The Price / Volume Relationship

[Stevecs 10]

There are a number of people who quietly follow along and do their work as time allows, when ever they can. I am very grateful for Todds effort, and perfectly willing to pay forward anything I have learned here. There is nothing I can add beyond those that have had close contact with either Jack or Todd and have already shared. When Todd stopped posting I moved to using other types of volume studies as an overlay to Jacks basic paradigm. Order flow analysis and auction market theory also fit nicely within Jacks channel fractal symmetry. Last year I shared a chart description in JH software in ET, containing one of the volume studies I use as an overlay. This thread isn’t about watching open interest and knowing where commercials defend their positions before an FTT happens. I’m glad you think things are funny. I’m not the one operating in a vacuum. I’m making an effort to follow though and learn something Jack and Todd wanted to share and help others.

Edited April 10, 2013 by Stevecs

[Heisenberg 10]

  jbarnby said:

The reality is that a down fractal did not complete until 1320 on 04/04/13. This trend began back on 04/01/13. If one maintains fractal integrity, and understands equal weight containers, then it's impossible to complete at 1545 on 04/03/13.

 

So there is a trend from ??:?? on 04/01/13 to 1320 on 04/04/13. Would you call this trend a tape, traverse or channel?

 

H.

[wilddog 10]

  Heisenberg said:

So there is a trend from ??:?? on 04/01/13 to 1320 on 04/04/13. Would you call this trend a tape, traverse or channel?

 

H.

 

What is your definition of a Tape, Traverse and Channel? As Spyder said it does not matter what you call them, goats,cows or whatever.

[cnms2 10]

  Heisenberg said:

So there is a trend from ??:?? on 04/01/13 to 1320 on 04/04/13. Would you call this trend a tape, traverse or channel?

 

H.

I guess your question is if jb trades that fractal (traverse), one fractal above (tape) or one bellow (channel).

 

If you daytrade, you should try to identify all three moves inside each single day. For example, you could have about 9 trades (traverses) of 9 bar average, built of 27 tapes, forming 3 channels.

 

Don't forget that the volume information is of paramount importance for this method, so you want to rely on it when you determine your working fractals. When you span over multiple days it is more difficult to make sense of the intraday volume data. Don't use the volume pane just to annotate what you're seeing in the price pane!

[Heisenberg 10]

  wilddog said:

What is your definition of a Tape, Traverse and Channel? As Spyder said it does not matter what you call them, goats,cows or whatever.

 

Perhaps nobody knows :crap:

[wilddog 10]

This has been posted before, check out Post #15 by Spydertrader

 

http://www.traderslaboratory.com/forums/candlestick-corner/6180-open-free-discussion-volume.html

 

Different people trade at different fractal speeds.

 

HTH

[FilterTip 10]

  Heisenberg said:

Perhaps nobody knows :crap:

 

I'm no authority on this.

But as I'm not getting any younger and as much pain, anguish and cost

as I've been through with trying to understand this methodology to a level that is consistantly usable, the following is in an effort to help all and anyone that has either been through the same and or, to help avoid or limit the confussion going forward:

 

There is only one life (that we so far know of), so it's better to live it, share it and enjoy,

whilst we are still here....

 

It would seem that it's not a matter of what we call something, be it a BBT, a Tape a Goat etc..but rather, that we know what something is.

 

What does this mean ?

 

Lets use terms (labels) we can all refer to:

 

A BBT gets us from Tape P1 to Tape P2,

X2X.

This is a known fact of this methodology.

 

What is also a fact, but little known, is that HOW BBT (1) is constructed, determines how BBT (2) and BBT (3) also need to be constructed in order for us to know what we have is a Tape.

 

This is what is referred to as containers of "equal weight".

Only if, or not until we have BBT's of equal weight, can we have a Tape.

 

What does this mean ?

 

BBT's are either "Simple" or "Complex"

 

Simple = a container (BBT) within which we are not able to annotate any non dom trend lines as per the 10 x 2 bar cases.

 

Complex = a container (BBT) within which we are able to annotate non dominant trend lines as per the 10 x 2 bar cases.

 

Non dom trend lines in an up BBT =

FBP, EH, SYM, and also IBGS and OB.

 

Non dom trend lines in a down BBT =

FTP, EH, SYM and also IBGS and OB.

 

ie: in an up container (BBT), a FTP would not make the container Complex, because we cannot annotate non dom (down) trend lines to a FTP.

 

Hence this would be Simple, for as long or unless we are not able to annotate any non dom trend lines.

