Spydertrader's Jack Hershey Futures Trading Journal
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Not so sure about bar 7. Your commentary for it rings true, except it is an outside bar that closed well above the price on bar 6. Therefore I can't make the conclusion that it is an R2R. In fact it could just as easily be a rejection of going lower, getting set to resume the dominant B. I would consider it an HVS, until direction is more clear.
I'm also uneasy about the FBO on the red channel (bar 15) because I don't buy the channel. It looks like a tape that was extended. I see bar 15 as point 3 that would set the red channel, but I would have trouble marking it so until bar 16, when price breaks lower. But since it breaks on declining volume, I wouldn't want to trade this traverse. At this early point in my development of the JH method, I'm only wanting to trade right to left dominant traverses, and FTTs of channels. Don't know about exiting on tapes at this point either, though I like your logic there (bar 11).
Thanks for putting your analysis out there. It helps to see what others are thinking.
Thanks for the comment! You are probably correct on most of what you said. To clarify, this chart was done in hindsight and I am trying to build the logical foundation for how my thought process should go real-time. One thing that trips me up is which FTTs to reverse on, how many actions to take, etc. For example, if I'm long after an FTT and five bars later there's an ftt (lowercase) at the same time as an FBO (uppercase), does one reverse because it's an ftt or exit because it's an FBO? I am always finding situations where there are multiple end results at the same time, if looking at multiple channels. Assuming one is operating on the most BASIC level, as one should be for January, what would be the unquestionably "correct" actions to take in this sequence? I.E. WWSD (what would spyder do) with just price/volume to go on, and the three basic rules, on the snippet I posted?
One thing that comes to mind is to rely the Gaussians. Has there been a change in the Gaussian dynamic. Has the traverse from the FTT turned into a dominant? If so, no reverse, if it is still non dominant, reverse.
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I am always finding situations where there are multiple end results at the same time, if looking at multiple channels... [/QUOTE]
I can get confused when there are too many channels in play. I try to decide which channel is the most immediate and important, and stick to that one. If one uses the longer term channels and multiple channels all the time, it has the effect of making every PV reversal action an FTT. So I only use those when they support what the immediate channel (not tape) is saying, or there is no established immediate channel, or I'm getting quite close to the RTL or LTL of the longer term one. Don't know if this is a valid course of action or not.
I can get confused when there are too many channels in play. I try to decide which channel is the most immediate and important, and stick to that one. If one uses the longer term channels and multiple channels all the time, it has the effect of making every PV reversal action an FTT. So I only use those when they support what the immediate channel (not tape) is saying, or there is no established immediate channel, or I'm getting quite close to the RTL or LTL of the longer term one. Don't know if this is a valid course of action or not. [/QUOTE]
EstebanUno - thanks for posting the volume formations. Hopefully we'll get some answers on that. I have a theory that when we get into congestion or stall where the bars go r-b-r-b-r-b-r-b and there is no dominant, that there is no gaussian and we need to wait for the dominant to show up. We'll see how this plays out.
If I understand what you're saying ( I apologize if I misunderstood) as far as the overlapping channels I think you are on the right track. But there should always be some established channel extended forward, even if it's a carry over channel. The intermediate channels are the ones to trade right now. They are in context of the long term - so you can see where you are in the long term channel but the intermediate channel will most often be where you get your signals (FTT). Sometimes as the intermediate approached the long term the market goes sideways.
If you check the daily chart, you'll see this last week price was oscillating around the right downtrend line.
With the tapes, if you get to the left line and it's a wide intermediate channel, the tape might be the only way to get a FTT for the retrace. What I mean is if the channel is slow and wide, I don' tthink it's prudent to wait for the intemediate to show a blatant FTT when the tape does, and it's a long move to the other side.
When referring to SCT the trading frequenct is 20 -40 trades a day. So you see where all those "making every PV reversal action an FTT" come in. The small micro traverses are traded. That is the end game we'll eventually get to.
