The Price / Volume Relationship

[gucci 10]

This should look familiar.

[saturo 10]

This should look familiar.

 

To all those participating in the recent discussion - thanks!! And a special Mit tiefer Dankbarkeit! for gucci.

 

I drew in a couple of extra channels for emphasis.

[gucci 10]

To all those participating in the recent discussion - thanks!! And a special Mit tiefer Dankbarkeit! for gucci.

 

I drew in a couple of extra channels for emphasis.

 

Your orange pair of lines do not represent a channel, but a faster fractal thing (aka faster fractal traverse) which misses the first part of the sequence. The black pair of lines represent even a faster fractal thing (aka tape).

 

HTH.

 

By the way, thank you for your gratefulness, but it is actually Spyder, who deserves it.

[saturo 10]

Your orange pair of lines do not represent a channel, but a faster fractal thing (aka faster fractal traverse) which misses the first part of the sequence. The black pair of lines represent even a faster fractal thing (aka tape).

 

My screenshot tool only has one line thickness ... my black lines were meant to be thin and orange lines meant to be medium. Sorry for any confusion.

[gucci 10]

My screenshot tool only has one line thickness ... my black lines were meant to be thin and orange lines meant to be medium. Sorry for any confusion.

 

 

If you use paint, you will be able to choose among at least 4 line thicknesses.

[gucci 10]

Find the differences. Enjoy.

[emac 10]

Find the differences. Enjoy.

 

I will give it a go.

The blue container - the 16:10 bar is the 1st b2b move which created a ve on the way to pt 2 on the inner dark lined fractal, hence we anticipate 2r that created the point 3 on the next bar and fanned on the next 1620 bar.

 

The pink container - r2r broke rtl of blue container, and subsequent point 3 created after 2b ending at 1705 bar. The next move of 1-2-3 of yet another faster fractal (starting at gaussian trough 1705 bar) had a r2r 1710 intrabar breaking previous rtl the 2b previously. This creates pt 2. On the same faster fractal, point 3 created at 1720 hrs. The sequence completion with the 2r with VE and acceleration. So the sequence had completed for the 2r move that started at 1705 bar.

 

Essentially, the first one was a x2x dominant move whereas the latter was a 2x dominant move. Am I seeing it correctly ?

 

TQVM

[saturo 10]

Find the differences. Enjoy.

 

In the 1st oval the TAPE itself does NOT have a VE but the tape creates a traverse level VE.

 

In the 2nd oval the TAPE does have a VE and also creates a traverse VE.

[zt379 10]

Find the differences. Enjoy.

 

I don't understand how the B2B can start prior to 15.50 ?

ie: you have a B2B starting before your Blue P1 at 15.50 ?

 

I also don't understand how Blue P2 at 15.50/55 can be inside the Magenta RTL ?

 

Thx

Edited November 13, 2010 by zt379

[wind_ 11]

Gucci,

 

Thanks for posting the drill. Before I try to differentiate the VEs, I have questions regarding the gaussian in that snippet. It looks to me that market had not reached pt2 yet at 15:55 because price is still within previous container. Please see attached image how I would draw it. But my gaussian drawing doesn't look correct either because the market did not show 2R leg after R2R.

 

So, some of my understanding must be incorrect here.

1. Is it correct that pt2 must be outside previous container?

2. Would you point out why my drawing of the first blue container B2B 2R 2B is incorrect here?

 

Thank you very much.

[gucci 10]

I don't understand how the B2B can start prior to 15.50 ?

ie: you have a B2B starting before your Blue P1 at 15.50 ?

 

 

Look at 15:50 bar closely. You’ve got an IBGS on decreasing volume. What transpired on this bar? The market stopped moving from right to left (after it completed all of the sequences on every fractal of the prior trend) and started moving from left to right on decreasing volume. What else do you need? You can verify this by going to a smaller time frame. On a smaller time frame you will be able to place your B2B after our point 1. The market doesn’t care about how we arbitrarily chunk the flow, i.e 5min, 2 min or any other time frame. You just have to keep up with the sequences.

 

 

 

 

I also don't understand how Blue P2 at 15.50/55 can be inside the Magenta RTL ?

 

Thx

 

It is not inside. The CLOSE of the BAR is inside, but the point 2 is outside.

Edited November 13, 2010 by gucci
clarification

[gucci 10]

Gucci,

 

Thanks for posting the drill. Before I try to differentiate the VEs, I have questions regarding the gaussian in that snippet. It looks to me that market had not reached pt2 yet at 15:55 because price is still within previous container. Please see attached image how I would draw it. But my gaussian drawing doesn't look correct either because the market did not show 2R leg after R2R.

 

So, some of my understanding must be incorrect here.

1. Is it correct that pt2 must be outside previous container?

2. Would you point out why my drawing of the first blue container B2B 2R 2B is incorrect here?

 

Thank you very much.

 

Look at your snippet again. You answered your own questions. The sequences are always complete.

 

As point 2 is concerned. You are right. Point 2 must be outside of the previous container. Note, I did not say "the bar where point 2 is located", nor did I say "the close of the bar where point 2 is located" must be outside of the previous container, I said "point 2 must be outside of the previous container".

