Iterative Refinement

[ljyoung]

Quote from Tums:

Lateral View

A most sincere thank you Tums for this, IMO, important chart. I am not in the habit of dispensing advice in this thread, nor should I be as I simply don't know enough to do so. That said, I would urge any and all to download this document and study it carefully.

lj

 

[ticktrade]

morning view
10:10 bar, I had JW change, seems similar to previous discussions. I'm still not clear on them. I took both yesterday and todays signals.
Maybe someone can show me my error for today which may provide clarity for the previous examples.

 

[ljyoung]

Quote from ivob:

Well, did you really see it like this realtime? You honestly saw change (to short) even before the pennant was broken and did not expect a point 3 up? Yes that is how I would have seen this in real time. Although my annotation was incorrect for a traverse trader, the peak volume change signal was in place with the 14:50 bar and it said 'go short'.

I agree (of course) 11:55 is a point 1 and 14:40 a point 3 and then it is broken but my point is the following:
- we have a downchannel.
- it is broken clearly on increasing black volume. (no lateral break, no spike bar, no steeper channel break)
- We do not get a point 3 up after that.
IMO, there was more than one person who thought we were going to change trend direction in the late afternoon, but when the 15:00 bar touched the prior ID low and then the 15:05 bar broke it by one tick, that notion went out the window. As we both know, the retrospectroscope is an extremely powerful and accurate instrument and it clearly pointed out the error in my thinking.

Do you think this cannot happen if we haven't had a lower low before during the same day (making pt1)? Of course it can.

These three points above are all facts. So when you say: "There will always be a point three" it is necessary to specify when because it clearly is not always the case if a channel is broken on increasing volume. That is a fact because we all saw it. Imo this comes very close to: Anything can happen. While I would agree in some sense that anything can happen, I would also say that some things always happen and the points 1, 2, and 3 sequence is one of them

The best I can come up with is:
- We BO'ed on increasing black.
- So we expect a point 3 up.
- We get a pennant. All fine.
- Pennant is broken on (a lot of / too much) increasing red volume.
- Something unexpected happened. The pennant break created a point 3 down of a wider channel. We do not expect pt3 up anymore.

Reasoning like this you wouldn't have lost a lot providing you caught the move up at point 1. (14:40). However, that is not my point. My point is we do not always get a point 3 after a channel break on increasing volume. Correct, as opposed to proper annotation is critical when one makes a statement like this. While we may see different things when we look at a chart, there are certain outcomes of that viewing which are dead wrong. One needs be careful that one's argument isn't based on such a fallacy.

regards,
Ivo

Hi ivo,

Sorry for taking so long to respond to your post of late yesterday. I have inserted my replies into your post.

lj

 

[ivob]

Quote from ljyoung:

Hi ivo,

Sorry for taking so long to respond to your post of late yesterday. I have inserted my replies into your post.

lj

No problem, I appreciate your point of view.

>Yes that is how I would have seen this in real time.

Okay but my question was did you?
Anyway, I just think that price action was terrible for a short. We have a breakout on increasing volume forming a point 3 up on a slower fractal... Of course going short the next bar, the pennant BO (+ same time bo of the slower fractal), is a different thing.

>While I would agree in some sense that anything can happen, I
>would also say that some things always happen and the points
>1, 2, and 3 sequence is one of them

Yeah well, I guess then the question is whether point 3 will be up or down...

regards,
Ivo

 

[ljyoung]

Quote from ivob:

No problem, I appreciate your point of view.

>Yes that is how I would have seen this in real time.

Okay but my question was did you?
Anyway, I just think that price action was terrible for a short. We have a breakout on increasing volume forming a point 3 up on a slower fractal... Of course going short the next bar, the pennant BO (+ same time bo of the slower fractal), is a different thing.

>While I would agree in some sense that anything can happen, I
>would also say that some things always happen and the points
>1, 2, and 3 sequence is one of them

Yeah well, I guess then the question is whether point 3 will be up or down...

regards,
Ivo

I responded to your question in such a way as to indicate, I thought, that I did not view that particular time period in real time. Sorry if that was not clear. I can say, in all honesty, that how I saw it at the end of the 14:50 bar is precisely how I would have seen it in real time {in real time probably before the end of the bar - PRV is a very useful tool}. If you are asking further did I take a trade based on my assessment, the answer is 'no'.

For me, the second "A" in the MADA sequence is clicking the mouse. All things lead up to this and those things are not only what is involved in the method we use but also all the other stuff that goes on between our ears which allow or prevent us from acting on our "D" (decision). It is as simple or as complicated as that. There are many ways to reach and move through the 'click point'.

Thanks for your thoughts,

lj

 

[ljyoung]

Quote from icarus618:

What is your rationale for the violet colored box? It looks to me you just drew two horizontals from the extremes of the 14:30 bar. What's so special about the 14:30 bar? That whole sequence of bars is merely hugging the LTL at the end of the R2L traverse. Happens quite a lot.

IMO, the rationale behind the construction of the 14:30 lateral has to do with the fact that if one subscribes to the utility of laterals, then one would have annotated the lateral (the pale green box) just above the violet box. The close of the 14:30 bar marks the second consecutive close below the lower boundary of the first lateral and thus kills it. The violet lateral is in place for a further 6 bars before it too is put to sleep.

The constructs present in Romanus' depiction are also to be found in Tum's handout from earlier this AM.

lj

Please note that I have snipped Romanus' original illustration to focus on the question posed by icarus618.

 

[ptunic]

Hi everyone. Great discussion!

I'm beginning to learn JH's methods, been lurking for quite a while. At this point I'm learning how to draw tapes, channels, and gaussians.

Next up in my targets to spend time on is parallel movements, and then flaws. Since I haven't gotten to those, you won't see them in my charts yet. For now, I'm still working on even more basic trend line drawing skills at this point.

Here is my chart for the morning.

 

[Spydertrader]

Quote from ivob:

My questions to Spyder are: What is it that did not give permission to look for change arround 14:40-14:45 ? Why was the sequence not completed? Even if we don't look for change we saw change didn't we?

1. Learn to properly annotate a chart, and that which you fail to see should jump right out at you from the screen.

2. Start at 13:45 ES [close of] Bar. Your chart failed to show a Traverse which begins right here.

3. This traverse (which you failed to annotate) leads into a Lateral (after the traverse completes its sequences).

4. Hmmmm. A down traverse, followed by a Lateral Traverse. I wonder what must come next.

5. Do you have, on the chart, that which must come next when you see this signal for change?

6. If not, then you do not have permission to seek a change in mode.

- Spydertrader

 

[ptunic]

Attaching file.

 

[thenewguy]

Quote from ptunic:

Attaching file.

Hi ptunic,

Here is my take on the day so far, with some added notes. I'm at about the same stage you described, but i'm having troubles telling a real FTT from a fake one, as you'll see in the notes.

So far I've learned that tapes give FTT's on traverses, and traverses give FTT's on the biggest channels (someone will hopefully correct me if I'm wrong with any of this). The issues I think stem from mixing up the size of my traverses/tapes. On my chart, I delete the tapes as soon as they form the traverse, and maybe that's part of the problem.

The interesting thing is, I can always (usually easily) clean up the chart to see what I should have done in hindsight, so hopefully I'm grasping the concepts here and need to focus my attention on closing the gap between my real time intrepretation and my hindsight intrepretation.

Thanks,

TNG

Edit: The notes on the chart are directed at me, not to you, just fyi.