I think you may have combined two situations which may or may not work in unison. Lateral movement occurs within all sorts of formations. In the chart I posted (See above), Lateral movement occurred within a Flat Bottom Pennant (FBP) Formation. Lateral formations (CCC, some HVS situations, Lateral Channels, etc.) represent a slightly different phenomenon. Again, we aren't talking about 'flaws' per se. Forget 'flaws' for now. We need to learn to differentiate between Lateral Movement (which may occur within a flaw [or may not], and often occurs within many formations - in addition to - Lateral Formations) and a formation which results in a lateral. Again, a Pennant (FTP, FBP or SYM) often has lateral movement within it, but does not form a lateral formation. All poodles are dogs, but not all dogs are poodles. - Spydertrader
Guys, you are talking about channels as primary trading tool. Traverses, etc. Price moves inside many channels at the same time. I can suppose that almost every 5min bar can be potential FTT bar for some channel. How to know what channel is "true price operating channel" NOW? This is the most intricated part for me.
Hi, Look at the gaussians. There's high volume when the borders of the channels are touched. If you think you see the channels but you don't see the volume you got your channel wrong. The FTT is very interesting and there are different things to consider. Price should try to touch LTL (else it's not an FTT) and fail. If this happens then it's an FTT. However, in my opinion some more factors play a role: volume of the FTT bar compared to volume when price was around same level earlier.., volume of previous bars, etc. Did the FTT take place on high volume or on low volume, etc. regards, Ivo
The open secret is here: http://www.elitetrader.com/vb/showthread.php?threadid=83604 If you have not read these "secret" documents, Ivob's reply above probably do not make much sense to you.
I want to add that I am far from complete in my reply regarding FTT's. There are more factors to consider and usually it's not one factor but a combination. (consider the complete dataset , not just one element). There are different kind of FTT's and recognizing them quickly and acting quickly is crucial for this method. Just as important is recognizing quickly the FTT was a flaw.. So we need to know what to expect right after the FTT so we also know it when something unexpected shows up. We need decreasing non dominant volume, or a flaw in the new dom direction is nice as well. This is followed by FBO or BO and then incr. dominant volume. BTW There are also things to expect before the FTT. (flaw(s) and/or VE). So not every 5 min bar can be a FTT It happens all the time when I think :"Mmm. if this would be a valid FTT we would not see this right now". This happens even before price moves against you so in general it's a volume issue or something on the finer tools. Like this one can quicky exit with a profit or reverse and wait for the next FTT. If you are wrong the market will at least temporarily try to make you think that you were right.. So if you were quick to enter and quick to recognize this you can exit with a profit. Some months ago I was just thinking. FTT is failure to traverse to LTL. That is true for sure but there's so much more to know then "enter and wait". If you simply enter on every FTT (at end of bar for instance) you get killed if you don't know what to expect after it. regards, Ivo
This is just a followup, to something regarding tick I posted recently. Bundlemaker, Hope this clarifies what I posted , and the pm. The 2 pair here , I don't think is what JH had in mind, but it is a 2 pair to a b/o. Spyder, if this is incorrect as how I should look at 2 pair, please correct me, when you return is fine.
Typo, * retrace in down channel in post above , reference to left side label. Half asleep when I type.
Now this is probably more likely what JH is talking about when he mentions 2 pair shift on tick. Also you can see the relationship to the DOM here. This is a volatility expansion on the ym 2 minute, in a down channel, on the 15: 20 bar lows
I use DOM tool as Spyder described it here, though trade a differentl method. Yesterday was a difficult day, too much chop. However using DOM where price bounces off wall, helped me tremendously. I rarely look at ES market, and it felt very good to be able to recognize some of turning points.