Iterative Refinement

[Atari]

I figured that was the case just wanted to make sure.

Great walkthrough tonight.

 

[cnms2]

Thank you very much Spydertrader, and everybody! I guess it's too late on the East coast.

 

[bi9foot]

Quote from cnms2:

YM shows a Lateral Formation too; it also shows decreasing black volume with price taping up.

As long as the ES doesn't BO of its Lateral Formation we have acces to YM. Isn't it?

12:28 Lateral Formation FBO (on increasing black volume) => CONTINUATION

12:30 tape RTL BO down on increased red volume, that doesn't get out of the lateral formation => CONTINUATION

12:32 pennant (decreasing black volume) => CONTINUATION

12:34 Lateral Formation BO up on increasing black volume (B2B) => CHANGE => reverse LONG

A brief visit back to context 1.

I don't have video of this sequence. However I would have gone long on the attempt of the ES pennant breakout (12:20) and gone flat when the BO failed and then stayed out since the YM was in a formation and probably missed the leg down at 12:30.

If I attempted to use the YM to trade that area, I would have gone short at end of the 12.22 bar, long @ end of 12:24 and short again @ end of 12:28 bar. Here is the the sequence of my interpretation:

Looks like a Pt 3 up on the YM at 12:18. Next bar does not give our increasing volume, anticipate change. 12:22 bar goes higher and closes below the open - change. 12:24 bar goes lower and then closes above the open - change. Finally the 12:28 bar goes higher and closes below the open - change to short.

The second scenario would certainly been a bit of chop, is this how one should have handled it with the YM?

 

[Spydertrader]

Quote from cnms2:

Is it correct, although ES is still inside its Lateral Formation?

Let's take a look and see

About 20 seconds into the ES Bar, The YM goes increasing black on PRV. Anybody want to be short in the face of increasing black Volume?

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1804542>

 

[Spydertrader]

Quote from Spydertrader:

Anybody want to be short in the face of increasing black Volume?

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1804543>

 

[gooch87]

Real nice study tonight. Thank you.
here was my context for the same period using CNMS2 chart.

 

[Spydertrader]

Quote from bi9foot:

The second scenario would certainly been a bit of chop, is this how one should have handled it with the YM?

Trading Breakouts on decreasing Volume doesn't place oneself on the right side of the market very often. However, if PRV indicated increasing Volume (at the time of BO), then one must go with PRV in order to correctly anticipate a breakout. However, if at some point within the bar, one knows Volume cannot make it to increasing actual Volume, then a reverse (not exit) is in order.

Again, the goal here is to 'see' the signal and maintain a position on the right side of the market. Once accomplished, the same logic - applied to a finer tool set - allows the trader to 'carve' the turns more closely. For now, focus entirely on 'seeing' the correct signal and knowing the right side.

- Spydertrader

 

[cnms2]

So it was the ES's down RTL BO on increasing black volume ... Without it, should've we reversed, just based on the YM"s BO of its Lateral Formation? Or even earlier on the YM's RTL BO up?

Quote from Spydertrader:

Let's take a look and see

About 20 seconds into the ES Bar, The YM goes increasing black on PRV. Anybody want to be short in the face of increasing black Volume?

- Spydertrader

 

[Spydertrader]

Quote from cnms2:

So it was the ES's down RTL BO on increasing black volume ... Without it, should've we reversed, just based on the YM"s BO of its Lateral Formation? Or even earlier on the YM's RTL BO up?

How about even earlier than that?

Price moved up one tic on increasing black PRV as shown on the YM. Since the YM leads the ES, what must come next? If I would have hit the 'pause' button a half second sooner, you'd have seen it on the YM.

- Spydertrader

 

[cnms2]

This sounds nice ...

Quote from Spydertrader:

How about even earlier than that?

Price moved up one tic on increasing black PRV as shown on the YM. Since the YM leads the ES, what must come next? If I would have hit the 'pause' button a half second sooner, you'd have seen it on the YM.

- Spydertrader