Spydertrader's Jack Hershey Futures Trading Journal

[Bearbelly]

Quote from Spydertrader:

When volume and volatility occasionally drops off later in the day, some have found difficulty following the FTT's. If you experience similar difficulty, then I recommend taking a very hard look at Gaussians. Rather than focus bar to bar, try to anticipate a bigger picture (Forest level) Gaussian. Start to do this in the mornings as well (when higher volume and volatility exist). With practice, you'll begin to 'see' the bigger picture much clearer, and as a result, lower volume in the afternoon's won't fool you one bit.

- Spydertrader

No comment on you finally removing the indicators.

I have not been up to snuff on the gaussians. I will bear down on them.

 

[Spydertrader]

Quote from ivob:

Am I right when I say that the bias for the market before opening was up but that it was not confirmed by increasing black volume?

Correct. Notice decreasing black on bar 2 (compared to the opening bar) which is then confirmed with even less black volume on bar 4.

Quote from ivob:

After all the market opened higher so a up channel could be drawn providing a pt 3 would be formed (on increasing black volume). As volume was decreasing the first four bars I was expecting the fifth bar to form this point 3 on increasing black volume. It quickly became evident it didn't and instead formed a point 3 on a down channel. Am I concluding the right thing here?

See circled area on Attached chart. Note how far price comes back off the high. In reality, a Gaussian change had already started within the second bar of the day. The majority of Volume at the end of bar 2 (the 'top' if you will) resulted from red volume - as we see price pull back. If you look and think to yourself, "OK The Gaussian has already started" and mentally 'see' the 'pullback' on bar two is less than the length of bar three, you, in effect, can see increasing red volume (top volume on bar 2 and all of bar three). This is simply an example of a Gaussian change which starts intra-bar. Now that you can recognize it. Begin to think in this fashion when you encounter 'spikey' bars in the future.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1374393>

 

[ivob]

Quote from Bearbelly:



Do you find the ftt signals in the afternoon to be as reliable as those in the morning? I have a much more difficult time reading them when the volatility drops so I pretty much avoid trading in the pm. Curious if others are doing ok with it.

My observation is that FTT when volatility is low are also FTT's but often everything is going in slow motion. That however doesn't mean that the move won't be big because we don't know how far it goes.

For example today at 11:25 there was this FTT on ES that was hard for me to see on YM BTW which was already going sideways. Volatility was already decreasing on ES as well as YM (I display average true range on my screen). I was thinking "Afternoon has started, probably it will not be a big move" and probably some others did too. ES droppped 8 points until 1PM... Lesson: do not assume. We don't know how far a move will go. Just my observation.

regards,
Ivo

 

[ivob]

Quote from Bearbelly:

ivob

YM was definitely leading the way this morning. Down from the second bar on. ES tried to protest but finally gave in.

Sure but we trade ES and YM leads ES on moments that matter which for me is FTT. Of course ES will not go thru the roof when YM is going down. So basically YM was telling to me "Don't go long". This is of course important information so your observation is right IMO. YM also gave this clue. Thanks for mentioning.

regards,
Ivo

 

[Jander]

Quote from Spydertrader:

Correct. Notice decreasing black on bar 2 (compared to the opening bar) which is then confirmed with even less black volume on bar 4.



See circled area on Attached chart. Note how far price comes back off the high. In reality, a Gaussian change had already started within the second bar of the day. The majority of Volume at the end of bar 2 (the 'top' if you will) resulted from red volume - as we see price pull back. If you look and think to yourself, "OK The Gaussian has already started" and mentally 'see' the 'pullback' on bar two is less than the length of bar three, you, in effect, can see increasing red volume (top volume on bar 2 and all of bar three). This is simply an example of a Gaussian change which starts intra-bar. Now that you can recognize it. Begin to think in this fashion when you encounter 'spikey' bars in the future.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1374393>

Spyder...

Just to expand on your debrief of that sequence....Say you could have 2 volume bars for each of those price bars, it would look something like this? I think that is what youre getting at...

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1374413>

 

[KK70]

Quote from Spydertrader:

Let's say you do not believe the price action to which you refer resulted in an FTT on the ES. Certainly you do see an FTT on the YM at the same time (See attached). Since the YM leads the ES, and you have a signal for change on the YM, we follow the market signal and expect price to head higher from this point. Decreasing black volume marks a retrace of a channel. When the Gaussian changes from decreasing black to increasing black (a \/-B2B), we have a reversal (breakout of the channel).

Spydertrader,

Thank you for the clarification.

However, an almost exact situation existed earlier at around 10:00 AM when the downtrending 2 min YM had an FTT and subsequently BO over the RTL and ultimately resulted in another FTT around 10:26-10:28.

The downtrending 5 min ES however did NOT result in a BO of the RTL between 10:00-10:20 and resumed an orderly downtrending pattern again till the 10:45 bar which I refer to.

So both the situations (10:00AM and 10:46AM) looked similar in the YM but had different results in the ES -- the 10:00 move in the ES was contained in the down channel while the 10:45+ move was not.

So how then would you have played the earlier 10:00 AM move? Would you have gone long at 10:05 and short again at 10:26?

Thanks again.

 

[Jander]

Quote from KK70:



So how then would you have played the earlier 10:00 AM move? Would you have gone long at 10:05 and short again at 10:26?

Thanks again.

After the FBO at around 10:15-10:20 you would exit or reverse...depending on your experience level. No reason to hold that long back to your entry point IMO... is that what you are asking?

 

[KK70]

Quote from Jander:

After the FBO at around 10:15-10:20 you would exit or reverse...depending on your experience level. No reason to hold that long back to your entry point IMO... is that what you are asking?

Yes, and more importantly, I am wondering if it is right to go long between 10:00-10:06 based on the YM FTT.....

 

[Spydertrader]

Quote from Jander:

Just to expand on your debrief of that sequence....Say you could have 2 volume bars for each of those price bars, it would look something like this? I think that is what youre getting at...

Correct. Especially on 'spike' type Price Bars, one needs to begin mentally to 'see' a Gaussian shift happening within the bar - without manually changing fractals on your chart (or looking at another chart of a lower fractal).

- Spydertrader

 

[ivob]

Quote from Spydertrader:

Correct. Especially on 'spike' type Price Bars, one needs to begin mentally to 'see' a Gaussian shift happening within the bar - without manually changing fractals on your chart (or looking at another chart of a lower fractal).

- Spydertrader

Wouldn't it help to just see that spike type Price bar in a lower fractal?

Just to see how it is build up? I mean, it could be going up on high volume and go down on low volume. When you see this exact bar divided into 5 bars (or even 2 would do) it's easier to see. After all it is an important bar.

regards,
Ivo