Iterative Refinement

[Spydertrader]

Quote from romanus:

Spydertrader, if you'd be so kind, what is the correct view of the whole 1435-1450 [close of] movement

Price breaks a lateral Formation on Increasing red Volume. What must come next? More Increasing red Volume. What actually came next? Decreasing Black Volume. Therefore, we expect the trend to change. Price and Volume then create a Lateral Formation in exactly the fashion expected - decreasing black Volume. As such, we expect the trend to continue. Next we see Price head higher on increasing black Volume - confirming our trend change as Price and Volume return to the dominant direction - up - on Dominant Volume - black.

Quote from romanus:

without referring to the YM

Unwise.

- Spydertrader

 

[romanus]

Quote from Spydertrader:

Price breaks a lateral Formation on Increasing red Volume. What must come next? More Increasing red Volume. What actually came next? Decreasing Black Volume. Therefore, we expect the trend to change. Price and Volume then create a Lateral Formation in exactly the fashion expected - decreasing black Volume. As such, we expect the trend to continue. Next we see Price head higher on increasing black Volume - confirming our trend change as Price and Volume return to the dominant direction - up - on Dominant Volume - black.

Thank you, Spydertrader!

 

[capcom]

Quote from Spydertrader:

Price breaks a lateral Formation on Increasing red Volume. What must come next? More Increasing red Volume. What actually came next? Decreasing Black Volume. Therefore, we expect the trend to change. Price and Volume then create a Lateral Formation in exactly the fashion expected - decreasing black Volume. As such, we expect the trend to continue. Next we see Price head higher on increasing black Volume - confirming our trend change as Price and Volume return to the dominant direction - up - on Dominant Volume - black.

- Spydertrader

So we have?

1. Up trends
2. Lateral trends
3. Down trends

Gary

 

[Jesus_Freak]

This may deserve thread of its own, but I was wondering why there seems to be some.... animosity towards Jack and Spyder elsewhere on the board. This is pretty much the only journal I read, but I was parusing around and found lots of people trying to "disprove" Gaussians, etc. If a theory does not work, I would imagine it would die on its own, because people are not making money. Myself, it seems the more I understand the theory, the more money I make.... but if that were not true for a majority of people, they would just give up and move into something more successful. There would be no need for any disproving of anything because the "market" would decide on its own that the theory was useless...

Again, I am new to this, so maybe its just a the culture of ET to challenge one another and make better traders out of one another....

Thanks!

JF

 

[romanus]

Quote from capcom:

So we have?

1. Up trends
2. Lateral trends
3. Down trends

Gary

I believe that lateral movement represents continuation of the trend that was in effect before that lateral movement started. So in this particular case:

1. first, we begin with up trend

2. then price creates lateral formation (price moves laterally inside lateral formation, but it's not necessary for a lateral formation to be formed for the price to move laterally, i.e. (a) closes within previous bar range, (b) price going higher on decreased black volume in up channel, (c) price going lower on decreased red volume in a down channel. (a), (b) and (c) also represent lateral movement). Lateral movement = continuation

3. then price breaks a lateral formation on increasing red volume. Price moving on increased red volume is found in the down channels when the trend is down. The trend did change - price moved lower on increased red volume.

4. for down trend to continue, what must come next is more increasing red volume. Instead we see decreasing black volume. When what must come next, did not come, that itself signals change again. ( absence of continuation = change). This is where trend changed from down to up.

5. then price creates lateral formation again. Lateral movement = continuation. Means up trend continues

I am relatively new at this, but I think I got this sequence right.

 

[romanus]

Quote from Jesus_Freak:

This may deserve thread of its own, but I was wondering why there seems to be some.... animosity towards Jack and Spyder elsewhere on the board. This is pretty much the only journal I read, but I was parusing around and found lots of people trying to "disprove" Gaussians, etc. If a theory does not work, I would imagine it would die on its own, because people are not making money. Myself, it seems the more I understand the theory, the more money I make.... but if that were not true for a majority of people, they would just give up and move into something more successful. There would be no need for any disproving of anything because the "market" would decide on its own that the theory was useless...

Again, I am new to this, so maybe its just a the culture of ET to challenge one another and make better traders out of one another....

Thanks!

