The Price / Volume Relationship

[jbarnby 10]

Hi jbarnby. Couple questions...I thought a lateral required 3 bars, but from your chart it looks like only two. Is two the rule, or three? Almost all the action for the day is contained in lateral the way you've drawn it. Also, how did you determine the "down black" volume line after the R2R? I don't see a decreasing black volume pattern. I do see the price action fits that pattern, though. That makes it look like you've used price to determine volume. Did you?

 

Am I being too stringent? From a technical standpoint, it seems sometimes the correct volume Gaussians do not exist in the expected pattern or order unless we concoct it to make it fit? Or that sometimes have to use "price only" for one leg the pattern because volume doesn't fit or isn't clear, which means the corresponding expected volume line is extrapolated in the context of the whole rb2b2r2b collection even though it may not exist for one leg? Such as the down black volume line you drew? I'm just trying to understand this better, any help would be appreciated.

 

1. Laterals always require at least 3 bars. Two bars make a formation (ftp,fbp,sym,eh, etc). Reread this thread from the beginning if you need more help with lats. 2. You've equated dec black vol with dec black gaussian line. Quite often the two do not correlate. 3. Your questions indicate a need for much more study of the method. If I were you I would reread this thread from Sept 2010 forward.

[plantrader 10]

1. Laterals always require at least 3 bars. Two bars make a formation (ftp,fbp,sym,eh, etc). Reread this thread from the beginning if you need more help with lats. 2. You've equated dec black vol with dec black gaussian line. Quite often the two do not correlate. 3. Your questions indicate a need for much more study of the method. If I were you I would reread this thread from Sept 2010 forward.

 

Thanks guys (mandelbrot & jbarnby). My current understanding is that lateral are a min of 3 bars. I thought you were drawing 2 bar lateral formations all over the chat, hence question. While I do agree I need to study this more, it really shouldn't take 500+ pages to congeal the guidelines. That's the difficult thing with this thread, so much of it is indirect when reality it's not so hard to be direct.

 

For example, I had no idea that dec black volume isn't required with dec black Gaussian line (since a Gaussian is a part of a volume sequence/pattern). I don't recall that being stated clearly over hundreds of pages. I thought Gaussian patterns/lines had everything to do with volume increase and decrease accordingly the direction indicated the color/pattern. This misunderstanding on my part is probably why sometimes I have the impression that the proper ones aren't discernable.

 

Could you help with some clarity on that please? I can formulate my own trading strategy, as I'm decently knowledgeable on things like that. But it's tough to do that when the right & wrong type of basics aren't clear. That also makes it harder to practice this.

Edited February 23, 2014 by plantrader

[jbarnby 10]

For example, I had no idea that dec black volume isn't required with dec black Gaussian line (since a Gaussian is a part of a volume sequence/pattern). I don't recall that being stated clearly over hundreds of pages. I thought Gaussian patterns/lines had everything to do with volume increase and decrease accordingly the direction indicated the color/pattern. This misunderstanding on my part is probably why sometimes I have the impression that the proper ones aren't discernable.

 

"You've equated decreasing Volume with non-dominant movement.

 

- Spydertrader" This is copied from post #2187, dated 10/10/10 i believe.

[plantrader 10]

I've got an idea... is anybody interested in practicing this together, maybe discussing a chart a couple times per week outside of this thread? That way, we can combine our collective knowledge and find out what holes we've still got. Then we can present our questions to the thread to see if others can help to clarify... then we can get back to practicing again. All the while, being able to help others in the thread as our expertise progresses? I thought bouncing questions off each other freely outside this thread might be helpful.

 

My questions might seem basic, but I'm not THAT bad at this (have studied privately & put it to practical use on my charts)... I just don't like to make too many assumptions, so my questions seem simple at times. It's just for better understanding or confirmation.

 

Any takers? :missy:

 

I'll also read from Sept 2010 forward as jbarnby suggested, as I might've missed some important clarifications. So my idea is to start collaborating after I have a few days to read this thread some more. Quite a long spread out thread, as far as finding the valuable info vs things that we shouldn't heed.

[Mandelbrot 10]

I suggest you read this post: #2158

 

See how the B2B forms on a single fractal. Note (by looking at the Volume Bars themselves) how a B2B forms the Point Two.

