The Price / Volume Relationship

[gamblerKi 10]

Hi ,

 

In ET old posts, Spyder said the end effects of FTT are: 1. BO 2. FBO 3. FTT

 

According to guuci(TL post #2732 & #2734), there aren't any FBO.

 

In ET old posts, Jack said FBO existed and described in details what happen during FBO.

 

My question is: A SCT trader find FBO after FTT because:

a. he/she is not skillful or 'jumps fractal'?

b. FBO really exists in the market?

 

TIA.

 

To amend my previous post for gucci TL posts:

guuci TL post #2732: http://www.traderslaboratory.com/forums/technical-analysis/6320-price-volume-relationship-69.html#post114503

guuci TL post #2734: http://www.traderslaboratory.com/forums/technical-analysis/6320-price-volume-relationship-69.html#post114508

 

 

To further elaborate my previous post:

 

In Forums - Getting down and dirty is where the rubber meets the road ...

 

gucci asked about 5 traverses in a channel. Isn't the 4th traverse "FBO" the channel and the channel do "expansion" to include 2 more traverses?

 

Forums - Getting down and dirty is where the rubber meets the road ...

 

 

Jack explained "Expansion" in this page. Is expansion caused by FBO of the 4th leg in a container?

Jack also talked about "Bookmark" for traverse FTT. Is this handling of traverse FBO?

 

I am just confusing, if a *very* skillful SCT trader like Jack , Spyder or gucci, will they mis-identify the 3rd leg in a container as FTT? Will they ever see violation of their "Bookmarks

?

[xioxxio 10]

gamblerKi,

 

 

From my own experience, Jacks writings are confusing. Jack is an extremely bright man (probably a genius) which makes him difficult to understand.

 

Make sure you are on the same fractal as what is being discussed. Only focus on what Spyder says, forget about gucci and the others. As Vienna pointed out in a previous post, block all users except for Spyder and Jack. As mentioned above if you understand Jack read his comments.

[gosu 10]

@gamblerKI:

 

Your question is, does a FAILURE TO BREAKOUT (FBO) exist?

 

To be clear, an FBO can occur only after a BO. If no breakout, there cannot be a "failure to breakout," although literally the term does seem to describe a breakout that didn't happen. Compared to the failure to traverse (FTT), which really means "there's a traverse but it didn't get to the other side," the FBO can be described as "there's a breakout but it didn't stay broken out."

 

If you've done any monitoring at all, you already know the answer to your question. Of course the FBO exists, for the simple reason that we know BOs exist and not all BO's stay "broken out." In fact, most BO's do not stay broken out. That is why the FBO is always on the table when there's a BO unless the market gives the indication to take it off the table.

 

Just a comment about the FTT: If you spot a failure to traverse, just know that only one thing follows it, and that is the retrace. It is after the retrace that all the fun begins: breakout or resumption; if resumption could be a full traverse or another FTT and part of a larger formation such as a pennant (FTP, FBP SYM); if breakout, then either an FBO (resumption, either full traverse after fanning or another FTT and larger formation) or not FBO (often a retrace to reversal) and on to p2 on increasing volume.

[xioxxio 10]

Spyders comments:

 

Once you locate an FTT and begin to follow price from that location, look for three possible ‘End Effects’ and take appropriate action.

 

1. Another FTT (Reverse)

2. An FBO (Exit)

3. A BO (Hold)

[SK0 10]

Change coming up soon is never sure IMO. Only if what must come next materializes. What must come next after an FTT is price going in the new direction...taking out the FTT bar. Next bar the same.... Doesn't have to go like crazy and might be little choppy but EOB should tell.

 

If it doesn't do that then we have 2 options...a point 2 was formed (a little later) and price retraces (or moves sideways) to form a point 3 inside the old channel (and then price just shoots away) or the FTT is invalidaded. (taken out). Of course we would need some space in the channel between point 1 and 2..so I really expect the next few bars after the FTT to go in your direction (assuming we took the trade). Sideways movement right after the FTT is not good...

 

The FTT bar itself is very interesting. Usually it seems like a not very meaningful bar..moving slowly. Because of the lack of market participation. (hence the low volume) price has to move to a new area fo find buyers and sellers who agree and a new channel is born. Anyway, If the FTT bar would look meaningful traders would probably be aware of the change and that's not what the market wants because it always moves to f**k as many people as possible except for the JHM traders who were trained to spot FTT's ;-)

 

Ayway..it's good to know about the why.

