Something to think about during the holidays: While starting out with all of this a good way to build trust in this system (or any system really) is to verify every little thing/tenet for yourself. Don't take anything that anyone says as an absolute truth but rather think about things for yourself to understand the underlying logic and come to your own conclusions. during my journey there have been many things i came across in the forums that did not make sense to me, or at the very least didn't make sense as they were written in the literal sense. Attached is one example of something we all take for granted but is not so straight forward as one may think. The underlying premise is that the market moves in a fractal manner and follows an exact sequence of events. More specifically : point 3 comes after point 2 which comes after point 1. Simple enough right? in the attached you see the fastest channel built from 2 bars , we all probably drew the same channel on the left as we did on the right. It has pts 1,2,3 and the obvious ftt . Let’s follow the sequence of events for the left case. We have a low (pt 1), on bar 1 ,an obvious move up on bar 1 to get us to (pt 2) , a move down to the second bar low (pt 3) and a move up to the ftt. Awesome so simple. BUT can you say we have the same sequence of events on the right case??? Do points 1,2,3 of that channel happen in the correct sequence . we draw these fast tapes all the time but never really think about how everything should happen in the exact same way for fast tapes, traverses and channels . Do the work, think about things logically and don’t take anything for granted . Happy Holidays to all.
Correct! The world is very lacking in logical thought, imo. But in your first example, there is no way to be certain which points (1 or 2) come first. We can study statistics and know the probabilities, but based only on your OHLC bar, we can't be certain.
As far as I can tell, the right one had a pt.1 on the first bar but not a pt.2 because it didn't go from bottom of the bar to the top but top to the bottom. Second bar (or possibly the third bar) is where pt.2 would form. Not sure how you guys trade tapes. I find I miss the big moves or re-enter at the wrong time if I try to time the trades with the tapes. Actually, that goes for channels too. They rarely line up exactly to the tick for entry for me so are more like a guideline to find (and confirm) FTTs when I notice other signs of momentum shifts at the time. The RTL sometimes line up better few bars after the FTT, other times it's good from the FTT bar. I always wondered how anyone can trade tapes.
In the context of the post by @nir, you are not looking at tapes. You are looking at bar-by-bar formation. A bar-by-bar pt1, pt2, pt3, & ftt sequence can have a minimum of 1, 2, or an unlimited number of bars. A 1-bar pt1, pt2, pt3, ftt sequence (which would also involve IBGS) is scarce (beyond rare) IMO, but, the depth of rabbit holes do vary. I mention this bar-by-bar point-sequence tracking because the two 2-bar examples given, are NOT TAPES! In "old" terminology the bar-by-bar is referred to as BBTs, Building Block Tapes... 3 BBTs make 1 tape. 3 tapes make the prescribed trading fractal (aka traverse), and 3 traverses make a channel. Tapes offer great trading opportunity, with very reasonable (money) risk. With a comfortable pace, of and for trading, compared to bar-by-bar point-trading, IMO. Happy Holidays!
I obviously need to clarify the point i was trying to make. please do not get hung up on terminology. what you really need to take from my previous post is the right construction of a channel that has an RTL and a LTL . if to construct the channel you are using just 2 bars you had better make sure that point 1 that sits where the RTL starts doesn't happen AFTER pt 2 that sits where the LTL starts as in my second example.
the real point i was trying to make is that i was doubting the assertion that you don't need to care about the OHLC of the 2 bars when constructing the RTL and LTL of the channel connecting them. some bars came to be a certain way that negates the logic of just putting the 1,2,3 pts arbitrarily . to me that didn't make sense so i worked on that for quite a while til i found a solution that incorporates the actual sequence of events(pt 1 before pt 2 before pt 3). the whole fractal nature of things really resonated with me from the beginning so if something bugged me as being incomplete or illogical i set out to think and work on it on my own.(as in my example) which brings me back to my previous post about making sure you understand where every little thing in your system is coming from. there were many many such instances for me....
@nir In my post, I quoted specifically about trading tapes. All is good. Frankincense, Gold, and Myrhh to all.
Does that mean 3 BBTs are about 6 bars in length(tape)? A traverse about 18? Give or take about 2 bars for tape and 6 bars for traverse? Happy Holidays!
I have not done any research of bar counting regarding any Jack or Spyder method or portion thereof. What i do know is that when asked, Jack said more than once, he took 30-40 RTH trades per-day using the 5 minute time-frame.