Question for Grob/Hershey...

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...I've posted more in this thread than in all of ET... and I'm starting to feel like a jabber mouth :)

as you can see I also consider the possibility that channels tilt at tops and bottoms before going lateral then in the opposite direction..especially on Ym.

another thing I'm open to is that maybe during an up trend channel, when I'm approaching overlap, is that my next channel may be a lower volatility up trend channel (lower tilt), or a lateral channel, instead of going from up channel straight to down channel, so it calms me on a reversal to think of it this way. I don't always expect the overlap to bring me into a down channel from an up channel. It just helps me to relax a bit more if I reversed in the overlap. I monitor to see what type of channel I reversed into. If the (new) pt 2 that's forming, breaks the RTL of the prior trend, then I'm patient to see what pt 3 gives me...a lateral or down channel, and I'm also ever tuned to see if point 3 pulls me back into the prior trend channel (fbo) or setting up a prior trend ftt. If I get a lateral or if2, I wash (I'm working on this actually..). These considerations are applied at all fractal levels and tend to keep me in the market during otherwise sideline times. Working through this with positive re-enforcing experiences while mending the sequences, iterating the details and recording/scrubbing annotations on a TD is my current work at hand.
 

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I've inserted the documents Icarus posted and the revisions are uploaded.

http://mithrilstudios.com/Articles/TemporaryRepository.html

I asked Spydertrader if would post them to the documents section on MSN, but it appears that they are too big. He very generously offered to make them available on his webserver. I think that would be a wise decision since I believe he is maintaining the MSN discussion group now.

Thoughts/comments/opinions?

Anthony
 
...I've posted more in this thread than in all of ET... and I'm starting to feel like a jabber mouth
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mgin your posts are quality and always appreciated. The points you raised prompted me to spend a lot of time reviewing a few specific areas of the charts and I discovered a lot from doing so.

for me the possibility of overlap came more into view than a resumption so I was more tuned to that during monitoring
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I'm glad you mentioned this as it is generally a congestion area that alerts me to watch for a new channel. At the time I saw it as just another traverse. Looking back I see the strength of the move is one thing that differentiates it from the previous traverses.

When you are trading do you treat channel overlap differently from any other L2R?

Seeing the new RTL of the next trend sitting there for 2 price rotations (RTL+LTR) would've had you reversing without the hesitation I'm sure.
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I've been looking at the BO for more clues and I think the potential outcome might have been clearer had I paid closer attention to the YM 2m.

On the ES 5m the formation was a regular pennant with five consecutive bars of lower highs that couldn't pierce the RTL. As we were still inside the channel it seemed very reasonable that we would resume short.

Looking at the YM 2m one thing I notice now is that it had already broken out of its channel while ES was still within its. This wasn't obvious to me at the time as I had only annotated the YM traverses and not the channels. I attached a chart with the bars in question highlighted. Also note the YM the formation was an FTP (continuation pattern).
 

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I agree that mgins comments are very good.
I´ve only watched Ym and Es together for a week, but one thing I like is that while you see the trends better on es 5-min, it´s easier to spot formations on the ym chart - flags, wedges, pennants... this is not only because of the timeframe but also because the tick increment is smaller on ym.
 
More recently when observing the two side-by-side I've noticed the moves are not always proportional... example, my previous post shows the YM BO many bars before the ES breakout.

Could this be "why" a pennant formation developed? YM broke out while ES stalled at the RTL so YM then stalled waiting for confirmation from ES? YM broke out so it formed an FTP (bullish) while ES formed a pennant (neutral)?

Does anybody have comments on proportion of moves getting out of sync or of divergence (P or V) between the two and the significance of this?
 
I'm trying to catch up on a few things - sorry for not commenting on recent posts.

edit

This is an SCT thread. It is not a place for beginners nor intermediates to participate. It is not possible for anyone to respect this as we all know by now. Using advanced beginners as moderators precludes moderation at all. We know this and understand this.
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Jack posted this at the beginning of the current thread.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=54894&perpage=6&pagenumber=2

I want to apologize to the people working on SCT for taking this thread off course. I am a beginner. I did not "see" this post initially.

Since I do not want to be a detractor by adding noise, I will return to lurking at this point and when I reach a point where I can contribute towards iterative refinement of SCT, I will do so.

