Spydertrader's Jack Hershey Futures Trading Journal

Pepe · Sep 17, 2007

Hi Ivo,

My 0.000000002 cents:

First, you can not assume that ALL volume with less than 50% / 60% will be a flaw. That's just a 'rule of thumb' to put you in 'alert mode' for a possible flaw being formed at that moment. You can't rest until you are sure (which for me is only confirmed at next bar) that that bar is a flaw or not.

You had also a LTL bounce which really means "CHANGE" (with respect to price (and channel)). Doesn't matter if it is the original LTL or a VE, it means "Change". But, as always, and as you said you decide over a dataset.

Last, be aware of the basic nature of this method. It only indicates 'Change' and 'Continuation' with disregard of the resolution level one is.

Best Regards,

spooz_trader1 · Sep 17, 2007

Quote from ivob:

Price touched LTL and made a new high on the highest volume of the day so far (no FTT). PRV of the next bar is about 50% of the former bar so we think: FLAW.

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regards,
Ivo

Hey Ivo,

I'm not sure what resolution you're monitoring but from your chart, I'll assume you're at least at the traverse level. I wasn't monitoring live at this point in time so my comments are hindsight-based.

When you saw the "highest volume of the day" on the 10:15 bar, were you thinking "hey, this might be a candidate Gaussian peak"? If so, what comes next, assuming it is a Gaussian peak? Retrace, right? And price ended up retracing to the traverse RTL, followed by R2R.

So, at the traverse level using bar-to-bar analysis, it looks like one would know price wasn't going any higher on the R2R BO. Any sooner than that, you have to zoom in.

FWIW,

spooz

Bearbelly · Sep 17, 2007

Quote from ivob:

Hi BB,

I would like to be convinced but I am not.

I am always suspicious and I was also expecting a pt3 down but could not find enough data elements to be short there. A flaw is still a flaw even after a gap in my opinion.

Ivo

Well I didnt go short until the rtl got taken out. That was enough evidence for me that the previous bar was not a flaw.

guavaman · Sep 17, 2007

Quote from Pepe:

Last, be aware of the basic nature of this method. It only indicates 'Change' and 'Continuation' with disregard of the resolution level one is.

Pepe,

This doesn't sound right to me. It is my understanding that the whole point of learning this method is so one will know what the market is saying. As one's refinement of the methods improves one will "know" at finer and finer resolutions what the market is saying.

Is an "indication" the same as "knowing" a change in sentiment is occurring?

Just my thoughts. For the record, I am finding it very difficult going with todays market action. Whenever Price hugs the RTL for extended periods of time, I find myself looking for FTT's which cause me problems. Additionally, I keep interpreting the numerous flaws/inside bars as evidence of a new (up) channel is starting.

bundlemaker · Sep 17, 2007

Quote from Pepe:

Hi Ivo,

Last, be aware of the basic nature of this method. It only indicates 'Change' and 'Continuation' with disregard of the resolution level one is.

Best Regards,

This is quite incorrect. Change on one resolution can easily be continuation on another.

Pepe · Sep 17, 2007

Hi Guava,

Nice to 'see' you

Quote from guavaman:

Pepe,

This doesn't sound right to me. It is my understanding that the whole point of learning this method is so one will know what the market is saying. As one's refinement of the methods improves one will "know" at finer and finer resolutions what the market is saying.

Is an "indication" the same as "knowing" a change in sentiment is occurring?

What I wanted to say is that the market only 'comunicates' with you by saying "Change" and/or "Continuation", this happens channel to channel, tape to tape, bar to bar, intrabar, intra-intrabar, etc

. The problem is that the market don't know which level are you trading (Forest, Tree, limb, bug) and it says many times on multiple ocasions "Change", it is up to you to judge for yourself if that "change" signal is at your level (sometimes one only finds out later that it was the one that we should take). Flaws are a "Change" signal, but at some levels (resolutions) we see them as "continuation", because there are actually two "change" signals inside a flaw. Retraces (LTL bounces) are "continuation" in some resolutions, and they are "change" in others. The market is saying "Change" in all this moments, but we take the ones that are at our resolution. It is why that staying at one resolution level is sometimes hard

Just my thoughts. For the record, I am finding it very difficult going with todays market action. Whenever Price hugs the RTL for extended periods of time, I find myself looking for FTT's which cause me problems. Additionally, I keep interpreting the numerous flaws/inside bars as evidence of a new (up) channel is starting.
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One suggestion: if price is riding the RTL, wait and exit when it breaks it.

"Use the Lines Luke!"

Best Regards,

makosgu · Sep 17, 2007

Quote from Pepe:

...

One suggestion: if price is riding the RTL, wait and exit when it breaks it.

"Use the Lines Luke!"

Best Regards,

This too is my rule numero UNO! My rule numero DOS is if price breaks back above the RTL (intrabar), I have a FBO and there is an action for that. Ultimately, only 2 things can happen, either the action "clears" my RTL, or it FBOs and XO back towards the LTL... Intrabar, FBO is in my cards until the bar "clears" the RTL. Until it "clears", I am on alert to FBO the bar and reverse. Either way, there is no falling off the earth and on the right $ide of the action...

MAK

ivob · Sep 17, 2007

Quote from Bearbelly:

Well I didnt go short until the rtl got taken out. That was enough evidence for me that the previous bar was not a flaw.

I agree with this.

Ivo

ivob · Sep 17, 2007

Quote from spooz_trader1:

Hey Ivo,

I'm not sure what resolution you're monitoring but from your chart, I'll assume you're at least at the traverse level. I wasn't monitoring live at this point in time so my comments are hindsight-based.

When you saw the "highest volume of the day" on the 10:15 bar, were you thinking "hey, this might be a candidate Gaussian peak"? If so, what comes next, assuming it is a Gaussian peak? Retrace, right? And price ended up retracing to the traverse RTL, followed by R2R.

So, at the traverse level using bar-to-bar analysis, it looks like one would know price wasn't going any higher on the R2R BO. Any sooner than that, you have to zoom in.

FWIW,

spooz

Hi Spooz,

Your question:

When you saw the "highest volume of the day" on the 10:15 bar, were you thinking "hey, this might be a candidate Gaussian peak?

In an FTT I am looking for the situation where the FTT bar cannot make the same volume as the previous bar + does not touch LTL. But I also compare the potential FTT bar with other previous volume bars around that same price especially with former highs or lows. Had the 10:15 bar been a bar with significantly lower volume than the 9:35 bar I would have been on FTT alert. In that case price could not make new highs on higher volume which (imo) is a reliable signal for change especially if the bar closes lower than that previous bar which it did not by the way.

The higher volume is telling me: "More people are participating. This can probably continue.". Even if its a shadow bar this is usually the case. The "flaw" just confirmed this in my view. The "change" or "real FTT" often occurs one or two bars after the gaussian peak and on lower volume.

regards,
Ivo

guavaman · Sep 17, 2007

Pepe,

Per usual I have found your posts informative and insightful.

In reference to your previous post regarding the S/S and the tic chart working together, do you by chance have any video examples of how this actually works? I have rearranged my workspace to group these two tools together, but my ability to use them remains elusive

.

If not I shall simply soldier on...

John