Spydertrader's Jack Hershey Futures Trading Journal

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FTT at 11:20, 31 Aug

Just wanted to mention the FTT on the 11:20 bar as a very clear example of the Wall + games, 2-pair, spike -> retrace -> reversal sequence. (Volume was lower than the prior bar though.)

I didn't record the session but perhaps someone who did can post some detailed screen shots around that time.

I know there are many other examples to choose, but this one seemed crystal clear.
 
Quote from guavaman:

R/R since you experienced the same scenario, did you anticipate continuation of the uptrend? I imagine so, but it seems we may be in the minority.
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There were many other factors to consider at the same time and after the even harmonic was established I held to my change mindset that was established early in the 15:25 bar.

I had two forest downtrend RTL's approaching for this uptrend to contend with and volume was decreasing as this rally progressed, so within the larger picture I was anticipating a reversal rather than channel widening and resumption upward.

Since the 15:25 FTT was also an FBO of my brown channel (see attached chart), the red volume was 20% greater than the previous bar, and the close was right on the RTL, I anticipated a break downward even though I did notice the even harmonic.
As the 15:30 bar developed with very low PRV during the BO I was also prepared for a wider pt3 (long). However when the next bar couldn't get higher and started down on increasing volume for my anticipated R2R I knew my pt 3 (short) had been established.
 

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Hi all,

10:45 - 10:50 was a problem for me. There had not been a flaw or VE yet so I was expecting price to continue going up especially after the 10:50 bar which is an outside bar.

Of course the whole thing (10:15 - 10:45) was just a retrace from the 10 o click bar so maybe I should have anticipated the pt3 down..

regards,
Ivo




Quote from Spydertrader:

08-31-2007 ES Chart

Please note the yellow outlined areas marked in the Price pane. Note also, the Volume changes which occur within these 'zones' as well. Understanding the 'formations' which occur within channels (a subset of which, we define as 'flaws') should assist everyone's understanding of the next discussion on the syllabus.

With respect to the 'finer tools' discussion currently underway, I do not wwant to squelch the iterative refinement process. We can continue the discussion at the same time (and even into the next month if need be), but for now, set aside the 'finer tools' and focus on the next point in the syllabus.

After everyone has a firm grasp of this month's topic, it will then be time to bring the 'expert level' tools to bear - especially when we discuss the October Topic: Additional Signals for change.

- Spydertrader
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Quote from nkhoi:

minority rule, second post , bottom up
http://www.elitetrader.com/vb/showthread.php?s=&threadid=23103&perpage=6&pagenumber=9
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Direction of price movement is not determined by the size of orders on Bbid/Bask. As I am sure you know, it is determined by buyers and sellers who step up to the plate and trade. If we have 20 on the bid and 1000 on the ask and someone buys 1000, price will tick up. One cannot simply expect the smallest number to be eaten away first, as implied in the above post. Watching a recording of the DOM will confirm this time and again. If there is a big disparity between bid and ask, it might be reasonable to say that the smaller side may get eaten first, but it only takes someone to pull orders from the larger side or a larger trader to step in and that theory goes out the window.
 
Quote from dkm:

Direction of price movement is not determined by the size of orders on Bbid/Bask. As I am sure you know, it is determined by buyers and sellers who step up to the plate and trade. If we have 20 on the bid and 1000 on the ask and someone buys 1000, price will tick up. One cannot simply expect the smallest number to be eaten away first, as implied in the above post. Watching a recording of the DOM will confirm this time and again. If there is a big disparity between bid and ask, it might be reasonable to say that the smaller side may get eaten first, but it only takes someone to pull orders from the larger side or a larger trader to step in and that theory goes out the window.
More...

Yep, that's how I see it. It's the market orders that are important. They want to buy (or sell) and they want it now. So if you want to buy 1000 contracts you can either enter a market order or eat the wall (hit the ask) if you know there is enough supply.

regards,
Ivo
 
A. Hitch
As dominant traverses proceed the price change there is, at first, an almost continuous
advance. Therefore, from bar to bar, the offsets and the bar length repeat one after
another. Progress can soften after a period of time and it shows up as a momentary one
or two bar repeat. Repeat means that consecutive nearly identical bars show up. The
bars often do not have the volatility of the prior advancing bars. Volume will flag
somewhat preceding this phenomena. Then the price resumes its prior advance. The
market has momentarily caught its breath, so to speak.

B. Dip
Dips are like hitches only they are more pronounced, meaning that a small noticeable
retrace for one bar may occur. The corresponding volume flagging is more pronounced.

C. Stall
Stalls are longer hitches and the volatility may not be less than prior bars. Picture it as a
definite pause and dwell period that occurs not too close to the left fractal channel line.
Volume will oscillate somewhat by flagging and then refreshing and flagging again.

D. High Volatility Stall
This formation usually occurs near the limits of the market’s range and early in the day
when volume is brisk and the market opens somewhat near the prior day’s range. A
high volatility stall can be traded at the rate of one cycle per two bars and it can be
traded in both directions with a neutral bias. The tick length of the bars gives a
comfortable value of profit and leaves room for market fills that may not be at the limits
of the lateral values of the range of volatility in a bar.
 
Hopefully this falls into the category of flaws and lateral phenomena.

In bar to bar mode (distinguishing change and continuation) I have created a rule of thumb that is still in the making. I'm wondering if I've invented something that will lead me astray, or if this has valididty.

Let's say we have a doji bar (open and close same or perhaps a tick apart). I have divided these into a couple of categories based on volume compared to prior bar and price overlap of prior bar. Basically, if the doji bar extended little or nothing beyond the prior bar, then I ingnore volume and just look at it as a stall. If the doji bar extended beyond the prior bar by a significant amount, then I split the volume between red and black. In the latter case, this usually is construed as change, as 1/2 the total volume is almost always less than the volume of the bar before.

Make sense?
 
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