12
Programming The “Livermore Market Key” By KH Tang
Programming The
“Livermore Market Key”
By KH Tang
100
120
100 *(1+2*ThresholdPercent)
120
100
96 *(1+2*ThresholdPercent)
120 *(1-2*ThresholdPercent)
96
115.2
UpTrendThreshold Calculation=>
DownTrend*(1+2*ThresholdPercent)
DownTrendThreshold Calculation=>
UpTrend/(1+2*ThresholdPercent)
Error with Simple Multiplication method when calculating the Up and Down Pivot Point.
Solution to handle the error: =>
Process StateNo 1RoutineUpTrend
Program Start
End
StateNo = 1 ?
True
False
Initialization
Process StateNo 2Routine
NatlRally
StateNo = 2 ?
Process StateNo 3RoutineSecRally
StateNo = 3 ?
Process StateNo 4RoutineSecReact
StateNo = 4 ?
Process StateNo 5Routine
NatlReact
StateNo = 5 ?
Process StateNo 6RoutineDnTrend
Conditional Reset ofNatRallyReset Flag
andNatReactReset Flag
True TrueTrue True
Jesse Livermore Secret Market Key Flow Chart by KH Tang
False False False False
First Bar ?
False
True
Note: Short form used in the flow chartPP = PivotPointNat = Natural Sec = SecondaryDn = DownReact = Reaction
Initialization
End
StateNo=1;InUpTrend=True;InDnTrend=False;
UpTrend=C;NatRally=C;SecRally=C;SecReact=C;NatReact=C;DnTrend=C;
NatRallyReset=True;NatReactReset=True
UpTrendPP=C;NatRallyPP=C;NatReactPP=C;DnTrendPP=C;
NatReactReset=True
Conditional Reset Parameters
InUpTrend ANDNatReact <{UpTrend/
(1+2*ThresholdPct)}?
True
False
InDnTrend ANDNatRally >{DnTrend*
(1+2*ThresholdPct)}?
NatRallyReset=True
End
False
True
State No=1 (InUpTrend)InUpTrend=TrueInDnTrend=FalseUpTrend=Price
Price >UpTrend
?
True
Price >=LastPrice
?
Process StateNo 1(InUpTrend)
False
True False
Price <(UpTrend/
(1 +ThresholdPct)?
End
StateNo= 5 (InNatReact)NatReactReset=False
NatReact= PriceUpTrendPP = UpTrend
StateNo = 4 (InSecReact)SecReact = Price
UpTrendPP = UpTrend
True
FalseNatReactReset ORPrice<NatReactPP
?
State No = 6 (InDnTrend)InDnTrend = TrueInUpTrend = FalseDnTrend = Price
UpTrendPP = UpTrend
(InDnTrend ANDPrice <DnTrendPP)
ORInUpTrend AND
Price < {UpTrend/(1+2*ThresholdPct)}
?
False
True
True
True
False
Price >NatRally
?
StateNo = 2 (InNatRally)NatRally = Price
False
True
Price >=LastPrice
?
True False
End
Process StateNo 2(InNatRally)
True
(InUpTrend ANDPrice >UpTrendPP
ORInUDnTrend ANDPrice>DnTrend*
(1+2*ThresholdPct)}?
False
Price <(NatRally/
(1 +ThresholdPct)?
StateNo= 5 (InNatReact)NatReactReset=False
NatReact= PriceNatRallyPP = NatRally
StateNo = 4 (InSecReact)SecReact = Price
NatRallyPP = NatRally
True
NatReactReset ORPrice<NatReactPP
?
State No = 6 (InDnTrend)InDnTrend = TrueInUpTrend = FalseDnTrend = Price
NatRallyPP = NatRally
(InDnTrend ANDPrice <DnTrendPP)
ORInUpTrend AND
Price < {UpTrend/(1+2*ThresholdPct)}
?
False
True
True
True
False
False
State No=1 (InUpTrend)InUpTrend=TrueInDnTrend=FalseUpTrend=Price
StateNo = 3 (InSecRally)SecRally = Price
True
False
Price >=LastPrice
?
Process StateNo 3(InSecRally)
State No = 1 (InUpTrend)InUpTrend = TrueInDnTrend = FalseUpTrend = Price
StateNo = 2 (InNatRally)NatRally = Price
Price >NatRally
?
Price >SecRally
?
State No = 6 (InDnTrend)InDnTrend = TrueInUpTrend = FalseDnTrend = Price
Price <NatReactPP
?
StateNo = 5 (InNatReact)NatReact = Price
StateNo = 4 (InSecReact)SecReact = Price
End
Price <SecRally/
(1+ThresholdPct)?
