Iterative Refinement

[Spydertrader]

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1930045>

One.

YM [close of] 12:46 Bar - Price moves higher on decreasing Volume, after a Point Three - change

YM [close of] 12:48 Bar - Price moves lower on increasing red Volume - more change

YM [close of] 12:50 Bar - Price moves laterally on decreasing red Volume - as expected - continuation down

Two:

YM [close of] 13:40 Bar - Pennant BO on previous Bar with increasing black volume. Expect more increasing black Volume. Received decreasing red Volume - change.

YM [close of] 13:44 Bar - Price moves Higher and FBO's the Lateral Formation - continuation short

YM [close of] 13:50 Bar - Price moves lower on increasing red Volume - contnuation short.

- Spydertrader

 

[gravitonium77]

Quote from Spydertrader:

Look again (closely) at the 11:04 [all times Eastern and close of] YM Bar. What do you 'see' with this specific YM bar? Does this bar not fall within the 11:05 [close of] ES bar?

- Spydertrader

On my chart what I see for the 11:04 YM bar is...

Increasing Red Volume(higher volume with lower low)
IBGS (close above open)
Lateral Movement( price closes inside range of prior bar)

Is the answre which I seek in the idea that the IBGS overides the LM? If so, would this always be the case? Or is there some context thing I'm currently not seeing?

Thank you seems so trite, but it's all I got at the moment

 

[Spydertrader]

Quote from gravitonium77:

On my chart what I see for the 11:04 YM bar is...

Increasing Red Volume(higher volume with lower low)
IBGS (close above open)
Lateral Movement( price closes inside range of prior bar)

Is the answre which I seek in the idea that the IBGS overides the LM? If so, would this always be the case? Or is there some context thing I'm currently not seeing?

Can you find an example of an IBGS which doesn't close back inside the the previous bar (on ES or YM)?

- Spydertrader

 

[ivob]

I was thinking about the second "incorrect analysis" as it was happening.

1. I was surprised by high bar range (3 points) in comparison to the low volume we had. I would expect much more volume here. (>30 K). Before we had much higher volume for 3 points moves.. We know change can come quickly when this happens...

2. We broke out of a lateral formation. WMCN is more increasing black after the breakout bar. It didn't come.

regards,
Ivo

Quote from guavaman:

Yellow text are the manifestly incorrect analysis.

 

[gravitonium77]

Quote from Spydertrader:

Can you find an example of an IBGS which doesn't close back inside the the previous bar (on ES or YM)?

- Spydertrader

I can find quite a few actually (eg. YM today close 9:48, 10:30, 11:00) BUT in all the cases I've found from a very quick look is that if the IBGS does NOT close within the prior bar, it DOES close within a recent bar which is the bar defining Lateral Formation AND/OR the IBGS becomes an outside bar.

Either way, I am sure I just had one of the patented "aha moments brought to you by Spydertrader".

 

[Spydertrader]

Quote from gravitonium77:

(eg. YM today close 9:48, 10:30, 11:00)

One should classify Outside Bars seperate from IBGS Bars.

In other words, all poodles are dogs, but not all dogs are poodles.

- Spydertrader

 

[romanus]

Quote from Spydertrader:

What you have is not a channel. It's a tape. However, what you do have is a tape which expands wide enough to create a tape the size of a traverse.

It is a tape indeed. Marked thin black on the attached, this tape is created using two bars: 1250 [close of] and 1255 [close of]. This tape grows into a traverse from pt1 to pt2 of future channel with slope and width similar to those of previous up channel.

Quote from Spydertrader:

...the BO of the RTL on increasing Volume makes sense, but the channel sequences you attempted to employ do not. Why?

The start of the sequence is an FTT. Since the price has not finished making pt3 in the down channel, an FTT is what will follow it. In other words we can not have an FTT before pt3. FTT of the tape does not = FTT of the pt3 channel. Must wait for pt3, then FTT and only then start the sequence.

Quote from Spydertrader:

BTW, you do have an accelerated chanel within this expanded tape.

I annotated it in pink. I suspect an FTT of the accelerated channel marks the start of a slightly different sequence - pt2 to pt3. Is this why accelerated channel always have to be annotated?

Quote from Spydertrader:

Again, review the bars in my first answer above in order to make sure you understand what signals the market has provided.
Does the 13:40 [close of] ES Bar say continuation or change? Why? What does the 13:40 [close of] YM Bar say with respect to continuation or change? Why?

13:40 [close of] ES Bar: price travels higher on increasing black volume = continuation
13:40 [close of] YM Bar: what must come next after formation BO on increased volume (more increasing black volume), did not = expect change

Quote from Spydertrader:

Now, note the up channel before this expanded tape. Draw your trend lines in about the same width, and opposite slope. Do so, and you should see the RTL of this 'corrected' channel pass right by the 13:45 or 13:50 [both close of] ES bars.

I have experimented with different angles for a couple of hours, and I think I am beginning to see what you meant in: http://www.elitetrader.com/vb/showthread.php?s=&postid=1495074#post1495074

Quote from Spydertrader:

If you drawn a channel (tape, traverse, etc.) of a certain slope and width, you'll need another equal (and opposite) channel (tape, traverse, etc.) of similar slope and width to form the next higher fractal.

Thank you, Spydertrader.

 

[Atari]

A great Lateral Formation (beginning 10:35 bar) to test knowledge of context and sequencing. You are provided valid reasons for taking signals for change or holding. Anyone want to take a shot at some Analysis of this area and the Decisions they would have reached?

I'll provide the contexts/sequences I see, after some replies are provided.

ES Chart

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1930194>

YM Chart

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1930200>

-A

 

[Atari]

YM

 

[romanus]

Quote from gravitonium77:

Is the answre which I seek in the idea that the IBGS overides the LM? If so, would this always be the case? Or is there some context thing I'm currently not seeing?

IMHO, while the change is always expressed quite clear either through volume (decreasing dominant, IBGS, outside bar, decreasing non dominant after an FTT) or formation behavior (formation FBO, formation BO on increased volume with WMCN didn't), the continuation presents in two types of fashion: increasing dominant volume or absence of change. Absence of change is really lack of sufficient data and lateral movement falls under that category along with formations. In other words, the fact that the price moved in dominant direction on decreasing volume on 1100 [close of] bar represents a sufficient dataset to determine change. The fact that the bar closed inside the previous bar range indicating lateral movement does not add any useful data to already sufficient dataset. If, on the other hand that bar went higher and formed a pennant for example, then in the absence of any other data the lateral movement becomes contiuation.
HTH