Spydertrader's Jack Hershey Futures Trading Journal
- Thread starter Spydertrader
- Start date
- Status
I think that it is important to consider context. Did the first long black bar follow an right trend line BO from a short channel? If so, then the subesquent retrace to form the pt 3 could be anticipated. If we were already in an established long channel then the pt3 as shown is an FBO following the ftt. Does that answer the question?
Guess it depends on what resolution you are monitoring. No change (i.e., continuation) in the forest, while seeing change in the tree. That leads me to ask: if one is trading at tree level, would he act on a BO after a single bar closes outside the tape RTL? Or, is that too late, as he should have already acted on the FTT?
Mr. Black, you seem to possess excellent annotating skills, and a solid understanding of the PV relationship. May I ask how long you have been studying the material? Hoping you will be inclined to continue posting your thoughts and observations. Regards ...
Mr. Black, you seem to possess excellent annotating skills, and a solid understanding of the PV relationship. May I ask how long you have been studying the material? Hoping you will be inclined to continue posting your thoughts and observations. Regards ...
I am sure that the present guidelines suggest entry at the FTT for the tree level or at the pt 3 for the forest level. Entry during the RTL BO is kind of in between the two and one might anticipate taking some "heat" during the retrace. I also think that it important to be able to recognise when a mistake been made asap. Both FTT and pt 3 entries allow this.
Good points, dkm - thanks!
Cool, we're still talking PV & Gaussians. Here's my debrief on the first snippet...
Starting with 2 bars, you've drawn in tape. If you're glued in RT, this is how one can start to build a channel. In snippet 1, we don't have any CO's or overall NOW sentiment. In other words, the NOW is the tape. And the tape ftt on bar 3 has so far done it's job as price has retreated back to the tape RTL.
If this is all I have to go on, I'm thinking that price has gone higher for 3 bars on decreasing black volume. If this tape is a dominant traverse, my interpetation of PV has me thinking CHANGE. Of course, price could be in a wider down channel and this tape the B part of a R2B. I don't automatically think price is in a down channel when I see price rising on decreasing black volume, but maybe I should.
Now, keep in mind, we're zoomed in here. Price is operating in a tape. Sure, there are times when a tape RTL holds and price continues in the current direction but we usually see volatility expansion (VE) in this scenario, right? And we're not seeing VE on these 3 bars, at least yet. We're seeing price moving higher on decreasing black volume.
If no VE, then another scenario, which jives with zoomed-in PV is that the tape will widen. Channels widen, right? Tapes widen for sure, IMO. Bar 3 might be the beginning of a Flaw sequence. Maybe a hitch, stall, etc, or a lateral.
Does the tape ftt on bar 3 signal "wider"/zoomed out sentiment change? Well, IMO, no. IMO, a FTT at any resolution has me anticipating, "price should retrace back to the operating RTL". The key word is "operating". In this snippet, the tape RTL. If increasing red comes in, we should see a R2R at the tape resolution. If low vol comes in, price prolly will "walk out" and the tape will widen.
Regardless, unless another shot of black volume comes in on the next bar (bar 4), price will prolly have a hard time continuing in the dominant direction, at least in the operating tape. Change? Or, maybe another way to look at it is, "not continuation".
As shown in snippet 2, price BO'd the tape and the next bar went lower in decreasing red volume. And another tape. Cool, this time, a short tape.
In the short tape, price is attempting to go lower on decreasing red volume. Granted, we're zoomed in big time but I've only got 4 bars to work with in the NOW. PV has me thinking CHANGE (or maybe Not Continuation) in this tape. Agreed? Using the same analysis as above.
Increasing black comes in on the next bar and we now have a candidate "new point 3" (long). And we get follow through. Now, we can go back and "fix" our gaussian, as annotated in snippet 2. A B2R. And we're finally in a traverse, a bit closer to the Forest
.So, to summarize, did we see CHANGE in the 2 tapes, at the tape resolution? If all I had in the NOW were the 2 tapes, then yes, IMO. But at the tape resolution, nothing more. But, as snippet 2 shows, this CHANGE was brief and really No Change after the wider channel is built. Comments?
I'm not sure that I answered the question. And I had to zoom in, slightly OT to the Forest, sorry. We don't have the tool set to trade at this resolution, right? But I attempted to debrief using my knowledge of PV. Of course, just my opinion and as always, I could be wrong. But Change/Continuation is the key at all resolutions, right?
Sorry for the long post, yet again...
spooz
Kudos for the thorough explanation (and the effort), spooz. Very evident that you continue to DO the work ... regards ...
These questions were posed by Jack in another thread. Seemed like a good idea to go through them to make sure we have it down. Hope this spurs some good discussion. Hereâs the original post:
http://www.elitetrader.com/vb/showthread.php?s=&postid=1418429#post1418429
1. What is the difference between a retrace and a reversal?
2. What is the leading indicator of a trendline BO?
3. How does the price test R or S?
4. How do you know a BO is going to fail.
5. How do you know when a BO has failed?
6. If R is broken where do you look for the new value of S and vice versa.
http://www.elitetrader.com/vb/showthread.php?s=&postid=1418429#post1418429
1. What is the difference between a retrace and a reversal?
2. What is the leading indicator of a trendline BO?
3. How does the price test R or S?
4. How do you know a BO is going to fail.
5. How do you know when a BO has failed?
6. If R is broken where do you look for the new value of S and vice versa.
- Status