Spydertrader's Jack Hershey Futures Trading Journal

[ivob]

Quote from Ezzy:


I had a lot of neutral sqz/str with short term blips in both directions so it seemed more a fine measure (if trading the leaves) than a confirmation of the longer swings - meaning I didn't find it helpful either during this period.

Hi EZ,

You are right. But long swings start with moments of change (FTT's). We zoom in and look at str/sq among other things and conclude. How long the swing will be we don't know. It's these moments (like possible FTT's) I'm talking about when I noticed opposite signals (strong positive str/sq values). Had these values been neutral I wouldn't have cared about it.

regards,
Ivo

 

[Bearbelly]

The first day of the chat room turned out much better than I expected. It is in Paltalk under Business/daytrading and is called
Channeltrading. Members are required to have at least an elementary knowledge of the method and its terms. We will not be answering questions like, what is an ftt, what does b2b mean?As of Monday it will require a password. PM me for the password if you are interested and if you already are familiar with the basics of the method. I am sending the password to those of you whose nicks I know. If I overlook anyone please chalk it up to bad memory and pm me for it. As per Magnas request please DO NOT ask questions about the room here in the forum as I will not answer them. You should pm me with any questions. I was hoping to have sound in the room Monday but Paltalk is having some issues and we will have to wait until they get it straightened out. Thanks to all who participated.

 

[Avi 8]

Here you go Ivo-

Quote from Spydertrader:

Let's take a look at Volume as a tool for trading the ES ....

If you notice my charts, you'll see several lines drawn through the volume bars.

Red Line - 2500 level
Blue Lines - 4500 and 7000 levels
Green Lines - 9000 and 19,000 levels

Everyone should add these levels (or an iteration there of) to their ES Charts.

These various levels represent the 'pace' of the market (I may have the levels slightly off, but Jack can provide the exact levels he uses). Think of it as what to expect from price when volume reaches these levels. The greater the level of volume, the greater the movement of price.

Mak posted his observations with respect to Volume, and I encourage everyone to review his post.

In addition, the Gaussians Attachment lays out our expectations for price movement based on continued volume increase. Note the Gaussian changes at the point of an FTT.

I hope everyone finds the above information useful.

- Spydertrader

-Mike

 

[Avi 8]

Here is YM info, Ivo-

Quote from Spydertrader:

First we need a measurement of Volume Pace. Similar to the fashion in which we added ES Volume lines, add the same lines to the YM at the following levels:

1200 High
600 Medium
400 Low
200 DU

I use 250 for my YM DU level, but the above Volume levels Jack has recommended.

[/B]

-Mike

 

[mephistoII]

Quote from Ezzy:


The lower peak volume (15:10 bar) has to do with extending the daily range. The previous peak had made a new high for the day. To extend that high you would expect "more" volume. The prior peak seemed to be peaking volume. Since we didn't get near that, to me it said we're not going higher, momentum is waining. So while I was pretty confident it wasn't going higher, the increasing black did worry me. Except for a couple minor blips after that, that was pretty much it for the day as we went sideways into the close.

Thanks for the comments. IMO debriefing these "rough" areas is very important as the bigger moves have much more room for error.

Regards - EZ

Ezzy - the above comments raise an issue that has caused some confusion personally. Considering this type of action the past couple days (slow grinding trend) , there were several examples of new highs in price on lower volume. Whenever I push the chair back to see the forest, then I can easily draw a descending black ray over these volume spikes. It is then not very difficult to find a higher time frame chart that confirms what we are viewing is just a non-dominant traverse within that view's dominant downchannel. I should add, the gaussian on this higher tf chart also supports that scenario.

So, my question is this. Are these declining volume peaks also a function of time of day and number of participants - kind of a normal daily decrease in activity. This is most probably an oversimplification of mkt action, considering the myriad variables, but something I've wondered about just the same. Regards ...

 

[Ezzy]

Quote from mephistoII:

So, my question is this. Are these declining volume peaks also a function of time of day and number of participants - kind of a normal daily decrease in activity. This is most probably an oversimplification of mkt action, considering the myriad variables, but something I've wondered about just the same. Regards ...

Typically the days volume will look like a saucer. And you get a W or M day. 2 legs in the morning, congestion, 2 legs in the afternoon. We've had a bunch of days recently that continued to trend (or grind) through lunch or had several saucer type volume patterns during the day.

Usually you can almost treat the morning and afternoon sessions as separate days. Near the close can be tough as a lot of settlement can take place in a narrow range. Yesterday there was 20K cars traded on a 2 tick bar and 28K on a 3 tick bar. With that volume you'd normally expect a 1.5 - 2.25 point bar.

BTW, the higher time frame comment was a good point. Usually I always check the higher time frame and work my way down, especially when it's a low volatility day, slow. Friday I didn't and that may have been helpful.

Regards - EZ

 

[Ezzy]

Quote from ivob:

Hi EZ,

You are right. But long swings start with moments of change (FTT's). We zoom in and look at str/sq among other things and conclude. How long the swing will be we don't know. It's these moments (like possible FTT's) I'm talking about when I noticed opposite signals (strong positive str/sq values). Had these values been neutral I wouldn't have cared about it.

regards,
Ivo

I have a little different view on the sqz/str, and my settings may have been different as I adjusted in the afternoon to 58. So I was mostly neutral through there and didn't get any strong signals. Wish I had recorded the session.

