The discussion pertaining to JADE actually began with this post from 05-02-2007. When I referred to the "Volatility Expansion" in my previous post, I intended to draw everyone's attention to the one formed on the 14th.
You can, no doubt 'see' the Volatility Expansion created as Price moved to its high on 05-14-2007. Price then 'pulled back' from its high - closing some distance from the left trend line. Now, picture in your mind's eye Price attempting to move back to the Left Trend Line created by the previous day's Volatility Expansion. We do not 'see' it on the chart, but we know it occurs when price 'gaps' up (ever so slightly) on the open of the 15th. In other words, if we had continuous trading around the clock, we could then 'see' Price move from where it fell at the close of the 14th to the open of the 15th. Price attempted to Traverse the channel but failed to do so. Instead Price (after gapping up a small amount) headed lower today (by quite a bit). This Failure to Traverse the Price Channel, we call an FTT. An FTT marks a signal of change. In addition, we can find FTT's by regularly looking for them right after a Volatility Expansion. FTT's don't always materialize right after a Volatility Expansion, but by training your mind to look for them at such a point in time, a new trader quickly develops the ability to differentiate between what is, and what is not, an FTT.
Actually, the 15th does create an FTT, right at the open, but yes, we begin to look for FTT's after a Volatility Expansion. Again, Price may continue to create Volatility Expansions for days or even weeks before an FTT forms, but once you learn to follow Gaussian Volume formations in conjunction with the FTT price formation, the P-V Relationship simplifies the process significantly.
Correct. Beginning Level Traders do not hold stocks during their Earnings Announcements.
Good Journey to you.
- Spydertrader
