Iterative Refinement

[treeline]

Quote from Spydertrader:

What started as a Traverse (built by tapes) widened itself out to the size of a channel...

...For clarity sake, the Blue Point Three began as a Traverse, became a channel, then 'fanned' out to form the Aqua Channel.

- Spydertrader

Thank you, this response led me to another Aha. Several weeks ago, I had a big Aha: I came to the realization that my Monitoring of the Channel level has been deficient since day 1. So I've been focusing on Channels and their relationship to Traverses.

I was at work today, so my Monitoring was done mostly 10 or 15 minutes after the fact. As I monitored in hindsight, I placed arrows where I thought I should have entered, reversed, and exited as a tree-level, end-of-bar trader. Thank you, Spydertrader, for providing the road map of the day so I can evaluate my work.

I made some errors in my annotations, apparently. I have a couple of Traverses where Spydertrader has Tapes. Interestingly, though, we ended up at the same place: with an up Channel. I caught a couple of Spyder's reversals on the correct bar and was a bar late on a couple. Also, I had a couple of extra reversals midday. I'll offer my thinking process behind these hindsight trades in hopes of discovering what I missed.

1. Short Bar 4 EOB: I considered this entry but decided to wait for BO of the LM which had started on Bar 2. So I entered short on Bar 5 EOB. If Bar 4 had been an IBGS and FBP FBO on IBV instead of DBV, I would have entered on Bar 4.

2. Reverse long Bar 8: I was anticipating a down Channel at this time, and planned to hold through an up Traverse or lateral Traverse before a down Channel was formed. So I held here. I annotated a steeper maroon P3 down Traverse on Bar 13. This bar also BO of a FBP. Then Bar 14 interrupted the down sequence by not showing more IRV after the FBP BO. So I was no longer anticipating a down Channel to form. At this point, I was neutral. I planned to go with the next change signal that came, in whichever direction. Bar 15 showed a maroon Traverse RTL BO on IBV, signaling to reverse long. So I was 7 bars late on this reversal because I was anticipating a down Channel. If I had followed Spydertrader's above quoted implication that we did have a Channel once it widened sufficiently, then I could have reversed at Bar 8 because we had a VE of the Channel at that time.

I apologize that my chart is in two different images; I didn't anticipate posting it today. I'll post my last few trades along with the p.m. Chart in the next post.


Orange arrows = enter short (first bar of day) or reverse short (all others)
Green arrows = reverse long
Blue arrow = exit
Gray arrows = sequence interrupted or else "back in play" ("back in play" simply means that after the sequence was interrupted, the next change signal was in the direction of the original trend)

 

[treeline]

Today's hindsight trades, continued:

3. Reverse short Bar 43: After the formation of the Blue up Channel (with P3 on Bar 28), I noted that it was a fairly wide Channel. So I anticipated an up Traverse followed by another, fanned, up Traverse before down became dominant. The dark blue up Channel showed a dominant olive up Traverse after P3, and then this Traverse fanned to create the blue up Traverse. Once the blue up Traverse formed, I was waiting for either a Flaw or a VE before an FTT. Bar 43 did provide a VE, and then it closed below midbar on Peak Volume. So the sequence was complete, including end effects, signaling change to down and reverse short.

4. Spyder did not reverse long on Bar 49. I was still anticipating the formation of a down Channel after Bar 48, but the FBO of the blue Channel RTL on an OB with Extreme IBV (higher V than that of the previous down Tape) had me reversing long erroneously. At this point I was anticipating fanning the up Channel RTL.

5. Bar 54: Fortunately the up sequence was interrupted when Bar 53 didn't show more IBV after the BO of the LF, so I profited (in hindsight, of course) from my earlier error by reversing short here.

6. Bar 58: I reversed long again here for similar reasons to those for Bar 49: an OB on IBV. This one offered the added comfort that it broke 2 RTLs and had high volatility, along with more Volume than the previous down Tape.

7. Bar 69: I reversed here due to the OB on IRV and inc vty, which also FBO'd the SP. Since we had already fanned our blue up Channel to create the green up Channel, I wasn't necessarily anticipating a fanned up Traverse after the P3 of the green up Channel. Bar 69 completed a Flaw within the green up Traverse (which represented the post-P3 dominant Traverse of the green Channel). On the same bar it gave us the change signal via the FBP FBO and OB on IRV. Reverse short.

8. Exit Bar 78, EOD.


Orange arrows = enter short (first bar of day) or reverse short (all others)
Green arrows = reverse long
Blue arrow = exit
Gray arrows = sequence interrupted or else "back in play" ("back in play" simply means that after the sequence was interrupted, the next change signal was in the direction of the original trend)

edit: changed "FTT" to "VE" in: Bar 43 did provide a VE, and then it closed below midbar on Peak Volume.

 

[LittleMac]

Spyder can you talk about treeline's early day assessment because I was almost exactly in line with him according to his monitoring especially his brown down channel and gold/olive up channel which as you can see are colored differently in my chart.

 

[romanus]

Quote from treeline:

...Bar 53...[/i]

Is there a table by any chance that show bar number corresponding to its close of time. I just quit trying to count to 53 , cause I was making mistakes several times.

 

[treeline]

Quote from romanus:

Is there a table by any chance that show bar number corresponding to its close of time. I just quit trying to count to 53 , cause I was making mistakes several times.

I apologize. When I trade from home I usually put the Bar numbers in the Volume pane but I didn't plan to post my Chart today. I will repost the charts with Bar #s at each of my entry/reversal/exit points:

 

[romanus]

Quote from romanus:

Is there a table by any chance that show bar number corresponding to its close of time. I just quit trying to count to 53 , cause I was making mistakes several times.

found it

 

[ljyoung]

Quote from romanus:

Is there a table by any chance that show bar number corresponding to its close of time. I just quit trying to count to 53 , cause I was making mistakes several times.

Voila. From JH who uses bar Open as the starting point, e.g., 9:30 = Bar 1.

lj

 

[treeline]

.

 

[romanus]

Quote from treeline:

4. Spyder did not reverse long on Bar 49. I was still anticipating the formation of a down Channel after Bar 48, but the FBO of the blue Channel RTL on an OB with Extreme IBV (higher V than that of the previous down Tape) had me reversing long erroneously. At this point I was anticipating fanning the up Channel RTL.
[/i]

I pulled all posts made by Spydertrader with the keyword traverse or traverses. Across multiple posts he describes in great length the mechanics and sequential order of building a channel from traverses.

As you correctly anticipated what follows VE 1305 eob (bar 43) is another pt3 traverse down and therefore the change signal on bar 49 shows transition from pt2 to pt3.

 

[Spydertrader]

Quote from LittleMac:

Spyder can you talk about treeline's early day assessment because I was almost exactly in line with him according to his monitoring especially his brown down channel and gold/olive up channel which as you can see are colored differently in my chart.

See my first chart posted today.

Again, how I annotate has nothing to do with how I 'see' the market. How I annotate has everything to do with how the market tells me to annotate.

'Seeing' the market is binary. One 'sees' it or one does not 'see' it. Most people really have never 'seen' the market.

If you failed to annotate the 'Orange' Down Traverse (on my chart), then you did not 'see' the signals provided by the market.

Once again, the market tells the trader how to annotate charts. The market says where to place the Point One, Point Pwo and Point Three.

The trader simply follows directions - drawing lines where told, and pushing buttons as instructed.

- Spydertrader