Spydertrader's Jack Hershey Futures Trading Journal

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Quote from optioncoach:

So my suggestion is that a major part of the review focus on reading volume.
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I agree. As a result, our review begins with insuring we all understand how Gaussian Volume Formations must match the channels - every channel. The Gaussian Volume Formations appear to create challenges when the Price and Volume Bar color (at the close) fails to match the lines we draw above the volume bars. In addition, varying volume levels (when the volume bars don't develop in the exact fashion as represented by the hand drawn examples provided in the past) creates a source of confusion (Is this increasing? Is this decreasing? It started red, but now its black, so how do I draw this line?).

See the attached chart snippet.

Note the (thin line) red down channel with black bars at either end. Setting aside the Kelly Green Up Channel for a moment and focusing only on the (thin line) red down channel, we annotate volume as red volume from the high down to the low Price Bars(circled red). We annotate in such a fashion due to the fact that Price moves lower on red volume. The flip side is also true. In an up channel, we annotate increasing black as Price moves higher within the channel from the low to the high Price Bars.

Today, everyone should force themselves to make sure every Gaussian Volume Formation matches every Price Channel currently monitored. In other words, had one monitored the Kelly Green Channel in the attached snippet, they would annotate their Gaussians differently from someone monitoring the red down channel. Ask yourself constantly throughout the day, what resolution level do I monitor, and am I correctly monitoring Volume on that resolution level? If anyone comes across an area where they feel confused, post the time here in the Journal.

Remember, your Gaussians must match every channel. Expect to find examples where it appears following such a rule proves difficult. However, after we all work through the logic, things should become clearer in this areas where some have experienced challenges in the past.

As always, one should see decreasing volume back to the right trend line with increasing volume on a breakout. The same rules apply as before, but beginning today, we all need to make sure we strictly follow the Gaussian Formations. In such a fashion, everyone should begin to see clarity as how Volume Leads Price.

If anyone finds the above instructions confusing, please let me know.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1453031>
 

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The attaced chart is an example of my trading ruminations and my problems. Most of my problems happened yesterday between
10am and 11am. After that I had no problems cause I had to get back to my job.

ANy commets wold be greatly appreciated.
 

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Here are my comments for what they are worth:

1. The main reason you had trouble trading on April 31st is that day does not even exist LOL (date on your chart).

2. On the left chart on YM I think you correctly noted the short entry on the breakout of the thin green trendline/channel on increasing red volume and also because it was a point 3 breakout from opening move lower. You also correctly, IMHO, started the red channel going down on that breakout after Point 2 formation, looking for point 3.

However, after a few bars retrace, a large black volume line appeared on move higher above your drawn in channel. I think this would call for a reversal since volume and price did not follow through what you would expect to happen on the BO fo the thin green channel/trendline and in fact signalled strength in the other direction. If you were short you could cover for a small loss and go long and you would have caught the 30 or so point move in the YM following that which would have more than made up for the loss on the quick reversal of the breakout.

I am not at expert status yet but here is a perfect example of where VOLUME tells us we are on the wrong side and we should switch and VOLUME and PRICE keeps telling us it was the right call.



Quote from 8833broc:

The attaced chart is an example of my trading ruminations and my problems. Most of my problems happened yesterday between
10am and 11am. After that I had no problems cause I had to get back to my job.

ANy commets wold be greatly appreciated.
More...
 
This morning on bar 4 (about 1/2 way through bar) I called an FTT. Early in bar 5, the volume situation made it look more like a flaw to me and I reversed to short.

I was happily rewarded. This is the first time I recognized a flaw of this nature so early on. Credit is due to the review of Fridays' HVS. But also, I noted throughout several minutes that S/S seemed to persist more below minus 2 than above positive 2. This didn't occur at any specific decision point, but throughout the flaw. Is this a valid way to use S/S or was it coincidence?
 
Quote from bundlemaker:

This morning on bar 4 (about 1/2 way through bar) I called an FTT. Early in bar 5, the volume situation made it look more like a flaw to me and I reversed to short.
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Nicely done. When PRV shows significantly less volume (40% to 60% less) than the previous bar, my brain begins to think, "We might have a Flaw." While not always the case (FTT's still can develop at these volume levels), once you train your brain, to switch into "Possible Flaw here" mode, you'll catch these more often and with greater consistency. In such circumstances, a trader then continues the bar to bar monitoring (normally only performed at individual resolution level 'action points') to the next bar in an effort to 'see' continuation in the direction of the dominant trend.

Quote from bundlemaker:

I was happily rewarded. This is the first time I recognized a flaw of this nature so early on. Credit is due to the review of Fridays' HVS. But also, I noted throughout several minutes that S/S seemed to persist more below minus 2 than above positive 2. This didn't occur at any specific decision point, but throughout the flaw. Is this a valid way to use S/S or was it coincidence?
More...

You have correctly observed how one goes about switching to Intra-bar monitoring and remaining on that resolution level until the close of the bar. You observed multiple and repeated STR / SQU signals indicating change. Once received, you immediately acted upon the signal, and continued to monitor to insure no opposing signal for change developed Intra-bar. On the next bar, you could see by increasing PRV (red) that you continued to remain on the right side of the market.

Nice job.

- Spydertrader
 
Chart for the morning. +5 points.

Interesting part started at 10.

red volume , 91 K or so. next three bars are lateral so good point to enter. (I didn't). The point is, we need more than 91K of volume to create a downtrend.... That's a lot of volume and the question is are we getting it. The next bar is lower on lower volume and I am looking to go long, around 10:30. RTL on YM has already broken. As soon as I noticed YM is moving lateral I enter at 10:34, the moment ES RTL is broken.

After that no reason to sell so far. After FTT's we are only seeing laterals so far and no decreasing red.

regards,
Ivo
 

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