My view is the +2, -2 levels are a guide. Kind of like the volatility for a given volume can be skewed from one day to the next. I keep a line at the +5, -5 levels. Those tend to be the strong signals, seen more often at major turning points. They tend to stick for a while too, the more they stick the stronger the signal.

Much of the time sqz/str has quick spikes back and forth and can really mess you up, especially if they are just a bit past +2, -2. I'm sure you've noticed times in the same bar getting several long and short sqz/str signals, sometimes very strong in both directions. During a trend "usually" it will tend toward the trending side of neutral but not always.

At the Forest/branches resolution I look for the bigger sqz/str numbers at FTT's and TL's. As Spyder said, sometimes it doesn't give a signal. When we get down to fine I think the blips and shifts will be more important.

All this is based on my opinion and observation, FWIW. Someone else may see it very different.

Regards - EZ

 

[WGTrader]

Quote from Ezzy:

Wish I had recorded the session.

Ezzy,

Here is my Excel file with the tick data from yesterday. (times are EST). You can see the calculated offset I used and the S/S spreads are highlighted (green over 2.0 and red under -2.0). It is interesting to note that there was quite a bit of S/S action between 10:00 and 10:04, again between 10:38 and 10:39, and a little around 1:15. The rest of the day was rather tame. I'm new to this tool but I'm starting to see that it does signal "something" around the FTT's and other key movements. I just have to learn what it's saying!

 

[jack hershey]

I have your chart before me and I will splice in some comments below.

The approach I am using to comment to you is to improve the overall context for trading.

I will use differentcolors in the comments because I want the different kinds of things I am addressing to stand out

Red will be overall general practices.

Green will by annotating technicalities.

Blue will be confirmations of something done correctly that you need to keep doing to build experience.

Italics will be a notation on your currrent thought typed in expressing something that I have something to say about.

So the colors all come together to offer a comprehensive view of the time from 14:30 on for the 13APR07.

My response will take several posts because I want to do a series of charts to make my points.

Quote from Ezzy:

Wanted to post a tough afternoon section (for me at least ) and break it down.

when things are getting tough there is a reason. The market is always doing the same thing: telling you what is going on.

By annotating, you steadily and surely provide a ball park in which to bat. The scope and bounds of what is possible pricewise is always before your eyes. you have a reason to annotate it is to KNOW what the playing field is and the limits of the playing field.

We use greys to see the more detailed traverses within the 1 weight lines. (green for long and red for short); a 2 weight boundary is made for the 1 weight movements. I note laerals of all weights (and greys) in yellow.

Thus I am emntally color and weight coordinated and I KNOW what is going on. The EFFECT for me is sports memory trading.

YOUR TOUGH AFTER NOON STARTED AT THE LEFT SIDE OF THE es CHART OR BEFORE

the discussion I am doing starts at the red double arrow on the left of the ES chart. The YM does not come into play until the green up arrow (also denoted nicely by the thin dark green vertical line). See attached chart

Annotation is not in a good place at this point in time.


At 14:50 it looked like an FTT on the ES, was clearer on the YM. Change

15:00 Everything looks fine and declining red on the YM. Non-dom retrace but also looking for a #2.

15:05 There is a tape BO on declining volume on the ES. YM had a bump in volume but a couple were DU volume so I thought hold. Watch for #3

15:10 We get increasing black. Now I'm thinking continue. Starting to really worry and think wash and reverse. But the volume is much lower then the previous peak. So lots of questions here. Looks overall decreasing black, but it's going against me.

15:15 By now the YM has put in a possible point 3 for a lateral. The ES follows suit. We get declining red on the YM. I'm watching for increasing black. During this bar I'm thinking lateral. Hold?

15:20 Have a tape up. But also the lateral channel. I've realized I lost sight of the Forest and trying to work it out. Looks like a stall on the ES. YM has a down tape.

15:25 As we walk sideways for several bars I realize we're working toward the RTL on the ES, the non-dom retrace as when we started 14:50.

Kinda lost track of the forest because the short term action between the TL's sucked me into the leaves. I'd be interested to hear how others viewed the action during that period.

Regards EZ

 

[Bearbelly]

I would like some input on the best way to progress here. It is my understanding that you should be making cash money on a fairly consistent basis using only the 5 min ES chart with channels, volume and prv before moving on. You just watch and annotate the 5 min. You then sim the 5 min until you get consistent results. You then trade the 5 min realtime. When you become proficient at this level THEN you move to the next level. Mak burned this into my brain awhile back and it makes a great deal of sense to me. In the chat room there are a number of people simming with everything up to and including stretch and squeeze without ever having made a dime and I cant help but feel that this is a huge mistake. Having jumped ahead several times over the course of this thread I understand where they are coming from but I did realize that I was making a mistake and backed up all the way to the beginning again. More is not neccessarily better if you are not equipped to handle it. Jack has mentioned that the one minute is way too hyper and I cant help but feel, after watching the 2 min ym for quite awhile that it, too, is too hyper if you are not prepared for it. People are not going to the 2 min ym from the 5 min for clarification but rather watching the 2 min and then going back to the 5 min. Going back to the 5 min only has slowed things down considerably for me and I am doing better. I am posting this, not to criticize, lord knows Im one of the worst about jumping ahead, but to try and get others to keep from burning out before they ever get a grip on this thing.