Spydertrader's Jack Hershey Futures Trading Journal
- Thread starter Spydertrader
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FWIW, when I see a "tape" FTT, often it's close (right before or after) to the tape BO. I'm not sure how much faster one can catch an FTT in a tape. Maybe additional tools down the road and experience will help me spot these guys quicker.
However, on traverses and trend channels, I'm working hard to train my brain to spot the FTT WAY before the BO. IMO, waiting for the BO in these types of channels can be very late in the sequence. Ideally, following the 'beginner rules' that have been posted, I want to be HOLDING thru a BO, not entering.
That said, if BO's are working for you, then cool.
Good trading to you...
spooz
Sorry about not color coding up and down price and volume. My free charting Software doesn't let me.
I am not sure what the value of my observations about today will be. I am hoping to solicit opinions and gain more insights into the working ( ie. tradeable ) aspects of volume in today's action.
1) There were few FTTs today on the 5 minute factal.
2) Most of today's volume was spent in the morning trades and
price drifted with low volume from around 10:15am to about
12:30pm. Volume /selling pressure really came in this
afternoon.
3) I noticed today that volume really dissipated when the price
was riding the downward sloping right trend line
Today's chart is attached and it pretty much mirrors the charts that I've seen posted today.
I am not sure what the value of my observations about today will be. I am hoping to solicit opinions and gain more insights into the working ( ie. tradeable ) aspects of volume in today's action.
1) There were few FTTs today on the 5 minute factal.
2) Most of today's volume was spent in the morning trades and
price drifted with low volume from around 10:15am to about
12:30pm. Volume /selling pressure really came in this
afternoon.
3) I noticed today that volume really dissipated when the price
was riding the downward sloping right trend line
Today's chart is attached and it pretty much mirrors the charts that I've seen posted today.
Clym,
I attached your chart with some comments. I didn't see all of the
ftt's that you saw. I placed red arrows where i thought ftt's were.
I also placed a new green trend line just to show an alternative perspective.
Your smaller scale between prices and the bigger chart size made your chart easier to read than the chart i attached in my prior post.
I attached your chart with some comments. I didn't see all of the
ftt's that you saw. I placed red arrows where i thought ftt's were.
I also placed a new green trend line just to show an alternative perspective.
Your smaller scale between prices and the bigger chart size made your chart easier to read than the chart i attached in my prior post.
First of all, thank-you to everyone who sent their well wishes with respect to the new addition to our family. I appreciate the sentiment very much.
Now, on to the ES and the FTT.
I don't want anyone to take this in a negative fashion, but I really don't know any other way to say it without sounding patronizing. I certainly do not intend my comments to fall into that category. Rather than worry about how it sounds, I'll just say it straight and let the chips fall where they may.
For whatever reason, a number of people have failed to follow directions. Perhaps, I did not make it clear. We find ourselves in observation mode at this point. No real money, no simulators. We draw lines (and annotate), and we watch price and volume. We make mental notes of anticipating what comes next with respect to Price (FTT's) and Volume (Gaussians). Now, some of the traders following this Journal already have moved beyond observing and into actual trading because of 1. their trading experience, or 2. their familiarity with Jack's teachings. No problem here. You'll notice these same people already have a firm grasp and an ability to spot on FTT quite quickly.
However, for those of you still having difficulty, please do not use a simulator. Why not? The minute you move to monitoring a P & L (even a simulated one), you have stopped training your brain to see price and volume patterns. The time will come when we will concern ourselves with execution. At that time, you will have trained yourself to never look at your P & L. We are not at that point in time yet, so please, do yourselves a favor, and simply monitor (while drawing in channels and Gaussians, and annotating same) the chart.
Also, I cannot recommend enough, the importance of reviewing the links posted at the beginning of this Journal (as well as other links posted throughout). If you have not yet read through the recommended pages - as outlined in the first four posts to this thread, please take the time to do so.
Now, something more positive ...
I realize some of you are having difficulty 'seeing' the FTT using only the ES. As we add more tools, the process becomes quicker and easier. However, if you cannot see the FTT until 3, 4 or 5 bars later, then you simply need more practice using Price and Volume. I have allotted plenty of time for practice.
In an effort to provide some assistance, I'd like those of you experiencing difficulty to try something different tomorrow. Using only Price, Volume, Channels and Gaussians, I want you to try and anticipate what comes next while looking for the FTT's. I do not mean to say, I want you to predict what comes next, but rather based on where you find price and volume now, what should happen in the subsequent bar(s). Speak to yourself out loud as you do it. I know that sounds rather silly, but it actually helped me, and still helps me when I speak with others via phone during market hours.
