Iterative Refinement

[cunparis]

Quote from Spydertrader:
...as you have yet to post a thoroughly annotated chart. As such, moving onto Analysis or Decision Making before mastering Monitoring represents a flawed decision.

If I am not annotating properly, it would be nice to have a list of things I need to improve. For the moment, ivob is the only one who gave me specific feedback to help me improve my chart.

Honestly Spyder your reply basically said to keep reading the journal, which strikes me as odd because at the same time you saw things that I'm not doing (or doing wrong) yet didn't mention them.

I debated posting to the IR thread for a week now. This morning I started a message and then canceled it. I later changed my mind and decided to post it. I hesitated because I was afraid of receiving another RTFFJ (Futures Journal) reply.

In hindsight I probably asked the wrong questions. I should have just asked for feedback on my annotations.

 

[Spydertrader]

Quote from cunparis:

So then my thinking was if you annotate an FTT a bar after, aren't you too late? If your entry is a bar late, it might be much higher than the FTT. And then if price reverses and goes back down, your position can quickly become negative.

Context. Context. Context.

In all things, context is king. Bundlemaker had a problem (among many others) identifying flaws. Rather an heed the advice given previously (the answers would present themselves later in the Journal), he insisted on needing a way to identify flaws sooner.

I gave him what he asked for.

Now, you appear ready to make the same mistake.

Feel free to 'skip ahead' to see how that road ends.

In addition, you now want to discuss how implementing the solution causes you to 'get in too late' after a signal. No shit. Perhaps, one should instead, learn to Thoroughly and Properly annotate a chart before concerning yourself with entry and exit.

Just a thought from someone who might know a thing or two about the topic under discussion.

- Spydertrader

 

[romanus]

Quote from cunparis:


At the first yellow circle at 10:35 I thought I had an FTT. In hindsight I'm not exactly sure why, in hindsight it looks like we couldn't confirm it until 2 bars later at 10:45 when volume dropped. I ended up reversing in the middle of the 2nd bar there (10:40) and went long. Then on the 3rd bar at 10:45 I thought I was wrong and I reversed again to go short. Then I realized that it was really an FTT and reversed yet again. I forgot how much the reversing cost me but it was around $200 or more I think. The other problem with this approach is that the entry point (the last reverse) is often too high and then the pt 3 of the new channel can drop below the entry. Overall it doesn't seem like a good situation.

So my question is did I miss anything that could have helped me to have a better reversal? And when one reverses and then you think you were wrong, how many ticks do you let it go against you?

I am probably the last one who should offer any opinion, as I still can't find my way out of a paper bag with respect to channels and FTT’s. But if one attempts to trade FTT’s and reverse/exit on FBO’s then following is my view of this situation:

1. Entering on bar14 ( with incr red volume) seeing an FTT.
2. Since we are acting upon the coarse level signals ( FTT of the blue down channel) we don’t exit/reverse until proven wrong or FBO of the blue down channel. Which means we cant take any signals intrabar
3. Bar15 confirms an FTT by going higher on decreased black volume and creating a formation FTP. No change
4. Bar16 inside bar. We are still inside the formation. No change.
5. Bar17 black bar on incr black volume still inside the formation. No change.
6. Bar18 creates FTP and we are still inside formation.
7. Bar19 IBGS black bar on incr black volume creates pt3 formation (chubby tape). Things seem to go in the direction of the FTT where we went long.
8. Bar20 retraces back to RTL of the chubby tape and creates FBO of the chubby tape.
9. Bar 21 creates an FTT of the chubby tape and breaks out on incr volume. That is a clear (at least to me ) sign that the trend established by chubby tape is over
a. On PRV basis bar21 is trading outside of the chubby tape with incr PRV volume starting around 11:11:45 with price trading around 1388.50
b. On On PRV basis bar21 is trading outside of the chubby tape with incr PRV volume and actual volume being equal to the volume of the previous bar starting around 11:11:59 with price trading around 1386.50

Any of the views in the above logic means walking away with small(??) loss unless one sees a green up channel created using as pt1 - last bar of Thursday, as pt2 - first bar of Friday and as pt3 - bar 15 (FTT of the blue down channel).

