Iterative Refinement

[ljyoung]

Quote from Spydertrader:

Breaks = break out

But no, I do not mean the High / Low of the previous bar in the above post. Pennant Boundaries are the lines drawn when annotating a Pennant. When Price "breaks out" (starts on one side of the line and moves to the other side of the line) of these lines, it does not necessarily hold true that Price has broken the High / Low of the bars involved in Boundary creation.

- Spydertrader

So in ehorn's example of today, beginning from the 15:00-05 bar if the 15:10-15 bar had not broken the low of the first bar then you would have called the formation a Pennant First, Lateral Second because price closed within the boundaries of the pennant? Price did break the pennant bar but then closed within the pennant boundaries and so would you have called this a formation FBO? Is this different from the situation where you break the bar but close within the bar but outside the "inside" boundary? Obviously it is "different" but I mean in the sense of having different possible consequences.
TIA again,
lj
Parenthetically I might note that sometimes the "iterative" aspect of this thread refers to the person (in this case, me) and not the method.

 

[Spydertrader]

Quote from ljyoung:

So in ehorn's example of today, beginning from the 15:00-05 bar if the 15:10-15 bar had not broken the low of the first bar then you would have called the formation a Pennant First, Lateral Second because price closed within the boundaries of the pennant? Price did break the pennant bar but then closed within the pennant boundaries and so would you have called this a formation FBO?

Your two examples above result in the same end point - Price closing within the Pennant Boundaries. However, to answer your question, yes. They each have a slightly different contexts.

Quote from ljyoung:

Parenthetically I might note that sometimes the "iterative" aspect of this thread refers to the person (in this case, me) and not the method.

And I would note that the methods never change, the person learning the methods changes.

- Spydertrader

 

[ljyoung]

Partial quote from Spyder:

And I would note that the methods never change, the person learning the methods changes.

- Spydertrader

Firstly let me thank you for the clarification. You are incredibly patient and correct with respect to "the methods" but, IMO, that is only true if the theoretical underpinnings and ramifications thereof, do not change. It is a tenet of the scientific method that one fits the theory to the data not the data to the theory. Of course one must prove that the data is of such quality that the theory needs to be changed and until such time as that happens it is a footnote, at best.

The back-testing crew (and drats, I missed their foray into the "Software" thread) just can't seem to see that data-forcing is exactly what they are doing. While we can learn from the past we shouldn't live there.

The A-team rules. Pass the kool-aid.

Larry

 

[TIKITRADER]

Quote from PTVtrader:

I can understand your point of deleting tapes and channel lines, otherwise one can become "line crazy", but my point is that those deletions don't invalidate those "lines" in the future. Also because it takes volume to push through the original LTL to create the VE, don't you think that original LTL becomes the new RTL of the VE. So, if we get increasing black through the original LTL, it should at least confirm a non dominant traverse with and increasing possibility of reversal with the b/b.

I delete the tapes after they have done their job. Again, just to keep the chart clean. Sometimes I forget to erase a tape, but for the most part I remove them.
It is not that the tapes and what they have done become invalidated, it is just once they have served their purpose, price moves on from them and I look to the future.

As far as a channel formed from a left trendline and a VE, within those borders would not be valid.

A point 3 channel will form the container that price is in. Once the container has been expanded, that is the new channel. Your channel trendlines now become the right trendline and the left trendline formed by the VE.
It is this VE line that you are looking for price to traverse to and if it fails to, you now have an FTT to the VE.
Visualize taking the wall of a square room and pushing it out ten feet to form a rectangle. The room ( container ) that you enter is now expanded.
The new expanded room would be the parameters that you can now traverse.
The space where the old wall once stood and the new wall would not form a new small room, as the rooms boundaries have expanded and the entire container is a larger one.

When looking to confirm a non dominant traverse of your resolution, confirmation of a non dominant traverse to the right trendline would take place on decreasing volume.

 

[LostTrader]

Thank you, Spyder, for replying to me yesterday.

I am starting to really like the OTR tick charts -- they show me very clearly

• where price is NOW,
• how the 5 or 2 min bar was formed,
• the actual volume distribution between rising & falling price,
• answering was that really a double top/bottom? or just an artifact of an arbitrary bar split.