JF

lots of aliases does not equal lots of people
It seems to me that the set of aliases, which volunteer their negative opinion on any subject related to JH and Spydertrader, can be divided into three distinctive groups:

1. more than a dozen usernames belong to one individual, who was publicly caught using JH methodology, so the only explanation I can think of as to why he keeps compulsively starting threads on JH related subjects, is he is simply bored out of his mind and finds it amusing to mess with other people brains. He claims to have a Multiple Personality Disorder, and some of his personalities are actually quite entertaining.

2. the second group of aliases belongs to no more than a few individuals, that keep stalking every thread mentioning JH, Spydertrader or the methodology. I suspect Jack referred to them as "crazies" who follow his posts "assiduously because of their mental state and orientation".

3. the third group of individuals is plagued with radical ignorance , and can be best described as people who "spend hours and hours posting as to why it can't be true, but at the same time insist that they will not spend the time to see if a method works unless shown verifiable proof" http://www.elitetrader.com/vb/showthread.php?s=&postid=1397134#post1397134
After stumbling upon Hershey's writings on ET I started reading threads where he posted. After seeing the same group of people posting counterarguments over and over again, I admit with embarrassment researching their posting history to see if they offer anything of substance. I found nothing but void and lack of basic reasoning skills on their part. Total waste of my time.

If I could go back in time and offer any advice to my younger self, it would be: "Start drawing channels until you see it, FTT's, R\/R's, B\/B's, etc." After all, as Spydertrader pointed out, this staff is binary, once you see it, you can't not see it.

 

[Padawan]

Quote from romanus:

I believe that lateral movement represents continuation of the trend that was in effect before that lateral movement started. So in this particular case:

1. first, we begin with up trend

2. then price creates lateral formation (price moves laterally inside lateral formation, but it's not necessary for a lateral formation to be formed for the price to move laterally, i.e. (a) closes within previous bar range, (b) price going higher on decreased black volume in up channel, (c) price going lower on decreased red volume in a down channel. (a), (b) and (c) also represent lateral movement). Lateral movement = continuation

3. then price breaks a lateral formation on increasing red volume. Price moving on increased red volume is found in the down channels when the trend is down. The trend did change - price moved lower on increased red volume.

4. for down trend to continue, what must come next is more increasing red volume. Instead we see decreasing black volume. When what must come next, did not come, that itself signals change again. ( absence of continuation = change). This is where trend changed from down to up.

5. then price creates lateral formation again. Lateral movement = continuation. Means up trend continues

I am relatively new at this, but I think I got this sequence right.

Thanks, Romanus. For 2b, and 2c, is the assumption that price is within the shadow of a previous bar? If not, I thought that "(b) price going higher on decreased black volume in up channel, (c) price going lower on decreased red volume in a down channel" both signal change.

Thanks.

 

[romanus]

Quote from Padawan:

Thanks, Romanus. For 2b, and 2c, is the assumption that price is within the shadow of a previous bar? If not, I thought that "(b) price going higher on decreased black volume in up channel, (c) price going lower on decreased red volume in a down channel" both signal change.

Thanks.

I believe that lateral movement presents itself in four different ways:
1. Anything that goes on inside lateral formation presumed to be lateral movement by definition.
http://www.elitetrader.com/vb/showthread.php?s=&postid=1468195i#post1468195
2. Decreasing red volume in a down channel.
3. Decreasing black volume in up channel.
4. Bar closing inside the previous bar range.
Notice that 1, 2 and 3 deal with the context of channel or formation, where 4 deals with the context of previous bar.
So where we use the concept of the market mode (continuation or change) I think is determined by resolution.
Just like the concept of actionable signal, I think exists only within the context of resolution. To be more specific:
Look at the 1440 bar [close of]. Price went higher on decreasing black volume. That signals change. Was there change on the next bar (1445 [close of])? Yes, the price went lower after that bar opened."Would you take that signal and go short or not, and why?" - is determined by the resolution level you trade on. The more I think the more it seems to me that the answer to your question has to do with the concept of resolution. I don't have the clear understanding of resolution and unfortunately I am not yet able to coherently put all this in writing to look all logical and make perfect sense.
So if my ramblings don't help, I am sorry.

 

[Padawan]

Ok, I understand now, lol. I was definitely misreading your posts. That's what happens when you're sleep deprived. My apologies, and thank you very much for responding. And yes, resolution is key and something I'm working on as well. Your ramblings (j/k) do help.

 

[dkm]

Quote from romanus:

Lateral movement = continuation

Lateral movement between pt2 and pt3 is seen as continuation because pt3 has yet to appear. After pt3 has been formed, lateral movement = change. We must consider context.