The Price / Volume Relationship

[frenchfry 10]

  romanus said:

In the chart that I posted for every line drawn in volume pane (gaussian) there exist a corresponding pair of lines (trendlines) drawn in price pane. The relationship between those two ( namely a pair of trendlines and gausisan line) can be described using the verb "match". Where do you see the contradiction between your premise ("...the gaussian lines should ALWAYS match the trendlines...") and what is drawn?

 

There is maybe no contradiction but probably more a knowledge gap on my side. I look at your chart and I see your blue channel. I see where you probably put your points 1, 2 and 3. Then I look at the the gaussians (the thicker ones) below. There I see b2b = point one to point two. The 2b part of this b2b is not where I see point two (which of course can be wrong). Then it goes 2r which should be point 3 of that channel. But it seems that point 3 comes later. I hope this description helps.

 

Greetings.

[PTVtrader 10]

I appreciate the renewed interest in the thread (very thought provoking), thought I'd post a chart.

[frenchfry 10]

  PTVtrader said:

I appreciate the renewed interest in the thread (very thought provoking), thought I'd post a chart.

 

Can you please clarify what "PFC", "m1" and "m2" mean?

 

Thanks.

[TIKITRADER 10]

  frenchfry said:

Can you please clarify what "PFC", "m1" and "m2" mean?

 

Thanks.

 

 

I can help you there. Pre Flight Check, and Move1 and Move2

[sambrown 10]

  TIKITRADER said:

One more lateral that meets current topic.

 

 

Differentiation

 

Context

 

Order of events

 

I would say more bars are needed before the laterals to know which direction both of these laterals will exit.

If the first bar (bar before the lateral) of both laterals are PT1s, then you know the laterals are retraces from PT2 to PT3 and the price will exit in the same direction as PT3.

But if the first bar of the laterals are after PT3 and hence the up cycle is complete, the direction of price will be depending on the order of events inside the laterals.

Edited January 30, 2010 by sambrown

[cnms2 10]

  frenchfry said:

There is maybe no contradiction but probably more a knowledge gap on my side. I look at your chart and I see your blue channel. I see where you probably put your points 1, 2 and 3. Then I look at the the gaussians (the thicker ones) below. There I see b2b = point one to point two. The 2b part of this b2b is not where I see point two (which of course can be wrong). Then it goes 2r which should be point 3 of that channel. But it seems that point 3 comes later. I hope this description helps.

 

Greetings.

My view. .

[romanus 10]

  frenchfry said:

There is maybe no contradiction but probably more a knowledge gap on my side. I look at your chart and I see your blue channel. I see where you probably put your points 1, 2 and 3. Then I look at the the gaussians (the thicker ones) below. There I see b2b = point one to point two. The 2b part of this b2b is not where I see point two (which of course can be wrong). Then it goes 2r which should be point 3 of that channel. But it seems that point 3 comes later. I hope this description helps.

 

Greetings.

I could be mistaken, but I am going to assume that your "operational definition" of Point Two is the location on the price pane where the LTL touches the price bar. And personally, as far as the definitions go in general, confusing the definition with an assumption is what gets me in trouble all the time.

[cnms2 10]

  PTVtrader said:

I appreciate the renewed interest in the thread (very thought provoking), thought I'd post a chart.

I don't think those are m1-m2, but a three move retrace.

[Ezzy 10]

  romanus said:

I wonder why the 1540-1555 can't be considered as b2b2r2b on some super-extra-fast level?

 

Yes there can. Didn't try to do them all, ran out of line weights. For example another one starting at 12:55.

 

But I not convinced that the one added at the end of day 15:55 still needs 2 more legs. Though it certainly appears to. It may be finished and we can't see it at this level, and the last bar of the day is change. We'll know Monday.

 

There are blue markers where the gaussian sequences come together. The finishing leg of the smaller fractal is drawn in. Usually you don't "see" that finishing leg as it gets absorbed into the 2nd half of the R2R or B2B. It makes annotating cleaner when it's absorbed, but there are still some people who have confusion on how they sync, or come together. So seeing it drawn this way may be of help.

[Ezzy 10]

  TIKITRADER said:

In this image is a lateral. This should be one that fits the the current topic.

 

Can the direction of this lateral exit be known with just the information shown ?

is there enough information here for . . .

 

1) Differentiation

 

2) Context

 

3) Order of events

 

 

This is for anyone who wants to answer any or all questions.

 

additionally . . . Spyder, could you just give a yes or no to each question here if possible ?

