Iterative Refinement

Nobody knows "what will come next" ... :)

Spydertrader mentioned the paradigm: signal, action, confirmation (look for "what must come next").

VE on decreasing volume is a signal of change. Looking at the context makes you think change or continuation? Decide, act, look for confirmation, or contradiction.

M-A-D-A, M-A-D-A, M-A-D-A, ...

EDIT: At this point I would hold short, but we can eventually reach the same conclusion following different paths, with different profitability.
Quote from gooch87:

Hi Tiki,
I think this is a possiblility.
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interesting study
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http://www.traderslibrary.com/productpages/palmquist/SPalmquist_SampleChapter.pdf
 
Quote from cnms2:

Nobody knows "what will come next" ... :)

Thank you for that and please know I am not saying what will come next, I am showing what I think it would look like if price moves in one of the 3 directions.

Spydertrader mentioned the paradigm: signal, action, confirmation (look for "what must come next").

VE on decreasing volume is a signal of change. Looking at the context makes you think change or continuation? For the larger brown down channel I think Friday indicates change and anticipate a point 3 up. (continuation up) So, on Monday, if price opens near the low and then on increasing PRV moves below Fridays close, then continuation down. If price increases on increasing PRV volume then continuation up. Next, I would anticipate more increasing volume to clear the prior lateral. Decide, act, look for confirmation, or contradiction.

M-A-D-A, M-A-D-A, M-A-D-A, ...
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Quote from cnms2:

Considering that you tried to trade the least steep retrace of the day, your reasult is actually not bad. Now, was this your only trade because that was the only time you watched the market today? If not, it means you tried to "catch a falling nife", to pick a bottom, and this requires a skill you probably don't have yet. Until your skills get better, try to trade with the trend.
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Yes, I understand you're saying. After a pt3, if I'm not in, I'm looking for the next ftt. I just always think after I miss the pt3 "oops, too late. Look for the next trend."

Which is why I tend to miss out on strong trending days.

Of course I'm in entry/exit mode. An SCTer wouldn't have these issues.
 
Quote from ang_99:

Yes, I understand you're saying. After a pt3, if I'm not in, I'm looking for the next ftt. I just always think after I miss the pt3 "oops, too late. Look for the next trend."

Which is why I tend to miss out on strong trending days.

Of course I'm in entry/exit mode. An SCTer wouldn't have these issues.
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ang_99, I received this info from a trader. I'm not sure how others in entry/exit mode are trading Pt 3's, but maybe this will assist you.

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Snip: As of today, I only trade the dominant trends in the big picture. I cover my positions on FTT's.

Snip: Over the last few months I have had great success trading the 20 SMA as it meets my RTL. I know this is only one of many indicators, but I use it as confirmation of the current trend.

Snip: I am not yet at the skill set to reverse my position…My most successful trade: increasing dominant volume at the RTL, with a close above/below the 20 SMA.

Snip: The 20 SMA does work as a trend line, but only with normal level volume. When volume is high using the 20 SMA is not recommended.
 
Quote from cnms2:

I'm up for it, but don't forget that there are some major differences between price and volume action on the 5 minute and on the daily charts. Market internals and externals have different weight on these charts. Open and close prices have different relevance. On the 5 minute chart we watch and act intra-bar too. On the daily chart volume is affected by roll-overs, expirations, holidays. Intraday the activity, hence volatility, depends on the time of the day. And so on.

It might actually be more useful to take an almost random intraday ES 5 min chart (unknown to others) and walk through it one 5 min bar a day. We could also look at the 2 min chart from the same day. If you have an older recorded day you could take snapshots of it every 5 minutes (or even every 1 minute if you like). The discussion will take more than 2 months (if using 1 minute snapshots, for expedience I would suggest advancing five 1 minute snapshots a day).

EDIT: You could just cherry-pick one "interesting" period from a past day (date unknown to others). We can back annotate it up to before that period, then start our one-bar-a-day analysis from that moment (5 min or 1 min snapshots).
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We have discussions on 5min charts all the time. A study of the daily chart can bring new perspective to those cross-eyed FTT searchers (a byproduct of watching too much CSI?) who tend to look for a FTT at the microscopic level.

I review the daily chart every morning before the market opens. I highly recommend this routine to every trader.
A new study of the daily chart can help traders develop this habit.



To add a different take to our study, I would suggest SPX or the SPY chart...
Both instrument track the ES closely, but do not have inconvenience of roll over gaps every 3 months.
 
The "one 5 min bar a day" proposal was meant to offer a possibility to have time to discuss each 5 minute bar without having the "benefit" of knowing "what happened next". Obviously there are still some limitations: not having a proper intra-bar discussion, the YM 2 min bars that sync 5 to 2 with the ES 5 min bars, etc..
Quote from Tums:

We have discussions on 5min charts all the time. ...
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just an idea...

if ES 5min = 100%
if YM 2 min = 40% of ES(5min)

if ES daily(rth) = 405 minutes(81 bars x 5min) = 100%
if YM 162 min = 40% of ES(405 min)

Then technically, the YM 162min rth should lead the Es daily rth.

If thats the case then all would be able contribute to WMCN and anticipate the "future coming into the now"

A third chart (the 5 MIN ES) could be added to further (A)nalyze the context of the day [IBGS, W or M day, inc b/r on 5min but dec b/r on daily etc...]

just an idea...
 
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