Spydertrader's Jack Hershey Futures Trading Journal

[bi9foot]

Quote from Spydertrader:
.....

On Friday, I count 17 formations (Pennants and Lateral Formations). Of those, I see 6 FBO's and 11 Non-FBO's. Of the six FBO's, 4 continued on the next bar in the direction of the original break out - leaving 2 which changed direction compared to the previous break out.

I went over Friday's chart and and I highlighted what I consider FBO of formations. I got 8 but 7 is more accurate since the 12:55 bar was very low volume. What was different is I highlighted (purple) 6 FBO's that went in the opposite direction of the FBO and 2 (pink) that went back in the direction of the original breakout. So my interpretation of the direction of the BO is different from yours so I would appreciate if could tell me where I am wrong.

Quote from Spydertrader:


It appears, to me at least, you have created an arbitrary mental construct defined as, "a lot" for a situation, which, presents a problem, two to three times a day.

Agreed, I would also admit that I have taken action based on breakout of YM formations. There are a lot more of them and maybe I should not be doing that.

Quote from Spydertrader:

What if we look to see what possibilities exist when we have a Pennant Break Out (you'll find three).

Pts 1, 2 or 3

Quote from Spydertrader:

In other words, no need to guess what might happen, know what can happen, and then, when you 'see' the one possibility remaining at the end, you'll have a plan in place for how to handle it.

Does that mean one holds off on the trade until one is sure of the one possibility rather than take the trade as price breaks out of the formation?

Anyways, thanks for your post. Your last two paragraphs got me thinking quite a bit.

 

[Pr0crast]

Quote from Spydertrader:

To use the vocabulary of 'conventional orthodoxy,' you know much earlier than 14:00 bar, but you receive confirmation with the 1400 bar. In other words, the dominos begin to fall, and the sequence begins, much earlier.

- Spydertrader

What dominoes? I don't see anything that would prevent the 1350, 1355, or 1400 bars from crashing down in similar fashion to the PT3 bar. To me this unusual channel is just something you draw at the time "because it fits" and because there is no downward PT3 yet. I don't see how you could "know" that the lateral would break up. In fact, that just seems like guessing to me. What is your thought process here? Are you alluding to other tools?

 

[cnms2]

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1657436>

 

[cnms2]

Most of the formation FBOs were at midday...

Quote from bi9foot:

I went over Friday's chart and and I highlighted what I consider FBO of formations. I got 8 but 7 is more accurate since the 12:55 bar was very low volume. ...

 

[cnms2]

This is how I've perceived that period, using just ES 5 min chart's volume and price:

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1657484>

Quote from Pr0crast:

What dominoes? I don't see anything that would prevent the 1350, 1355, or 1400 bars from crashing down in similar fashion to the PT3 bar. To me this unusual channel is just something you draw at the time "because it fits" and because there is no downward PT3 yet. I don't see how you could "know" that the lateral would break up. In fact, that just seems like guessing to me. What is your thought process here? Are you alluding to other tools?

 

[Padawan]

Quote from guavaman:

I want Padawan to teach me how to draw charts like that. They're beautiful .

Thanks, guavaman. The overall support in this journal is encouraging.

One step I've taken this weekend to deepen my understanding of what to look for is to study the sweeps chart and commit it to heart. However, there's a big a gap (I think) in my understanding.

Would someone please share how market pace is connected to the sweeps chart? PRV increasing/decreasing is specifically outlined in the sweeps chart. I'm wondering how/where we fit the fast, medium, and slow paces of volume into our analysis as well if PRV and pace aren't describing the same tool. My thoughts right now are that fast pace = coarse monitoring, medium pace = medium monitoring and slow pace = fine monitoring, but this could be very wrong or there may be more to it than that when determining how to incorporate the pace aspects into our sweeps. My apologies if this has been answered already. If so, I'll retrace and find what I overlooked.

Thanks.

 

[cnms2]

As I understand that document, coarse / medium / fine refer to your monitoring level, not to PRV or pace. You monitor at coarse level, then as the flowchart indicates you graduate to the medium, and eventually to the fine level to make your decision: continuation / change.

Quote from Padawan:

Thanks, guavaman. The overall support in this journal is encouraging.

One step I've taken this weekend to deepen my understanding of what to look for is to study the sweeps chart and commit it to heart. However, there's a big a gap (I think) in my understanding.

Would someone please share how market pace is connected to the sweeps chart? PRV increasing/decreasing is specifically outlined in the sweeps chart. I'm wondering how/where we fit the fast, medium, and slow paces of volume into our analysis as well if PRV and pace aren't describing the same tool. My thoughts right now are that fast pace = coarse monitoring, medium pace = medium monitoring and slow pace = fine monitoring, but this could be very wrong or there may be more to it than that when determining how to incorporate the pace aspects into our sweeps. My apologies if this has been answered already. If so, I'll retrace and find what I overlooked.

Thanks.

 

[dkm]

Quote from Spydertrader:

1. Break on decreasing Volume must fan, but break on increasing Volume can fan. One set of circumstances results in mandatory action. The other results in an optional action. How to distinguish between when to do so and when not to do so results from noting, "Did the trend change, or just the channel?"
- Spydertrader

I must confess, this statement has shaken my confidence considerably. I am currently using only es, ym, prv and channels, not having yet reached anything like consistency in my abilities to anticipate correctly the direction of price movement. The suggestion that fanning a channel is "optional" on the appearance of an rtl bo on increasing volume is bewildering.

My recent focus has been on how to avoid dropping to a lower, inappropriate, resolution. However, this has led to an increase in confusion as to what signals on ym are relevant and what should be ignored. It would seem inevitable, if one is to anticipate using ym, that one is going to drop to a finer resolution. Am I completely misunderstanding how one should anticipate?

 

[Padawan]

Quote from Pr0crast:

What dominoes? I don't see anything that would prevent the 1350, 1355, or 1400 bars from crashing down in similar fashion to the PT3 bar. To me this unusual channel is just something you draw at the time "because it fits" and because there is no downward PT3 yet. I don't see how you could "know" that the lateral would break up. In fact, that just seems like guessing to me. What is your thought process here? Are you alluding to other tools?

Pr0crast, do you think Spyder could be referring to the fbo of the green up channel? Trying to figure things out on this one, too.

 

[cnms2]

Just a note: the 1335 increasing red volume was relative to the previous bar, in the context of the red retrace channel on my chart, as it was expected from a volatility expansion.

In the larger context of the thick green line channel, that 1335 volume was smaller: look at the 1320, 1400, 1405 volume bars' levels.

I really believe that the volume always tells the story ... We just have to learn to read it correctly and sooner. Monitor it, analyze it, decide, act, and all over again!

Quote from dkm:

...on the appearance of an rtl bo on increasing volume is bewildering. ...