Topic: Martin Armstrong Discussion - page 133. (Read 647176 times)

Its right at the end...

"The election of a Reversal normally indicates that the expected high or low that should unfold could take place in as short a time span as 1 to 3 units of time, be it daily, weekly, monthly or quarterly. Therefore, a low might develop the very next day following the election of a Daily Bearish Reversal or within the next few days. The same is true for all price activity levels."
https://www.armstrongeconomics.com/the-princeton-models-and-methodologies-a-users-guide/system/

in the Models & Methodologies Second Edition (recommended) pdf its on page 28. "The election of a reversal normally indicated that the expected high or low that should
unfold could take place in as short a time span as 1 to 3 units of time (i.e. daily, weekly,
monthly, or quarterly).

Thank for quick reply.

I posted a link to a document from
https://www.armstrongeconomics.com/models/
Models & Methodologies Second Edition (recommended)


Can you be more specific with a text quote?

I checked https://www.armstrongeconomics.com/the-princeton-models-and-methodologies-a-users-guide/system/
and I don't see how is reversal election implying high or low.

Bikefront, keep in mind the Reversal System is not based on technical analysis, its very existence is based on the key principles of physics.  Armstrong has said The Reversal System is not intended to pick highs or lows, "The Reversals provides a map of precisely how far a market can move against the current trend without actually “reversing” the trend itself."

I can't recommend enough everyone read the user guide on how to use the reversal system, it will explain everything
https://www.armstrongeconomics.com/the-princeton-models-and-methodologies-a-users-guide/how-to-use-3/
https://www.armstrongeconomics.com/the-princeton-models-and-methodologies-a-users-guide/system/

Majors are definitely more impressive and usually results in a move significant move when they are elected since they are generated from a major high or low but it just means there is more resistance/support at that level, minors are essentially a minor resistance/support level and majors are a major resistance/support level. The important thing is to find the gaps regardless of whether it’s a minor/major or even if multiple reversals have been elected. Such as I recall the pound electing 3 weekly bullish reversals and bouncing off the 4th reversal so it went down from there.

Most of the time when one level is penetrated, the market price activity will continue to the next available Reversal so therefore we need to look for the gaps because a daily bullish reversal may be elected yet the next available reversal may be a  weekly bullish reversal(weekly resistance) or even a  monthly bullish just above which can overpower the daily and so on but I believe this is more true than ever when we are approaching the end of the week or month where the market will tend to gravitate towards those reversals and so the daily reversals can easily become overpowered by a much stronger cycle.

Regarding  the question do you know if there are there any plans for Socrates to trade based on its own information, I believe that will be coming in stage 2

Here are some more links that are very helpful in understanding more about the reversal system

(https://www.armstrongeconomics.com/qa/filtering-the-reversals-what-level-to-use/
https://www.armstrongeconomics.com/armstrongeconomics101/basic-concepts/the-third-fourth-reversal/
https://www.armstrongeconomics.com/armstrongeconomics101/basic-concepts/trading-reversals-in-reverse/
https://www.armstrongeconomics.com/models/understanding-the-trading-model/

Absolutely it's all on armstrongeconomics.com see the links below
https://www.armstrongeconomics.com/the-princeton-models-and-methodologies-a-users-guide/system/
https://www.armstrongeconomics.com/the-princeton-models-and-methodologies-a-users-guide/
https://www.armstrongeconomics.com/models/

Hi Strike Eagle!

Thanks for your comments.

Can you send the link where did you see that "election of a Reversal normally indicates that the expected high or low that should unfold"?
I understood that election of reversal is continuation of a move.
https://d33wjekvz3zs1a.cloudfront.net/wp-content/uploads/2016/02/ModelsMethodologies.SecondEdition.pdf - Page 26

"The election of the first Reversal Point indicates that a move to the second reversal is likely."

What do you mean by multiple election?

I understood that once reversal is elected, it looses it's validity as a reversal. Can be support/resistance in the future.

@Thekees - i hope to learn too.

