrong" version will sync up with my chart, and the way the seasons flow in my head. What can I say? ... I'm a little weird that way.

I appreciate you indulging me.

Bruce_L
Posted : Monday, April 30, 2018 3:28:43 PM


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I have sent you a TCMail with a chart containing my interpretation of the UnclePennybags Seasons indicator.



-Bruce
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Al_Gorithm
Posted : Monday, April 30, 2018 3:35:10 PM

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Now THAT's what I'm talking about! :)

I guess one version is from a mathematical/analytical/Spock-ish point of view, and the other is from a meteorologist's point of view. All depends on how you look at it.

Hey, as long as I can buy that yacht, either view works for me.

Thank you. Thank you. Thank you!!

traderc
Posted : Monday, April 30, 2018 4:38:55 PM
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If this is not uncle’s propriety might i take a look at this as it is similar to what i was looking at doing from a market timing perspective but not with as many micro stages. Great post Uncle.

thnx rctrade

Al_Gorithm
Posted : Monday, April 30, 2018 5:23:07 PM

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Sorry, Patent Pending.

Al_Gorithm
Posted : Monday, April 30, 2018 5:24:00 PM

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Just kidding. :)

Al_Gorithm
Posted : Monday, April 30, 2018 5:41:08 PM

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Go for it. It is "proprietary" in the sense that I came up with the idea. Granted, I'm standing on the shoulders of giants, as Elder and Pring are two huge influences, but that's how progress happens. Even Steve Jobs stole most of his ideas. 

And, oh yeah, besides Alex and Martin, Bruce had a little bit to do with this too. ;)

Besides, this is just a tool. The odds that you and I (and anyone else) using this and taking the same trades are pretty much slim and none. Give ten carpenters ten saws and ten hammers, and you'll get ten different rocking chairs. Unless, of course, you hand them a blueprint to work from.

You can bet my blueprint and your blueprint are different. My tickers, timeframes, entries, exits, targets, etc., are all going to be different from yours.

If you do make some money using this, though, I'd appreciate "a little something for the effort". I'm saving up for a yacht. ;)

 

Al_Gorithm
Posted : Monday, April 30, 2018 5:59:13 PM

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And here's a perfect example ...

What traderc calls "micro stages", Elder calls "price fluctuations", and a friend of mine calls price "wobbles".

I just call it being thorough. :)

I'm not a CMT and I haven't looked at this on many charts today (been another one of those days) but I expect the even-numbered combinations (Spring, Summer, Fall, Winter) to be in the majority. I think the odd-numbered combinations will be the exception rather than the rule, but hey, I've been wrong like a bazillion times before.

One price fluctuation or wobble or candle isn't necessarily going to shake me out of a trade, but it's good to know it's there.

I know you can tell the same thing by looking at price alone, and I'm still a huge proponent of basing your final decision on pure price action. Having a computer doesn't give you a license to turn off your brain. You still have to think.

But Bruce's awesome implementation and PCF's will allow me to create scans, and alerts, and conditional orders, based on my secret sauce.

And what, you may ask, is that secret sauce?

You can ask. But I ain't telling. :) ... the model stands on its own merit and has value the way it is. Again, it goes back to what you do with it.

If it helps traderc and others, that would be very cool. And I'm sure there are a lot of traders out there that are a lot smarter than me.

Good luck, and good trading.

Enjoy!

 

 

Bruce_L
Posted : Tuesday, May 01, 2018 9:00:19 AM


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I have sent you a TCMail with a chart containing my interpretation of the UnclePennybags Seasons indicator.



-Bruce
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Al_Gorithm
Posted : Tuesday, May 01, 2018 9:32:06 AM

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Just a thought for those, like traderc, who prefer fewer than 8 "stages".

You have at least two options that I can think of ...

First, you can leave the PCFs the way they are, and just use fewer than 8 colors. A good idea would be to just use four colors and combine columns 1&2, 3&4, 5&6, and 7&8.

Another option, if you're comfortable with PCF syntax, is to dive into Bruce's code and remove the EMA-rising and/or EMA/falling bits. Just focusing on the MACD and its centerline will give you Martin Pring's Four Seasons model, without my "enhancements".

Just a thought. Enjoy, and good luck!

traderc
Posted : Tuesday, May 01, 2018 6:45:04 PM
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Thanks Bruce and Uncle. Will take the time to dig into it,  I have it on screen thanks to Bruce sending it, but need more time to look deeper into it. I don't use the Impuse system or seasons - so need time to internalize and see if it fit's. Will let you know either way.

Thanks Again for sharing,

rctreade

Al_Gorithm
Posted : Wednesday, May 02, 2018 9:15:39 AM

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traderc,

The quickest way to get up to speed on both Elder's Impulse and Pring's Seasons (IMO) is Elder's latest book, The New Trading for a Living. It's a very popular book so many libraries should either have it or be able to get it for you. I haven't checked Amazon lately but maybe you can pick up a used copy for less than retail price.

For a guy whose native language is not English, Elder writes incredibly well. Very concise, yet thorough, if you know what I mean. I think the book belongs on every traders shelf.

Anyway, you can always Google the stuff on the Internet, but I suggest begging, borrowing, or stealing a copy of Elder's book. 

Enjoy, and good luck!

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