[volume] Distinctions Between the Types of Volume Analysis.

[zdo 20]

This thread could also be titled :

The slow group needs help from the smart group

 

We need help shrinking / resolving inconsistencies between

1 VSA (Williams book, TG, and purists’ commentary, et al) and

2 Wycoff purists and

3 SMI and

4 DbPhoenix work

 

 

Step 1 Order of analysis ?? (First you look at _____, then you check ___, etc)

VSA ??

Wycoff purists ??

SMI ??

DbPhoenix ??

help!

 

 

Step 2 Terminology ???

Example: Here’s one way I am currently shrinking / resolving any inconsistencies between VSA (book and purists’ commentary) and the other approaches. Whenever I read or infer the terms ‘professionals’ or ‘smart money’, I substitute the word ‘size’ – particularly in any VSA content. An example from MTMv3, I would read “…markets move because of the effect of professional accumulation or distribution. If a market is not supported by professional activity, it will not go very far… ” (pg 39 pdf) as “…markets move because of the effects of size accumulating or distributing. If a market is not supported by size, it will not go very far…"

 

need help making other differentiations and distinctions where terminology may be impeded our understanding of these various volume approaches.

 

 

Step 3 Stability Context ???

(continuing from Step 2... "go very far…") ... And, yes, size needs to be smart or it won’t stay ‘size’ for long - but that’s not the point. Neither is it the point that size, to be effective / create results, may need to be size ‘known to be in the know’ (ie ‘professionals’). The point is that at and during the occurrence of all these Wycoff and VSA based volume dynamics / patterns, the market is not in a place of precarium (where a single car could trigger a bifurcation). Size participates in high volume wide range, etc and either size participates in tests or no test even occurs, etc. And size is intrinsic to the whole prerequisite process where a ‘crossing the stream’ can occur, etc

 

Db’s volume dynamics / patterns / processes are a slightly different animal. Db’s processes / volume indicators (that oughta wake him up! just zinging you buddy :haha::helloooo: Just a tiny bit more seriously, I hope it will elicit new contructs or perspectives or ways of describing it from you) form in a more local context at pre-selected potential SR and are much less dependent than Wycoff or VSA patterns on a broad sequence of activity and its ‘correct’ result on the chart (ie on a background formed by many ‘bars’).

i.e. Although size has dominated at least some occasions in the formation of an SR zone (or line, etc), his work does not require the same background / size setup / footprint as VSA setups His triggers generally occur in more routine market conditions that are actually closer to instability but it is still less likely a single car could trigger a bifurcation.

(and, also, the order of analysis may be quite different from the VSA contexts – comments anyone?)

 

A step closer to precarium …

 

Then there are those more rare moments / dynamics / processes when a single car could and does trigger instability and in these conditions, size will often contribute to / exacerbate the sudden instability by ‘gettin the ‘#vck’ out of the way

 

Step 4 Pattern size / Number of bars needed to form a gestalt ???? help!

 

Step 5 ???? help!

 

Step 6 ???? help!

 

....

 

Please offer your additions, perspectives, fill in the blank areas, and make corrections where content is 'out to lunch' to help clarify the differences between these 'volume' approaches.

 

Thanks

[DbPhoenix 42]

re: "…The "WRB", in other words, disappears when the price action is displayed in another interval. The price action is the same; the only thing that's changed is the means by which it is displayed." Yes that is true. But, in other intervals, a run up into resistance (etc) does not disappear. Please be careful here - and I know we've had to deal with this issue before on T2W. You are again questioning the other's representation system without really fully explaining how yours is different / better. Even though I could see how you might feel you have explained it ad infinitum elsewhere, there are aspects to it that you are possibly so 'unconsciously competent' at seeing that you don't even realize they are a part of but not explicit your processing of price action.

 

I'm not making you wrong. And please don’t let anyone run you off. I’m asking you to explain the difference – besides the obvious fact of different representations of the same market action. Everything we see on our screens is a representation of the market – not the market itself. It is all at least a once removed map of the auction – whether one is looking at T&S, MP, Ohlc, Candle, Tic, CRB, P&F, MarketDelta, or lord knows what else.

