Sypder, The potential FTT marked 2 on the attached chart that you labeled a HVS has more red volume than the subsequent green ftt that you labeled. I would of probably recognized and labeled the green FTT 1 bar later than you. I would of definitely labeled and probably reacted to the HVS bar ( marked 2 ) as a ftt and would of traded out of it for a couple of tick loss when the congestion area was broken on the upside. I'm probably beating a dead horse but feel this is the crux of my problem and probably others. Your recent charts with all of the micro channels labeled are really helping me see the different levels of gaussians. thank You!
For your chart area #1, see Spyder's recent post to ticktrade where he described this "Dip". I saw the FTT at your #2 just as you did and took the short trade on that bar. I realized an HVS was occurring but mistakenly held short due to my misunderstanding of Continuation vs Change in this situation. I need to review Spyder's recent posts about this topic. I perceived the FTT occurrence in the middle of the flaw as a signal for change that would offset the impact of the upward price move into the Flaw. Spyder's 3/16/07 chart has two HVS areas worth reviewing as the second one has an FTT right in the middle of it that did signal change. http://www.elitetrader.com/vb/attachment.php?s=&postid=1400157
Spyder, I saw the 15:20 ES bar as a potential FTT as it went slightly lower on less red vol and also just touches the LTL. Price then shot up nicely on the very next bar giving me confidence that the FTT probably legit. My question is, what specifically tells you that we arent going to make it to the RTL of the down channel (for a potential BO or FBO) rather turn around and head lower? The only thing I see is price is at the RTL of the YM and the 20 SMA is acting like resistance there. Thoughts?
While nothing is 100% sure, when I see PRV Levels which indicate significantly less Volume compared to the most recent Peak Volume Levels (13:20 & 14:20), I remain relatively confident that the bar in question isn't going to 'have the stuff' needed to sustain enough momentum to break on through to the other side. Again, anything can (and often does) happen, but when I see decreasing levels of Peak Volume, I view it as an indicator of Market Sentiment. In other words, my brain thinks, "Fewer People than before felt up was the correct direction." As a result, I can then anticipate a smaller retrace, or more importantly, a retrace instead of a reversal. - Spydertrader
I agree with you 100% when peak volume fades like that at newer highs I also see this as a good sign that the mkt has run out of steam at this particular time. However, after we BO the upchannel at 15:00 (on my chart I have an upchannel ) on increasing vol we are definitely in a down channel. The 15:20 bar to me, looks very similar to the 14:20 (slightly higher highs on significantly less black vol) bar of the up channel, slightly lower lows on significantly less selling vol. I got long here and the very next bar was nice to see. For all I know, price could traverse back to the RTL and either BO or FBO. I know another FTT is also possible and this is what ultimately happened. I am just trying to figure out if there was something in the 15:30 or 15:35 bars that could have tipped me off sooner or maybe something on the ym? I know you mention to really only pay close attention to the YM at points of change like its RTL and I could see this as being the catalyst for the ES not traversing to its rtl. Would you view the 15:20 bar as an FTT potentially, all other things being equal?
If on your chart, the 15:20 bar failed to reach the RTL, then yes, it makes perfect sense to view it as an FTT. On my chart (and chalk this up to variances among data providers), Price did hit the LTL. As such, it cannot be an FTT (again, on my chart). Still a signal for change, but not an FTT. However, how you viewed the market matters most, and according to your charts, you had an FTT. As a result, you had a signal for change, and acted accordingly. As I see it, you followed the market exactly as you should have. However, after the market failed to provide you with the anticipated continuation data (on subsequent bars), you had an additional signal for change - indicating Price had no intention of continuing higher. What Jack calls, "What wasn't That?" (and others have described as WTF?!?!), reared its ugly head - meaning you didn't continue to see decreasing black volume nor Price continuing to head back up across the channel. At this point, the dominant trend continued (down) and hopefully, you observed this data in time to execute a reversal back to short. - Spydertrader
I've been acting under the assumption that we can have an FTT if price touches the LTL however if any volitility expansion occurs then we cannot. I guess what I should start thinking is that a touch of the LTL on less volume than the previous low COULD be a signal for change however def is not a bona fide FTT right? This makes good sense and is a good vital piece of info. I guess, from what you've posted here and the previous answers makes me think that the 15:35 bar shoud have gone higher on dec black vol for me to continue to hold this non-dom retrace, when it does not (at bars close?), this is my signal for continuation of the down channel. The 15:30 bar is tough because this could just pause and the next bar could go higher. You've mentioned before that we need to see decreasing black vol across the WHOLE retrace channel and alot of times we dont get this bar by bar as this would make it so much easier to see. I dont think I could justify exiting the long position based on the ES 15:30 bar alone, however close inspection of the YM shows that we are at its RTL and price is exiting on low vol (and 20 SMA there). Perhaps this could be an early warning that we will FTT again on the ES? One thing I am really trying to avoid is watching the YM too closely all the time, rather just focus on it at points of change (FTT, PT 3, RTL). Do you agree this is the right thing to do? Thanks for all the help!!
Yes, The YM leads the ES at points of change. However, keep in mind, Intra-Bar Gaussians Shifts (changes in sentiment occurring within the bar itself), we can only see using the fine level tools. Over time, you'll settle into just how frequently to swing back and forth between monitoring the YM and ES, and based on market pace, how closely to follow each. Jack calls this 'sweeping' for data sets. - Spydertrader