I hear ya Steve... That part if giving me trouble as well. I would love to hear a debrief of that entire orange channel if someone has it--I think that would help out alot. Also, Spyder has a red increasing gaussian from that 15:35-15:45. Well after the first two bars all you have is increasing black--no idea that the incr. red is coming up, so what are you thinking during this time? I know that 15:40 black bar came back down a few ticks before it closed, but i think it's still 50/50 as to what the next bar is going to do. Hard to stay at forest view at times like these I think...
For me, when price 'walks' out of the channel (moves laterally), I automatically look for a way to widen the original channel (fan out and recycle Point One). When prices 'moves' (with the aid of volume) I look for continuation of the 'change' signal. I hope that makes sense. - Spydertrader
Look at the price bars. The first (of the black bars) closes right at the open price. It's safe to say we had a 50 / 50 split of red to black dominating that bar. The second bar spikes and closes just above where it opened. Much of the end of this bar is dominated by red volume - hence the spike and pullback. In other words, the Gaussians changed within the bar itself. However, on the Forest Level, nothing but experience (from viewing 1000's of charts over the years) tells you to look at these volume bars in such a fashion. - Spydertrader
This is a very intersting area and one that comes up all the time. Here is how I see it.(coarse method) Coming in with a cushion makes a lot of difference.
I also hesitated when seeing this realtime. What caused me to stay on the short side where the following things: - first black bar at 15:35 (actually grey on my screen because open=close). Nothing wrong here. It did not take out the previous bar on the upside and volume is lower than the previous bar. - second black bar at 15:40. Bar did not close above 15:30 bar. In fact, after reaching its high sellers came in and pushed it even below the middle of the bar. The volume was higher which caused me to immediately draw a trendline starting at the last FTT which was the 15:05 one on my screen. The volume told me :"This bar has marked an important point, you have to draw something". - I actually saw these three bars as an HVS because they have the same low. I don't know much about HVS but I do know it's a pause and it means hold cause price will continue. Price was just pausing for a little while. - On bars like this I often zoom to 3 minute view. I am not trying to introduce something we shouldn't do but I just cannot help it. I wanted to see better how this bar was formed by seeing it broken apart. Seeing these few bars in this fractal it becomes even more obvious that at 15:38 sellers came in after price went up a little and also the HVS was more obvious (5 bars exactly lined up). - YM shows also sellers coming in and increasing volume at 15:38. The volume was very obvious (more obvious than on ES). You had to wait till the end of the bar though. Then something more subjective: - After an FTT price seems to retrace just to a point where you tell yourself now it MUST go down or I do not believe in this move anymore. That's what it did. I guess this is the "second chance" to get on board that the market tends to give. For us beginners it's the first chance BTW. (point 3 = point to enter if it was you pt 3). - I was very sure of the FTT at 15:05. And after a screaming FTT I found you just need to relax and give the new channel time to be formed. After all we front run the breakout traders and other people who trade after the fact. The FTT comes early in the move, the earliest possible as far as I know. It comes so early that often I find it hard to believe that price could turn very much (causing me to bail out with just a few ticks profit; not this time) but I have seen it does, over and over again. So there is not one thing but just a combination of things that said "HOLD". regards, Ivo
Thanks alot for the explanation...Although I dont have quite enough experience, it makes sense and it will help me start looking 'inside' the volume bars for more clarification... good stuff going on here
This is a great illustration of why we "sweep down" to the YM... the YM tells the story perfectly for that time period... pt1 to pt2 on rising black vol - pt3 on falling red. FTT on rising black - falling red - switch. But hey - that is totally useless if you didn't have the "forest view" in mind... in other words - you must be anticipating a sequence like that in the context to make use of the info. Coarse -> a little medium (and that's as far as we've gotten).
It's the right trendline. If you use RTL as your stop then time is your friend as long as price stays between those lines. regards, Ivo