TLs on the OTR have helped me when looking for new channel points (too bad TL alerts don't work on OTR charts) or as a warning of price momentum slow-down.

and I've started to wonder about the R2R & B2B Gaussian shifts on the OTR, they also frequently appear to be significant (i.e., showing up just in time).

I haven't developed any feel for Stretch/Squeeze, the DOM or T&S, etc. but I don't let that bother me.

It is my belief, from reading all these forums, that one should be able to successfully (.i.e., profitably) trade real money using just the ES & YM PV, Channels & Gaussians. That is my goal, prior to using the other tools.

best wishes...

 

[PTVtrader]

When a ve happens, only 2 things can happen(a pt 2 non-dominant retrace) or a (pt 1 non dominant retrace of an eventual new up channel)

Ok, so how can I anticipate which one its going to be. For me, and please correct me if I'm wrong, is how price will react around the original LTL (which with a little imagination can be an anticipated pt 2 of an eventual up channel or a pt 3 continuation of the existing down channel.)

In the example that I have drawn, increasing red caused the ve but when price retraced back to the original LTL(an obvious resistance level, imho), increasing black with volume exceeding the increasing red ve volume happens.

So, am I wrong to think that a supply/demand shift has taken place given the p/v dynamic, and I now should be anticipating a pt 3 of an up channel.

I understand that these questions are a little off curriculum, but I would appreciate any thoughts.

 

[bi9foot]

Quote from Spydertrader:

Breaks = break out

But no, I do not mean the High / Low of the previous bar in the above post. Pennant Boundaries are the lines drawn when annotating a Pennant. When Price "breaks out" (starts on one side of the line and moves to the other side of the line) of these lines, it does not necessarily hold true that Price has broken the High / Low of the bars involved in Boundary creation.

Here are a few scenarios I have drawn (based on the recent discussions).

I marked b & c as lateral movement because the last bar cleared the high of the formation bar 1.

Please let me know if I am wrong.

 

[Spydertrader]

Quote from PTVtrader:

When a ve happens, only 2 things can happen ....

Of course, Price could continue moving higher creating numerous Volatility Expansions one after another. In addition, a flaw might materialize after a VE. As such, The Market has provided an opportunity for a steeper (accelerated) channel.

Lastly, I'm not quite sure how one could get a Point Three after a VE. I can see the following sequence:

VE - Decreasing Non-Dominant Volume Back to the RTL followed by increasing Dominant Volume to an FTT (with lower High than the High of the VE).

However, I cannot 'see' a Point Three immediately following a VE. Perhaps, you could post a chart indicating that which you described in case I have misunderstood your meaning.

Good trading to you.

- Spydertrader

 

[ehorn]

Hello PTVtrader,

When a ve happens, only 2 things can happen(a pt 2 non-dominant retrace) or a (pt 1 non dominant retrace of an eventual new up channel)

A VE only occurs once a PT3 channel has been created (i.e. tapes do not)- so a VE can create a PT1 of a non-dom channel or it can be the PT1 of the new dom channel, or it can be neither.

Ok, so how can I anticipate which one its going to be. For me, and please correct me if I'm wrong, is how price will react around the original LTL (which with a little imagination can be an anticipated pt 2 of an eventual up channel or a pt 3 continuation of the existing down channel.)

It becomes more important to answer this question based on the resolution of your trading, in other words if you are trading at the tree (or limb) level you have defined change...

Change is change, ('T') and if you are trading at forest level, while you may note change, you would hold through this until price breaks above the RTL of the current dominant channel.

So, am I wrong to think that a supply/demand shift has taken place given the p/v dynamic,

No, you are correct. But you must seek these answers (given the current level of resolution) within the Gaussians. For instance R2R2B ( /\/ ) or B2B ( \/ ). I have annotated your chart to include typical gaussians patterns for the Forest, tree, and limb levels of your chart).

and I now should be anticipating a pt 3 of an up channel.

You would look for PT2 then PT3.

 

[Spydertrader]

Quote from bi9foot:

Please let me know if I am wrong.

You correctly described the scenarios listed.

- Spydertrader