False
True
False
True
(InDnTrend ANDPrice <DnTrendPP)
ORInUpTrend AND
Price < {UpTrend/(1+2*ThresholdPct)}
?
(InUpTrend ANDPrice >UpTrendPP
ORInUDnTrend ANDPrice>DnTrend*
(1+2*ThresholdPct)}?
True False
True True
False False
True
False
StateNo = 4 (InSecReact)SecReact = Price
StateNo = 5 (InNatReact)NatReact = Price
State No = 6 (InDnTrend)InDnTrend = TrueInUpTrend = FalseDnTrend = Price
State No = 1 (InUpTrend)InUpTrend = TrueInDnTrend = FalseUpTrend = Price
StateNo = 2 (InNatRally)NatRally = Price
StateNo = 3 (InSecRally)SecRally = Price
Process StateNo 4(InSecReact)
Price <NatReact
?
End
Price <SecReact
?
False
False
Price >=LastPrice
?
False
Price >NatRallyPP
?
Price >SecReact*
(1+ThresholdPct)?
False
(InDnTrend ANDPrice <DnTrendPP)
ORInUpTrend AND
Price < {UpTrend/(1+2*ThresholdPct)}
?
(InUpTrend ANDPrice >UpTrendPP
ORInUDnTrend ANDPrice>DnTrend*
(1+2*ThresholdPct)}?
True False
True True
False False
True
True True
True
StateNo= 5 (InNatReact)NatReact = Price
State No = 6 (InDnTrend)InDnTrend = FalseInUpTrend = TrueDnTrend = Price
State No = 1 (InUpTrend)InUpTrend = TrueInDnTrend = FalseUpTrend = Price
NatReactPP = NatReact
StateNo = 2 (InNatRally)NatRallyReset = False
NatRally = PriceNatReactPP = NatReact
StateNo = 3 (InSecRally)SecRally = Price
NatReactPP = NatReact
Process StateNo 5(InNatReact)
Price <NatReact
?
End
Price >NatReact*
(1+ThresholdPct)?
False
True
NatRallyReset OR Price>NatRallyPP
?
True
Price >=LastPrice
?
False False
False
True
(InDnTrend ANDPrice <DnTrendPP)
ORInUpTrend AND
Price < {UpTrend/(1+2*ThresholdPct)}
?
(InUpTrend ANDPrice >UpTrendPP
ORInUDnTrend ANDPrice>DnTrend*
(1+2*ThresholdPct)}?
True False
True True
False
State No = 6 (InDnTrend)InDnTrend = TrueInUpTrend = FalseDnTrend = Price
State No = 1 (InUpTrend)InUpTrend = TrueInDnTrend = FalseUpTrend = Price
DnTrendPP = DnTrend
StateNo = 2 (InNatRally)NatRallyReset = False
NatRally = PriceDnTrendPP = DnTrend
StateNo = 3 (InSecRally)SecRally = Price
DnTrendPP = DnTrend
Process StateNo 6(InDnTrend)
Price <DownTrend
?
True
False
Price >{DnTrend*
(1+ThresholdPct)}?
Price >=LastPrice
?
NatRallyReset OR Price>NatRallyPP
?
False
True
True
False
True False
(InUpTrend ANDPrice >UpTrendPP
ORInUDnTrend ANDPrice>DnTrend*
(1+2*ThresholdPct)}?
End
True
False
Sample Chart
In late 1939, Livermore's son, Jesse Jr., suggested to his father that he write a book about his experiences and techniques in trading in the stock and commodity markets. The book was completed and published in March 1940. It was titled How To Trade In Stocks. ( Downloadable)
In this short book, Jesse Livermore spent a great deal of effort, more than 1/3 of the book, in explaining and illustrating this “Livermore Market Key” technique in details. Later in November 1940, he passed away…
May be… just may be that… Who Knows? May be he wanted to pass down this tool to the public to avoid personal financial crash due to the Stock Market Manipulation in the future? As it surely would help those who believe and follow through his work. (See it for yourself from the charts on the next link.)
The above flow-charts were proven to be programmable as the result shown in my blog: Stock Market Tools (6) - Livermore Market Key.
"La guerre! C’est une chose trop grave pour la confier à des militaires."
"War is too important to be left to the generals."
- Georges Clemenceau (1841-1929): A French journalist, physician and statesman. He served as Prime Minister from 1906 to 1909 and from 1917 to 1920.
With the same token, it is suggested that:-Personal Finance matter is Too Important to be
left to the Financial Advisors!
Thus, it is so serious that individual Must spend part of the time to learn and understand how economy works!
Bless YouKH Tang24 Jan 2010