 

EDIT: All bars are finished, none are forming

Using snippets this short, much of the context and order of events is missing. It is really only useful for differentiating the object.

[TIKITRADER 10]

  Ezzy said:

Using snippets this short, much of the context and order of events is missing. It is really only useful for differentiating the object.

 

 

I agree, although is it possible to use a small amount of data to determine? This is to see what amount of information is needed to identify a lateral and understand a laterals direction. Understandably, the greater amount of information available, the better one can identify . . . but just how little the info available can still be enough to properly identify.

 

This is the first lateral I posted that conforms to Spyder's drill with a small addition of information.

 

With this additional info, do we have enough for

 

 

1) Differentiation

 

2) Context

 

3) Order of events

 

Anyone is welcome to comment.

Edited January 31, 2010 by TIKITRADER
spell error- add comment

[TIKITRADER 10]

This is the second lateral I posted that conforms to Spyder's drill.

 

Enough info to identify the lateral ?

 

Remember these are not trick questions. This is only to review just how little information is enough to identify the lateral.

[TIKITRADER 10]

  Spydertrader said:

Of course you looked for increasing Volume to confirm your Point Three, but what you failed to note was that the context was different here. Price found itself inside a Lateral. In such a case, the failure of the market to provide that which you anticipate is in fact, the signal for change.

 

I believe Jack used to call it, "What wasn't that?"

Again, the whole point of the exercise is for a trader to learn how to know which direction Price must head as it exits the Lateral.

 

HTH.

 

- Spydertrader

(all spyders comments in blue are highlighted to point out importance of his post )

 

In this example the lateral was properly differentiated, but the error was in the context.

 

So as we analyze each step to determine the direction of the lateral exit, the difficulty increases.

 

This is a work to know what a sufficient data set is to determine what kind of lateral has developed, and which direction it must exit the lateral.

 

 

Differntiation- easy enough, compare the developing lateral to known lateral builds.

 

Context - a little more complex with careful analysis- analyze the lateral and all the data it is forming in.

 

Order of events- Highest complexity requiring very careful analysis of the sequential order.

This is where the greatest potential for error can be. Critical to properly know where in the sequential order the lateral is forming and what must come next.

Edited January 31, 2010 by TIKITRADER
wording

[TIKITRADER 10]

Later today I will post the complete days the two laterals were chosen from.

[FilterTip 10]

  Spydertrader said:

Of course you looked for increasing Volume to confirm your Point Three, but what you failed to note was that the context was different here. Price found itself inside a Lateral. In such a case, the failure of the market to provide that which you anticipate is in fact, the signal for change........

 

- Spydertrader

 

Hi Spyder and all.

 

I'm having real trouble reconciling the above in bold.

 

By "anticipate", (in this respect we are "anticipating" increasing black volume to tell us we have the 2b of b2b2r2b) are we talking about WMCN in terms of the volume sequence that must complete, yes or no ?

 

Until this question is answered as "no", let us "presume" the answer is "yes".

 

So how are we to deal with the M in WMCN when you say that we had it by virtue of it not happening.?

 

You do state

  Quote

that the context was different here. Price found itself inside a Lateral.

.

I can only deduce, from what you say, that if price finds itself within a lateral then WMCN may not apply?

Edited January 31, 2010 by FilterTip

[cnms2 10]

  TIKITRADER said:

Later today I will post the complete days the two laterals were chosen from.

Maybe the lack of response to your drill is due to the weekend break, and you should leave it open until people have more time to think about it, and express opinions. Most of us aren't yet able to anticipate correctly how a lateral will develop from 4, 5 or more bars, but everybody could try to annotate it and make observations about each bar's volume, price, closing, about groups of bars, trends, etc.. Not knowing what follows has the advantage of keeping us ... honest

[NYCMB 10]

  frenchfry said:

There is maybe no contradiction but probably more a knowledge gap on my side. I look at your chart and I see your blue channel. I see where you probably put your points 1, 2 and 3. Then I look at the the gaussians (the thicker ones) below. There I see b2b = point one to point two. The 2b part of this b2b is not where I see point two (which of course can be wrong). Then it goes 2r which should be point 3 of that channel. But it seems that point 3 comes later. I hope this description helps.

 

Greetings.

 

Hi frenchfry,

 

This chart is specially for you. HTH

Edited January 31, 2010 by NYCMB

[TIKITRADER 10]

  cnms2 said:

you should leave it open until people have more time to think about it, and express opinions.

