By my estimates, ideally these actions would have netted ~26 pts, with a daily range of 11 pts or ~2.5x daily range I thought it might be helpful to look at each entry/reverse/exit as a decision point and try to go through the thought process involved with making the decision. Anyone care to take a stab? 1] long at 9:30 2] reverse short 9:50 3] reverse long 10:10 4] reverse short 10:45 5] exit 11:40 6] long at 11:50 7] reverse short at 13:55 8] exit on close
Bundle, it is not that I didn't read this thread in it's entirety or all the material outlined at the beginning of it. Is that I have never traded at this resolution level before and get bored. I also have a couple of years of experience looking at bars and volume and find it difficult not to jump the gun at times. I am trying to find the correct frame of mind to where we are and I have. That's it. Sorry for disturbing the process.
Thanks Spyder. My lack of patience has truly been my worst enemy in this business. A human quality that you seem to have endless amounts of... You are correct in your assessment of where I am now, and after seeing your chart I understand how I am making this much harder than it is... I have much to learn from the forest level still though......to be a lot more patient at the very least. Thanks again and please excuse my interruptions.
O.K. Actually, the signal is after 9:30 AM. ES Price forms an FTT on the Red carryover channel from the previous day. At approximately 9:32:15 we see Price begin to head higher on the YM (also forming an FTT on its carryover channel. Ym also shows increasing black volume. Again, it's a bit past the open of the 9:50 bar when we have ES Price break the tape of our up channel. In fact closer to the close of that bar than the open. A little passed 9:54 on The YM, Price begins to head lower confirming a YM FTT. ES shows decreasing red volume here as well. Looking at the ES, Price breaks our down channel with this signal. However, by monitoring the YM, we see an FTT appear much earlier and know the market plans to head higher. Even if one wasn't watching the YM, we should already see a 'Point Three up channel on the ES. From 10:10 to 10:15, we also see increasing black volume on the ES. Clearly this is a long signal. FTT on the ES after two volatility expansions combined with decreasing red volume. ES price breaks through the right side trend line signaling an exit. I gave credit here for missing the FTT which occurred on the ES red down channel at 11:35 AM. Again, I tried to make things as realistic as possible - including slippage, missed signals and late recognition. A second FTT within the Red Down channel forms a Point Three Up Trend (blue). The Gaussians also show a forming B2B. We enter long on such signals even at the most coarse forest levels. FTT of the most steep channel on the ES. Break of the right side channel tape. One may have chosen to exit here in an effort to 'bank' profits on the day. If so, the next short wouldn't come until 15:05 or later (whenever one recognized the Point Three red down channel). As a side note, we already went well past normal Peak Volume levels. In fact, many probably felt the 13:35 / 13:40 bars were forming an FTT, but based on Volume we could tell this was a flaw. If anyone was fooled here, don't fret it. With time and experience, you won't be - red volume levels were way too low for it to be an FTT, and you'll recognize that in the future (if you didn't already). Actually, the exit occurred when ES Price broke through the most steep down channel (orange) Right Trend Line, but because the cash market closes at 4:00 Pm Eastern, we would have exited on the close. The above signals / decision points were based on someone who switches resolution levels between a 'Forest' and 'Tree' level resolution. In other words, a trader who feels comfortable entering both on an FTT and on a Point Three. However, all traders on the 'Forest' Level Resolution should have at least caught the Point Three Entry at 11:50 AM on the ES. Hope that helped. - Spydertrader
No need to fret over it. You are talking to the guy that spent years searching for the exact formula for calculating Dry Up Volume. You think maybe I don't look back and wonder, "Gee, maybe I could have spent that time elsewhere?" LOL. Again, relax, kick back, and remain patient. The market provides enough hurdles for us in real time. no need for us to go creating additional ones for ourselves. The hardest thing to learn is 'sitting on your hands.' Remember, Jack says the number one action we take is hold. No buttons to click on a hold. Enjoy! - Spydertrader
Spyder I was just going to agree with Jander that a breakdown of the thought process would be of great benefit. As I opened a window to post this, your post of the breakdown came. For me it is a huge learning tool to see this. I have one question regarding the 9:50 short. I see it clearly but you mention the decreasing red volume. What do you see in that decreasing vol bar. I would think ideally you would want that to be increasing. The black vol bar before was large and price did come off the high. I imagine it would have been asking a lot to have the red bar increasing. The fact that you mentioned it made it seem significant and I don't understand that. The delta on that decreasing red bar was almost all selling and the ym ftt was accompanied by a delta shift from 6:50-6:54 so it was clear what was going on. Thanks for taking the time to break that down it was a huge help. At least for me.
