Spydertrader's Jack Hershey Futures Trading Journal

[RoughTrader]

in CFBW, Jack says: "Pt 1 and 2 are formed after a tape is made. This is the first leg of a trend. Once pace decreases, you get pt 2 and are forming the pt 3 for the trend channel."

I interpret this to mean that the low of ANY subsequent bar that violates the tape RTL in even the most infinitesimal amount, then resumes movement in the direction of the trend, establishes the point 3 of the channel.

Starting out a new day, if the first tape is drawn such that it is more than 2 bars long and has gaps between bar lows and the tape RTL, the tape is drawn INCORRECTLY.

If the violation is very tiny (even a fraction of a tick), a new channel is born, but will be so skinny that it itself looks like a tape.

This is what I am taking from this document. Am I on track here?

RoughTrader

 

[Jander]

November 7th ES

The bluish arrows are my depiction of ideal tree level trades. I may have the term incorrect, but this is the level that I feel most comfortable at. It netted around 46 pts, if only I could mimic it in realtime. The decisions (hindsight) were made as I would have liked to realtime without the use of STR/SQU or the TICK chart.

So the journey continues, I think the hardest part is the HOLD button. These holds are all 20 minutes or longer, and all the intrabar noise makes me jumpy and I end up with a few trades in a twenty minute span... How calm it would be to hold for this long and only click the mouse button 6 times during the trading day I definitely think this is attainable, gotta keep on keepn on

 

[RoughTrader]

Quote from Tums:

Try to think of the market as a fluid motion...

The market does not know we use 5 min bars to represent its action.

The market just oscillates... up, then down, and up again.

Sometimes the market oscillates faster, other times slower.

Most of the times the 5 min bars can capture the oscillation motion.

Sure, this is correct. Market data streams in as a continuous-time signal. Charts are the sample-data form of that signal. We sample O,H,L, and C at regularly spaced time intervals (5m) to limit the amount of data we need to process.

A lot of the FTTs and reversals we see happen inside the 5m bar, which is why I try to enhance the sampling speed by 5x (using 1m bars) to catch them sooner.

RoughTrader

 

[Tums]

Quote from gooch87:

I have a good trade to post.

I sold early because I had to leave.

good trading everyone
gooch87

Good going !




p.s. if you had put on a tape after entry, you would/could have picked up 2 more pts.

 

[Jander]

Quote from RoughTrader:



Starting out a new day, if the first tape is drawn such that it is more than 2 bars long and has gaps between bar lows and the tape RTL, the tape is drawn INCORRECTLY.

If the violation is very tiny (even a fraction of a tick), a new channel is born, but will be so skinny that it itself looks like a tape.

I dont think INCORRECTLY is the right term to use. Rarely will more than 2 bars in a tape sit on the RTL. As long as the market is making higher highs, I dont see why you cant fan (rotate) the tape RTL to contain the action. Perhaps this becomes a pt3 channel then, but this depends on your fractal of choice.

You will end up eating the bad end of a bullet trying to draw tapes on a 1m chart. If you are serious about automating this strategy I would suggest learning to trade it successfully on the 5m chart first. I hope it works out for you though

 

[cnms2]

That is a great post!!!

Quote from TIKITRADER:



Try this one also.

 

[RoughTrader]

Quote from Jander:

I dont think INCORRECTLY is the right term to use. Rarely will more than 2 bars in a tape sit on the RTL. As long as the market is making higher highs, I dont see why you cant fan (rotate) the tape RTL to contain the action. Perhaps this becomes a pt3 channel then, but this depends on your fractal of choice.

You will end up eating the bad end of a bullet trying to draw tapes on a 1m chart. If you are serious about automating this strategy I would suggest learning to trade it successfully on the 5m chart first. I hope it works out for you though

Hi Jander,

I don't draw tapes on a 1m chart. I use the 1m chart to build 5m bars, 5 bars at a time. These 5m bars are used to build tapes and channels. So my charts would look the same as yours, only 1m bars fill all the spaces in between your 5m bars. This allows me to see the action inside each 5m bar.

I see where you are coming from regarding "fanning" the tapes, but there has to be a hard and fast rule about this. Otherwise, we will be mixing fractals which is no good. I'd like to here from more posters about how they tackle this issue.

Perhaps one good condition to fan out the tape is if the progression of volume bars is up. With growing volume, we have continuation of traverse, so no reason to break the tape. If we have higher highs and higher lows on a decrease of volume following an increasing progression, perhaps this would be a good time to start establishing the pt. 3

RT

 

[Spydertrader]

Quote from Vista:

How would you rank each of the above four tools from 1 - 10 (10 being very important) for your trading?

I wouldn't rank them as each becomes most important at the exact moment the information becomes most important. To use a sports analogy, if a similar question was asked of Tiger Woods, "Which club do you find most important?" His answer undoubtedly would be, "All of them." When standing on the tee, the driver has the most utility. When in the bunker, the sand wedge rises to the top of the list, and when on the green, the putter becomes the first choice.

When I look to see if size has moved into the market, I look at the T&S. When an early indicator of Price is required, I look to the YM. When I reach the extremes of Price movement, the DOM plays an important role, and when I really want to carve the turns, the OTR becomes the first choice.

Quote from Vista:

Also, you didn't include str/squ. Do you not find it useful at this time?

I use it everyday, but often, it falls into the category of dominos I expect to see fall in order to confirm the decision (and actions taken) after the point of change.

It really is as I have always said.

Once one views the market as the difference between continuation and change, even the FTT becomes nothing more than a confirmation of what the trader already knows.

- Spydertrader

 

[cnms2]

I suggest you re-start drawing and annotating manually, practice until it starts making sense to you, then graduate to entries and exits, and so on. It will take awhile, but I think that no amount of asking would help you skip those stages. You still didn't grasp the basics, in my opinion. Good luck!

Quote from RoughTrader:

... but there has to be a hard and fast rule about this. Otherwise, we will be mixing fractals which is no good. I'd like to here from more posters about how they tackle this issue.

Perhaps ...

 

[Avi 8]

Here is a reply to a PM about my trade today:

Yes it was quite a retrace from a PnL standpoint. Very easy to get caught up in the PnL and get distracted from what the market is telling you. Looking back now would there be anything different to do? NO! Not on coarse or 'forest' level. Now that 7.5 pts will be there for those more skilled. And it is an incentive to master beginner level and move to intermediate and expert level trading where those points ARE banked. I even managed to screw up the exit as I was guilty of dropping down a resolution level.

Look at the volume in the proper resolution, that 'wide range on 50% more' volume bar, was it decreasing or increasing AT MY resolution? Did it signal continuation or change? I was anticipating a pt 3 down to form, what did I 'need' to see? Did I get it?

The point is: don't watch the PnL, watch the market.

Mike

Mike,
Very nice trade you posted today. Great job. What I find most impressive is not the 12.50pts total, but the fact that by 15:00 you were up 8.25 pts which you didn't take, and then you HELD thru a 7.50 pts retrace!!! That would've been extremely difficult for me since the 15:05 black bar was wide-range on 50% more volume than the prior bar, and it closed near its high. Wasn't sure if the earlier 14:55 was in fact a pt3 up channel (pt1 being 13:15), and if the next bar (15:10 black) had shown increasing volume your entire 8.25 pts profits could have been wiped out. But twas not to be and it "only" showed about 19k volume, a bit less than the 15:05 monster, and the market turned back down.
Again, great job, great read, incredible hold.