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cnms2
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Everything posted by cnms2
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It seems you did really good work chasing the elusive "lateral exit" rule, and although you didn't solve it at your satisfaction I'm sure you didn't spent all that time in vain. It is definitely possible to correctly annotate without knowing in advance the direction of a lateral formation exit, and even completely ignoring all laterals. As with most signals and key words used with this method to describe the market, it's easy to cross the boundaries of anticipation into prediction, which obviously goes against the spirit of the method. Even if you can't "predict" the direction the price will exit a lateral, this shouldn't alter in any way the order you expect the events to unfold: 1-2-3-ftt, as the volume and price define them. It seems that occasionally laterals end their scope before the price closes consecutively twice outside their boundaries, and continuing to look at them as lateral formations beyond that point can be misleading. Obviously, all these are my interpretations of the method under discussion here, and shouldn't be interpreted more than such.
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Happy and prosperous 2012 everybody! May this year revive our thread too! :cheers:
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Go and re-read the first pages of this thread, and pay attention to spydertrader's drawings! If the through of the B2B or R2R is where the price crosses the old RTL, it means that the point 2 of the new traverse has to be outside the old traverse. If you're tempted to annotate a point 2 inside the old traverse, resist it: either you have an annotation error, or you're about to jump fractals. I suggest to look at all the ET information in historical perspective, and to try not to "interpret" it, or as Jack says: don't invent anything!
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Higher high and higher low bar means long (black). Lower low and lower high means short (red). All the other cases are internals (yellow), meaning they don't actually set a new direction. One exception to the first two statements is when they're inside a lateral.
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I see the OB as setting a new Pt1 on the fastest observable fractal (2 bar tapes). This may or may not be a new Pt1, 2, or 3 of the trading fractal.
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I find difficult to read your charts, so I can't comment on them. Regarding spydertrader's charts, I believe it's a great exercise to try to reverse engineer them, and it would be an even better exercise to have their unannotated versions, to firstly try our hands on them, and only then to check how our work compares to the master's. Also, as it was repeatedly mentioned, they may have been drawn from a different perspective than the one emphasized at the beginning of this thread. Regarding an apparent contradiction, in some places, between where the point 2 is annotated, and the "rule" that it has has to be outside the old RTL ... It definitely has to be so, because that's the way the jokari windows work: the dominant volume increases, and the non-dominant volume decreases. I believe that what you've noticed on those charts, in most cases, it was spydertrader's intention to emphasize specific things like: accelerated traverses that redefine the boundary of the right side of the market, traverses that grow into channels firstly defining the new right side at traverse level that become later the new right side at channel level. Maybe you should take only one instance and give your version of annotation, and the reasons behind it. Anyway, good luck in your endeavor!
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See attached an illustration of the "trends overlap" concept.
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This is an obvious example of "volume leads price". The dominant red volume takes over the non-dominant black volume before the tape sequence in the price panel seems to end: "trends overlap". The volume sequences are always obvious at traverse level; they may be less obvious at tape level. Jack found the way the markets work, and openly explained it to whoever wanted to listen. Spydertrader understood it and translated it in a more accessible language, introducing some original helping concepts too. For those who study this method, sometimes various concepts don't make sense. This is because those traders don't fully understand the significance of those concepts, and how to apply them. This method is not a set of rules to be mechanically applied, in any context. You wrote that you're a math teacher and that you studied this method for years. It may be time for you to try to look at it with a different mind set. Try to forget everything you've learned, and study again Spydertrader's posts here. I believe this should be enough to make you profitable. Be aware that looking at charts posted by Spydertrader on older threads might not apparently make sense. I'm writing "apparently", because it is just a matter of perception, not substance. Also, to not add more difficulty to your quest, stick to the ES 5 min chart, using Spydertrader's coloring.
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Start by making sure you have a good data source, and change bar coloring per Spydertrader's recommendations. Try to build your annotations starting from the fastest observable fractal up. I'm sorry that I don't find anything right yet. Just start from the beginning of this thread, very carefully reading and studying every word in Spydertrader's posts. Then keep practicing, re-reading, again and again.
