The Price / Volume Relationship

[Tams 20]

Regarding fractals...

You can find this post on the first page of this thread...

http://www.traderslaboratory.com/forums/f34/price-volume-relationship-6320.html#post70030

 

Trend Lines

 

Accurately drawn trend lines in a chart Price Pane represent ‘containers’ of trend on the three trading fractals. We represent the fastest trading fractal using skinny lines (described as ‘tapes’) which, in turn, build the next slower fractal (represented by ‘medium’ weight lines) – known as a Traverse. These Medium fast trends (Traverses) build the slowest fractal (thick line weight) known as a ‘channel.’

 

 

To Be Continued ...

 

- Spydertrader

[nkhoi 10]

interesting, fractal analysis DotComPreneur.com > Landing Page Template

[ljyoung 10]

A question for Spyder (or as always, anyone else who believes they know the answer).

 

If what romanus has discerned is correct (and IMO, it is), that for 5 min ES players, there must be FTT's at points 1, 2, and 3, then is it likewise correct to say that all of the FTT's, at points 1, 2, and 3, must demonstrate a FTT of ALL of the components of 'the tape' associated with each point?

 

What I mean by ALL of the components is this.

 

For the 5 min ES traverse trader, the fastest trading fractal, on the ES 5 min fixed time fractal, is the 2 bar tape. Expert level traders can do the 'intrabar' thingy but the traverse trader should by and large leave that stuff alone, for a later time, if you will. As we all know there are trading fractals (aka 'goats' and such) which lie 'between' the 2 bar tape and the traverse. For the purposes of this discussion, you have simplified matters by gathering all of these non-traverse fractals into a single fractal which is called 'the tape'.

 

Thus when one turns a corner at points 1, 2, and 3, it seems logical that if the trader has correctly mapped the path to the point, then there must be a FTT of the entire tape and if there isn't an FTT of the entire tape then you don't have, as yet, a point 1, 2, or 3. So if you have a FTT of the 2 bar tape but don't have a FTT of one of the 'goats', then you have to wait until you do have a FTT of the 2 bar tape and all of the goats.

 

Is this 'all or none' Boolean kind of thing correct?

 

lj

[TIKITRADER 10]

Spyder,

 

You have mentioned many times we need to place focus in the volume.

 

It is those pace lines that probably play a big role in the importance of point 1 and point 3 in volume

Those points will be seen as the valleys (troughs ) in volume and the pace levels will be most likely different when a b2b or r2r forms, and if we were to compare that pace level to when a point 3 valley forms.

 

If so, after point 1 valley forms we should look for a change in pace for the point 3 valley. One completed, then look for a pace change from a point 3 valley to the next trough at point of change.

 

So should we be placing focus on the valleys and their pace levels ( or pace increases ) at points 1 and points 3 ?

Edited July 24, 2009 by TIKITRADER

[Spydertrader 10]

So should we be placing focus on the valleys and their pace levels ( or pace increases ) at points 1 and points 3 ?

 

While noting the various Pace changes might help someone to see what I have described in this thread, plenty of other, more critical, information exists, other than, observing Pace transitioning across pink, red, blue and green lines.

 

- Spydertrader

[TIKITRADER 10]

While noting the various Pace changes might help someone to see what I have described in this thread, plenty of other, more critical, information exists, other than, observing Pace transitioning across pink, red, blue and green lines.

 

- Spydertrader

 

 

In this method volume is used a number of ways.

 

Spyder, if I have missed something here would you please inform me.

 

 

1 ) Volume per 5 minute bar

 

2) Increasing volume compared to last 5 minute bar

 

2) Decreasing volume compared to last 5 minute bar

 

4) Increasing volume throughout a fractal

 

5) Decreasing volume throught a fractal

 

6) Increasing - decreasing - increasing volume to build a fractal

 

7) Pace Levels

 

8) Pace acceleration

 

9) Pace deceleration

 

9) Acceleration - deceleration - acceleration to build a fractal

 

10) Dry up pace volume

 

11) Medium pace volume

 

12) Fast pace volume

 

13) Extreme pace volume

 

14) Peak volume

 

15) Peaks

 

16 ) Troughs

 

17) Multiple fractal build

 

18) Gaussian

 

19) Intra bar Gaussian shift

 

20) B2B

 

21) R2R

 

22) B2R

 

23) R2B

 

24) B2B 2R 2B

 

25) R2R 2B 2R

 

26) Pro rata volume

 

27) 81 bars of - 5 minute volume

 

28) Volume relation to price

[Spydertrader 10]

28)

 

That's some list you have there.

 

However, I encourage everyone to keep this process as simple as possible.

 

For example, those who focus making decisions and taking action at the end of a bar, have no need for Pro-Rata Volume (a calculation which anticipates future, at end of bar, Volume as a function Current Volume [now]). One observes PRV while learning to transition from 'taking action' at end of bar to taking action intra-bar.

 

Some other things (on your list) give the appearance of redundancy.