 

Since the market exists on a fractal basis, all fractals must contain the same attributes.

 

Whether B2B or R2R, the market creates the exact same picture in terms of how a given fractal arrives at a Point Two.

 

Make sure the faster fractals 'nest' correctly by ensuring each faster fractal shows the exact same attributes as the one above.

 

HTH.

 

- Spydertrader

 

Have a look at FilterTip's posts regarding simple and complex bbt's, from post #3957, Page 495

Edited February 26, 2014 by Mandelbrot

[plantrader 10]

Does anybody use NinjaTrader and have a comfort level for the "Price Volume Tools" indicator package as provided on the EliteTrader thread this month (Feb 2014)? I believe it's been around for a few years already, but updated version this month.

[Fractals 10]

For date 01/02/14 the entire move to 1425 was a faster fractal, building the R2R of the fastest fractal we monitor.

 

I have been trying to wrap my head around this method for a while and this is something that just wont click for me.

 

I see what you mean where that time period is r2r, but how that r2r is built confuses me. If you would be so kind, when you say it is 3 equal things which 3 are you referring to?

 

In other words, which of these images would match the gaussians of one fractal lower than the r2r?

 

Option A is 3 equal things with the third one "repeating".

 

Option B doesn't really appear to be 3 equal things (to my mind at least) but maybe that's what im missing.

 

Or is there an option C?

 

Thanks.

[wilddog 10]

I have been trying to wrap my head around this method for a while and this is something that just wont click for me.

 

Interesting, what is your previous username in this forum before the recycle to Fractals?

[Fractals 10]

Interesting, what is your previous username in this forum before the recycle to Fractals?

 

I'm not sure if I should feel insulted or take that as a compliment. When i said a while, I meant since a bit before Christmas if that maters. I never found the need for a user name before now as the thread seemed pretty well dead.

 

I know I addressed my question to jbarnby, but would be happy for your input as well. I see you have been here since 2011, I could surely use some of your experience.

[Ezzy 10]

I'll also read from Sept 2010 forward as jbarnby suggested, as I might've missed some important clarifications. So my idea is to start collaborating after I have a few days to read this thread some more. Quite a long spread out thread, as far as finding the valuable info vs things that we shouldn't heed.

Think I mention this before, you'll get more help if you post a chart that you have annotated. It shows that you have done some of the work rather than reading and people can see where you're at. And you'll probably answer some of your own questions.

 

I have been trying to wrap my head around this method for a while and this is something that just won't click

For some it won't click. Equal weight isn't an equal number of bars or period of time. It can be a few bars or a couple of days. That may be the issue as it's hard to see an 8 or 16 hour move being equal to one that takes an hour.

 

Think about what it takes to have a completed container. For example 1,2,3, FTT on price and completed volume sequence. So let's say this is a tape or a BBT or whatever level you call it, doesn't matter. If you built a dominant one, you now need an equal non-dom. If that doesn't happen, and the move continues dominant. What is that first container called now? What happens to it? If you built a dom tape, and a non-dom tape doesn't happen, you can't be at pt3 of a traverse. You still need to build a non-dom tape. This applies to all your levels.

 

That is why Todd mentioned that the market sometimes transmits information in a relative way. Now add in the market accelerating and decelerating changing what you've built. And sequences extending. See the posts around Oct 14 or 15, 2010 channel drill.

 

It can be quite difficult as times.

 

The reality is your annotations indicate that you have jumped fractals. For date 01/02/14 the entire move to 1425 was a faster fractal, building the R2R of the fastest fractal we monitor. How does one know? Fractal integrity. One slower thing is built from three equal faster things. Pace acceleration also plays a role in fractal integrity, and it can do so on all fractal levels. (PA does not apply in this specific example)

 

Finally, the market achieves R2R or B2B in the exact same manner on all fractal levels, and it does so without exception. This has previously been covered in this thread.

 

Thanks for posting the chart. It would be helpful if you could point out where he jumped fractals. It looks like for a good part of the day in RT he was on. Since we may see things a bit differently I can 't speak to exactly where you were talking about, and of course as things unfolded and moved there isn't just one point. So if you have a correction or clarification to my comments please post them.

