A Pt3 shows lower / lowest volume, on its fractal. If your fractal is higher and includes faster fractal channels, a Pt3 on your fractal may coincide with an FTT on the next faster fractal, which usually means higher volume on that fractal. This is more pronounced when your dominant channle is a retrace of the next slower fractal. I hope I don't sound confusing ...
Spydertrader's Jack Hershey Futures Trading Journal
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Thanks Pr0crast! I was ready to write something on exactly these same lines ... Also, there is no unique recipe for success. Jack, Mak, Spyder, and others presented openly the recipes that work for them. Those are slightly different from each other, and most likely won't work for you.
Maybe it's easier if you think about entering on Pt3 in terms of entering after DU in the Hershey equity method.
The closer to the Pt3 you enter, the more often you'll be wrong. The more you wait for confirmation, the more of the swing you'll miss. There's a give and take, and you should slide more toward what works for you and makes you more comfortable. In the beginnig, when you need to build confidence, slide toward more confirmation and less profit. In time you'll find your optimum.
Also: the Pt3 defines the setup. You have to use an entry method (like BO of RTL and / or end of bar, and / or PRV increase). Before deciding to enter you have also to identify a probable profit target (look through the channel), and to define ahead when you'll know that your entry failed. You might conclude not to take that entry, and wait for another setup.
The closer to the Pt3 you enter, the more often you'll be wrong. The more you wait for confirmation, the more of the swing you'll miss. There's a give and take, and you should slide more toward what works for you and makes you more comfortable. In the beginnig, when you need to build confidence, slide toward more confirmation and less profit. In time you'll find your optimum.
Also: the Pt3 defines the setup. You have to use an entry method (like BO of RTL and / or end of bar, and / or PRV increase). Before deciding to enter you have also to identify a probable profit target (look through the channel), and to define ahead when you'll know that your entry failed. You might conclude not to take that entry, and wait for another setup.
I agree with this. We don't get increasing volume immediately. Why not? Because a point 3 is nothing else but another FTT on another fractal or a flaw. FTT's. High volume is not a characteristic of an FTT or a flaw.
Sometimes you can even see the FTT on the downchannel on YM when ES is making its point 4 up.
regards,
Ivo
In my experience: an FTT, as well as an LTL touch, and a VE are almost always accompanied by high volume on its fractal. Decreasing volume follows. That's actually the best place to exit or reverse from a dominant traverse, when you realized that the volume peaked.
Identifying what kind of flaw you have helps you identify not only that you have a flaw, but helps you identify when you don't have one. Just thinking binarily flaw / no-flaw is more error prone. A volume between 40-60% is inconclusive.
Identifying what kind of flaw you have helps you identify not only that you have a flaw, but helps you identify when you don't have one. Just thinking binarily flaw / no-flaw is more error prone. A volume between 40-60% is inconclusive.
A quote from one of the very good guys on ET.
"An analogy, the market is like a book and TA is discussed in the last few chapters.
To ignore everything else and only read the chapters about Technical Analysis may be ok for awhile but eventually it will catch up to you along with not allowing you to fully understand the book.
Mark
(a.k.a. NihabaAshi)"
To read the post in it's full context:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=101830
The method traded by Mark does not matter, His advice as to know what is behind the price action does.
When finer fractals are not clear we look to the larger fractal to see things better.
Knowledge of the mountain is important before the forest can be traversed.
When the forest is not clear, the mountain is there.
WGTrader's execution of the Fed announcement yesterday was a good example ,and an excellent trade.
. . . and a Thank you to Mark
"An analogy, the market is like a book and TA is discussed in the last few chapters.
To ignore everything else and only read the chapters about Technical Analysis may be ok for awhile but eventually it will catch up to you along with not allowing you to fully understand the book.
Mark
(a.k.a. NihabaAshi)"
To read the post in it's full context:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=101830
The method traded by Mark does not matter, His advice as to know what is behind the price action does.
When finer fractals are not clear we look to the larger fractal to see things better.
Knowledge of the mountain is important before the forest can be traversed.
When the forest is not clear, the mountain is there.
WGTrader's execution of the Fed announcement yesterday was a good example ,and an excellent trade.
. . . and a Thank you to Mark
VE and LTL touch okay but FTT's occur on decreasing volume. Decreasing (lower) volume means change.
There can be peaking volume before the FTT but the FTT almost never occurs on that same bar. It is in the next few bars where price tries to break new ground on higher volume and sometimes fails to do so.
Here's an example from this exact moment (DAX trade). Checkout the circled bar. I entered long at end of bar. (and I admit that's early, could have waited one bar or for new point 3).
Price failed to continue to go down on higher volume so I'm on FTT alert. Then there is this low volume black bar. It's a lower low on lower volume but the bar is black.. This means change especially if we did not get the increasing red volume. Note that often these kind of bars seem very insignificant, they must be in order to fool the majority
When price breaks new ground volume should be increasing if we want the trend to continue, not decreasing.
The FTT becomes then the new point1 and the new point 3 falls in this case within the old overlapping channel. Once we have the new point 3 we look for new FTT's and respect the Right Trend Line.
regards,
Ivo
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We have to always judge the volume on the right fractal. Probably you and I talk about different fractals here.
In your example, the point in discussion looks like an FTT (a higher relative volume on its fractal) in a down channel, which is a pt 3 or other RTL FBO in an up channel on a slower fractal (a lower relative volume on its fractal) ... (?)
The slower fractal sentiment, expressed through volume, refers to a larger group of traders, hence its effect is more visible.
In your example, the point in discussion looks like an FTT (a higher relative volume on its fractal) in a down channel, which is a pt 3 or other RTL FBO in an up channel on a slower fractal (a lower relative volume on its fractal) ... (?)
The slower fractal sentiment, expressed through volume, refers to a larger group of traders, hence its effect is more visible.
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