Iterative Refinement

If anyone would feel to help, is this channel correct? according to the "rules" spyder points out: if a bar has a higher has it's considered black volume, so hence my question:)

looking back at this, is this not a sym. pennant? this would be considered the subtlety?

edit: to me the turquoise channel would be correct, but just to make sure..
 

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Quote from Atari:

Okay, let's think about it this way, by the end of the 10:45 bar, as you pointed out, price and volume are providing WMCN to meet the very general definition of a retrace. However, if a trader decides to act on change and reverse position based on a potential FTT, what is the specific anticipated outcome from the FTT that made the trader want to switch sides of the market? By the end of the 10:45 bar, do we have WMCN for that anticipated outcome?



Correct, and what type of price movement? What does this signal to us?



Is some cases, that was the case in this dicussion, but you picked up on a good deal of the clues provided - you just weren't sure how to apply those clues. Going forward, try to be on the lookout for clues you formerly missed. For the ones you were uncertain how to apply, take them one at a time go back and study where they were discussed and then look for them on charts to confirm you are using the signals correctly. Take your time and make sure you feel fully comfortable with each one and you will get there.

-A
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The specific anticipated outcome from a FTT is a channel BO and the formation of a traverse channel in the opposite direction. We did not have WMCN for that anticipated outcome. If we identified the 10:35 bar as change and reversed long, the 10:40 bar does not provide a signal to reverse short since it becomes our new potential FTT. The 10:45 bar, however, shows that we have not made the kind of retrace that one expects during the formation of an up traverse channel (trend change) and it is these traverse channels (generally 7-10 per day) that we attempt to catch. Additionally, we would at least like to see the bar make a higher high than the previous bar. Without a true retrace, we can anticipate that the point 3 down will be formed. By EOB 10:45, the market tells us that the lateral is in control and we get back short, anticipating that we are moving laterally from a point 2 to a point 3. We then hold until an overriding signal for change develops.

Matching channel slopes and widths provide important clues as well. If the market comes out of one steep channel and into another with a comparable slope, then the trader may not anticipate a point 3 even without much of a retrace. And when there’s a BO of a larger opposing channel but the current channel does not widen to match the width of the previous channel, it can be a sign that the point 3 won’t materialize and we’ll get continuation of the overall trend.

I am thankful for the PM’s that were sent regarding this exercise, and I have essentially rehashed what was shared with me. Doing so has provided additional clarity, and I hope it helps others as well. Please feel free to add or edit as you see fit. Thanks.
 
This is just a heads up. ET has deleted a bunch of older inactive threads. So if you have some that you bookmarked but not saved, might want to see if they're still there, and save ones you don't want to disappear. - EZ
 
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