Spydertrader's Jack Hershey Futures Trading Journal

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Quote from EstebanUno:

Ivo, thanks for the comments.

The dotted lines represent minor point 3 channels, and the solid lines represent the major channels I'm attempting to trade. I use the finer dotted line channels to support trading decisions of the major channels. I've made no attempt to draw tapes for some time, but maybe it's time to try again.

That explanation is very helpful. I'll keep this in mind tomorrow.

But it is the high point of what would be point 3 of a new point 3 down channel, and bar 8 is the high that originates the next bar with red volume just like bar 2. The only difference I see between bar 2 and bar 8 is that volume peaks after 2, but not after 8, where it just increases slightly red on bar 9. Does this mean you won't draw a RT until peak volume has occurred?

Regarding using peak volume points to match gaussians in reference to taped channels, do you steepen channels to match these peak points? Like in the attached?

Esteban
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Esteban,

Note the attachment, yellow highlighted area. You DID draw the first gaussian in your volume. (incr. red) for the 1st three bars. The point is, there should be a channel there to match that gaussian (drawn in red). I know it is a tape but that doesn't matter. It is significant and that's what matters because there's red volume "in it" and if that red volume does not continue down in the same pace (which is marked by the red channel) we have change.

The next channel (your grey dotted one) seems completely arbitrary to me. Price is going up and the channel is down. The top is formed by bar 2 and bar 8 but this could just as well have been bar 2 and 6, or bar 2 and 4. There is no relation with the volume. Bar 8 is very low volume and your channel is broken 2 bars later. Getting my point?

Does this mean you won't draw a RT until peak volume has occurred?

No. Channels are drawn as bundlemaker explained in his excellent video. In a down channel you use the top and draw a line clockwise until it touches a point. If that point is a high volume point in the direction of the channel then it is an important channel. If it is low volume and the next bar is up and channel broken easily then it's not an important channel and not even a channel anymore. I don't know of a better way to formulate it. Just draw them and see if they match the gaussians.

Regarding using peak volume points to match gaussians in reference to taped channels, do you steepen channels to match these peak points?

I do but that's optional. It's a way to lock in more money (get out at RTL of faster channel) or to trade a FTT on a fast channel. For example checkout yesterday ES between 11:50 and 12.00. increasing red volume, pace is very fast. Taped FTT, opportunity to make 3 points on the retracement. This retracement is on the forrest level just price moving from point 2 to form another point 3 down but volatility is so high we can easily extract a few points here. On the tape (fast down channel) we have 1 (the taped FTT) and 2 and 3 up as price breaks out. But the point 1 one the tape is in fact a point 2 on forrest level.

regards,
Ivo

<IMG SRC="http://www.elitetrader.com/vb/attachment.php?s=&postid=1464440">
 

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Quote from dkm:

I may have misunderstood Spyder but I thought the RTL BO was an exit signal. Just trying to follow the Forest rules of entry at a pt3.
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I want to expand on this so I will draw up a chart from yesterday to make my point. Spyder and I usually have very similar charts. I annotate volume a little differently but we get to the $ame place. The first 15 bars of yesterday should clarify what I mean... However, I have to run out for a moment and pick up my new v6 toy (the 6 is to keep it more green friendly)...
 
Today&#8217;s AHA moment.
I was waiting for pt.3 of my blue channel, I thought I had it at 10:32. At the end of the next bar, the volume and price went up, then PRV and volume dropped on bar 15 (10:40). I was thinking it&#8217;s an FTT and went short. The beginning of bar 16 PRV was showing even less then 15, but I noticed that the price behaved strangely. Then it clicked, it wasn&#8217;t an FTT, but a flaw, a stall most likely, so I immediately reversed and caught the move up as it continued after the flaw.
 

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Chart for the morning.

The interesting period IMO was the yellow highlighted area.

First we saw an FTT around 9:45 - 9:50. So we have change. Price breaks RTL and a new downchannel is formed.

In order for price to continue to go down we need increasing red volume. But what do we get instead? We do get increasing volume but price not going down. (look where the bars close all the time and don't let the color of the volume bars confuse you). If price does not go down on this volume then people are buying and it can only go up...

A HVS or lateral of some sort would have been on both decreasing black and decreasing red volume meaning price continue to go down. In this case price was moving sideways on increasing volume in a down channel.

Here also an FTT is formed right at the moment where we expected it and we caught it right at the exact moment.

regards,
Ivo
 

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Quote from ivob:

Chart for the morning.

The interesting period IMO was the yellow highlighted area.

First we saw an FTT around 9:45 - 9:50. So we have change. Price breaks RTL and a new downchannel is formed.

In order for price to continue to go down we need increasing red volume. But what do we get instead? We do get increasing volume but price not going down. (look where the bars close all the time and don't let the color of the volume bars confuse you). If price does not go down on this volume then people are buying and it can only go up...

A HVS or lateral of some sort would have been on both decreasing black and decreasing red volume meaning price continue to go down. In this case price was moving sideways on increasing volume in a down channel.

Here also an FTT is formed right at the moment where we expected it and we caught it right at the exact moment.

regards,
Ivo
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Very good point. I saw it the same way. But I have to admit that these weak price advancement bars on higher volume can be tricky. Had that bar closed 1 tick lower (lower than the 2 prev bar lows) I would have been thinking r2R. When these reversals don't work out and the next bar is really big red on + vol, I tend to think I was over analysing.

The next bar, 10:10, had strong price movement on declining volume. In a trend I would consider this a sign of weakness. But in a reversal situation after a volume peak in the opposite direction, I tend to view the dec vol as a continuation of the reversal sign (if there is good price advancement), displaying almost total lack of interest in selling. Of course subsequent trending bars must show + vol to sustain the new trend. Kind of goes against needing increasing volume on the break of the down RT (in this case a taped RT.) And I don't know where to expect the new vol that would complete the b2B, so if price moves laterally I don't know which side of the market represents continuation, so I don't know whether to hold through lateral movement or not.

Ivo, thanks for the detailed reply about matching RTs to gaussians. I'm trying to incorporate those guidelines as I draw lines today, but must admit I'm somewhat overwhelmed by all the tape clutter, and my analysis is a bit delayed as a result.

Esteban
 

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You're on it :D

Just start at the beginning and there are some links to help out as well.

Quote from guavaman:

I am looking for detailed information on the Price - Volume relationship. Can anyone recommend a specific thread?
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Man walks into the Tourist Center at Times Square and asks:

"How do you get to New York City?"


Quote from guavaman:

I am looking for detailed information on the Price - Volume relationship. Can anyone recommend a specific thread?
More...
 
A VERY similar to the earlier example low volume reversal just showed up. Same question, which direction is hold until change?

Earlier setup is in BLACK, this one in BLUE.
 

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