Iterative Refinement
- Thread starter Spydertrader
- Start date
.Correct. Two possible sources of error exist when one attempts to evaluate what the market has provided in terms of signals. Either, what the trader sees does not fit the definitions supplied by the market, or what the trader sees does fit the definitions supplied by the market, but the trader has mis-applied the correct defintion onto an incorrect context.
A small dose of critical thinking should point to which of the above answers applies here.
- Spydertrader
The only explanation I can think of with respect to context - is that the bar in question shows increasing black volume after pennant BO on increasing volume. Therefore, based on pennant BO, 11:15 [close of] is a signal for continuation.
But I have no idea how to determine the true nature of that bar in the real time, other than by looking at YM which shows continuation at 11:15 EST.
I recommend starting with making sure you annotated the area correctly, and once sure you have thoroughly annotated this portion of your chart, determine what you know. When does a trader apply the Jokari Window? When does a Trader not?
Something says not to apply the Jokari Window at this specific point in time. Determine what 'things' provide such information. Then, determine which of the 'things' applies here. You do not need the YM, nor any other tool except the 5 minute ES chart.
HTH
- Spydertrader
ES Daily Chart August 14 2008
I added two areas of lateral movement which were missing from my chart.
Two times when a trader does not apply the Jokari Window come immediately to mind:
1. The market is building a Traverse but has not yet shown a Point 3;
2. Price is in a Lateral Formation or Lateral Movement (by "Lateral Movement," I refer to 3 or more bars of Lateral Movement as opposed to simply a single bar closing inside the range of the previous bar).
By 11:15, I see three Point 3's in the up Traverse, based on the way I annotated the day. This rules out #1. But I noticed that Lateral Point 2-3 Retraces can be drawn (aqua on my chart) such that both the 10:25 and 11:15 bars close in Lateral Movement. (I realize that the 11:10 bar closes outside LM, but Spydertrader recently recommended that we require 2 closes outside the Lateral to "kill" it.)
Am I correct that the reason not to apply the Jokari Window to analyze the 10:25 and 11:15 bars is because they both closed in Lateral Movement, which always signals continuation for the 5min ES-only Traverse-level trader?
Thanks to Spydertrader, Avi 8, and romanus for this great discussion.