Iterative Refinement

Quote from Ares1:

After seeing what romanus just posted, I moved the rtl of the descending channel (counter trend) higher and added more notes.
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I encourage you to increase bar spacing and set your scale more appropriately, so that others may have an easier time of actually 'seeing' what your charts and annotations say. In addition, using OHLC charts, rather than candle charts should increase the number of responses you receive.

Quote from Ares1:

Just noticed that the 50 sma crossed above the 200sma ( a golden cross) on UYG's hourly chart and added it to the annotation.
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By time the 'golden cross' has occurred, you have already missed much of what your chart (Price and Volume) needs to tell you.

- Spydertrader
 
Quote from Spydertrader:

Since you have yet to indicate whether or not you now see those previously undetected differences, are you really asking me why I didn't use an example where you already stated you couldn't differentiate?



Wrong.

Look Again.

These two (blue and pink) ...

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2008571>

Compared to These two (Orange and Blue)...

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2008572>

Still no differences?

Edit: Correct Bar coloration is not applied to the bottom chart snip.
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Which fractal do you trade?

For me, there are only 2 degrees of trend (fractals) in those 2 examples: red channel and its traverses, notwithstanding the fact that the pink channel in the first example has clear traverses within it. Such occurs in strong trends and often lead to channel expansions; still I consider it a traverse of the red channel, which is the killer channel.
 
Quote from icarus618:

the fact that the pink channel in the first example has clear <strike>traverses</strike> tapes within it. Such occurs in strong trends and often lead to channel expansions; still I consider it a traverse of the red channel, which is the killer channel.
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Pink and Blue do represent Traverses and the Red does represent a channel - the only channel on this snippet. However, the very skinny lines represent tapes - not traverses within the pink traverse.

Tapes build Traverses, and Traverses, in turn, build channels.

In other words, a traverse is a Point Three constucted from tapes and a channel is a Point Three constructed from traverses.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2008600>

- Spydertader
 
Quote from romanus:

http://www.elitetrader.com/vb/attachment.php?s=&postid=2008336
We know that tapes build traverses and traverses build channels.
Channels have points 1, 2 and 3. Applying the same logic here, in order for a channel to exist, it would be necessary for a price to build traverses as it travels
1. pt1 to pt2
2. pt2 to pt3 (could also be a lateral)
3. pt3 and beyond
To me it seems logical that all three traverses need to be in place for a channel to exist.

If you thought that the red pt3 down is a channel formed by orange down traverse, followed by LTR lateral traverse, you would need to see another dominant down traverse, which we don't see in this case.

P.S. In case where one channel ends, we know another begins. So when an existing channel ends and we have a traverse that BO's and exits old channel, we know what comes next is another channel, where this traverse would be a dominant one as price travels from pt1 of the channel to pt2 of the channel.
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On 5m bars:

Q: What is the minimum number of bars needed to draw 2 parallel lines (points 1,2,3)?

A: 2.

Two bars give 4 end points. You use 3 of them to get the lines. There are exceptions to this, which everyone here knows.

When you draw the lines off 2 5m bars, you can bet your ass that is not the "best" channel to operate on. I use the word "best" here from the viewpoint of a beginner whose focus should be on growing his account and building up confidence. Call that channel a traverse. Oftentimes the 2 bars are similar in volatility. The bars that follow will be too. Give this an additional name: a tape. But don't forget, the channel you just drew is a traverse.

Q: What is the minimum number of traverses needed to draw 2 (wider) parallel lines?

A: 2.

Two traverses give 4 end points (one overlaps). You use 3 of them to get the lines. If the second traverse exceeds the extreme of the first, you wait for the next traverse.

This is the "best" channel to operate on. In Spydertrader's examples, this is the red channel. Look for the "best" places to extract from this channel. Again, I'm using "best" here from the perspective of a person looking to grow his account and build confidence.
 
Quote from Spydertrader:

Pink and Blue do represent Traverses and the Red does represent a channel - the only channel on this snippet. However, the very skinny lines represent tapes - not traverses within the pink traverse.

Tapes build Traverses, and Traverses, in turn, build channels.

In other words, a traverse is a Point Three constucted from tapes and a channel is a Point Three constructed from traverses.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2008600>

- Spydertader
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I see where you are coming from. My take is a simplified form of yours. On the 5m bars, 2 bars start off a tape. This is always a traverse of a larger channel (red channel) formed by additional traverses.

We both know that a tape comes in a usual place within that larger channel: it is usually a first traverse. We also know where the p3 of that larger channel will be too: it will be outside of that tape. And further, we know that the traverse after the p3 will usually be complex; i.e., you will be able to draw more lines than you did for the tape first traverse.

You delineate your channels much more than I do, which is a good thing for sure. I admit I get sloppy at times keeping up with my annotations.

In any case, you're doing great work here. Transference is pretty much a thankless effort.
 
Quote from Spydertrader:

Quiz: Why do we not have a signal for change on Bar Six?

Everyone should feel free to provide an answer. I have no plans to provide the quiz answer (or additional hints) until the correct answer appears.

- Spydertrader
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I hope I'm not incorrect, doesn't seem like anybody answered correctly yet, as Spydertrader has not mentioned it.

So far, peak volume doesn't explain it, nor does lack of VE and/or flaw. I find myself asking myself what signal(s) for change apply to a traverse, but NOT a tape? Can the answer be divined by only looking at/annotating/studying the 6 bars of that day?
 
Quote from icarus618:

In any case, you're doing great work here. Transference is pretty much a thankless effort.
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I am personally most appreciative and grateful for the efforts.... Great work here Spyder!

So what is the reward... That we all pay it forward using the paradigm... See one. Do One. Teach One.

Thanks again Spyder!
 
Quote from icarus618:

I see where you are coming from.
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And I, you. I just wanted to make sure our different use of vocabulary wasn't masking a failure on my part to clarify. I see now we use slightly different terms to describe the same event.

Enjoy the weekend.

- Spydertrader
 
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