 

So:

BBT (1) determines what is required of BBT (2) (to know we are at Tape P3) and what is required of BBT (3) to know we have a valid Tape.

 

In other words;

If BBT (1) = Simple, then BBT (2) and BBT (3) need only be Simple, but can be Complex,

in order to know we have a Tape.

 

If BBT (1) is Complex then only if (or until) BBT (2) is also Complex can we be at Tape P3.

 

BBT(1) is the road map for how our Tape needs to be constructed

(in order to know it is a Tape)

 

ie:

If BBT (1) X2X is Complex (which gets us to Tape P2)

and BBT (2) 2Y is Simple, then BBT (2) is not of equal weight to BBT 1.

(BBT (2) is not realy a BBT)

So we cannot yet have a valid Tape P3.

 

What we do here is fan our BBT (1) rtl to encase BBT (2) (which is not really a BBT).

Hence we are still only building BBT (1)

In other words we are not yet at Tape P2.

 

 

 

 

The above assumes a minimum of 3 x BBT's to build a Tape.

The above also assumes that the OOE, (p1,p2,p3 and ftt) have all been satisfied

for each BBT.

 

HTH.

Edited April 22, 2013 by FilterTip

[frenchfry 10]

  Heisenberg said:

So there is a trend from ??:?? on 04/01/13 to 1320 on 04/04/13. Would you call this trend a tape, traverse or channel?

 

H.

Is there an annoted chart that shows that downtrend with all its containers?

 

On one hand it doesn't matter how you call the containers but on the other hand it does when you annote and need to decide which one you are currently in and which one is being created next.

Edited April 22, 2013 by frenchfry

[FilterTip 10]

further to my last post:

 

There is only one thing that negates requiring 3 BBT's (minimum)

of equal weight to know that we have a Tape.

 

That being Pace Accelleration.

 

ie: assume we have a Complex BBT 1

(made up of any maner of x2x2y2x...2y2x..2y2x etc...)

and hence BBT 2 is required to be Complex in order to know these 2 BBT's

are of equal weight and hence we know we are building a Tape.

 

Let us further assume BBT 2 has only 2 bars (translating) and is there for

Simple.

 

If price then brakes out of BBT 2 (which is not really a BBT because not of equal weight to BBT 1) and we have PA within the next container (BBT 3),

then this promotes BBT 1 (Complex) and BBT 2 (Simple) and the BBT (3) within which we have PA, all to a Tape.

 

PA is defined as:

successively higher troughs and peaks within a conatiner

(in this case BBT 3), without there being decreasing peaks (decelleration) by the time

the container (BBT 3 in this case) has finished.

 

HTH.

[Heisenberg 10]

All of this doesn't make much sense. Maybe someone can show a little picture of the difference between a BBT and a tape?

 

And yes it may not matter what you call it, but for me it helps to give things a name.

 

H.

[frenchfry 10]

FilterTip, thanks for your summary!

 

One question: How does volume fit in all of this? Do you use volume with all of those BBTs, tapes, etc.? Is volume actually needed?

[wilddog 10]

  frenchfry said:

FilterTip, thanks for your summary!

 

One question: How does volume fit in all of this? Do you use volume with all of those BBTs, tapes, etc.? Is volume actually needed?

 

Very good observation, where is the volume? It seems this is all happening in the price pane.

 

Post annotated charts, or is this another blind leading blind story. The biggest risk in this forum is learning from people who don't understand themselves.

[FilterTip 10]

  frenchfry said:

FilterTip, thanks for your summary!

 

One question: How does volume fit in all of this? Do you use volume with all of those BBTs, tapes, etc.? Is volume actually needed?

 

Price and volume go together.

There's no relationship without both.

 

Lets think OOE's.

P1, P2, P3 and FTT.

 

We need dec to inc volume to get to Tape P2.

We need inc volume to confirm P3.

 

So yes volume needs to fit in regards to our OOE's.

 

For example a Complex BBT has non dom trend lines within it (as per our 10 x 2 bar cases).

The non dominance is not only via price but signifies non dominance on volume.

 

Let us also consider, in as simplistic terms as possible, that a container requires a volume sequence within its trend lines.

 

For example a Tape would have say a skinny X2X2Y2X within the trend lines of our Tape.

For say BBT 1, (Tape P1 to Tape P2) we only require a minimum of X2X.

Lets say we get more..ie x2x2y2x prior to breaking out of this containers (BBT) trend lines.

