Spydertrader's Jack Hershey Equities Journal II

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Quote from bundlemaker:

Was this your early experience with channels or does it sound more like I'm just massively screwing it up somehow? I've been using the ES on the 5min to practive drawing in real time channels.
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First, Congrats on your success with equities. As you no doubt by now realize, using the beginner methods trains your mind to 'see' how things begin to work. As a result, you have a desire to move trading to the next plateau - and improve your profits. Frustration marks a normal part of the transition, so don't fret too much about it - especially with today's ES.

A few things which may help you:

Using the same fractal (5 min) begin to look for longer term trends. Perhaps, start a day (or two) prior to the current day, drawing in the 'longer term trend' on the five minute fractal. Once you can locate this dominant trend, you can more easily anticipate the traverses within the trend. Focus on locating the FTT's and The Point three (smaller trends) within the overall larger trend. In other words, focus on the bigger picture first, then scale down looking for the traverses (See the Forest before looking at individual trees).

Today does not represent a very good day for experimenting with this technique, but the two previous days (and the last three days of last week) do provide excellent examples.

If you think it would help, I'll post my ES chart at the end of each trading day (beginning tomorrow). Since trendlines work with both futures and equities, doing so should should satisfy the goal of remaining 'on topic' within the Journal.

Lastly, keep in mind that your 'taped' channels will rarely be perfect. Don't worry about the 'noise' messing things up. Focus on the overall direction and slope.

- Spydertrader
 
Quote from Spydertrader:


If you think it would help, I'll post my ES chart at the end of each trading day (beginning tomorrow). Since trendlines work with both futures and equities, doing so should should satisfy the goal of remaining 'on topic' within the Journal.


- Spydertrader
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Thank you for some very useful suggestions. Any posts you make of the ES charts would help immensely. I, like so many others, typically don't trust myself to get it right and it's nice to compare with someone with more experience such as yourself. Also, the basic tenets of NLP tell us that seeing more patterns coming at us faster will teach us quicker and better (though I wouldn't trade real $$$ under those circumstances :) )

Bob
 
Quote from Spydertrader:

If you think it would help, I'll post my ES chart at the end of each trading day (beginning tomorrow). Since trendlines work with both futures and equities, doing so should should satisfy the goal of remaining 'on topic' within the Journal.
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Time, I think, for me to put aside tinkering with code and focus on the ES. If you're going to be posting your charts after each day, I'll join in the exercise.

Thanks for this, Spydertrader.
 
Quote from Spydertrader:

If you think it would help, I'll post my ES chart at the end of each trading day (beginning tomorrow). Since trendlines work with both futures and equities, doing so should should satisfy the goal of remaining 'on topic' within the Journal.

- Spydertrader
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Spyder,

Awesome!

As I've mentioned to you before, what really helped me progress with channel drawing was Jack posting annotated charts EOD to his blog a few months ago.

I think it's a good idea to use the ES as a "reference" instrument for channels refinement since it seems there are people here like myself who are interested in both SCTand PVT. Just my .02...

spooz
 
Not a problem. However, let's keep the discussion within the envelope of channel drawing only with respect to the ES - or any other similarities between equities (Bruno R, Rockets, etc.). I don't want the thread to devolve into a discussion on futures exclusively. Channels do apply directly to equities, and as such, understanding what the various trends represent benefits everyone.

Irrespective of where one finds themselves along the learning continuum (Observer, Beginner, Intermediate, Advanced or Expert), one should resist the urge to 'jump ahead' until the appropriate time. As I have often said, rushing ahead before one has built a proper foundation, provides a framework for failure.

After all, the only vocation where one starts at the top is well digging. :D

Good trading to you all.

- Spydertrader
 
Quote from Spydertrader:


If you think it would help, I'll post my ES chart at the end of each trading day (beginning tomorrow). Since trendlines work with both futures and equities, doing so should should satisfy the goal of remaining 'on topic' within the Journal.

- Spydertrader
More...


Spydertrader

Great idea, drawing channels correctly is the biggest challenge I have at the moment.

It might be a good idea to post some stock charts as well from time to time.

Thanks again.