Personally, I aim to annotate the matter like B. The truth of the matter is that while in RT, I do not know what the next bar will be (ie. +PRV/-PRV). As a result, my RT anotations are more B and rarely C. Clearly, A is the ideal case. However, there are a fair number of Bs which we have to deal with. This is where the bigger picture becomes iimportant. So what to do? If we pick B apart, I would have noted two things. 1. Whether the first 2 red bars were inside price bars. If they were, I would written them off as a STALL (ie. not an HVS). 2. Whether the first 2 red bars were drifting lower. If they were, then it was business as usual and a retrace. NOW, on the third red bar, I would have had your r2R and would have started annotating a new SHORT CHANNEL the moment I saw a +PRV. The next bar is black and -PRV. For me it appears as business as usual for the new SHORT CHANNEL. The picture of this new SHORT CHANNEL would have looked like I had 2 bars where the +PRV is my dominant of the new SHORT CHANNEL and the -PRV would have been my retrace of this new SHORT CHANNEL. However, on the next bar, I would have +PRV and at the very moment I would have annotated a new LONG CHANNEL since it is a new dominant. Personally, for me, this is why I keep things strict. I had r2R and a b2B. Although it would have cost me less to do a C, B also keeps me on the right side of the market without knowing that B is actually C.
Regards,
MAK
Mak, thanks for the comments. It really helps my understanding to see your thought processes behind this. I see your point about RT. C is much easier to arrive at in hindsight. B is just reacting bar by bar.
I've noticed that not only dominate traverses, but also retraces often come to an end with a shot of volume. RT it is hard to tell if this is the retrace becoming dominant, or its swan song. The volume increases compared to the previous bar (especially if the previous bar was fairly low V), but is still way lower than it was when the retrace started at the H point. So even with the increase it's still a decrease overall. At least that was my justification for how to arrive at C realtime.
Perhaps the 2 min will help with this, or a close RT watch of how the volume developed at the H point (the highest volume point). The H bar is usually some combination of B and R volume as the retrace begins from the highest point. Then one could see if the increase at the L point was an increase or decrease compared to the R portion of the vol at the beginning of the downtrend.
I'm probably getting ahead of myself, I know. But I've seen some Gaussians drawn on Spyder's chart and others that seem big picture oriented and ignore these kind of bar by bar fluctuations.
I've noticed that not only dominate traverses, but also retraces often come to an end with a shot of volume. RT it is hard to tell if this is the retrace becoming dominant, or its swan song. The volume increases compared to the previous bar (especially if the previous bar was fairly low V), but is still way lower than it was when the retrace started at the H point. So even with the increase it's still a decrease overall. At least that was my justification for how to arrive at C realtime.
Perhaps the 2 min will help with this, or a close RT watch of how the volume developed at the H point (the highest volume point). The H bar is usually some combination of B and R volume as the retrace begins from the highest point. Then one could see if the increase at the L point was an increase or decrease compared to the R portion of the vol at the beginning of the downtrend.
I'm probably getting ahead of myself, I know. But I've seen some Gaussians drawn on Spyder's chart and others that seem big picture oriented and ignore these kind of bar by bar fluctuations.
Yes it's the intermediate channels I'm talking about. Thanks for the reminder of the nomenclature. It's not unusual for me to have no new channel when there is a sudden change from up channel to down channel for example, because it takes a while for the point 3 to be established in the new down channel. I'm having a hard time accepting that the extensions of old channels that have been out of play for a long time or by a lot of price action become suddenly important again. If I extend all old intermediate channels forever into the future the chart resembles spaghetti, as someone noted recently.
But I'll keep an open mind about this point and watch for those extensions that make sense to me. I should post an example, but not now.I see your point about wide channels and trading off the tape.
Thanks for the comments. I'm looking forward to the development of the trading frequency you mention. Enjoy the weekend.
Thanks, Nkhoi. I'll be studying that chart closely. But in the morning. Probably Monday morning.
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