You (and everyone else following these many pages) already know the signals for change. Needing to learn them isn't where people have had problems. The difficulty most people experience comes from knowing when the market has provided a signal indicating the time has come to seek a signal for change and / or having the ability to differentiate from times when the market has signal the trader does not have permission to seek a signal. For example, 14:25 Pm forward to end of day provided several instances where the market showed signal of change, but never indicated the time had come to look for them. Now, one can easily determine which path represents a better choice in terms of what is needed for each individual by simply asking oneself, 'Do I 'see' any signals for change between 14:25 and EOD?" If a trader can see them, then clearly, the trader does not need to learn them. If a trader (at any point during this timeframe) wondered why the market did not follow the signal provided, then such thoughts indicate a far different path where one needs to apply focus. As I have said many, many times, one cannot seek a signal for change until the market has completed the sequences from Point One to Point Two to Point Three. Now, feel free to travel down any path you wish, but were I you, I might find it critical to know exactly when those sequences signaled completion. HTH - Spydertrader
I have defined for myself a Traverse Level Signal for Change as something that which if occurs after sequence completion results in change of trend 100% of the time. While reviewing the charts, I have found the evidence that Pennant FBO (where price exits the boundaries established by the 1st bar of the pennant and closes back inside) does not meet the definition above.
This is interesting to read. Are you saying that this is not yet defined? I'm still reading the original futures journal and thought to myself that I will wait before I ask that question. Maybe it is answered somewhere in the Iterative refinement thread so I better wait until I reach that point in the journal. But if this basic concept is still not defined after two threads and so many posts then I'm a little bit worried.
Such assertions make little sense in light of how the Price Volume Relationship works quite effectively on a 30 minute and / or Daily fractal when applied to the equities markets. Clearly, nothing magical or mystical exists on a five minute time frame. 'Traverse Level' simply indicates trading with one tool set with the intention of not jumping to a faster fractal (specifically because one isn't using the tools required to trade that faster fractal) throughout the day. In other words, one learns on one fractal, then applies what one has learned onto all others. This is what I did moving from equities to futures. One can change markets or change timeframes, but the principles apply universally throughout. Any market, Any time frame - provided sufficient liquidity exists. - Spydertrader
Thanks Spyder for annotating the Dominant and Non-Dominant bars. This is an area I need to work on. I had a nicely annotated chart I was going to post at EOD, but unfortunately for some reason, Ninja Trader didn't want me saving it today FWIW, I found the 10:45 and 14:05 bars very telling clues to be alert for change within the next 3 or 4 bars.
Thanks for pointing out those annotations. D and N do not refer to Dominant and Non-dominant on the previously posted chart - even though some letters appear to correspond. You'll note a few 'D' bars inside a Lateral, when clearly, a Bar would not be dominant. To avoid confusion, I have reposted with a more clean chart. Again, thanks for bringing the annotations to my attention. I'd hate to add to anyone's confusion. - Spydertrader
I also have this definition because otherwise a signal for change can't be a signal for change. There is a definitional aspect to the pennant change signal and let me present my thoughts here for your consideration. Pennant = a 2 bar formation. All these are 3 bar entities: Pennant BO = a breakout of price with a close ouside the high or the low of the first bar of the Pennant. Pennant FBO (1) = a breakout of price above the high or below the low of the second bar of the formation but NOT the first bar and with a close inside the second bar of the formation. Pennant FBO (2) = as above but with a close outside the second bar of the formation. Pennant BO FBO = a breakout of price above the high or low of the first bar of the Pennant but with a close inside the high or the low of the first bar of the Pennant. Pennant BO+FBO = a breakout in price with a close outside the the high or the low of the first bar of the Pennant followed by a fourth bar which has price close back inside the first bar of the Pennant. The signal for change is the Pennant BO FBO and as best I can tell, but I have not done an exhaustive search, is kosher. lj