About the Arrays I have printouts since Feb19 and found that the Text often mention a Strong Turning Point and a Key Turning Point. The Key TP is the one to look at imo.
And the Opening Numbers work too but the Reuters Site don’t show me the realtime price, so cannot be valid for Daily Trades. Or is there another place to look?

@ Strike Eagle 26

[/quote]
if you going to enter the market you could buy or sell against a reversal if tested
[/quote]

My old Strategy was to buy against the Weekly Reversals. I used to open a trade if the Price came near the Reversal from Monday till Wendsday. There was a greater chance of bouncing off than at the end of the week.

I found a Blog Entry from MA, and I looks like he is doing a so called straddle. Opening both orders at the Reversal.

QUOTE
A September high for the euro is still possible since July is a Directional Change. We could see the initial sharp drop creating the low from which new Weekly Bullish Reversals will be generated. We then watch to see if they are exceeded and if so we can still end up with a September high and then the crash.
I simply step in and step out. Sell against the 115 reversal and we know where you are right and wrong. Let the market decide and if exceeded then look for the 120. If not, you sold the high at 115.

https://www.armstrongeconomics.com/armstrongeconomics101/basic-concepts/playing-the-reversals/

Heres another Bolg Entry….

QUOTE
Reversals can be used in two ways. First, as shown above, you can add with each reversal until the trend changes. This illustrates JUST the reversals and only on a one-time level. You can build a position using the broader ones and then exit using the Daily or Weekly.
On the other hand, you can use reversals in the opposite manner for the initial entry.
https://www.armstrongeconomics.com/uncategorized/using-reversals/

I guess this is like the hypothetical Long, Short Position what Socrates writes. But Socrates does often open a position after one Reversal in between. Or does it only open another Position on major Reversals? Also, if I got this right, opening a long position on a Monthly Reversal and then close it when the first Weekly Bearish is elected…???
Never though about that.

[/quote]
So let's say we elect  3 weekly bearish reversals going into May but hold the 4th on the day / week or month of a turning point you could simply buy against the 4th bearish reversal since time is up.
[/quote]

Maybe its a good idea to buy the second Reversal and sell the Third. On the Weekly scale this takes too much time. I always had problems to know where to start, and if I look at the Reversal data, I collected, there is often just one Reversal from the other site. So I could start at the second. This is very useful and I will try it. Thanks.

[/quote]
if/when that 4th reversal is elected this market will begin to explode to the upside once again and hit new highs.
[/quote]

MMhhhhh, I first thought that too. But the Dow is Bullish right now. And the shift in Trend would be the Bear Trap imo. Could that be?

[/quote]
as you move closer to the date the more accurate the array will be such as the Dow monthly array was previously saying June was the turning point and now it is May.  you may need to take a screenshot of the daily array every so often and the weekly/monthly so you can easily see the turning points before they change since the height of the bars are relative.
[/quote]

Should I ignore the Text completely and focus on the Bars?

Has anyone find some more bugs to avoid? I recogized that some of the latest elected Reversals in the Reversal Tap disappeared from end of March to April 1st…..In Gold, Dow and EURUSD.
Could be a Bug?
Another thing is the difference between the Summery Analysis Weekly Reversal and the Premium Weekly Reversal, for example in Gold 3rd April 19..... Summery: Weekly Reversal is 1301.4 but on the Premium the first Bullish Reversal starts at 1325.9 and 1301.4 wasn’t  on the Table.

Also, has anyone observed a difference in electing major and minor Reversals? F.e. is the major Reversal more „magnetic“?
Is the multiple election of a Reversal (two times or more) something important?

Kiwibird,

whenever any trading system or algorithm is created, it is always back-tested with historical data, and make sure the trading system WORKS with historical data.  Armstrong will not be the first guy who publishes some successful record of back-tested data.  All the wallstreet firms with trading algorithm would have done so many times.  If an algorithm cannot even produce a positive trading result with historical data, it is junked right away.

What is much more important is to see how well a certain trading system/algorithm works in real time, because that is the TRUE test.

Furthermore, it is extremely difficult to discern whether the published signals are truly using PAST data ONLY, UNLESS the author ACTUALLY published the exact method to obtain the trading signals.  If ANY future data was used (which is impossible to get in a real-time real trading), then it will invalidate the trading system right away.

