The Price / Volume Relationship

[Monkman 10]

There were several laterals today. In the pm it got pretty interesting. In my chart for today, I wrote in a couple more annotations. Cleaned up my tapes a bit, and worked on connecting the tape formations, to form the tape channel.

 

Padrotshik, and others have mentioned using Clean Page 4. I have that chart burned into my head from over the years. I understand it on one level, but in my charts it shows others that I have a lack of understanding in that area. In the chart for today, I included a clean page 4 annotation. If someone would be willing to provide an example of how to apply this concept to market day, the extra detail may help.

 

[patrader 10]

  Monkman said:

In my chart for today

Hi monk.Your color on some bars(price and matching volume) are still incorrect.I don't use ninjatrader but i have seen other ninja users with the correct colors on their bars.Look at your ibgs price and volume bars they should be the opposite color on your charts.Having the correct colors on the volume pane is very important to start the process of annotating gaussians.hth

[Monkman 10]

  patrader said:

Hi monk.Your color on some bars(price and matching volume) are still incorrect.I don't use ninjatrader but i have seen other ninja users with the correct colors on their bars.Look at your ibgs price and volume bars they should be the opposite color on your charts.Having the correct colors on the volume pane is very important to start the process of annotating gaussians.hth

 

Thank you for pointing that out. I looked into Steph7s, indicator and some others from the Hershey tools elite trader thread. With Steph's I noticed he wants your email, then you have to get a code from him to enable the indicator etc. I am not sure what they motivations are behind that but I prefer to use indicators that work without those requirements.

 

It appears Bigmoose, has updated his PRV indicator. I am going to import that in for Monday's trading day, and see how that works.

 

I also have the option to get Trade Navigator back up and running, where I can get the Spyder/Mikey library. I hope its still available, added it years ago while I was trading stocks.

[stepan7 10]

  Monkman said:

 

..................................I am not sure what they motivations are behind that .....

 

My reason is simple: I won't AutoChannel Tool distributed beyond scope of people studying JHM.

 

Stepan

[Monkman 10]

First Impression

 

 

Second Impression, after R2R on Traverse appears a bit off.

Edited October 31, 2012 by Monkman

[patrader 10]

10-31-12 ES chart with pfc

Edited October 31, 2012 by patrader

[patrader 10]

10-25-12 11:50 est thru eod 10-31-12

[Monkman 10]

  patrader said:

10-25-12 11:50 est thru eod 10-31-12

 

Thank you for posting the chart. Hopefully you will post another, so I can compare yours to mine to figure out where I made mistakes.

[Monkman 10]

Basic chart , with tapes drawn on the price. The thicker lines are tapes. I went that direction they would be easier for me to see.

 

Trying to keep it, as simple as possible to get this important building block down.

[Monkman 10]

Below is a chart of the FF tapes, with one traverse in orange towards the end. I attempted to correctly nest the FF tapes together. It is not an easy task because of the added variables of non consistent fanning rules, flaw inclusion rules, etc. Also, it is often difficult to know whether to fan the RTL or create a non dom FF tape. This I know is crucial because if not done right it throws off the whole cycle. Anyone willing to comment?

 

In the orange traverse, the FTT was violated. I assume when this happens, you form a new pt 3 by fanning out from the pt1 to the lowest point of the non dom tape.

 

[Monkman 10]

Today was pretty odd. The midday low volume levels carried into the close. Maybe the traders went to lunch and decided not to come back today.

 

In the chart I focused on my FF tape annotations again, to build proper Tapes. I know there are several people out there that just trade based on price, and do extremely well. Real time when I am trying to annotate the volume cycles correctly, I tend to get bogged down because I think I see one part of the volume cycle, so I act on that. Then I find out its not correct, and its an extension of the previous cycle. I am wondering if I focus less on volume annotations real time, and more on price, if I will catch the transitions a lot quicker. Rather than waiting to see a certain volume cycle form before I act.

 

As many of you know, if you get in on the FTT you are usually good to go, but if you get the next bar, its less forgiving during an intra-bar retrace.