 

Monkman:

In my view, after the initial pt3 down at 11:25, if what you thought you had built was a dom tape down, there was never an equal weight opposing tape. Though at several times it may have looked that way, initially. The check is "did you get an equal weight container" after. Instead there was fanning and extending until finally the RTL break. And after the RTL BO there wasn't a tape up to validate your tape down. If there was, then you still need another tape down. Hope that helps.

 

Regards,

 

EZ

[tradingwizzard 10]

just bluntly saying that I don't believe in volumes showed by any broker, futures, etc....

 

anyone?

 

TW

[Fractals 10]

If you built a dominant one, you now need an equal non-dom. If that doesn't happen, and the move continues dominant. What is that first container called now? What happens to it? If you built a dom tape, and a non-dom tape doesn't happen, you can't be at pt3 of a traverse. You still need to build a non-dom tape. This applies to all your levels.

 

 

Thanks. This is where I run into problems. I see a volume sequence then I don't know if the next thing is equal to that or a part of that.

 

When you say "if that doesnt happen" do you mean that I need to see the next thing to know what the last thing was? If that is so, how do I tell when the 3rd part of something is done?

 

If I stepped on any toes with my question I didn't mean to, I was basing my drawings on a picture from Spydertrader near the first of the thread showing multiple layers of the volume cycle. If this is fractal wouldn't each piece of each piece have the volume cycle?

 

I guess I'm just one of the ones it won't click for.

[jbarnby 10]

To expand on what EZ said - building equal containers isn't always obvious, or at least doesn't always appear obvious. Let's say the market gives you a dominant container. The events that happen within that container suggest if it's "on" or "below" your fractal. Is the container built from three faster things? If so, are THEY equal, and so on. Also important is how price/volume moves between the points of said container. Are there laterals, if so what kind, do they begin on an ftt or a ve? Does market pace play a role? etc etc. The market cannot reach pt 3 of your trading fractal unless and until it builds an EQUAL nondominant container. Equal being the key word. You can't just look at price. You can't just look at volume. And you can't just examine pts 1,2,3 ftt. I have seen subfractal building block tapes go on for more than a day, and I have also seen traverses complete in a few short hours. Looks are deceiving and, for some, it can take years to refine that process.

 

In my opinion, after years of study followed by great success, I cannot see how this method could ever be successfully transferred via a trading blog thread. I've sacrificed a huge chunk of my personal life in recent years, mentoring students in small groups or one-on-one, and even with that personal attention the process is long, tedious, and frustrating for most everyone. (about to wind down the mentoring process in 2014)

 

Finally, some may not realize that even Spyder changed his approach to fractal integrity mid-stream during this very thread. (You think maybe there was a reason he discouraged gucci and others from referencing older charts?) While basics of the method, x2x2y2x, ve's, etc can be found early in this thread as well as on on other forums, I've repeatedly stated where the real meat is located. IMO older threads are a waste of time. Period. Nothing within TL is going to supply you with all of the answers, but if you can dissect the basics, and think outside the box, you have some chance of making progress over time.

Edited February 26, 2014 by jbarnby

[jbarnby 10]

just bluntly saying that I don't believe in volumes showed by any broker, futures, etc....

 

anyone?

 

TW

 

I find volume supplied by TradeNavigator to be very pure and accurate. No complaints and I've used them for years. Couldn't do this without it.

[tradingwizzard 10]

I find volume supplied by TradeNavigator to be very pure and accurate. No complaints and I've used them for years. Couldn't do this without it.

 

ok but what do they represent? the whole market or just an average offering an educated guess?

 

TW

[jbarnby 10]

ok but what do they represent? the whole market or just an average offering an educated guess?

 

TW

 

Oh c'mon man - google it or ask your broker.

[tradingwizzard 10]

Oh c'mon man - google it or ask your broker.

 

that is my whole point.....volumes do not represent the whole market

 

TW

[jbarnby 10]

that is my whole point.....volumes do not represent the whole market

 

TW

 

right, right.....thanks for pointing this out. Now I realize all of my success has been a fluke. Guess I'd better hang it up.

[tradingwizzard 10]

right, right.....thanks for pointing this out. Now I realize all of my success has been a fluke. Guess I'd better hang it up.

 

)))...well if it works, it must be something out there......but just saying it is not the WHOLE volume.

