Spydertrader's Jack Hershey Equities Trading Journal III

My chart looks more like yours Littlemac, so now I'm slightly confused as to which is more correct. Could someone else chime in?

 

Yes,

Qcharts has a 65 day avg. volume column. The really nice column though is the unusual volume column which shows you current days volume as a percentage of 65 day avg. Sorting using that column quickly brings to your attention good potential stocks to trade.

-A

 

Price breaks the Orange Down channel on Increasing Black Volume. Price then forms a Sym Pennant (yellow) followed by a Lateral Formation (Purple). These formations occur on decreasing Volume. While all Black Volume appears to form levels less than the previous Gaussian Peak, one can 'see' a new ST Channel forming (Green) within the larger down channel (Brown). In other words, both of the previous sets of annotations 'work' depending on one's trading resolution level.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1703332>

 

Thanks Spyder,

I really need to learn my flaw formations - recognizing them brings alot more clarity to the gaussian analysis. I think I need to be more conscious of spotting a FTT when redrawing my channels. I think in this case, I might have recognized that I had a flaw (instead of a FTT with Thursday's bar) and I probably would have held off on fanning out to my brown down channel.

-A

 

Over in the Futures Journal, my Five Posts in the beginning of September clarify the Formations. In addition, November's 'Putting it all Together' post has some information you might find useful.

- Spydertrader

 

Spyder,

A couple of posts in the futures journal have me confused on a couple of points regarding FTTs. Since I assume most of the people who follow the futures journal have a good handle on the FTT and this information also relates to equities, I decided to post my question here. Let me know, and in the future, I will post such questions over there.

My first question is: if a price turn, from the Dominant Traverse to the Non-Dominant Retrace, occurs on the channel’s Left Trend Line or after a Volatility Expansion of the Left Trend Line is that considered a FTT? I always assumed that it was essentially a FTT and would annotate and treat it as such, but the following question (by dkm) and your response makes me think I was incorrect in this.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1703678>

In addition, if this is not considered a FTT, I do not understand how this fits in with the initial trading system outlined at the beginning of the futures journal. Where the trader enters on a FTT, which is always followed by one of three things: 1. Another FTT (reverse position); 2. A FBO (exit); or 3. A BO (hold). I figured the trader would want to exit at the top of the channel, but if that is not a FTT, then the rule set doesn’t seem to work. The trader would hold through the turn and down the retrace then sell on a FBO (which makes sense) or hold through a BO (which no longer makes sense).

If you can help me with where my misunderstanding is, I would appreciate it. I have another question I will put in a second post.

Thanks,
-A

 

No, it is a LTL bounce and not a FTT. This was covered much later than the post you referenced.

 

This question involves gaussan analysis with the FTT. Spooz-trader1 mentioned that noticing increasing volume following an FTT helped him spot them (sorry I don’t have the direct quote from the journals, I noticed it in Pr0crast’s summary of the first month). In another post Spydertrader (once again don’t have direct link), you said “what would normally occur during an FTT – decreasing red volume followed by increasing red volume.”

My question is do these volume pace changes occur right around the FTT or over a longer period as price moves through the channel? I was under the impression that, in most cases, there is increased volume around a FTT then volume would decrease as it retraced the channel to the Right Trend Line. After it reached the RTL, price would either continue down (assuming we were in an up Dom. Channel) on increased volume creating a BO or price would have a FBO where up volume would increase as we traverse the Dominant up channel again.

A related question (assuming the volume changes you spoke of take place over time as price crosses the channel) do we anticipate a BO of the current channel following a FTT? Is that why you specify: “decreasing red volume followed by increasing red volume”?

-A

 

Thanks for the reply Avi. When it was covered later on, was my question regarding how it fit in with the original trading rules cleared up?

-A

 

As Price moves through the channel from the FTT back to and then through the RTL.

Yes we anticipate a BO after an FTT.

Yes.

- Spydertrader