The Price / Volume Relationship

[cnms2 10]

  Breakeven said:

... everything from 7/16 onwards just "worked". ...

You may want to go further back to early July, then mid June.

[saturo 10]

About degapping -

 

I have found that the PV patterns stay consistent as they cross from RTH to ON and ON to RTH. I use a 15 minute and 60 minute chart to see the volume trends during the ON session. If you just apply the logic we all know and love - you'll find that it works!

 

For example - today's RTH ended with the market making a DOM black tape on the 5 min. The highest volume pace was extreme... and the volume trend over the tape was falling into the close.

 

The first 15 minute ON bar was green... so it was WITH the trend of the closing tape. Falling volume with the trend tells us to look for change. The next bar of the ON kicked off a R2R.

 

Here's the cool thing. Once we see DOM black volume again - there is NO WAY it will best the volume levels on the tape that closed RTH. So *categorically* the yet unseen DOM black volume will END the sequence of the long traverse that the market was making during RTH.

 

Once the market has "tied off" the unfinished business from RTH - then it's just like a normal chart - just much much lower pace.

 

The same thing applies when transitioning into RTH. Today for example bars 1-2 terminated the short trend that ended the ON session.

[saturo 10]

  saturo said:

The first 15 minute ON bar was green... so it was WITH the trend of the closing tape. Falling volume with the trend tells us to look for change. The next bar of the ON kicked off a R2R.

 

Here's the cool thing. Once we see DOM black volume again - there is NO WAY it will best the volume levels on the tape that closed RTH. So *categorically* the yet unseen DOM black volume will END the sequence of the long traverse that the market was making during RTH.

 

DOM has switched back to black on the ON session. There was a VE coincident with Australia's monetary policy annc. We are sitting near the LTL.

 

So far we have B2B only. When the volume sequence completes - it is the end of the long traverse being built during RTH. There is just no way there will be sufficient P&V to continue that trav.

[saturo 10]

Looks like the volume sequence is nearing completion. We have 2R and we are just waiting for a definitive 2B/FTT. When this happens the last trav of RTH also completes and we have a pt1 of a new traverse.

 

This traverse may end during the ON session or it may carry over into tomorrow's RTH. If it DOES it will also be consistent with the de-gapped chart. This helps you really get on top of the opening.

[emac 10]

  saturo said:

Looks like the volume sequence is nearing completion. We have 2R and we are just waiting for a definitive 2B/FTT. When this happens the last trav of RTH also completes and we have a pt1 of a new traverse.

 

This traverse may end during the ON session or it may carry over into tomorrow's RTH. If it DOES it will also be consistent with the de-gapped chart. This helps you really get on top of the opening.

 

Hi Saturo,

 

Can you post a chart to show what you are describing ? Thanks.

 

emac

[saturo 10]

The DOM short traverse that began ON did not complete by the start of RTH.

 

The first long tape of RTH was the 2B (which also ended the degapped long traverse from the prior day) - followed by 2R to complete the ON traverse/establish a new short trend on the degapped chart.

 

If I have some time this weekend I'll put together some graphics.

 

One very interesting thing about the ON session is that you get predictable pace shifts when various world markets open. This helps you to "see" what a pace shift looks like. This is very useful for situations like a pace shift on a non-DOM (which can be very confusing and you end up screwing up your annotations).

[patrader 10]

Try this link for Jan Tucson '07 JH files 4shared - My 4shared - shared folder - free file sharing and storage

[emac 10]

Yesterday as I see it. The challenge is to remain on the right fractals during the low pace periods. Appreciate comments on errors and any corrections needed. TQ.

[emac 10]

Continuation. ND 2B channel with a r2r forming ...

[emac 10]

continuing to share and learn and hopefully for other newbies to learn as well.

Lower pace on opening resulted with FBO and a fan with new PT 3 . R2R followed FTT onwards...

