Flash paradise: RTLBO/FBO on IV MUST be fanned if new P3. A beautiful demonstration of this on YM today and thank you Victor. Rock on: http://www.youtube.com/watch?v=tqWP1rsAMrw lj Yes. This is a two part message because we just can't be that obvious. Rock hard: http://www.youtube.com/watch?v=bBI4T3uoKUw&feature=related
I have lost my blade Or else some butt-munch stole it A ruler is best Bozu Allright now with that twerp out of the way, a question du consequence. So let's say we have an RTLBO on IV with a further BO/FBO to a higher high on the next bar BUT this bar has LV when compared to the prior bar. Do we fan or wait? Such a scenario developed this AM with the 10:46 YM2 bar. As I compose this lump of lard, there is furious PA at the YM RTH open, 29 points above the trader's ID Pivot and as well the 100% Fib retrace of the AM gap. To top it all off, it's Friday 5/9/09. Need I say more? Yes. Price just broke through and what else, ran smack dab into the RTH high from 2 day's ago. Perfect. lj http://www.youtube.com/watch?v=MJYdJ53_tS8&feature=related
The answer would be that one waits since although there was a BO/FBO it was on LV and thus this could represent an X2X. The same would hold true if there was no FBO. FWIW, IMO, there are some excellent charts being posted by romanus on the IR thread. lj
By excellent I mean that the logic that is used to construct the various tapes, traverses and channels follows, as best I can tell, a set rigor. However as excellent as the constructions may be, if the RTL's are 'incorrect' then what follows from them will be incorrect. Therein lies the rub. Unlike Marc Bolan, I simply cannot slide, so here's what's for the 9:30 - 4:15 time frame, and the monochrome is intentional. The 5/8/09 terminal construct is not yet complete. lj http://www.youtube.com/watch?v=2m9XLGhEu3U
Now add in the dictum, "You MUST fan with an RTL break on decreasing volume" and apply these most recent thoughts to a tape. BTW, Mr. Black has an expanded version of the last pictorial offering which is similar but not identical. Decisions, decisions. lj
The most important 'driver' in the construction of a new traverse (like a new downtraverse following an uptraverse) is the RTL of the old traverse. The Hershey trader is faced with the task of being absolutely sure that he/she has the correct RTL. When one 'draws' an RTL, as its length increases and/or the angle between its supporting poles decreases, it can be tricky to accurately draw the appropriate line far into the future (that's why one draws RTL's - they are future projections). If there is a pennant, one can lay the RTL on the software-assisted pennant boundary but if there isn't a pennant, care must be taken. The question naturally arises as to whether or not this driver has a built-in redundancy associated with it so that one does not have to draw a wretched RTL from some appropriate point that was discovered many hours, days or weeks ago. IMO, there should be RTL redundancy. Perhaps the sandbox is bigger. It's a very dry sandbox but preliminary observations as to one's ability to play in it, look most encouraging. lj
As someone once said to me, "The JHM is simple but it is not easy" and that is true. There is, IMO, always a huge contextural component which is weighted differently when you are channel or traverse trading as opposed to cutting the 'big' turns with two-pairs or the not-so-big turns with the STR-SQU 'flicker' and walls. Everything is the same but one looks at different parts of the assembly differently. For the 'slower fractal' traders you must absolutely know where you are in the 1,2,3 sequence or you will get royally screwed. Unless you elect to tape trade WGT-style, you have no business being in the market. What is very confusing is the situation where you have what appears to be completion. You're then 'looking' for a change signal, you 'find' it, enter the market and then watch as the whole thing goes down the crapper. What's the deal, Neil? You KNOW that change signal was Kosher yet no change occurred. The deal is context and the critical component of context is the CORRECT RTL. You simply cannot have change (of the standard traverse type for the slower fractal traders) if you are on the wrong side of a correct RTL. What does this mean? It means your P2 has to be positioned above (uptrend) or below (downtrend) the correct RTL. If you don't have the P2 you can't have a P3 and you can't have change (an FTT) without a P3. So draw some tapes and draw some RTL's and watch the stuff for a few days. Do this on YM2 and ES5 and watch very closely how YM leads ES at pointes du change. Oh yes, and to facilitate this exercise you have to do the Spyder-slide, the nkhoi-nudge or come up with something of your own to deal with the gap. Jack likes to talk about developing a sense of trust between oneself and the market. It is a concept that is difficult for edgers to appreciate because the very nature of their trading method (probabilistic = correct, X% of the time) dictates that they are going to get screwed periodically. Hence stops. The JHM is NOT probabilistic. It is Boolean and hence is supremely well-suited to the 'tell' concept but you gots to have the correct tell or again you are going to get screwed. IMO, a real tell is an absolute on-off, a "0" or a "1". So for JHM traders who are not sure about whether or not their 'tell' is what it is supposed to be (an absolute on-off signal), either stayTF out of the market (Option A) or use a stop like Mr. Black, the benificent Bulgarian does (Option B). Both will help you avoid nasty losses. One last thing the difference between 'anticipating' and 'predicting' is one that relates to the time component of the three degrees of market freedom (P, V and t). When one anticipates one lets the market inform you when the time is upon you, whereas when one predicts one instructs the market as to when that time should occur. I'm back to observing, "M"-ing, if you will. My risk capital allotment (as opposed to end condition) is so pitifully low I simply cannot trade, for real, until I'm dancing with Mrs. P. For the perspicacious B-team market aficionado (is that an oxymoron?) that would mean I have selected option A. lj For the record, there are some B-teamers who really are effective at their edge-craft. Hypo is one of them and I truly do miss not having his wit and yes, occasionally, wisdom, gracing the boards. We are all occasionally wise and it is usually (and best) when we don't know that we are so. Here's a great song from a great movie: http://www.youtube.com/watch?v=NAqRwZ9YYw0
Clearly a B-team lesser light. Distinguishing characteristics: can't spell; immediate ad hominem; inspired moniker; stupid (= I don't understand and I'm proud of it). That will do for starters. lj
This AM is a classic example of the criticality both of the 'correct' RTL and of dealing with it properly. Although many things last PM pointed to a reversal, the dominoes did not fall this AM and if one held on to the idea that a reversal must have occurred because ..., then they got screwed. This same failure to follow through happened yesterday afternoon. The so-called 'signals for change' and 'signals of completion' are not cast in stone and are, IMO, VERY contextual = discretionary. There is nothing wrong with JHT but at lower levels of resolution, the trader must be appropriately discriminating and not blindly apply some preconceived rule set. Which is to say that if we really bottomed out between 10:26 and 10:28 this AM, the dominoes should continue to fall. lj