Some visual examples of flaws, also per Spydertrader:
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1354018>
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1354018>
Spydertrader's Jack Hershey Futures Trading Journal
- Thread starter Spydertrader
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Thanks cnms2,
I saw that post also. It just seems that exists several definitions for 'Stalls' (see Jack's post). This definition from Spyder can be used for every bar that is a 'pause' in the trend (which can be the correct and only interpretation
)
I post an example from one of Spyder chart's (21-May). See the two red bars in the middle of the up trend, at least one of them can be considered a 'Stall' using this definition....I think
Either way, this is just a question that arised because of the hint from Spyder's chat that made me search for more info.
Best Regards,
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1482453>
I saw that post also. It just seems that exists several definitions for 'Stalls' (see Jack's post). This definition from Spyder can be used for every bar that is a 'pause' in the trend (which can be the correct and only interpretation
)I post an example from one of Spyder chart's (21-May). See the two red bars in the middle of the up trend, at least one of them can be considered a 'Stall' using this definition....I think
Either way, this is just a question that arised because of the hint from Spyder's chat that made me search for more info.
Best Regards,
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1482453>
Quote from Pepe:
I post an example from one of Spyder chart's (21-May). See the two red bars in the middle of the up trend, at least one of them can be considered a 'Stall' using this definition....I think
Not Quite. Neither of the bars represent stalls. Together, both of the bars create a retrace (red tape) of a traverse (thick blue) of a channel (thick red). Please note how the red volume bar at 14:25 continues to exceed the levels of the black volume bars prior to it (i.e. Increasing Red still holds dominance).
As such, the first red bar forms a Volatility Expansion (or a Left Trend Line Bounce - depending on how one draws in their channel lines). The second red bar creates an FBO of the Traverse (and a Volatility Expansion of a tape). Such detail represents trading at a much finer resolution level (in this case, limbs and leaves) than one should normally monitor at a Beginner Level. If one has chosen to head further down the rabbit hole before obtaining the necessary experience to do so, then one has far greater concerns than differentiating between 'types' of flaws.
In the original posting of this chart, I avoided annotating the finer resolution levels in an effort to dissuade others from heading down the rabbit hole too quickly. Just as FTT's do not exist on every bar, so too do we see relatively few flaws throughout the day. At this resolution level, we do not need to know the subtle differences between each particular type of flaw. We simply need to know what happens after an FTT, and when to anticipate the likelihood of flaws developing (Volume provides the clue). When what happens next doesn't begin to materialize in a timely fashion, we know we must have a flaw. Learn to differentiate flaws from FTT's and it won't matter what type of flaw you see. As I pointed out several times in the beginning of this Journal, developing the ability to quickly recognize errors made during observation allows the trader to wash, or better yet, profit from, their errors (thinking FTT when one actually has a flaw). By focusing on the differences between flaws and FTT's (and given some time and experience) you'll 'see' on your own the subtle differences between flaws as they develop on the price charts.
I hope you find the above information useful.
- Spydertrader
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1482493>
Spyder (and others),
My Up channel for 5/25 am is a bit different than yours and it looks like the 10:55 stall bar in my Up channel could either be the first bar in another B2R (FBO as well) or, a part of the non-dominant traverse.
Given the recent discussion of flaws, I'd appreciate any feedback on the 10:55 stall in my up channel as it seems to potentially be a dominant/non-dominant "boundary" case.
thanks,
spooz
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1482604>
Based on your channels you have an FBO followed by a second FTT. Your up channel differs from mine because it doesn't take into account the previous day carryover channel (Thick Green lines on my chart snip).
- Spydertrader
I'd have drawn the channels the same as you: it matches the gaussians up to 10:55. This channel identifies the FTT well and potential P1 at 10:45.
However, (and this is why Spyder's channels are different I think) the RTL is crossed on decreasing red volume. This BO/FBO bar is a flaw (of the short channel) or possibly, as you considered, a resume of the long. But volume is insufficient for it to be a resume and we now know flaws only occur in dominant traverses. This little addition to the tool-kit is pretty cool as others have noted.
So does this all mean our original channel, FTT and P1 were wrong? I don't think so - it just means that the RTL is no longer working (after the FTT) and you should be prepared to fan if necessary or consider the channel over if you see a BO and R2R. There is redundancy in some of this analysis!
Spyder and PointOne,
Thanks for the feedback. Yep, I figured your green up channel was CO. I'm just trying to apply the "flaw" rule (occur in dominants) using my up channel.
It seems to me that the 10:55 bar could be viewed as the beginning of another B2R. Given the 2 previous B2R's were nearly textbook, note that the volume of the 10:55 bar was very similar to the 10:25 and 10:30 bars. In other words, the potential new 10:55 B2R, in the NOW, looked similar from a volume point of view. No "change" yet in the NOW (10:55 bar), so have to anticipate another B2R, right?
The 11:00 bar seems to be the flaw in my up channel. It's volume is the lowest for the past hour. This bar could be viewed as a FTT plus BO upon bar close. Sure, it's red but only by one tick (maybe 2). And it wasn't increasing black which is needed for continuation.
I'm pretty sure that the 11:05 bar was the reason I drew in the increasing red gaussian.
So, if my analysis is correct, the 11:00 flaw did occur in the beginning of a new B2R but it also was a part of a boundary condition BO plus R2R. In your wider up channel, it is more clear that the flaw(s) occured in a non-dominant and therefore apply the "rule".
I'm probably over-analyzing this but I felt pretty comfortable about my channels, especially the up channel, textbook IMO.
spooz
In your up channel, we see Price flirting with the RTL. When we see Price approach either trend line, we move to the next tool in our bag - the YM. If we find the YM also sits on its trend line, we move to the next tool (and so on and so forth until we 'see' the sufficient data set). In other words, Price already has moved to the trend line. Trying to apply the 'flaw' guidelines here is a bit like closing the barn door after the horse has already departed the farm.
If Price exits a channel on decreasing Volume, then you have the market telling you the channels are incorrect.
I hope you find the above information useful.
- Spydertrader
Yes, I know we are discussing an issue that doesn't apply to the Forest resolution. But, nonetheless, it is a very valuable and interesting issue, as it gives more clues of how one can 'see' the different characteristics of the market.
Also, as one research and study the different aspects of the market one can better understand the 'big picture'. One of the best methods for learning is the so called 'ID Recursive Learning' (Inductive-Deductive) as one learn by going further in detail and came back to the more basic level just to go further again in detail (repeating this 'cycles' over and over) even and mainly if one doesn't understand one particular issue, the rule is to never stop this process and always continue to move on. I know this is completely off-topic and it's not the matter of this discussion, but believe me, I know what I'm talking about
Anyway, thank you for this explanation, it helped very much. The only thing that is not very clear is Jack's explanation of stalls, but Iâm sure with time it will reveal by itself.
Best Regards,
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