On 10-case geometry and beyond

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

  1. Simples


    Started on weekly chart for PNDORA. Traverses seem to morph into channels in huge sustained moves:

    Or like this:

    Last edited: Jul 12, 2017
    #71     Jul 12, 2017
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  2. dratsum


    Since you're starting on a new chart I thought it might be worth sharing this. While I'm aware continuing with the same symbol (PNDORA, on a different bar interval) offers synergistic benefits due to it's continuity with the work already done ...imagine for a second how the results of doing that going forward, ...would compare to the results obtained if a more mainstream symbol were being analyzed. A symbol with a larger following. I mention this in part because I don't have access to PNDORA data, but even if I did (like if I imported the data) it still distracts me (from following the market).

    I define the market as ES, NQ, YM (or SPY, QQQ, and DIA). I believe a lot more people would want to follow along and possibly participate in this topic, if it were possible to change to one of these symbols.

    That is in no way meant to imply I personally want to publish anything, on this thread or any thread. I want to program tapes, traverses and channels in TradeStation, for my own use.
    #72     Jul 12, 2017
    Sprout likes this.
  3. As a daily user of some of these methods, I agree with this idea.

    One thing that has not been mentioned, perhaps just overlooked, is that containers (referred to in this this thread as tapes, traverses, and channels) are DEFINED by volume, not by visual geometry, not by price alone. Defined by volume. Points 1,2,3, and characteristics like FTT, BO, FBO, & VE; ALL have specific requirements. If it was as easy as drawing a parallelogram container and counting to 3, well, enough said.

    I will add, since September became front month, for NQ, for me, I am only trading tapes. Wider containers are just not defined (by volume) with clarity for trading. It's also quite interesting and a change of pace to follow RTY, from it's first day of trade.

    Trade On!
    #73     Jul 12, 2017
    Sprout likes this.
  4. svrz


    Can you kindly illustrate this point by an example from one of your charts?

    I tend to agree however this technique can be lead to problems in fast moving markets. Perhaps you have developed ways that avoid such issues.
    #74     Jul 12, 2017
    Sprout likes this.
  5. Sprout


    The second gives more usable context.

    We started with a symbol and chart that you have a personal interest in.

    We started here for here you were willing to do work. The method starts where you are.

    With that said, both dratsum and tiddlywinks have good comments.

    The method's approach to risk management is by the implicit diversification that comes with trading an Index AND/OR by going through the process of scanning for and building a universe of High Quality stocks. Both involve a method of managing risk. Building a Universe of HQ stocks has a long bias. Although stocks that, through the repeating cycles of Acc/Dist, do provide opportunities to short, it's left to the individual trader to apply the necessary adjustments from a firm grasp of the principals. In contrast the PVT method rotates stocks in and out of holding positions as they progress through their Dominant traverses.

    Although Pandora's fundamentals could be an opportunity for a LT position (no idea), it's observable PV action would exclude it rather than make it to this list. We know by price action, that this stock does not have eps>90 nor rs>90, both a requirement to make it to this list of high quality stocks. Sometimes due to market conditions the aforementioned parameters are adjusted to screen for a larger set of qualifying stocks. (ie. eps>80, rs>80)

    As an educational exercise Pandora is fine but misses other essentials that are also foundational concepts. The goal of this undertaking, aside from the spectrum of differentiation that you are building within your mind, is to make money.

    We can make money by not losing money too.

    Back to the idea of Failsafes. The first component of a FS is the horizontal lateral boundaries that we draw on the bar before. When price moves directionally opposite of where we were anticipating, XO of this line changes context. This is where tight stops are used in CW. We do not use them the same way. Nor suffer the same effects.
    The second component of a FS comes from looking at all the fastest fractal tapes. You will notice the slope of the RTL. Observe the slope of the RTL from a 2 bar combination.

    When the slope is steep what does price on the next bar do?
    What if when the slope is shallow?

    As this two bar tape is drawn, What does the the second bar do in our order of events when volume has
    1) incr from the prior bar ?
    2) decr from the prior bar ?

    3) What happens with price and the RTL on the third bar?

    The reference points tiddlywinks has mentioned can be applied to the fastest fractal first.

    We do this for we know that all larger trends develop from any two bars we contextualize, accurately and throughly.
    Last edited: Jul 12, 2017
    #75     Jul 12, 2017
    Simples likes this.
  6. Sprout


    Jack's RDBMS - BO,T1 of the Failsafe addresses this.

    Any 2 bar high volatility move is bound by a RTL. Next bar close XO of this line is the pt1 of new trend segment. As you say, it can lead to problems when there's a short non-Dominant traverse and price translation begins again with return to dominance.

    Stacking EE's on a single bar can alleviated this particular issue. BO,T1 and BM-rev can occur on any bar and overrides any EE identified. The two operate in tandem at fast paced misidentified turns.

    However, more detailed discussion for a different thread.