 

In other words, no need to focus on a laundry list of items.

 

- Spydertrader

[Spydertrader 10]

For the purposes of this discussion, you have simplified matters by gathering all of these non-traverse fractals into a single fractal which is called 'the tape'.

 

One cannot 'gather together' that which does not exist.

 

While certainly, additional trading fractals (beyond skinny, medium and thick) do exist, they reside not 'in between' skinny and medium, but rather, below (or faster than) a skinny line.

 

As a result, we rarely see them. However, when we do see these faster (than skinny line) fractals, they operate in the exact same fashion as all other fractals (skinny, medium and thick) which we see each and every day.

 

While the remainder of your question provides logical points which one can observe as correct or incorrect - simply by viewing a thoroughly annotated chart, the question leaves out one very important point.

 

What role (if any) does 'context' play in the application of your conclusion?

 

One can, quite easily, find themselves far 'off track' simply by applying the correct rule to the in-correct context. For this very reason, I have recommended everyone learn to differentiate the 'subtle differences' which develop time after time.

 

To that end, I plan to post another differentiation drill later this weekend.

 

While you may feel that I have failed to answer your question sufficiently, if you read my response closely, you should see that I have provided you valuable direction.

 

HTH.

 

- Spydertrader

[ljyoung 10]

One cannot 'gather together' that which does not exist.

 

While certainly, additional trading fractals (beyond skinny, medium and thick) do exist, they reside not 'in between' skinny and medium, but rather, below (or faster than) a skinny line.

 

As a result, we rarely see them. However, when we do see these faster (than skinny line) fractals, they operate in the exact same fashion as all other fractals (skinny, medium and thick) which we see each and every day.

 

While the remainder of your question provides logical points which one can observe as correct or incorrect - simply by viewing a thoroughly annotated chart, the question leaves out one very important point.

 

What role (if any) does 'context' play in the application of your conclusion?

 

One can, quite easily, find themselves far 'off track' simply by applying the correct rule to the in-correct context. For this very reason, I have recommended everyone learn to differentiate the 'subtle differences' which develop time after time.

 

To that end, I plan to post another differentiation drill later this weekend.

 

While you may feel that I have failed to answer your question sufficiently, if you read my response closely, you should see that I have provided you valuable direction.

 

HTH.

 

- Spydertrader

 

Thank you for your thoughts. You answered my question with sufficiency.

 

The choice of the phrase 'in between' was reached after some consideration and is best viewed as a functional description of what I see. IMO, the basic unit of 'PV currency', if you will, for the traverse trader is the 2 bar tape which is the most simple type of what you call a 'skinny fractal'.

 

There is a large component of context present in what I discussed, though it may either be unapparent or appear to be different from other sorts of context. The basic principles of the PV relationship are adhered to.

 

In passing let it be said that it is very nice indeed to have a pleasant portal which permits a frequently meaningful exchange of ideas about the method. The periodic purveyors of maltransference are voided with logical thought not howling and screaming or worse, magical thinking.

 

Catch you later.

 

lj

Edited July 25, 2009 by ljyoung
phrase change

[Spydertrader 10]

Drawing tapes to translating bars should rarely cause anyone difficulty. After all, connecting higher lows and higher highs (or lower highs and lower lows) represents the easiest of all tapes to draw. However, the majority of our trading day contains bars which do not show translation. We've already discussed some of these examples (Stitch & Lateral Formations), but what about the other internals?

 

Perhaps, a bit of differentiation with respect to Pennants can provide some clarity. The quickest bit of differentiation results from what type of Pennant the market has created.

 

Flat Top Pennant (FTP)

Flat Bottom Pennant (FBP)

Symmetrical Pennant (Sym)

 

(Examples Attached)

 

 

What else might differentiate these three - from each other and from the rest of the market?

 

Grab a clean copy of Friday's 5 minute ES chart, and begin to look for subtle differences - again, between the three examples and between all three examples and the rest of the market day.

 

I'll start you off with one ...

 

Two of the three Pennants already have a 'built in' way to draw a trend line. The third example requires another bar in order to determine which trend line presents a correct view of the market.

 

Group the various differences together in order to form a consistant view (based on context), and apply that view onto all congruent contexts.

 

Take some time to focus on what develops after the market creates these pennants.

 

HTH.

 

- Spydertrader

[jbarnby 10]

What else might differentiate these three - from each other and from the rest of the market?

 

Grab a clean copy of Friday's 5 minute ES chart, and begin to look for subtle differences - again, between the three examples and between all three examples and the rest of the market day.

 

 

Take some time to focus on what develops after the market creates these pennants.

 

I took the charts for Thursday and Friday and removed all annotations. I decided to begin with FBP and FTP formations. I highlighted all FBP/FTP's for those two days. After review, here are some early findings.

 

In an uptrend, FTP's usually BO with increasing volume in the direction of the trend, thus presenting continuation in the direction of the tape created by the FTP. Same applies for FBP in a downtrend.

