Iterative Refinement

[Spydertrader]

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?

Try to stop, for just a moment, and think. Stop trying to 'dig in your heels' and win an argument. Such a path, sooner or later, causes people to stop wanting to provide assistance.

Read the following and understand it.

You haven't learned everything needed to trade. Period. I don't care what you think you know. I don't care how you think you learn best. I don't really even care if you listen to this advice or not, but you aren't even close to the point where the time has arrived to push buttons. At best you sit 10% of the way through your journey. Again, at best - 10%.

How do you make it the next 90%?

You stop, look around at those who offered advice, and listen to what they have to say. And then, you go off and do it.

Right now, you have no idea how silly you sound with respect to some of this stuff. Fortunately, nobody holds this against someone new. Down the road, you'll laugh at yourself as well (assuming you follow the advice provided). In addition, you'll begin to see that which (right now) you couldn't find with a map.

Forget what you think you know for now, and do the work required. In time, just as others learned, the process provides the clarity required, and the answers you seek are found, not only on the pages of the future, but also, within yourself.

These are fundamental truths in all things.

- Spydertrader

 

[cunparis]

Quote from Spydertrader:

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

I told ivob that I was going to study his comments and I will. I value his contributions in the journal and I value them now. But to be honest, it would be easier with a few more hints. In the past I have found that you've had very profound comments on other people's problems that have been very helpful to me.

In no way am I meaning to downplay ivob's feedback. But the idea of creating a new channel when I see increasing volume is, at the moment, puzzling me.

I will also take another suggestion and post my charts and ask for feedback on the annotations (I'm forgetting trading for now, I promise). if I'm going to be posting them I will invest more in the charts which means fully annotating them (one of ivob's suggestions).

Just a few weeks ago I had a hard time with gaussians. You said something about the guassians have to match the channels and that if they don't, there is a missing channel. This is an example of what I mean by you often having a very simple yet profound feedback. That comment alone has had me checking and double checking my charts since then and I've made a lot of progress in making the two match. But I've still got a long way to go.

I truly apologize if I angered you or anyone else, or if I came across in a negative way. Thank you all for your help and support, especially about posting future charts for feedback which I'm definitely going to do.

 

[Spydertrader]

Quote from cunparis:

I truly apologize if I angered you or anyone else,

No need to apologize as nobody has grown angry over your comments.

Sometimes, I need to be blunt and wack people upside the head with a digital 2 by 4 in order to get their attention. Otherwise, people have had the tendency to head so far off the reservation, no amount of posting can bring them back.

Good Journey to you

- Spydertrader

 

[cunparis]

Quote from Spydertrader:

No need to apologize as nobody has grown angry over your comments.

Sometimes, I need to be blunt and wack people upside the head with a digital 2 by 4 in order to get their attention. Otherwise, people have had the tendency to head so far off the reservation, no amount of posting can bring them back.

Good Journey to you

- Spydertrader

Thank you spyder, I deserved and needed the wack.

It's bedtime here so I will be studying the feedback tomorrow and posting a chart or two next week.

 

[romanus]

Quote from cunparis:

To bounce ideas around and talk it out. Very helpful and a lot of fun. I hope there are others.

Count me in!!

My previous post was not meant to be confrontational, as I would be the first one to admit feeling an enormous frustration at times trying to understand the logic, then thinking I got it, then trying to test it ( even in hindsight) without complete understanding. Especially late at night, when the brain stops working .

This stuff is every counterintuitive and while the signals can be seen on properly annotated chart , the logic of applying them is a separate issue ( resolution, jumping fractals etc.)

I will PM you.

 

[guavaman]

Quote from cunparis:

But to be honest, it would be easier with a few more hints.

You said something about the guassians have to match the channels and that if they don't, there is a missing channel.

"easier"......sheesh

Gaussians having to match their channels have been discussed since the very introduction of Gaussians. It is really all in the Journal

 

[romanus]

Quote from ehorn:

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.

