Quote from oddiduro:
As price approaches the left channel line, there will either be a VE, or an FTT. A VE usually occurs on rising volume. An FTT usually occurs on falling volume. A VE guarantees an FTT.
Spyder brought the above to our attention some time ago. He suggested that we should pull out a number of charts, look for VEs then see what comes next and how often. How many of you followed that advice?
Thankfully, I understood what he was saying at the time and did my drills 100 times over and that very drill is paying dividends now. I hope this helps!
Spydertrader's Jack Hershey Futures Trading Journal
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I am not sure that the statement "An FTT usually occurs on falling volume." is correct. If comparing guassian to gaussian, I agree, but not bar to bar. On a bar to bar basis, FTT's often occur on peaking volume.
Also, a VE does NOT "guarantee an FTT." A bar creating a VE will, by definition, move the LTL and its high will touch the new LTL so it can never be an FTT.
If a bar reaches the LTL on reducing volume then, yes, that is an alert for a possible reversal.
It is my guess that there are probably quite a few in he same boat, perhaps even some that have not recognised it yet. I know in the past I have sought answers from my tools where the issue was clearly with the craftsman (me). What's the old adage "a poor craftsman blames his tools". These really are fine tools and actually the 'beginner' tool set is pretty straightforward. I think you could make a fair go of it just with the main channels but when you add in the tapes and the price volume relationship you have something very powerful. I can completely understand Spyder wanting to keep the pace slow and focused on the basics at the start. It's easy to look for solutions in the wrong place (a finer resolution tool for example).
I know the following comment is page 1 of the thread stuff' but I think it it bears repeating over and over "the normal course of action is to hold". This is what I plan to focus on this week. It just seems hard to drill this into the subconscious. It's much easier to try to fret about identifying a FTT earlier, or a 'better' way of distinguishing if a trip to the right hand channel line is going to break out or fail. You know what it doesn't matter as long as we take appropriate action.
Cheers,
I know the following comment is page 1 of the thread stuff' but I think it it bears repeating over and over "the normal course of action is to hold". This is what I plan to focus on this week. It just seems hard to drill this into the subconscious. It's much easier to try to fret about identifying a FTT earlier, or a 'better' way of distinguishing if a trip to the right hand channel line is going to break out or fail. You know what it doesn't matter as long as we take appropriate action.
Cheers,
you picked an interesting example as the :50 is an OSB (slightly different rules) and volume decreased through the entire area. I don't know why Spy showed an increasing red Gaus right there.Quote from guavaman:
Please note the 10:40 to the 10:50 FBP on the attached chart. It seems that the :45 bar was actually a Formation FBO (because although Priced BO'd from the FBP Formation, it seems to have closed at the low of the previous two bars). As a result Spyder extended the Yellow boundaries to include this bar into the original two bar formation.
If the above assessment is correct, the :50 bar is a case study in my confusion of a BO of FBP's and FTP's. Since the close of the :50 bar was outside the sloped side of the Yellow Boundaries of the FBP does it constitute a BO? It seems that Volume of this bar ( as well as the :55 bar) did not have the requisite increasing Volume over the previous one(s). Which incidentally is odd since it serves as a PT3 for the red down channel, but I digress. So although the initial move down of th:50 bar would have caused me some concern, ultimately I would consider this bar a Formation FBO as well. Lastly, although the :55 bar closed outside the Formation it did so on decreasing Volume.
Signed,
Confused in Pennant Land
Anyway, I think this post is very relevant to your concerns and worth review:
http://www.elitetrader.com/vb/showthread.php?s=&postid=1614733#post1614733
The FTT starts a retrace, so it should be on declining volume at that fractal until we hit the (original) RTL and either get a BO or an FBO. By shifting to the 2-minute YM to look for rising volume I think you are shifting to a lower fractal (the retrace/tree), and therefore seeing the appropriate rising volume for the first dominant traverse at that lower fractal.
Quote from oddiduro:
As price approaches the left channel line, there will either be a VE, or an FTT. A VE usually occurs on rising volume. An FTT usually occurs on falling volume. A VE guarantees an FTT. By this point we should be on the smallest resolution that allows us to enter on rising volume.
The bar that interfaces with the LTL will be one of higher or lower volume. If it is of higher volume then there is nothing to do, we continue. If it is of lower volume we are on an FTT alert, and we should be on the 2min YM looking for acceleration in the opposite direction.
This is what I mean that ALL trades should be entered on RISING volume.
If I read this wrong, now is a great learning opportunity for me.
Best Regards
Oddi
Edit: I should have said higher or equal volume, then we continue.
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