And that is why, the BEST way is simply to put the trading system to test in real-time real world.

Real profits will never lie.

I asked them about this 3 times and never got a reply, I thought there was something wrong with the arrays. They are sure taking their time to fix the bug.

I can't remember exactly when I stopped following Armstrong.  2015 was just the approximate time.  Before that however, I read every single article available from him.

Since you have also read his stuffs since 1995, could I check with you on my following understanding of Armstrong's stuffs, and see if they are the correct understanding:

1. Nothing in the market or even in the world is really random.  What has been set in motion decades ago, cannot be changed.  Armstrong's Socrates observe all global events and capital flow (unlike the fishbowl economists), and the forecast/predictions around the world are obviously interlinked and inter-related.

2. The number 26 is from 52/2, and 52 is from 8.6x6=51.2, and 224 is from 8.6x26=223.6.


I never claim that I'm an expert on Armstrong.  I just quote Armstrong, because I don't want to make the stuffs up.  You can explain what you think Armstrong means by Panic cycle, but my understanding is that panic cycle will be a period with high volatility, and could be either up or down, and almost certainly exceeds either the highest or the lowest point achieved in the previous period (day/week/month/year).  I'm sure Armstrong may have explained that somewhere, but since he writes so much, very often it's hard to find something unless some notes were taken.


It's getting too late at night.  I will re-post those previous points that I have made when I find time.  I also want to dig out the URL links, which will take quite some time and research.  I do NOT want to make stuffs up, and talk about Armstrong just based on my personal memory.

I advise not jumping into it if 26900 is surpassed. You be almost buying at all time high since most buyers are already in since Jan and waiting to take profit .
The bullish sentiments is something you want to look at too . beside there is a danger of a false breakout here .that could end up being a bad call.

I can't remember which poster on here directed the thread to this website, but a lot of work has gone into this Socrates buy/sell signals example:

http://armstrong.forumprofi.de/showthread.php?tid=78


"....Socrates Dow buy / sell signals - profit calculation

Armstrong has published the buy and sell signals for the Dow on the below long term chart. He has mentioned the "net profit/loss" number, but that in itself is not telling much about the real profit that could have been made. I've Iooked at every single position and calculated this chart with some real position and equity numbers. The following was the outcome.

Positions are additive and for simplicity I've taken the initial Dow at 7000 points = 7000$ for 1 position, but this can of course be scaled up or down. Depending on how much drawdown you are willing to accept (or capital / leverage is used), the below table shows the profit that could have been made.
Since the initial position size of 7000$ will change over time, the average position size during those 18 year was 10.500$ per position . The maximum number of open positions at one point was 9 positions which equals around 120.000$ in total. This was between 2004 and 2008 and all 9 open buy positions were closed in 2008 when the first sell signal came up. Then the first sell position was opened when the bear market ongoing. In 2002 the amount of sell positions was 9 positions (from 9 sell signals) which results to about 76.000$ in total, In Oct. 2002 all 9 sell positions were closed and a buy position was opened at the same time.
There was one period during 2008 and 2009 where 8 positions were accumulated (= 55.000$) and and in 2013 til 2015 it were 5 positions ( = 70.000$)
The average equity used over the 18 years was 35.000$ in this example.
The maximum drawdown happened during 1999 and 2011 were 3 consecutive open positions were closed with loses during a choppy period.
These numbers are calculated on the long term. There were 3 bull markets and 2 bear markets during that 18 year period. To take advantage of these numbers, one should to stick to those signals for at least 2 years (better 3 or ideally 18 years), I would say. As Armstrong also said, these signals work well during bull or bear markets. If the markets move sideways for a long time (several years), then signals don't work so well without timing.

The below values are related to the average equity invested over the whole time period of 18 years. In this case it is 35.000$
9 open positions max. = 120.000$ max. investment at some point.
Max. drawdown is related to the average equity.