This is an extremely true statement. Being someone that is used to doing fifteen things at once, this has been the hardest thing of all to learn. Things that seem to work: watching a movie on monitor #2, listening to zen-inducing music, brewing lots of chinese tea, lighting candles, and tackling all those addicting online puzzle games. When the account grows a bit, I think it would be +EV to hire a personal masseuse to have on hand for the entirety of the market day Great posts today Spyder, very helpful stuff.
As I often try to do with situations such as these, I prefer to take you back to what I knew (or thought I knew) at the point I made my decision. We start the day with an FTT on the ES (Point One). Over the first four bars of the day, we see increasing black volume. As such, my brain thinks - uptrend. After all, we expect to see decreasing volume in a retrace. Here, we have increasing black volume as price improves. In addition, I already have an uptrend developing with the YM. When price begins to pull back on the ES (Point two, my brain says), and the YM shows an FTT, I expect to see decreasing red volume as price retraces back toward my anticipated Point Three on the ES. When price breaks the 'uptrend thin green channel' on my previous charts, combined with red volume (with less volume showing on a PRV basis than the 9:45 bar), I feel pretty confident that everything is going to progress exactly as I expect. My sole concern developed as time moved closer to the end of the 9:50 bar. At this point, I see significantly lower volume than I would normally expect to see at an FTT. Now, I entertain the idea that I may actually have a flaw of some sort developing. However, since I do not have anything (YM Price / Volume, ES Volume or ES Price signaling 'change' I reach the conclusion that I have 'continuation' and continue to hold. The 9:55 bar on the ES then confirms my decision to hold by bushing Price even lower (and creating a small volatility expansion). At the 10:00 AM bar, I see Price begin to slow in its downward pace, as well as a reduction in volume. As a result, I begin to think 'change' should be upcoming (after all, we did just have a Volatility Expansion, and I am now on the look out for an FTT). I also notice Price failed to make it to the left trend line (skinny red lines) and I begin to look for a possible trend change. When Price again fails to reach the left trend line on the 10:05 bar, and begins to head higher, I already see an FTT on the YM and PRV volume on the ES tells me to expect increasing black once again. All that remains to complete my data set is to see Price breach the right side trend line of this down channel. When it does, one enters long. The above description went a little farther than your question, but I wanted to show how the process really doesn't require any sort of hyper activity. In reality, we had more than enough information to reach a conclusion at almost every step. One didn't need to go check the YM, but it certainly was nice to see it confirm everything as we walked through the morning's opening bars. I hope you find the above information useful. - Spydertrader
Spyder, I almost feel proud--I did see that 11:35 FTT, and my small 'aha' moment for the day was seeing confirmation of the new uptrend in the declining red volume of the 11:40-11:45 bars. But I wonder what would have happened if I were trading. I would have had to endure retraces on both the 11:35 black bar and the 11:45 red bar. I'm pretty sure I would have thought I didn't understand what was going on and exited for some kind of loss (and then kicked myself as I was proved right). How do you (and how should I) handle such moments?. One other question: I annotated the 9:45 bar as an intrabar FTT when price tried for a second run at the high and failed. Is that legitimate? thanks so much, palinuro