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Spydertrader's Jack Hershey Futures Trading Journal
- Thread starter Spydertrader
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Spydertrader,
I'm wondering why bars 15:20, and 16:00 are not marked as FTT on your chart. Aren't these double bottoms on the bar following channel expansion?
I guess the first one is start of HVS. So that negates the FTT aspect? Does it only qualify as a stall because highs and lows are the same?
The second one seems straightforward double bottom expansion channel FTT.
Thanks,
Esteban
I'm wondering why bars 15:20, and 16:00 are not marked as FTT on your chart. Aren't these double bottoms on the bar following channel expansion?
I guess the first one is start of HVS. So that negates the FTT aspect? Does it only qualify as a stall because highs and lows are the same?
The second one seems straightforward double bottom expansion channel FTT.
Thanks,
Esteban
Quote from Spydertrader:
The bars to which you refer aren't marked an HVS because they do not form an HVS. The price formation looks very similar to an HVS, but in reality, does not form one. The actual flaw bar (bar 9) is a stall. The price formation looks similar to an HVS because all three bars have the same high. Price forms an FBO then heads lower (and back into the channel). Bar 9 stalls and heads higher. had bar 9 not made an equal high as the previous 2 bars, the whole Price sequence would appear much clearer.
Hope that helps.
- Spydertrader
Thank you but it is not completely clear.
How could I have noticed this was not an HVS?
- I did notice that the range seemed a little large for being an HVS (considering low volatility at that moment).
- Also I noticed that on YM within what I thought to be an HVS there was some increasement in volume whereas inside an HVS one would expect volume decreasement (black as well as red). However, this was just slightly.
- Is it the fact that there seems to be some kind of 'dip' on YM of around 6-8 minutes between the highs? The fact that it did reach the same high on YM confirmed at that moment for me that it was an HVS because sometimes there is "change" within the HVS that can be noticed on YM and hardly on ES.
Did I just answer my own question or where there other indications that this was not an HVS?
Just to show what we're talking about I have included the images.
regards,
Ivo
<IMG SRC="http://www.elitetrader.com/vb/attachment.php?s=&postid=1476255">
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Quote from ivob:
How could I have noticed this was not an HVS?
Walk with me as we review the price action at the time. If you can follow the decision-making process, you should see how (and when) you 'know' what the market says to you.
See attached. The Price pattern begins with Bar 7, however, we cannot confuse Bar Seven with an HVS as it is a Breakout Bar. On bar 8, we see what we (at the time) think is an FTT. We then check Volume and note (based on PRV) everything appears simply fine and dandy. We have just the right amount of Volume coming in to form our FTT (decreasing red in an Up Channel). As normal, we need to continue to monitor bar to bar at our "Points of Change" while asking ourselves what do we need for continuation? (decreasing red) and what do we need for change (anything black). Bar nine opens and begins to head lower (again confirming in our minds Bar 8 as an FTT). After forming an equivalent bottom with Bar 8, Price, on Bar 9 heads higher).
Immediately, we think, "Uh-oh" as PRV Volume no longer shows red, but black (and decreasing to boot.) At this point (just as Price on Bar 9 moved above the Open), we need to determine what we have in terms of the Price formation. Clearly, we did not have an FTT on Bar 8 as we once thought, but we do we have? We can axe CCC from the list as Volume already is way too high. Hitch doesn't fit as the Price Bars have too much range. As such, we are left with Dip, Stall and HVS. As Price continues to move higher within Bar 9, we can scratch Dip off the list (we don't have the typical Price 'bowl shape' typical of a Dip) - leaving us with Stall or HVS. As Price forms an equivalent Top Between Bar 8 and Bar 9, we axe Stall from our list of possibilities as well and only HVS remains.
Now that we have seemingly decrypted the Price formation, all we need to do is determine how we entered the HVS and how we exit. No worries, we entered from below, and expect to leave through the top. All set right? Well, not quite.
We still need to ask ourselves, "What do we need for continuation and what do we need for change?" to make sure we have no erred on our determination of this Price Formation. No problem, since Price always exits how it enters a lateral channel, we expect increasing black to drive Price higher on the exit. Now, everything does look fine, but we need to make sure. Because, if we made an error and we actually did have an FTT on Bar 8, then (since that FTT created a Point Three), we are going to have increasing red Volume driving Price lower.
Whoops! On Bar 10 we do not see increasing black. We see increasing red (possibly decreasing red at first, but red none the less). Since increasing red does not drive Price higher, we realize we have made a second error (First on the FTT [it actually was an FTT] and second on the misidentification of the HVS).
Now, when we look back, and wonder, "WTF?" we note how price did move lower off the FTT creating a Point Three. In the process, Bar 9 becomes the actual Flaw Bar (a stall), as Price moves lower through the dominant traverse of the down channel.
Probably, the best way to make sure we correctly read Price formations is to always ask the question, "What do we need for continuation, and what do we need for change?" In addition, flaws forming at or near trendlines deserve closer inspection that normal.
I hope you find the above useful.
- Spydertrader
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1476317>
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Spyder,
These kind of intricate posts really help tell me I'm on track with my thinking process. Thanks so much.
One question which appears a bit of a mystery, or I'm a bit blind. You have a pt3 annotated at the top of the flaw bar being discussed as well as the asscociated channel lines. Where is pt1 ? I put the RTL as you have it on my chart and extended it backwards and I don't see what or where it matches up to.
These kind of intricate posts really help tell me I'm on track with my thinking process. Thanks so much.
One question which appears a bit of a mystery, or I'm a bit blind. You have a pt3 annotated at the top of the flaw bar being discussed as well as the asscociated channel lines. Where is pt1 ? I put the RTL as you have it on my chart and extended it backwards and I don't see what or where it matches up to.
Quote from Spydertrader:
Walk with me as we review the price action at the time. If you can follow the decision-making process, you should see how (and when) you 'know' what the market says to you.
......
Thanks Spyder for the excellent explanation as always. A couple of questions: First, where are the red and brwon carryover channels start from the previous day as I could not figure them out. Also in reality, how do you take timely action? When you see a presumed FTT, do you wait for 2 or 3 bars to confirm it or just jump into the market and correct the error late? Thanks again.
Quote from bundlemaker:
Where is pt1 ?
High of the 15:10 Bar yesterday. See attached.
Quote from alp168:
When you see a presumed FTT, do you wait for 2 or 3 bars to confirm it or just jump into the market and correct the error late?
When you see the Signal for change, you take immediate action. Following this instruction is most important when one is beginning to learn these methods. It teaches you to quickly fix any errors made, and as a result, allow one to eventuALLY profit from mistakes.
- Spydertrader
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1476412>
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