What follows remains a fundamental truth to any market with sufficient liquidity on any time frame. When you have an FTT, only three possible outcomes can occur. 1. Another FTT (in which case you reverse), 2. an FBO (in which case you exit, or reverse depending on market conditions) or 3. a BO (in which case you hold for additional gains). As a result, when you see an FTT you trade in the opposite direction of the current trend, you hold until receiving another action signal. In the example above, you short the first FTT (blue), reverse long the second FTT (brown), reverse short on the third (green) FTT and reverse long the fourth (brown) FTT. Each time, you place yourself on the correct (right) side of the market. In equities, one should start only trading the FTT's resulting in a long trade. After sufficient experience, adding FTT's which result in short trades provides the necessary building blocks to make the leap to futures trading. Good Trading to you. - Spydertrader
Spyder For trading the ES are you also drawing channels on the 2min YM and using it as a lead indicator?
This is a snap shot of a piece of price only. What you see is a terrific series of annotations that are being made ASAP or when it is posible. It is true that in the routine there are five decision possibilities and one of them is WAIT as you point out. Mostly this snapshot of price is showing the HOLD and REVERSE elements of the decision possibilities. Imagine yourself as going through the routine and doing the four parts over and over. Think how many times you did it and think how many times annotations were added to the chart. For humor notice a little maintenance still has to be done on the heavier Blue trendline that ended before the letter B. There are several "layers" of channels (traverses) going on at any instant of NOW. Each layer has its own nature and evolution. For each layer there are the aspects of that layer. There are FTT's on different layers as part of that. While a person doesn't count chips while he is playing as a focus, there is the aspect of the account value working as if you are filling your tank all the time at the gas station. This SCT trading requires a big tank. Let us look at the filling process. You are making decision to HOLD (fill up the tank more) and the rate varies as seen by the bar's envelope, namely the immediate container of the bar. What is at hand and why the routine is continually repeated, is the consideration of getting all that is available in each segment. Then you are dealing with making the flow always be from the source to the tank and not vice versa. FTT is there for you to be able to keep the direction of the flow straight. Sometimes it is evident that fewer direction corrections are necassary than other times. But it is not a "waiting"; it is just a few decisions one after another to RIDE through (HOLD, HOLD, HOLD) and emerge into another market operating point. FTT's are there to tell you that soon the dominant nature of the level you are operating on will be different since the FTT ended that series of dominant moves. There are non-dominant moves between dominant moves as we know. This is not a discussion of hyperness either. There are two themes regarding this. Think one one as "pausal" as pause and resume. Think of the other as an opportunity to really tattoo the market by doing trades on bars. Trades is plural and doing more than one on a bar is something else and it has to do with VOLATILITY bing in the space. Think of all of these things in the context of the pipe (pump hose) that is staring back at you. The number of contracts that ES is "flowing" is the amount of money available to put in your tank. If you are pulling a percentage of that flow out of the market into your tanks you need to handle two things: the routine of being on the right side of the trade and HOLDING and making sure that you have the right amount of contracts riding as compared to the flow. Lets say we cut off the T&S at 10, 20 50 or so. That slows down the speed of the the roll. Imagine that it is your job to make sure your portion of that(the quaint expression is you car #) is a percentage that is just below that which would affect the flow. Each tick of price change is then an amount that is very noticable in your changing account size in dollars. Just think 50 contracts for a moment. Okay. So now, what the snapshot is showing you is a lot of tick by tick traversing where you see more and more how well you can do the HOLD (filling 50 ticks per tick movement) and reversing (locking in profits at the right tick level) and beginning again to run more ticks in your tank. Optimizing becomes more and more real as time goes by simply because you have a routine that is growing more optimal and well understood. What is at hand is using NOW most effectively and efficiently. By annotating on several levels and seeing the FTT's on differing levels you also see how you GET the market to TALK to you. you do it by LISTENING (meaning annotating and doing the routine. FTT's are parts of data sets where the data set is sufficient and complete to be able to draw a conclusion (it is automatic after a while) and with the conclusion there is a tag named the appropriate decision. These all are pre-attached to each element of the conclusion set. WAIT doesn't usually come up. HOLD usually comes up. FTT's are where REVERSE comes up often. And it can be on any of the three levels. The Blue heavy line is a fun line for FTT's as you are finding out. On Monday it was one long wait for an FTT. You know the 50 cars and 23 points wait. By posting the post you posted, you now get to be really leaning into the work of staying focussed on NOW and annotating into the future so the annotated future then moves into the present. You surround futures prices with the possibilites as they are revealed in advance. Then you do your routine in NOW with the forming bar and have a fine fine understanding of how the bar fits into the context that you built for it. I have my machine coded so it types each letter of FTT as it comes into view. Just kidding but it does seem that way as a consequence of being sure each data set is sufficient to pair it with a conclusion that already has the decision tag attached to it. The FTT stuff is a personification of the people, collectively, who are deciding things. There are a lot of them there and they vote according to their positions. The thing to do and do well is to have a chart identical to the ones that are being posted.