 

Also, if you make a mistake, which happens for me quite a bit. I think I see an FTT because the volume and price cycle appear to have been completed. So I then get in on that bar going the other direction. Then next bar will be a VE, and you get smoked. Has anyone found a working solution this problem?

 

[Savant 10]

Thanks for all your effort man... Keep doing good job

[Monkman 10]

 

Real time annotations done during PM.

 

One area that threw me off today was the uptrend from 13:20 to 13:25. Previous to that, my PT3 was at the 13:00 point. After it broke out of the turquoise channel, I assumed the cycle had completed. Then I expected to see a new B2B cycle. Instead, price goes back into the previous turquoise channel, and continues the last 2R part of the cycle. As a result, I decided to fan out, and redo the PT3. At the 13:10 point, I believed that was the PT3 of the traverse, and the FTT of the non-dominant tape.

 

I am wondering how others handle this particular situation. When this happens, does one immediately close the position or reverse when price goes back into the previous Tape?

[Monkman 10]

Here is today's chart. Put some questions within the chart if anyone wants to comment. Thanks.

 

[cnms2 10]

  Monkman said:

Here is today's chart. Put some questions within the chart if anyone wants to comment. Thanks.

Trends overlap.

On the left side of the RTL you're in the trend.

So there's an area where you're on the left side of both the winding down old trend, and the emerging new trend.

Annotations are a matter of what tells you more, but should be consistent.

In your example, the long trend's VE causes 2 additional moves that could be annotated as part of either trend, but the short trend being stronger the M2 shows falling volume.

[Monkman 10]

I am wondering how others annotated 12:35 to close. The only way I could make sense of this area was to draw, what I call a prolonged tape, where the B2B 2R 2B cycle extends itself. So for example the 2R and 2B will continue to cycle within the current bounds of the P1-2-3 created by the channel. Now, I have noticed, and read about modified PT3s, which I am still trying to understand. If I was annotating real time I would consider 13:05 as the first area of PT3, then since its a lateral, fan out, making 13:10 the modified PT3. What gets interesting is the 13:05 bar appears to break that tape, hard to tell since its a close one. On bar 13:40 it definitely breaks through, which I believe is the start of what becomes a modified PT3. I am not sure how you account for these gaussian wise or how you spot them real time. The reason why this is important is because one PT3 is an entry point, and two, if you were holding since the PT1, you would have gotten a signal to exit prematurely. Below is the chart for today, any comments are welcome.

 

[FilterTip 10]

  Monkman said:

I am wondering how others annotated 12:35 to close. The only way I could make sense of this area was to draw, what I call a prolonged tape, where the B2B 2R 2B cycle extends itself. So for example the 2R and 2B will continue to cycle within the current bounds of the P1-2-3 created by the channel. Now, I have noticed, and read about modified PT3s, which I am still trying to understand. If I was annotating real time I would consider 13:05 as the first area of PT3, then since its a lateral, fan out, making 13:10 the modified PT3. What gets interesting is the 13:05 bar appears to break that tape, hard to tell since its a close one. On bar 13:40 it definitely breaks through, which I believe is the start of what becomes a modified PT3. I am not sure how you account for these gaussian wise or how you spot them real time. The reason why this is important is because one PT3 is an entry point, and two, if you were holding since the PT1, you would have gotten a signal to exit prematurely. Below is the chart for today, any comments are welcome.

 

 

Monkman.

Just thinking out load here:

13:00 is an OB.

13.05 creates a Sym pennant.

13.10, creating a lateral, and still within the Sym,

with 13.15 translating all 3 as up.

 

Not withstanding volume,

this would seem to push, initially, the P2 of whatever container

is being built (from your 12.35 bar) up to 13.30.

 

Again just thinking out load.

Others may know better or be able to offer a more accurate understanding.

 

Appreciate your posts btw.