I don't watch volume BTW, just price, bar length, the way bars move.

 

Hi ivob.

 

You are correct. Strange that you don't take advantage on volume to confirm AND lead price moves. On EOB basis, I look at the slope of last volume bar to prior bar. I may split volume bar mentally if the open and close of last price bar are near to each other, eg Doji. I also look at the sequence of O, H, L, C to know whether gaussian shift has occurred intrabar-wise. The alternatives are finite. Sometimes, pace change and time of day can be so drastic or to get a headup that it is good to look at the micro change of volume direction inside a bar.

[joshdance 10]

there is one thing that comes before price and volume and that is The Smart Money. Their trading decides what the price will be and the volume is the physical manifestion of their activity

 

Labeling who trades what by calling it retail money or smart money or dumb money or big money or whatever, only serves to add confusion to the mix. It matters not WHO does the trading. What matters is the footprints they leave behind, their transactions.

 

I learned a hell of a lot from Tom Williams and Gavin Holmes at Tradeguider dot com, and still have a long way to go, but some of the fog is lifting. Have you ever wondered why price always seems to reverse shortly after you get into a trade? :doh: That's the trap that Smart Money know we will fall into every time...! Better learn how to read volume! Pattern and cycle trading are good too, but volume gives you that extra edge.

 

This sounds like a tradeguider commercial. You don't need multi-thousand dollar software to show you any one of many different labels which overly complicate matters. I would encourage anyone interested in volume to study Wyckoff.

[blott 10]

Hi Ivob,

It doesn't matter when you enter. The market doesn't know that

 

You are partially correct, only in that The Market doesn't know if your computer is switched on or not. But if you are watching the chart, Smart Money knows exactly what The Herd will do, (because we all succumb to human nature) and manipulates price to entice you to jump in. What do you think false breakouts are; the market suddenly think "Oh, that's the wrong way, I think I'll reverse"? Hah! That's what they do to get you to jump into the wrong direction, then they lock you in by going back to test if there are any more participants, before steaming off past your stops, leaving you wondering whsat happened!

 

Or they will suddenly make a surge and you think "Yes, this is it, I'll jump on the train!" when it's a 2 bar reversal and you're left high and dry again. BTW, when I say "you" I mean "people"

 

Regards,

 

 

Mike

 

 

 

 

Go take a look at tradeguider.com (no affiliate link in there :-)) There you will see VSA principles in action that will save people from making costly mistakes

[ivob 10]

Yeah, I agree it's smart money in the end who decides where the market goes after buyers and sellers have exhausted eachother. Jack also writes about this (the minority moving the market).

 

Fake moves, false breakouts etc simply happpen. It is the nature of the market to deceive and to move to a point where buyers and sellers are in balance. Just like a bird flies the market makes these kind of moves. It has evolved like that so only the smartest are correct. Imagine if everyone was convinced the market would go down? There would be no volume right? (no buyers). So price finds a balance to shake people out, find new people etc.

 

What is interesting is that on a chart everyone of us know the trend and what's happening while always at the current bar something extraordinary seems to be happening... (trend change for instance) and then EOB everything becomes clear again. Talking about deceiving. I always thought fast (noticing, entry) was good and advanced. It's not. EOB is fine as long as the analysis is correct.

 

Ivo

 

 

 

 

 

 

 

Hi Ivob,

It doesn't matter when you enter. The market doesn't know that

 

You are partially correct, only in that The Market doesn't know if your computer is switched on or not. But if you are watching the chart, Smart Money knows exactly what The Herd will do, (because we all succumb to human nature) and manipulates price to entice you to jump in. What do you think false breakouts are; the market suddenly think "Oh, that's the wrong way, I think I'll reverse"? Hah! That's what they do to get you to jump into the wrong direction, then they lock you in by going back to test if there are any more participants, before steaming off past your stops, leaving you wondering whsat happened!

 

Or they will suddenly make a surge and you think "Yes, this is it, I'll jump on the train!" when it's a 2 bar reversal and you're left high and dry again. BTW, when I say "you" I mean "people"

 

Regards,

 

 

Mike

 

 

 

 

Go take a look at tradeguider.com (no affiliate link in there :-)) There you will see VSA principles in action that will save people from making costly mistakes

[Wes 10]

Yes you can, and it happens every day. Volume indicates participation. Price can move quite a lot on decreasing volume, and it can churn in one place on heavy volume. Volume equals trading activity.