Max. drawdown 9% profit 160% (56.000$ without leverage)
Max. drawdown 18% profit 320%
Max. drawdown 27% profit 480%
Max. drawdown 36% profit 640% (224.000$ - with a leverage of 4x per position)
Max. drawdown 45% profit 800%
Max. drawdown 55% profit 960% (336.000$ - with a leverage of 6x per position)

Since having 120.000$ invested at some point might not be an option for everyone, I've calculated this for fewer positions as well
and skipping everything above that position number. This is given that the initial positions size is 7000$ per position and position size is growing over time.

3 open positions max = (40.000$ max.) - 10.500$ in average per position , average equity used during the 18 years = 23.000$
The 50.000 for 3 positions were only when the Dow was at

Max. drawdown 15% profit 160% (37.000$ without leverage))
Max. drawdown 30% profit 320% (74.000$ - with a leverage of 2x per position)
Max. drawdown 45% profit 480% (111.000$ - with a leverage of 3x per position)
Max. drawdown 60% profit 640% (148.000$ - with a leverage of 4x per position)

During 1997 til 2015 the Dow itself had a max. drawdown of 50% (in 2008) and a total profit of around 250%. However, who could have known that it really goes up to 17.000 - 18.000 in 2012 with all of the banking crisis and subprime crisis going on. Who would have bought and sold the Dow during the panic of 2001 or 2008 correctly?

So in my opinion those signals were very successful compared to the Dow itself and it is super-simple to follow. You just have to consider the buy and sell signals by looking once a month at Socrates.
What also needs to be considered is position size, leverage, duration of investment, trading tools (ETF's or alike), the max. number of positions and the max. drawdown that can be accepted. Profits could be re-invested and additional equity could be added over time so that one doesn't have to start with 120k or 35k equity from the beginning.
With only 3 open positions max. it may happen that one is not trading at all for 2 years because there were more than 3 positions open at the same time. Also a leverage of 2x - 3x would be good to compensate inflation.

This one took me several full days to collect the data and create the formulas. Quite some work..."

MA_Talk You claim to have been following Armstrong for decades yet have misunderstood even what a panic cycle is please explain to me again since you are such an expert?
and also what else do you have on the charlatan that is Armstrong you must have exposed him I recall you had many points about how you had exposed Armstrong as a charlatan please put forth your views? even though you have already stated you stopped following Armstrong since 2015

The ECM is accurate down to the very day you are simply mistaken the dates are not the same because those numbers are in quarter cycle intervals so of course the dates are different since that is not how the ECM has originally been calculated.Again I have already explained this to you are clearly way in over your head this model is deeply complex not everyone can and will understand it, it requires a dynamic mind you clearly think in a very linear fashion so it will be difficult. Your inability to comprehend this model does not prove anything and you are simply wasting everyone's time here since you have already made up your mind. You keep posting because you are still in doubt so you need to convince others.

well because its nice to see whats coming in advance

Based on your statements above, I understand that you are using his timing model, the turning point, as it is.  No other additional information is necessary.  I thought you said that REVERSAL is the only game in town?

I'm not saying "why these dates are different from the one's Armstrong has been giving".

I'm saying because of the following FACTS:

1. BOTH dates were given by Armstrong.
2. Dates were not the same.
3. Armstrong continuously claims that ECM dates are accurate down to the "very day".

And we all know for sure that #1 is true, and #2 is true, and therefore

#3 or whatever Armstrong claimed canNOT be true.


Obviously, Armstrong has made many more mistakes in his post.  I just want to point out the key error in his core ECM model.

Your argument is based in sheer ignorance you are saying I don’t understand why these dates are different from the one's Armstrong has been giving therefore Armstrong is a fraud, is that really the best you have to disprove him?  
Surely you must more evidence for a such a charlatan I mean that can't be his only mistake he has been active for decades.

https://web.archive.org/web/20190210014758/https://www.armstrongeconomics.com/writings/1999-2/the-business-cycle-and-the-future/

