I 'recycle' my Point Three into a New Point One, rather than, use the Original Point One because I 'see' the market in terms of 'rolling through' various points instead of starting and stopping on those points of change. I annotate my channels in real time, and when Price breaks a RTL on decreasing Volume, we often have yet to see the end of the current trend. In other words, the channel needs changing because the trend did not change. When a particular channel continues on for quite some time, I may need to use the most recent 'trough' of Price (most likely a flaw, but could be an FBO point) for the New Point One - rather than go all the way back to the Point Three. This is the way I fan my channels as I feel it gives me the best view of the actual market. Others, who may view things differently might draw their fanned channels differently. I posted on this topic before. You may want to review that post to see the specific examples I use.
I don't subscribe to any Universal TA applications with respect to Pennant formations. As I have indicated in the past, Pennants create a place where one can watch the market briefly pause, as it provides an opportunity for those studying these methods, to know the right side of the market. By using the YM as a 'trigger' for trend direction, one can often enter the trade using the ES - prior to - actual Formation BO. Trading within these formations requires use of the fine level tools. Finally, no. One does not always see increasing Volume on a formation break out. In addition, even with increasing Volume, Formation FBO's occur. Some of these formation FBO's involve changes in market sentiment - while others, do not.
Most 'shallower' channels become higher fractal channels once one annotates an 'accelerated channel' inside them. I continue to leave these 'shallower' channels in place for those trading on different resolution levels than my own. technically, one can always find another channel up the totem pole, but that really isn't the point of this methodology.
FTT's do not signal a change in pace. They signal a Change in Sentiment. How long this sentiment change remains in effect, and how far Price travels in the process has nothing to do with an FTT. That domino has already fallen. One then needs to look for the remaining dominos in the sequence in order to determine what must come next.
- Spydertrader
