The orange channel is there because a new point 3 formed. Nothing has changed in how channels are drawn. By definition, a point 1 is "recycled" at least twice for every single channel. This is because the move from point 1 to point 2 (taped channel) breaks and a retrace on lower volume forms a point 3 (point 3 channel or whatever you want to call it). By definition both these channels use the exact same point 1. If in doubt, just lay in lines where ever they make sense to you. As soon as you catch "a mistake" (this word is truly a misnomer), fix it by erasing or adjusting or perhaps by next time realizing you need or don't need a given mark on your chart. The channel document PDF has several pages of exacting instructions and examples that may help you. IT's as close to a set of channel rules as you'll find in one place. I'm the kind of guy that needs really exact intructions to feel comfortable. That document helped me until at some point I realized I needed to trust myself. Trusting happens after you do 20 or 30 or 40 days of channel and annotations in real time. DOing it after the fact, (for me anyway) caused more harm than it helped.
I agree with you about using pt 1 for the red channel, our first of the day, and the brown channel that shares the same pt. 1 is also clear for me to see and understand as this give us a slightly more "zoomed out" view and smooths out pace as well. I guess maybe the orange channel is something you either feel is necessary or dont. Personally, the red one worked well and the FTT @ 10:55 was clear on my chart. As I write this, I notice something else from Spyders ES chart that I am unclear of. The light pinkish/purple channel which shares a pt 1 with the darker purple channel is drawn in using a pt 3 on the 1:30 bar. I am assuming this channel is fully drawn in AFTER the 1:30 bar is complete? Technically the 1:25 bar opens and closes outside of our RTL but volume is very light. This part of the chart is a little confusing to me as I am new, I'm working on getting things straightened out.
Thanks Bundlemaker I will read the channels Pdf again and hopefully this will clear up my mental block
Steve, As far as drawing the channels in real-time, I try to be as "mechanical" as possible. I usually start with 2 bars. This is the "tape" resolution. I like to start with a tape because sometimes a tape becomes a channel thru volatility expansion. Other times a tape BO has me thinking a new point 3 (channel) is coming up. I "zoom in" by drawing the tapes but "zoom out" as new channels develop. One has to be careful when zoomng in and not get stuck at the leaf (or lower) level. But for me, this is a mechanical operation: zoom in, zoom out. For example, on my Fri. ES chart, I had a tape at 11:50 that held for 3 bars. Price "walked out" (BO) on low vol but around 12:15, after an increase in red vol, I drew in another channel which is the same as Spyder's red channel. At this point in time, I had a thin red channel. This channel, thru numerous volatilty expansions, held the rest of the day. If I wasn't glued to the screen around 12:00, I might not have started with the tape at 11:50. But I was, and so I saw the tape form, BO, a new point 3 develop, followed by volatility expansions. Getting back to your question above, price BO'd/"walked out of" the channel price/volume was currently operating in at 13:20. So, like in the example above (even though this isn't a tape), time to zoom out a little and look for a new point 3. For me, this was after 13:30 but I don't recall if I waited for the bar to complete. Probably not. A good looking gaussian was forming (increasing red) and I hope that I drew the new channel in quick. I try to draw in the channels quickly as a channel can always be adjusted or deleted at bar closing time. So, as Bundle said a few posts ago, a new point 3 developed. Sure, there are times when I miss them but I try to be mechanical as possible by zooming in/out. The discretionary part of this stuff for me is deciding which channel to "operate in". By "operate in" I mean "apply the rules to". Like Spyder's chart, I had the dark red and red channels that contained price the entire afternoon. If you chose either of these two channels to operate in (using the Forest View guidelines), you would have been short the entire afternoon. Right? Price didn't BO either of these two RTL's. For me, the pace was too steep for these two channels so I decided to zoom in and look for channels that synched with the gaussians. My post from Fri. night debriefs my thinking using the YM chart. I may be incorrect here but I believe one has to find the channel resolution that is comfortable to operate in. Friday afternoon offered several to apply the new guidelines. But for me, this is independent of drawing channels. I'm constantly zooming in/out looking for new point 3's and documenting the traverses within the "current" channel. Deciding which channel to operate in (to apply the Forest View guidelines, or FTT-BO-FTT rules) is another matter. Hope this helps and sorry for another long post, my long post quota for a while. spooz
Reversing is starting to make more and more sense to me. If you have been on the right side of the market and get to a decision point and change is indicated then reversing is your insurance policy. You can ride out the retrace in perfect comfort. If it resumes the worst that can happen is a small profitor wash on the resumption but if it takes off in the other direction you are already on board. I suppose I am jumping ahead again but chalk it up to irrational exhuberence. I have been running replays all weekend. edit: Ensign keeps a running library of tick data dating back a few months. It is a great way to practice and almost as good as the real thing.
