Iterative Refinement

[ivob]

Quote from guavaman:

Recently I have abandon trying to trade FTT's and rely on PT3's for all entries because at present I cannot accurately identify them, I see them all over the place which is obviously incorrect. Perhaps the addition of these suggestions to my nightly debrief will help.

Thanks.

Guava,

Pt3's are formed as FTT's or flaws (or LTL bounces). Just on a faster fractal / non dom channel. You see point 2-->3 on ES and this is just another channel if you zoom in. It's the same thing. Often on YM you can see it clearly (before any tape breakout).

BTW for myself speaking I am not convinced trading pt3's is always the easiest to trade. I find they take of too fast sometimes and I feel uncomfortable entering after that. I often miss them. Sometimes I find FTT's easier or RTL breaks.

regards.
Ivo

 

[guavaman]

Ivob,

I agree that PT3 are generally more difficult to trade than FTT's. Truth be told, my shift to enter on PT3 wasn't really an intentional one. It just kind of happened. I thought PT3 were a safer entry for me because all the bars I interpreted as FTT's weren't. If you look hard enough you will see change whether it is really there or not (on a beginner resolution).

In most channels there are bars that do not get to "a" LTL a good deal of which have increasing volume. In addition, even if some of the interpreted FTT's are real FTT's (and not a figment of my imagination ) the end effect is not necessarily a BO of the channel or even a significant move away from the entry price. All of which is anticipated and fine, but since I am not really able to effectively react (except for the fall back IF1 IF2 scenario) the result is point losses and frustration. Which is why I shifted to trying to trade PT3's and formations only.

Like I said, I didn't intentionally stop trying to trade FTT's I kind of slipped into trading PT3's. However, I will refocus on trying to correctly analyze, decide and act on entering on FTT's because in closing D) I believe they are really the best and safest way to trade profitably...when done correctly.

 

[ivob]

Quote from Spydertrader:

Waaaaaaaay further south than Old Mexico.

Ten un buen semana.

- Spydertrader

Thank you, but...... 4 words, 3 mistakes.

Que tengas una buena semana.

Now you can continue to point out my trading mistakes

regards,
Ivo

 

[cnms2]

I kind of disagree... PT3s are turning points as FTTs are, only in SLOW-MO-TION because of the PT2 to PT3 volume decrease on your trading fractal. From another perspective, PT3s are FTTs on the next faster fractal's non-dominant traverse. If you look at the sequence of events of an FTT/PT1, a PT2, and a PT3, you'll notice similarities and differences. FTT to FTT is the most efficient trading because it means trading the longest diagonal (best entry=best exit), but it is a little more difficult than entering on PT3 and exiting on RTL breakout.

Quote from guavaman:

Ivob,

I agree that PT3 are generally more difficult to trade than FTT's. ...

 

[bi9foot]

Quote from Spydertrader:

For purposes of the drill, entering on increasing PRV, and noticing Volume showed decreasing by the end of the bar, requires an exit.
- Spydertrader

Spyder a couple of questions regarding the drill from last week.

a) if we have a open position and the next bar starts showing decreasing PRV do we exit or wait for the close of bar to determine final volume exit.

b) In the case of an outside bar, should we reverse the position when price exits in the opposite direction or just exit. Assuming of course that the PRV is increasing.

Thanks

 

[ivob]

Hi,

Why would the PT2 -> PT3 volume decrease make it easier? We don't just enter somewhere between PT2 and PT3 do we? We enter on BO and this often goes too fast for me...

What I can understand is that PT3's are very reliable. I mean, there's no doubt we just saw the PT3 after price really takes of and after +PRV we can still enter and it will often continue especially on high or extreme pace.

However, if you know how to recognize FTT's they are just as reliable and they give more profits. Also I like the comfortable feeling that I can sit thru PT2 --> PT3 without having a loss and it is also easier to site thru the next retracement (while always monitoring obviously so never get too comfortable).

regards,
Ivo

Quote from cnms2:

I kind of disagree... PT3s are turning points as FTTs are, only in SLOW-MO-TION because of the PT2 to PT3 volume decrease on your trading fractal. From another perspective, PT3s are FTTs on the next faster fractal's non-dominant traverse. If you look at the sequence of events of an FTT/PT1, a PT2, and a PT3, you'll notice similarities and differences. FTT to FTT is the most efficient trading because it means trading the longest diagonal (best entry=best exit), but it is a little more difficult than entering on PT3 and exiting on RTL breakout.

