I 'recycle' my Point Three into a New Point One, rather than, use the Original Point One because I 'see' the market in terms of 'rolling through' various points instead of starting and stopping on those points of change. I annotate my channels in real time, and when Price breaks a RTL on decreasing Volume, we often have yet to see the end of the current trend. In other words, the channel needs changing because the trend did not change. When a particular channel continues on for quite some time, I may need to use the most recent 'trough' of Price (most likely a flaw, but could be an FBO point) for the New Point One - rather than go all the way back to the Point Three. This is the way I fan my channels as I feel it gives me the best view of the actual market. Others, who may view things differently might draw their fanned channels differently. I posted on this topic before. You may want to review that post to see the specific examples I use. I don't subscribe to any Universal TA applications with respect to Pennant formations. As I have indicated in the past, Pennants create a place where one can watch the market briefly pause, as it provides an opportunity for those studying these methods, to know the right side of the market. By using the YM as a 'trigger' for trend direction, one can often enter the trade using the ES - prior to - actual Formation BO. Trading within these formations requires use of the fine level tools. Finally, no. One does not always see increasing Volume on a formation break out. In addition, even with increasing Volume, Formation FBO's occur. Some of these formation FBO's involve changes in market sentiment - while others, do not. Most 'shallower' channels become higher fractal channels once one annotates an 'accelerated channel' inside them. I continue to leave these 'shallower' channels in place for those trading on different resolution levels than my own. technically, one can always find another channel up the totem pole, but that really isn't the point of this methodology. FTT's do not signal a change in pace. They signal a Change in Sentiment. How long this sentiment change remains in effect, and how far Price travels in the process has nothing to do with an FTT. That domino has already fallen. One then needs to look for the remaining dominos in the sequence in order to determine what must come next. - Spydertrader
2] Are there any practical advantages in drawing/recognizing pennants in regards to trading them? The ones you have drawn very rarely follow their 'universal TA' application in breaking the horizontal--which is not surprising as they are only 2-3 bars. I understand that these are signified by decreasing volume, so naturally you'd wait to see increasing vol to determine direction--but isn't this always the case? I'm having a bit of a problem getting my head around what you are saying here, Jander. As previously defined on this thread, a pennant is a 2 bar entity - period. If there is no BO and no close beyond one of the extrema of the first bar, then this is called a Lateral Formation. There is, as best I can ascertain, no certainty as to which way a pennant will break, either as defined in this thread or in "classical TA" Ã la Edwards and Magee (I don't know what "universal TA" is). To my mind a pennant, as defined in this thread, is a pause, giving one time to gather one's thoughts before the next price movement. lj
Sorry Spyder. While I was composing my profundity (not), you slipped in and dealt with my uncertainty. lj
No need to offer an apology. In my former life, I rarely encountered a physician with your ability to create interesting, educational and entertaining prose. Your posts almost make me believe, during your undergrad years, you avoided the standard Biology / Physiology classes, and instead, rolled with the English and Philosophy majors in south quad. - Spydertrader
Spyder: Thanks for your explanation...cleared alot up - I do appreciate it -- I am looking forward to your videos LJ : Please see http://www.chartpatterns.com/ascendingtriangles.htm I assumed there was some correlation between an ascending triangle and a flat top pennant... Apparently there is not Ericta: I am assuming that he is not at the res. level that takes action on dom/2pair.. perhaps I am wrong. By his posted charts it appears he is not Tums: You are so helpful to reply each time I post. Are you currently researching all my old posts to find where I may have asked that before? I expect nothing less... I understand 'recycling' was discussed ad nauseam months ago. That chart posted today takes it to a whole new level. There are about 7 or 8 channels crafted from that last uptrend to end the day, complete with about 15 pt1/pt3s scattered throughout. Every conceivable RTL touch begins a new channel, never seen anything like it...just trying to clarify
I too draw my gaussians to match my channels. They also help me in correctly drawing my channels. In my opinion some of your gaussians on your chart don't make sense, and this may be a reason that you were a little confused by that period of time.
and instead, rolled with the English and Philosophy majors in south quad. Would that it were so. The best explanation for the loquacity most probably stems from the fact that I'm a half-assed Irishman (mother's maiden name - O'Shaughnessy) combined with the muse-like qualities of my wife, who provides substance and style to my offerings simply by being near. Regards, lj