The Price / Volume Relationship

[cnms2 10]

  zt379 said:

... For me, this is only about how to know to what fractal the gaussian relates.

 

If the solution, to understanding how to determine what fractal we are on, is about volume peaks and troughs then it would be great to have the general principles explained on that as I do not recall them being given in this thread, nor indeed in any of the threads that I have been following for at least the last 4 years !

 

many thx

Spydertrader's first words of this thread:

  Quote

Volume leads Price. Always. And without exception.

 

In order to comprehend how the above statement (both in concept and in practice) represents a true and accurate assessment of market dynamics, a trader needs to understand the basic structure of all markets and how such markets operate. Since all markets represent a fractal nature, it turns out, Mandelbrot had it right all along. By correctly and thoroughly applying a framework, in an effort to ‘see’ the various fractals operating on a market, a trader can begin to see the Price / Volume Relationship at work – all day, every day.

 

Succinctly, unless and until the components of one fractal reach completion, the next slower fractal cannot begin. It trading terms, unless and until the Volume Cycle Sequences reach completion, the current Price Trend cannot end.

 

In general terms: if Volume is increasing, then the Price Trend is continuing. ...

(my highlights)

[TIKITRADER 10]

For those who may have missed this post.

This is an excellent contribution from MKTr

 

 

http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-112.html#post84360

[Zan-shin 10]

Spydertrader,

 

It is frequently the case that 3 thin containers make a medium container and 3 medium containers make a thick container, and under these circumstances, all 3 fractals are visible. However, it is often the case that not all of the thin containers are visible in all of the medium containers, and we might occasionally see the sub-thin containers that make the thin containers.

 

As an example, consider that we have created a medium container with 3 visible thin containers, taking us from P1 to P2 of a new thick container. The following medium container that takes us from P2 to P3 of our thick container may NOT reveal the thin containers that built it. If we have assumed that the second medium container had begun with a thin container then we would discover (eventually) that we had jumped fractals because what we assumed to be thin had ACTUALLY been medium as price began its journey from thick P2 to P3.

 

Occasionally we see an x2x made up of a sequence of lower and lower peaks following by a sequence of higher and higher peaks. In these circumstances it is clear that faster sequences are visible. Also, we see situations where the 2y leg contains a sequence of decreasing peaks, and/or the 2x leg is made up of a sequence of increasing peaks. Both reveal that faster sequences are in play.

 

However, we will occasionally get a container that does not show sequences of peaks, but ends up NOT begin thin. Is this a situation where we HAVE to assume our container is thin and rely upon subsequent information to tell us that our “thin” container is in fact medium or can we KNOW for sure what fractal level each volume sequence is starting on?

 

Thank you

[ptunic 10]

For those using charts with the opening (overnight) gap removed, is it advisable to look back several days if you are comparing if price went higher than a previous high etc? Or do you switch to using a chart with the gaps present if you are in these situations (where you are looking back more than just the previous tape/traverse, but possibly several days)?

 

I was reading the post a few days ago about knowing at what point you know for certain a trend has ended and that got me thinking a bit

[zt379 10]

  gucci said:

One more time… It is not ONLY about volume BUT ALSO about price.

 

Think…

 

How do you draw a tape? Where do you place the point 3 of a tape? Since the tape is nothing more then the faster fractal traverse, think about the following questions.

 

How do you draw a traverse ? Where do you place point 3 of a traverse AND what HAS TO HAPPEN in the VOLUME pane for your point 3 of a traverse being in the right place?

 

Why do you HAVE sometimes to steepen your RTL?

 

Now what about the LOCATION of point 2? Does it have to be OUTSIDE of something?

 

Do not answer these questions for me. Think about them while analysing or annotating a chart.

 

 

 

Yes. AND where those troughs and peaks are located (see price pane, points 1,2,3 containers) AND what the volume did to price.

 

 

 

I can relate to your frustration, believe me. But the GENERAL principles where explicitly explained by Spyder in the beginning of this very thread. You just had to pay attention.

 

HTH.

 

I very much appreciate you patience and efforts gucci.

 

My issue is about knowing what fractal we are on.

I'm aware of the concept of this method where by faster things build the slower thing

that decreasing then increasing volume creates the gaussian V shape at X2X and we need increasing volume to confirm the P3 etc...

 

I know these things.

My issue is about knowing what fractal these things are happening on.

 

And I still have not found any resolution as to why the 2R leg is still inside the trend lines that contain the B2B leg on the spydertrader snippet.

 

I'm not laboring on the issue here regards each leg needing to have it's own container

and how are we to know what fractal level (medium, thin, dashed, dotted etc..)we are on.

 

Regarding containers:

 

IE: an X2X's (of a B2B2R2B) is within its own container of thin black lines.

Moving forward the 2Y (the 2R) is in it's own container and the final 2X (2B) is it's own container.

