Iterative Refinement

[Spydertrader]

Quote from ljyoung:

I have some ideas and would like to hear what you or anybody else has to say.

You (and everyone else following these many pages) already know the signals for change. Needing to learn them isn't where people have had problems. The difficulty most people experience comes from knowing when the market has provided a signal indicating the time has come to seek a signal for change and / or having the ability to differentiate from times when the market has signal the trader does not have permission to seek a signal.

For example, 14:25 Pm forward to end of day provided several instances where the market showed signal of change, but never indicated the time had come to look for them.

Now, one can easily determine which path represents a better choice in terms of what is needed for each individual by simply asking oneself, 'Do I 'see' any signals for change between 14:25 and EOD?" If a trader can see them, then clearly, the trader does not need to learn them. If a trader (at any point during this timeframe) wondered why the market did not follow the signal provided, then such thoughts indicate a far different path where one needs to apply focus.

As I have said many, many times, one cannot seek a signal for change until the market has completed the sequences from Point One to Point Two to Point Three. Now, feel free to travel down any path you wish, but were I you, I might find it critical to know exactly when those sequences signaled completion.

HTH

- Spydertrader

 

[romanus]

Quote from ljyoung:


4. Pennant/Formation BO on increased volume (not sure if that one's included)

I have defined for myself a Traverse Level Signal for Change as something that which if occurs after sequence completion results in change of trend 100% of the time. While reviewing the charts, I have found the evidence that Pennant FBO (where price exits the boundaries established by the 1st bar of the pennant and closes back inside) does not meet the definition above.

 

[PTVtrader]

...

 

[frenchfry]

Quote from ljyoung:

You make some excellent points gman.

We need to formulate a clear definition of a tape and a traverse. Again I know that a tape has been set as being composed of 2 bars and a chubby tape composed of 3 bars but there are tapes which are longer than 2 bars or 3 bars. When does this long or extended tape stop being a tape and become a traverse movement? Would you agree that a traverse is composed of 3 traverse movements - an up-down-up series (LONG) and a down-up-down series (SHORT)? Does each traverse movement have a 1,2,3 sequence? At what point does an IFM come in to being? Does each IFM have a 1,2,3 sequence? At what point does a channel come in to being?

I have some ideas and would like to hear what you or anybody else has to say. Thanks for your input.

lj

This is interesting to read. Are you saying that this is not yet defined? I'm still reading the original futures journal and thought to myself that I will wait before I ask that question. Maybe it is answered somewhere in the Iterative refinement thread so I better wait until I reach that point in the journal. But if this basic concept is still not defined after two threads and so many posts then I'm a little bit worried.

 

[Spydertrader]

Quote from ljyoung:

The 5 min ES trader is a specific type of Hershey trader governed by constraints which in the world of real money trading may be difficult to adhere to, especially at times like these.

Such assertions make little sense in light of how the Price Volume Relationship works quite effectively on a 30 minute and / or Daily fractal when applied to the equities markets.

Clearly, nothing magical or mystical exists on a five minute time frame. 'Traverse Level' simply indicates trading with one tool set with the intention of not jumping to a faster fractal (specifically because one isn't using the tools required to trade that faster fractal) throughout the day.

In other words, one learns on one fractal, then applies what one has learned onto all others. This is what I did moving from equities to futures. One can change markets or change timeframes, but the principles apply universally throughout.

Any market, Any time frame - provided sufficient liquidity exists.

- Spydertrader

 

[WGTrader]

Quote from Spydertrader:

Chart for Today

Thanks Spyder for annotating the Dominant and Non-Dominant bars. This is an area I need to work on. I had a nicely annotated chart I was going to post at EOD, but unfortunately for some reason, Ninja Trader didn't want me saving it today FWIW, I found the 10:45 and 14:05 bars very telling clues to be alert for change within the next 3 or 4 bars.

 

[Spydertrader]

Repost

 

[Spydertrader]

Quote from WGTrader:

Thanks Spyder for annotating the Dominant and Non-Dominant bars.

Thanks for pointing out those annotations. D and N do not refer to Dominant and Non-dominant on the previously posted chart - even though some letters appear to correspond. You'll note a few 'D' bars inside a Lateral, when clearly, a Bar would not be dominant. To avoid confusion, I have reposted with a more clean chart.

Again, thanks for bringing the annotations to my attention. I'd hate to add to anyone's confusion.

- Spydertrader

 

[ljyoung]

Quote from Spydertrader:

You (and everyone else following these many pages) already know the signals for change. If I knew what the 5 signals for change were Spyder be assured that I would post them, as I think anyone else, yourself aside - you should not be expected to post them, would. Needing to learn them isn't where people have had problems. Here I would not agree with you because I don't believe that people know what they are. Thus my suggestion for the board denizens to post their list of 5 signals and see if a consensus can be reached The difficulty most people experience comes from knowing when the market has provided a signal indicating the time has come to seek a signal for change and / or having the ability to differentiate from times when the market has signal the trader does not have permission to seek a signal. I agree with you completely that most people have the most difficulty deciding when the signal for change is applicable.

For example, 14:25 Pm forward to end of day provided several instances where the market showed signal of change, but never indicated the time had come to look for them.

Now, one can easily determine which path represents a better choice in terms of what is needed for each individual by simply asking oneself, 'Do I 'see' any signals for change between 14:25 and EOD?" If a trader can see them Again I agree if people know what they are., then clearly, the trader does not need to learn them. If a trader (at any point during this timeframe) wondered why the market did not follow the signal provided, then such thoughts indicate a far different path where one needs to apply focus. Again complete agreement.

As I have said many, many times, one cannot seek a signal for change until the market has completed the sequences from Point One to Point Two to Point Three. I understand exactly what you are saying here, but as I said yesterday, for whatever reasons, until then I did not appreciate the fact that the third traverse movement ALSO required a 1,2,3 sequence completion before the trader could have permission to look for a change signal. Basic stuff, like gallbladder disease. Now, feel free to travel down any path you wish, but were I you, I might find it critical to know exactly when those sequences signaled completion. We are in singular and absolute agreement on this critical point.

HTH

- Spydertrader

lj

 

[ljyoung]

Quote from romanus:

I have defined for myself a Traverse Level Signal for Change as something that which if occurs after sequence completion results in change of trend 100% of the time. While reviewing the charts, I have found the evidence that Pennant FBO (where price exits the boundaries established by the 1st bar of the pennant and closes back inside) does not meet the definition above.

I also have this definition because otherwise a signal for change can't be a signal for change. There is a definitional aspect to the pennant change signal and let me present my thoughts here for your consideration.

Pennant = a 2 bar formation.

All these are 3 bar entities:
Pennant BO = a breakout of price with a close ouside the high or the low of the first bar of the Pennant.
Pennant FBO (1) = a breakout of price above the high or below the low of the second bar of the formation but NOT the first bar and with a close inside the second bar of the formation.
Pennant FBO (2) = as above but with a close outside the second bar of the formation.
Pennant BO FBO = a breakout of price above the high or low of the first bar of the Pennant but with a close inside the high or the low of the first bar of the Pennant.

Pennant BO+FBO = a breakout in price with a close outside the the high or the low of the first bar of the Pennant followed by a fourth bar which has price close back inside the first bar of the Pennant.

The signal for change is the Pennant BO FBO and as best I can tell, but I have not done an exhaustive search, is kosher.

lj