 

And Eiger - I can say with certainty that all these posters you are chiding for going off topic are actually here in this thread to learn VSA and also that there is no way on earth they can suddenly divorce their old representation systems and ‘think’ pure VSA just like you or Tom or… Taking those same time periods and showing the VSA interpretation of the same market activity, rather than make others wrong for the way they represent the action to themselves is the best way to keep them on track.

 

I understand that you don't understand what I'm talking about. Many people don't. But then many people do. And more are beginning to.

 

But if you've read everything I've written, including the real-time commentaries, and you've read Graifer and Wyckoff and Neill and Dunnigan and Magee and you still don't understand what I'm referring to regarding price action, then clearly there is a difference in perceptual and conceptual constructs between those who understand this and those who don't, and that difference cannot be reconciled with yet more explanation, at least by me.

 

The only way I know of to understand price action is to sit in front of a computer screen and study price action. Until recently, not everyone could do that, which may help to explain why even EOD traders had so much trouble making a go of it. But with the advent of replay, anyone who is willing to put in the time can "trade price" in "real time", watching price move, watching volume move in tandem, watching how they interact. Yes, this takes a lot of time and it is a lot of work, and very few people are willing to do it. But that's not my problem.

 

I used to think that if only the original Wyckoff course were made available at a reasonable price, without having to go through all of the SMI modifications, that the nature of price action would suddenly become clear. But I've learned since that it wouldn't make any difference at all. Talking about this and reading about this will take one only so far (which is the chief reason why I declined to participate in the Best of Wyckoff conference being held this fall), and how far is demonstrated by what reads on message boards by those who've only talked about it and read about it. If one truly wants to understand it, he simply must make the commitment and put in the screen time.

 

None of this is intended to insult you or anyone else. And perhaps there is someone out there who is more gifted than I who can explain price action better than I. If so, I wish he'd step up to the plate. Absent that, I'm unable to help you further.

[zdo 20]

db,

 

Thanks for your reply – so elegant so arrogant :o

I was not questioning your paradigm at all. But, despite your excellent observations about “difference(s) in perceptual and conceptual constructs”, etc, I continue to question how clearly you actually communicate it to others vs how clearly you think and feel you communicate it to others. And your points about screen-time and study are not lost here.

 

I have no doubt you see something and that you see that others are missing seeing it – but I can guarenfreakintee you it isn’t only and broadly ‘price action and volume’ or SR lines on a short time frame. For example: The “stretching” itself in any given WRB, wide spread bar, high range bar, etc, may generate just as much ‘resistance’ as does some horizontal zone or line indicating some quality and quantity of ‘memories’. In real time, this same “stretching” may also not happen to generate any resistance at all, just as any given horizontal R line may perhaps provide no more resistance than a jet vapor trail would to an ascending space shuttle. And either case can occur regardless of volume / activity patterns! Happens all the time.

You’re scaring me db. I’m starting to suspect you are seeing things you aren’t conscious you are seeing. I’m wary that you may start manifesting things you are not conscious you are manifesting.

 

Have a good one.

[tune 10]

Perhaps only price action can embed price action. One way of experiencing a lot of price action in a short time has to be the adding of a seconds timeframe window to your screen. I have recently done this and am pleased I did. It took a few days to adjust but once done a huge amount of action streams by in days. Missed a lot just by writing this.

[thrunner 10]

A failure to communicate, what we have here...

 

I think what is missing from a lot of successful discretionary traders is that there is often a lack of formal definition of terms they are describing. Whether it be a no-demand bar or a support resistance level. These could all be described formally and mathematically, so that one could go back after the fact and ask whether a VSA bar or SR level was valid. Without these definitions you are often left with answers such as screen time, experience, subjective feelings, which is all fine but not as helpful as a formal definition.

This is why the first VSA thread was so helpful in that PP did have pages and pages of formula to go with charts which described what he was seeing. This is not to say PP's VSA formulas were all correct, but it formalizes the trading method and allows for refinements and improvements.

