Hi PointOne, thanks for your feedback. In the case of a pace increase, what you suggest seems logical. However, let's keep in mind what the purpose of our channel really is. Our objective is to create a seamless flow of tape to tape, channel to channel, catching the reversal points as early AND accurately as possible. If we widen the channel simply because volatility dictates we must, so be it. By this, I mean that larger, non-dominant traverses occur without any valid 1-2-3 formation for a new channel in the opposite direction. However, If a channel increases pace with a steeper 1-2-3 formation, any future FTT's or BO's that create a channel in the opposite direction will be realized MUCH SOONER, protecting more profits realized in the direction of the original channel. If one was to trade the most beginner methods, one would have to wait for an FTT and BO to occur through the original, more shallow RTL. If I'm off-base, please let me know. RoughTrader
my notes from the journal <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1364493"> it would make even more sense if gaussians were added.
You are correct and that all makes sense. However you should keep track of the original channel RTL too as it may be a tape resume point (dominant traverse). In other words your steep channel breakout may only be a retrace of the more mellow channel - so make sure you track what is the dominant volume at all times (not trivial!). (See Spyder's journal, no need to rehash it all here.) In my experience, there is a hierarchy of FTTs from steepest to shallowest. You don't have to know the bigger boundaries if you are reversing from tape to tape but it is useful information.
I think I have answered some of my own previous questions, but the more I think about the rules, the more I question "what makes a tape". My latest concern is the a two-bar tape. Specifically, for the case where H2 = H1 and L2 > L1 (or H2 < H1 and L2 = L1), we don't really have a "momentum" 2-bar move. Rather, it is closer to an inside bar formation. Given this condition, are the two bars sufficient to make a tape? or do we actually have to seen a later bar break through the H2 = H1 level (or L2 = L1 level)? RoughTrader
I have the document and have been scrutinizing in particular the pages you mention. Page 88 is the first reference for the formation I'm talking about. It states: "c. Bar 2 has a lower high and same low as bar 1 (fbp) - Use bar 1 for the left side of the tape." The document does not mention whether this formation qualifies as a tape. My question is whether, in this case on page 88, the L2 MUST BE LOWER THAN L1 TO QUALIFY THE TAPE or not. RoughTrader
Without sounding offensive, why do I get the feeling I am unable to get direct answers in this thread? RoughTrader