 

This is what I understood to be a principle of this methodology.

So you can understand why I don't understand why the 2R leg is not in it's own container on the Spydertrader snippet.

And it needs to be in order to have the 3 (B2B2R2B) thin gaussian legs to make the medium B2B.

 

I thought it was because we accelerated the Olive RTL (even though no LTL VE) because of increasing volume.

If this is the case then why, having accelerated the RTL at 10:40, didn't have medium 2R at 10:45?

 

Regarding knowing what fractal we are on:

I can better explain this with your Dax charts.

And thanks, I do see why you do and do not accelerate the RTL.

 

The Blue Up Traverse:

Your b2b (13:50-14:05) is within it's container (thin black lines)

Your 2r (14:05-14:25) is in it's own down container (thin black lines)

And your last 2b (14:25 -14:35) is in it's own container (thin black lines)

These 3 containers build the Blue Travers.

And indeed both your down Magenta traverses are built similarly with 3 things.

 

However, referring to your B2B 15:55- 16:20.

This is in it's own container of thin black lines.

but you do not annotate the 2R for the down container in the thin black lines from 16:20 to 16:30.

Nor a subsequent 2B in the up container of thin black lines from 16:30 to 16:35

Those 3 things do not build a travers for you even though there is a volume sequence.

 

I do not understand why they do not build a travers here

where as they do for the Blue Travers.

 

I'm trying to understand how you know those 3 things from 15:55 do not build a travers by 16:35?

 

This is what I mean by knowing what fractal we are on.

You knew to extend you B2B2R2B from 15:55 to to 18:00 even though there had been a B2B2R2B volume cycle by 16:35.

 

Thank you again and as per your reply, I have thought about this before posting.

I can't explain the multitude of ways I've looked at things over the years.

In spite of how much I do understand of the principles, I have always failed to know why, when using the same principles, they sometimes do not build the same thing.

 

Kind regards.

Edited October 21, 2010 by zt379

[bi9foot 10]

  ptunic said:

For those using charts with the opening (overnight) gap removed, is it advisable to look back several days if you are comparing if price went higher than a previous high etc? Or do you switch to using a chart with the gaps present if you are in these situations (where you are looking back more than just the previous tape/traverse, but possibly several days)?

 

...

 

Use the charts with the opening gap removed.

[Spydertrader 10]

  ptunic said:

For those using charts with the opening (overnight) gap removed, is it advisable to look back several days if you are comparing if price went higher than a previous high etc? Or do you switch to using a chart with the gaps present if you are in these situations (where you are looking back more than just the previous tape/traverse, but possibly several days)?

 

You use the 'gap adjusted' (removal of the overnight gap) Price to determine whether Price has moved 'beyond' your 'point of certainty.'

 

HTH.

 

- Spydertrader

[Spydertrader 10]

  Zan-shin said:

It is frequently the case

 

I do not know what you can and cannot see with respect to how all markets operate on a fractal basis. I only know all markets exist on a fractal basis. A trader's ability to 'see' that which the market provides results out of two criteria - the individual trader's mental filters which prevent accurate transfer of information, and market pace.

 

HTH.

 

- Spydertrader

[Zan-shin 10]

  Spydertrader said:

I do not know what you can and cannot see with respect to how all markets operate on a fractal basis. I only know all markets exist on a fractal basis. A trader's ability to 'see' that which the market provides results out of two criteria - the individual trader's mental filters which prevent accurate transfer of information, and market pace.

 

HTH.

 

- Spydertrader

Thank you. I tried to explain what I can and cannot see with respect to how all markets operate on a fractal basis. Your answer only confirms that it is pointless posting questions.

[Tams 20]

If a condition prevents you to be a winner,

remove the condition.

[nkhoi 10]

  Tams said:

If a condition prevents you to be a winner,

remove the condition.

very profound thoughts, sounds like a winner.

[patrader 10]

today's es chart.comments welcome

Edited October 21, 2010 by patrader

[cnms2 10]

  Zan-shin said:

Thank you. I tried to explain what I can and cannot see with respect to how all markets operate on a fractal basis. Your answer only confirms that it is pointless posting questions.

You drew the wrong conclusion here, and your reaction doesn't help you either. If you want people to read your posts and feedback their opinions, try to ask short, clear and pointed questions accompanied by small, clear and meaningful chart snippets. Don't crowed one post with multiple questions, and avoid hypothetical scenarios that you can't back with actual data.

 

Any way, when the pace is slow finer fractals are observable. You have to identify them as such.

[cnms2 10]

  patrader said:

today's es chart.comments welcome

It seems that you decided that the nondominant gaussian color doesn't matter. Would you explain why does it make things easier for you?

[ptunic 10]

Thursday, October 21, 2010.

