Iterative Refinement

[romanus]

Quote from Spydertrader:

eod.jpg

Thank you.

If anybody was thrown off by increasing black 14:45 close of - it has been covered before:

As price moves toward Point Three, one often receives what appear to be conflicting signals. The appearance of these 'so-called' conflicting signals results out of context. should the resulting changes from Point Two to Point Three occur within the previous channel, one can often 'see' Volume return to increasing Dominant.

 

[Tums]

Quote from dkm:
If it is 11:55 on the 19th, price goes higher...............

Yes, in that case, you could draw a line straight through. I do that on occasion.
But you should also recognize a retrace, no matter how small, is built in to that leg.

 

[jbarnby]

Quote from Spydertrader:

I expect most people felt 14:15 completed a down sequence, and began another up sequence. Clearly, it did not.

- Spydertrader [/B]

Spyder,

I have a question to which the answer will help me greatly.

I understand that the 14:15 bar today (9/24) did not complete the sequence. I believe this would be because 14:15 was a bo of a formation. Now let's compare today's sequence with that of the up traverse on 9/19. The 12:30 bar in that sequence was also a formation breakout. Was that also an incomplete sequence?

Thanks for your help.

John

 

[Spydertrader]

Quote from jbarnby:

Was that also an incomplete sequence?

See my response to phineas.

- Spydertrader

 

[ljyoung]

Yet another question for you this evening.

The 3 blue lines show areas where you 'broke' a Lateral Movement or a Formation (Pennant/LF) while the 2 red lines show areas where you maintained the LM's. Could you elaborate why you took these actions? I can see where one decision may have been prompted by the change in dominance but the others are less obvious.

TIA

lj

 

[Spydertrader]

Quote from ljyoung:

Could you elaborate why you took these actions?

Where your red lines point, Laterals are forming - one Lateral Formation and one Lateral Movment. Where the blue lines point, laterals ended or could not form due to change (one sequence ends and another begins), or IBGS on increasing volume.

- Spydertrader

 

[guavaman]

Quote from Spydertrader:

whereas the other scenario first appeared to complete its sequences, but the market informed the trader that the market had not yet finished moving from Point Two to Point Three.

Spyder,

Sorry to be so dense on this issue. Undoubtedly, with my confusion on these type of scenarios it is no wonder that protracted lateral movements are a significant source of my mis-analysis and costly mistakes.

I just don't see an appreciable difference between the two areas I sighted. Both complete a sequence. with a confirmed Pt3 and a close inside a lateral. Both have increasing volume and price in the opposite direction.

How is it that the close of the 12:20 bar in lateral movement suggested that a Pt3 has not been reached, but the close of the 11:50 bar has?

 

[Spydertrader]

Quote from guavaman:

How is it that the close of the 12:20 bar in lateral movement suggested that a Pt3 has not been reached, but the close of the 11:50 bar has?

I have highlighted the two bars in question - circling the Point Three bars in the Sequence. Note how one bar creates a Point Three, but has not yet confirmed with increasing volume. The other bar devlops on increasing Volume well after the Point Three bar.

HTH.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2087551>

In addition, note one of the three ways increasing volume can develop when Price moves from Point Two to Point Three, and tell me if you 'see' such an example where you currently find confusion. Does Price move from Point Two to Point Three in dominant or non-dominant fashion?

- Spydertrader

 

[guavaman]

Quote from Spydertrader:

I have highlighted the two bars in question - circling the Point Three bars in the Sequence. Note how one bar creates a Point Three, but has not yet confirmed with increasing volume. The other bar devlops on increasing Volume well after the Point Three bar.

In addition, note one of the three ways increasing volume can develop when Price moves from Point Two to Point Three, and tell me if you 'see' such an example where you currently find confusion. Does Price move from Point Two to Point Three in dominant or non-dominant fashion?

The three ways we can have increasing volume while price moves from Pt2 to Pt3 are BO of Pennat, RTL and a Spike bar. I see where we have increasing volume with the BO of the Pennant at 11:40. And although we didn't have increasing volume in the dominant direction immediately it did show up shortly after. The other Pt3 12:15 had confirming Pt3 volume the very next bar. I am lost still further in trying to assimilate these questions into my original question of why we know 12:20 did not confirm a Pt3 up and the increasing volume that followed did not indicate change. We didn't have a lateral BO on the 12:30 bar so that is not an explanation of the increasing volume.

I am confident your questions relate to why the 12:15 bar was known not to be the actual Pt3, but I have yet to figure out how so the conundrum continues.

 

[guavaman]

Quote from guavaman:

The three ways we can have increasing volume while price moves from Pt2 to Pt3 are BO of Pennat, RTL and a Spike bar.

Okay, I see the spike bar at 12:30 which accounts for the increased volume and in itself doesn't provide any indication that a change in dominance has occurred.

Still haven't figured out how two bars earlier we knew we still had more lateral movement to go through.