Another questions as far as tactics go while I am learning to draw these channels. Is the video, Bundlemaker makes the point that one should start drawing channels immediately. Once the basics are down, he then suggests ACTING on those channels, and not worrying about being wrong. You'll learn to correct yourself as time goes on. Here's my question. There have been times when I think I see a pattern forming in DU stocks which indicate the next day will be either an up or down day (TRA two days ago, FMCN today for shorting), but I did not act upon it. Would the end of day be a good time to act upon a trend I see forming on the daily chart? JF
Nah. Everybody makes errors from time to time. Even me. Nothing stupid about it. Learn from it because you will see this again. - Spydertrader
Allow me to translate your question ... "I haven't learned to thoroughly annotate a chart as part of the M-A-D-A Process just yet, but can I expect any consequences from jumping ahead to the second 'A' portion of the process before completing the 'M, first A and D' portion of the paradigm?" Do I still need to answer? - Spydertrader
Despite all the times I have seen increasing volume between pt2 and pt3, I still don't think this aspect has truly sunken in. I saw the change at 15:40 and even saw the incr vol that followed but with pt1 and pt2 on the same bar and the rtl bo on decr vol, I was convinced we needed to fan to pt3. I have some homework to do........ Thanks.
Spydertrader, if you'd be so kind. Following the bi9foot question as to what goes on inside formations: a. For a beginner all decisions take place at the end of bar. b. No decisions are made while price is inside formation "For a beginner, as long as Price resides inside a formation you cannot take a trade (even if you wanted to)" http://www.elitetrader.com/vb/showthread.php?s=&postid=1614733&#post1614733 1. On those occasions when formation is formed inside other (larger) formation, which of the two is considered for the purposes of determining the "inside a formation" (referenced above in (b). In other words as a beginner am I limited by the borders of smaller formation or do I wait until price leaves the boundaries of larger formation to make a decision. See attached. 2. I know that you consider price to be inside formation even if bar closes right at the boundary for the purposes of determining formation BO/FBO. Should the same rule apply for decision making part as well? In other words as a beginner I can not make decision if price closes at the boundary, even if there's a clear signal on YM. Thank you.
One should not attempt (as a beginner) to trade within formations. Rather, one should attempt to anticipate the breakout there of. However, Monitoring, Analysis and Decisions remain a continuous process. Keep in mind the effect context may have on this answer as well. In your sepcific example, the context which may effect this answer is the Point Three down channel (not annotated) which the Lateral Formations creates as Price moves from Point Two to Point Three. - Spydertrader