[patrader 10]

  cnms2 said:

It seems that you decided that the nondominant gaussian color doesn't matter. Would you explain why does it make things easier for you?

 

Some time ago i discovered that my charting platform had a volume study that showed the volume bars as either lite gray for decreasing volume bars or dark gray for increasing volume bars(all in relation to the previous volume bar).I found it helpful to view this study for a while because it highlited the difference between peaks and troughs quite well.JHM is based on the order of events on fractals where the the peaks and troughs indicate dominant and non-dominant market behavior.I have found it easier to read the market sentiment and fractal nesting by showing dominant market direction with black or red color and non-dominant market direction with gray color.Since i usually trade only the dominant direction (unless volatility is unusually large) it helps with entries/exits and reversals.This also highlites where the market creates a decreasing volume bar after completion of the order of events like has shown in the jokari window(good example of that is today's bar 55).hth

Edited October 22, 2010 by patrader

[cnms2 10]

  patrader said:

Some time ago ... hth

I see. .

[Breakeven 10]

  Spydertrader said:

 

The market begins a new cycle (for all fractals) at 14:15 (Eastern Time) yesterday (10-13-2010). Start the annotation process from that point in time.

 

HTH.

 

- Spydertrader

 

"There is only one problem in life: How do you go about the process of solving problems."

 

Let me make another attempt at this.

 

On the 19th the market made a gap adjusted high over the 10-13 14:15et Pt1. So, somewhere between there we have: 1. A complete down Channel, 2. At least 3 Traverses, 3. At least 9 Tapes.

 

When I posted my first chart of 10-13 to 10-14 (this post) you confirmed for me that I jumped fractals with my gaussians. My instinct was that I completed the Traverse too soon but that was not correct. I believe now that my original Traverse actually ended in the correct place even though I did jump fractals to get there. I think that is what makes this so difficult, sometimes incorrect annotations can get the correct answer.

 

For this chart I attempted to apply the same "reasons" consistently across each container. As I said, the Traverse still ends in the same spot as my original attempt but the road to get there is different. Every bar seems to fit with the exception of a single bar in the last Tape (the last black bar before the end of the Tape). WWT takes care of this bar but I think I would have reversed here in realtime.

 

If you would be so kind, I would like to ask the same question as my original post on this:

 

Did I still manage to jump fractals with the gaussians shown?

 

Any other comments more than welcome as well.

 

TIA

[Spydertrader 10]

  Breakeven said:

Did I still manage to jump fractals with the gaussians shown?

 

Before I answer, why not extend your annotations (which began on the 13th) out until 10:30 AM (Eastern Time) on the 15th of October.

 

I think, by doing so, you'll realize you aleady know the answer to your question. If not, feel free to let me know.

 

- Spydertrader

[wind_ 11]

Thursday 21 Oct 2010

 

TIA for any comments/feedback.

[Breakeven 10]

  Spydertrader said:

Before I answer, why not extend your annotations (which began on the 13th) out until 10:30 AM (Eastern Time) on the 15th of October.

 

I think, by doing so, you'll realize you aleady know the answer to your question. If not, feel free to let me know.

 

- Spydertrader

 

I believe the market action following my last chart confirms that it was correct. That first Traverse really needs to end at 15:05 Eastern on the 14th (14:05 on my chart) and everything seems to fit into place.

 

However, the fact that you specifically mentioned 10:30 Eastern on the 15th makes me seriously doubt my annotations for that day. I have the morning of the 15th as a Tape. The lower low it creates gives 100% certainty that the non-dom Traverse which started on the afternoon of the 14th is over. That is pretty much all I can deduce from that timestamp as long as this area is annotated as a Tape.

 

If the morning of the 15th is a Traverse (I now suspect it is) it would end at 10:30. I will admit that this area looks very similar to the chart Gucci started a discussion on a few days ago. My problem is that I have to disprove some of my "facts" to make this a Traverse. :crap:

 

Anyway, this is my chart before the current round of second guessing kicked in. As I have already convinced myself while typing this that I jumped fractals on the 15th there is probably no point in asking. :rofl:

 

Any comments would be very welcome!

TIA

[gucci 10]

  zt379 said:

 

 

This is what I understood to be a principle of this methodology.

So you can understand why I don't understand why the 2R leg is not in it's own container on the Spydertrader snippet.

And it needs to be in order to have the 3 (B2B2R2B) thin gaussian legs to make the medium B2B.

 

I thought it was because we accelerated the Olive RTL (even though no LTL VE) because of

increasing volume.

 

 

If this is the case then why, having accelerated the RTL at 10:40, didn't have medium 2R at 10:45?

 

First of all, you should pay attention to the situations where volume suggests an acceleration of a trend and where it doesn’t. Look at the 10:40 (close of) bar. The volume is increasing, but is it really black? In the price pane you see that a lot of volume on this bar is actually red. So you can not have black volume dominance on this bar.