Below snippets 1,2 and 3 are from:

http://www.elitetrader.com/vb/attachment.php?s=&postid=1314296
http://www.elitetrader.com/vb/attachment.php?s=&postid=1321591
http://www.elitetrader.com/vb/attachment.php?s=&postid=1368574

The snippets 4,5 and 6 are from:

http://www.elitetrader.com/vb/attachment.php?s=&postid=1316144
http://www.elitetrader.com/vb/attachment.php?s=&postid=1346864
http://www.elitetrader.com/vb/attachment.php?s=&postid=1354764

Note the logic applied in constructing the channels above marked with yellow bright arrow.

I tried really hard but failed to see the difference in that logic and the logic I applied constructing this channel:

Bars 17 and 19 are increased black volume.

Appreciate any comments.

 

[ehorn]

Quote from romanus:
I tried really hard but failed to see the difference in that logic and the logic I applied constructing this channel:

When we opened on the day we have a gaussian formation of B2R \/ bars 1-7, signifying down is the dominant direction 8-13 gave us the retrace and the PT3 of our down channel, if any of those bars gave increasing black volume then we look for the up channel. Turns out they did not and bar 14 confirmed the dominant direction. So we have a PT3 channel and we are looking for an FTT. That is the context going into the bars in question.

Now, look at the volume on bars 8-10, now look at the volume on bars 17-19. See much difference? The intent of channels is to contain price and channels must match volume and gaussians in order to be of any value.

That up channel MIGHT have been relevant IF the context was different. Remember, we need increasing black volume to move prioce away from the PT3, did we get that to support the up trend? Did we BO of the down channel on increasing black volume to confirm the new trend?

Lets look and see:

bars 17-19 volume is not increasing black (not boding well for a new dominant direction).
None of the bars 15-19 tested the upper bound of the lateral formation (not boding well for a new dominant direction).
bar 17 and 18 formed a FTP, so we would expect bar 19 to breakout with increasing black volume to confirm the new dominant direction.
Bar 19 became a IBGS and had weak volume. (not what we expect to see to confirm the up move)

In other words, none of the dominos fell in that direction

Hope that helps.

 

[Tums]

Quote from cunparis:

... But the idea of creating a new channel when I see increasing volume is, at the moment, puzzling me.

Oh shocks, Ivob you are not supposed to give out the grail. >

 

[romanus]

Quote from ehorn:

...channels must match volume and gaussians in order to be of any value.

That statement has been driving me nuts for a little while now
It has been repeated throughout the Futures Journal many times. On one hand it makes a lot of sense because gaussians annotations are obviously extremely important – just look at how Spydertrader's charts progressed from simply volume in the beginning, to noting peaks and throughs in January of last year, to extremely detailed annotations few months after he started posting his charts in the journal.

The thing about this statement that is especially frustrating is that I can't seem to grasp the matching part.

Here's my logic:
1. As the snippets in my previous post show that when multiple channels are drawn, the same movement of the price may find itself being part of dominant and non-dominant move at the same time. Look at snippet 1, do you see how bars 3 through 6 is pt2 to pt3 retrace for one channel and pt3 to FTT for another.
a. Those are opposite moves but both moves share the same volume bars.
b. There is only one way to draw Gaussians on the same volume bars.
c. But they suppose to much opposite moves (opposite in a sense dominant and non-dominant).
All of that is pretty much summed up in this quote:

Quote from Spydertrader:


Again, Three ways for Price to move from Point One to Point Two. Three ways for Price to move from Point Two to Point Three. One way for Price to move from Point Three into the channel.

Now, if one rephrased that statement to ‘channels must match volume and gaussians IN SUCH A WAY THAT THERE’S ALWAYS INCREASE IN DOMINANT VOLUME AFTER PT3’ that would make a perfect sense to me. But I am afraid that’s not all there is to it. What happens between pt1 and pt2, between p2 and pt3 should also match. But it could be a combination of any or all of the three ways price can move between those three points.

The left part of the snippet is from:

http://www.elitetrader.com/vb/attachment.php?s=&postid=1728724

What is it in Gaussians on the left part of the picture as price moves from Point One to Point Two and from Point Two to Point Three, that makes it a valid channel?

What is it in Gaussians on the right part of the picture that makes this channel invalid?

Any comments are appreciated.

PS. I won’t be able to acknowledge or respond until Monday morning due to some family commitments.

EDIT: I am pulling all posts Spydertrader made that contain words gaussian or gaussians ( all 234 of them) and will report my findings later.