Iterative Refinement

I did Spyder's drill but I was not very succesful with respect to collecting points. I think I lost about 15 points before Bernanke's speech. Collecting points was not the objective however.

The point is when is a bar really broken on increasing volume?

Sometimes there's +PRV while the bar is breaking but the bar ends lower volume or the bar ends well below the previous bar's high. Other times the bar is broken on "low" volume and once price is very far away already we see the PRV increasing.... Long after the break.

For example the 3pm bar. It was not until 1432 we saw increasing PRV. (also YM showed volume increasing volume very late)

Also pennants (I was following them) confuse me. For instance 1:15 pm. several times it seemed to be broken on increasing volume but failed. Then the next bar it looked increasing volume but it wasn't at end of bar but it did break the previous bar. Exactly following the rules can imo easily lead to losing 3 x 2 points or more. Should we not care about this and just keep on following the rules?

BTW we just had another pennant before that and these pennants after pennants don't make it very clear for me.

regards,
Ivo
 
Quote from ivob:

The point is when is a bar really broken on increasing volume?
More...

Actually, no. This isn't the point. Nor, does the drill provide a way to profit from the day. The drill provides the trader - you - the opportunity to 'see' where your strengths and weaknesses occur. By following the 'rules' of the drill, a trader should 'see' when the 'rules' cause an exit, when the trader knows to hold.

Does that sound like any sort of behavior many of you do each day? You know to follow the methodology, but for whatever reason, you do not. The drill provides just such an environment. "Hey, this is a Pennant! I should hold here - not exit! Awe crap, the rules say exit." It all sounds quite ridiculous, doesn't it? :D

In addition, the drill also provides an opportunity for the trader to 'see' where a real exit (or reverse) does develop, but the rules say hold. Does such an environment resemble anyone's behavior reading along? Many should recognize it. Again, quite often, people know what to do, but fail to act, or fail to act in a timely fashion.

Hence, the drill. It clearly shows the absurdity of repeatedly performing a task which fails to provide a benefit. The drill also points out where one's weaknesses reside. In other words, The drill points out in glaring detail where one needs to apply greater focus.

If anyone requires clarification on the drill 'rules' please let me know. If, on the other hand, the market provided the confusion, then the specific area of the market where the confusion occurred should reveal the specific area of the methodology requiring a review.

Remember, the drill isn't designed to provide profits. If the drill creates a profit along the way, that's a bonus.

- Spydertrader
 
I am curious to see how folks handled the 10:30bar.

I noted change and went short in the 10:25 bar and noted the increasing red volume on the ES. The 10:30 ES bar had flawish volume and was at the 20SMA. I looked at the YM and noted the decreasing black volume and figured we had continuation. When the bar cleared the high of the prev bar I exited the position.

A few questions:
1) Did anyone see change back to long earlier in the bar?
2) Did anyone reverse back long? I was hesitant because of the volume on the ES
3) Spyder is this a bar you would consider unusual or did I miss something?

I eventually got short on 2 bars later and caught 3 points when I reversed back long.


I will also share my experiences so far, I am still simming. If I consistently book profits when I see the slightest hint of hesitation I end my days profitable (also means I miss big moves as well). However when try to stay in all the time I end most days with a loss because I cannot see change soon enough (reacting rather than anticipating) and my reverse is always late.
 

Attachments

Quote from guavaman:

Thanks all for the comments and suggestions (except for Tikitrader's innate ability to be a relaxed trader :p) I will report back on my findings after I do Spyder's drills.
More...

Thats funny stuff guava:D
Music is very relaxing. So I enjoy listening to my favorite when trading. It keeps me in a good place.
If it is not distracting to you, give it a try !
 
Quote from bi9foot:

Spyder is this a bar you would consider unusual or did I miss something?
More...

