Quote from austinp:
Too bad that class doesn't include you. Funny, that seems to have painted you well. Since all you do is generally post based on your own testimony, you can be easily dismissed. You have zero clue how I perform, and I don't trade using divining rods, as you appear to do. Based on your recent posts, it looks like you are entranced by witchcraft:
"First chart shows trendline breaks of 5-bar fractal patterns. Fractals (pivots) are very common base signals for mechanical system volatility breakouts. The filtering process for exactly which ones to trigger can include volume studies, momentum, highs / lows, x-number of bars back, much more. Obviously the big programs that center around breakout strategies are somewhat more complex than easylanguage in a retailer's box. But, core approach appears similar. Key for us is to get in ahead of those anticipated breaks, or add to initial positions into the surge moves when levels break. I'm almost always in ahead of those key spots on a chart, enjoying the momentum push when it unfolds. Oops trades include failed wedges and failed coils, i.e. the box pattern edgehunter described... which is actually a "spring" pattern. About half these wedges break and run as expected, it's the failed pattern types which really surged on volume this week. It was very deliberate failure, leapt out at us for easy plays."
Oh yeah, the triangle = wedge breaks in ES have been more trappy than legit. Every day I've seen a couple of perfect wedges break one way and immediately slam the other direction on big volume for distance.
Follow-up on the fractal patterns = pivots. If you get in front of these on a trade and the level breaks, good to go. You've got program surges filling your sails.
I see a lot of program acceleration on breaks of 5-bar fractals. It looks to me like many of the programs are volatility breakouts based on x-number of bars backward in time as a core basis.
That said, all 5-bar fractals (pivots) naturally include 3-bars and most are 10-bar patterns, etc. some of the filters may be volume based, time of day based, trend = momentum but the overall premise right now seems to be measured breakouts on programs.
Many times these visible levels - trendlines break and it's an instant surge higher or lower respectively.
Volatility of past few days has been historical variety... off the scale of normal market action. We base our long-term career success on degrees of normalcy, which this is not.
Markets will exhaust themselves soon. Volatility will be more like last July - Aug and Nov, with periods of calm in between. Nearing a bottom soon that will hold for awhile, which will be part of the settling process.
Contrary to current belief, the indexes will not drop to oblivion straight down. It's about to get real bouncy, real soon. That's what these whipsaws are predicting.