Iterative Refinement

[Spydertrader]

Quote from sscott:

My chart reflects my attempt at a "fully annotated chart".

You've defined 'thoroughly annotated chart' in a fashion which appears to include "adding vocabulary words" to your charts. I recommend starting with your interpretation of my words - making sure your interpretation matches my own. Perhaps, 'thoroughly annotated' holds a different meaning for you than it does for me.

Charts represent tools traders use to convey information. Only with thorough annotation does the market convey the correct information to the trader.

For example, before 11:00 AM [Eastern Time], the market shows both increasing red and increasing black Volume. One could make a case to draw in channels and traverses in a different fashion than I have shown. However, since the drawing of trend lines does not represent a subjective science, the market must have conveyed something (some information) indicating the correct method.

Locate that information.

- Spydertrader

 

[TIKITRADER]

ES Daily Chart July 9 2008


Daily ES bar made a HH and a HL on decreased volume today.

Bar today also FBO the white dominant traverse, and then closed near the low of the day.

Range today = 34 points

Volatility to previous bar = 87%

Close of bar = 10% of range today

edit : volume missing from chart, will update that on next daily post.

 

[sscott]

Quote from Spydertrader:

You've defined 'thoroughly annotated chart' in a fashion which appears to include "adding vocabulary words" to your charts. I recommend starting with your interpretation of my words - making sure your interpretation matches my own. Perhaps, 'thoroughly annotated' holds a different meaning for you than it does for me.

Sorry, I typed "fully" instead of "thoroughly". It won't happen again.

 

[Spydertrader]

Quote from sscott:

Sorry, I typed "fully" instead of "thoroughly". It won't happen again.

If you believe my previous post referred to a typographical error, then you have missed the point entirely.

- Spydertrader

 

[cnms2]

Spydertrader, is there a reason for which you annotated differently those gaussians on your morning chart? For consistency, I would've expected one of the two choices I've attached. Thanks.

Quote from Spydertrader:

Attachment: 0709esam.gif

 

[Spydertrader]

Quote from cnms2:

Spydertrader, is there a reason for which you annotated differently those gaussians on your morning chart?

The black Volume Bars resulted from a Break of a Down Traverse RTL followed by Price creating higher highs, while closing back 'inside' the previous bars. As such, although we had transitioned to a new dominant mode (black), we had yet to transition back to the new non-dominant (red) before reaching Point Three, or we would need to see a change in Pace to the upside.

The second (Red Volume) Sequence resulted when Price exited a Pennant Formation while failing to show nore increasing Red Volume after the Formation BO. As such, we expect the trend to change. Because we expect the trend to change (in this specific example, back to the upside), we know we had not yet reached Point Three.

Expecting another B2B as we move from Point Three into the channel, the only way to create a Gaussian B2B, while at the same time, showing a continuous Red Volume move was to draw it as shown.

Based on how the market had already created a down traverse, and the fact that we had yet arrived at a Point Three for an up traverse, I felt it the annotations appropriate. Had the market created a traverse, before this point in time, I expect I would have drawn things differently.

HTH

- Spydertrader

 

[cnms2]

Thanks! Very nice. It's like you ... anticipated the market's moves ...

Quote from Spydertrader:

... HTH

- Spydertrader

 

[TIKITRADER]

Daily ES Chart with volume. July 9 2008

 

[Jander]

Quote from Spydertrader:


Expecting another B2B as we move from Point Three into the channel, the only way to create a Gaussian B2B, while at the same time, showing a continuous Red Volume move was to draw it as shown.


HTH

- Spydertrader

Thanks for the explanation Spy.. I had to read it a few times but it helps a great deal. I do have one question about the statement above if you dont mind..

Any reason in particular that you were expecting a B2B there? It sure looks like decreasing red, would a R2B be out of the realm of possibility to create the pt 3?

Perhaps this is just a nitpicking issue and doesnt matter? My main concern is that Im missing a major sequencing rule here. Thanks again

 

[ehorn]

I am starting to see the benefits from 'D'ecision (which results in Continue) and 'A'ction (which results in Hold)