On 10-case geometry and beyond

Discussion in 'Technical Analysis' started by Simples, Jul 3, 2017.

  1. Simples


    If we start with the beginning of the bar it's the Open. There are several possibilities. These are some main ones for this context:


    a) High volume BO in-line with higher black volume in trend, could go long though still early in bar (aggressive).
    b) High volume above previous close, but no BO yet, wait for confirmation.
    c) High volume but still inside OB, wait.
    d) High volume BO below OB, anticipate Change or at least long not interesting any longer.
    e) High volume BO below RTL, strongly anticipate Change and start considering reversal.
    f) Low volume BO. Less attractive than a) but could still go long, expecting some continuation (aggressive / chasing the market).
    g) No BO yet, wait.
    h) No BO yet, wait.
    i) BO below OB on low volume, anticipate short-term limited upside.
    j) BO below RTL on low volume, anticipate FBO or BO and forget longs for a while.

    Of these, none are particularly interesting at Open since we should wait for more data, but if aggressive (ie. high quality pick) could go long in a) or f).

    I think this should cover Open. Interesting cases to look further at is a) - c) and f) - h). They can each have High First or Low First, so will be at least 12 more cases, maybe more. d), e), i) and j) may be pruned out of further long-analysis.

    If this helps, I can continue with the interesting cases and High First or Low First, or if you have concrete suggestions I can attempt to incorporate them, though I'm not exactly sure how to now.

    EDIT: Maybe b) and c) can be merged together, as well as g) and h) as they're very similar?

    Also, maybe d)-e) and i)-j) not too bad depending on further price development, according to possible new channel forming, so shouldn't be pruned after all? Seems to be many possibilities.

    Last edited: Jul 9, 2017
    #51     Jul 9, 2017
    Sprout and dratsum like this.
  2. Sprout


    This is a good segway into failsafes. Failsafes are in an ordinance context. A way to handle a worst case is a off read of off time,.. out of sync,..phase,.. vibration,, etc,..

    The most recent bar gives us these failsafes. The first is our lateral boundaries. The boundary that defines IB or OB is the first indication of context. We are in our small diamond form within the geometry of the 10 price cases.

    If the open is outside this boundary then we know that four cases are eliminated. We look at volume and the direction of the first leg. There will be a moment (or not) the close comes before the 2nd or 3rd leg. We advance one peak to define the current bar as a single bar leg with a missing 1st and 3rd leg. This makes more sense when you look at what came before, the rtl, the context we have created.

    Failsafe. If our position is opposite the right side of the market. The failsafe is the hardline of the stoploss. Our risk management has very low tolerance for the reduction of capital. If we missed identified the entry, we are in a state of unknowing.
    We act in knowing. This loss is the smallest loss possible per unit of time.
    Accept this and reset.
    As one's skilis increase reversing comes into view.

    As one advances the BO of the RTL is always viewed as changes in sentiment. This is where the early birds hang out. Other early birds hang out at the FTT's. Others hang out at the prior turn as an early early bird. It gets darkest before the dawn for them.

    Changes in sentiment occur on all timeframes and multiple fractals within those timeframes.

    Advanced experts use this knowledge as wind in the sails,...
    #52     Jul 9, 2017
    JamesRoscoe, dratsum and Simples like this.
  3. Sprout


    Imagine the open cases you identified as closes.

    On two images, draw a bar each way.

    What is the context now?

    Where does price want to go now?

    What must volume do for this to be true?

    On case a)
    Price incr, vol incr, open above our lateral bookmark.

    This is Continue

    The correct symmetry is true.

    Enter market long, draw RTL from L.1 pt1 to L.0 pt3 (as the current low of building bar. )

    Exit/reverse when a close XO this RTL produced by a two bar high volatility move. Anywhere from 1 to 4 bars in typical length.

    Reset Lateral Bookmarks and possible RTL's, repeat.
    Last edited: Jul 9, 2017
    #53     Jul 9, 2017
    Simples likes this.
  4. Simples


    Still, just for educational purposes, not trading this.

    Stock is falling directly from Open, so would be a good day for long if stock going to ie. 680 (Open at 679):


    Rough look at longer view has some promise of upside BO as well (but this is not QC'ed and says nothing about probability):
    Last edited: Jul 10, 2017
    #54     Jul 10, 2017
  5. Sprout


    Yes, we are building.

    The idea of MADA is to ground every bar (on your trading timeframe) through the process that ultimately requires an action. The most frequent action is hold (continue) in between signals of change. It's important to complete the loop. Since we are monitoring EOB. Then at the EOB, after sweeping our dataset, we have a conclusion. This is the conclusion we test with the market. The market is our teacher and is always right. If our conclusion was false, then we debrief as we are sidelined. We only enter on knowing. We sideline or exit when our understanding isn't in alignment with price action. Money is a by-product of understanding. To set up a system any other way is like receiving random rewards de-coupled from any causal variable within our control. Hence, the uncontrollable outbursts of rage, anger, frustration, fear, anxiety, etc..
    We are cultivating a better and more productive state of being when participating in the markets.

    On the first chart, the opening bar was an OB. This set the stage for a lateral. We draw our lateral boundary. As soon as the current close extended past the lateral boundary, this was a short trend segment presenting itself. The first short trend segment was over when price XO the rtl drawn on the high of the previous bar as point one and the high of the current bar as the pt3.

    The fourth or fifth bar set a new pt3 for the short channel underway. We observed the Dominant and non-Dominant traverse of this short channel up to this point.

    In a situation like this, when drawing a new channel coming into view, sometimes it's better to recycle the pt3 as opposed to the pt1.
    #55     Jul 10, 2017
    Simples likes this.
  6. Sprout


    It looks like you have the ability to go to a faster timeframe than the Daily. If so, pull up the 30min. This will give you an idea whether the volume pace is in line to become a peak or a trough volume notation for the day.
    #56     Jul 10, 2017
    Simples likes this.
  7. Simples


    It's already after close here (after 17). This is 15 min, don't have option for 30 mins. It's T-day:


    Unfortunately EOD is scaled differently so won't go well with working chart:


    So will need another solution if to follow this bar by bar in future.
    #57     Jul 10, 2017
  8. Sprout


    That's ok.
    We have plenty of other tools to work with. At Daily EOB we see decr vol with an IB. We just logged an A turn with this bar. If volume decreases from this bar in subsequent daily bars we'd still be in A turn non-Dom traverse hugging the RTL of the larger short channel.
    This is the setup for a B-turn and return to Dominance set forth at Jul 1. This is also the setup for a C-turn and Change of Dominance. The amount of volume that arrives will determine which of the two channels we have annotated is currently valid and the one that has served it's purpose.

    With this daily bar, we see a missing leg1. What did price action do at other OB->IB combinations with same volume profile of peak to trough and a missing 1st leg?
    #58     Jul 10, 2017
    Simples likes this.
  9. Simples


    Went down like a rock 10-29 May (though, after BO of OB downside). PA could be overextended at short-term (looking at 1yr chart) and medium trend definately down (again 1 yr chart), but change of sentiment could also provide some support.

    Looking at 1 yr I'd expect some pull back to a new P3, but if PA rockets up it'd be nice to be able to jump aboard too (though this is what proper stock picking will aid in so not a big concern here).
    Last edited: Jul 10, 2017
    #59     Jul 10, 2017
  10. Simples


    Could be similar PA to 2-9 Jun with sideways drift, Change of Dominance and DU of volume, though we won't know it will play out too similar, there could be similarities.
    #60     Jul 10, 2017