ES U8 Daily Chart July/ 7 /2008 Daily ES bar formed an outside bar today on increased volume. Made a steeper point 3 down within the white dominant traverse, using outside bar today as point 3 on increased volume. Volatility expansion of Dominant channel today. Range today = 34.25 points Close of bar = 32% of range today
I got out of BEXP today because I believed the decreasing black 10:30 bar(first circled) was a confirmation of an FTT of the 10:00 price bar of the purple channel. Turns out it wasnt. PRV showed decreasing red on the 11:00am bar and the trend continued down until an actual FTT appeared at the 1:00 bar(second circled). Lost some profit potential here and I'm trying to dig back into the journals to find an example specific to this one. Was it the decreasing red PRV of the 11:00 am bar that should have got be back on the short side or the fact that the price bar at 11:00 broke the low of both the 10:00 and 10:30am bar?
It appears to be the case. An excellent advice indeed, thank you. Got it, definitely a first thing on my list now. P.S. A quick question re: Lateral Movement annotation. Specifically those cases of Lateral Movement which did not start of as a pennant or two bars with equal highs and lows. Today one of them was annotated between 1345 eob ((pt2 of the red down fanned outward channel) and 1410 eob (an FTT). When market has made a left to right traverse in which price moves in a lateral direction is a scenario where this type of annotation is used according to my understanding. From the way they are annotated (on attached I highlighted them with red) it looks to me like the first bar of the lateral movement establishes the boundary. (just like the Lateral Movement which starts of as a pennant). Then the second bar close is lined up within the first bar. Now, the third bar closes inside the boundaries established by the first bar, and inside the second bar, except the highlighted number 9 and today's [between 1345 eob ((pt2 of the red down fanned outward channel) and 1410 eob (an FTT)]. These two examples are exceptions where the fird bar closes within the boundary, but not inside the second bar. When you have a moment, could you elaborate on the rule set used for annotating those in terms of bar closes and their relationship to each other.
See advice recently provided to romanus. In addition, Remove the indicators (MACD & both Stochastics) from your charts. They have hindered your progress. Focus entirely on Trend Lines and Gaussians. You have missed something critical as well. Review the Building Channels for Building Wealth Document. Start annotating on a daily fractal, and note how Volume moves Price within tapes, traverses and channels. Review Formations (Pennants and Laterals). After this review, the answers to the questions above should appear right before your eyes. - Spydertrader
Laterals can form retraces, traverses and channels. When laterals do not form any of these three things, they have no other meaning. Use Bar 1 of the formation to 'set' the upper and lower boundary. Do not think of Laterals which form retraces, traverses or channels as 'signals' to begin to look for change. Rather, note how these formations have a beginning and an end. Note also, what enters a lateral forming a retrace, traverse or channel, also exits in the same fashion. Lateral Formations have subsequent bars entirely inside the forming bar (highs less than or equal to the upper boundary & lows equal to or greater than the lower boundary). Lateral Movement has all the subsequent closes inside the forming bar (equal to or greater than the lower boundary and equal to or less than the upper boundary). - Spydertrader