The process should work something like this:
"O.K., Price failed to reach the left trend line on really big (30,000 contracts) - huge even - volume on that last bar. PRV Volume (30 seconds) shows 2000 contracts traded and volume is red. No way volume reaches the same levels as last bar. Price already failed to exceed the last bar high. This might be an FTT right here. If it is an FTT, I expect to see decreasing red volume, followed by increasing red volume and decreasing price."
Now you would continue to monitor price and volume looking for changes to your expectations and noticing how the market changes confirmed or invalidated your hypothesis.
Expect to make errors. Expect to be incorrect in your analysis. But, keep talking yourself through each bar until you reach the midday. Review your morning. How did you do?
The above exercise forces a trader to look at the big picture (forest), while at the same time, focusing on the details (trees). At some point, you'll simply become somewhat "in tune" with the market's ebbs and flows. You'll know that price has to come down to a certain level in order to make that "Point Three" Formation. Think how you'll amaze yourself when you think it in advance and then it happens.
Again, I hope everyone takes my opening statements in the light that I intended - an effort to keep people on track and out of the ditches (so to speak). Nobody should take my comments as anything other than an attempt to provide assistance. IF anyone takes offense, allow me to apologize now.
Good Journey to you all.
- Spydertrader
Now, on to the ES and the FTT.
I don't want anyone to take this in a negative fashion, but I really don't know any other way to say it without sounding patronizing. I certainly do not intend my comments to fall into that category. Rather than worry about how it sounds, I'll just say it straight and let the chips fall where they may.
For whatever reason, a number of people have failed to follow directions. Perhaps, I did not make it clear. We find ourselves in observation mode at this point. No real money, no simulators. We draw lines (and annotate), and we watch price and volume. We make mental notes of anticipating what comes next with respect to Price (FTT's) and Volume (Gaussians). Now, some of the traders following this Journal already have moved beyond observing and into actual trading because of 1. their trading experience, or 2. their familiarity with Jack's teachings. No problem here. You'll notice these same people already have a firm grasp and an ability to spot on FTT quite quickly.
However, for those of you still having difficulty, please do not use a simulator. Why not? The minute you move to monitoring a P & L (even a simulated one), you have stopped training your brain to see price and volume patterns. The time will come when we will concern ourselves with execution. At that time, you will have trained yourself to never look at your P & L. We are not at that point in time yet, so please, do yourselves a favor, and simply monitor (while drawing in channels and Gaussians, and annotating same) the chart.
Also, I cannot recommend enough, the importance of reviewing the links posted at the beginning of this Journal (as well as other links posted throughout). If you have not yet read through the recommended pages - as outlined in the first four posts to this thread, please take the time to do so.
Now, something more positive ...
I realize some of you are having difficulty 'seeing' the FTT using only the ES. As we add more tools, the process becomes quicker and easier. However, if you cannot see the FTT until 3, 4 or 5 bars later, then you simply need more practice using Price and Volume. I have allotted plenty of time for practice.
In an effort to provide some assistance, I'd like those of you experiencing difficulty to try something different tomorrow. Using only Price, Volume, Channels and Gaussians, I want you to try and anticipate what comes next while looking for the FTT's. I do not mean to say, I want you to predict what comes next, but rather based on where you find price and volume now, what should happen in the subsequent bar(s). Speak to yourself out loud as you do it. I know that sounds rather silly, but it actually helped me, and still helps me when I speak with others via phone during market hours.
The process should work something like this:
"O.K., Price failed to reach the left trend line on really big (30,000 contracts) - huge even - volume on that last bar. PRV Volume (30 seconds) shows 2000 contracts traded and volume is red. No way volume reaches the same levels as last bar. Price already failed to exceed the last bar high. This might be an FTT right here. If it is an FTT, I expect to see decreasing red volume, followed by increasing red volume and decreasing price."
Now you would continue to monitor price and volume looking for changes to your expectations and noticing how the market changes confirmed or invalidated your hypothesis.
Expect to make errors. Expect to be incorrect in your analysis. But, keep talking yourself through each bar until you reach the midday. Review your morning. How did you do?
The above exercise forces a trader to look at the big picture (forest), while at the same time, focusing on the details (trees). At some point, you'll simply become somewhat "in tune" with the market's ebbs and flows. You'll know that price has to come down to a certain level in order to make that "Point Three" Formation. Think how you'll amaze yourself when you think it in advance and then it happens.
Again, I hope everyone takes my opening statements in the light that I intended - an effort to keep people on track and out of the ditches (so to speak). Nobody should take my comments as anything other than an attempt to provide assistance. IF anyone takes offense, allow me to apologize now.
Good Journey to you all.
- Spydertrader
How rude of you .....
heheIf I may add to this .... a little.
Ask yourself this question.
Were will you be in 3 months from today?
