Spydertrader's Jack Hershey Futures Trading Journal

Status
Not open for further replies.
Hi

Today was an amazing day... this high volatility was too much for me....:D

Anyway...

Spyder, if you please, I want to ask you one thing...

You have stated many times that one for having success with this methodology one must always think in terms of Change and Continuation. That one must always be aware for signals of Change when one is already in the market, and act accordingly immediately.

I have found many times several signals of change that cannot be taken "immediately" because price is not "ready" to change direction when signal shows. I give you an example: For instance, when we see decreasing volume with price making new highs, we know that price will change direction anytime soon...what we don't know is when.

This signal, I think, must alert someone to wait for another signal of change, not to act immediately..

I believe the other change signal should be in Price. I tried to look to price and see if I can see 'long up tails' in the following bars, but this often makes me antecipate the FFT for 1 or 2 bars.
:(

Of course, if volume suddenly starts to increase (compared to previous bars) this 'change' signal must be invalidated, and we come back to "Continuous" mode.

I ask you if is this correct?, or I should search for another 'change' signal other than Price when this kind of situations happens?

Thanks in advance,

Regards,
 

Attachments

Quote from PepeIlegal:

Today was an amazing day... this high volatility was too much for me....:D
More...

I should have gone fishing instead of watching the market from 11:15 AM Eastern Time onward. Expect more of the same until Wednesday around 14:15 PM Eastern time. :D

Quote from PepeIlegal:

This signal, I think, must alert someone to wait for another signal of change, not to act immediately..
More...

This is what Jack talks about when he mentions 'Sufficient Data Sets, in his posts. It's sorta' like "knowing when you know you have enough information to act."

On day's like today (when volatility has declined to nothing and volume sits at anemic levels), one can trade, but the risk certainly outweighs the reward. In other words, a trader cannot expect to make a lot of money per unit time. In addition, the signals for change often occur at such subtle levels (and for only a brief moment), traders often miss them entirely. Lastly, during periods of Lateral Price movement, tools, we have not yet discussed, play an increasingly important role. For these reasons, Jack often advises new traders to sideline during periods when the market flatlines.

Setting aside days like today, we normally want to look for multiple signals of change, not in a initial signal / confirmation sense, but in terms of multiple data points saying the same things. One signal may arrive seconds before another (e.g. STR / SQU heads below - 2 moments before the YM heads lower) or one signal may arrive several minutes before another (YM begins to head lower a few minutes before the ES heads south). If one thinks in terms of change sequences, considering during each 'sweep' of the data "what do I need to see at this moment in time?", a trader can then begin to 'see' the market and its dominos as they begin to transition from a period of change into a mode of continuation.

Unfortunately (as if we needed enough things to keep in our heads), context plays a major role as well. Since the current context in which we currently find ourselves (with respect to the 'right side of the market') constantly changes, so too does the definition of 'sufficient data set' change throughout the day. When price breaks out of CCC, a sufficient data set might mean increasing PRV of a particular color. Yet, when price finds itself on a left trend line around 10:00 AM, the sufficient data set might include STR / SQU and the DOM Wall.

As you can see, experience (knowing when you know enough) determines when you have sufficiency. Based on your post, it looks to me that you have yourself on the right track.

- Spydertrader
 
Quote from Spydertrader:
(...)
Unfortunately (as if we needed enough things to keep in our heads), context plays a major role as well. Since the current context in which we currently find ourselves (with respect to the 'right side of the market') constantly changes, so too does the definition of 'sufficient data set' change throughout the day. When price breaks out of CCC, a sufficient data set might mean increasing PRV of a particular color. Yet, when price finds itself on a left trend line around 10:00 AM, the sufficient data set might include STR / SQU and the DOM Wall.

As you can see, experience (knowing when you know enough) determines when you have sufficiency. Based on your post, it looks to me that you have yourself on the right track.

- Spydertrader [/B]
More...

Thanks for your answer Spyder...

Unfortunately, I don't know how to make a good use of STR/SQU for now, and I have 'ignored' it for the time being. I'm only focused in Price (formations, channels) and Volume (PRV and Gaussians) in ES and YM (YM btw is an excelent help). So, I can only count with PV to be in the RSM (Right Side of Market) :)

I have only two rules:
Enter on FFT when quickly detected or then wait for pnt3 to enter;
Exit on break out of RTL;

And I will not move forward until I can make money (in simluation) consistently at least for 3 weeks, just with this.

I believe this methology that you and Jack (and Mak) is teaching us should be sufficient to take at least 10% to 30% of the daily range consistently. I'm not greedy :)

Thanks again Spyder...

Regards,
 
Quote from PepeIlegal:

Unfortunately, I don't know how to make a good use of STR/SQU for now, and I have 'ignored' it for the time being.
More...

My use of the STR / SQU in the above post served only as an example. The same 'sufficient data sets' could materialize out of YM Gaussians and ES Trendlines. My point was simply to look for these 'sequences' which fall in line like dominos in a row.

Keep up the great work.

- Spydertrader
 
Quote from Tums:

today's quiz.
More...

My Guesses:

1. Left Trend Line
2. Right Trend Line
3. Right Trend Line
4. Left Trend Line
5. Upper Trend Line
6. Lower Trend Line
7. Dominant Traverse
8. Non-Dominant Traverse
9. Dominant Traverse
10. Non-Dominant Traverse

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=473136>
 
I ran across this thread today during a search on another topic. I noticed I had neglected to include it in the original Background Material on page one of this Journal. I include it now in case someone finds the information helpful.

- Spydertrader
 
Status
Not open for further replies.
Back
Top