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Iterative Refinement
- Thread starter Spydertrader
- Start date
Quote from innersky:
could you explain (or give a hint) why the first 2 bars tell you to go short?
Before Bar One ever opens, the trader reviews the latter part of the previous day in an effort to complete a 'Pre-Flight' Check. What do we know about the end of the previous trading day? We can 'see' a Down Traverse completed, and followed by, a Lateral - which ends the day. What must come next to complete the sequence? The market has moved dominant, then non-dominant, leaving only another dominant piece of the puzzle. BEfore we can begin to form this final piece, we need to make sure the market has finished moving in the non-dominant direction.
As Bar One opens and gaps up, we 'see' Price moving on increasing Volume. Because this is Bar One (and we only rarely ever see decreasing Volume on bar one compared to the previous trading day's final bar), we know two things. First, this increasing Volume finds itself colored black because the trading software colors bars black based on certain criteria met by Bar One. However, Price does close below the open on this first bar forming what would be (on any other bar of the day) either an IBGS or an Outside Bar. We also know, what direction the markjet has deemed dominant.
As a result, as our day begins, we know the dominant mode of the market (short), and we know what the market needs to deliver in order to complete a channel sequence (short traverse).
As Bar Two opens, Price begins to head lower at first on increasing red PRV. At about the exact moment, the trader starts to think all is well, price does an about face, and begins to head higher. By time Bar Two closes, Price has completed formed an Outside Bar on increasing black Volume. However, note where Price closes on Bar Two - back inside the previous bar. We know what the Jokari Window says about that. As a result, what appears to be a change in dominance, really results in a continuation of the current mode from Bar One - short.
All that remains is for the trader to note when the market begins the sequences required to complete the short traverse, and finally, the trader can begin to monitor for a signal of change.
One final note. Unless and until one has the skills required to trade with a great deal of confidence, I do not advocate entering the market at Bar One. Beginner Level traders should await market sync (at minimum) before entering.
HTH.
- Spydertrader
Thank you very much, it sure helps
--
innersky
--
innersky
Quote from Spydertrader:
Before Bar One ever opens, the trader reviews the latter part of the previous day in an effort to complete a 'Pre-Flight' Check. What do we know about the end of the previous trading day? We can 'see' a Down Traverse completed, and followed by, a Lateral - which ends the day. What must come next to complete the sequence? The market has moved dominant, then non-dominant, leaving only another dominant piece of the puzzle. BEfore we can begin to form this final piece, we need to make sure the market has finished moving in the non-dominant direction.
As Bar One opens and gaps up, we 'see' Price moving on increasing Volume. Because this is Bar One (and we only rarely ever see decreasing Volume on bar one compared to the previous trading day's final bar), we know two things. First, this increasing Volume finds itself colored black because the trading software colors bars black based on certain criteria met by Bar One. However, Price does close below the open on this first bar forming what would be (on any other bar of the day) either an IBGS or an Outside Bar. We also know, what direction the markjet has deemed dominant.
As a result, as our day begins, we know the dominant mode of the market (short), and we know what the market needs to deliver in order to complete a channel sequence (short traverse).
As Bar Two opens, Price begins to head lower at first on increasing red PRV. At about the exact moment, the trader starts to think all is well, price does an about face, and begins to head higher. By time Bar Two closes, Price has completed formed an Outside Bar on increasing black Volume. However, note where Price closes on Bar Two - back inside the previous bar. We know what the Jokari Window says about that. As a result, what appears to be a change in dominance, really results in a continuation of the current mode from Bar One - short.
All that remains is for the trader to note when the market begins the sequences required to complete the short traverse, and finally, the trader can begin to monitor for a signal of change.
One final note. Unless and until one has the skills required to trade with a great deal of confidence, I do not advocate entering the market at Bar One. Beginner Level traders should await market sync (at minimum) before entering.
HTH.
- Spydertrader
Quote from Spydertrader:
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2086621>
Spydertrader,
Just to finally get this clear in my mind. Regarding your purple down sequence, that ended on bar 11:50. Which bar actually completed the sequence, with valid increasing red volume. Was it either of these two?
11:45 Pennant BO on increasing red volume
11:50 Lateral Fbo on increasing red volume
Thanks,
Phineas
Note: Price/Volume action at purple down traverse point 3.
11:35 inc black vol, close outside previous bar and lateral (Dom UP)
11:40 dec red vol, 2nd bar in pennant, non-dom retrace (Dom UP)
Quote from phineas j. w.:
Was it either of these two?
11:45 Pennant BO on increasing red volume
11:50 Lateral Fbo on increasing red volume
11:45 would have completed the sequence had it not exited a Pennant Formation one bar prior. As a result, 11:50 actually completes the sequence because of the context in this specific example.
Also, you have chosen to view 11:35 and 11:40 as Dominant. Note how I annotated that area (as non-dominant). 11:35 tells you this is so.
All times Eastern and [close of] ES bars
- Spydertrader
Quote from Spydertrader:
11:45 would have completed the sequence had it not exited a Pennant Formation one bar prior. As a result, 11:50 actually completes the sequence because of the context in this specific example.
Also, you have chosen to view 11:35 and 11:40 as Dominant. Note how I annotated that area (as non-dominant). 11:35 tells you this is so.
All times Eastern and [close of] ES bars
- Spydertrader
Okay;
Regarding the context. I know from you chart notes that the signal for change was a lateral Fbo (so lateral was still in place). So in this context, the increasing red volume bar that is the signal for change bar, can also complete this sequence.
Thanks for details,
Phineas
Note: Not sure if the fact that Signal for change bar followed an increasing red volume bar that was a Pennant Bo, affects context or not. I will review earlier charts for any similarities.