Thanks for the reply. I'll try the PNG next time. Usually I'm using JPG, the GIF was already in that format. EZ
Spydertrader, In chat you mentioned a newbie might see the 10:00 am bar as a FTT during it's formation. Could you go into more detail on why or why not? The YM 2 minute shows the down move of the bar was swift and recovered just as fast. Volume had been sustaining or increasing on the ES, but the second half of the 5 minute bar, and next 2 Min YM bars, volume was declining. So it's possible the early volume or PRV surge could have sucked someone into reversing and having to wash and re-establish a long. But later in the bar, the lower volume said dip or hitch. So the question: As the ES bar heads down, how far do you let it go against you? Looks like a hold to me, but a bit worrisome as it had a large retrace. Some of that would depend on if you're a beginner, intermediate or expert. There is a large spread between taking profits at the top of the channel and holding for a new #3 point after the 10:00 bar. Why were you comfortable that this was just a pause, and held during the formation? Or are you just a more patient person?
Exited SIRF in the first 30 minutes this morning @31.37. Purchased Friday morning @31.23. Exited NVEC in the second 30-min. bar @39.01. Purchased Friday morning @31.37. I ended up holding on to 42% of Friday's gain on these 2 positions.
We start with patience, and within this context, we determine first what wasn't that. Markets rarely move in a straight line from one point to the next. Zig-Zag, Stairstep and Pullback represent a few of the names given to this phenomenon. In our vocabulary, we have named these events CCC, HVS, hitch, dip or stall. Because markets do not move in straight lines, we anticipate encountering one of these momentary (or longer) pullbacks along our way. Quite frequently, we encounter a CCC or HVS (differentiated primarily by volume). As a result, we anticipate the event in advance, and then allow the market to signal confirmation or invalidation of our hypothesis. What wasn't that? Volume, based on a PRV basis indicated levels which (by end of bar) would fall outside those of a hitch or CCC. Price had already shown enough movement to eliminate CCC and a dip. After elimination, we only have Stall or HVS. Stall and HVS differ by duration, so from our perspective, we take the same action in both environments (beginners hold through a stall or HVS). So, now that we know what it wasn't, we know what action to take - hold. O.K. Fine, but how did we know it wasn't an FTT? Again, we can look to volume. On a PRV basis, Volume did not show the telltale signs of an FTT (See Jack's work on Gaussians). Volume indicted (again on a PRV basis) traits more often observed during a spike - a temporary event as well. (See Red Circle on attached snip of chart) Price and Volume have shown us the 'impossible' choices - leaving us with but one choice - in this case, a stall - and only one action - hold. More importantly than knowing exactly what the 10:00 AM bar represents, is knowing what to do if you misinterpret the signals provided by the market. In this circumstance, do not fall into the 'trap of hope' and begin to pray the market works in your favor. After a trader recognizes their error, they do not need to go back to the 'input analysis and decision-making' stage. One simply needs to take the appropriate action to place them back on the right side of the market - in this case, wash and reverse. Interestingly, these 'errors' lay the groundwork for the initial phases of SCT trading - where the trader trades through the Hitch, Dips, Stalls and HVS by design, rather than, by accident. Pretty cool, huh? Good Trading to you. - Spydertrader <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1292622>
just a hint to all the newcomers here: the so called "ftt" is nothing else but a strange description for a simple higher or double bottom / lower or double top / buy or sell divergence - nothing new under the sun. if you think that it will one day help you to enter/exit at the absolute top/bottom you're wrong.