This makes it Complex, but it's still only getting us to Tape P2.

 

Now BBT 2 (Tape P2 to Tape P3) needs to be Complex,

meaning it will require a volume sequence of at least x2x2y2x within one set of trend lines.

 

Lets suppose we get x2x only in BBT 2.

It's there for not Complex, but Simple.

Hence any break out of the x2x trend lines is going to be still building BBT 2.

In effect this BO is going to BBT 2s p3.(absent PA after the BO)

 

However:

What if we have x2x and then 2y, still within our trend lines (no BO),

hence we are able to annotate non dom via say a SYM.

This is our 2y.

However, for our final 2x ,p3 into the trend of this container (BBT2)

we require increasing volume.

 

We need to be mindful here and recall volume out of a formation to validate increasing volume.

 

If we don't get increasing volume on the first bar out of a formation (inc over the first bar of the formation)

then we don't (yet) have p3 volume.

We don't yet have our OOE's both on price and on volume.

 

(if we get subsequent inc vol after the first bar out of a formation, then we do have p3 vol)

 

 

Further more.

In respect to BBT 3, we can look to BBT1 and the volume sequences that constructed it (if anything more than just X2X) to help determine the construction of BBT 3 (as a minimum)

 

hth

Edited April 22, 2013 by FilterTip

[wilddog 10]

FilterTip

 

 

Walk the walk and post your annotated chart. The last time you posted a chart was 3 months ago and by the questions you were asking suggested you were struggling. We would all like to see the improvement in your current charts.

[FilterTip 10]

  frenchfry said:

FilterTip, thanks for your summary!

 

One question: How does volume fit in all of this? Do you use volume with all of those BBTs, tapes, etc.? Is volume actually needed?

 

The attached chart is of May 21st 2010.

See Spyders post # 1835.

I've added some notes.

 

It might hopefully help to explain, in this example, how volume relates to price

for BBT 2 in so far as BBT 1 being Complex.

And so help with knowing when and if we have a Tape rather than a Traverse etc..

 

hth

[Scooty 10]

  FilterTip said:

....

 

Lets use terms (labels) we can all refer to:

 

A BBT gets us from Tape P1 to Tape P2,

X2X.

This is a known fact of this methodology.

 

....

 

Thanks so much for sharing the information. I wonder why no one, literally no one, has talked about it in here and ET. Is it something that somebody said "best to keep it to yourself"?

 

BTW isn't the BBT you described the same as Fast Fractal Traverse mentioned in Iterative Refinement thread? The most helpful answer I found for BBT is when someone asked what was it and the response was Building Block Tape. Hah! :frustrated:

Edited April 23, 2013 by Scooty

[Mandelbrot 10]

  Scooty said:

Thanks so much for sharing the information. I wonder why no one, literally no one, has talked about it in here and ET. Is it something that somebody said "best to keep it to yourself"?

 

BTW isn't the BBT you described the same as Fast Fractal Traverse mentioned in Iterative Refinement thread? The most helpful answer I found for BBT is when someone asked what was it and the response was Building Block Tape. Hah! :frustrated:

 

 

I am not sure on how long you have been following this method but bbt is not a new concept. Jack spoke about bbt's from the beginning of time. If you read this thread you will come across BBT's. Simply faster fractals.

[FilterTip 10]

  Scooty said:

Thanks so much for sharing the information. I wonder why no one, literally no one, has talked about it in here and ET. Is it something that somebody said "best to keep it to yourself"?

 

BTW isn't the BBT you described the same as Fast Fractal Traverse mentioned in Iterative Refinement thread? The most helpful answer I found for BBT is when someone asked what was it and the response was Building Block Tape. Hah! :frustrated:

 

Hello Scooty.

I don't really recall what a "Faster Fractal Traverse" refered to in the IR thread.

 

From this thread there is a simplification to look at containers on three levels:

Tape/Traverse/Channel.

 

A BBT is just a name, a label, for the container that gets us from:

Tape P1 to Tape P2,

Tape P2 to Tape P3,

and Tape P3 to Tape FTT.

 

It's the "Blocks", combination of 10 x 2 bar cases listed at the start of this thread that "Build" our "Tape".

Nothing more complicated than that I think.

 

A BBT needs to complete it's OOE's.

p1/p2/p3 and an ftt.

 

Only at an ftt of BBT 1 can we, at best, think we are at Tape P2.

This is an "at best" situation.

We don't actually know if we are at Tape P2 yet.

How can we (?)