 

Think about it this way. Had you traded on a 3 or 4 min timeframe, the CLOSE of the bar in question could be outside of the previous container.

 

HTH.

[gucci 10]

I will give it a go.

The blue container - the 16:10 bar is the 1st b2b move which created a ve on the way to pt 2 on the inner dark lined fractal, hence we anticipate 2r that created the point 3 on the next bar and fanned on the next 1620 bar.

 

The sequences always complete. Now take your answer and try to draw the tapes your suggestion implicates make the sequence complete.

 

You didn’t really pay attention to what had transpired in the volume pane, did you?

 

 

 

The pink container - r2r broke rtl of blue container, and subsequent point 3 created after 2b ending at 1705 bar. The next move of 1-2-3 of yet another faster fractal (starting at gaussian trough 1705 bar) had a r2r 1710 intrabar breaking previous rtl the 2b previously. This creates pt 2. On the same faster fractal, point 3 created at 1720 hrs. The sequence completion with the 2r with VE and acceleration. So the sequence had completed for the 2r move that started at 1705 bar.

 

 

The idea of the drill was to show two different types of VEs. The first one lets you anticipate a new point 3. The second one doesn’t. Jack explained that very thoroughly in his post, link to which was posted by cnms2 in this thread.

 

Funny how the chart of Spydertrader with two VEs didn't evoke much interest.(the chart Spyder posted in this thread)

 

 

 

Am I seeing it correctly ?

 

TQVM

 

Let the market falsify your hypothesis. The sequences are always complete.

Edited November 13, 2010 by gucci
spelling

[gucci 10]

In the 1st oval the TAPE itself does NOT have a VE but the tape creates a traverse level VE.

 

In the 2nd oval the TAPE does have a VE and also creates a traverse VE.

 

You are close. Now take it from here and think in terms of completion of the sequences on ALL of the observable fractals.

[zt379 10]

Look at 15:50 bar closely. You’ve got an IBGS on decreasing volume. What transpired on this bar? The market stopped moving from right to left (after it completed all of the sequences on every fractal of the prior trend) and started moving from left to right on decreasing volume. What else do you need? You can verify this by going to a smaller time frame. On a smaller time frame you will be able to place your B2B after our point 1. The market doesn’t care about how we arbitrarily chunk the flow, i.e 5min, 2 min or any other time frame. You just have to keep up with the sequences.

 

 

 

 

 

It is not inside. The CLOSE of the BAR is inside, but the point 2 is outside.

 

Thx for your efforts in replying gucci, it's greatly appreciated.

 

I didn't know that about a P2 not needing to close outside an RTL.

I will have to take that on board in respect of what an FBO and fanning the previous down RTL

(Magenta) would mean.

 

Also, if you're able to help.

I'm confused about the new P3, having Ve'd.

I presume the new P3 is on the 16:20bar?

 

However, if so, I thought the 2R leg for medium (the 16.15 bar), because medium level Ve'd at 16.10,

needed to be in it's own container (even if only a one bar container) to get to the new P3 ?

 

If 2R does need to be in it's own container and so 16:25 is the 2R then how do we return to black dominance at 16.30,

to complete the last medium black, without increasing black volume ?

 

Continued thanks...

Edited November 13, 2010 by zt379

[Zan-shin 10]

I didn't know that about a P2 not needing to close outside an RTL.

I will have to take that on board in respect of what an FBO and fanning the previous down RTL

(Magenta) would mean.

Hmmmm.... When price leaves our container on decreasing volume, some might say that we should fan.......

 

Quote:

 

Price exited the channel on decreasing Volume. Anytime this happens, we anticipate the trend remaining intact, but the channel needs altering. Hence, we fan outward. The market will let us know if we anticipated correctly.

 

- Spydertrader

 

Break on decreasing Volume must fan, but break on increasing Volume can fan. One set of circumstances results in mandatory action. The other results in an optional action. How to distinguish between when to do so and when not to do so results from noting, "Did the trend change, or just the channel?"

 

- Spydertrader

 

If I need to 'fan out' a channel (when price leaves the channel on decreasing volume) I usually fan from my last Point Three. Not only does the decreased slope of the new (fanned) channel visually represent a reduction in market pace, but using the Point Three vs. recycling the Old Point One normally results in fewer fans as time moves forward. Either way works. Choose whichever you feel best allows you to 'see' the market.

 

- Spydertrader

 

End quote.

 

Worth bearing in mind when you consider putting a p2 inside the previous container

[gucci 10]

Hmmmm.... When price leaves our container on decreasing volume, some might say that we should fan.......

 

Quote:

 

Price exited the channel on decreasing Volume. Anytime this happens, we anticipate the trend remaining intact, but the channel needs altering. Hence, we fan outward. The market will let us know if we anticipated correctly.

 

- Spydertrader

 

Break on decreasing Volume must fan, but break on increasing Volume can fan. One set of circumstances results in mandatory action. The other results in an optional action. How to distinguish between when to do so and when not to do so results from noting, "Did the trend change, or just the channel?"

