Spydertrader's Jack Hershey Futures Trading Journal

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I annotated some of the volume moves out of the lateral formations on a per minute basis on the charts. I felt that the lower factal volume , especially around the 1pm low volume pace lateral, would be a real good indicator of the strength of the move.

The minutely volume out of these moves really jumped out at me today.
 
Just throwing up the 5M and 15M... Different fractal, same tools. Strict PV as usual... :cool:

Also note how the channels of the 5M are the legs of the 15M.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1339686>
 

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Mak,

I didn't think we could steepen a channel. I thought we went from up to down and down to up, throwing in a few laterals where needed. I was under the impression that steepening was handled by volatility extensions. I occasionally had down > lateral that broke the down> down again, but your RTL was not violated. So I'm confused.

Could you explain what it is you saw that caused a new, steeper channel in the same direction rather than an extension? From my limited experience, I understand steeper channels will sometimes give an FTT sooner. But other than that, I don't see how to differentiate the P,V clues that made the first channel valid from those that would lead to a steeper one.

And one other Q I came up with today. Let's assume a down channel for this. Is an FTT always the pt. 1 for a new channel? If the FTT is also a lower low, this would make sense. But if the FTT is a higher low, can we use the LTL bounce or LTL extension as the pt 1 and the FTT as Pt 3? I ask because I was having trouble understanding why the beginner rules were to enter on the FTT. I get the importance of finding the ftts, but if the FTT is pt 1, it's a counter trend trade. I'm not trading any of this yet, but just thinking ahead. I realized today that if the FTT can be the pt 3 and P,V has flipped, then the FTT entry is actually a trade with the new trend. Hope that makes sense and I appreciate any insight here.
 
Quote from C99:


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I didn't think we could steepen a channel. I thought we went from up to down and down to up, throwing in a few laterals where needed. I was under the impression that steepening was handled by volatility extensions. I occasionally had down > lateral that broke the down> down again, but your RTL was not violated. So I'm confused.
More...

Thanks for your Q! I was hoping somebody would ask and today was a great day to highlight what I call "tightening the channel". We had a similar day a few days back where the morning just sank and we watched a prolonged short channel ensue. You will have to keep in mind that I am a strict PV person. VERY STRICT. You can check all the dominants I annotated on volume. So for me this is my containter. Since pts 1,2,3 are critical values of the channel, I explicitly correspond pts 1, 2, 3 with volume. You are correct, you can handle your channel by pushing out the LTL due to the volatility expansion of the channel. So for the moment, look at the 5M and ignore the grey channel lines. On the second short channel, which began around 11:30 on the RED DOMINANT VOLUME, I get pts 1, 2, and 3 within approx 25M from the break out of the blue lateral. It is business as usual until I get to 12:05 where I get volatility expansion of the original short channel, WHICH WE ANNOTATE AND EXPAND our LTL! By the 12:30 the channel has been in place for about an hour. On this 12:30, I saw a RED DOMINANT out of a NON DOMINANT. My PV orientation expects a TRAVERSE to ensue. For me, such a bar is a point at which I TIGHTEN my channel as PV has put in a new critical point (ie. a new pt3). Nonetheless, lets say you don't tightent, then your channel goes until about 12:50 where you would get an FTT off of the original RTL.

It really is a matter of orientation/preference/experience. Since I am strict PV oriented, my M.O. is that all variables and annotations must correspond. On a generic level, what this means for me is that on any particular fractal, critical pts lose their effectiveness the older the datapoint is. This may sound vague but it has alot to do with what's happening NOW more so than what happened in the near past. In a sense, I am always trying to keep the previous 3 critical pts of the current formation. When I see a DOMINANT BAR take off from a particular point, since it is a NOW bar, it has alot of influence and thus I annotate accordingly. Additionally, we were in the lunch zone which I was VERY aware of as to having laterals and drifting.

On the second Q, pt1 can come in two forms as someone had posted a pic of earlier in this thread. Usually it is the FTT, however, there are occasions when it is the bounce of the LTL. My rule which is arguably a deviation is that I begin my annotation on the DOMINANT bar. However, all this is just nitpicking details. As your skill improves, then these things become decipherable. By just keeping focused on the big picture channel and keeping on the right side of the big picture RTL, you are on top of the ball. I am a detail guy so I slice and dice what I find to be the relevant points of the full enchilada.

Regards,
MAK
 
Quote from mephistoII:

C99 - here is the pic to which Mak referred in his last post, wrt the FTT and Point 1 Q. ( I'm always going back in the journal to drive this stuff home and had just recently viewed it) :D

http://www.elitetrader.com/vb/showthread.php?s=&postid=1315212#post1315212
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:)

It's like deja vu all over again.

A review from the start looks like a good idea for this weekend. Thanks for pointing me back.


And thanks Mak- I get what your saying and I'm going to spend some time reviewing yesterday's chart so I can really wrap my head around it.
 
Quote from C99:

... I ask because I was having trouble understanding why the beginner rules were to enter on the FTT. I get the importance of finding the ftts, but if the FTT is pt 1, it's a counter trend trade. I'm not trading any of this yet, but just thinking ahead. I realized today that if the FTT can be the pt 3 and P,V has flipped, then the FTT entry is actually a trade with the new trend. Hope that makes sense and I appreciate any insight here.
More...

I've given this question some thought as well. I think the point of the FTT, which would be a reversal trade as opposed to trading with the trend, is to get on the right side of a NEW trend as soon as possible. At the point at which an FTT is identifiable, the dominant traverse has come into question. V could be declining a rate which makes the traverse unsustainable, or price might not be advancing with increasing volume, or whatever else could be happening that makes you consider annotating a point as FTT. Shoot first, ask questions later.

Once you've annotated the FTT, most likely the new traverse has not yet become dominate (though it may have from PV action). So after the FTT you are watching PV very closely to see if it is becoming dominant, or not, again with the attitude of shoot first then question.

So the fact that the dominant traverse is not proceeding as expected calls into question the sustainability of the channel, thereby creating an opportunity to get in on the ground floor of the NEW channel.
 
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