[Spydertrader]

Originally Posted by Ezzy »

Have I already missed the lesson here, or at least, what have I got right?

Hopefully, the following analogy can help you to see where you need to focus ...

If I asked you to tell me the differences between two different types of tools - a claw hammer and a hand saw - you might begin to point out that one uses a hammer to pound nails into wood, but one uses a saw to cut wood. If I then picked up a ball peen hammer and said to you, "Well this doesn't look like a tool used for cutting wood, but its made by Craftsman (just like the claw hammer and the hand saw), so I dunno what to think." How quickly would you smack your forehead?

Now, let's lok at what you wrote ....

Originally Posted by Ezzy »

Ok, the 1st green circle doesn't start with a sym pennant as the ones in the drill and follow up drill. The 2nd green and both orange start as syms, - but since it was said some of them are in a different category, that a can only be one factor in this drill.

O.K. So you do see that each of the examples in The Lateral Formation Drill (and follow up) begin with a Sym Pennant. Perfect.

Originally Posted by Ezzy »

In the first drill the doji either sets or tests the lateral boundary within 3 or 4 bars. In the follow up drill 3rd or 4th bars sets or tests the boundary, sort of making a FTP or FBP looking lateral.

Now. Read the above quoted lines a few times. You appear to be noting, in once sentence, the observation that the lateral requires a doji. Yet, in the next sentence, you indicate 'a bar' is all that is needed. Which do you think the answer to be?

Originally Posted by Ezzy »

The 1st green lateral starts as a FBP with a doji and the 3rd bar set the boundary. So I would say it is different from the drill laterals, as it doesn't start with a Sym, though it does have a doji setting the bottom boundary.

The above paragraphs looks to me like you picked up a ball peen hammer and decided you might not be able to tell the difference between this hammer and a hand saw because they are both made by Craftsman.

Originally Posted by Ezzy »

15:35 Lateral on Wednesday, tests the boundary on the 3rd bar, and the 16:05 lateral has the 4th bar (Thursday's open bar gap adjusted) test and penetrate the boundary temporarily and then goes the other way forming a spike bar - not unlike the doji's.

Look closer. You have not described the same things here. 14:05 and 15:35 conform to the examples provided by The Lateral Formation Drill (and follow up). Whereas, the (gap adjusted) 4:05 to 9:35 does not. You wrote (earlier in your post) about 'testing or setting' the boundary. Perhaps, you should look carefully to see which one of these two observations provies correct.

Originally Posted by Ezzy »

They all seem to have different locations in the sequences, so it would seem we're just differentiating the object for this drill? Trying to keep this simple and look at the similarities, but can see dozens of differences that probably aren't significant.

For now, I wanted to focus on the different things in an effort to motivate people to 'see' that which actually exists, and not, simply what they believe is there. How one annotates these different things first depends on context, and then depends on where they fall within the order of events.

HTH.

- Spydertrader

[rs5]

Thursday 14 January 2010

[rs5]

Originally Posted by NYCMB »

Hi rs5

I am wondering why you didn't mark Bar55, 67 and 79 respectively as the first bar of each SYM Lateral. Could you explain it?

Bar 55 formation (13:05 on my chart) should have been marked - my bad.

Bar 67 formation (14:05 on my chart) starts with a SYM but does not test the boundaries before completion of this formation thus not within our current study.

Bar 79 formation (15:05 on my chart) is an incomplete formation thus not marked.

But you probably have figured that out from Spydertrader posts above

Happy MADA!

rs

[Ezzy]

Originally Posted by Spydertrader »

If I asked you to tell me the differences between two different types of tools - a claw hammer and a hand saw - you might begin to point out that one uses a hammer to pound nails into wood, but one uses a saw to cut wood. If I then picked up a ball peen hammer and said to you, "Well this doesn't look like a tool used for cutting wood, but its made by Craftsman (just like the claw hammer and the hand saw), so I dunno what to think." How quickly would you smack your forehead?

Now, let's lok at what you wrote ....

So the hammers are Syms, the saw is the FBP starting laterals. The ball peen getting to the differences from that point. Like the formation drill, first 2 bars to separate them, SYM vs. the FTP and FBP (which share obvious similarities), and the EH.

Originally Posted by Spydertrader »

O.K. So you do see that each of the examples in The Lateral Formation Drill (and follow up) begin with a Sym Pennant. Perfect.

Originally Posted by Spydertrader »

Originally Posted by Ezzy
In the first drill the doji either sets or tests the lateral boundary within 3 or 4 bars. In the follow up drill 3rd or 4th bars sets or tests the boundary, sort of making a FTP or FBP looking lateral.

Now. Read the above quoted lines a few times. You appear to be noting, in once sentence, the observation that the lateral requires a doji. Yet, in the next sentence, you indicate 'a bar' is all that is needed. Which do you think the answer to be?

Just a bar to set or test the boundary, regardless of type.

Originally Posted by Spydertrader »

Originally Posted by Ezzy
The 1st green lateral starts as a FBP with a doji and the 3rd bar set the boundary. So I would say it is different from the drill laterals, as it doesn't start with a Sym, though it does have a doji setting the bottom boundary.

The above paragraphs looks to me like you picked up a ball peen hammer and decided you might not be able to tell the difference between this hammer and a hand saw because they are both made by Craftsman.

I've lost the plot here, (which one was the saw) but yeah, that one is different, not a sym start.

Originally Posted by Spydertrader »

Originally Posted by Ezzy
15:35 Lateral on Wednesday, tests the boundary on the 3rd bar, and the 16:05 lateral has the 4th bar (Thursday's open bar gap adjusted) test and penetrate the boundary temporarily and then goes the other way forming a spike bar - not unlike the doji's.

