Spydertrader's Jack Hershey Futures Trading Journal

[Spydertrader]

Quote from bi9foot:

How would one know to hold off until the real point of change?

See Attached.

If it were one bar later (meaning if Price was moving around within the yellow lines), would you want to take action? Could you take action? What would tell you to take action (again, if we were one bar later)? How is the environment different now (besides not being one bar later)?

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1672519>

 

[cnms2]

I think that when using only the ES and YM these situations will happen from time to time at the end of channels (in this case that up retrace). When it happens it is part of your cost to be on the right side of the market. It happens to me daily and I don't flinch on it.

So MADA: you MA short on your trading fractal then DA short, 30 seconds later you MA long then DA long, another minute later reverse again if that's what you see. It is much riskier to hold against your MA, hoping that you were right earlier and wrong now.

I guess you're monitoring the YM so closely only when the ES signals a change (course), don't you? Because in your first post you wrote "ES has gone down on increasing volume." This is already a strong signal. Normally you look at finer tools to anticipate, not to confirm. But I guess you're doing this correctly.

On the other hand, in my opinion your light blue channel is incorrect. It is not a real channel. In an up channel, any slower slope channel is a retrace so its LTL has to be drawn through bar tops. Your analysis based on VE should also be incorrect. I also disagree with "YM had a VE on two channels so I am thinking we have change." I don't think that VE is a signal of change.

Fine print: yada, yada

Quote from bi9foot:

Finally we have change.

I am trying to view this from a different angle. So any suggestions are welcome. Ideally I should have held off on the trade for at least another 2 mins.

How would one know to hold off until the real point of change?

 

[Spydertrader]

Quote from cnms2:

I don't think that VE is a signal of change.

A Volatility Expansion can provide a signal for change, just as it can provide a signal for continuation. A very stark, and clear cut, difference exists between the two situations. This unmistakable and unambiguous difference, once located, often causes the trader to wonder aloud, "Why the hell didn't I see this sooner!"

- Spydertrader

Edit: The chart provided by bi9foot does not have this difference.

 

[cnms2]

Decreasing volume ?

Quote from Spydertrader:

A Volatility Expansion can provide a signal for change, just as it can provide a signal for continuation. A very stark, and clear cut, difference exists between the two situations. This unmistakable and unambiguous difference, once located, often causes the trader to wonder aloud, "Why the hell didn't I see this sooner!"

- Spydertrader

Edit: The chart provided by bi9foot does not have this difference.

 

[Jander]

I havent delved deep into the practical application of T&S, but I found this example to be very interesting today. Without fully understanding the macro factors taking place, it's easy to see this size come in, form an FTT and scream change. Didnt recognize it as such at the time, but definitely will next time

 

[cnms2]

It seems that although I drew this yesterday I haven't posted it (yet) ...

I believe that a tape or a channel can't be drawn meanigfully in a vacuum. This is why I think that you can't look at a bunch of bars and know for sure how to correctly contain them in tapes or channels.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1672605>

Quote from RoughTrader:

...
The volume formations are also different, the first is for change, the second is for continuation. I'm not sure if the first volume sequence requires the 1-2-3 to be formed, or if a widened tape is still ok.

Thanks,

RoughTrader

 

[bi9foot]

Quote from Spydertrader:

See Attached.

If it were one bar later (meaning if Price was moving around within the yellow lines), would you want to take action?
No

Could you take action?
No

What would tell you to take action (again, if we were one bar later)?
BO of formation


How is the environment different now
Within the bounds of the previous bar - possible formation forming.

The take home from this is:
When looking for YM to signal change one should not make a trade while the current YM bar is still within the bounds of the previous bar (i.e as long as a possibility of a formation being formed exists).

I am correct with this conclusion? Thanks.

 

[bi9foot]

Quote from cnms2:

....

So MADA: you MA short on your trading fractal then DA short, 30 seconds later you MA long then DA long, another minute later reverse again if that's what you see. It is much riskier to hold against your MA, hoping that you were right earlier and wrong now.

That is the balance I am really trying to get, because it is very easy to get too reverse happy. LOL, hoping that you were right earlier and wrong now happens too often to my displeasure.

Sometimes I get in thinking a retrace is done (like the example I posted) but I am too early. As long as volume is decreasing I hold the position but like you said very risky.

Quote from cnms2:


I guess you're monitoring the YM so closely only when the ES signals a change (course), don't you? Because in your first post you wrote "ES has gone down on increasing volume." This is already a strong signal. Normally you look at finer tools to anticipate, not to confirm. But I guess you're doing this correctly.

ES Bars 2, 3 and 4 confirmed the dominant was down and my first trade was closed because I forgot to move my target out of the way. So I was looking for an entry and the retrace was on decreasing volume so I was was using the YM to give me the signal for the down ward resumption.

 

[RoughTrader]

Quote from cnms2:

It seems that although I drew this yesterday I haven't posted it (yet) ...

I believe that a tape or a channel can't be drawn meanigfully in a vacuum. This is why I think that you can't look at a bunch of bars and know for sure how to correctly contain them in tapes or channels.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1672605>

So are you suggesting that this formation at the start of a session cannot be marked with correct tapes and a fresh channel without volume?

RT

 

[cnms2]

It seems to be the case. Without following the first bar's intra-bar action you can't say which end was firstly hit, the top or the bottom ...

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1672725>

Quote from RoughTrader:

So are you suggesting that this formation at the start of a session cannot be marked with correct tapes and a fresh channel without volume?

RT