A. You will have followed this journal through and learned the CORRECT way to make money from this method and potentially lose 1/2 of your account in errors and education.
or
B. You will have followed this Journal through and learned the CORRECT way to make money from this method and still have ALL the money that you have right now.
Either way it will still take you 3 months right?
FWIW, I felt pretty good about the FTT I spotted this morning (the first of the year for me ) and I thought I would post it for consumption and comments. I would be very interested in hearing if others spotted the FTT using a different real-time analysis.
Although I didn't spot the FTT at the high of the bar 3, I was able to spot and annotate it before the 5 min bar ended. The big clue for me on this particular sequence was both price and volume-related. Price was dropping from the high/bar. And volume was strong/fast-paced. I don't recall the exact PRV estimate, but the question I ask myself a lot these days is "how much volume is needed to push price to the LTL". Since the high was approx mid-channel and price was falling, I felt this bar was a good 'candidate' FTT. I didn't write down the time but the Chat log has it timestamped at 9:43:32 when I mentioned it (No, I don't know how accurate the ET Chat timestamp is...)
I'm not saying this particular sequence will work every time. I'm sure it won't. I'm just trying to build the (hopefully) finite set of FTT sequences. And this one was worked this am. So, I've added it to my set.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1314016>
Semi-related, the drill that Spyder recently posted has me thinking that it is important to be able record and debrief when annotations are made on a chart. Since I have Excel up and running during the session anyway, I'm going to create a sheet that I can enter comments like "Price failed to reach the left trend line...". With a simple macro, the comment/annotation can be auto-timestamped. Add a Debrief column for after market comments. So, 3 simple columns to start: time (auto), comment, debrief. If this turns out to be useful, more columns can obviously be added for precision. I'm going to try it for a while and if I deem it useful, I could post the sheet if anyone wants it. My theory is that one should be able to gauge annotation progress if an accurate log is kept. We'll see... As a quick side, it would be WAY cool if charting software did this automatically. But don't get me started on this topic...
Sorry for the long post...
spooz
) and I thought I would post it for consumption and comments. I would be very interested in hearing if others spotted the FTT using a different real-time analysis.Although I didn't spot the FTT at the high of the bar 3, I was able to spot and annotate it before the 5 min bar ended. The big clue for me on this particular sequence was both price and volume-related. Price was dropping from the high/bar. And volume was strong/fast-paced. I don't recall the exact PRV estimate, but the question I ask myself a lot these days is "how much volume is needed to push price to the LTL". Since the high was approx mid-channel and price was falling, I felt this bar was a good 'candidate' FTT. I didn't write down the time but the Chat log has it timestamped at 9:43:32 when I mentioned it (No, I don't know how accurate the ET Chat timestamp is...
)I'm not saying this particular sequence will work every time. I'm sure it won't. I'm just trying to build the (hopefully) finite set of FTT sequences. And this one was worked this am. So, I've added it to my set.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1314016>
Semi-related, the drill that Spyder recently posted has me thinking that it is important to be able record and debrief when annotations are made on a chart. Since I have Excel up and running during the session anyway, I'm going to create a sheet that I can enter comments like "Price failed to reach the left trend line...". With a simple macro, the comment/annotation can be auto-timestamped. Add a Debrief column for after market comments. So, 3 simple columns to start: time (auto), comment, debrief. If this turns out to be useful, more columns can obviously be added for precision. I'm going to try it for a while and if I deem it useful, I could post the sheet if anyone wants it. My theory is that one should be able to gauge annotation progress if an accurate log is kept. We'll see... As a quick side, it would be WAY cool if charting software did this automatically. But don't get me started on this topic...
Sorry for the long post...
spooz
See attached chart. As I annotated my charts tonight (Yes, in hindsight ) I ran across this series of Price bars, and felt pretty confident some of you may have confused the Hitch for an FTT. After all, we just had a point three formation (on both the Thick Olive and Thick Green Channels) and even in hindsight, it looks like an FTT. Why isn't it? Take a look at volume (Yellow Highlighted Area). Note the significant difference in volume between the Hitch Bar and the Black Bars on either side.
"Well, that's all fine and dandy Spyder, but how do I know that volume will turn out like this without the benefit of hindsight?"
Fair Question and one that has, no doubt, caused a great deal of frustration.
The answer is one that few people want to accept, and that answer is (for right now), "It doesn't matter."
Yes, that's right. It doesn't matter."
Read that again.
It doesn't matter!
"Spyder, you have certainly lost it. How can the answer not matter?"
Easy. Your errors teach you. First, they teach you how to recognize the differences between flaws and FTT's, but most importantly, your errors teach you how to trade your way out of the mistakes we are all bound to make each and every day. I still get fooled by a Hitch now and then, but because I made the errors before (multiple times) and learned from them, I recognize those errors much faster now.
