Spydertrader's Jack Hershey Futures Trading Journal

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Quote from pct:

My thinking at the time was that price was advancing but selling pressure was coming in (increasing red volume) and the 11:35 bar was an ftt: consider change. This may have been a logical conclusion based on incorrect drawing of my channels. I looked at the chart Spydertrader posted. I fanned out from pt 1 AM low whereas he drew a new up channel from the previous point 3. Is it incorrect to fan out from the previous point 1 when price moves laterally? If I had drawn a new up channel from the previous pt 3 then the 11:35 bar would not have been considered an ftt.
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Price moves higher in an up channel on increasing black volume. Sometimes, we have a bar make a new high on increasing black, then turn and end up closing below its open creating a situation where it appears price went higher on increasing red volume. We see such a circumstance in the areas marked on your chart. I match up my Gaussians by how price moves, and not by how the bar closes. PRV tells me increasing Black Volume, then i anticipate improved Price in an up channel. Should the Price bar 'spike' and head lower after making the new high, I still mark the bar as increasing black.

Keep in mind, STR / SQU gives us the 'heads up' during Intra-bar Gaussian shifts. In other words, we need a different tool (other than Volume) to show us continuation or change. IF we opened a 2 minute ES Chart, you could see the Gaussian change more clearly when it happens Intra-bar on the 5 minute charts.

If I need to 'fan out' a channel (when price leaves the channel on decreasing volume) I usually fan from my last Point Three. Not only does the decreased slope of the new (fanned) channel visually represent a reduction in market pace, but using the Point Three vs. recycling the Old Point One normally results in fewer fans as time moves forward. Either way works. Choose whichever you feel best allows you to 'see' the market.

I hope the above information helped to provide some clarity for you. If not, please let me know.

- Spydertrader
 
Quote from pct:

Spydertrader,

( or whomever feels qualified to answer)

I have a question in regards today's chart and proper labelling. I am unsure if I am labelling the gaussian cycles properly. The area in question on my chart marked by the green vertical lines from 11:20--11:35. The 11:20 bar made a new high and finished lower on vol of 23.7k. The 11:30 bar finished higher on vol of 19.5k. The 11:35 bar made a new high by 2 ticks and was met with selling. Volume was 22.8.. It appeared to me that price was advancing as red volume was increasing. Have I mislabelled my gaussian cycle as R2R ? Does the peak/low in price have to correspond with the peak/low of the gaussian cycle? I have placed an alternate labelling above the volume bars. Please tell me which one is correct.

My thinking at the time was that price was advancing but selling pressure was coming in (increasing red volume) and the 11:35 bar was an ftt: consider change. This may have been a logical conclusion based on incorrect drawing of my channels. I looked at the chart Spydertrader posted. I fanned out from pt 1 AM low whereas he drew a new up channel from the previous point 3. Is it incorrect to fan out from the previous point 1 when price moves laterally? If I had drawn a new up channel from the previous pt 3 then the 11:35 bar would not have been considered an ftt.

Thanks
PCT
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That volume spike bar can make it hard to see inceasing/decreasing volume bars... Check out this snippet in addition to Spyder's comments and I think you will get the idea. Hope it helps

-John

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1453727>
 

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Quote from nkhoi:

you need to note b2b and r2r where the direction change.
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Hi nkhoi,

Thank you for your suggestion :)

I had annotated the b2b and the r2r, but I think they are annotated in a different way.

I try to annotate like the picture annex to force me to draw in advance what to expect next...

For instance, when comming from a FTT we have "decr red", so I expect to have "incr Red" when price reaches the RTL for a BO or then we have "incr black" and we have a FBO (this can be seen in the PRV when price touchs the RTL). Either way, this gaussians annotations made me realize how much they are important...
 

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Quote from ivob:

"Volume precedes price". I'm just repeating Jack and stuff I have read. First there's the volume, then the price following. Often price will peak after the volume peak. I find this especially true for example on a tape, when price is moving in one direction. So if I look for FTT and think I see one in a tape or after a lot of movement in one direction I will wait one or two bars. If I see volume + price peaking in a area of congestion for example in a rounded top or bottom (we often already had the first peak then), I enter usually on same bar.

However, it is recommended for beginners, and that includes me, enter on point 3. (so after the FTT). First FTT, then decreasing non dominant volume, then BO, then pt3 in the new dominant direction on increasing volume. Exit on RTL break of the new channel.

regards,
Ivo
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Thank you for your help...what you said made me think...

Of course..."Volume precedes price" I have heard that so many times but I never thought on that at that time...it makes all sense.

I went to my research and found a pdf from PointOne that describes this movement so well. I have to thanks PointOne for this and hope he doesn't mind if I put it here again.

Regards
Pedro
 

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Quote from PepeIlegal:

Hi nkhoi,

Thank you for your suggestion :)

I had annotated the b2b and the r2r, but I think they are annotated in a different way.

...
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sometime you have them match, sometime you don't.
 

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My chart and my thoughts. I annotated my chart between 1055 till 1120 with the rational for entering and exiting trades. This is typical of my results where I have decent initial entries and then
misread and overreact to things that I think I see on the charts.
 

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