<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1290307> See attached GMXR annotations in above chart. What you term 'failure to retrace,' I see as continuation from the FTT (blue channel). FTT's occur on any time frame (provided sufficient liquidity exists). In addition, the equities system as described trades on a daily time frame. Jack has added the tools in an effort to make it easier for a trader to act when seeing an FTT. Using the various tools confirms what the trader should see. I cannot place enough emphasis on this: Learn to spot the FTT. No problem. If you do not feel the time is right to move forward, don't. All the methods listed in both Journals focus on entering or exiting based on what happens after an FTT occurs. Most people need to be brought along the continuum at a pace where gradual change permits the building on a paradigm of successful reinforcement. By focusing on locating the FTT, a trader can then use the indicator set and historical sequences as confirmations for holding longer term. Again, no need to rush forward. I simply wanted to provide a transition point for those individuals ready to take the next step, as well as provide a transition from journal Two to Journal Three (in 2007). Enjoy the Weekend. - Spydertrader
Yes, I was in a hurry trying to get ready to attend a Christmas Party this evening. In an attempt to avoid confusion, I deleted the channels no longer relevant. Unfortunately, my efforts resulted in additional confusion. I apologize for that. See the chart snippet below for the additional (deleted) lines. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1290310> Looks great. Keep up the super job. - Spydertrader
I took a long position in NVEC today, entering at 11:07 am, fill price of $38.63. Daily Fractal Criteria Price Price did not gap more than 5%. Volume NVEC has been in DU for the past 3 days. Channels I have the current LT channel as an uptrend. The current IT channel is a downtrend, and the current ST channel is an uptrend. A FTT occurred 4 days ago. Indicators MACD histogram was rising. MACD fast and signal lines were below 0 and rising. Fast Stochastic fast line was turned up and heading for 50 XO. Slow Stochastic fast line was turned up and heading out of 20 zone. 20 SMA is significantly above the current bar (ie no resistance nearby.) All of these together made for a very nice setup, and as such, I began to monitor the 30m fractal for the opportunity to enter. 30 minute Criteria Volume Daily volume exceeded LBDU at 11:07 am. Volume rate was beginning to accelerate. The 30m bar volume had exceeded the previous bar's volume. Price Price had improved above previous day's close and was nearing previous day's high. Price broke above 20SMA on previous bar. Channels Price had broken above a previous LTL on the ST channel. Indicators MACD histogram was positive and increasing. MACD fast was above 0, signal was below zero. They were diverging. Fast Stochastic fast line > 80. Slow Stochastic fast line > 80. Hold Criteria Price remained above yesterday's close. Price remained above my 2% stoploss level of $37.85. [edit for typo] Price and volume maintained good channel patterns on the 30 minute.
Aurum, The only comment I would make is that NVEC didn't make FRV, so strictly (according to beginner equity rules) it should be exited at EOD (or on open next day as the 'rules' were amended to) I entered PCCC @ 14.06 and COGO @ 18.27 via my auto-script. When I got up this morning, I entered NVEC @39.20 (my position sizing algorithm was too conservative, so it didn't enter it automatically at 39.05 when I got a signal). Of these three, only PCCC got above FRV or even the 65 day average, so would be the only one held according to the Journal 1 rules. Of course, there are many different rules, I'm just commenting on the trade as I see it.
Thanks for the comments Mischief, and you are correct about the volume criteria for beginners. According to my calculations (which may be slightly different than others), I have the FRV level for today at 540k. With that in mind, I've moved a bit beyond the beginner stage with respect to volume criteria for holding. If volume doesn't meet FRV, then I make sure it had price improvement and volume improvement over the previous bar. If not, then I'll exit it.
Thanks for clearing this up. I just wanted to know what was wrong and you explained it perfectly. - Monk
mischief, I followed your posts with great interest from the beginning of this journal, and I think the first one as well. I'm glad to see you are still around. Please continue to post. By the way, have you done any more work on the amibroker scripts? Also, do you recommend the basic amibroker version or the professional one? -John
-------------------------------------------------------------------------------- Use the search button above, there is plenty of information on various threads. Happy searching/reading.
NVEC 30 minute chart. It looks AOK to me. Near the 50 day MA for potential support. You might want to use a stop offset based on the bottom trend line.