Nope. All that extra stuff is SCT. Forget all that for now. Put it all away. Learn to draw the channels and find the dominant trends (point three formation). Locate the FTT's within the trends and follow instructions above (in previous post). This is how one learns to trade both equities and futures. DOM, Stretch / Squeeze, YM, 2 min ES, 30 min ES, Stalagmites, Bouncing Balls, PRV, Gaussians, Time and Sales all have their place as added tools to help a trader. However, the fundamental process by which a trader receives an early warning for an upcoming change in trend is the FTT. Learn it, study it, know it, like you know how to count to ten - before moving forward. The FTT provides the foundation to all other aspects to both the equities and futures methodologies. If a trader never moves beyond this level of expertise (trading ONLY the FTT's), they can expect a very nice helping of profits. Understand the importance of this post. The lessons should serve you well. - Spydertrader
Attached, please find today's annotated ES Chart. Note the thick Blue Trend Line started two days prior to today (I shortened it in the chart snippet above to avoid confusion). - Spydertrader Edit: Evidently, I mucked up the scren capture of the chart. Hopefully, I have now corrected the problem. Edit II: For some reason my full image fails to uplaod, I'll try a third time.
Another example of the FTT in Equities ... <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1281233>
Hope this works .... Edit: Ok, I apologize for the delay. I have no idea why the charts failed to upload in the first three attempts. Thanks to everyone who provided me the heads up. - Spydertrader
I had COGO, GMXR, and SMSI on my watchlist for today. However, I also maintained the final universe in a separate workspace just to observe. I've been following TXCO for quite a while prior to this so it has held my interest. While doing my primary stuff with the ZB's today (posted in my journal) I decided to go back and review the volume and price behaviour of the final universe on the 5 min and the 30 min. I saw a lot of very interesting things. You'll see consistent repeatable patterns. In the process of doing the above, I concentrated on TXCO and noticed that it was dipping in price this AM. I had already reviewed the daily charts on all final unverse stocks and I had already decided that TXCO was on my short list if and when it would appear on the DU scan. It did yesterday, but not today. To make a long story short, I bought 100 shares at 0925 CST at 13.22 during the dip. I realize this wasn't according to the rules. My question is, was the correct Hershey trade on TXCO between 1230 and 1300 CST? From what I see, everything lined up: price higher than yesterday, STOCH, MACD, Volume. Finally, I believe I've read that it is OK to trade a stock that didn't show up on today's watchlist, but is still in the Final Universe? Is this correct?
Yes, you can trade any stock at any time. This policy simply falls outside the 'beginner methods' as outlined in Journal One. Throughout both Journals numerous examples exist of traders who utilize the basic premise of the Hershey Methodology, but implement their trades in often widely different ways. Building a firm understanding of the basic principles allows the iterative refinement process to provide for a variety of implementations which fit the individual trading styles of the many different types of traders which monitor these pages. Remember, finding which iteration best works for you remains an individual choice. - Spydertrader