I don't know how those dates were calculated since they only go to .2 decimal places and the "…" next to each number such as 2013.6… seem to indicate there are more numbers not being displayed which will of course change the final date which could be the answer because every date given there is always a few days more than the ECM numbers that are not calculated in quarter cycles which can be calculated to the day but they move in 2.15 and 1.075 intervals!  So for example 2013.6 which is the ECM number so that is .6 x 365 = 219 days into the year which is August 7th, from the link you provided the final number could very well be 2013.642 which would be .642 x 365 = 234 days into the year which gives you 08/12/2013 the exact date given there. with those dates provided by that link i'm sure there is a way to figure out what the rest of the number is beyond the .2 decimal places

but those dates are moving in intervals of 2.15 years so that is a quarter-cycle of the ECM so those dates are also significant in their own right. Each wave of the ECM is 8.6 years. so a quarter cycle would be 8.6 divide by 4(or 8.6 x 0.25) which comes to 2.15 so it is simply another  way of calculating the ECM but the math is exactly the same it still comes to 8.6.  So 2.15 x  2 is equal to 4.3 which is a half cycle of the ECM. so Armstrong is saying that the ECM can also be calculated in intervals of 2.15 years and that is not a contradiction at all based on the math.  The 1.075 wave is again cutting the 2.15 quarter cycle in half again. you could also probably do a quarter cycle calculation of the 8.6 month cycle and the 8.6 week cycle being 2.15 months and 2.15 weeks and they would also produce a different set of final dates.
 .

why don't you email Armstrong and he or someone from his support team will surely explain it better than I ever could.

 Armstrong has also not fully explained the model and is holding on to a few important discoveries on cycles that he has yet to fully explain in detail which is probably the only reason he is still alive today.
You are simply wasting your time unnecessarily the model works, how and why it works is irrelevant. It will be proven and we will go in real time we have a turning point which means a high or low should occur in May so let's see what happens.

I got response from support that due to bug, on daily level "today" is always a turning point. You should look into future bars to identify highest ones which are possible turning points.

Key is alignment of price and time but ....

I would follow the reversal system which will tell you the direction and let that be the guide since Armstrong has said the array is not 100% but I do find the directional change to be very good. The market may move against you in the short term but the reversals will ultimately define the trend.

if you going to enter the market you could buy or sell against a reversal if tested on the day/week/month of a  turning point so for example on the Dow monthly array we have a turning point in May which also has a directional change which suggests we could get a spike high or low that month as Armstrong has suggested as well. You then would need to find what week in May this turning point(high or low) may occur which appears to be the 6th of May and you could simply buy or sell against whatever reversal it is testing at that time and if the reversal is not elected then time is up and that should mark the high or low. 

So let's say we elect  3 weekly bearish reversals going into May but hold the 4th on the day / week or month of a turning point you could simply buy against the 4th bearish reversal since time is up. The Dow has a lot of weekly bearish reversals(support) at the 24300 area.

For the week of  March the 4th we elected a weekly bearish and we also at the same time elected a weekly bullish just below at the 25200 level which we tested and then moved up from there. For the 22nd of March yes we elected 3 daily bearish reversals and on the 25th we hit a low and came close to testing the next bearish reversal at 25312. It don’t believe we did actually elect a bullish reversal on the 26th I have screenshots, you need to keep checking especially the daily reversals since it does change quite a lot.

There were 2 daily bullish reversals elected on the Nasdaq yesterday with the main one at 7998 which implied the market would move up today with the next one at 8057.27 so that was the area you needed to sell which was functioning as the resistance level


Regarding the 4th  reversal he said there is no rush to jump in until we elect the 4th weekly bullish reversal which stands at 26951.82. we have been consolidating this year and we have not yet exceeded the high of 2018 so Armstrong tells us that Only when ALL FOUR Reversals have been elected do we consider that there has been an important shift in trend. if/when that 4th reversal is elected this market will begin to explode to the upside once again and hit new highs.
 
 as you move closer to the date the more accurate the array will be such as the Dow monthly array was previously saying June was the turning point and now it is May.  you may need to take a screenshot of the daily array every so often and the weekly/monthly so you can easily see the turning points before they change since the height of the bars are relative.

Armstrong basically explains why the bars change and why we see such big changes especially on the daily array.

