Spydertrader's Jack Hershey Futures Trading Journal

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Below is my view, which may or may not be correct. Someone else may see these from a different view or situation. I hope to bring those out. What do you think or see?

1. What is the difference between a retrace and a reversal?

Lower volume on the retrace, increasing volume on the reversal.

2. What is the leading indicator of a trendline BO?

For leading we have an FTT after a retrace, a R2R or B2B shift, or the YM BO first.

3. How does the price test R or S?

On support there is usually lower volume as it’s approached, thinking new point 3. Usually increasing volume going to R, then a taper off for the retrace. With increasing volume we go past both points.

4. How do you know a BO is going to fail.

Wow, tough one similar to the question Ivo asked the other day. How can you know until it happens? Watching the Gaussians?

5. How do you know when a BO has failed?

FBO has volume come in to go opposite the BO. Here I’m thinking of a RTL break that reverses and gives a new point 3. Or a CCC or lateral/stall BO that initially breaks out and volume but quickly stalls and a volume increase in the other direction.

6. If R is broken where do you look for the new value of S and vice versa.

R being broken would be a volatility expansion, we extend the channel for new R. New support = new point 3 and might require a new trendline.
 
Very interesting questions. Here's my view.

1. What is the difference between a retrace and a reversal?

Retracement: decreasing volume and then price turning and continuing in the original direction on increasing volume. (possibly after FTT). Reversal: decreasing volume and then increasing volume in one direction with possibly another retracement between. There may also be a retracement of the retracement etc. but you have to see this on forest level. Then when a main trendline with the smallest slope (or more correct: the trendline you have on the screen of all trendlines with the slope that is the closest to zero) is broken that's the reversal. Fridaymorning at around 11:20 this happened.

2. What is the leading indicator of a trendline BO?


Decreasing volume. Volume getting really low. The trendline does simply not exist anymore. Price does nothing anymore at trendline. If price meets resistance there, any resistance, I get suspicious. On YM a BO has already happened. So the answer is YM and volume.

3. How does the price test R or S?


High volume on both. High volume = coninuation. People agree. (maybe not on direction but they do agree on price) and things go as they have been going. Continuation means buying and selling takes place at the same pace. Price stays in the channel.

4. How do you know a BO is going to fail.


After the FTT you expect certain things to happen. First decreasing non dominant volume. If we don't get this then something is wrong. If volume at the trendline is high then trendline will not break or maybe it will break just only for a little while. Of course at the same time you monitor YM.

5. How do you know when a BO has failed?


When price crosses the trendline back again and bar closes there. If volume remains low I still believe in it and price may crawl up a little and may break RTL again (seeming insignificant). However, I would still have closed my position if I had opened one at FTT.

6. If R is broken where do you look for the new value of S and vice versa.


Look for volume in direction of the trend. Spot the gaussians and draw the trendlines. The right trendline is our support.
 
Quote from Ezzy:


1. What is the difference between a retrace and a reversal?

All reversals begin with a retrace.

The gaussians show sequences of the form RBRB2B or BRBR2R.

In other words decreasing volume is a retrace and increasing volume in the same direction, after a retrace, is a reversal.


2. What is the leading indicator of a trendline BO?

FTT, retrace, PRV+.


3. How does the price test R or S?

In waves. If there is a WALL then the line will hold. You often seen quick retreats from S or R and the bars form spikes as the line holds. If the wall is chipped away enough (after more than one attempt usually) and PRV is high enough or the wall is withdrawn, then the line will be broken.


4. How do you know a BO is going to fail.

PRV fades. A true BO requires PRV+ (frantic covering).


5. How do you know when a BO has failed?

PRV fades (as above), DU (a momentary pause), reverse, back into original channel.

6. If R is broken where do you look for the new value of S and vice versa.

Glib answer: R forms new S, S forms new R. (For good reasons.) Look for Pt 3 at the slope to match the market pace (expect a retrace to Pt3 before resume). Pt3 may well be within the old channel as channels overlap.
More...

I think Spyder is on the road. It's not a stretch to think he is squeezing in some R-R (in Vegas?) before he B back for the next part of the syllabus.

P1
 
Im about 75% sure he's on vacation. I think I remember him posting something a couple weeks ago saying he was going to the DR soon? I could be wrong but thats my guess.

Quote from optionpro007:

Spyder's last post was March 29th in the morning.

Anybody know where he is?
More...
 
He's on a short work/vacation trip. He should be back Monday or Tuesday.

He's heading to the Dominican Republic in a few weeks - not sure exactly when, but he'll give us a heads up about his depart and return dates before he goes.

-Au
 
1. What is the difference between a retrace and a reversal?

A retrace is a decrease in volume in a dominant channel, before resuming in the same direction ( continuation).

A reversal is change in the dominant channel, Gaussians R2R and B2B forming an FTT with an increase in volume ( change).

2. What is the leading indicator of a trendline BO?

The leading indicator of a trend line BO is the volume.

3. How does the price test R or S?

The price tests R and S with an increase in volume. If the volume is greater than the previous peak, these zones will be penetrated by the buyers/sellers.

4. How do you know a BO is going to fail.

The price bar closes back in the operating channel with decreasing volume.

5. How do you know when a BO has failed?

The price goes back in the operating channel with decrease in volume.

6. If R is broken where do you look for the new value of S and vice versa.

Previous resistance becomes support and previous support becomes the new resistance.
 
Thanks to those that gave answers. I wanted to comment on #3 and #4 and look a bit deeper at #3.

3. How does the price test R or S?

There might be a difference in what is considered a test vs a BO; or a successful vs. unsuccessful test. A test being a return to a trendline (horizontal or slanted). I saw the reference as to "how" price got there. Could also mean how it acts once there, or how it reverses.

What happens once it's there?
Is there a difference in lateral trends vs up/down trend?

We know what is required to push past these points.

4. How do you know a BO is going to fail.

I saw this as more of anticipating or even predicting Q. I agree with watching the volume during the BO. Need it for continuation. If it's not there we can anticipate failure.
 
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