So this is a continuation from my last journal. There, we explored trend lines and just begun looking at FTT and volume tendencies in the channel. (Only need to look at this years posts to get up to date) In this thread we will continue to look for problems that pop up to us AS THEY ARISE in the markets. So we should all be looking at the same issue at least for now. Most of the readers this year will be more experienced then me. But if you happen to be confused or lost about Jacks work at best you can speed through my thread and in doing so speed through the process of accepting that his way is right and there is a method to his clearly organised method. Respect, not posting pics but instead using the choose file button below, helping keep focus and on track will be our first goal. Lets Open the chart to recap what we have seen
This is not some thing you should look at right now. But It is placed here for a reason. It would be best to skip to the lower "hypotheses" part part. Above chart, Legend 1.Red lines (2-3) going from top left to bottom Right represent our channel. 2. The other smaller channels are tapes and/or transverses. 3.PT =point 4.FTT=failure to touch (transverse) 5.DU- dried up volume 6.expansion is when we have to expand our red channel cause price 7.moved out of it. Or Volatility increased. Note PT 2 and 3 (even 1) were drawn ILLEGALLY that is to say that they were drawn in hindsight and deserve no respect. It is even questionable if we would of had the confidence to draw the trend line before our FTT. Observations 1. Between pt 2 and 3 we see price going up. during this time we look down and see decreasing volume 2. Just before pt 3 we see candles with really small bodies. 3. One of these candles have a really low volume bar. It is a white bar and has the lowest volume to date on the chart. (I don't like to quote Jack as I only see a tip of an iceberg and even haven't looked closely at it.) But this is a DU (or dried up volume) 4 After our DU bar we see volume increase from the DU 5 We then see price reverse at our red channel (sfter teh DU and increase in volume. 6 As price goes down volume increase, voume drops for a bit as there is a small pull back before the FTT and then volume increases again as price drops to the FTT 7. We see the biggest volume bar between the FTT to the FTT come in, it is green. 8. Dried up volume (DU) is not clearly defined and at the time it was deemed to be absent. 8. After this bar volume falls and stays low and price is very choppy in a small range. (near the blue moving average.) 9. volume increases and so does price. 10 price passes our trend line and we create an expansion.... ------------------------------------------------------------------------------------ Hypotheses development Price stayed in its channel unless it hit another channel. EXCEPT when we had our FTT near our moving average DU's occur near turning points at times 3 Up trend mini channels (red or yellow) are shown in the picture. between pt 1 and pt 2, between FTT and expansion, and the last move up in the yellow to the moving average from the bottom red line to the top red line. (RTL to LeftTL) Only the first up trend had decreasing volume bars. The others were flat or increasing depending on when it is looked at. We are observing to see a link in the change of volume bars can mean a potential break out.. ----------------------------------------------------------------------------------- After this we had a break out and found that it was justified because we "missed" drawing a channel. We also found that channel drawing is a battle between between what one sees before the fact, and what one can make fit to current situation. Also it is a battle of space on a chart, We left off assuming that a new pt 1 2 and 3 are needed.
As one can see, If they were to look at the last post or 2 on my last journal we left with an upward bias and price today is making new highs. An asteroid will also hit the earth. Lets try to fare and just.
John Henry JH? You need to read turtle trader or trend following to understand this has nothing to do with JH. surf
OPTIONS. Many options present themselves when we break out of a channel we look at 2 of them: . 1. To draw a parallel volatility expansion line the (GREEN) 2. To draw a new channel. PINK 3... Some of you may of been distracted by looking at the above chart and making sense of it. Some of your will now be detracted with this choice that presents itself. Since our intention is to make money of price we will let price choose. Price may show us that one is more beneficial. We also have to look at organisation, chart cluttering and our source for ideas (JH to date.) We should have orders in every day. But we do not put orders in when we have not done sufficient work. Even if we had an upward bias that could result in the most profitable trade of the week. We must miss the trade due to not doing what we should be. This thread was brought to you by money lost in this trade. It is an investment in a newbie that decides that this is where he is at.
I will try to be more clear. The work presented is from ideas floating in my head, at this time much of this is from JH. But it does not mean that it is JH work. clearly it is a developing system. The title can be understood in many ways in retrospect. Thank you for pointing it out
Lets try to keep things on track. For any off topic posts any one can PM me any time. Market surfers post was not on topic but it was an important one that needed to be cleared up. There is you, and there is "no one" and there is some one. Clearly you are trying to divert. Again PM me if you have a response. We are side lined because of time spent in the wrong places.