Again, my apologies.

Best of trading to you all -
Anthony
 
Actually this thread was initiated by a new trader asking for help and got transformed into "advanced" thread . It is now becoming an archive and link site for Jacks writings which is great because the beginning stuff will be there for those who want to do the research. Having watched many hopefuls go down in flames trying to trade sct from the gitgo I advise caution.
 
That is no wonder. Rockets don't test with positive expectancy. Breakouts don't test with positive expectancy. Channels don't test with positive expectancy. Nor do more than a few other elements of SCT. But of course we believe the non-ergodic hypothesis here: the expected value does NOT equal the ensemble average.
 
txuk, I can not answer your question since I´m new to watching the markets together in realtime, but on some days one of the market seems to be significantly stronger through out the whole day.
When you look at a wedge or something on ym and you have a break out I think you should wait to enter es until it starts to "shake" a little, showing you it´s alive :).
But personally I wouldn´t trade rockets and break outs at this point. Not because crude oil King Hypotamus did a backtest on his computer, but because I´ve seen how difficult it is.
My 2 cents is you have a better chance making money on BO if you learn to scalp in during the congestion so you´re already in position when the breakout comes.
/Stalker
 
When you are trading do you treat channel overlap differently from any other L2R?

No. I'm not aware that its THE channel overlap, when I annotate it. The Overlap possibility is just one of several components in the sequence I keep in mind during the sweep but it serves no special function in isolation. The channel is merely projected and provides the context for analysis. In this case, it provided the context for analyzing the lateral (5m pennant) riding the RTL of the prior trend, heading to the RTL of a potential new trend. Time was the only carrier during the transition. As time passed, the lateral hit the RTL of the overlapped channel and the "suprise side" went into full effect. WWT. Well it wasn't the distribution we needed to resume the short.

I aspire to SCT and being in the market. Because of a personal handicap on the 5m chart, I find I spend a lot of time operating on the traverse level by means of a smaller fractal where I can more clearly see 20-40 actions daily. When operating on the traverse level, I deal with the overlap 20-40 times a day. As a consequence, I also deal with E1 errors a percentage of those 20-40 times. I'm striving to operate within the channels and overlaps to extract the 3 profit-takings that led to the BO. The BO itself was simply a nice bonus chunk that I would expect in my coffers simply by doing an expert job. The routine is relatively small yet dense and sufficient, but know that it occurs over and over again, at least 20-40 times daily. How many profit-takings did I see and was prepared for today. How many profit-takings did I bank. Leading up to the BO, I counted at least 11 money-making possibilities, with the BO being number 12. Hit "T", at least I didn't let #12 pass me up, yet while I'm sidelining, #13 is setting up. The backside of the gaussian unwinds #13 into another lateral channel for about 15 mins while it drifts over to the RTL again. A bracket here would have brought us into #14 for another 2.5 point chunk ending in an ftt considering the extended LTL and after all that, we're back working from the same prices that we were working with at the open, however potentially 25pts richer. Reversing on the extended LTL ftt and walking away would have yielded another 7 or so points ending the day at 32pts give or take, 3x the day's high/low.

As we were still inside the channel it seemed very reasonable that we would resume short.

Reasonable, yes. Certainly, no one here is suggesting you were "wrong" for being short. The market will do what it does, and we will do what we will. The market will not do what you want or hope it to do, and clearly, we do not always do what the market tells us to do according to the market truths we have accepted. Our rules tell us to sideline and bracket a pennant. The market made a pennant for us.

Could this be "why" a pennant formation developed? YM broke out while ES stalled at the RTL so YM then stalled waiting for confirmation from ES? YM broke out so it formed an FTP (bullish) while ES formed a pennant (neutral)?

Does anybody have comments on proportion of moves getting out of sync or of divergence (P or V) between the two and the significance of this?

It's really beyond my skill level to give a discrete answer to this. In practice, I have noticed how the two seem connected together by an elastic band almost, similiar to the relationship of YM to DJ. Specifically, price and channel divergence comes to mind, where YM will make a lower high while ES makes a new high, or one will extend the channel while the other is reaching to meet the channel. I'm not sure I could go down this path without finding myself predicting. Coarse and medium goes far with SCT without any predicting assuming your MADA is up to par.
 
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