The Price / Volume Relationship

[nkhoi 10]

  vienna said:

Like I said, probably my fault, perhaps there are some basics that I am missing.You guys seem to be quite ahead on the curve. I would have to ask some pretty basic questions, and thought I save everyone some time if a document exists that clears that up...

a pic worths thousands words put up a pic with some lines on it, we can take it from there.

[nkhoi 10]

  Spydertrader said:

Alright.

 

Now, we are getting somewhere. You've narrowed things down to a binary choice.

 

Which Trough best represents the market fractals in terms of 'nesting'?

 

...

 

- Spydertrader

looking at a official doc I think this is the answer.

Edited October 10, 2010 by nkhoi

[vienna 10]

Yes as a matter of fact I did... will study it. Right now it is chinese.

 

  Spydertrader said:

Perhaps, you missed the following ...

 

http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-54.html#post104382

[vienna 10]

Ok you were forewarned.. wanted to save you guys the trouble Like I said, it seems I am missing some basics....this is an older post from spyder.

 

  nkhoi said:

a pic worths thousands words put up a pic with some lines on it, we can take it from there.

[vienna 10]

And this one too....you will now understand what I don't understand....

 

  nkhoi said:

a pic worths thousands words put up a pic with some lines on it, we can take it from there.

[nkhoi 10]

  vienna said:

Ok you were forewarned.. wanted to save you guys the trouble Like I said, it seems I am missing some basics....this is an older post from spyder.

look left does 2B > R2R volume?

[nkhoi 10]

  vienna said:

And this one too....you will now understand what I don't understand....

no idea, you just has to ask the author of the pic.

[vienna 10]

My try:

 

If your Gaussians show you R2R, where are you with respect to the order of events?

- You are at the top of an upchannel (or traverse). You have created a point 1 for a new downchannel, and that point one is the FTT of the old upchannel (or it bounced off the LTL of the old upchannel).

 

If your Gaussians show you R2R 2B, where are you with respect to the order of events?

- You have now created a point 2

 

If your Gaussians show you R2R 2B 2R, where are you with respect to the order of events (and what then do you want to see to tell you this order of events has ended)?

- you have now created a point 3... you now want to see increasing red volume for the next dominant traverse of the new down channel

 

??

[patrader 10]

  vienna said:

No... I was just trying to find a clear summary on how to draw gaussians... I looked at that drill but do not think I could complete it if I do not know how to draw them correctly.

 

Vienna,that comment was directed to nkhoi who referred readers to the "refinement thread" (Iterative Refinement) but i believe meant Spydertrader's Jack Hershey Futures Trading Journal page 264 gaussian drill.hth

[Spydertrader 10]

See Attached.

 

 

Note what decreasing black line stands for.

 

- Spydertrader

[Spydertrader 10]

  vienna said:

If your Gaussians show you R2R, where are you with respect to the order of events?

- You are at the top of an upchannel (or traverse). You have created a point 1 for a new downchannel, and that point one is the FTT of the old upchannel (or it bounced off the LTL of the old upchannel).

 

Incorrect. R2R places you squarely at a Point Two

 

  vienna said:

If your Gaussians show you R2R 2B, where are you with respect to the order of events?

- You have now created a point 2

 

Incorrect. The market has moved from Point Two through a non-dominant retrace and to the Point Three.

 

  vienna said:

If your Gaussians show you R2R 2B 2R, where are you with respect to the order of events (and what then do you want to see to tell you this order of events has ended)?

- you have now created a point 3... you now want to see increasing red volume for the next dominant traverse of the new down channel??

 

Incorrect. The market has moved from the Point Three and has headed back toward the Left Trend Line (LTL). The time has arrived for you to locate an FTT on your trading fractal.

 

HTH.

 

- Spydertrader

[Spydertrader 10]

  vienna said:

And this one too....you will now understand what I don't understand....

 

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

 

- Spydertrader

[saturo 10]

  Spydertrader said:

Alright.

 

Now, we are getting somewhere. You've narrowed things down to a binary choice.

 

Which Trough best represents the market fractals in terms of 'nesting'?

 

You've drawn things one way (as did Nkhoi in an earlier post), but another possible way also exists.

 

My understanding is that the nesting choice depends on the layout of RTLs.

 

In my graphic you see the "fast" fractal B2B breaks out of the prior "fast" RTL *and* the prior "medium" RTL so the medium B2B trough is placed coincident with the fast B2B trough.

 

The alternative - placing the medium B2B trough at the fast fractal 2R - implies that all of the medium level black volume has been non-dominant. Since we saw a medium RTL break out this is not the case.