NH
 
Spyder

This is a follow up on the DTLK chart you posted a couple of days ago. I have drawn the same lines (same color as well) you had in your chart. The only difference is the new price bars for the last couple of days and a new channel (greyish-yellow) and a new pink trendline. Basically I am updating this chart daily as a practice to try and see if I can predict the next move.

Four days ago, we were looking at a potenial traverse to the left (channel) purple line along the blue channel. After the FTT (which occured 4 bars from the end), we were looking at a potential retrace back to the right purlple line (trendline) along the red channel 3 bars ago.

After the last two bars, I believe the red retrace channel has been replaced with the greyish-yellow channel Whose points 1, 2 and 3 are marked in yellow. The point 3 was formed when the last bar broke the tape created by the 2nd and 3rd bars from the end.

Yesterday, I could have drawn a new channel based on the pink trendline to replace the blue channel as well. I did not draw the corresponding channel line because it is getting too crowded there and more importantly, the price breached the trendline today which certainly means the pink trendline's point 3 will be different (lower) than it is currently.

How do you determine the current channel? In this case the current channel is the greyish-yellow channel. But, what if today's price hadn't breached the pink trendline, how would one deteremine the active channel. Does the FTT (shared by the Blue & purpe channels) make the retrace back to the right purple line the current channel.

The question I am getting to is how can you predict the next move in real time. This is where I am having trouble. Yesterday, it looked like price broke out of the red channel and started to go back up to the left line, however today's price movement just changed the retrace channel a bit and keeps the current channel still continuing to the purple right line (trendline). The low volume (DU volume) is not helping towards establishing a trend as well. Based on my channels, tomorrow I am expecing the price to move towards the left (channel) line of the greyish-yellow channel or a FTT or BO of the channel. So far my attempts to predict using the daily and 30minute charts have been mixed at best, I am missing something :confused: . What is your take on this chart going into tomorrow?

If you don't mind, I would appreciate if you can share your latest DTLK chart for comparison of my channels with yours.

And thank you for reading through the whole posting.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1268096">
 

Attachments

I don't want to sound critical, and if I do, I apologize in advance.

If you post charts, could you please scale them to fit within the standard ET frame? If that doesn't work, could you just attach them, instead of imbedding them?

When wide charts are imbedded, which change the width of the posting, it makes all the other posts very hard to read.

Thanks - it's much easier on the eyes!

:)
 
Attached, please find my current daily chart for DTLK. I have altered the blue (up trend) lines since my last post, and I expect to do so again before DTLK arrives at a position sufficient to trade. I await the formation of a new FTT in the current, short term down channel (skinny red lines). The previous down channel (skinny orange lines) we leave behind when price breached the right side. We have an additional down channel (with the red lines) because we see a point three formation. Since the price bars within the channel have not yet failed to traverse, we do not yet have our FTT in this current down trend. The FTT tells us when to enter. As a result, I expect to have to continue to adjust the blue uptrend lines downward as price on DTLK continues to fall (until we see the FTT form).

We trade the FTT's and hold until we have an FTT in the opposite direction (an FBO) or until after a break out, we arrive at the FTT in the dominant uptrend (skinny purple lines).

Always, watch for the FTT.

- Spydertrader

P.S. In the future, could you limit the size of your charts in an effort to make them fit within the standard space? When the chart size exceeds the normal thread width, one has difficulty reading the post. Thank-you.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1268118>
 

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After reading your post a couple of times Bi9foot, I noticed that you made the statement "predict" a couple of times. One of the things I found useful, was to replace the concept of predicting with anticipating.

As an analogy, when you play chess, you can only move a bishop diagonally. As such, when you move any of your pieces, you try to keep them off a diagonal from the enemies bishop.

For drawing channels, we anticipate several things occuring in sequence - we have a point 1, followed by a point 2, and then a point 3. We can then have a right to left traverse, which will either end in a "bounce" off the left trend line, OR will prematurely turn around forming the FTT. (Now, this is not a definitive sequence list, so note well that there are more things which can happen.)

By looking at the sequences of what goes on when forming a channel, and then traversing it, you can begin to more easily anticipate what should and can come next, and plan accordingly.

HTH
 
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