Did you act on any signals between 10:45 and 13:00? I tried to do reversals in this congestive area with really poor results. I lost ~8 points there. I've decided to just sideline during those market situations as I'm not ready to profitably do reversals. Do you act on the same signals during congestions as you would during a large trend near the end of the day? Do you just hold through such an area or do make quick scalps?
The two long traverses in the morning were easy to catch and I was sidelined during the series of laterals... Maybe that got me distracted since I was late on everything in the afternoon... Got to work on that focus! One other comment: I stopped drawing detail Gaussians during the laterals, and just waited for clarification. The Forest level Gaussians are therefore drawn after forest movement is defined.
Quote from Grob109: ... The 81 bars can be divided into four kinds of segments: legs, 2point trades; 3tick trades and sidelining when the signal is less than noices. The segments are determined by the horizontal volume lines: DU for sidelining; low for 3 tick; medium for 3tick to 2 points; high for 2points; and extrodinary for leg trading. ... <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1687021>
Nope. I just kept on extending the Lateral Formation Lines. when the lateral first began, I certainly did not anticipate it would continue for so long. In fact, I even went to lunch in the middle, only to return and see Price holding steady within the formation. Based on your description, it sounds as if you do not have the skill set required to trade periods of congestion. Not having the skills required to do reversals is an entirely different matter. Again, you mentioned nothing about reversals, but you did attempt to trade during low volume and within a period of congestion. I encourage you to determine whether reversals, congestion or both give you difficulty. Nope. Once the context changes, the answer to the question, "What do I need for continuation or what do I need for change also changes[/b]. During congestion, I spend significantly more time at the fine level of tools. During the trend periods, I rarely use the finer tools. I prefer to make fewer trades - holding through most of the Non-Dominant Traverses. As a result, I don't have to spend as much time focusing on my charts. The market provides plenty of opportunity for easy profit. As such, I feel no need to fight over nickels and dimes. Good Trading to you. - Spydertrader
What benefit results from drawing tapes using a formation? When one has a formation, one knows** the direction of the Break Out, and that direction IS the right side of the market. As such, drawing tapes which include the BO Bar creates a far simpler method of knowing when the right side of the market has changed after a Formation BO. After all, its after the BO where things can get 'messy' for the trader. Before the BO, we having little to do, but wait. You need a tape to tell you to wait? - Spydertrader **Disclaimer: Formation FBO's and Outside Bars present an entirely different matter.
Perhaps we should have a prize for the worse offender. I think I'd beat you hands down!! Today nailed both the 1 & 3 of the second channel (the shallow down sloping one) both within a couple of ticks. I am embarrassed to admit how quickly I washed them. However in the interest of full disclosure I can tell you it was a matter of seconds for +.5 & +1. Did marginally better later on. Cheers.
The problem rests with reversals during congestive areas, which is why I decided to focus my attention on this area. I made 12 points in the first 90 minutes and made a profit doing reversals in the afternoon as well. I'm still sim trading but I will go live soon. That makes sense. I still need to hone my skills when it comes to the finer tools. I'll sideline in the future and see if I'm able to use them to make the 3 tick trades that Jack talk about in cnms2's post above. A few of those can add up pretty fast, as witnessed by my losses Most of the money is made available during the large trends. If a trader knows how to correctly position himself for those trends he will be able to make ~1.5 times the daily range day in and day out. So far that's looking pretty good so I'm focusing on areas where my undertanding is still very much limited. Thanks for your answers and good trading to you as well.
The first part of my blab had to do with how to draw particular types of channels de novo and then morphed into a discussion about whether contextual considerations should be brought to bear when attempting to do this. This is separate from what to do when you find yourself "inside" a formation, e.g., pennants or a lateral. In answer to your question about whether it is particularly useful to draw tapes while inside the formation or are tapes necessary in order to wait, the answer to the latter is an unequivocal "no" but if one was going to try and trade inside the lateral then the tapes should be useful (not on my list of things to do at present). As you have outlined, the matter of most consequence is just waiting for the BO, and wait you must because when you are inside these formations, pennant or lateral, you do not know which way they are going to breakout - ever. Again as you have outlined, when the BO has occurred, with a close above or below the appropriate extremum of the harami or "honking big bar", you prepare to draw your tape using the BO bar as the first bar of the tape. I think I have this correct and if not please nail me. With respect to the disclaimed entities, the formation FBO just means you're back to where you were before it broke out,i.e., it returned to the formation envelope. The outside bar scenario is a different kind (correct?) of formation (equivalent to an engulfing bar) but again you cannot predict which extremum of the "honking big bar" is going to form the point 1 of the new channel. If I'm wrong about these two things, "Please, sir may I have another " (ho, ho). Your continuing "hover", Spyder, is greatly appreciated and you will be sorely missed when you move on. Thank you for your interest. lj Edit: I haven't done "Harmonics" yet .:eek:
I wonder how many of this thread followers browsed through these links recommended by Spydertrader on 12/29/06 ... They contain a treasure of information for trading Hershey's methods. In my experience, even if you've already read them, with the knowledge acquired over the past year, re-reading them now is most beneficial.