 

 

 

Sounds good. I will leave it all week and when everyone is ready the complete charts will be posted

[Spydertrader 10]

  FilterTip said:

I'm having real trouble reconciling the above in bold.

 

When presented with a situation (problem) where no clear solutions appears to exist, I often encourage people to look at said situation from an alternative point of view.

 

  FilterTip said:

By "anticipate", (in this respect we are "anticipating" increasing black volume to tell us we have the 2b of b2b2r2b) are we talking about WMCN in terms of the volume sequence that must complete, yes or no ?

 

Yes.

 

  FilterTip said:

So how are we to deal with the M in WMCN when you say that we had it by virtue of it not happening.?

 

  Spydertrader said:

To give yourself a hint. Take a look at the YM for this period of time

 

  FilterTip said:

I can only deduce, from what you say, that if price finds itself within a lateral then WMCN may not apply?

 

No.

 

- Spydertrader

[FilterTip 10]

Thx for your replies.

 

With respect to:

  Quote

I can only deduce, from what you say, that if price finds itself within a lateral then WMCN may not apply?

No

 

is it correct to conclude the following;

1) that by price being within a lateral we have permission to look at the YM?

 

2) and in doing so then the lateral is both the object and the context?

 

3) and if so that the YM is to be included in the information we are using, in order to know which way price will exit a lateral?

 

Thx

Edited January 31, 2010 by FilterTip

[Spydertrader 10]

  FilterTip said:

is it correct to conclude the following;

1) that by price being within a lateral we have permission to look at the YM?

 

No.

 

  FilterTip said:

2) and in doing so then the lateral is both the object and the context?

 

No.

 

  FilterTip said:

3) and if so that the YM is to be included in the information we are using, in order to know which way price will exit a lateral?

 

No.

 

- Spydertrader

[FilterTip 10]

Thx for your replies...

 

Hmmm...

I'm not following then because what you say (in bold)

 

"Of course you looked for increasing Volume to confirm your Point Three, but what you failed to note was that the context was different here.Price found itself inside a Lateral. In such a case, the failure of the market to provide that which you anticipate is in fact, the signal for change........"

 

This does imply that it is the lateral that is the context does it not?

 

With respect to your "hint to take a look at the YM",

there obviously must be a reason to do so.

 

Is it that we are given permission to look at the YM because price (in this instance) was in a formation (a Sym at 9:45 and indeed followed by a FBP) rather than just a lateral?

 

 

This is all in respect of:

"So how are we to deal with the M in WMCN when you say that we had it by virtue of it not happening.?"

 

Without a resolution to which, I'm finding it difficult to know when I should still anticipate a part of the volume sequence to complete or whether it has done so by not completing.

 

Thx..

[Spydertrader 10]

  FilterTip said:

This does imply that it is the lateral that is the context does it not?

 

No.

 

  FilterTip said:

With respect to your "hint to take a look at the YM",

there obviously must be a reason to do so.

 

Yes.

 

  FilterTip said:

Is it that we are given permission to look at the YM because price (in this instance) was in a formation (a Sym at 9:45 and indeed followed by a FBP) rather than just a lateral?

 

No.

 

-Spydertrader

[sambrown 10]

  TIKITRADER said:

Later today I will post the complete days the two laterals were chosen from.

 

Thanks for the drills TIKI.

I will take a shot at the first lateral.

[frenchfry 10]

Hello cnms2 and NYCMB,

 

thank you far taking some of your time and your efforts! And of course thanks to TIKI but at the moment I need a break from hammering myself with laterals. :-)

 

cnms2 and NYCMB, your channels/containers seem to be identical. However with your annotation cnms2 I'm not too sure what you are trying to tell me. Are you saying those gaussians below are correct? If so here is what blocks me: In my world b2b2r mean point 1 to point two to point 3. Which means I have a container with three points. But at the moment I don't see a container which belongs to those gaussians. I see you try to show me to which "segment" the 2r part belongs but then point two is in the wrong place?

 

This is maybe where NYCMB comes into play with what he calls "Real p2". Real point 2? What's that? Is my first reaction. :-) If I draw a channel (or should I say container), then at the beginning I define where my point 1, 2 and 3 are. Everything that follows thereafter either must be an FTT... well... now I have to think... or a VE with a new point two(?). But the bar which you marked with 47 to me looks more like an FTT (and cnms2 seems to confirm it) of your dotted green container not a VE with a new point two. But at the end I could also be wrong.