Iterative Refinement

[ehorn]

Quote from treeline:

Thanks for the compliment, ehorn. However, I missed both of the channels that Spydertrader pointed out. I can easily see the pink one, but the orange one confuses me. The orange channel's point 3 bar (12:55 EST) in the chart below appears to have the same high and same low as the previous bar. This is also what my data provider shows. I didn't realize that a valid channel could develop if there's never a lower low after Pt 3.

Perhaps Spydertrader's data provider shows a lower low on the 12:55 bar? Or perhaps I need to revise my view of what constitutes a valid channel?

Thanks for any help...

Hi treeline,

I will offer my analysis...

We are in a lateral formation, and while we did BO of the pink channel on increasing black volume, price closed back on the LTL. So we would anticipate bar 42 (the one you have labelled as PT3 up) to have increasing black volume to confirm the new dominant up channel. We had an IBGS and increasing red volume on bar 42 with continued lateral movement, which is signaling to look for a possible fanned channel (in this case the orange channel formed with increasing red volume).

Turns out this bar was an FT3. Then the market confirms the right side on Bar 44 and 45 (BO on B2B).

 

[romanus]

Quote from treeline:

I didn't realize that a valid channel could develop if there's never a lower low after Pt 3.

Try this logic:

1. This bar is a pt1 of the new channel in the opposite direction.
2. Channels overlap.
3. pt1 of the new channel is an FTT in the old channel.
4. Some FTT's fall on the same bar as pt3. They're referred to as FT3:

http://www.elitetrader.com/vb/showthread.php?s=&postid=1899181&highlight=ft3#post1899181

Quote from Spydertrader:

FT3 = Where Point Three, Increasing Volume and an FTT all converge on the exact same Price and Volume Bar.

5. this bar has increasing Volume which means it could be pt3 of some channel

6. There has been Intra Bar Gaussian shift ( I am not yet sure how to recognize that particular phenomena - but it's it the only logical way to count some of that bar's volume as red)

1 + 2 + 3 + 4 + 5 + 6 => that bar is valid pt3

 

[guavaman]

Quote from Spydertrader:

Yes. It's a Valid Point Three as the market showed Three Bars minimum with all three points on three separate bars.

Great! I was concerned that I didn't have a retrace

P.S. Dude, what's with all the psychedelic colors? Did your parents chill at woodstock?

Its not enough for me to just annotate correctly, they got to be groovy too

 

[guavaman]

Quote from treeline:

but the orange one confuses me. The orange channel's point 3 bar (12:55 EST) in the chart below appears to have the same high and same low as the previous bar.

It is really a volume thing

 

[LostTrader]

Quote from romanus:
wrong application of the tools . . .

With respect, while you are learning, you should consider not having the software draw your Gaussians for you (turn that part off) and draw them yourself.

Every time you draw a 123 channel, there should be a supporting Gaussian to match it. That will also help you to see the layers of Gaussians... It is good practice (IMHO) to actually draw them while learning.

best regards...

 

[romanus]

Quote from romanus:

Try this logic:

1. This bar is a pt1 of the new channel in the opposite direction.
2. Channels overlap.
3. pt1 of the new channel is an FTT in the old channel.
4. Some FTT's fall on the same bar as pt3. They're referred to as FT3:

http://www.elitetrader.com/vb/showthread.php?s=&postid=1899181&highlight=ft3#post1899181



5. this bar has increasing Volume which means it could be pt3 of some channel

6. There has been Intra Bar Gaussian shift ( I am not yet sure how to recognize that particular phenomena - but it's it the only logical way to count some of that bar's volume as red)

1 + 2 + 3 + 4 + 5 + 6 => that bar is valid pt3

scrath all that - I was looking at the wrong bar. Sorry.

 

[western]

So after browsing this thread I've seen a bunch of charts and lines and triangles. But where are the actual trades? Is anybody actually implementing this stuff in real life?

 

[ehorn]

Quote from western:

So after browsing this thread I've seen a bunch of charts and lines and triangles. But where are the actual trades? Is anybody actually implementing this stuff in real life?

Yes, and the trades are found within the charts

We are doing 4 things here:

M - Montitor (a bunch of charts and lines and triangles as you call it)
A - Analyse what the context of the market is at any given time (we call it NOW, and what MUST come next)
D - Deciding what is happening (continue or change)
A - Action (enter, hold, reverse, exit - the actual trades as you call it)

You do not see action because you have only browsed the thread. Action is found annotated within the charts of those who have done the work.

Best wishes to you

 

[romanus]

Quote from LostTrader:

With respect, while you are learning, you should consider not having the software draw your Gaussians for you (turn that part off) and draw them yourself.

Every time you draw a 123 channel, there should be a supporting Gaussian to match it. That will also help you to see the layers of Gaussians... It is good practice (IMHO) to actually draw them while learning.

best regards...

I am trying, but my eyes are at price and volume looking for FTT and potential channels and because drawing gaussians for me is not a reflex type of thing yet, I am afraid to take my eyes off the current bar for a few minutes, which is how long sometimes it takes me to put them in place. I am going to come up with some sort of mnemonic rule for gussians so that I can just glance on it and draw immediately.

Thanks, LostTrader

 

[Atari]

Quote from romanus:

I am trying, but my eyes are at price and volume looking for FTT and potential channels and because drawing gaussians for me is not a reflex type of thing yet, I am afraid to take my eyes off the current bar for a few minutes, which is how long sometimes it takes me to put them in place. I am going to come up with some sort of mnemonic rule for gussians so that I can just glance on it and draw immediately.

Thanks, LostTrader

Hey Romanus,

LostTrader is providing you excellent advice here and your response shows exactly why he brought the gaussians to your attention. By not properly focusing on gaussians your efforts to look for FTTs and other potential channels is handicapped.

Proper gaussian analysis confirms you are focusing your attention in the proper channel, lets you know that you have missed a channel or need to adjust your current channel. If you are not operating with (or missing entirely) the correct channels confirmed by gaussians you certainly can not recognize the FTT or other annotations of that channel. Channels and gaussians are the foundation that you have to have down cold before you can progress to identifying what the price/volume relationship is telling you regarding what is going on within these channels (which allows you to fully annotate correctly).

I know that if I run into an area where the gaussians get a little tricky, the first thing I do is work out what is going on with my gaussians and make sure I have not missed something in regard to my channels. Only after I am satisfied I know what is going on with my channels and gaussians do I go back to monitoring what is currently happening with Price/Volume.

Hope you find some of that advice beneficial.

-A