 

Second of all, you can not place your medium 2R at 10:45 because the market didn’t break the container of B2B of the medium lines here.

 

Third of all, why do you continue to ignore the volume behavior in the 10:50-11:00 area?

 

HERE you see an ACCELERATION of the medium fractal trend and this accelerated container of B2B of the medium fractal trend is broken by 11:05-11:10 tape. This is your 2R of the medium fractal trend.

 

The market “jumped” the fractals here and you just had to go with it.

 

HTH

 

  zt379 said:

I'm trying to understand how you know those 3 things from 15:55 do not build a travers by 16:35?

 

I knew this because the market changed pace on 16:35 bar and didn’t return to dominance yet. Look at the price bar and volume. Furthermore all of this transpired in an accelerated B2B container.

 

  zt379 said:

This is what I mean by knowing what fractal we are on.

You knew to extend you B2B2R2B from 15:55 to to 18:00 even though there had been a B2B2R2B volume cycle by 16:35.

 

 

You have to be very cautious here. The RTH for DAX end at 17:30, so you have to take that into account. Sometimes I continue annotating afterhours for educational purposes only (just to learn the change of the behavior of the market ) but change the annotaions the next day after restoring the RTH of the chart. Sorry if I added to the confusion. The main part was the annotations of the red down channel.

 

HTH.

[zt379 10]

  gucci said:

First of all, you should pay attention to the situations where volume suggests an acceleration of a trend and where it doesn’t. Look at the 10:40 (close of) bar. The volume is increasing, but is it really black? In the price pane you see that a lot of volume on this bar is actually red. So you can not have black volume dominance on this bar.

 

Second of all, you can not place your medium 2R at 10:45 because the market didn’t break the container of B2B of the medium lines here.

Ok, I recall Spydertrader saying something like "orientate to higher highs and lower lows first and then close."

I think what you are saying is that a higher high here at 10:40 on Spyder clip does not make it an up bar, to which we would otherwise accelerate the rtl, because it closes below its open.

16:35 on your Dax clip closes above it's open and outside the range of the previous red bar, but you still considered it as a non dom bar. I shall have to ponder on why.

I'm hoping the reason is definitive ?

 

  Quote

Third of all, why do you continue to ignore the volume behavior in the 10:50-11:00 area?

 

HERE you see an ACCELERATION of the medium fractal trend and this accelerated container of B2B of the medium fractal trend is broken by 11:05-11:10 tape. This is your 2R of the medium fractal trend.

 

The market “jumped” the fractals here and you just had to go with it.

 

Yes I now see what you mean and to be frank I don't think I would ever have considered a bar with higher high on increasing volume as not being a return to dominance due to the close so my sincere thanks for your insight.

 

There is of coarse the situation where a bar making a higher high and closing either below it's open or within the range of the previous bar with increasing volume, would be a SOC bar and could only be so if it had also returned to dominance.

I suppose that will come down to what fractal the trader is trading and whether that SOC is on their fractal. (?)

 

  Quote

HTH

 

most certainly and thx gucci

 

 

  Quote

I knew this because the market changed pace on 16:35 bar and didn’t return to dominance yet. Look at the price bar and volume.

Furthermore all of this transpired in an accelerated B2B container.

 

Would I be correct to say that the green rtl on your dax chart is your accelerated ?

If so then you wouldn't have accelerated that until the close of the 16:35?

 

If so I'm a bit confused by that last sentence above I've put in in bold?

 

 

  Quote

You have to be very cautious here. The RTH for DAX end at 17:30, so you have to take that into account. Sometimes I continue annotating after hours for educational purposes only (just to learn the change of the behavior of the market ) but change the annotations the next day after restoring the RTH of the chart. Sorry if I added to the confusion. The main part was the annotations of the red down channel.

 

HTH.

You have not added to the confusion.

On the contrary, you have made things clearer.

My sincere thanks for taking the time and effort to reply to my questions gucci.

 

PS: to anyone, how can I get multiply quotes included from a post?

there is only the one, as above and the rest have not been displayed in the same way

Edited October 23, 2010 by zt379

[Ezzy 10]

  zt379 said:

PS: to anyone, how can I get multiply quotes included from a post?

there is only the one, as above and the rest have not been displayed in the same way

 

When you reply, on the toolbar between the "mountain icon" and the "#", there is a button that looks like text. Highlight each individual section of text in the message then click that icon, it wraps your text with quote code. Do that for each section. Or type (without the spaces and including the brackets):

 

[ Quote ] before the text and

[ / quote ] after the text.

[zt379 10]

Thx EZZY..I've tried both typing in the

  Quote

before and [/quote} after and tried highlighting the text and clicking that icon but neither does it beyond the first quote.

 

No mind, I'' give it a try another time perhaps.

 

thx..

Edited October 23, 2010 by zt379
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