Hey guavaman, Here is a video of the time you have in question. It starts around 11:45 and ends around 1m. It is a tick replay of just the ES with prv , as I had not recorded live, the day. Playing this back may help to see something you might have missed. It is annotated up to the time in question, then very lightly annotated after that, so you can see things your own way. I hope this helps, maybe others who replay this can post what thay see at the times in question. One note- I did not put any pennants, as you had mentioned you do not use them. I did annotate flaws up to the time that was not clear for you. Again , hope this helps. Entire video is consolidated up to 5 mins total time. video link :http://www.screencast.com/t/L0rCZmGW3
cnms2, You just nailed my favorite thing I look for. When it comes my way, it is usually gold. The greater the consolidation of price and dry up, on one bar. . . especially at a right trendline, the happier I am !
Start out by counting the number of formations occurring in any one day. Use any chart you like, for any day you prefer. Once you've totaled the number of formations, count the number of actual FBO's which develop. Then count the numbers of formation break outs which did not result in an FBO. Which list has a significantly higher number. On Friday, I count 17 formations (Pennants and Lateral Formations). Of those, I see 6 FBO's and 11 Non-FBO's. Of the six FBO's, 4 continued on the next bar in the direction of the original break out - leaving 2 which changed direction compared to the previous break out. It appears, to me at least, you have created an arbitrary mental construct defined as, "a lot" for a situation, which, presents a problem, two to three times a day. What if we look to see what possibilities exist when we have a Pennant Break Out (you'll find three). If one knew what possibilities existed, and then had a plan for each, one would not, could not, feel anything but comfort, as you'd then know in advance what to do should any of the three scenarios unfold. In other words, no need to guess what might happen, know what can happen, and then, when you 'see' the one possibility remaining at the end, you'll have a plan in place for how to handle it. - Spydertrader
Spyder At 13:35 on that attached clip from 26 Oct, price bo's the green RTL on increasing red vol but you chose to annotate it as a new pt3 long. I have assumed that we only fan channels in this manner when the RTL is broken on decreasing volume. Could you explain how you reached this decision please? I noticed that you did a similar channel adjustment on Thursday 25th Oct at 11:30 where price bo'd the RTL on increasing black volume, yet you annotated a new pt3 for a shallower short channel. Thanks David
1. Break on decreasing Volume must fan, but break on increasing Volume can fan. One set of circumstances results in mandatory action. The other results in an optional action. How to distinguish between when to do so and when not to do so results from noting, "Did the trend change, or just the channel?" 2. In this specific case, the Outside Bar formed a Point Three (as they often do) which made the choice quite easy. - Spydertrader
Given that the outside bar with incr red vol at 13:35 formed a lateral, with subsequent black bars with decreasing vol, was it possible to reach the conclusion of "this is a pt3 long" before the bo long at 14:00?
To use the vocabulary of 'conventional orthodoxy,' you know much earlier than 14:00 bar, but you receive confirmation with the 1400 bar. In other words, the dominos begin to fall, and the sequence begins, much earlier. - Spydertrader
Hi Spyder, I read your answer to DKM, and some things you said made me have some questions that I hope you can help me understand them better I understand that we must fan our channels when we have Decreasing Volume, but I was a bit surprised to see that we do that even if we have Increasing Volume. I thought that if we have a RTL BO with increasing volume, we have a change in Trend. No subjectiveness here imho Letâs imagine we were Long from 12.20 PT3 and Holding. How could we tell that the Trend hadn't changed if we were at 13:35 outside bar close with a RTL BO? I thought in some possibilities: a) Because it bounced at SMA? b) Because 13.35 is really not increasing volume when compared with last peak volume (13.20), so we didn't have a really R2R there? Thanks in advance