Quote from dkm:
How does this tie in with the requirement for volume to keep reducing as price continues its way to the RTL after an FTT?
For the sake of your example above, let's assume a trader catches the FTT at the exact point of change (be it exact tic, exact volume 'at some point' or at close of bar - doesn't matter). Now, what
must come next? Just as you outlined, decreasing Volume
must take Price back to the RTL. As long as this continues to occur, do you want to take a trade? Of course you don't, you are holding through awaiting the break out.
1. Do I want to take a trade?
2. Can I take a trade?
If one receives a
hold signal (based on one's resolution level) from the market, one would not, could not, should not
want to take a trade. The 'at some point' test does not apply unless and until one arrives at the question, 'Can I take a Trade?" At the Forest / Tree level, we don't trade the
Non-dominant Traverses (exception being after an FTT). Trading Non-Doms occurs at the
Limb Level.
Hold Signals (for this resolution level outlined above)
Decreasing
Non-Dominant Volume back to the RTL.
Increasing Dominant Volume moving away from the RTL.
Decreasing Dominant Volume with Lateral Price Movement.
Decreasing
Non-Dominant Volume as price moves from points 2 to 3.
Flaws
Formation Development
Now, one might receive a
change signal after any of the above, but certainly one would not, could not, should not
want to take a trade should one
already entered correctly after an FTT, and then, received any of the above data sets.
Once entered correctly on an FTT, one cannot start to look for another FTT (on the same resolution level) until
after forming a Point Three Channel. Otherwise, the trader has jumped fractals, and is monitoring on multiple resolution levels (falling down the rabbit hole).
Know thy resolution level and deviate not from it.
- Spydertrader
.