Spydertrader's Jack Hershey Futures Trading Journal

[Spydertrader]

Quote from Pr0crast:

Am I making sense?

Yes. You make complete sense. Rather than focus on too fine a picture, a LTL bounce signifies nothing more than a change in Market Sentiment. While we can notice the Sentiment change sooner by watching the YM, we only need know change has occurred - which allows us to anticipate the upcoming sequences of events necessary for continued profit.

- Spydertrader

 

[Pr0crast]

Do you know that an LTL bounce is a bounce and not a flaw for the same reasons you know an FTT is an FTT and not a flaw, i.e. needing to see decr vol bars >60% etc?

 

[Pr0crast]

This is a bounce. Yes?

Have your logical processes allowed you to realize this was a bounce at any time before that FBP broke?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1626309">

 

[Jander]

Was kind of wondering if there was a certain % of the bar that needs to be retraced to qualify or not. Perhaps Im getting too technical, but I dont see any other way to differentiate between a VE that comes back a good bit or a LTL bounce?

I was also thinking that the bounces were why my RTL were not holding after no apparent FTT, but I see that is a rare outcome of the bounce. Any other signs that the RTL may not hold, or just wait and see what happens...

 

[Pr0crast]

Quote from Jander:

Was kind of wondering if there was a certain % of the bar that needs to be retraced to qualify or not.

I think this is just semantics and in the end a point of change is a point of change is a point of change. For example, a minor retrace followed by another dominant traverse or a resumption of the dominant traverse is often labeled as a Dip, but if the Dip prolongs itself a little longer, that resumption is often labeled an FBO. Does it matter what you call it? I'm not sure.

In general, my theory is twofold.

1) a bounce will retrace with more "gusto" than a flaw and often produces "spike" bars
2) one determines something is or is not a bounce using the same framework as with an FTT (i.e. differential analysis, eliminating possibilities as time progresses)

 

[Spydertrader]

Quote from Pr0crast:

1) a bounce will retrace with more "gusto" than a flaw and often produces "spike" bars
2) one determines something is or is not a bounce using the same framework as with an FTT (i.e. differential analysis, eliminating possibilities as time progresses)

There you go. The whole thing really boils down to determining if we have continuation or change. Attempting to differentiate an FTT from an LTL Bounce misses the point. One simple needs to recognize (and know in advance) the sequences required. We need not know how long continuation will last. We only need to recognize the next time the market signals change. This process differs for each skill level and for each resolution level.

We already know the sequences for the various flaws. We already know the sequences for what happens at an FTT (and back to the RTL). This same process works anytime the market transitions from the dominant to the non-dominant in terms of direction.

Wash. Rinse. Repeat. At any skill level, at any resolution level, its all about recognizing continuation vs. change.

- Spydertrader

 

[oddiduro]

Bundle,

You are making this too hard.

Take whatever time frame you want.

Look at the last two bars ONLY.

If the volume of the current is less than the volume of the prior bar, but greater than 40 percent, go to a smaller time frame. A smaller time frame is defined as 40% of the larger time frame.

On the smaller time frame, look for b2b or r2r, and go in the appropriate direction.

If, on the smaller time frame, volume of the current bar is less than the volume of the prior bar, but greater than 40 percent, go to the DOM.

Look for a change in the 2 pair.

Do this, and you will nail a reversal to the tick.

Best Regards
Oddi

 

[cnms2]

It's a good workout to split hairs on a known outcome mystery ...

I'd've known it was a reversal when the RTL was broken on increasing PRV. I should've probably gotten a hint about it as soon as the PRV forecasted a too high red volume for a retrace (it ended up being of the size of the VE black volume!), if it had happened before the RTL's BO.

For me, the FBP's BO wouldn't've probably been enough to anticipate a reversal, except if the PRV was already very high.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1626416>

Quote from Pr0crast:

This is a bounce. Yes?

Have your logical processes allowed you to realize this was a bounce at any time before that FBP broke?

 

[Pr0crast]

Quote from cnms2:

It's a good workout to split hairs on a known outcome mystery ...

I'd've known it was a reversal when the RTL was broken on increasing PRV. I should've probably gotten a hint about it as soon as the PRV forecasted a too high red volume for a retrace (it ended up being of the size of the VE black volume!), if it had happened before the RTL's BO.

We sure like to split hairs )

For me, the FBP's BO wouldn't've probably been enough to anticipate a reversal, except if the PRV was already very high.

I think the two of us are talking on different resolutions though, to be clear. In reality, I live in your resolution! But the LTL bounce is a point of change between the dominant and the non-dominant (like an FTT), not a reversal of dominants. So also like an FTT, it can end in FBO or BO. +red PRV approaching the RTL on the other hand is an early warning for a BO, and in this resolution, FTTs and LTL bounces are irrelevant.

 

[Dantheman]

Quote from Pr0crast:

This is a bounce. Yes?

Have your logical processes allowed you to realize this was a bounce at any time before that FBP broke?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1626309">

For me, (aside from considering the ym during the bounce phase)...I would be taking note of the fact that the closing of the price bar should be a heck of a lot higher on that much volume.

in other words... "why would this price bar be closing so "low" on extreme volume at the LTL?"

big warning flag for me.