Look closer. You have not described the same things here. 14:05 and 15:35 conform to the examples provided by The Lateral Formation Drill (and follow up). Whereas, the (gap adjusted) 4:05 to 9:35 does not. You wrote (earlier in your post) about 'testing or setting' the boundary. Perhaps, you should look carefully to see which one of these two observations provies correct.

I see, the gap adjusted bar went lateral movement, it's not the same. That bar didn't make the clip here - the TN "clone" tool broke so I can't show it properly.

Originally Posted by Spydertrader »

Originally Posted by Ezzy
They all seem to have different locations in the sequences, so it would seem we're just differentiating the object for this drill? Trying to keep this simple and look at the similarities, but can see dozens of differences that probably aren't significant.

For now, I wanted to focus on the different things in an effort to motivate people to 'see' that which actually exists, and not, simply what they believe is there. How one annotates these different things first depends on context, and then depends on where they fall within the order of events.

HTH.

- Spydertrader

Did you say differences? How much time do you have?

[gucci]

Originally Posted by Spydertrader »

These represent the types of Lateral Formations which need differentiation first. Then, and only then, should one move onto other types of laterals.

- Spydertrader

Spyder, why do think those Laterals are of utmost importance? What is special about them? TIA.

[double eagle]

Hi Ezzy and Spyder. I am going to throw my opinion into the mix here. I think what Spyder is trying to get at is that there are different types of laterals that can be grouped based on how the boundaries are formed. I am not saying that this is the only way that laterals should be grouped, I am just saying that it seems Spyder is pointing us there as a one of the focuses of the discussion.

This is much like how pennants are grouped. For pennants we have FTPs which have a boundary at the top (second bar high equal to the first bar high), FBPs which have a boundary at the bottom, SYMs which do not have a boundary formed by the 2nd bar, and EHs which have boundaries at both the top and bottom. The FTPs and FBPs have directional components to it (you can draw a trend line), the SYMs don't, and the EHs have a lateral trend associated.

I am thinking that Spyder is saying let's look at laterals that have the boundaries at the top (like a FTP) or bottom (like a FBP) and differentiate them first. Then we can move on to ones that don't have a bar that set the boundaries (like a SYM pennant) or boundaries at both (like an EH).

Laterals that have a boundary at the bottom can form in 2 ways. One way is for it to begin as a SYM and then have a subsequent bar set the boundary. The other way is for the lateral to begin as a FBP. Those are the only two ways that are possible. The way that they accomplish the task is different, but the function is the same. This is like having two different kinds of hammers. In the end, the function is to pound a nail into wood even though there are other differences between them. The same logic applies to laterals that have a boundary at the top.

There are other laterals that do not have a boundary setting bar (equal high or low of a subsequent bar compared to the first bar). They start out as SYM pennants. The subsequent bars don't set a boundary. Eventually one of the bars BOs of the high or low of the first bar (no bar closes with an equal high/low to the first bar). So we see a difference. It's like the difference between a FTP that BOs on the third bar and a SYM that BOs on the third bar. One had a boundary, the other didn't prior to BO.

Finally, there are laterals that have boundaries on the top and bottom. They start out as a SYM pennant, some bar later sets one side of the boundary, and then some bar later sets the other side of the boundary. This is like an EH.

I am going to throw a wild off the cuff thing out there and say that if you broke down a pennant by looking at a smaller time frame chart (whatever that might be) you would see a lateral that forms in the same ways as described above. For example, you would see a FBP form as a lateral on the smaller time frame with either the second bar or a subsequent bar creating the boundary (the two types of hammers I described above). I don't want to go too far down the rabbit hole. This is just an observation that I thought about.

So our job is to first look at context, then at the sequences, and then at the "thing". Just as not all FTPs are alike (volume can be increasing or decreasing, the open can be higher or lower than the close, etc.), not all FTP-like laterals are alike. We need to differentiate all the permutations.

With all this being said, I am trying my hardest to go through this process of differentiation and hoped that my post would spur some further discussion. I humbly must admit that all that I just typed could be rubbish... or there could be something to it. If there is something to it, I'm trying to figure out what is the market "tell" in each situation, how does that affect WMCN, which side of the lateral will price break out, does it create pt. 2 to pt. 3 of "something" or are we still on our way to pt. 2 of "something" as we exit the lateral, etc.

Sorry for the long post. I just wanted to get some of my late night/early morning thoughts out there to see what people thought.

[ptunic]

Some other lateral observations to add (with the disclaimer that this is purely brainstorming, laterals confuse me probably more than anything!):

First, one thing I noticed about the laterals that are in the Lateral Drill: the bar that starts the lateral has a greater range than the bar before it.

On a related topic, I haven't figured out when laterals end yet. I am aware of the 2 outside closes (or 3 if in a flaw) guideline, but there might be other cases that end a lateral:
- ibgs on increasing volume with either close or open outside a boundary
- spike bar with higher range than the previous bar on increased volume with high and low both outside the boundaries
- peak volume bar with open or close outside a boundary

Then in some cases laterals seem to end but immediately start another lateral. I haven't determined what to do here, in terms of are these potentially another part of the sequence or are they better though of expansions of the previous lateral.

[rs5]

Thank you all for this interesting discussion on laterals (the thread is awake - Yippie!)

As far as I understand it, the boundaries of the lateral is set by the high and low of Bar 1 (regardless of the two inside bars which forms subsequent to it)