Iterative Refinement

[Spydertrader]

Quote from teguichilla:

Spyder, any chance of you posting your chart? Thanks.

You do not need my charts in order to learn how to 'see' that which currently eludes your grasp. The market hands back corrected exams at the end of each trading day. Grade your paper. Note where errors occured, then, determine why they occurred. The debrief process shows everyone exactly where additional focus needs application.

If you can't 'see' where or why an error occurred, after working on it for a while, post your chart and ask what others noted during the same time.

Someone should have the ability to point you in the correct direction.

Remember, its called the Price-volume Relationship for a reason.

- Spydertrader

 

[Spydertrader]

Quote from guavaman:

Talk about tricky, IBV confirming Pt3 up traverse with close inside previous bar and FTT (10:10 = SOC) followed by more IBV with another close inside previous bar and FTT (10:15 = SOC).

Think for a moment. Does increasing Volume always indicate dominance? Certainly, you can already name three instances where Price moves from Point Two to Point Three on increasing Volume, yet moving Point Two to Point Three clearly represents Price moving in a non-dominant direction.

The key to knowing whether or not Price has completed its transition from point Two to Point Three (from dominance to non-dominance and back to dominance once again) does not only involve increasing Volume.

Study signals for change which result after the formation of a Lateral Retrace, and note first, why the lateral formed. Also, note whether or not 10:10 and 10:15 ES [close of] bars provide examples of bars fall under our 'three reasons' increasing Volume might show up when price moves from Point Two to Point Three.

- Spydertrader

 

[ljyoung]

If one starts a lateral with the high pace OB at 9:45 it's clear why the 10:05 bar CAN'T be a P3 for a traverse trader and that is because there are not 2 bars closing above the upper pole of the LM on increased volume. It would seem that the simple fact that there has been a pace jump is enough to justify the start of a lateral.

The same holds true for the next lateral, which in this case is a formation, beginning at 10:15 and ending at 10:40.

What I said earlier was if one started a lateral at 10:35 then you couldn't have a P3 at 10:50 because of the failed breakout rule (2 bars above the upper pole of the LM, in this case, on increased volume). Clearly I must be wrong since Spyder has said the 10:50 bar (which would have been inside the LM) completes the sequence and the 10:55 bar provides a SFC and a reverse.

This is the case I referred to earlier and not the 10:55 bar, which must be the start of another lateral.

lj

 

[Spydertrader]

Quote from ljyoung:

This is the case I referred to earlier and not the 10:55 bar, which must be the start of another lateral.

Do the exercises I outlined. Note the differences. Note the similarities.

Of all the laterals you discussed in your post, only one begins with a Signal of Change.

By annotating the lateral forward of The ES 10:55 [close of] Bar and following the sequences, then doing the same without a Lateral forward of The ES 10:55 [close of] Bar, you should arrive at two different contexts with respect to the three change bars mentioned previously. The difference in context is a result of annotation errors. Which method of annotation does the market indicate as correct?

Do the exercise, and the answer will be obvious.

- Spydertrader

 

[guavaman]

Quote from Spydertrader:

Think for a moment. Does increasing Volume always indicate dominance? Certainly, you can already name three instances where Price moves from Point Two to Point Three on increasing Volume, yet moving Point Two to Point Three clearly represents Price moving in a non-dominant direction.

The key to knowing whether or not Price has completed its transition from point Two to Point Three (from dominance to non-dominance and back to dominance once again) does not only involve increasing Volume.

Study signals for change which result after the formation of a Lateral Retrace, and note first, why the lateral formed. Also, note whether or not 10:10 and 10:15 ES [close of] bars provide examples of bars fall under our 'three reasons' increasing Volume might show up when price moves from Point Two to Point Three.

- Spydertrader

Increasing volume in the context of a Pt2 to Pt3 can occur w/ BO of a pennant, RTL or spike bar. In my recollection, I don't remember seeing this phenomenon occurring in what became the dominant direction. I have seen these developments in happen in the non dominant direction. In this case, if price moved down in any of the three ways described above, I would not have been tripped up. As it developed, it seems at every point to be a SOC. Like the similar situation on 7-31-08 where an HVS interrupted a down trend SOC, it looks like the HVS (10:20 to 10:30) performed the same role.

 

[Spydertrader]

Quote from guavaman:

Increasing volume in the context of a Pt2 to Pt3 can occur w/ BO of a pennant, RTL or spike bar.

Red Highlight was the answer I was looking for.

Quote from guavaman:

In my recollection, I don't remember seeing this phenomenon occurring in what became the dominant direction.

Review Friday's Chart. It happened twice.

- Spydertrader

 

[TIKITRADER]

Crude


Followup from last evening, this chart posted:

http://www.elitetrader.com/vb/attachment.php?s=&postid=2067972


Crude fell sharp today.

Still looking to finish the final dominant traverse.
Possible lateral movement now, then a resumption down to finish.

All trendlines are as they were posted yesterday.

 

[TIKITRADER]

Market at this moment.
Ym - ES - crude

 

[ljyoung]

Quote from Spydertrader:

Do the exercises I outlined. Note the differences. Note the similarities.

Of all the laterals you discussed in your post, only one begins with a Signal of Change.

By annotating the lateral forward of The ES 10:55 [close of] Bar and following the sequences, then doing the same without a Lateral forward of The ES 10:55 [close of] Bar, you should arrive at two different contexts with respect to the three change bars mentioned previously. The difference in context is a result of annotation errors. Which method of annotation does the market indicate as correct?

Do the exercise, and the answer will be obvious.

- Spydertrader

If one annotates the 10:55 bar without a lateral then after a 'volume validated' P3 at 11:25, you get a run of JW signals which don't produce change.

When one annotates with a lateral beginning at 10:55 then it appears that the kill bars at 11:30 and 11:35 do not confirm a P3 at 11:25 but what I'm not sure of is what the OB at 11:25 does since it is completely inside the LM, just like the 10:50 bar from earlier today.

lj

 

[Spydertrader]

Quote from ljyoung:

When one annotates with a lateral beginning at 10:55 then it appears that the kill bars at 11:30 and 11:35 do not confirm a P3 at 11:25 but what I'm not sure of is what the OB at 11:25 does since it is completely inside the LM, just like the 10:50 bar from earlier today.

So begin your sequences with the first bar not contained within the Lateral, what context changes result over those three change signal bars now? Where does the actual signal for change result? Which method of annotation (with or without lateral) does the market indicate as correct?

- Spydertrader