Ok, I find myself questioning whether I've built these channels correctly or not. CNMS2 commented that tapes and channels cannot be constructed properly without volume as a context, and I'm thinking he's right.... Here's a fundamental question: When you construct a nes pt. 1 to pt. 2 tape (which also creates the first leg of a new channel), do we HAVE to see increasing volume? meaning, every single 1-2-3 sequence must exhibit rising-falling-rising volume? I see some of the channels I've made have falling-rising-falling volume, which could be wrong... I don't know. RoughTrader
Take a look at Spyder's daily charts, you can do a reverse engineering on it to figure out what you need. Alternatively you can refer to the Jan and Feb section of this journal for detail.
Here is how the ym daily chart looks now. 100 day m/a is yellow line. 50 day is purple. edit- I think on a daily chart a few more bars would be a better pennant. Annotated that pennant at eod yesterday just to see how it would play out
The YM was giving me a dozen signals during those 70 minutes. I had reversed on the FTT on the 13:55 bar but didn't manage to turn that trade into a profitable one as I reversed a couple of times during the market action that followed. It's a good thing the closing rally more then made up for it.
6 charts: 30 minutes, 4 trades, +3 points <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1668853 width=512>
6 charts: 30 minutes, 4 trades, +3 points <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1668856 width=512>