Quote from LittleMac:
Haroki or Anyone for that matter,
In my chart of DSL I have two laterals. First off, are they correct? Second off in the circled area is it correct to widen my channel from the blue to the white channel because of this lateral movement?? Third the red bar in the square, is this a Formation BO, a Channel BO, or both.
I feel like equities constantly has more sideways mess and lateral movement and sloppy Guassians on the daily than the E-minis but I keep telling myself to push through and annotate, annotate, annotate and then Ill be able to annotate almost any chart but again I consistently get demoralized when moving to one of the many equities charts that confuse me.
Some things that always make me feel lost are when
1. My Guassians don't match my channel pts 1,2,3(I find myself inventing)
2. A B2B or R2R occurs in the Guassians and on the channels but from there it reverses again such as an R2R followed by immediate increased black past the original R2R. (I was led to believe a FTT/BO can only occur after pts 1,2, and 3 have evolved.
I'm charting til 3a.m. some nights and getting stuck dozens of times throughout this period.
Hey Littlemac,
I'll provide some of my thoughts on the confusion you're experiencing, take what you can use. There is no doubt that getting the gaussians and channels to match up for equities is not always as clear as it is with the ES. Don't beat yourself up, if you can't make them work, or force yourself to fully annotate a chart that has you confused.
Always remember that the culling process is not perfect, it simply provides you a list of manageable stocks that have some built in safety by being generally high quality and have a good chance of being tradeable due to rank, volume levels, float parameters, etc. Added to these we have tenured stocks that no longer meet all the initial parameters. Therefore, you are going to have stocks that simply aren't tradeable or readable right now (mainly due to insufficient liquidity). There are plenty of stocks in the Final Universe that are clear and tradeable, so don't worry about the ones that don't make sense to you.
Personally, I have plenty of stocks (especially with all the current gaps and volatility in the market) where I simply hold off on annotating any further, until something happens that provides me the context to know where the proper channels should be drawn. There are days where most of my stocks are unclear as to what must come next, and I have hardly anything in my tradeable list, then that day's trading clears everything up for me and I can fully annotate my charts once again.
Now that you are annotating the ES where you know you always have sufficient liquidity to make the gaussians match your channels and you'll see these same formations day after day, I think you'll find that your recognition skills get better much faster. Take what you learn from the ES and apply it to your equities annotation and you'll get more proficient at recognizing where you can properly annotate to clear up any confusion (such as recognizing flaws or laterals), and where the stock simply is not currently readable.
As far as laterals, properly recognizing them will definitely clear up alot of annotation problems. Here is a great post, using a specific example, where Spyder walks through the proper thought process in identifying, properly annotating and recognizing what must come next from a lateral formation:
http://www.elitetrader.com/vb/showthread.php?s=&postid=1490394#post1490394
As is often said, it's the journey not the destination that matters. It's obvious from your posts and charts that you are improving with your channels and gaussian analysis. Don't get too frustrated and bogged down with certain stocks that confuse you, use what you know to recognize trades in stocks that you can properly annotate. The process will clear up more situations as you go and help you to recognize when you simply can't make the gaussians and channels work at this time.
Hope some of that helps,
-A
