Discussion in 'Technical Analysis' started by Simples, Jul 3, 2017.
Good work. The first three are accurate. Your fourth answer brings another concept into view. It's that trends can be interrupted at any time. In this example, answer 3 is the fourth turn trend. It is that of the Drift Trend. The drift trend can cycle through A and B turns until a point that they don't. This is the overbought and oversold regions of the stoch. These zones are associated with accumulation and distribution in popular terms. The third type of Turn Trend has not presented itself in this PV chart.
Bar 26, 29 need revisiting.
Now that we have most of the Turn ID's, start to look at Turn ID's in what came before, the current turn and if that was the current bar, what were the likely Turn ID's that must come next? Look at the zigzag trend segments, look at pace and slope of the 1st dominant traverse after a BO of the prior trend. What helps is to trace price as a bar is build from 3 legs.
Notice how the 1st leg of any of the 3-leg bars always entices a trader to enter. It's our Sym. Through the creation of multiple containers of context, we have a robust backdrop by which to make an informed decision. A lot of times, that decision is to wait. Hold if we are on the right side of the market and no signals of change. Reverse if we see a signal for change that builds a congruent dataset that we sweep. Sideline if it gets confusing. Enter when we see directional movement with incr vol. Exit during the tail end of the directional movement when vol pace decreases.
It's premature to get into the trading aspect of it, just a seed for future discussion.
This will bring up the next area we will clarify - high volatility PA in building a bar vs the path of least resistance.
Like 26 Jun, like an intrabar "SYM" / consolidation?
Is the last (AB)-sequence interrupted?
Following the flow, there's abrupt C-reversals , B-trend boosting (sometimes sputtering engine) and lots of A-drifting
I don't readily see a EOB Sym in the price case on that Bar.
May 9th the Short channel was interrupted at bar 19. If that was red volume, then it would have been a B-turn. The B-turn would have completed the smallest drift trend C-(A-B)-(A-B)-C.
Drift trends can go on cycling C-(A-B)-(A-B)-(A-B),..etc. Not too long though before volatility arrives with a C-turn interruption. There is a typical drift trend from the 30th to the 8th; C-(A-B)-(A-B)-C
Volatility arrives in 4 C-A-C turn trends as the tug-of-war of dominance plays out with BO at Jul 1.
On a larger fractal we can see C-A-C are turns themselves. Dominance one way then dominance the other just like
The major takeaway is viewing tapes, traverses, channels, turns and trends as composed of Dominant move -> to non-Dominant move -> return to Dominant move.
We know what's what by measuring Volume.
By annotating 50 charts in this manner, your facility will improve as well as recognizing changes at the Hard Right Edge which is getting us to RTH.
The annotations that are a specialized are the zigzag drills. They are not necessarily annotated in real time once one can see the "space" in the minds eye.
We have defined 2 of the 4 primary characteristics of volume.
What would the other two be?
If we zoom in on 26 Jun bar as an idealization:
It's short-lived, maybe 2/3 of a bar (sub-bar) or less and small, but does resemble a SYM. It's a very symmetrical doji at least, so could have similar characteristics but weaker in the higher fractal / timeframe:
Or maybe it is not symmetrical enough? If open and close were closer to vertical center?
Peaking (topping) and Troughs (bottoming)?
You got it. The example you provided is what can be discerned when one shifts from a traditional up/down vertical orientation of PA to one that is horizontal.
We see it as aggregate time-scaling where a 15min bar is 3 x 5min, etc.
However we are creating a different type of display through annotating and logging.
If you take a copy of your 5x5 rectangular grid and do as you did above tracing the path of least resistance to build the final representation of a bar. You'll notice price passes through the doji on all 3 legged bars.
(You'd make a trace drawing next to the bar depicted in the 5x5)
Take another copy and if you take the path of greatest volatility, price will pass through and present doji's multiple times.
As one drills down in timeframes this can be seen ie. 30min encapsulates 6 x 5min bars, etc.
However what one is building is a recognition on the current bar of one's trading fractal whether there is greater movements of bi-directional influence or if the bar itself trends as the bar is built.
There is a region of bars where this will happen more than the others on the 5x5.
Essentially this is the critical line of support/resistance that shows sentiment. When annotating channels, one comes across another concept coming into view - Congestion, Convergence, Centering (CCC). It's the zone where two opposing channel RTL are forming a forest sized Sym.
As the channels are being annotated, by waiting for a resurgence of dominance, there comes a point where any pt3 will XO the horizontal, sentiment has shifted on the larger timeframe.
This is simpler then is sounds. Look at the 3-legged bar. One could draw a RTL as price reaches for it's high and low within this bar. The slope changes as this happens and shifts from long to short or short to long. This is the reasoning behind the insight all 2nd legs are the dominant leg.
To note, I am describing 5min bars. The chart you are working with are Daily bars. The principals are the same.
The four primary elements of volume leads us to the "Pattern"
The "idealized" pattern is b2b2r2b for long and r2r2b2r for short.
Let's go on a hike. We are hiking up the peaks and troughs of volume.
We'll work with the first one. For the start of a Dominant long, as we annotate and log, we will see decr black volume with incr price (b2b2r2b) This is price still within the boundaries of the prior short channel. We have just logged an FTT (which frequently becomes the pt1 of the new opposing channel).
This is the trough on the volume histogram. When price XO the RTL, if Dominant long is true, then incr black volume with incr price will come to the market (b2b2r2b).
This incr in volume will peak at some point. On smaller timeframes this lines up with the bar. On larger timeframes the peaking of price is offset from the peaking of volume. Volume peaks come first in this context. This is also the pt2 of our price channel. As volume decr, then we are in a non-Dom move (b2b2r2b) If Dominant long is true on this larger channel fractal, price will decr. At some point (pt3) this changes and the previous dominant price direction will resume with incr vol (b2b2r2b). This is move 3 - a return to dominance. From pt3, if incr vol (in comparison to the prior segment of incr vol), then price will form a VE. If the incr vol is not at the same pace as the prior segment then an FTT will present itself in price action.
The symmetry is true for r2r2b2r.
Start with a fresh chart. Use the distinctions you've created so far, annotate and post it.
I've a fresh chart here with some space to focus:
[(UPDATED again to fix some color errors)
In your charting software you should have the ability to change where the current bar is being built. You want open space in the future of price action.
Also we want to start drawing all the price cases. Your should be able to fill within two parallel lines. Light yellow for laterals, ftp, fbp, syms and hitches. Violet for stb, str. Blue for OB.
This is just a screenshot from a website called BigCharts, and they don't provide that option unfortunately. I'm not sure exactly what is required yet for this methodology of annotation, but will something like this suffice just for now (created extra space to the right)?
I know this is low-tech, but would rather keep complexities and limitations of tech out of the way just for now if possible.
Meanwhile I'll look into setting up NT, although I don't have access to download data for this particular instrument anymore, or the same data at least if I find a workaround for that, so might be different data and time spent for this particular setup.
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