Iterative Refinement

Todays chart.

Yesterday proved to be an exercise in confusion that led to a big mess. Or perhaps it could have been printed and called a piece of modern art, incomprehensible to all including the artist.

Today I've tried to visually differentiate between the different fractals and still annotate everything. Doing that I've decided to omit annotating some accelerated 'movements' to keep sane. Today I felt a bit more comfortable. At least until Spyders post in response to Janders chart where two traverses were not (I have them annotated, too).

I've learned - once again - that I really don't have a clue. As they say, realizing you don't have a clue can be the first step to recovery. Or something like that. I wish.

:D
 

Attachments

ES 5 Minute chart July 29 08.



If I am wrong in getting this, then I hope all will benefit from my slow understanding of traverse verses formation !
This is how I had seen it after Spyder's reply.
Snapshot taken when bar 79 was forming.
 

Attachments

Anyone who annotated a down traverse on their charts today. Kindly detail the signal for change which caused you to go short and the signal for change which caused you to return to the long side.

- Spydertrader
 
Quote from dkm:

with the benefit of hindsight...
More...

I didn't say you annotated incorrectly (and I didn't say you annotated correctly either), but it is important to know what 'signal' told your brain that you needed to be short. This exercise might assist everyone in learning (conciously) what their brain already knows (subconsciously). Or, this exercise will show everyone where (and how) they 'jump fractals' - if that is what they did (and I am not saying you did or didn't).

It's a process - one which should help enable everyone to learn how to learn.

It should already be obvious that one could annotate this area several different ways. I feel it important to learn how to know the correct way.

- Spydertrader
 
Right now I don't know if I am annotating correctly or incorrectly. In all likelihood I am probably reinforcing bad habits but, then again, how could I tell?:confused:
 
Quote from Spydertrader:

However, both instances do not represent Peak Volume. One example shows a Pace change, but not peak Volume. The other example does show Peak Volume.
More...

Quote from Spydertrader:

Peak Volume also needs three bars to create acceleration of the Gaussians Slope.
More...
Attached are multiple examples of Peak Volume and one example of simply increased volume. Differentiating based on the difference between the height of the last (third) volume bar in the three bar Gaussians Slope acceleration sequence and the second volume bar seems rather subjective. Is this a binary definition: third volume bar in a sequence is higher (even by 1 contract) and we have a Peak Volume?

However looking beyond the colors of the bars in accelerated of the Gaussians Slope it appears that in the example of increased volume (first picture with red text below) the second bar is colored red because it made lower low, but most of the volume in that bar resulted from price moving higher on volume that is not red, and therefore in the direction opposite to the price movement.

Applying the same logic to our two cases (A and B in the attached) I notice that that 1140 eob also closed in the direction opposite to the move. Therefore it seems logical that today would not be the case of Peak Volume.

However, looking at this picture:
http://www.elitetrader.com/vb/attachment.php?s=&postid=2009435
I also see the second bar in the Gaussians Slope acceleration sequence (1030 in the picture, IBGS on increasing black volume) as being black because of its higher high. It did however closed lower than open and therefore the price was moving on red volume. This invalidates my previous hypothesis and I temporary give up as I can't find any differences.:(

Second point. My understanding of the formation BO and the bar that follows it was based on the following logic:
1. Pennants form more often than not with second bar being lower volume than the first. Therefore we expect BO on increasing volume.
2. In order for a trend to change we need to see more increased volume followed on the bar after the formation BO.
3. The failure of more increasing volume to follow indicates that the trend has not changed.

This is the first time I am seeing applying this logic in a situation where the trend exists already.

It seems like it's a change and continuation at the same time.

Change as in "BO which fails to provide more increasing volume, and thus, creates a signal for change"
http://www.elitetrader.com/vb/showthread.php?s=&postid=2011228#post2011228
and

Continuation as in "you need more increasing Volume after these events to confirm a Trend Change has taken place. Otherwise no Trend Change exists which requires the trader to get back on the right side of the market. In other words, a trader thinks a trend change occurred, but the market has said otherwise."

http://www.elitetrader.com/vb/showthread.php?s=&postid=1926413#post1926413
 

Attachments

Quote from Spydertrader:
Anyone who annotated a down traverse on their charts today. Kindly detail the signal for change which caused you to go short and the signal for change which caused you to return to the long side.
More...
Since I posted a chart today, one with several down traversals, I find myself compelled to reply. I'm still at the 'M', trying to learn the mechanics of annotating a chart thoroughly. I'm not doing any 'A' (at least not consciously).

I try annotate what (I think) I see. If I see 'movement' - regardless of fractal - I put it on the chart. 'Movement' must be confirmed by volume (or volume confirms the movement). As an example, by that logic the purple annotation from 10:50 with pt3 at 11:10 [close] is a valid 'down movement'. I've annotated it using dashed lines (for traverses) which is how I've tried to differentiate between fractals on the chart. Of course, now I know that traverse to be wrong, because you wrote so. And from your question and the charts posted by TIKITRADER and dkm I also know that the rest of my annotated 'traverses' are wrong.

Knowing the traverses to be wrong does not mean I understand that they are wrong, unfortunately. According to the way I have come to understand the method they are valid 'movements' on at least one fractal.

I'm sorry I can't detail any signals for change.

To be honest the channel/traverse/tape/fractal discussions of late have confused me. It's like starting over yet again. :(
 
Quote from Spydertrader:

I didn't say you annotated incorrectly (and I didn't say you annotated correctly either), but it is important to know what 'signal' told your brain that you needed to be short. This exercise might assist everyone in learning (conciously) what their brain already knows (subconsciously). Or, this exercise will show everyone where (and how) they 'jump fractals' - if that is what they did (and I am not saying you did or didn't).

It's a process - one which should help enable everyone to learn how to learn.

It should already be obvious that one could annotate this area several different ways. I feel it important to learn how to know the correct way.

- Spydertrader
More...
This is actuallty an awesome drill. It clearly shows that every signal that one thought to be a change was later invalidated by the market. I just did that and it's incredible!!!

:D Is there a drill that would help seeing it sooner?
 
You must log in or register to reply here.
Back
Top