Iterative Refinement

I'm beginning to think that ehorn has the right notation in his last chart...
The last blue up traverse isn't one since pt2 is inside the previous 'traverse'.
Exept when one annotates an acellerated traverse in the first traverse of the red down channel.

--
innersky
 
Quote from WGTrader:

Absolutely Not! I definitely use volume.

To me, tapes breaks are a fabulous signal to watch for. For example yesterday starting with the tape break on the 11:30 bar, we had NINE consecutive bars of lower lows without a higher high (i.e. no tape breaks). It was the tape break and break of the high of the previous bar on the 12:15 bar that confirmed sentiment had changed (to me anyhow). That was my clue that this short run was over and to bank my profits. I did not trade the retrace to the larger channel RTL because I find that these can be messy. But my thinking is they should be. After all, price had just dropped 14 points and it if sentiment has changed it does not shoot right back up. (after an FTT you want to see favorable price movement towards the RTL on declining volume; you know, standard stuff...)

So actually I'm employing the same principals that you are but in a more selected fashion. I just rely heavily on tapes for key signals and I try to focus on those trades that I can stay in for 4, 5 or maybe 9 bars or more! Sometimes you get a good run, sometimes not. I find that this type of trading is more risk adverse, but it does put money in the bank on a consistent basis. Here is my (uncorrected) chart from yesterday.

Hope you find this (my) explanation helpful.
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Thanks for the explanation, WG.

So if I understand you correctly, you prefer to trade just the meatiest part of each move. I congratulate you on your consistent profitability. However, it seems you're sacrificing a significant slice of the pie... going short on the 11:30 bar captures about 60% of the move.

The long traverse sequence completes on the 10:45 bar, and the next bar signals change. YM presents consecutive signs for change at 10:46 and 10:48. Once short, (assuming 5-minute ES Traverse level trading), continuation is signaled until the 12:15 bar, which offers a good opportunity to reverse long and capture another decent move.

If we're genuinely receptive to all the market's signals, then risk need never enter the equation. I'm sure you're much closer to this point than I am, but it's the goal we all aspire to.

Calm and enjoyable trading, carving every turn with no stress and no risk.
 
Quote from innersky:

I'm beginning to think that ehorn has the right notation in his last chart...
The last blue up traverse isn't one since pt2 is inside the previous 'traverse'.
Exept when one annotates an acellerated traverse in the first traverse of the red down channel.

--
innersky
More...

Hi innersky,

I agree that your blue trendlines don't represent the same fractal as the prior traverse.

I'm also a little confused as to how you've connected your two red channels.

Regards,
Neo
 
Quote from Neoxx:

Hi innersky,

I agree that your blue trendlines don't represent the same fractal as the prior traverse.

I'm also a little confused as to how you've connected your two red channels.

Regards,
Neo
More...

What do you mean with connecting the two red channels? After the first red channel follows a green up channel, followed by the second red channel.

--
innersky
 
Quote from innersky:

What do you mean with connecting the two red channels? After the first red channel follows a green up channel, followed by the second red channel.

--
innersky
More...

As I'm sure you know, a channel is a specific thing, constructed in a specific way.

Not all of the things you have referred to as channels meet the criteria for being classified as such.
 
Quote from Neoxx:

As I'm sure you know, a channel is a specific thing, constructed in a specific way.

Not all of the things you have referred to as channels meet the criteria for being classified as such.
More...

I'm just learning, just as you do. And I didn't say my chart is the correct annotated one.

So what criteria do you miss?

--
innersky
 
Quote from innersky:

I'm just learning, just as you do. And I didn't say my chart is the correct annotated one.

So what criteria do you miss?
More...

Innersky,

I didn't mean it as a criticism, just a helpful comment from a fellow student. It's always useful to keep in mind that tapes form traverses, which, in turn, form channels.

Regards,
Neo
 
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