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Your request is too vague, and implies too much effort from my part, that might not even be helpful to anybody. Better: ask a specific, limited scope question, accompanied by a chart snippet, and your opinion. Somebody on this board might be able to help.
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The method discussed in this thread works on any time frame, as long as there is enough liquidity. You can annotate the 1 min chart using the same methodology as the 5 minute chart. This doesn't necessarily mean that zooming from the 5 min into the 1 min is like using a magnifier. For this reason, it's probably better to stick to one time frame and extract all the information from it only. A faster chart may help carving turns, but only when your trading chart tells you to look for them. I believe that your 1 min chart gaussians are not fully accurate.
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There are many concepts related to the method under discussion, introduced in tons of posts, and discussed in even more posts, sometimes by people who don't have a correct understanding of those concepts. So I'll try my hand at it, too.
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You have everything you need in this thread.
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Start with the basics!
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See a few notes I made on your chart. Suggestion: read spydertrader's posts from the beginning of this thread, practice, re-read, practice, again and again and again ... Ask clear, limited scope questions based on chart snippets. Critically absorb the information.
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I'd word it like this: a container is made of three sub-containers, and three containers form a super-container, keeping in mind that at faster paces a container might look like a sub-container, and at slower paces it might look like a super-container. This is not my rule, it is one of the basic principles of the market operation that this method is based on. Others observed this fractal structure too, e.g. the Elliott waves. In the discussed example, after those three black bars you had what looked lika just a sub-container.
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I really meant 1-2 and 2-3 are built the same way, and 3- was not yet built that way after those 3 black bars (11:35). See attached.I don't do the kind of analysis you're proposing, so I have no opinion on it.
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The containers formed between pts 1 & 2, and pts 2 & 3 are formed in the same way. After pt 3 there's there's no such container formed yet. Look at the thinnest tapes on the chart. It is the "old jokari matrix" applied on multiple levels (fractals) simultaneously. As long as you trade based on what you expect to happen, not based only on what happened and what is, you predict (guess). Any amount of data or the perfect analysis can't predict with 100% chance of success. Keep doing MADA to determine the current "right side of the market" and stay on it. Don't think of what the price will do, or of your P&L.
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I'm not sure what you're asking. Point on the chart which gaussian you call THICK? What sequence do you ask why you should HOLD? In principle, you hold through pt 2-3 retraces on your trading fractal, and when you have a new pt 2 you may keep holding or not function of your assessment of the strength of the move. Some of the successive gaussian throughs you're seeing correspond to the various fractals' RTL crossings. The B2B annotation on the chart you posted tries to emphasize this. Regarding the "volume leads price", it happens on all fractals simultaneously, so what you see is the effect of all of them. In summary, I watch on the volume pane the absolute and the relative values bar to bar, peak to peak, groups of peaks to groups of peaks, keeping in mind that volume increase means continuation, and volume decrease means change. You have to be careful to distinguish between anticipation and prediction. Anticipation, in my understanding, means that you see what has already happened, and knowing how sequences unfold you decide what is the right side of the market (on your trading fractal), then trade accordingly enter, exit, hold, or reverse. Prediction means that you decide based on what you expect to happen, which is different. If you're an end of bar, traverse trader, don't expect to make the full traverse range, because when you trade based on anticipation the signals you monitor and analyze will make you trade a little later. If you try to pull the trades sooner you may start to get into prediction, guessing, and your percentage of correct decisions will decrease. Obviously all of the above is "in my view".
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See attached my view, without the benefit of knowing what followed. The way I understand this method, one trades only what one sees, and not what one expects to happen. Also, as volume leads price, sequences pictured by my volume annotations lead sequences pictured by my price annotations.
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I guess he wanted to emphasize the B2B leading to the accelerated green pt2 (the spike bar). How would you annotate that area?
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B2B2R2B, or digging in: (b2b2r2b)2R2B.
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Just drawing the tapes.
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It depends on the principles you use to draw your tapes, e.g. if you look how the price moved inside the bars. Volume leads price.