 

As always - I might be wrong

[vienna 10]

Ok got it that is helpful, thanks!

 

  Spydertrader said:

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

 

- Spydertrader

[vienna 10]

That's what I mean... basics. Got it, thanks.

  Spydertrader said:

See Attached.

 

 

Note what decreasing black line stands for.

 

- Spydertrader

[nkhoi 10]

see how fast you get a clear answer once you post a pic?

[Spydertrader 10]

  saturo said:

My understanding is that the nesting choice depends on the layout of RTLs.

 

Remember the goal of this exercise: Accuracy and Precision. In other words, we want to annotate correctly and consistantly - all day - every day we look at a chart.

 

You've arrived at an answer based on a 'context oriented' solution. In order to know whether your rationale for this context applies to all other contexts, one must then locate a scenario where you feel a different solution applies and test accordingly.

 

Keep in mind the possibility your mind may have merged several concepts together (such as Point One's always overlap, Point Three's occassionally overlap, but Point Two's never overlap) in an effort to arrive at a solution to an old problem. I'm merely suggesting a better way to know whether (or not) a solution represents the solution.

 

One must always allow the market to provide the answers.

 

HTH.

 

- Spydertrader

[wind_ 11]

  Spydertrader said:

O.K. look away from the charts again (for a moment).

 

Review this post.

 

 

Thanks for pointing me to that post. From the image in that post:

 

I can see that for a single fractal case, B2B's through is located at the right trendline of previous down container just before it broke out with increasing volume. So for any fractal, am I correct by saying that B2B's trough is located at the last volume trough within previous container? This could happen at the first volume trough or 2nd volume trough of lower fractal, as long as it is within the previous container.

[Spydertrader 10]

  wind_ said:

I can see that for a single fractal case, B2B's through is located at the right trendline of previous down container just before it broke out with increasing volume.

 

Such is the case for this specific example, but not necessarily all examples. One must strive to locate solutions which apply to all contexts, and not, apply solutions which work for a singular event.

 

  wind_ said:

So for any fractal, am I correct by saying that B2B's trough is located at the last volume trough within previous container?

 

Ever see Price shoot straight down (like a rocket) on super high increasing Volume directly after an FTT of an Up container? Does your solution work for such a scenario?

 

  wind_ said:

This could happen at the first volume trough or 2nd volume trough of lower fractal, as long as it is within the previous container.

 

The market (for whatever reason) might not provide a trough until well after Price crossed my previous right trend line (RTL). Now what do I do?

 

HTH.

 

- Spydertrader

[Avi 8 10]

Here is a different view that may help.

 

[TIKITRADER 10]

/////////////////////////////////edit

Edited October 11, 2010 by TIKITRADER
nada

[wind_ 11]

  Spydertrader said:

Ever see Price shoot straight down (like a rocket) on super high increasing Volume directly after an FTT of an Up container? Does your solution work for such a scenario?

 

Thanks for pointing that out. You are right, I did not consider the possibility of price broke out with increasing volume of the previous container right after we have an FTT. This means that the volume dominance shift within one bar, so the non-dominance part of the volume should be seen within that BO bar.

 

In this case, if I apply the same logic, I will put the trough on that BO bar.

[Spydertrader 10]

  wind_ said:

In this case, if I apply the same logic, I will put the trough on that BO bar.

 

Whatever conclusion you reach (based on a sufficient data set), make sure to test it against that which the market provides.

 

- Spydertrader

[wind_ 11]

  Spydertrader said:

Whatever conclusion you reach (based on a sufficient data set), make sure to test it against that which the market provides.

 

Thanks Spydertrader for this helpful guidance, and gucci for providing the initial question. I didn't think it was important to put the correct through before this discussion. I will review some charts to see if I can apply this hypothesis to the market consistently.

[cnms2 10]

  wind_ said:

Thanks Spydertrader for this helpful guidance, and gucci for providing the initial question. I didn't think it was important to put the correct through before this discussion. I will review some charts to see if I can apply this hypothesis to the market consistently.

"... So B2B means Black 2 Black and that is a description of the price and volume move from point 1 to point 2 of the parallelogram that forms the analytical container used for decision making to continually extract money from the markets. Point 1 is beginning of B @ a peak in volume. The volume reaches a trough at 2, the BO of the RTL. So the trader "reads" this as increasing price and decreasing volume. A more general term is used for price;from H1 (Hypothesis 1) the term is continuing. The trough of volume coincides with the BO of the RTL. Price is B as it goes frther outside the old trend to a point 2 where volume is increasing to its peak. ..."