Edited August 15, 2010 by emac

[cnms2 10]

  emac said:

continuing to share and learn and hopefully for other newbies to learn as well.

Lower pace on opening resulted with FBO and a fan with new PT 3 . R2R followed FTT onwards...

I've annotated that area a little differently (snippet from your chart).

[cnms2 10]

I'd like to venture an idea: if Volume leads Price, then an accurate gaussian annotation should show this too.

Edited August 16, 2010 by cnms2
stereogram

[emac 10]

  cnms2 said:

I'd like to venture an idea: if Volume leads Price, then an accurate gaussian annotation should show this too.

 

Hi cnms2,

 

Thanks for pointing out the error. Much appreciated.

 

On your post above, I can only see a greyed out pic. Is that intended ?

[cnms2 10]

  emac said:

... On your post above, I can only see a greyed out pic. Is that intended ?

It is a stereogram that reads: VOLUME LEADS PRICE. It's like when a chart shows nothing meaningful to the untrained eye / mind.

[saturo 10]

Let's suppose you have a non-dominant 2R on your trading fractal.

 

By definition that means it is preceded by B2B and followed by 2B.

 

Now - we drill down and see R2R in the Non-dom 2R. This is followed by a PACE increase on the drilled down 2B. This PACE increase mimics the 2B of the higher fractal.

 

Fractal jumping ensues... trader reverses short but the sequence is not complete.

 

Any advice from the old hands here on things to look for to avoid jumping a fractal in this situation?

[cnms2 10]

  saturo said:

Let's suppose ...

Post a chart ... .

[MKTr 10]

Friday. 20 Aug 2010.

 

MK

[Spydertrader 10]

  saturo said:

Any advice from the old hands here on things to look for to avoid jumping a fractal in this situation?

 

Begin your annotations for your down container from the correct Point One.

 

- Spydertrader

[emac 10]

Concerning annotating correctly, I started with bar 29 b2b followed with 2r and then a 2b pt 3 ending 1300 hrs. So I drew a traverse for the 2B after the R2R on open that ended on at bar 29 FTT.

 

Then at bar 42 r2r broke followed by ND tape down that lasted till 1405hrs bar 55 . My question is since I already have a traverse, then how would I know the bar 42 r2r is not the beginning of 2R Dom traverse down at that point of time even up till bar 55?

 

As it turns out, price made a higher high on bar 61 tape which gave me an FTT at bar 61. So I would have the ND 2B (bar 29- 61traverse).

 

So at that point of time, how would i know that the 2B Long has not ended at 61 ? At the moment, I reasoned that at bar 61, the gaussians volume was too low to make a FTT on the traverse as I would expected a vol closer to or in excess of the b2b move (>20K) for a peaking volume. But it is awfully close on the graph to discern a real difference.

 

The same issue arise on the Pt 3 move starting bar 55 till 71. When the ftt started after bar 61, my mind was asking , is the 2B over ? As it turns out the next 2 red bars had no IRV and at bar 64, and we have another 2b tape up. From bar 55 to bar 71, it looks to be a tape that has been fanned twice at bar 63 and bar 67 but my BIG question is at that point of time , how can I tell that it is still going to go up (unless use the gaussians but sometimes DRV can be deceiving as a nested r2r hidden inside).

 

To date, one of my big challenge is to correct annotate and anticipate the price moves correctly before moving to the finer tools.

 

I would appreciate if someone can pose an alternative chart for comparison and share their thoughts on this issue.

 

TQVM !

Edited August 23, 2010 by emac

[MKTr 10]

19 August 2010.

 

MK

[Spydertrader 10]

  emac said:

Concerning annotating correctly, I started with bar 29 b2b followed with 2r and then a 2b pt 3 ending 1300 hrs.

 

My apologies.

 

It appears I have inadvertantly attributed your issue to the DOWN containers which ended at noon. I recommend not applying my comments (with resepct to the down containers) onto your issue with the Up containers (which commence at noon).