[DbPhoenix 42]

I think what is missing from a lot of successful discretionary traders is that there is often a lack of formal definition of terms they are describing. Whether it be a no-demand bar or a support resistance level. These could all be described formally and mathematically, so that one could go back after the fact and ask whether a VSA bar or SR level was valid. Without these definitions you are often left with answers such as screen time, experience, subjective feelings, which is all fine but not as helpful as a formal definition.

This is why the first VSA thread was so helpful in that PP did have pages and pages of formula to go with charts which described what he was seeing. This is not to say PP's VSA formulas were all correct, but it formalizes the trading method and allows for refinements and improvements.

 

I can speak only to the support/resistance business, and that, to a large extent, is why I did three weeks of RT commentaries in my Blog along with charts, to show where and why I located S&R at given zones and levels. Most people got it. Some didn't. But there's nothing super-sophisticated about it. It's an outgrowth of auction market theory, or MP if you're into that. If not, consider it as a variation on the Darvas Box.

 

As for "formalizing the trading method", that's certainly possible, but it is somewhat antithetical to Wyckoff's approach, and perhaps even to pre-TradeGuider VSA. This is not to say that Wyckoff just went with his feelings. He incorporated wave charts, vertical charts, P&F charts, position sheets, trend lines, etc, etc, etc in an effort to enable people to use his methods even if they didn't understand the basis for the methods (as distinct from Dunnigan, who went to great lengths to tie his method to his thought process every step of the way; in order to use his method profitably, one would have to understand what he was thinking and why). Then, of course, there are those who can apply what they've read to produce the most gorgeous analyses you've ever seen. But they can't trade them.

 

Given the state of technology, I see no reason why one can't buy a "virtual tutor", who will guide him through dynamic charts (not just bar by bar scrolling charts), with Q&A and instant correction and frequent reviews. Though trading moving average crossovers is a lot easier.

Edited February 9, 2009 by DbPhoenix

[zdo 20]

Perhaps only price action can embed price action.

It may just be a cost(/benefit- ultimately?) of watching many time frames for too many hours but I'm suspicious that even price action cannot embed price action. :pc guru:

 

One way of experiencing a lot of price action in a short time has to be the adding of a seconds timeframe window to your screen. I have recently done this and am pleased I did. It took a few days to adjust but once done a huge amount of action streams by in days. Missed a lot just by writing this.

 

Yes! Sorta like VisualTapeReading illustrated below.

First attachment is about 20 minutes of 3 tick YM (TS doesn’t have subminute charts)

Second attachment is 102 tick YM and I actually use it via

Drop down to that for pinpointing entries after getting trend setup via other technqs. and timeframes.

 

btw, much cleaner patterns show up in currencies than in ndx's, etc...

 

I think the genealogy is GuppyMMA to CyroxRainbow with a few other adherents and contributors thrown in along the way.

Edited April 3, 2008 by zdo
grammer and speling

[zdo 20]

The Seven Signs of the Singularity:

1. You refinance your house and it's a thirty-second mortgage.

2. GM turnips form a biotech company and sequence their own genome.

3. The Nasdaq moves to scientific notation.

4. Your toaster has its own webcam site.

5. "Femtotrading" is frowned upon by day traders. :doh:

6. The Luddites are building a reclusive, slower-paced Dyson Sphere.

7. People are debating whether the Singularity will arrive in 2015 or

2030 nanoseconds.

 

http://yudkowsky.net/humor/signs-singularity.txt

[tune 10]

I don't think of seconds as a fast timeframe because price still goes up and down at the same speed. The width of it provides detail but it is no faster.

[DbPhoenix 42]

That's a very good point, Mr Tune. The only difference between a 1m chart and a 1h chart is that, with a 1h chart, price moves up and down in a tube for an hour, then it jumps into another tube. The 1m gets on with its life, travelling down the chart's highway, leaving little messages about the relationship between buyers and sellers throughout its journey. The task is to be able to read the notes.

 

Destination's the same. Time it takes to get there is the same. Journey's different.