Spydertrader's Jack Hershey Futures Trading Journal

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Ivo,

I think the answer to your question concerning the 10:20 ES bar(flaw or no flaw?) is in your YM chart. This is the way I see it.

10:18 bar was Decreasing Black Volume

10:20 bar was Increasing Red Volume

10:22 bar was Decreasing Black Volume

10:24 bar was immediately red and breaking thru RTL (on probably increasing prv)

I think that sequence made it fairly convincing that change was on the way and the 10:20 ES bar wasn't going to be a flaw, even though it had the 'rule of thumb' flaw volume.

Hope that helps.


<IMG SRC="http://www.elitetrader.com/vb/attachment.php?s=&postid=1608066"> [/B][/QUOTE]
 
Quote from dkm:

ES 17 Sept 07

Got confused seeing increasing black at 13:45. Saw 13:30 as an r2r and the next 2 bars had decreasing black as price approached the anticipated pt 3. Suddenly I see increasing black at 13:45 and I think "Is my channel wrong?" 13:50 forms an FBP and 13:55 confirms the pt 3 with incr red vol.

The 14:45 outside bar also had me thinking wtf? Having seen the ftt at 14:20 I was patiently looking for the pt 3 which eventually arrives at 15:05.
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Hello David - found this interesting, as I was "skype-ing" with one of your 'old' partners today during this time. We had just discussed the possible smallish 13,30 R2R, and then the two decreasing black (green) vol bars, and were actively seeking the Pt. 3 down.

I wanted to try and relay a few things that have slowly started to stand out in my mind during all these months;

- Pt. 3's almost always go a few more ticks that what one expects

- I have seen this same "three black bar" pattern many times around a Pt.3. And as you mentioned, while viewing 'live', it looks like the beginning of the next dominant traverse, when considering the increasing prv of the third black bar. However, this same bar often reaches its extreme during a "quick flourish" (an exhaustive type move, if you will) and the reversal is quite sudden.

- Repeating Bearbelly's reference to kosher (or maybe what I'm gonna say is more akin to heresy :) ) I also try and 'anticipate' at what level 'ye ole S/R ' may play into the Pt. 3 reversal. ( I employ a 28 tick chart for these observations)

-I don't know if my interpretation is correct, but I must first see some type of R2R on the move from Pt 1 to Pt 2, before eagerly scouting for Pt 3. This is on a finer resolution than the forest view - notice how Spyder's gaussian formation during this same time today appears, compared to my annotation.

For what I know, all the above may be a load of hogwash, but I personally have witnessed this same scenario numerous times, so thought it was worth mentioning.

Best of luck ...

P.S. Tums mentioned Tiger Woods last night in a post. Today, an issue of Sports Illustrated just appeared on our kitchen counter, with the cover story about Tiger (my wife says she doesn't know where the mag came from, and I know I have no idea - very strange. She thought maybe in the mail, but I'm not a subscriber, and it was the 04/02/07 issue - hahaha) Anyways, the author of the article included a quote from a Japanese poet - Kenji Miyazawa:

We must embrace pain and burn it as fuel for our journey

Something to consider during the tough times :D
 

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Quote from mephistoII:

..
-I don't know if my interpretation is correct, but I must first see some type of R2R on the move from Pt 1 to Pt 2, before eagerly scouting for Pt 3. This is on a finer resolution than the forest view - notice how Spyder's gaussian formation during this same time today appears, compared to my annotation.
..

Something to consider during the tough times :D
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of course it's correct, R2R, B2B = change = p1 of the new direction near by.
 
Quote from ivob:

Hi Mak,

Okay, if price breaks above RTL intrabar we have an FBO and there's an action for that.

What if price keeps on going intrabar above and below RTL? We keep on doing actions and lose 3 ticks on every action? I assume you are talking about YM because we're supposed to monitor YM when ES price is at RTL?

>Ultimately, only 2 things can happen, either the action "clears"
> my RTL, or it FBOs and XO back towards the LTL...

The key here is the word "Ultimately". What do you do when price approaches RTL? Do you decide to just wait a few bars before taking action? Any tips on that? Do you wait for buyers and sellers to eat eachother and then see who is moving the market (VDU?)

I regularly make mistakes around RTL.

regards,
Ivo
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Would you say more often than not you see this type of thing? For me this is more of an exception. But then again, the xo are not hyper for me.

Usually here, I watch the accumulation and note which side of the DOM is falling out. In actuality, only 2 things can happen, either the bar "clears" the RTL or it FBOs. What you describe is going to be on a bar that is relatively low volume. In other words, on faster paced bars, the action will tend towards a cleaner break. For slower paced RTL BO/FBOs, I reinforce my dataset by sweeping the more finer details like the DOM, cumulative bid/ask volume, especiallly STR/SQU and YM. It is only a 5M bar, the flip flopping, which for me is the DOM 2 pairing, can only happen so many times. I usually consider myself to be early to the party, call it 3 ticks if you will. So while you may see P flip flopping across your RTL, I am sweeping the tick chart to see the DOM BID/ASK 2 pairing away and watching closely for one of the pairs to start STICKING and for a spike to begin which would then tell me otherwise.

As for the "ultimately", there is no waiting several bars to evaluate whether the action was right. Ultimately, it either is a XO/BO or FBO. Volume picks it off a good deal of the time. If I am taking action at a RTL, then I am already late to the party since the FTT was before the RTL. The RTL is my safety net for doping around and not seizing the FTT. If I am being snotty, I restrict myself to 2 actions per bar, REVERSE for XO/BO, RE-REVERSE for FBO. The characteristics for XO/BO is usually very different than for an FBO. It may be worthwhile for you to sort out the particulars so that you can recognize them...

MAK
 
# of tape changes >= # of level 1 changes >= # of level 2 changes >= ...

If you trade al level N and monitor at a lower level, you'll get a number of change signals that will translate in actual changes at levels up to N-1, but they won't induce change at your trading level.

There's a give and take between identifying the change earlier, and misidentifying it. The finer the tool, the more wash trades you'll have. Important is to quickly identify when you were wrong and take action.
Quote from guavaman:

... 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. ...
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This is very similar to IF1 IF2 APA.
Quote from makosgu:

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
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When the previous bar sits on RTL I wait for the current bar to BO the previous bar's end too. This happens more often on steeper tapes.
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.
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I am long. I think I recognize a flaw. I take action: hold. I anticipate the behavior of the price and the volume. My anticipation is not confirmed. After all it was not a flaw, but a change signal. I take action: reverse / exit. I continue MADA.

At any level of expertise, at any level of monitoring, there'll be times when you'll be wrong. The right attitude is to recognize it, better sooner than later, and take the appropriate action. Don't give it a second thought until debriefing! Don't attach any emotional reaction to what happened!

Quite often people remain stunned: "It didn't happen what was supposed to!". This is counterproductive, and a "four letter word": prediction :)
 
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