 

We can only expect WMCN via a non dominant BBT 2 to Tape P3.

However, BBT 2 may not be of equal weight to BBT 1

(ie: if BBT 1 is Complex and BBT 2 is Simple)

and if not, if we didn't get WMNC, then it is not BBT 2, so we fan BBT 1's rtl.

Such that we weren't at Tape P2 as previously thought, but are instead still building BBT 1, so have yet to arrive at Tape P2.

 

If we stick to (3 x minimum) BBT's build a Tape and

(3 x minimum) Tapes build a Traverse,

then we can seek to avoid getting too lost in anything below a BBT.

 

In other words, in the construction of BBT 1 (and BBT 2 and 3 from there on) any price action within BBT 1 would be on a faster level (fractal) so we don't really need to concern ourselves with or indeed annotate on price or on volume anything within our BBT's.

 

Price action within our BBT will do what ever it will do.

ie: BBT 1 may get us to tape P2 via just an X2X, or it may have x2x2y2x..2y2x..etc

but so long as we can correctly see

that our BBT has met it's OOE's (a p1/p2/p3 and an ftt) then all we have is a BBT.

All we need is a BBT.

To get us to Tape P2.

 

And in the case of BBT 1, all we need do is sit and wait for it to complete, by arriving at it's ftt, then wait for an equal weight BBT 2 to form, at which point we can start BBT 3 and hence know we have a Tape.

 

Always, such as in the case of when BBT 2 is not of equal weight to BBT 1, it changes BBT 1 into a wider container that is now all BBT1, what we have built, in real time, may change.

 

This is difficult to grasp at first. It goes against the mind set that we know what will happen next and that what we have always remains so.

WMCN is not "Must" in the sense that it's going to, but rather what is "required" to come next in order to validate what we so far have. If it doesn't then what we so far have may need to be re- "labelled".

 

The only absolute is that our volume sequence of X2X2Y2X (as a minimum)

must complete before we can start a new sequence.

 

How that happens is down to the relationship price has with volume and just like any relationship, it's not always immediatly apparant and may seem to change from what we thought it was but so long as both parties are "completed" (where's Mr Maguire when you need him lol) then they can keep on building, what they set out to build, together.

 

hth

Edited April 23, 2013 by FilterTip

[frenchfry 10]

  Scooty said:

Thanks so much for sharing the information. I wonder why no one, literally no one, has talked about it in here and ET. Is it something that somebody said "best to keep it to yourself"?

 

BTW isn't the BBT you described the same as Fast Fractal Traverse mentioned in Iterative Refinement thread? The most helpful answer I found for BBT is when someone asked what was it and the response was Building Block Tape. Hah! :frustrated:

Jack tries to explain it here: http://=http://tinyurl.com/bng2jhn

[cnms2 10]

Never seen so much interest in this thread. I guess it's a mistake:

[Heisenberg 10]

  jbarnby said:

Is the trend (fractal) complete yet, or is there more to come? How would you know? Some of the best advice Spyder personally gave to me was to spend more time studying the volume pane of my chart. The trendlines tell us where our points reside, but the volume tells us what we've built.

 

In this chart:

http://cdn3.traderslaboratory.com/forums/attachments/34/33706d1357177527-price-volume-relationship-010213.png

 

You followed up with the following comments:

Seqences: r2r2b2r and b2b2r2b.

 

Did you mean one must look for a faster fractal forming starting from the traverse point 3 in order to know if the trend(traverse) is complete?

 

H.

[Heisenberg 10]

Would the image in attach be a good start to understand fractal nesting? Showing tape, traverse, channel.

 

H.

[wilddog 10]

  Heisenberg said:

Would the image in attach be a good start to understand fractal nesting? Showing tape, traverse, channel.

 

H.

 

Jack speaks about nesting fractals in the post below;

 

Forums - Nesting Fractals

 

HTH

[Heisenberg 10]

  wilddog said:

Jack speaks about nesting fractals in the post below;

 

Forums - Nesting Fractals

 

HTH

 

I don't know if you noticed, but Jack isn't always very clear when writing stuff. I choose not to read from him anymore...

 

H.

[Stevecs 10]

  FilterTip said:

I'm no authority on this.

 

What is also a fact, but little known, is that HOW BBT (1) is constructed, determines how BBT (2) and BBT (3) also need to be constructed in order for us to know what we have is a Tape.

 

HTH.

 

Given the fractal nature, substituting tape for bbt and channel for tape would be appropriate?

 

Thanks