Iterative Refinement

[ljyoung]

ES for today. The chart is very similar to ehorn's (tobbe's and WG's don't have the TL's) with the exception that both the RTL and the LTL of the short channel from yesterday have been pierced. I checked the prior contract [ES 200812] and another data feed/software vendor [NinjaTrader] with similar results, i.e., in all cases both TL's were breached.

My question Spyder is how much is there to be made of this? Have you seen this sort of thing before? The deepest penetration was 3 points below the LTL and 2.5 points above the RTL. The RTL breaches were within formations (and with no follow through) while the LTL's were a low range bar between a pair of OB's. So we can accomodate the RTL breaks but what about the LTL.

Generally I thought that channel trendlines were pretty much inviolable, so I couldn't do a VE on the channel LTL of a previously formed channel.

AM I off the mark here? Your comments would be helpful.

TIA

lj

 

[Spydertrader]

Quote from ljyoung:

My question Spyder is how much is there to be made of this?

Not much.

A channel LTL breach simply represents a VE of one sort or another. A channel RTL breach prior to sequence completion simply requires a slight 'fan' of the trend channel in order to accomodate the changing slope of the money velocity. Contract rollover (and the assiciated Volume changes which result), changes in seasonal and historical volatility, overnight gaps, and even, sloppy annotations, create an environment where the changing trend slopes may result in a temporary Trend Line Breach.

Nothing to worry about.

- Spydertrader

 

[PTVtrader]

Quote from Spydertrader:

Not much.

A channel LTL breach simply represents a VE of one sort or another. A channel RTL breach prior to sequence completion simply requires a slight 'fan' of the trend channel in order to accomodate the changing slope of the money velocity. Contract rollover (and the assiciated Volume changes which result), changes in seasonal and historical volatility, overnight gaps, and even, sloppy annotations, create an environment where the changing trend slopes may result in a temporary Trend Line Breach.

Nothing to worry about.

- Spydertrader

Really??? I thought channels contained price? Wouldn't connecting the 12:05 and 13:00 bars EST more accurately reflect the channel that price is operating in.

 

[ehorn]

Debrief of the day that was...

I will be watching tomorrow to see if the volume phase shift and FBO's earlier causes the sequence to be reset and a new down channel to form. If this is the case, I anticipate a completion of the first DOM traverse down formed this afternoon (with the PT3 possibly completed at EOD today), followed by a NON-DOM traverse up and a return to DOM down to complete this sequence.

 

[R/R]

Quote from PTVtrader:

Really??? I thought channels contained price? Wouldn't connecting the 12:05 and 13:00 bars EST more accurately reflect the channel that price is operating in.

Please note that Channels, Traverses, and etc., originate, have their Pt2, and Pt3 at particular locations defined by Sequences and Change, not just available geometrical points.

 

[PTVtrader]

Quote from ehorn:

Debrief of the day that was...

I will be watching tomorrow to see if the volume phase shift and FBO's earlier causes the sequence to be reset and a new down channel to form. If this is the case, I anticipate a completion of the first DOM traverse down formed this afternoon (with the PT3 possibly completed at EOD today), followed by a NON-DOM traverse up and a return to DOM down to complete this sequence.

I think we had a traverse pt 2 at 15:40est followed by what I presume to be a High Volatility Speed Traverse :eek: (HVST) that completed eod. So PFC imo should be pt 3 sequence down followed by another HVST(a tape 2 to 3 of a channel) followed by another dom down traverse which would bring us to a channel pt 2...

 

[PTVtrader]

Quote from R/R:

Please note that Channels, Traverses, and etc., originate, have their Pt2, and Pt3 at particular locations defined by Sequences and Change, not just available geometrical points.

R/R,

Which channel to you most accurately reflects price ? Angels are very similar... Also you have brought up geometrical points a couple of times. I can only guess that they refer to channel overlap, failed breakouts, etc..btw, I do understand and appreciate what you are saying.

 

[R/R]

Quote from PTVtrader:

R/R,

Which channel to you most accurately reflects price ? Angels are very similar... Also you have brought up geometrical points a couple of times. I can only guess that they refer to channel overlap, failed breakouts, etc..btw, I do understand and appreciate what you are saying.

Please see Spyder's last post that described fanning the channel RTL when appropriate. That is the solution instead of arbitrarily starting a new RTL which appears to better contain price. You said you understood what I said, but I'm not sure.

These things I mentioned define a strict model of the market and are the foundation. By geometrical points, I refer to "swing" highs or lows. These points are not connected by lines without strict purpose.

 

[guavaman]

 

[PTVtrader]

Quote from R/R:

Please see Spyder's last post that described fanning the channel RTL when appropriate. That is the solution instead of arbitrarily starting a new RTL which appears to better contain price. You said you understood what I said, but I'm not sure.

These things I mentioned define a strict model of the market and are the foundation. By geometrical points, I refer to "swing" highs or lows. These points are not connected by lines without strict purpose.

Nothing arbitrary about it...sequences were complete...new pt 1. As for understanding :

http://www.elitetrader.com/vb/attachment.php?s=&postid=1999985