 

With respect to fractal jumping you can locate the solution to your concerns by using the exact same logic used when driving a car.

 

When driving your car, how do you know when you've arrived at where you are going? Understand the process used to determine the answer (to my question about the car), and you'll find the missing piece which caused you to ask your question (about fractal jumping) in the first place.

 

There is only ever one problem (question) in life: "How do you go about the process of solving problems (questions)?"

 

- Spydertrader

[emac 10]

  Spydertrader said:

My apologies.

 

It appears I have inadvertantly attributed your issue to the DOWN containers which ended at noon. I recommend not applying my comments (with resepct to the down containers) onto your issue with the Up containers (which commence at noon).

 

With respect to fractal jumping you can locate the solution to your concerns by using the exact same logic used when driving a car.

 

When driving your car, how do you know when you've arrived at where you are going? Understand the process used to determine the answer (to my question about the car), and you'll find the missing piece which caused you to ask your question (about fractal jumping) in the first place.

 

There is only ever one problem (question) in life: "How do you go about the process of solving problems (questions)?"

 

- Spydertrader

 

Dear Spydertrader,

 

Thanks for your comments. I am not sure if I understood your answer (sounds cryptic ). Nevertheless, when I do drive, I set my destination mentally, determine the best route subconsciously and start driving there. I get there when I can see that I am there and probably my subconscience will tell me I got there. By the same token, you are saying that I should mentally already have set my target (anticipation) and then having to see the process of the market getting there to confirm it. My question is how do I know for e.g. the 2B traverse would end at bar 42 at the close of bar 42 - much like I know the 2B traverse will follow but how long will the journey to a destination take and what route will it take to get there ? I am looking for markers on the road as part of the MA (DA) which I have missed in my annotations or should I like many cases, let the market show me where it is going and annotate accordingly, after which only I see where and what it has done to determine the next move ?

 

Apologize for not able to get it the first go from your answer but I am working on it .

[cnms2 10]

  emac said:

... My question is how do I know for e.g. the 2B traverse would end at bar 42 at the close of bar 42 - much like I know the 2B traverse will follow but how long will the journey to a destination take and what route will it take to get there ? ...

If I count correctly you're asking about bar 43 (?). It might be a good exercise to list all the reasons you should hold long and all the reasons you should reverse short at the close of that bar (closing at 1305). I've cropped your chart.

[Spydertrader 10]

  emac said:

Apologize for not able to get it the first go from your answer but I am working on it .

 

Review the car question again. Then, review your response.

 

According to your response, the (subconsciously determined best) route you travelled, somehow, represents a determining factor as to whether (or not) you have arrived at your destination.

 

Really?

 

The car question, while appearing cryptic at first glance, shows you how to determine the exact nature of a problem. Your response includes information not requested by (nor relavent to) the question itself.

 

The car question (like remaining on the same fractal) requires a certain level of information in order to respond correctly. Not more information, and certainly not less information, than required. Responding outside the required parameters causes the indivdual (driver or trader) to arrive at the incorrect conclusion.

 

Think. "How do you know you have arrived at your destination?"

 

What you do not see in the correct answer to this question is also what you do not see when you ask questions of the market. Once you fully understand the car question, then (and only then) should you attempt to apply what you have learned onto the market.

 

In other words, if you cannot understand the answers provided by the market, ask it different questions.

 

HTH.

 

- Spydertrader

 

There is only ever one problem (question) in life: "How do you go about the process of solving problems (questions)?"

 

P.S. Another way to do the same question is to ask, "How do you know you have not arrived at your destination when driving your car?" Some people find it easier to understand the first question by working on the second question first.

[saturo 10]

  Spydertrader said:

Begin your annotations for your down container from the correct Point One.

 

- Spydertrader

 

:doh:

 

After letting your simple statement marinate.. I let myself see that I was not letting the R2R or B2B sequence fully complete before jamming a pt1 in there for the next phase. tks.