Spydertrader's Jack Hershey Futures Trading Journal

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Quote from foible:

QQ re trading today

I see a lot of bars on the 2min and even 5min which have shot up on huge vol only to close at or below their open price. How should we interpret this?

The ones I'm thinking of today happened (on the 5min) at 10:00, 10:55.

In other circumstances, I'd have figured that these would indicate an inability to sustain a rally and so would portend a reversal. But not today. Does anyone know what's going on?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1332267"/>
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So this is a later on thing. But just to give you an idea about how it is dealt with I will make a brief comment. FOR ME, the 10:00 and 10:55 were two single bar HIGH VOLATILITY STALLS!!! Your PRV read HIGH VOLUME through the entirity of the bar. Our PV MATRIX projected that HIGH VOLATILITY was in the cards. In other words, we KNOW we will get HIGH VOLATILITY because we have HIGH VOLUME. The STALL part is how the price changes migrated within the bar (ie. close near open). Alot of folks call it an OUTSIDE BAR. Unfortunately, you would have had to look elsewhere to find the turn (ie. DOM). The other way to deal with the action is to just simply isolate the bar, and see if it spikes. If you get a spike off from the extreme and volume is still running it's course, then the bounce off the extreme has been sustained. Of course, a counter spike can occur between extremes and head back into extending the extreme of the bar. For a few of us, these types of bars are very special (ie. HIGH PROFIT BARS). On these types of bars, you are looking to catch both directions and double the H-L of the bar. Admittedly, this is not easy and you have to KNOW WHEN and WHERE to look for your dataset. We will deal with these bars later. For now mark them as flaws. We do not need to speculate as to what happened here. When we get to dealing with STR.NEUT.SQU, spyder and I will specify the bone we pull from under our sleeves to immediately pick off and up all that these isolated bars have to offer...

Regards,
MAK

PS.
ALSO!!! KEEP IN MIND that you pointed out 2 bars which are FLAWS for you. If you get hung up on 2 bars, you miss the big picture. If the majority of the bars are business as usual, do not concern yourself with the 2 outlying bars. Alot of traders screw up all the time by concerning themself with every little detail. PV is about the herd, NOT the actions of a lone trader within the hred. If you nail identifying DOMINANTS and NON-DOMINANTS, then you will "see" that the big picture is a continuous non-failing sequences of these cycling pairs. Every CHANNEL, PENNANT, LATERAL have cycling Ds and NDs. Sometimes, you get the D and ND on the same bar. For now, classify these two bars as having both a traverse (dominant) and retrace (non dominant).
 
Quote from jack hershey:

It was my birthday yesterday so I am running several 250 contract partial fills into the market.

Sorry about the spikes.
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Hope you had a Happy Birthday Jack and you have many more.

I am not quite as old as you (getting close) but old enough to realize that every morning my eyes open is a good day.

I just wanted to tell you how much I appreciate the effort you and Spyder and Mak have made. Although I haven't completely absorbed all the details yet, I can see a better future.

Thanks.
 
Here's todays chart. On the gaussians I took more a of a forest view.

Questions on the gaussians:
On the ellipse there was low volume and didn't seem to be any dominant direction on volume. Are gaussians always there or only with higher volume/volatility? Is this where we get into odd/even harmonics?

On the last R2R we're in a stall, so is it R2R or nothing there?

The last B2? is more of a general question. Sometimes I'll see a black rising to black falling to red rising. We had a shift in dominance but there was no red falling first: B/\R B/\B R/\B. I thought B2B and R2R were only "between" the gaussians: B/\R R/\B. Is that ok or am I reading it wrong?

Regarding the stalls/flaws MAK mentioned - I hope we get into more detail on these as my notes have various definitions of dips, hitches and stalls, and it would be nice to nail these down. At the end of the day it looked like we're in a stall, then volume picks way up as trades are closed out. So HVS or? Is the stall a close near the open, or a bar high (low) same as the last bar?

- EZ
 

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Quote from Ezzy:

The last B2? is more of a general question. Sometimes I'll see a black rising to black falling to red rising. We had a shift in dominance but there was no red falling first: B/\R B/\B R/\B. I thought B2B and R2R were only "between" the gaussians: B/\R R/\B. Is that ok or am I reading it wrong?


- EZ [/B]
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I'm seeing this too. Is this a valid transition?
 

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Quote from makosgu:

ALSO!!! KEEP IN MIND that you pointed out 2 bars which are FLAWS for you. If you get hung up on 2 bars, you miss the big picture.
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Thanks Mak, I guess I needed to hear that. I identified two FTTs less than a minute after the bar closed which is a huge improvement for me. Instead of thinking of the gains I'd made, I was just focusing on what more to learn. It's good to keep perspective.

For now, classify these two bars as having both a traverse (dominant) and retrace (non dominant).
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Interesting. Okay, I'll go over the tick data and see how that works. Thanks for the insight.
 
So, you pumped the market to illustrate your "Volatility Compression" theory, I guess.

According to Mak, the high bar (supposed at 10am , you entered several 250 contracts) representing HVS; may I say that it is a compression and led to an expansion afterwards(for 11 bars).

Very good present that you gave to youself.
 
Quote from C99:

I'm seeing this too. Is this a valid transition?
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The 1pm to 3pm region was definitely interesting if not tricky. This is why I keep my PV VERY STRICT, especially in regions as such. I am hoping to finish my remaining posts and thus be effectively caught up with the thread by the end of the weekend. Additionally, post 3:45 pm, we get in to end of day effects in which many daytraders are simply closing out their position across all fractals. In other words, it is the opposite of what we see in the first 15M where the initial volume is attributable to the herd of daytraders putting on positions across the range of daytrading fractals. This post 3:45 pm is subject to a myriad of flaws that have categorized as "END OF DAY EFFECTS", better known to me as "END OF DAY FLAWS".

Regards,
MAK
 
Quote from bucherwin:

So, you pumped the market to illustrate your "Volatility Compression" theory, I guess.

According to Mak, the high bar (supposed at 10am , you entered several 250 contracts) representing HVS; may I say that it is a compression and led to an expansion afterwards(for 11 bars).

Very good present that you gave to youself.
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You'll have to pardon Jack's sense of humor. I find it to be strangely different and admittedly amusing. Wait till he starts phoning ahead to the floor to approve market turns...

LOL!

Everything here can't be dry. It is good to have humor amongst the nitty gritty...


:cool:
MAK!
 
Some Gaussian food for thought. Ezzy's chart for the day spurred me to think through some common Gaussian PV action.

Take a look at the almost identical attached examples, A, B, and C. Ex A is the textbook progression that we are all comfortable with interpreting. B and C are identical price and volume charts and quite similar to A, but with different Gaussian interpretation. B shows an extra cycle where R becomes dominant.

I arrived at C by the following thought process. I look at price first and attempt to identify a movement of 2 or more trending bars. I then assign a guassian letter B or R for doms, b or r for non doms, to each price movement. If you assume that the line price in the examples is progressing price bars without flaws, then each price movement up or down begins at an H or L point. The important point is that there is only ONE price movement in each red or black leg, all the way from the H to the L, that I am attempting to assign a label to. Therefore, up and down variations in the volume for each leg are viewed in the entirety of the price leg.

Using this spot the trend first, assign a Gaussian second, has greatly simplified what had often been a frustrating process. Ezzy, maybe this will help with your interpretation of the area within the ellipse.

I hope this Gaussian interpretation is a correct one. We'll see what the experts say.

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1333385" />
 

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