This channel (I only saw it in hindsight) should be valid because bar 17 brings increased black volume. Bar 19 is an FTT of the green up channel confirmed by bar 20 with decreasing red volume as price retraces back to green RTL. Assuming that the green channel is valid exit/reversal seems warranted any time during bar20 when you know that the volume will be less than that of the previous bar.

I would appreciate if somebody with experience could confirm whether or not the green up channel and it’s FTT logic is valid.

I apologize for embedding the image, ET doesn't accept my attachments

 

[Spydertrader]

Quote from cunparis:

Honestly Spyder your reply basically said to keep reading the journal, which strikes me as odd because at the same time you saw things that I'm not doing (or doing wrong) yet didn't mention them.

My advice still stands. Continue reading. You already received advice on what aspects of your annotating needs improvement. Do you mean to suggest I now need to repeat what others have already provided?

- Spydertrader

 

[cunparis]

Quote from Avi 8:

Late for what?

I hope it isn't for a trade, because trading is the fourth step in learning, not the first.

If one is not trading, then a 'position' can NOT become negative.

This is the irony of all this. We're told not to trade, yet we're learning a method about trading. And many times spyder has said that if you find yourself on the wrong side of the market you simply reverse. Reverse what?

 

[ehorn]

Quote from romanus:
I would appreciate if somebody with experience could confirm whether or not the green up channel and it’s FTT logic is valid.

Hi romanus, I hope I did not cause confusion as I had posted a snapshot with that channel that day. That is NOT a valid channel given the context which occurred after (the FBO of the down channel and subsequent price breakdown on increasing red volume). IF we had increasing black volume and a subsequent BO of the down channel, then it would be valid.

The reason I had included it was to show how price declined exactly to that point and retraced (bars 14-19) to the RTL before proceeding down. I often observe this behavior. If you look at Bars 1 and 3, they create a trajectory, which when projected create a channel which contains price for a period. The market stopped dead on that point (a potential FTT and PT3) and gave the trader a moment to consider which side is the right side. But with the FBO and decreasing black volume, the trader was told which is the right side, and consequently which channel becomes valid.

Hope that helps.

 

[Spydertrader]

Quote from romanus:

7. Bar19 IBGS black bar on incr black volume creates pt3 formation (chubby tape). Things seem to go in the direction of the FTT where we went long.

Right here is where you missed the signal.

1. Just prior to this bar, what formation do you see?
2. What does one expect from Price and Volume after such a formation?
3. What actually happened?

- Spydertrader

 

[romanus]

Quote from cunparis:

And many times spyder has said that if you find yourself on the wrong side of the market you simply reverse. Reverse what?

I understand how you feel. I find myself sometimes extremely frustrating with my slow progress in understanding, but you are taking Spydertrader's words about reversing and generalizing by adding word simply. The decision to reverse is supposed to be made based on data (signals from the market). There's plenty of discussion about signal, validation and confirmation in both journals and chats (I have not studied them in depth yet, but the review indicates that SIMPLY reversing was never suggested).

 

[romanus]

Quote from Spydertrader:

Right here is where you missed the signal.

1. Just prior to this bar, what formation do you see?
2. What does one expect from Price and Volume after such a formation?
3. What actually happened?

- Spydertrader

Acknowledged, working on that. Thank you.

 

[Avi 8]

Quote from cunparis:

This is the irony of all this. We're told not to trade, yet we're learning a method about trading. And many times spyder has said that if you find yourself on the wrong side of the market you simply reverse. Reverse what?

This is your response to my post:

Quote from Avi 8:

Late for what?

I hope it isn't for a trade, because trading is the fourth step in learning, not the first.

If one is not trading, then a 'position' can NOT become negative.

So exactly where is it said NOT to trade?

Follow directions or your own path, I care not. I already gave you an example of one who followed the directions he WANTED to follow instead of what was presented.