So do you switch to a 15min chart with indicators at EOD in order to get an impression of market sentiment for the next day or do you switch to that view intra day as well? If the day's price action ends with a CCC formation, does this change your anticipation of prices around the next day's open?
For next day "anticipation" I look at dailies, occasionally half-dailies or so. But I think that when trading 5 minute charts, so large time frames' trendline margin of error is too large, and they don't provide good tradable information, especially for indices.
Spyder, What does the bar after the FBP mean? to confirm the down trend? Why do we need to draw FBP? Thank you ericta
The sequence actually began several bars back with the formation of the blue FTT. I wanted to show how one can correctly anticipate the points of change and the sentiment shifts which repeat over and over again every day in the market. The bar to which you refer breaks out of the FBP on increasing volume. Had you not been on the 'Right Side of the Market,' the FBP BO allows you to place yourself back on the Right Side of the Market (See five posts for September). We annotate all Pennants in an effort to anticipate the future as it moves into the NOW. - Spydertrader
Hey Spy, I know you have previously mentioned you watch the YM for formations as well, I was wondering if you consider YM formations equally as important as the formations on the ES? The reason I ask is that there are lot more formations on the YM giving more opportunities for one to ensure he/she is on the right side of the market. Or do you only consider these formations when you are expecting a turn in the ES or when the ES is near the trend lines? From my experience, I have found the YM formations extremely valuable in helping me stay on the right side of the market.
No. I find them more important. Often, while the YM Price Action creates a 'formation' on the 2 minute chart, the ES finds itself in the midst of an 'overlap' on a bar, or, what appears to be, temporary lateral movement. By noticing what develops on the YM, one can then expect to see certain things develop on the ES 5 minute chart. 'Knowing' what to expect fosters feelings of comfort and allows the trader to mentally say, "Damn, I knew it was gonna' do that." The more frequently one enjoys such a relaxed demeanor while trading, the fewer opportunities for 'freak out' develop. Over time, this positive feedback provides significantly improved confidence as well. Good Trading to you. - Spydertrader