 

and you might say who cares if it works?

 

TW

[gltrader 10]

This is where I run into problems. I see a volume sequence then I don't know if the next thing is equal to that or a part of that.

 

 

 

I am still learning, but i think this post is very important when it comes to equal fractals.

 

I don't know why Jack started referring to tapes as "bbt's". Bars building tapes?? Correction - Building Block Tapes.

 

It is unfortunate that this thread has never fully addressed the process of forming tapes and traverses. As I understand it, all tapes begin with 2 bars, unless the 2nd bar is a flaw, in which case we wait for a bo of the 2nd bar in order to draw the RTL and LTL. Of course, if the 3rd bar high and low also fall inside the high and low of the 1st bar then we have a lateral tape. Having constructed our 2 or 3 bar tape, the tape continues until price closes outside the tape RTL, bearing in mind that the RTL is fanned as and when necessary to include all of the price action as long as price continues to close inside our tape. After we get our first close outside our initial tape, we can then begin to construct our next tape. The RTL bo of the 2nd tape forms the pt3 of our new Traverse, assuming that the the first tape began at pt1. This idea of 3 tapes forming a "Traverse" goes back to the beginning of the first Spyder journal on ET. However, we are reminded in this thread that it is the volume sequence that defines the presence of a Traverse so the above description cannot be considered complete unless we observe the mandatory b2b2r2b or r2r2b2r. It might also be worth mentioning that Spyder explained at the NY meeting that the absolute minimum number of bars for a Traverse is 5. Three bars to give us our "b2b", a 4th bar to give us "2r", and the 5th to give us our "2b" and sequence completion, and there MUST be a close outside each tape RTL in order to construct a Traverse.

 

My apologies if this is going over old ground but I suspect it might be of use to someone who is more confused than myself, and it might even shed some light on my misuderstanding if someone wishes to correct this.

[jbarnby 10]

I am still learning, but i think this post is very important when it comes to equal fractals.

 

Actually, it's not relevant or helpful. Try re-reading from May 2010 thru October 2010.

[Ezzy 10]

Thanks. This is where I run into problems. I see a volume sequence then I don't know if the next thing is equal to that or a part of that.

Yes, again, it is difficult. You know what you need as a minimum, but not the maximum.

 

When you say "if that doesnt happen" do you mean that I need to see the next thing to know what the last thing was? If that is so, how do I tell when the 3rd part of something is done?

 

To know for sure, yes, hindsight. Refer to posts #369 and #2298. In real time, that's the hard part, application.

 

If I stepped on any toes with my question I didn't mean to, I was basing my drawings on a picture from Spydertrader near the first of the thread showing multiple layers of the volume cycle. If this is fractal wouldn't each piece of each piece have the volume cycle?

 

I guess I'm just one of the ones it won't click for.

 

The drawings are an ideal, it shows the sequences needed. In real time the market doesn't paint a perfect picture, the sequences stretch and shrink. If the pace changes you may not see each fractal piece. I'm not being a dick when I say it won't click for most. Generally we're taught "this is the formula to solve a problem", or "this is how you build a house," or "this code will do that." It looks the same each time. With this method, what "appears" to be the same changes regularly, daily and throughout the day depending on the market. It's a difficult concept for most to accept, even more so to apply.

[gltrader 10]

Hello.

 

I'm trying to learn to annotate correctly.

 

Today 15:55, is it possible an ftt of a traverse that started 10:05?

 

TIA for any help.

[FilterTip 10]

Hello.

 

I'm trying to learn to annotate correctly.

 

Today 15:55, is it possible an ftt of a traverse that started 10:05?

 

TIA for any help.

 

If your skinny black and skinny red lines are of the same fractal,

then your p2's need to be outside a previous (same fractal) rtl.

 

"Outside" doesn't need to be a close outside,

but at the very least, for example, the high of a bar for an up p2 needs to be outside a down rtl.

 

hth

[Mandelbrot 10]

If your skinny black and skinny red lines are of the same fractal,

then your p2's need to be outside a previous (same fractal) rtl.

 

"Outside" doesn't need to be a close outside,

but at the very least, for example, the high of a bar for an up p2 needs to be outside a down rtl.

 

hth

 

Check out Clean Page 4

 

hth