SpyderTrader I modified your chart slightly to show another possible channel and FTT. Not sure if horizontal channels are within the guidelines but at the time felt that this channel was the best fit for the price movement. Are Horizontal channels ( Support and Resistant ) allowed? Spooz Trader I noticed the same thing a few posts ago. This made me realize the problem with a discrete time period volume snapshot as opposed to a realtime continuous volume monitoring tool. I would think that this limitation is very well known to the folks that are SCT experts and probably wiil be addressed at an appropriate time. I think a Real TIME bid/ask spread combined with a Real Time T&S monitoring would really shed some light on the ebb and flow of volume. But for now I am challenged getting my chart channels and identifying the 5 minute price formations.
Spydie, I don't know if I'm jumping ahead but would you care to comment on the role of the 5m vs the 2m Gaussians. When Where to use one OR the other? Thanks.
Your question implies a search for a 'laundry list' of items to 'check off' in order for a trader to 'know' if they have an FTT or they do not have an FTT developing in real time. At our current level of expertise, no such 'laundry list' exists. I cannot place enough emphasis on where everyone needs to be with respect to observing the market. If a trader, "thinks" they have an FTT, then they do, and they need to act accordingly (take action immediately). If later, a trader realizes a mistake has been made (and there will be many such mistakes), they need to fix those mistakes (also immediately). The addition of subsequent tools allows the trader to recognize an FTT faster. The additional tools also permit a trader to recognize errors sooner. The additional tools do not permit a 'differentiation' between what is and what is not an FTT as the FTT. At this stage of the learning process, a Flaw (Hitch, Dip, Stall, etc.) may never appear to you any different than an FTT in real time - at the point in which the FTT occurs. However, as one gains experience monitoring the changes of price and volume, one immediately (the next bar) recognizes the flaws for what they are. A combination of Price, Volume, Channel location and Context provide the clues for correct anticipation. However, even if your anticipation works out completely wrong, you benefit from the effort. By example, while in a downtrend, you observe increasing red volume. While calculating PRV in the first minute of the next bar, you notice price pullback slightly and volume (based on PRV) to be very low. Now, on the previous bar, you may have noticed the pace of Price and Volume slowing, and as a result you may have thought you had an FTT forming as price appeared to be a great distance from the left trend line (and even started to pullback). Since you thought you had an FTT, you took action, and as a result, watched as price moved away from your entry point. and continued to do so (although only a small amount) on the next bar. It is this significantly low volume level (based on PRV) which causes the concern. Since you have noticed many FTT's over the time observing the market, you realize FTT's do not act in such a fashion as this. As a result, you realize an error has been made, and what you once thought to be an FTT, you now realize is not. As a consequence of this analysis, you reverse to get back on the right side of the market. By the next bar, you notice improved volume in the same downward direction, and the market confirms what you felt - you had a Hitch. The process begins again, monitoring, analysis, decision making and taking action (Wash, Rinse, Repeat) bar after bar throughout the day. When you say, Volume doesn't always act like we anticipate at the beginning of a bar, I can understand how this might cause frustration. Remain patient. No rush to action exists. Why? Because you are still at the input analysis stage. At this point in the learning process, I have handicapped the input data forcing everyone to focus on Price and Volume on the ES. The skill needing work requires the trader to shift their focus from the forest to the trees and back again as each bar unfolds. Big Picture to Fine Detail (Wash, Rinse, Repeat). When you find confusion at the PRV stage, zoom out (even push your chair back from your monitor if need be) and take a look at the 'big picture' for a moment. Is price creating some sort of formation (Flat Top Pennant, Flat Bottom Pennant, Symmetrical Pennant, Lateral) I can recognize within the channel? Does this tell me anything? Does an FTT at this specific point in time confirm a trend already in place (Point Three) or start a new trend? Does my anticipated End of bar Volume (based on PRV) make sense in terms of Gaussian Formation? If not, then perhaps I have a flaw. As a trader gains experience, the above mental analysis occurs more rapidly and with greater accuracy. So, the next time you feel volume isn't telling you what it should, take a step back and look at the bigger picture. Remain patient and watch to see how things unfold. IF you witness a flaw forming in real time, note what happened, and if you see things progress as they should, you will have just proven to yourself that you need more patience. I apologize for the lengthy post, and I hope you find it useful. - Spydertrader
I draw horizontal channels all the time (HVS and CCC). We will address this topic when we add the next tool for monitoring. - Spydertrader
in pink oval, look like the up channel was created by drawing a line over the 2 bars top first, is that ok?
No. I incorrectly drew in the taped channel. Points 1 & 3 always occur on the right trend line. - Spydertrader
Spyder, this post is extremely helpful. Iâm amazed at how you know just what to say. Iâm also amazed at just how entrenched in the âedgeâ or âsystemâ paradigm I had been without even realizing it (until now). Thank you for being so willing to regurgitate what is needed to get over the old way of thinking.
Spyder, Great post! Although you've hammered these points more than a few times, I appreciate you taking the time to "drill down" deeper. I realize that I need improve my Big Picture to Fine Detail (and back again) routine. I think I'm spending too much time in Fine Detail, even just using the current tool set (example: tryng to analyze intrabar turns). I'm sorry that my post prompted you to post this stuff once again, but I can speculate that your post will benefit others besides myself. Thanks, spooz
Very useful post, thanks - it sets out the mindset to get in the groove: recognise you made a mistake and CORRECT it immediately. As Shakira has been known to say: "So be wise and keep on Reading the signs of my body And I'm on tonight You know my hips don't lie And I'm starting to feel it's right All the attraction, the tension Don't you see baby, this is perfection" (Shakira is the market. )