Quote from bi9foot:
Thanks Spyder for your response. I understand that the break out of the pennant needs increasing volume to confirm the current trend.
The quoted words above and what I wrote in my post do not represent equal stratements. I indicated the need exists to see
more increasing Volume
after the breakout bar. if Price breaks a Pennant (or Lateral Formation) on increasing Volume, then one needs to see
additional increasing Volume on the
next bar - in addition to increasing Volume on the breakout bar.
Quote from bi9foot:
My expectation for an up pt 3 was based on the B2B and the decreasing red after the pennant breakout @ 10:30am not as a result of the YM pennant breakout and accept that one of the possible outcomes of a formation BO is a FBO.
If the market shows
decreasing red after a Pennant BreakOut to the Up side on
increasing black Volume, then one
clearly does not have
more increasing Volume on the
next bar
after the breakout.
Quote from bi9foot:
What I was trying to get at with the post however was to see why he held off going long until the 10:45 ES Bar. Because after the fact, the 10:45 bar did like more like the FTT bar (of the retrace down) than the 10:40 as price price moved up strongly in that bar.
I view that whole area as Price moving from a Point Two to Point Three of a down channel since increasing red remained dominant at that point in time. As such, I see no reason to enter long at all.
Quote from bi9foot:
Often times, when I am expecting a turn I end up being too early and have to hold until the price reaches the real turning point. At times I see what happened with the YM during that period - ie we have a FTT followed by a FBO and then the real FTT happens aftewards and I usually take a position right before the FBO. The other case is price does not FBO after the FTT and the new direction continues.
Make sure you
only look at the YM when given permission by the ES, and make sure you
always look at the YM when given permission by the ES. Also, when the ES removes permission (such as when a forming Pennant fails to become an actual pennant), one must immediately
stop looking at the YM. Following these guidelines helps to eliminate 'shakeout' as the YM wiggles and wags. In addition, during periods of high bar overlap (or during some outside bars) additional tools help to provide clarity. For now, one has the choice of trading every retrace, or holding through certain retraces. Each choice has pros and cons. One must choose based on what works best for the individuals psychological make up.
Quote from bi9foot:
I cannot tell before hand which of the two scenarios will happen so I will always take the first sign of the turn. Then I wait for the dominos to fall and in today's case we did not get the price movement and volume as expected and when the 1 min ES showed B2B that was the first indication that my anticipation was incorrect.
The deeper one goes down the rabbit hole, the more frequently a shakeout can occur. I do not use the one minute ES for this reason.
Quote from bi9foot:
With my skill level these wash trades will result in maybe 3 or 4 tick loss so I would like to avoid as may of these as possible and that is why I was really interested in finding out why he did not go long at the 10:40 bar and waited until the 10:45 bar.
Do not take this the wrong way, but unless one can 'see' the signals for continuation or change on each and every bar - pushing buttons serves no purpose. If you continually rack up losses then something is off in your sequences which causes you to take action at the inappropriate time. As such, I encourage you to
only look at Volume (PRV) after given permission by the YM to do so (meaning the YM has signalled change). See if this reduces the number of 'flip-flop' trades.
Quote from bi9foot:
I have posted about this before here http://www.elitetrader.com/vb/showthread.php?s=&postid=1704111#post1704111. In both those trades I was early by 5 ticks and 7 ticks respectively and I missed the third trade because I decided to be more patient for the turn and missed it completely.
5 and 7 tics is
far to early to be entering into a trade. Three types of signals exist: Just before the turn, Just
at the turn and just after the turn. No examples exist of 5 or 7 tics before the turn.
Quote from bi9foot:
If you can provide some insight as to where you would have taken action from my perspective, that would be most appreciated. My perspective being that I missed the Point 1 entry and I am waiting for the point 3 entry long. I certainly did not see a reason to assume the dominant direction was down until the 10:50 bar when the increasing volume changed to red.
According to your chart snip posted earlier, you had increasing red followed by decreasing black during the 10:40 - 10:45 bars. Such sequences exist in down channels. When we have dominant red volume, we have no desire to be long - except after an FTT of a down channel.
Quote from bi9foot:
EDIT: sorry about the long post. Others are also welcome to chime in.
No worries. I hope you find the above information useful.
- Spydertrader