 

My favorite is when the same person who says "volume precedes price" then turns around on a holiday week and warns me "Be careful, it's a low-volume holiday week, so price could really move fast."

[ivob 10]

Lol. Yes, volume is deceptive (in my opinion). Price going lower on decreasing volume (yesterday end of day ES) and then suddenly end of bar a big chunk of volume comes in etc etc. Had I put a lot of emphasis on volume it might have shaken me out of the short. I don't want to deal with that. Price alone is enough. There's a relation between bar length and volume anyway so price and bar length say enough.

 

My favorite is when the same person who says "volume precedes price" then turns around on a holiday week and warns me "Be careful, it's a low-volume holiday week, so price could really move fast."

[ivob 10]

Good example of what must come next that does not materialise in this mornings EURUSD.

 

Bars with arrow look like FTT's... (especially the first one at that point in time). Actually they are! An FTT is an FTT.

 

But what must come next? A red bar. instead we get an inside bar. Next bar: also inside bar. So price moving sideways. Conclusion: Price is probably just on its way sideways to make a new pt 3 up. Stay in the trade. Had it closed lower....I would be out.

 

Second FTT: This one is easier. Next bar is reversal bar...closing above the open of our potential FTT. No problem. Stay in. It's not change so it must be continuation.

 

I closed half my position at 1.3635 and the other half at 1.3620 as the current bar 10 o clock bar closed at 1.3620 and I expect more down movement before a new possible point 3 up in the big green channel.

 

regards,

Ivo

[Tams 20]

the money I earned is always smart money.

the money I spent is always dumb money.

 

 

 

I wonder if the merchant knew that?

[ivob 10]

Mada for this morning's EURUSD.

 

I am often a little too early so took a little heat. The exit was very good though.

 

After determining the trend (blue channel) you know the direction of the trade. Then it is a good thing to wait for a FTT on a non dominant channel once that channel is formed. These make great entries.

 

For me it helps to distinguish between signal and entry bar. Signal bar is the FTT and entry is as soon as the FTT bar is taken out by a few ticks. But in this case I was early as often is the case.

 

BTW I prefer candlesticks as opposed to OHLC bars because I can see open and close much better. In my opinion open and especially the close are very important.

 

regards,

Ivo

[Jleon 10]

The Volume Price Relationship is without a doubt very true and at work every day. I even wrote a book about it.

 

There is a lot of smoke and mirrors in volume. It takes a long time to understand what volumes to look at and why. For Example: Histogram Bars, Footprint, Market Profile, DOM, T&S, Big orders, Small Orders, Quotes, no volume, weak volume, exhaustion volume, etc.... The list goes on...

 

This in itself is a full time job for years! Once a trader can understand this though I believe they can paint a good picture of the volume/price relationship.

 

Good Luck!

 

I offer free copies of books by Wyckoff and Jessy Livermore. These were the 2 best volume readers publicly known.

 

Have a great day!

[Tams 20]

The Volume Price Relationship is without a doubt very true and at work every day. ...

 

There is a lot of smoke and mirrors in volume. It takes a long time to understand what volumes to look at and why. For Example: Histogram Bars, Footprint, Market Profile, DOM, T&S, Big orders, Small Orders, Quotes, no volume, weak volume, exhaustion volume, etc.... The list goes on...

 

This in itself is a full time job for years! Once a trader can understand this though I believe they can paint a good picture of the volume/price relationship.

 

Good Luck!

 

....

Have a great day!

 

There is a lot of smoke and mirrors in volume and don't know whoat to do about them?

 

You write fast, but it sounds like you haven't read this thread.

Edited September 29, 2011 by Tams

[ivob 10]

Sounds complicated so I fall back on a very basic rule: do not overcomplicate ;-)

 

It works just fine.

Ivo

 

 

There is a lot of smoke and mirrors in volume. It takes a long time to understand what volumes to look at and why. For Example: Histogram Bars, Footprint, Market Profile, DOM, T&S, Big orders, Small Orders, Quotes, no volume, weak volume, exhaustion volume, etc.... The list goes on...

[ivob 10]

These are the best opportunities IMO...

 

Just like we saw yesterday at ES before a great move up.

 

Volatiltiy expansion on the traverse as well as the forrest (main channel of the day) followed by an FTT.