    The Failsafes are applicable here in this context.
    #76     Jul 12, 2017
  7. Not sure what problems you refer too. I do use faster than 5min charts however. Additionally, if trading a narrower container, almost all "problems" have lesser time in trade, and if trading tape points and/or ftt, many times its academic, intuitive, and, [yawn], boring. Up down up down, down up down up.

    Sure. This is NQ, 4minute, from yesterday, 7/11/17. Before anyone gives me crap, yes, I know I fractal jump! I annotate this in real-time and make adjustment real-time. Volume Gaussians tell you what you have, which is not necessarily the same as what you see in price bars alone. And I already mentioned I fractal jump.

    I give yesterday rather than today, because of the 40pt gap. But you can see I was ready. The white dashed guassians, if they are correct, which I added/adjusted at the open , suggest todays gap + (runaway) up move, is a move to point 2... there is no 3 point yet on the wider/slower containers, and that is based on the definition of points being defined by volume.

    I'll try to answer specific questions, and maybe learn or change a thing or two in the process.
    #77     Jul 12, 2017
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  8. svrz


    Thanks for posting your chart, tiddlywinks.

    So it appears that you wait for either b2b->2r->2b | r2r->2b->2r to complete and then wait for Signal For Change (SFC) which will be your entry, exit or reverse.

    If so, I follow a similar routine. The difficulty is that if a position is held after the completion of point 2, the retrace may be significant enough that it may result in forfeiture of most of the profits. OTOH, if the position is reversed at point 2, the retrace may be insignificant and the return to dominance can be quick and swift. In such a case, as Sprout stated above, BM should be utilized. However as illHeroic mentioned in past threads, his observations showed that often this resulted in small but frequent losses.

    Another problem could be such a sequence: b2b->2r->2b->2r->2b->2r->2b...

    Here there is a tendency to make an error in determining SFC and one could reverse into a position which as previously stated, can return to dominance quickly and violently. We saw such an example in simple's earlier charts in which after a completion of b2b->2r->2b, we observed a r2r tape with Ve. More than likely most of us would have held a short position at this juncture but it would have been a mistake as 2b resumed immediately after the r2r Ve. Sprout marked the inside bar after Ve as a FTT, but with all due to respect to him, it is highly doubtful that it would have been correctly identified as such in realtime.

    What I have described above is simply a symptom of not being able to concretely identify the portion of the cycle (i.e. b2b, etc.), SFC and continuation of dominance ad infinitum (i.e. 2r->2b->2r->2b...) on a regular basis. Various threads by Spydertrader here on ET and 'Traders Laboratory' were devoted to such discussions. In the latest and last thread on TL, it was not unusual for various participants to post a chart of the ES for the same period with somewhat significantly different annotations.

    The late Jack Hershey made an attempt to transform this exercise into an algorithm through his volume annotations which Stepan has named JHM 2.0. Our friend Sprout has made a valiant effort to clarify much of the definitions and concepts behind each label. Despite that, it is highly doubtful that we have taken a single step beyond what Spydertrader presented here (JHM 1.0) on ET or the last Price\Volume thread on TL.

    At the end of the trading day, profitability is highly dependent on a judgment exercise based upon abstract concepts which are transposed on price\volume charts with variable clarity.
    #78     Jul 13, 2017
    JamesRoscoe and Sprout like this.
  9. Actually, I trade point to point (including ftt, which if identified correctly is point 1), and additional container traverses. Obviously I (try to) "follow" along with slower containers, in addition to fast I use for trade. I constantly look for confluence (with other methods I employ too. JH comprises about 70%) and when it's there, I size up and go for the longer hold. Of course, SFC is confluence too, but Im just referring to dominance (or non-dominance) lining up on 2 or more containers. This occurs with ftt too.

    As for the other stuff you mention... I do not get lost in minutia. My charts do not give any time for that. Lines I draw on my screen are just that, lines on my screen; anything can happen, as you've highlighted. If a trade goes wrong, I'm out, profit, loss, doesn't matter... next! While Im not an SCT trader, I put on my fair share of trades and contracts. Through osmosis, and threads like this, I learn minutia; some tidbits I don't even realize I know/use.

    Sequels are rarely as good as the first.
    #79     Jul 13, 2017
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  10. Simples


    Steep slopes tend to be short-lived, often with price turning on a dime and reversing just as fast and sometimes even faster. Steep slopes + shallow retrace signify DOM and sign of trend. Next bar tend to touch or break steep slopes, while shallow slopes tend to be more respected even if touched, and can become steep slopes in further bars.

    1) Accellerate (even steeper slope) or absorption (last leg)
    2) Decellerate, pulling back or start of reversal (FTT)
    3) more chance of BO accompanied by volume spike in direction of BO (new opposing trend)

    So using shallow slope with trend on low volume can be used to enhance FS or even tighten stop-loss in non-DOM Lateral.

    Traversal can be drawn from last BO to next bar on rising volume, however if FBO is respected, then that can form a new P3 for analysis sake?
    Last edited: Jul 13, 2017
    #80     Jul 13, 2017
    Sprout likes this.