Using PRV Volume to compare one volume bar to the next (if one of the Tradestation guys could snip an enlarged picture of the Stacked Volume Gizmo for the yellow highlighted area that would be great) allows a trader to monitor the market for the signals which present an FTT or (in this case) a flaw. Now, I could type out each flaw (and we will do this down the road) complete with pictures and video and compare and contrast with the FTT formations, and everyone would have information overload. You'd spend half your time trying to match a price and volume pattern with a specific definition, rather than monitoring price and volume to learn. Such a method of transference fails to provide a sufficient foundation for success.
So for the time being, better we all learn to recognize a mistake quickly. Doing so provides opportunity to quickly correct the error and place yourself back on the right side of the market. Keep an eye on both Gaussian Formations and PRV to monitor your own progression outlined above (talking to yourself during the day ).
Example: At some point on the either the 10:00 AM Bar or the 10:05 AM Bar, a trader feels he sees an FTT forming and enters short. As price moves with the trade direction, the trader feels he made a correct decision. However, after noticing volume levels (and price heading off the lows) concern begins to creep in. Finally, the 10:05 AM bar closes, and the 10:10 AM Bar opens. PRV levels of volume not only show black volume, but also, higher volume levels than the previous two bars. In addition, price failed to head lower than the previous low. The trader now sees the 10:05 bar quite differently and sees it cannot be an FTT. Since the trader now feels they did not have an FTT, the correct course of action requires a reverse trade, to place the trader back on the right side of the market.
Notice, how in the above example, the trader fails to see what would normally occur during an FTT - decreasing red volume followed by increasing red volume. In the beginning expect to have a loss while monitoring. As one gains experience the mistake becomes a wash until finally, a trader can recognize their errors so quickly, the mistakes end up being profitable.
I hope you all find the above information useful.
- Spydertrader
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1314050>
) I ran across this series of Price bars, and felt pretty confident some of you may have confused the Hitch for an FTT. After all, we just had a point three formation (on both the Thick Olive and Thick Green Channels) and even in hindsight, it looks like an FTT. Why isn't it? Take a look at volume (Yellow Highlighted Area). Note the significant difference in volume between the Hitch Bar and the Black Bars on either side."Well, that's all fine and dandy Spyder, but how do I know that volume will turn out like this without the benefit of hindsight?"
Fair Question and one that has, no doubt, caused a great deal of frustration.
The answer is one that few people want to accept, and that answer is (for right now), "It doesn't matter."
Yes, that's right. It doesn't matter."
Read that again.
It doesn't matter!
"Spyder, you have certainly lost it. How can the answer not matter?"
Easy. Your errors teach you. First, they teach you how to recognize the differences between flaws and FTT's, but most importantly, your errors teach you how to trade your way out of the mistakes we are all bound to make each and every day. I still get fooled by a Hitch now and then, but because I made the errors before (multiple times) and learned from them, I recognize those errors much faster now.
Using PRV Volume to compare one volume bar to the next (if one of the Tradestation guys could snip an enlarged picture of the Stacked Volume Gizmo for the yellow highlighted area that would be great) allows a trader to monitor the market for the signals which present an FTT or (in this case) a flaw. Now, I could type out each flaw (and we will do this down the road) complete with pictures and video and compare and contrast with the FTT formations, and everyone would have information overload. You'd spend half your time trying to match a price and volume pattern with a specific definition, rather than monitoring price and volume to learn. Such a method of transference fails to provide a sufficient foundation for success.
So for the time being, better we all learn to recognize a mistake quickly. Doing so provides opportunity to quickly correct the error and place yourself back on the right side of the market. Keep an eye on both Gaussian Formations and PRV to monitor your own progression outlined above (talking to yourself during the day
).Example: At some point on the either the 10:00 AM Bar or the 10:05 AM Bar, a trader feels he sees an FTT forming and enters short. As price moves with the trade direction, the trader feels he made a correct decision. However, after noticing volume levels (and price heading off the lows) concern begins to creep in. Finally, the 10:05 AM bar closes, and the 10:10 AM Bar opens. PRV levels of volume not only show black volume, but also, higher volume levels than the previous two bars. In addition, price failed to head lower than the previous low. The trader now sees the 10:05 bar quite differently and sees it cannot be an FTT. Since the trader now feels they did not have an FTT, the correct course of action requires a reverse trade, to place the trader back on the right side of the market.
Notice, how in the above example, the trader fails to see what would normally occur during an FTT - decreasing red volume followed by increasing red volume. In the beginning expect to have a loss while monitoring. As one gains experience the mistake becomes a wash until finally, a trader can recognize their errors so quickly, the mistakes end up being profitable.
I hope you all find the above information useful.
- Spydertrader
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1314050>
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