Iterative Refinement
- Thread starter Spydertrader
- Start date
IMO, one of the sources of confusion for new people trying to learn the method is a failure to appreciate exactly how the trading day is being looked at by different practitioners of the method. There are three scenarios as best I can ascertain.
1. The day in isolation view in which each trading day is an entity unto itself. It starts at 9:30 AM EST and ends at 4:15 PM EST, what I have called Regular Futures Trading Hours (RFTH).
2. The slide view in which the open of the day is matched to the close of the prior day - a perfect split opening, every day. This view produces a continuum of 'no gap' days.
3. The carryover view in which the day is not viewed in isolation and there is no movement of the open with respect to the prior day's close. The gap is preserved and you have to deal with it.
I am NOT saying that one method is better or worse than another but do think it is important when you are deconvoluting the day's chart to say which one of these three you are using.
I always use the third of these. Trendlines which MUST begin at P1, are carried over not only from the prior day but from many days back when it is justifiable. On days when there is no traverse level P1, the P1 of the next slowest fractal is used.
The chart I get by doing this may look quite different from charts produced by use of the other views, but very, very often the three views end up giving a similar PFC anticipation at EOD.
Spyder's colorations for 5 min ES traverses and channels are used. The astute observer will note there are no Gaussian lines in my charts. The reason for this has been explained elsewhere but briefly put it is based on the fact that correctly drawn Gaussians MUST follow correctly drawn trendlines, with emphasis on the word CORRECTLY. Points 1, 2, and 3 are marked with the ovals and laterals with the horizontal purple lines.
Lest there be any confusion, volume is a critical component of how I look at the market, in absolute, relative and Gaussian senses. From the posted rendering there is a very clear anticipation of what lies ahead and as always the proof of the pudding lies in the eating.
1. The day in isolation view in which each trading day is an entity unto itself. It starts at 9:30 AM EST and ends at 4:15 PM EST, what I have called Regular Futures Trading Hours (RFTH).
2. The slide view in which the open of the day is matched to the close of the prior day - a perfect split opening, every day. This view produces a continuum of 'no gap' days.
3. The carryover view in which the day is not viewed in isolation and there is no movement of the open with respect to the prior day's close. The gap is preserved and you have to deal with it.
I am NOT saying that one method is better or worse than another but do think it is important when you are deconvoluting the day's chart to say which one of these three you are using.
I always use the third of these. Trendlines which MUST begin at P1, are carried over not only from the prior day but from many days back when it is justifiable. On days when there is no traverse level P1, the P1 of the next slowest fractal is used.
The chart I get by doing this may look quite different from charts produced by use of the other views, but very, very often the three views end up giving a similar PFC anticipation at EOD.
Spyder's colorations for 5 min ES traverses and channels are used. The astute observer will note there are no Gaussian lines in my charts. The reason for this has been explained elsewhere but briefly put it is based on the fact that correctly drawn Gaussians MUST follow correctly drawn trendlines, with emphasis on the word CORRECTLY. Points 1, 2, and 3 are marked with the ovals and laterals with the horizontal purple lines.
Lest there be any confusion, volume is a critical component of how I look at the market, in absolute, relative and Gaussian senses. From the posted rendering there is a very clear anticipation of what lies ahead and as always the proof of the pudding lies in the eating.
I think it would be very beneficial if you could elaborate on the logic behind your assertion (that the trendlines you refer to, are not supported by gaussians).
The only annotation error (aside from some missing tapes) in that chart I was able to locate thus far, is incorrect placement of the end of skinny b2b - it should end at 13:45 bar (BO of the skinny down trendline).
Quote from charts:
For daytrading check this ...
1. I am well aware of Spyder's thoughts on gaps and do not agree with his reasoning. Since he gets meaningful results from his manoeuver, otherwise he wouldn't be doing it, then he is welcome to continue to do it. In a like fashion, I get meaningful results from not neglecting the gap.
2. I wouldn't turn this upside down but you may if you wish to.
Hi romanus,
Thank you for your posts answering my questions on your 7/30/2009 chart. I have a lot of unsolved problems with fractals/ volume/gaussians. Hope you don't mind that my questions may not look brilliant.
In your post, you wrote : b/b should end at 13:45 (BO of the skinny down trendline). My assumptions towards the skinny down trendline are:
a) the skinny down trendline represents the trendline starts on
bar 16; and, I named it Burgundy trendline for the coming
discussion. Also another down trendline starting on bar 19 was
named Coffee trendline.
b) Burgundy trenline exists. Then, the point 3 falls on bar 19
(decision was made based on-- RTL of Burgundy trendline
touches the high of bar 19 / LTL of Burgundy trendlins touches
the low of bar 17, gaussians may not support it).
Now, my questions are --
1) Is there any relationship between Burgundy trendline and Coffee
trendline?
2) Is it possible to stop Burgundy trendline aroud bar 20?
TIA
Sorry about delay.
Trendlines generally continue until price breaks out and stays out. As such I continued the 'Burgundy' trendline until 13:45 BO. (An extensive discussion of trendlines exists in the 1st quarter of '07 Journal)
Beginning with 10:50 bar (#16)a tape sequence begins: a down tape followed by an up tape, followed by another down tape (red). The red down tape then fanned outward (decelerated) to accommodate a slowing money velocity. I consider the 'Burgundy' trendline to be an original trendline, and the 'Coffee' an accelerated trendline.