Quote from hypostomus:
But for the sake of completeness, I will point out a fourth immediate outcome of an FTT, not all that uncommon: a consolidation, often unbearably long.
Consolidation (another flaw), or as Jack terms it CCC, occurs between one FTT and the three End Effects metioned previously. Beginning traders also hold through this flaw - as all the other flaws.
Quote from hypostomus:
Oh, hell, the suspense is killing me. Would we have called an FTT Friday morning at bar 5, 6 or 7? Clearly a trick question given the volume pattern, haha! And regardless of your answer, it makes my point that a better entry (in this case bar 9) often follows an FTT. (I wish Jack had been born later so he would use candlesticks - so much clearer.)
Had you followed the advice given below ....
Quote from Spydertrader:
In an effort to get yourself âup to speedâ (so to speak), review the end of Journal Two beginning with This Post.
Eventually, you would have arrived at
this chart.
For whatever reason, you have chosen not to do so.
What you point out as an FTT - isn't. It's an HVS (High Volatility Stall). In yet another example, you have failed to recognize the appropriate signal. Since an HVS isn't an FTT, your assertion that a better entry exists beyond an FTT clearly has shown to be false.
That is the way I saw it at the time (based on my chart). However, how I see it represents a far less important point of view. How a trader sees the data input in real time makes for how that same trader reacts to the appropriate decision making.
At the beginner stages, a trader holds through an HVS. At intermediate and advanced stages, a trader trades through an HVS - entering and reversing based on the signals given via tools not yet brought into the discussion. For the sake of this discussion, let's assume you did think the HVS was an FTT (bar 5 or 6 [you pick]). The very next bar (seven) provides another FTT (in the opposite direction). Since an FTT followed by another FTT calls for a reverse, the trader who mistakenly identified the HVS as an FTT, would then be back on the right side of the market - after profiting from their misidentification.
As you see, mistakes not only cause the brain to begin to train itself, but as long as the rule set is followed, can often turn out profitable. As a result, misidentification of FTT's presents far less of a problem, than training oneself to take timely action once a misidentification reveals itself.
With all due respect to your trading expertise and tenure, I suggest a better use of your time might be to educate yourself with a review of my FTT posts (beginning with the link 2 paragraphs above), rather than, continually attempting to disprove the threads assertion under the guise of "clarification questions."
Feel free to chose whichever direction you feel best meets your own needs.
- Spydertrader
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