Spydertrader's Jack Hershey Futures Trading Journal

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Quote from mephistoII:

Could you please explain your rationale for how you decided upon the 1-2-3 formation which I have circled on your chart? To be clear, it was used to construct your "brown" downward sloping channel. On my chart, I selected the bar after "your #3 pt" as "my #1 point", since I figured the higher high was a logical place for the start of a new channel. And perhaps I didn't bring up the ES chart here until after this actual point in time today - can hindsight play tricks on a person? And am I just splitting hairs here anyway?
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I chose the particular Point One as the beginning of the Brown Down Channel as that was the point of the FTT of the Green Up Channel. If we believe that an FTT marks the point of change in market sentiment, then it stands to reason that we would want to begin our opposite direction channel at that very point. One could have chosen to begin another channel at the point you chose, as it also marks an FTT of the Green up Channel. I simply neglected to annotate it on my chart. If you did not 'bring up the ES Chart' until after price had passed my Point One, then it would most assuredly make better sense to begin your annotations from the current point in time - as you did.

Quote from mephistoII:

Finally, the above leads to a question on "housekeeping". Does this refer to going back and making adjustments to one's annotations, as future price action changes the "chartscape"?
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The only time I 'alter' my channels is when I think I have an FTT only to discover I have encountered a flaw. FTT's do not 'move' locations. We either have an FTT or we do not. Depending on price action, one might see a 'better' channel form. In such an environment, I simply draw another channel in a different color.

Good Trading to you.

- Spydertrader
 
Quote from Spydertrader:

I chose the particular Point One as the beginning of the Brown Down Channel as that was the point of the FTT of the Green Up Channel. If we believe that an FTT marks the point of change in market sentiment, then it stands to reason that we would want to begin our opposite direction channel at that very point. One could have chosen to begin another channel at the point you chose, as it also marks an FTT of the Green up Channel. I simply neglected to annotate it on my chart. If you did not 'bring up the ES Chart' until after price had passed my Point One, then it would most assuredly make better sense to begin your annotations from the current point in time - as you did.



The only time I 'alter' my channels is when I think I have an FTT only to discover I have encountered a flaw. FTT's do not 'move' locations. We either have an FTT or we do not. Depending on price action, one might see a 'better' channel form. In such an environment, I simply draw another channel in a different color.

Good Trading to you.

- Spydertrader
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Thanks a lot, Spyder! Your explanation cleared up several areas of confusion for me! Until next time, as I stumble down the path of enlightenment - cheers ...
 
Quote from Spydertrader:

I chose the particular Point One as the beginning of the Brown Down Channel as that was the point of the FTT of the Green Up Channel. ...

- Spydertrader
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Spyder, wasn't the Green Up Channel broken very significantly by 10:05? You have it marked as BO. Later the new uptrend is in place marked by your blue channel lines with extensions. Do these old broken channels (like the green one) come into play again when price reenters them after BO? This amounts to multiple channels in the same direction on the same fractal. Yikes!

FWIW, I annotated the action similar to mephistoII. But like him, I'm just learning.

This is my first attempt to attach a screenshot. We'll see how it comes out.
 
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Quote from Spydertrader:

If we believe that an FTT marks the point of change in market sentiment, then it stands to reason that we would want to begin our opposite direction channel at that very point.


- Spydertrader [/B]
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I understand how an FTT makes a logical point one, but does a point one have to be an FTT? If we get a bar that extends fully to the LTL or even expands the channel and then prices reverse, can that be a valid point 1, or should the new RTL be drawn from the following bar that failed to traverse?

Mak- any insight on volume would be appreciated. I have the basic tenant that increasing vol= continuation, decreasing vol= change, and constant vol= slow drift down. In the past I have monitored 30 sec. bars on ES and can more easily see the fluctuations in vol on the shorter bars. In the current scope of 5 min bars and absent finer resolution tools I'm having a hard time differentiating formations based on volume changes. In spyders chart for today he highlighted a volume formation around the afternoon FTT. At this resolution, should I be looking at multi-bar volume trends, or intrabar pace changes? TIA.
 
Channel Mechanics Question:

I'm starting to see ftt's now (caught the one near the end of the day) but often I'm a bar or two removed from the actual FTT that I see on Spyder's charts.

My question is when I draw the new channel, do I use the FTT I drew, knowing it is a bar or two late, or should I draw the new point one from the actual FTT?

TIA,

Doug
 
Quote from C99:
I understand how an FTT makes a logical point one, but does a point one have to be an FTT? If we get a bar that extends fully to the LTL or even expands the channel and then prices reverse, can that be a valid point 1, or should the new RTL be drawn from the following bar that failed to traverse?
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C99,

I posted this snippet a while back in Journal 2...

<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=1315212>

spooz
 

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Quote from spooz_trader1:

C99,

I posted this snippet a while back in Journal 2...

<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=1315212>

spooz
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i think that would explain it. Great help by the way. Now I know how exactly BO works. Thanks:)
 
This may be of use to someone. I use 2 versions of the 5 min chart. First one is exactly as Spyder describes and shows in all his excellent annotated charts. Sometimes though I find myself missing the forest - all I see is trees i.e. zoomed in excessively with lots of channels/tapes.

By having a second cleaner version of the chart to refer to as well, I get to see a better overall picture of the day. On the forest chart you are concerned with a better quality FTT vs every FTT when it comes to a physical trade, your projected channel lines allow you to end up seeing more potent FTTs with improved clarity and nailing them in a relaxed mode.

The forest view shows the wider channels and they tend to stick until the next potent FTT which will result in a new channel.

To be clear here, this is only an aid if you find over channeling is blurring the vision. There will be more FTT trades on the table - this is merely an easy way to see a subset of the available superset.
 

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Quote from rateesquad:

i think that would explain it. Great help by the way. Now I know how exactly BO works. Thanks:)
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Hey, there, rateesquad - hope you don't pin me to the mat for this inquiry :)

I'm dumber than a box of rocks here - could you expand a bit on your statement: "Now I know how exactly BO works."

The diagram seems to depict the arrival of a BO at the time of intersection of the two channel lines. Seems like in the example on the left, this could occur before price has actually vacated the previous channel. While the example on the right easily shows price would be well outside the channel before the latest RTL could be drawn ??

I just hope someone else can benefit from my ignorance - lol!

Thanks ...
 
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