This, of course, once when understood, the SCT method is the antidote to what is broadly called whipsaw. If one idea is learned in January, it is trading using FTT's. Here on the coarse forest level, you begin to build your mind to capture THE essential ingredient for success. FTT's tell you when the end of the channel has come; when the FTT is in, it has come to an end. What defines, specifically, the END of a channel is the beginning of the overlap with the new channel that is forming. On the forest level, we operate to make money using FTT's on the double weight channels. This forest level is where to operate until you learn the way it works thoroughly. The YM-ES combo is going to have several distinct segments of learning, each presented to add another level of sensitivity. Bearbelly, you are a student of Linda Rashke and it works in a certain way by using the conventional orthodoxy. The conventional orthodoxy is where you have chosen to operate as you say in various threads that you comment in. February and March, for you ,are going to be a tough experience, vis a vis SCT, especially since you are operating in "remote" and an inventor all the while. What you think you are seeing is something that is different than Linda takes into consideration in her work. It is also true that you cannot take pieces from SCT and weld them into the conventional orthodoxy and get them to work. Linda does not do what we do here. It is important for anyone to build on success. This comes from starting at the beginning of something and following it. You have posted charts of what you do, perhaps. Perhaps, they have been critiqued and then you have improved from that. On the other hand you may not have done the work of January but have just attached something to Linda's stuff here or there and she has not explained to you why she doesn't do what you do in her method what you have added to it. What will it be like in March, April and May for someone using Lindas strategy and methods? It will be the same for that person as it is now unless her method gets dilluted by "inventions" that she does not do. 2007 is the year that we go through beginner, intermediate and expert on SCT. It is a synthesis of layers of skills related to trading to be in the market, on the right side of the market and to take segments of profits as the market changes sides. Linda does not practice this approach. Linda does the gaming approach and uses things called entries and exits. You prefer the entry/exit approach to trading as you say in the threads you post in. It is not likely that many people can leave that mentality once it is entrenched in a belief system. What has to happen, and it is difficult to even imagine, is that a person has to go through personally acknowledging the opposite of what you are presently acknowledging to yourself and others you speak with. This is what is called a dilemma. There is no answer to a dilemma and there, especially, is not two half answers to a dilemma. It is something to see for the first time that an answer to whipsaw exists (our antiwhipsaw mechanism) but it is more important to know that you are in a place where your mind is filled with a belief system that cannot handle anti-whipsaw thing and also handle the whipsaw trap that remains in the Raschke approach. Believing in what creates traps does not make it possible to also simultaneously believe in a foundation that is anti-whipsaw oriented. Consider how people become experts. They follow a path of a learning process for a proven method or approach. Rarely, will you meet a person that can follow two or more approaches (proven methods) concurrently and be able to perfom the process of learning to get to expert in even one of the two. You have, since I have seen you on here, been doing a lot of alternatives to following a learning process. Among them, you "invent" and then toss the invention on the scrap heap. So you are very special, you think you are learning Raschke and believe in it through you experience applying it to make money, you say to ET members; you follow several other methods partially and without doing the drilling repetitions called "work" in any of those methods or approaches. You also "invent" as an alternative since the period where you largely were holding out for "proofs" in various forms as your priority for your mind's consideration. In SCT there is NO way you can skip ahead; that requires knowledge and skills that are not available as a consequence of you and your situation and not us who have the skills and knowledge. You are faking yourself out by what you are doing presently. It has nothing to do with SCT trading is what I am saying. A person has to focus, continually and adroitly get layer upon layer of drills done through repetition in a process. You are not able to do the process here because of the choices you have made. It is just fine for anyone to chose anything they want. Here to get this to make money, you had to make a different choice than you have made. It does not turn out that a partial effort works for any kind of trading. Many many people are "assessors" of SCT. That means that they do another approach to trading and they also acquire passive knowledge about markets, and trading regarding SCT. They do not aspire to trading SCT. They have the purpose to be informed and to understand a lot of aspects of making money. Some people will give SCT a trial by learning the template. Then they will turn to what they feel is an alternative. That is fine. They did not look at SCT as a "belief" oriented system. A lot of people try trading and 90% fail. SCT, when learned as a process, does not lead to failure. SCT cannot be learned when the person has an "alternative primary belief system" as you do bearbelly. It is just not a feasible thing to consider possible to mix two paradigms that have little overlap where one is a belief system (Raschke) and the other paradigm has to be proven from a set of questions that are exclusively sourced from past experience. This may seem like a negative post but it is just a reality check that I am introducing, generally speaking. It also, in part, may may it easier for people to filter themselves out of this process when there is no eventuality of it being passed forward, subsequently. Building on success is a main theme; if that is not in play, then it is a tough way to not make it.
Well I hate to burst your bubble but I am improving. I have learned from Linda. I have learned from you. I have learned from many people. I could give a rats ass about SCT. A couple of points a day will make you all the money you can spend in a couple of years and I am pretty confident I will get there. If you want me to stay away from this thread, fine. np. EDIT: after second thought I will not stay away from this thread. This is not your thread, it is Spydertraders. If he asks me to stay away I will do so. I am going to put you on ignore.
Throughout any learning process, it becomes increasingly important to differentiate fact from opinion. Fact: Through hard work, your efforts have transformed your mindset from uniformed skeptic to enthusiastic participant. Fact: Your contributions to this thread continue to provide assistance to those further back on the learning curve. While I respect whatever decision you ultimately choose, I strongly encourage you to continue your active participation in this thread. - Spydertrader
Can anyone pls comment on my question regarding recognizing a point three? What are your experiences with this? regards, Ivo