To me the key is having the correct carry over channel(s) in place. In this case, the last 5 bars of Thursday completed a point 3 channel and the opening bar on Friday was a gap up. That move up on the gap was a sort of instant dominant traverse. Even though the first bar was red on the chart, you really need to see it as increasing black due to the gap. The second bar on red volume was then decreasing and a non-dom traverse ending in FBO. Bar 3 was the start of the next dominant traverse. Bar 4 was indeed a flaw, but the relatively high volume for a flaw could have been confusing. This is where I try and avoid focusing on a single piece of data. At this point I'm in an up pt3 channel and things are looking good so I wait until next bar where price moves up so all is ok.
even with high vol bar 4 feel lack of direction due to it neither went higher nor lower than bar 3 , hold for more information.
I would be interested in reading anyone's thoughts concerning the inclusion of the NFP action in our charting. I started my charts yesterday an hour early in order to include this information, since many consider it the most important report of each month. Often times this action will create the high or low of the session, and if nothing else it provides another visual reference for price movement. No doubt this is all just a matter of choice, but if there are justified reasons why one should not include, I would appreciate knowing. Cheers ...
We continued a discussion started by this post. If interested you can view it here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=90495&perpage=6&pagenumber=16
I think I'm finally starting understand these methods. I am starting to pick out FTT's in my E7M07 Charts.
As previously noted, I do use the YM Pre-market (8:30 AM - 9:30 AM Eastern Time) as a gauge of Market Sentiment. Since the YM leads the ES, I don't bother with any additional ES data other than RTH. - Spydertrader
TB - in addition to what Tums has recommended above, I think it would behoove you to forego trading the Globex mini Euro for a while, and begin to familiarize yourself with the mkts of choice here, the ES and YM. I had been solely trading the Euro for well over 2 yrs before discovering these methods. It was not an easy decision to abandon all that I felt I had learned about that mkt, but it quickly became apparent that the best way to study here was to be on the same page as the entire group. Also, as you may have already read, the interrelationship of the ES/YM is an important conceptual tool, and using it can only speed your progress. I happened to read your later comments this evening in your journal - may I suggest that you strive to personally detach yourself from the mkts, and pursue all of this as an academic exercise. I wasn't aware earlier that perhaps you have already incorporated some of the ideas presented here into your own trading approach. But I can say that you, as a young man, have landed in a very unique and fortuitous situation , should you be prepared to do the work. By doing so, you have the opportunity to avail yourself of an assemblage of some very capable and helpful people. That is indeed a rare find in the world of internet trading forums! Best of luck on your journey ...