That bar caught me off guard as well. I did not anticipate the amount of Volatility shown in the 10:30 bar based on decreasing Volume. However, when Volume sits at the Extreme levels, anything can happen, so I should have considered the possibility. In addition, the entire day (even though marking an uptrend) really represented a non-dominant traverse on a higher fractal. Again, in such an environment (combined with Extreme Volume Levels), I should have remained mindful of the possibility of 'seeing' such a move. Of course, I don't worry too much about it. After all, it isn't often we have 5 point bars during a retrace. :D

- Spydertrader
 
Okay, I understand now. The drill isn't about the profit just about executing the method.

However, the following remarks did make me think that profits were important, should be counted and could be made using the drill. At least it seems to me that you were counting profits just like I was counting my losses :-)


Quote from Spydertrader:

01-10-08 04:32 AM

... You should 'see' a few winning trades, a few losing trades a few FBO's and an Outside Bar or three, and (if the market cooperates as it did the past 2 days) some very nice profits. You will however not catch an entire move.

Let me know how it goes.

- Spydertrader
More...

Quote from Spydertrader:

01-10-08 05:26 PM


...
For those using the drill today, the 12:15 & 12:20 bars should have worked out rather nicely - about 17.5 points in ten minutes. That sure makes up for a bunch of errors. :D

- Spydertrader
More...
 
Quote from ivob:

However, the following remarks did make me think that profits were important, should be counted and could be made using the drill.
More...

Yes, provided the market cooperates, profits can develop. One should keep track of profit and loss during the execution of this drill in order to 'see' how and why the profit and / or loss develops. The specific case today where 17.5 points profit resulted from the market run up, occurred when both the market and the drill provided the same exit point.

- Spydertrader
 
Heeee's back. I wasn't going to post today because the way I post is time consuming (and yes, I know, boring) BUT I had a moment of bright, shining light that I feel obliged to chare (you got to chare, mang) with you all. It has to do with the dreaded IF1,2/APA.

As usual when you reread Jackstuff a couple of dozen times (well, some of it anyways), it turns out that he makes perfect sense. So, here's my take on what IF1,2/APA means. Sorry all you NLP buffs, there will be no pictures here. We'll discuss a LONG case and reverse the thought process for a SHORT ('cause if you don't there will be pain).

We start on a 5 minute ES bar that we've just entered because we figured that price was going up.

IF1 refers to the fact that if price goes below the CLOSE of the prior bar, a RED flag goes up. If price goes below the LOW of that bar, you wash and reverse your position (so now you are SHORT). This action is referred to as IF2. The price at which you do this reversal is your new "ENTRY" point.

As Jack says: "...sometimes a subsequent wash and reversal is required". Well the only way this can happen is if the bleedin' price stops going down, reverses itself and moves up past the "ENTRY" point mentioned immediately above.

When this happens you wash and reverse (so that once again you are LONG) and drop down to a faster fractal which in this case is the 1 minute ES. This action is called APA and clearly you can only do this once because if you were to do it again you'd be down on the 200 millisecond fractal and nobody wants to do that (unless you're like ArthurDeco who has 16 brains - ho, ho).

So then what you do is, if necessary, apply IF1,2 logic to the 1 minute ES bars until the end of the 5 minute ES bar (that started all this stuff) and then GO BACK TO the 5 minute ES fractal when this bar closes. At this point I'd like to say that the 5 minute ES is my home away from home.

To repeat: You NEVER do the APA thing while you are on the 1 minute ES, unless you've really been bad and really want to punish yourself.

Glossary:
IF1 = yoiks!
IF2 = shite!
APA = fack!
If you have to do the IF1,2 thing on the 1 minute fractal you can come up with your own expletives.

I hope this helps. If it doesn't either I'm wrong (no way) or you need to read it again.

As always - SAW.

lj
 
ES Daily Chart. January 10 2008
I am installing DKM's volume tool that adjusts the daily volume.
For Thursday, you levels may not match.
I will have it adjusted for next week.

ESdailychartJanuary102008.jpg
 

Attachments

You must log in or register to reply here.
Back
Top