 

[cnms2]

Quote from ivob:

Hi,

Why would the PT2 -> PT3 volume decrease make it easier?

In the proximity of the RTL things happen slower. There is usually even a pause you can enter on. The slowing down at LTL and FTT is usually less noticeable.

We don't just enter somewhere between PT2 and PT3 do we? We enter on BO and this often goes too fast for me...

If you enter on the tape BO the volume didn't take off yet. If you enter on volume / PRV BO it might be too late if the new traverse has a slow slope.

What I can understand is that PT3's are very reliable. I mean, there's no doubt we just saw the PT3 after price really takes of and after +PRV we can still enter and it will often continue especially on high or extreme pace.

I wouldn't say that PT3s are more reliable. On the other hand if you're wrong in identifying a PT3, you might have more time to react, and at a slower pace.

However, if you know how to recognize FTT's they are just as reliable and they give more profits. Also I like the comfortable feeling that I can sit thru PT2 --> PT3 without having a loss and it is also easier to site thru the next retracement (while always monitoring obviously so never get too comfortable).

Not sure what you mean by this. If you hold through a retrace you obviously give points back, waste opportunity, and take additional risk. This is why one of the possible ways to trade is: FTT to PT2, sideline, PT3 to FTT. Obviously the better way is to reverse at PT2. If this is what you're writing about, obviously you'll hold through a lower level (faster fractal) PT2 to PT3 retrace. At some point you'll have to hold through some retraces, being them just flaws. During high pace, you may decide to reverse / exit even during flaws in order not to assume a too high risk.

regards,
Ivo

By the way your earlier post was great.

 

[Pr0crast]

My .02...

The PT2-->3 volume decrease gives you an eternity to prepare yourself to press the button... You know exactly what's coming next and you just have to sit on your hands until tape BO and/or incr prv. PT3s aren't always this clear though, especially if pace is really moving quickly (like that 30 pt drop many missed b/c there was no visible 5 min retrace).

FTTs, IMO, are similar in that there are some that are a real pain in the ass to nail (keeps flawing out) and some that are unbelievably clear (outside bar FTT of a non-dominant channel).

Quote from ivob:

Hi,

Why would the PT2 -> PT3 volume decrease make it easier? We don't just enter somewhere between PT2 and PT3 do we? We enter on BO and this often goes too fast for me...

What I can understand is that PT3's are very reliable. I mean, there's no doubt we just saw the PT3 after price really takes of and after +PRV we can still enter and it will often continue especially on high or extreme pace.

However, if you know how to recognize FTT's they are just as reliable and they give more profits. Also I like the comfortable feeling that I can sit thru PT2 --> PT3 without having a loss and it is also easier to site thru the next retracement (while always monitoring obviously so never get too comfortable).

regards,
Ivo

 

[Spydertrader]

Quote from bi9foot:

a) if we have a open position and the next bar starts showing decreasing PRV do we exit or wait for the close of bar to determine final volume exit.

Wait until the bar closes.

Quote from bi9foot:

b) In the case of an outside bar, should we reverse the position when price exits in the opposite direction or just exit. Assuming of course that the PRV is increasing.

Nope. exit only if Volume is decreasing.

The drill isn't designed to make money. The drill is designed to show the trader what fundamentals need more focus, and which skills the trader already has mastered.

Depending on what sequence of events unfolds, plan to have the drill cause you to exit, too early, too late, and on occassion, just at the right time. Note through-out the day what 'signals' tell you, its too late, too early or just right.

- Spydertrader

 

[cnms2]

Trading Jack's and Spydertrader's ways implies a different mind set than most / all other trading methods that work in the boundaries of the "money management". With this method is not only conceivable but actually likely that from a level of expertise to not have losing trades, except when you make mistakes, or when the market reacts extremely fast. When you're less skilled, it is dangerous to just "accept losses" if you haven't already proved to yourself that you trade profitably at least in long run.

Quote from ljyoung:

From personal experience also, I think that if you can get over the "being right" thing then the "additional confirmation" thing will vanish. No trader is always right with his/her initial trading decisions. Tudor-Jones says losing is part of the game and he's right. It can really suck getting over the necessity to always be right but if you don't, you can't trade, IMO.

lj