Here is an illustration whose value is that it shows a series of bars going from FTT to FTT.
Bar 30 is the first FTT and bar 37 is the second FTT. The profit is (161- 154), roughly. 7 points. we will use the standard of 30 points per contract margin which means 30 points allows another contract to be traded from profits.
7/30 is a decimal percent of capital; call it 23 percent profit over 7 bars.
On bar 37 a long TF is indicated so the trader goes long. As shown in the illustration the trader isgoing to reach the final new FTT with a reversal on bar 46 with an approximate profit of 15 points or 50% of capital. For this illustration lets just believe the final new FTT is on bar 46 and the pattern is finally traded. regard the market's offer as 15 points between bar 30 and bar 46 which is noted as 17 bars or 85 more or less minutes.
Logic dictates a lot of stuff. We deal in binary thinking to eliminate probabilities is what some people would say. The proper thought is that we deal in binary because it is the way to take the market's offer and that is the basis of the paradigm.
So let me take you through making money from bar 30 to bar 46.
Go long on 37; go short on 39 (as a wash); and go long on 46 to end the FTT to final new FTT profit segment. All are reversal trades.
Lets look at this as a generic TF trade where we trade all TF's generically one after another for the whole day.
What is the message I keep giving and which it takes so long for most to connect with?
The message is that PEP and its applications deal with binary vectors which are based on market behavior.
SCT has an anti whiplash additional benfit. It is not a corrollary or caveat. It is built in to SCT as a consequence of the logic.
Critique.
The annotations on this illustration are messed up; I fixed up the first part in another illustration. We actually know that the real final ftt was on bar 46 as a matter of fact and that the next TF FTT was bar 50 (long) and the next TF FTT was bar 55 (short).
Drill
1. Do wash trades on TF's that fail.
2. As you succeed at "washing", if possible let volume "tell" you to reverse as part of the wash.
3. Learn to fan on TF's that fail.
4. As you succeed at washing and fanning let volume tell you to reverse as part of the wash and fanniing.
5. Learn to extend LTL's that are still in play. This achieves two things: you will not use arbitrary LTL beginning points and you will see VE's.
6. Accelerate TF's as TF's (use the red or black middle weight lines). You get to see the new FTT and you have the RTL that is important for upcoming price movements.