Edited November 21, 2012 by FilterTip

[patrader 10]

Here is my latest 2 bar case annotation document.Case A and B both have 2 methods to annotate the ltl based on post #120 on page 15 by spydertrader(http://www.traderslaboratory.com/forums/technical-analysis/6320-price-volume-relationship-15.html).Gray colored bars can be either red or black depending on the relationship to the previous bar and/or the close of the bar in some situations(like an ob).The second bar in all case A's or case I's are always black.This is due to making a HH.Case B's and case J's the second bar is always red because they make a LL.hth

[cnms2 10]

  Monkman said:

I am wondering how others annotated 12:35 to close. The only way I could make sense of this area was to draw, what I call a prolonged tape, where the B2B 2R 2B cycle extends itself. So for example the 2R and 2B will continue to cycle within the current bounds of the P1-2-3 created by the channel. Now, I have noticed, and read about modified PT3s, which I am still trying to understand. If I was annotating real time I would consider 13:05 as the first area of PT3, then since its a lateral, fan out, making 13:10 the modified PT3. What gets interesting is the 13:05 bar appears to break that tape, hard to tell since its a close one. On bar 13:40 it definitely breaks through, which I believe is the start of what becomes a modified PT3. I am not sure how you account for these gaussian wise or how you spot them real time. The reason why this is important is because one PT3 is an entry point, and two, if you were holding since the PT1, you would have gotten a signal to exit prematurely. Below is the chart for today, any comments are welcome.

 

Happy Thanksgiving! .

[patrader 10]

2 bar case annotation document version 2

[patrader 10]

Here is the drill.Start with a ftp and add another bar.This third bar forms a 2 bar case using the second bar of the ftp and the third bar.Which "second" 2 bar cases never create a lateral formation? Which 2 bar cases always create a lateral formation? Which 2 bar cases can do both depending on the range of the third bar? (Spoiler alert. Don't look at attachment till after completing drill).Can you do the same drill using a fbp as the first case? How about the sym pennant? Notice any difference when using the sym pennant? Can you name the differences? Should create a few ah ha's.

[cnms2 10]

Per Jack Hershey:

 

All inside formations have the same rules. The first bar is always processed. the second or sunsequence bar(s) is NOT processed if smaller in volume than the first. If NOT, then it is processed.

 

For out side bars, they count as two bars in a trends sequence. THe first value is done as usual. The second value is simple: it is the NEXT value in the trend sequence.

Edited November 26, 2012 by cnms2

[Monkman 10]

[Monkman 10]

I marked three different areas on my chart today that threw me off real time. The first was in the 10:35-10:40 area. By 10:30 I thought the tape fractal had completed. 10:30, was what I believed at the time was the beginning of B2B. Looking back several bars afterwards it was easy to correct the mistake but real time, not picking the right PT3 on the Traverse or FTT on the Tape does not yield positive results.

 

Then the other area, which continues to be challenging is knowing when the VEs will end, along with the final FTT. Real Time, I believed bar 10:55 was the FTT. There were two VEs before it, volume had peaked several times, lower each time. By bar 11:00 volume began to decrease, SYM formed, and it appeared the tape fractal and traverse fractal were at a close. Was drawing in R2 at the time expecting a shift. Then, to my surprise 11:05, has increasing price and volume, heavy volume PRV. I see it getting close to the green bookmark, breaking upwards out of the SYM. At that point I thought I was wrong, and that another VE could possibly form. Does anyone know any clues that would have alerted me that 11:55 was not a FTT on that bar? By bar 11:05, where there any clues telling us that the move was at an end intra bar?

 

Also 13:05 to 13:25. Real time the build up of bars appear to create B2B on the FF tape level, which typically builds to the Tape once the prior channel has been broken. Here after what appears to be B2B, the 2R breaks back into the prior channel continuing the earlier trend. How does one handle this real time? Do you have to wait till 13:25 to reach with a reverse, or is there an earlier indicator of this failed break out?

 

 

 

[patrader 10]

  Monkman said:

is there an earlier indicator of this failed break out?

 

 

 

 

When the market breaks out of a down rtl and closes back inside the rtl what should you do with the rtl if the market did not take out the known entity? Then the market forms a ftp but the second bar is decreasing volume.In post #3622 cnms2 was kind enough to link to jack comments on how to view the second bar of an inside formation(otherwise referred to as pennants)."the second or subsequence bar(s) is NOT processed if smaller in volume than the first".Now do you see a b2b? Also verify that the color of 13:05 down stitch on your chart is correct per the volume and bar coloring of this method.hth

Edited November 29, 2012 by patrader