Iterative Refinement

[ehorn]

Quote from jbarnby:

Thanks Jay. I had the red channel drawn in as a super channel from the 15:15 FTT on Thursday and the Pt 3 of that channel from 15:45 on Friday. I can definitely see your take on it also. I'll have to examine the charts a bit more to work that out.

Ahhhh!

Well then that is beautiful how price moved up to it... retraced, (how convienent as a non-dom traverse on the newly forming channel, where have I seen that before) then PT3, then BO!

Immutable... Nice!! Thanks for clarifying.

 

[nkhoi]

congrats Mr Black on your SCT trades, here is your SCT medal.

 

[romanus]

14:50 eob
If anybody can share their insights, I would appreciate it.
It appears to me that 14:50 eob is a Lateral Movement on Increased Volume or Decreased Volatility on Increased Volume, whichever one perceives, I think it's both. As a change signal these two fall under Tape Level Changes.
It appears to me that there isn't any other way to annotate that period, other than placing pt1 of the new down traverse on that bar.

 

[treeline]

Quote from Spydertrader:

The market provided many opportunities to learn a thing or two this morning. First, the martket provided an Extreme Pace level bar on the ES 10:05 [close of] Bar - permitting the trader to recall an event on Friday on the ES 10:10 [close of] Bar. Both events showed Volume and Price breakout from Lateral Movement. Neither event showed Peak Volume. In addition, the market action this morning created a completed sequence from Point One to Point Two to Point Three on the ES 10:15 [close of] ES bar.

The market then stepped down in pace creating some sort of Lateral in the process. Hmmmmmmmm. Completed Sequence for a Traverse followed by a Lateral. What must come next?

The market breaks out of this lateral allowing the trader to see two examples of Peak Volume. However, as guavaman suggested, the sequences of Point One to Point Two to Point Three had not yet completed for the answer to our question, "What must come next?"

A few bars later, the market does complete its sequences for both a channel (and the channel's second dominant traverse) and offers up the expected signal for change creating an FTT in the process (ES 11:20 and 11:25 [close of] Bars).

Once again, the market undergoes an acceleration of Pace - this time creating an Outside Bar followed by a signal for change (Jokari Window), and once again we ask ourselves if the market has completed the sequences from Point One to Point Two to Point Three. Of course, the market has yet to do so, and as such, the trader (on The ES 5 minute Traverse Fractal) does not have permission to seek a change in market mode.

After another accleration of Pace (perhaps, by now, those Pace lines across the Volume Pane hold a bit more meaning than before) the market transitions into pace Step Down - where once again we see the formation of a Lateral. Since The market has yet to complete the sequences from point One to point two to Point Three for this new traverse, we once again know we have a Lateral Retrace, and expect a Breakout of Price and Volume to the up side - which will then complete our sequences, and provide permission for the trader to seek a signal for change.

HTH

- Spydertrader

During debrief, I tried to incorporate Spydertrader's above comments. As a result, my chart looks different from others posted today. (That doesn't mean mine is correct, however... )

 

[romanus]

Quote from treeline:

During debrief, I tried to incorporate Spydertrader's above comments. As a result, my chart looks different from others posted today. (That doesn't mean mine is correct, however... )

With respect to the red channel, rest assured, it does.
I fanned that first traverse before I had a chance to read his post.

 

[treeline]

Regarding Pace Lines in the Volume pane: for several months I've been doing approximately weekly adjustments to my Volume Pace Lines according to the following. I take one month's worth of 5 min ES bars and sort them by Volume, lowest to highest. I then use the following thresholds as the Pace lines:

Lowest 10% = Very Dried Up
10% - 30% = Dry Up
30% - 50% = Slow
50% - 70% = Medium
70% - 90% = Fast
90%+ = Extraordinary

When Spydertrader recently (about a month ago?) listed his current Pace Lines, mine were all too high by a fair bit. For example, my current threshold for Extraordinary is around 49,000 contracts.

Am I miscalculating the Pace Lines?

I should note that I currently use vorzo's spreadsheet for my calculations, but doing the sorting manually within Excel gives the same results. I filter out all bars after 4:00 pm EST.

Thanks.

 

[TIKITRADER]

ES Daily Chart August 4 2008

 

[Spydertrader]

Quote from treeline:

Am I miscalculating the Pace Lines?

Nope. Nothing incorrect about your calculations. The values I provided originated long ago, without seasonal, or volatility, adjustment.

I use automated calculations now (updated every bar), but if you revamp every month, I don't think you'll have any problems.

- Spydertrader

 

[LittleMac]

So the wrong thing to do here would be to fan the original pt 3 of the first traverse. The correct thing to do would be if you had viewed the lateral(beginning at 10:15 close of bar) as a non-dominant retrace of a channel and a lateral traverse..

Ive been waiting to ask this one. If what i said above is correct. How do we interpret the sequences from the pace acceleration bar(10:05 close) to the completion of a third domiannt traverse and our first channel at 11:25 bar close.

In other words, why no fan of the first dominant traverse and what(in terms of tapes/rules for creating a traverse) qualifies the lateral as a lateral traverse?

Sort of like ehorns drill a few days ago which I think helped everyone quite a bit

 

[treeline]

Quote from Spydertrader:

Nope. Nothing incorrect about your calculations. The values I provided originated long ago, without seasonal, or volatility, adjustment.

I use automated calculations now (updated every bar), but if you revamp every month, I don't think you'll have any problems.

- Spydertrader

Thanks for the quick reply and helpful information. I had a backline request to share my current Pace Lines, so here they are for ES. I don't currently calculate them for YM, since it is no longer on my layout.

Thank you also for the hint today regarding Pace Acceleration vs. Peak Volume. I think I now know where to focus to find the answer.

I updated the Pace Lines after Friday's close (8/1/08):

VDU: up to 10,113
DU: 10,114 - 16,278
Slow: 16, 279 - 22,389
Medium: 22,390 - 31,187
Fast: 31,188 - 47,882
Extreme: 47,883 or greater