 

I said I didn't care much about VE's but I have to take that back. Not based on this example but on observations of the last weeks. VE is a good opportunity to take profits and change may occur right after it.

 

 

regards,

Ivo

[mj_07_nc 10]

Good Afternoon Traders,

 

I Just wanted to take a minute and introduce myself. I've been trading part time for about 4 years and have been following the Sypdertrader threads on EliteTrader for the past few months. I just finished going through the enitre 1500 page thread about trading futures with this method. The work has transformed my trading to say the least. I now have a framework for how the market operates and not just mechanial rules for entry and exit.

 

I was curious if Spyder or Mak post here regularley anymore? The one hard thing for me in trying to learn the method was not having realtime support from traders posting recent charts and examples on the ES and YM. I was able to learn a great deal from reviewing the old charts but it would be fantastic to post my current annotated charts and be able to review other traders charts as well.

 

IVOB, I see that you were part of that original thread on ET and are still posting here. Looks like you are focusing solely on the FOREX market currently? Let me know if anyone has some ideas about how I might further my education and skills and how to connect with other SCT traders. Thanks!

 

Wolf

[xioxxio 10]

Good Afternoon Traders,

 

I Just wanted to take a minute and introduce myself. I've been trading part time for about 4 years and have been following the Sypdertrader threads on EliteTrader for the past few months. I just finished going through the enitre 1500 page thread about trading futures with this method. The work has transformed my trading to say the least. I now have a framework for how the market operates and not just mechanial rules for entry and exit.

 

I was curious if Spyder or Mak post here regularley anymore? The one hard thing for me in trying to learn the method was not having realtime support from traders posting recent charts and examples on the ES and YM. I was able to learn a great deal from reviewing the old charts but it would be fantastic to post my current annotated charts and be able to review other traders charts as well.

 

IVOB, I see that you were part of that original thread on ET and are still posting here. Looks like you are focusing solely on the FOREX market currently? Let me know if anyone has some ideas about how I might further my education and skills and how to connect with other SCT traders. Thanks!

 

Wolf

 

 

I agree with you. There are plenty of people on this forum form the elite trader thread that have given nothing back. Jack and Spyder have given so much time and effort with no monetary compensation. They have paid hundreds if not thousands of people forward. It would take less than 5 minutes of some ones time to screen capture and post it to this forum.

[ivob 10]

Hi Wolf,

 

Yes, I have been gone for a few years, focussing on my other business.

 

The Forex hours are better for me and I like the moves and above all I really like it that I can trade whatever size on forex....Still following the ES though.

 

I am very thankful for all that Spyder has done.

 

He provides a great method indeed but I have had difficulties. It has not been easy and often it still not is.

 

1.

He hardly ever writes about entries and exits...but these are very important because this is what determines the profits... No examples about succesful trades...

 

His words are too vague for me often... ...here is where I got in and there I got out is what I would like to hear... Simple and no oracle language. (sorry just giving my opinion...)

 

2.

The method seems so discretionary...there's always an explanation after the fact.. (Oh well...it was a hitch, stall, HVS, whatever).... at the same time we have to keep it simple...not overcomplicate... Sure...when he writes everything is clear but I have personally heared him (on live chat) and witnessed moments when everything was not that sure and clear.... Of course he has also called market directions correctly. All I am saying is that it's not always that clear. He's human after all...just like all traders eventually.

 

3.

According to Spyder it's all binary.....short or long...depending on the resolution and sequence (or however he calls it) play out. It's all in a certain order which has to be completed..... Well.. all it takes at some moment is a lot of people doing something at the same time (buying or selling). I believe the market can do anything at anytime and we better prepare for it.

 

The method caused me to be too relaxed at certain times...because the sequence hadn't played out after all.. (or I thought so...but the result was the same)..Seeing the market is not that hard, making a profit is.

 

I believe in the end you have to find your own method and sure: trendlines, VE, FTT may help... but following Spyder's words "religiously" hasn't helped me. For a while I even thought all this was a social experiment about people following someone they've never met blindly. (That was a joke ;-))

 

Sure...I defended him when new people showed up on the thread and criticised him and his method...but at that moment I was nowhere near profitable and I think most people who defend him are not...... What happens is you want to believe it works because else why would you put so much time and effort in it right? That's what people do. I am sure the biggest "defenders" are not profitable. The others are too busy making profits and finetuning their method...

 

I am not claiming the method doesn't work...it does work.... (lots of methods work, astrology may work LOL). All I am saying that it's not as easy and clear cut as it seems. (else why need 1600 or so pages)...

 

I don't want to seem unthankful but these were just some remarks.

 

I believe it's a great method!! Trendlines are great, the FTT is great. But we need a little more than just a great method (experience, mindset, common sense-->set a target when the market is choppy...) because even with a great method we can manage to be not-profitable. It takes more.

 

regards,

Ivo

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Afternoon Traders,

 

I Just wanted to take a minute and introduce myself. I've been trading part time for about 4 years and have been following the Sypdertrader threads on EliteTrader for the past few months. I just finished going through the enitre 1500 page thread about trading futures with this method. The work has transformed my trading to say the least. I now have a framework for how the market operates and not just mechanial rules for entry and exit.

 

I was curious if Spyder or Mak post here regularley anymore? The one hard thing for me in trying to learn the method was not having realtime support from traders posting recent charts and examples on the ES and YM. I was able to learn a great deal from reviewing the old charts but it would be fantastic to post my current annotated charts and be able to review other traders charts as well.

 

IVOB, I see that you were part of that original thread on ET and are still posting here. Looks like you are focusing solely on the FOREX market currently? Let me know if anyone has some ideas about how I might further my education and skills and how to connect with other SCT traders. Thanks!

 

Wolf

Edited October 6, 2011 by ivob

[vienna 10]

Good Afternoon Traders,

 

.... be able to review other traders charts as well....

 

 

 

Wolf

 

Here you go...have my own brand of annotating though......(see Gaussians. I annotate the non-dom in grey)

 

hth, Vienna

[mj_07_nc 10]

Thanks for all the comments everyone. Ivob, I appreciate your feedback and agree with many of your points. My philosophy on trading is that everyone has to adopt a methodology that is unique to them and that works based on their own specific psychology, long terms goals and personality. So, my idea is to take bits and pieces from others and put it into a system that works for me.

 

Vienna, thanks for the heads up...that is very sad to hear. SKO, I have located the two threads that you mentioned in your message and will dive into those ASAP.

 

Attached is my ES chart through lunchtime today. You will see that my Gaussians are there for the first part of the day but I accidentally erased the others when I was going to print my chart. I traded the second FTT (in gold) and exited with 2.5 points. I hesitated to pull the trigger on the 2nd FTT long (purple) and, once it had moved up significantly, I decided not to chase. Bad decision. I watched the market move up without me the rest of the morning without me and stayed on the sidelines.

 

On a side note, I find it hard to continue to trade once I have an early winner. I have a big fear of giving back gains. Anybody else have this problem?

 

I look forward to continued dialogue. Thanks again!

[mj_07_nc 10]

Also, thanks Vienna for the chart from yesterday. This is the first recent chart that I have seen since I started learning this method. It's great to compare your notes to mine from yesterday. I'm excited to see that most of my channels matched yours. Have a good day!

[mj_07_nc 10]

Thanks for all the comments everyone. Ivob, I appreciate your feedback and agree with many of your points. My philosophy on trading is that everyone has to adopt a methodology that is unique to them and that works based on their own specific psychology, long terms goals and personality. So, my idea is to take bits and pieces from others and put it into a system that works for me.

 

Vienna, thanks for the heads up...that is very sad to hear. SKO, I have located the two threads that you mentioned in your message and will dive into those ASAP.

 

Attached is my ES chart through lunchtime today. You will see that my Gaussians are there for the first part of the day but I accidentally erased the others when I was going to print my chart. I traded the second FTT (in gold) and exited with 2.5 points. I hesitated to pull the trigger on the 2nd FTT long (purple) and, once it had moved up significantly, I decided not to chase. Bad decision. I watched the market move up without me the rest of the morning without me and stayed on the sidelines.

 

On a side note, I find it hard to continue to trade once I have an early winner. I have a big fear of giving back gains. Anybody else have this problem?

 

I look forward to continued dialogue. Thanks again!

 

I'm still learning how to post in TL and just saw a typo in my last response. See the bolded item above...should be 3rd FTT, not 2nd. I guess we only have 1 hour to edit our post before the edit button disappears. Sorry for so many posts today.

[patrader 10]

here's a couple of days worth and 10-6-11.hth