Fair enough. In that case, open up the document Tums linked for you. Has a section devoted to the basic principles of taping. Good luck.
I don't do SCT but I have read up on it from time to time and taken a few hints from it. I would say that the charts all are going to appear to be annotated after the fact because you would be drawing the channel as it exists at a certain point and then redrawing it as things shape up and getting rid of all the lines that don't apply... you would have drawn a point 3 at 11:25 or so and then redrawn the channel later and erased what you drew at 11:25...
Hi frostengine, The bar in question Fails to Breakout (FBO) of the lateral, . Some of the folks shorthand this as LM-FBO. The market is telling the trader to wait for additional information to confirm that the non-dominant movement is complete... The very excellent reference chart which you see contains 3 levels of containers (tapes, traverses, and channels). With regards to rules, you may be interested to read what Jack is telling the beginner here: We are not making up stupid rules nor rule sets. we are building minds, more unconsciously than not. Best wishes in your journey.
Remember, it's not purely about price patterns. You can't mark a point 3 without volume confirmation. Therefore, 11.25 couldn't be a point 3. Now, lets say you draw a 1 -2-3 channel, and afterwards realize that the angle of the channel needs to be adjusted based on a new point 3. In these cases, you leave the original channel intact and simply draw a new channel.
The 11:25 bar closed lower on rising volume, I would have thought that would be a pt3 but what do I know.
That's the beauty of the Hershey Method... what is impossible for one eye... is crystal clear for the other. At 1125 [EOB], it would be a good place to make a geometric Point 3. That's what I were doing before I learned the method. As Neoxx pointed out, we need volume to support a Point 3 proposal. This differentiates the path the "pure" Price Action crowd take. We could have gone short at 1200 [EOB]. But when the price tucked back in the Lateral Movement at 1205, we knew right then and there that the market wasn't ready to give up the ghost yet. We had plenty of time to wash with a small profit... and to stand aside to wait for the next signal. There's no need to hope, panic, or get frustrated... Point 3 will come, when the market is ready.
That's the real beauty. What I am also seeing is: 10:55 [close of] is a pt2 of the pink down traverse as confirmed my R2R gaussian ending at that bar. What's next? Pt3. 11:05 and 11:10 [close of] that deliver the increasing red volume are pennant FBO and spike bar. Both cases where increasing dominant volume can develop while price is moving from pt2 to pt3. So, have we arrived at pt3 yet. I don't think so. So we have a down traverse followed by lateral movement. Hm, sounds like a down channel. This stuff is so amazing it's unreal
Check out bars12:35 and 12:45 [close of] both on increasing red volume. Red volume which develops how. One from spike and another from pennant BO. Again two of three cases where increasing dominant volume can appear while price is moving in non-dominant fashion. After leaving the lateral traverse the price continues to move in non-dominant fashion. So we need to transition to a new dominant mode red, then to non-dominant mode before reaching pt3 and making it back into traverse. Increasing red on 12:55 [close of] delivers first increasing red volume which isn't one of the three cases (where increasing dominant volume may appear while price is moving in non-dominant fashion). So do we have a permission to seek change on 13:10 {close of} Bar when it appears as if we have a Jokari window change signal. No we do not as we are not there yet in a sequence. Decreasing black gaussian signifying non-dominant portion beginning with 13:10 [close of] bar reminds us of that. Another increasing red on 13:35 [close of] results from pennant BO (one of the three cases). And finally 13:50 [close of] increasing red takes us back into the traverse and gives a permission to seek change. The increasing volume on that bar comes from a bar formed inside the lateral formation which is different from FBO. This stuff is simply awesome.
To me, that was biggest Aha! How sad is it not to see how many are having a difficulty at knowing how to know. Without knowing it, every single one of us have done this before, this whole mind building. It was called learning a Language. If you were to open a book and look at the characters, put yourself in the position of a caveman, it would be madness! The caveman doesn't know how to know, alas the book ends up as a sacred object!! Level 1:The markets give us 4 basic components: -Point 1-2-3-end; -It's dynamic: Pro rata volume; -2 pilars: Right and left channel line; -fractals. That is it! That is all you need to know! From that moment on, you either move on to level 2 or become an ET-stand up comedian. Level 2 is a tough one! Why? because it involves YOU. "Knowing how to know the market" is what evolves out of "Knowing how to know me, myself and my mind" Visualization is the Key component at this level. The bars we look at are the holy grail: They are noised out. It allows us to visualize what movement occurred. In nature we can compare this to the bees. In the nest there are hundreds of them together, moving around in total chaos or are they?! It turns out many of them were doing a movement which had a pattern (ritual). Self-sufficiency is the second component; It takes personality and belief in one's self. Repeating an other man'ss perception wont help you in the long run. This also works the other way around. Perception is just from a point of view. Things may get ironic! Bottom line is you have the answer to your question through component 3. Third component is using your unique ability (visualization) to debrief the market. Whilst the bars noise out the Ticks, you need to use your ability to noise out the bars to bring about a character. (A linear regression.) A character builds a word, which adds context. We repeat the characters ad nauseam. Forth component is knowing that the mind needs rest. Overdrive is a no-no. Just as the body gives signals, so does the unconscious mind. You may not realize it but when you've had dinner, you probably ate too much. why? because since we've never listened to the signals before, you don't notice them anymore. This is the same with the mind. Level 3: