Quote from ljyoung:
The OB would appear to be an effective way, with just 1 bar, to terminate a LF (or LM).
As always,
context remains key to determining what actions an Outside Bar signals. A trader could see an Outside Bar on Increasing Volume or Decreasing Volume. In addition (with reference to ending a Lateral) an Outside Bar might form with one or
both extremes contained within the lateral or outside the lateral boundaries. Lastly, the same outside bar, in a similar context, might close back inside the lateral boundaries - or remain outside it. As you can see,
numerous variations of contexts exist which determine how effecacious one should view the Outside Bar. A trader
must learn to differentiate
each before passing the monitoring phase of the M-A-D-A process.
Quote from ljyoung:
What is the 'driver' for the decision to use the poles of the OB as the first bar of a possibly forming LF (or LM)?
Logic.
When a sequence ends another must begin. However, one cannot 'begin' a new sequence until after a sequence ends. While sounding, at first glace, quite trite in nature, I refer you to Friday's Lateral which began to form
before an FTT, but where the trader annotated it on a chart
after the signal for change. Today, after the OB kills one Lateral, another begins. Volume tells the trader to expect just such a thing because of the OB accleration of Pace.
In other words, under Newtonian Law, we know, "For Every Action, an Equal and Opposite Reaction exists." The job of the trader is
not to react to the market's actions and reactions, but instead, to anticipate them and respond accordingly -
prior to their arrival.
Quote from ljyoung:
Is it the close inside the LF (or LM) ? If it closes outside the LF (or LM) does that immediately kill the LF (or LM)? WIth the outside close does one then need to wait for the second kill bar before constructing another possible LF (or LM)?
As always, the answers you seek depend on
context. One simply needs to determine
this specific context, and then, locate other examples of the
same context in order to compare and contrast. One does not require my annotations to perform this task. One simply needs to make absolutely sure to compare apples to apples, and not, apples to auto parts.
Quote from ljyoung:
A second question is why did you 'start' the second LM with the first kill bar?
Because the market told me to do so.
Two possible outcomes exist which develop after an acceleration of Pace. Volume provides the solution as to which outcome the trader needs to anticipate. However,
both outcomes require the trader to take but a single action -
hold.
Quote from ljyoung:
A final and more general queston is when you (Spyder) are annotating a chart, do you 'construct' your tapes, traverses and channels BEFORE you start addressing the various formations or is context of such consequence that, aside from the tapes, there can be no 'order' to this process?
The market requires that a trader perform all 'housekeeping' and 'paperwork' functions
prior to moving out of 'M' and into the 'A' portion of the M-A-D-A Process. As such,
everyone addresses tapes, channels, formations, flaws and
all other needed annotations as they unfold, or as the trader gains experience,
prior to their arrival onto the chart.
Having said that, when an
error in annotation leads to innappropriate analysis, which results in invalid conclusions and incorrect action, a trader must then
immediately search for the source of the error, and
immediately correct that which eluded their grasp in real time.
Order exists on each and every bar. Comonality exists in every tape, every traverse and every channel. Every flaw and Every formation alert the trader to know where they sit with respect to the right side of the market - with respect to their individual trading fractal.
The sequences from Point One to Point Two to Point Three
always complete. Dominant, Non-Dominant, Dominant - wash, rinse, repeat.
- Spydertrader