 

In an uptrend, FTP's which break to the downside seem to indicate a change in mode, but volume on the BO bar is telling. If the BO bar is decreasing volume, it's usually a minor retrace or the beginning of a lateral formation. A BO to the downside on increasing volume seems to suggest a shift in trend. The same principle applies to FBP's in a downtrend.

 

I also noted FTT's following FBP/FTP on a couple of occasions, which seemed to have occurred on higher (peaking) volume.

 

As stated, these are early finding, and I hope I'm approaching this correctly. Tomorrow I plan to add SYM pennants to the review.

[TIKITRADER 10]

Firday's ES chart. All Ftp, Fbp and Sym pennants labeled. Sym pennants marked.

Sym pennants can be contained within laterals.

Also Sym pennants can be found at points of change from dominance and non dominance.

 

volume removed to focus on the price formations

[NYCMB 10]

Here's another one, in case you were ever wondering (like me ) what the hell was built that day.:doh:

 

Hi romanus,

No offense here. It's very suspecious that the pink trendlines (starts at the 3rd bar) represent ES 5 min traverse. Based on your gaussians, real point 3 occured on the RTL of a tape. Could you clarify it? TIA

[jbarnby 10]

Continuing with the pennant drill, my observations are similar to Tikitrader's in that SYM pennants are often located where the market is transitioning from non-dom to dom...or 2-3 of some goat. I tried to differentiate SYM pennants by volume, noting that usually the second (internal) bar of the pennants have decreasing volume when compared to the first bar. One example I found which is different is 1545 on Friday. The 1545 pennant has increasing volume on the second (internal) bar of the pennant, which is interesting because at this point the market returned to the dominant trending direction.

[NYCMB 10]

Hi Spydertrader,

 

I have Dotted, Orange and Light green Lateral Formations. Does any of them end on wrong bar? TIA

[Spydertrader 10]

I have Dotted, Orange and Light green Lateral Formations. Does any of them end on wrong bar?

 

You should arrive at the answer you seek by applying the answers in this post onto your annotated chart snippet.

 

HTH.

 

- Spydertrader

[dkm 10]

 

What else might differentiate these three - from each other and from the rest of the market?

- Spydertrader

 

This is too vague.

 

Group the various differences together in order to form a consistant view (based on context), and apply that view onto all congruent contexts.

- Spydertrader

Since "context" has never been defined, this is also too vague.

 

HTH.

 

- Spydertrader

NR

 

Comparison attached

ftp differentiation.xls

[Spydertrader 10]

... in this post ...

 

If anyone has experienced difficulty with the above link, it should take you to post #110.

 

- Spydertrader

[rs5 10]

Greetings Spydertrader and all! Continuing the learning here...

[rs5 10]

The lateral formation continues until terminated with two closes outside the Lateral boundaries (created from the High / Low of Bar 1) - except where the 'two closes' form a 'flaw.' In such a case, we require a 'third' close outside the lateral boundary in order to have reached 'termination' of the previous lateral.

 

- Spydertrader

 

Will you give a graphic example of a "flaw" please?

[Spydertrader 10]

Will you give a graphic example of a "flaw" please?

 

You've already annotated the flaws on the chart attached to your previous post.

 

- Spydertrader

[rs5 10]

How embarrassing! I feel like a kindergartner attending a college class. Is the reduction in vol the flaw in this lat?

[Spydertrader 10]

Is the reduction in vol the flaw in this lat?

 

See Attached.

 

 

- Spydertrader

[Spydertrader 10]

 

What else might differentiate these three - from each other and from the rest of the market?

 

This is too vague.

 

Sesame Street teaches young children how to look for differences in things by using muppets and singing songs.

 

[ame=http://www.youtube.com/watch?v=tZIvgQ9ik48]YouTube - One of these things is not like the other things.[/ame]

 

Since "context" has never been defined, this is also too vague.

 

An online dictionary defines context as ...

 

"the set of circumstances or facts that surround a particular event, situation, etc."

 

Applying this definition, we can understand hearing someone yell, "Fire!" - while observing an execution by firing squad provides a far different meaning than hearing someone yell, "Fire!" while sitting in a crowded movie theater.

 

In the latter, the word 'fire' represents a 'noun' (i.e. "Something is burning"). In the former, the word 'fire' represents a 'verb' (i.e. "Pull the trigger and shoot the guy").

 

Context (the location or circumstances which surround the event) alters the meaning of the word.

 

Certainly, everyone can think of circumstances (or events) whereby the context in which the trader views Price and Volume (Monitor) alters the meaning (analysis) of what the market has signalled.

 

HTH.

 

- Spydertrader

[dkm 10]

Sesame Street teaches young children how to look for differences in things by using muppets and singing songs.

- Spydertrader

 

An amusing analogy but not entirely correct. Sesame Street actually points out the correct answer. To set tasks and never give an explanation is no way to achieve transference.