"The first thing you should understand is that the charting is proportional, and not explicit. For example, lets say that January had 30 hits from 72 models. That would be the highest bar. Then January passes and May show up as the highest bar when it was previously half that of January when previously charted. The bars are plotted on a relative basis to the time frame selected. So if the highest bar has 15 hits within that 12 units of time, it will be at the top. As time moves forward and a new target enters the window with 25 hits, it will now appear at the top and the bar with 15 hits will appear as if it diminished. So the charting is RELATIVE and not explicit."

Hi

I have also been using the socrates pro level for a few months and started off drowning in all the info especially since sometimes there are contradictions  and bugs in the text analysis provided. In addition, the reversal that are on the dashboard are not all in on tab parts for the reversals, the reversal tab is often missing reversals.
There are also more things to take in to account than only the reversals, I have seen a few very nice setups where there was a large gap, the reversal was elected, and price starts to move only to stop right at the technical level and then reverse. Armstrong has mentioned this to, so he did warn us about this happening. I have also seen reversal elected and then price just simply move the wrong direction without any real cause. Last week it happened with the USDCAD and this week it was USDCHF where on Monday 15th a major bearish reversal was elected, price dropped to touch a tech level and then just shot higher. In this case, the bearish probably failed because price elected a weekly bullish the week before which I guess, “over powered” the daily bearish, and again, the guide mentions this, but that means you need to keep an eye on all the reversal levels.
One of the problems with the reversals, if you to trade the way armstrong recommends is that the stop loss should be placed at the next opposite reversal, which is sometimes miles away! This means you will often have terrible Risk Reward ratio (if you use the next reversal as the target). Granted, Armstrong says it is best to wait and to look for trades where the bullish and bearish reversals are close together, so you have low risk and a large reward, but this doesn’t seem to happen very often.
Another thing with the reversals is the What-If scenarios that sometimes happens. As an example, price elects a bullish reversal at 100, next reversal is 110, price shoots up to 105 and then that same day price generated and elected a bearish reversal. Therefore, you will need to check the socrates for this every day if you trade the daily reversals. I haven´t see this happen very often but large gaps are also not very common which makes it a little frustrating when it does happen.
Regarding the arrays, I have only used them to time when a breakout will happen using the Directional changes, other than that I can’t seem to get the hang of them. I have saved weeks of arrays, saving them every day to see how they evolve over time but the high bars just constantly change so much that there is no way of knowing the turning point. What often seems to happen is that 3day out there will be a massive composite high, then the next day this bar will have all but disappeared and then suddenly reappear the day it is due. I have even started checking the numbers or the counts of each bar that is given on the main page of the premium account and the same thing happens, it’s as if the arrays break down 2-3 days out. If anyone can help me out with this I would appreciate it, it has been frustrating to say the least.
Last thing I want to comment on is when there is a Directional change due. Sometimes on the array page Socrates will print something like this “However, an opening above 100 will imply the directional change may point to a rally, and a close above 110 will mean a really will unfold till the next turning point”. These don´t happen very often but since I have started looking for this, they have always been correct. Here a few if you can back check.
07-03 DOW:    Open above 257356 means rally, opened below and dropped 285 points
13-03 USDCAD: Open above 133850 means rally
11-03 DAX:    Open above 114515 means rally, price opened and 11493 and rallied 100points!
14-03 DAX:    Open above 115420 means rally, price reached 11642 and failed to elect the reversal at 11641 and closed neutral.
21-06 GBPUSD: Open above 13212 means rally, price opened 1.31939 and dropped 1.4% until bearish reversal at 1.0110.

The first time I tried to trade this setup was on the on April 9, USDCHF: An open above 0.99930 will mean rally and a close above will mean 100080 rally until next turning point. I lost money on this because my broker said the open was just below while the next day Socrates said it was just above. I didn’t know I should have checked the Reuters feed since it was so close, lesson learned. 

I have screen shots is people don’t believe that Socrates printed the above numbers.

I haven´t been following the page so much because of all the bashing of martin armstong. I want to discuss his system and socrates and nothing else and now I see there are a few more of us I hope we can bounce ideas off each other and learn a thing or to. I hope we can do that here if not, maybe we should start a form somewhere else.