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Spydertrader's Jack Hershey Futures Trading Journal
- Thread starter Spydertrader
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Quote from Jack Hershey:
Have we put in enough time to see that the last traverse in a trend is a flaw.
The last traverse doesn't make it to the left trend line.
I call this a "failure to traverse." ...
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1667841>
Quote from RoughTrader:
cnms2, as I'm still just acquainting myself to this method, there's a lot still unclear to me. Would you mind taking a few minutes to describe exactly what makes these two points NOT ftt's?
Thanks,
RoughTrader
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Quote from cnms2:
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1667841>
Is the flaw differentiated from the ftt in real time just by volume? i.e. if the flaw volume < 40% previous bar volume, the market is pausing instead of fighting for a reverse with heavy transactions?
RoughTrader
FTT is a flaw in Jack's terms. The 40% is just a guidance, not an absolute value. There are almost no hard rules and values, except definitions. I don't believe this method can be fully automated.
Quote from RoughTrader:
Is the flaw differentiated from the ftt in real time just by volume? i.e. if the flaw volume < 40% previous bar volume, the market is pausing instead of fighting for a reverse with heavy transactions?
RoughTrader
Quote from RoughTrader:
sorry about that. I'm on the west coast and I keep my chart times at PST. just add 3 hours to the times you see. It is during regular session
I have attached my 5 min chart for 09/11/07. I believe that we are talking about the 11:45 bar and the 12:05 bar, as marked.
The 11:40 bar has decreasing red vol, suggesting possible change ahead. The 11:45 bar has an intrabar shift. It makes a lower low and then closes above its open. At the close of this bar (i.e. at 11:50) it is understandable why this bar might be considered an FTT. We have not yet had a flaw since the formation of the pt3 at 11:30 and this might suggest that 11:45 is NOT an FTT but this is by no means a hard and fast rule. At the close of the 11:45 bar I see nothing in the gaussian, the formation or the tape that says "this cannot be an FTT". At this moment, we had an ftt on the previous ym bar and an RTL BO on the current ym bar. The 11:50 bar opens and proceeds to make a higher high. At 11:51 we have increasing black prv on ym and decr black vol on ES (checked on screen recording for the day). This is in keeping with the conclusion that 11:45 was an FTT. By 11:53 we have a flaw on ym that suggests the dom direction has changed to long and ES is still black. At 11:54 we see ym forming a dip with a lower low, and es flips to red. I believe this is the point where an FTT becomes doubtful. By 11:55:25 we begin to see the dip forming on ES and the anticipated FTT becomes a flaw. Using on coarse tools, (ES, YM, prv and channels) we would incur a small loss reversing to short at this point.
On the 12:05 ES bar, we have a DB ( square odd harmonic) at 12:09:35, suggesting that price will go higher. My screen recording shows that at 12:10:28 we have RTL BO on ym (following an ftt) and a higher high on ES. PRV is increasing black on both es and ym. I see no reason why one might not conclude FTT. At 12:12 the situation is the same. By 12:12:30 we have rtl fbo on ym and es intrabar shift, suggesting the FTT is about the be invalidated. Again, a reversal to short at this point would incurr a small loss.
Unless I am missing something really fundamental here, I fail to see how one might avoid concluding "FTT" in both situations.
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Quote from dkm:
Unless I am missing something really fundamental here, I fail to see how one might avoid concluding "FTT" in both situations.
The first FTT marked on your chart forms a small dip. We an anticipate the formation of a 'flaw' (Hitch, Dip, Stall, HVS) since, prior to the "first marked FTT," we have no Volatility Expansion, nor do we have a Flaw or other formation - since the formation of our Point Three Channel. The second FTT marked on your chart, everyone should recognize as an Flat Bottom Pennant (also, and Outside Bar Follows).
Note the differences in Price action which appear between the first marked FTT (first bar of the Dip) and the actual FTT which results from the formation of an Outside Bar. Note also the differences in Volume.
- Spydertrader
Quote from Spydertrader:
The first FTT marked on your chart forms a small dip. We an anticipate the formation of a 'flaw' (Hitch, Dip, Stall, HVS) since, prior to the "first marked FTT," we have no Volatility Expansion, nor do we have a Flaw or other formation - since the formation of our Point Three Channel. The second FTT marked on your chart, everyone should recognize as an Flat Bottom Pennant (also, and Outside Bar Follows).
Note the differences in Price action which appear between the first marked FTT (first bar of the Dip) and the actual FTT which results from the formation of an Outside Bar. Note also the differences in Volume.
- Spydertrader
Until the appearance of the dip, we have only the fact that we have not seen a flaw or VE since the pt3 to prevent us from concluding FTT. Correct? Despite the fact we had both ftt and rtl bo on ym?
On the second "FTT", was it not reasonable to anticipate upward price movement with both the square odd harmonic and initially a bo long of the fbp?
Quote from Spydertrader:
The first FTT marked on your chart forms a small dip. We an anticipate the formation of a 'flaw' (Hitch, Dip, Stall, HVS)
- Spydertrader
It appears I have been putting undo requirements on my interpretation of what constitutes a Dip. I was laboring under the belief that the "hat" (in a downtrend) or "bowl" (in an uptrend) form had to be duplicated in both Price and Volume in whatever the dominant trend were.
I will revisit this section for study to see where I went awry.
Quote from dkm:
Until the appearance of the dip, we have only the fact that we have not seen a flaw or VE since the pt3 to prevent us from concluding FTT. Correct? Despite the fact we had both ftt and rtl bo on ym?
Correct.
Quote from dkm:
On the second "FTT", was it not reasonable to anticipate upward price movement with both the square odd harmonic and initially a bo long of the fbp?
The second FTT is a formation - an FBP. Formations exist as a conduit from the market to the trader - almost as if to say, "Are you sure?" If one found themselves on the sidelines, one would surely hold off initiating action during the formation of the actual Pennant. If one held a position in the market, one would surely not take action on that position until a break out of The Pennant.
Everyone should understand these principles.
Now, once the BO begins to materialize, we can only arrive at three possible conclusions. One of those conclusions is an Outside Bar. While rare, they do occur almost everyday. Without the use of a finer tool set one can experience difficulty dealing with the Intra-Bar changes in sentiment which occur within an Outside Bar. However, even if one never learned to effectively deal with the Outside Bar, one can more than make up for any losses incurred during the 95% of the day where Outside Bars do not materialize.
In this specific example the Outside Bar forms the FTT. As such, If1/If2 logic, while placing you on the right side of the market for this specific bar, requires additional usage on the subsequent bars. As a result, flip-flopping back and forth becomes the focus, and calm disappears - replaced by anxiety.
As a result, I recommend saving the focus on Outside Bars for another day. By that I mean, focus on the 'low hanging fruit' until such time where one can bring a finer tool set into more consistant use. Remember, try to think in terms of continuation and change, rather than FTT, FBO or Left Trend Line Bounce and Flaws.
With respect to your second question above, of course it was reasonable to anticipate as you suggest. However, one must also anticipate the other possibilities as well in an effort to remove any anxiety from the equation.
- Spydertrader
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