Spydertrader's Jack Hershey Equities Journal II

[Spydertrader]

For those who may have developed some confusion as the topic shifts back and forth between equities and futures, I wanted to once again remind everyone of the current plan to split the futures and equities discussions at the end of 2006. Although many (if not all) of the methods overlap between futures and equities trading, Splitting the discussions into different threads should provide some clarity as we move forward. Following along with both discussions may provide input for accelerating the learning curve.

- Spydertrader

 

[Spydertrader]

Once again, I have only marked the FTT signals for today. In this fashion, you can compare your own signals with the ones I have marked during debriefing of your day.

- Spydertrader

 

[Ezzy]

Spydertrader,

Have some questions on your chart.

1st bubble - Are FBO’s for the green channel or brown. If the brown, why?
2nd bubble - Was that a FTT during the bar, after the close, or after the next bar or two failed to get higher?
3rd bubble - FBO, I don’t see this one.
4th bubble - This broke out up and extended the channel (wider). There was a discussion on whether a BO was only on the right line, meaning trend reversal confirmation, or could also be on the left. Could you clarify please?

Thanks,
EZ

 

[Spydertrader]

Quote from Ezzy:

1st bubble - Are FBO’s for the green channel or brown. If the brown, why?

The FBO's refer to the Brown Channel as the Brown (Down) Channel is where the FTT's all occurred. Price stopped on the Green (Up) Channel, but price did not create an FTT in this channel. Price also created an FTT in the Orange (Down) Channel but I only added the one Orange FTT for clarification purposes. I always mark the FTT's, FBO's and BO's to correspond with the same channel color and FTT.

Quote from Ezzy:

2nd bubble - Was that a FTT during the bar, after the close, or after the next bar or two failed to get higher?

The bar pointed to by the pen icon created the FTT. I moved the pen lower on the bar to avoid covering up the chart annotations. The exact point of the FTT occurs at the high of the bar. Notice the large 'spike' in volume and how similar it looks to 'Peak Volume' in Equities. This volume spike also created a price spike (and price reversal). How do you know this is an FTT at that point? You may not have caught this without an additional tool or two. We will discuss adding these additional tools, as well as when to use them (and when to add them to the charts) in the Futures Journal to arrive at the end of 2006. I don't mean to sound as if I am suggesting "you need to trust me" here. I just would rather not open up the additional tools discussion until we split off the futures discussion.

Quote from Ezzy:

3rd bubble - FBO, I don’t see this one.

The FTT created by price Failing To Traverse the Blue (Up) Channel fails to head lower after creating a Point Two Red (Down) Channel. After Price creates a Point Three Red (Down) Channel, we see another FTT (red). If you didn't see the FBO as an exit, no need to worry. You would have seen the reversal at the FTT (Red). Now that i think of it, It probably would have been better to label the red FTT as also a Blue FBO. At least, I might have made it more clear.

Quote from Ezzy:

4th bubble - This broke out up and extended the channel (wider). There was a discussion on whether a BO was only on the right line, meaning trend reversal confirmation, or could also be on the left. Could you clarify please?

Price Broke out from the Red (Down) Channel - on the right side. The Red FTT created a Signal and the RED BO marked the end of the price run from that FTT. While price improvement did require adding a volatility channel to the left side of the Blue (Up) Channel, the FTT Signal and the Break Out occurred from the Red Channel.

I hope you find the above information helpful.

- Spydertrader

 

[bigmoose]

Gent's I thought I would ask for a little fine tuning on my chart. The question is about determining the point 1 on the first IT. I had Spyder's 2 and 3 point, but choose an earlier point 1. I have studied the bars again, and I need a whack on the back of the head from someone to see what I missed.

That mistake "helped" me to reverse late, instead of on bar 19 (the 11:00 bar). I IF1 on bar 20, and IF2 on bar 21 and reversed there. Perhaps I should have also paid more attention to the medium down volume on bar 20.

My channels dark green, Spyders in lime green.

http://elitetrader.com/vb/attachment.php?s=&postid=1300732


Comments appreciated. Regards, BigMoose

 

[Spydertrader]

Quote from bigmoose:

Comments appreciated. Regards, BigMoose

I don't think you missed anything with respect to your choice of drawing the channels. I carried over the Orange (My Chart) from the previous day which showed me the FTT (Orange). You used a different bar is all. In fact, doing so (drawing from a different view point) created an FTT short for you which did not show on my channels. You simply started the process from the low (Your Chart). I started on an Orange Channel (My Chart) FTT. As you can see, subtle differences might alter the specific trade signals (as the trader interprets them), but does not alter the fundamental process of placing the trader on the right side of the market.

Good trading to you.

- Spydertrader

 

[Ezzy]

Quote from Spydertrader:
The FBO's refer to the Brown Channel as the Brown (Down) Channel is where the FTT's all occurred. Price stopped on the Green (Up) Channel, but price did not create an FTT in this channel. Price also created an FTT in the Orange (Down) Channel but I only added the one Orange FTT for clarification purposes. I always mark the FTT's, FBO's and BO's to correspond with the same channel color and FTT.

So here the FBO's are a failure to break out higher to the top of the brown channel.

Regarding the spike bar, was just wondering how close we could get without other tools. Peaking volume was a big clue there.

Thanks for the explainations. - EZ

 

[Spydertrader]

Quote from Ezzy:

Regarding the spike bar, was just wondering how close we could get without other tools. Peaking volume was a big clue there.

Between the High of the bar and the Close of the bar.

- Spydertrader

 

[Spydertrader]

Attached.

 

[mephistoII]

Have a "what if" question concerning the mechanics of annotating. I am still unsure on how to proceed when I feel an adjustment is necessary on a chart, and have marked-up your chart from 12/19, Spyder.

Again hypothetical, but say the succeeding price action works on down and breaks below the heavy blue RTL and then reverses ( I have roughly scratched in some bars in order to illustrate) Would I then proceed to readjust this channel as also noted on the attached chart? (Naturally, the upper blue lines (LTL) would also be changed in order to maintain parallelism).

Hope this question makes sense...