 

- Spydertrader

 

If I need to 'fan out' a channel (when price leaves the channel on decreasing volume) I usually fan from my last Point Three. Not only does the decreased slope of the new (fanned) channel visually represent a reduction in market pace, but using the Point Three vs. recycling the Old Point One normally results in fewer fans as time moves forward. Either way works. Choose whichever you feel best allows you to 'see' the market.

 

- Spydertrader

 

End quote.

 

Worth bearing in mind when you consider putting a p2 inside the previous container

 

I hope you understand the quotes. Act on them. Enjoy the results.

 

However I would suggest you read them one more time.

 

Especially this part: "Did the trend change, or just the channel?"

 

But I guess you do know what you are talking about.

 

Again, point 2 is outside.

[gucci 10]

....................................................

Edited November 13, 2010 by gucci

[gucci 10]

 

I didn't know that about a P2 not needing to close outside an RTL.

...

 

P2 can not close anywhere.

 

I'm confused about the new P3, having Ve'd.

I presume the new P3 is on the 16:20bar?

...

 

Yes. 16:20 bar represents an “accelerated point 3” of a blue traverse.

 

 

However, if so, I thought the 2R leg for medium (the 16.15 bar), because medium level Ve'd at 16.10,

needed to be in it's own container (even if only a one bar container) to get to the new P3 ?

...

 

Again, look at the 16:15 bar. What do you see?. You can go to a smaller time frame and see your “own” container for this 2R there. But you can see this on the 16:15 bar as well.

 

You are trying to squeeze the market into some kind of a mold. Think. What does the movement from point 2 to point 3 represent? Why does the market move from point 2 to point 3 in a non-dominant fashion? What happens after the market finished its movement to point 3? Why does it move after point 3 in a DOMINANT fashion?

 

What is a fractal? In order to understand the concept go to a 30 min chart, for example, and take 2 bars heading in one direction. Construct a tape. Then go to a 2 min chart contained within your two bars and see what transpired.

 

Now what transpired on 16:15 bar?

 

 

If 2R does need to be in it's own container and so 16:25 is the 2R then how do we return to black dominance at 16.30,

to complete the last medium black, without increasing black volume ?

 

 

The sequences are ALWAYS complete. The market showed you that there is no return to dominance at 16:30. So 16:25 isn’t 2R. Note how I just repeat the stuff the market showed you.

 

One more thing. The first oval is an acceleration of an actual traverse. The second one includes a faster fractal traverse in addition to the last sequence of the actual traverse.

 

There is a big difference.

Edited November 13, 2010 by gucci

[wind_ 11]

As point 2 is concerned. You are right. Point 2 must be outside of the previous container. Note, I did not say "the bar where point 2 is located", nor did I say "the close of the bar where point 2 is located" must be outside of the previous container, I said "point 2 must be outside of the previous container".

 

Thanks for pointing that out. This is new to me. I've had the impression that point 2 needed to close outside previous container because in the previous tape drawing drill, the close was important.

Edited November 13, 2010 by wind_

[gucci 10]

Thanks for pointing that out. This is new to me. I've had the impression that point 2 needed to close outside previous container because in the previous tape drawing drill, the close was important.

 

Don`t you see the difference? In the drill we were talking about non-dom movement. Does that seem a bit different? Why do you think the process is called differentiation?

 

The market tells you where the right side is. Spyder explained how to be absolutely sure about whether or not the market has changed direction. My answers shouldn't matter at all. It is the market who tells. Start with thorough annotations...Well, now I'm just repeating something Spyder tried to convey hundreds of times.

 

Edit: Remember context is king.

 

http://www.elitetrader.com/vb/attachment.php?s=&postid=2210216

Edited November 13, 2010 by gucci

[Zan-shin 10]

P2 cannot possibly be on the 15:55 bar OR the 16:00 bar in the attached chart. The volume pane confirms this.

[zt379 10]

The idea of the drill was to show two different types of VEs.

 

Firstly, my apologies for the questions about the P2.

I just wasn't sure about it but now understand, so thank you,

and as you say, your drill was about VE differentiation.

 

One more thing. The first oval is an acceleration of an actual traverse. The second one includes a faster fractal traverse in addition to the last sequence of the actual traverse.

 

I am still digesting all this.

Your willingness to impart any fraction of insight is greatly appreciated gucci and by default

the same to Spydertrader.

 

The market doesn’t care about how we arbitrarily chunk the flow, i.e You just have to keep up with the sequences.

"chunk the flow". I love it. I might use it as a new user name

Seriously though.

I'm getting light bulbs going off in my head..

thx

 

You are trying to squeeze the market into some kind of a mold.

 

As above, I think you've explained a part of the problem I've had with this method for some time.

Thinking that we needed some sort of criteria like as you say a mold so that we knew what we had and how to build things.

Like a brick looks like this and these bricks build a house etc...

and incorrectly that a brick will always be the same.?

 

Would I be close to say the only mold we really need is to recognize dominance and non-dominance wrapped up in lines so we know where our P's are and an FTT to start/end the thing at the right bar ?

 

http://www.elitetrader.com/vb/attachment.php?s=&postid=2210216

 

Oh My .....more light bulbs......!!!!!!!!!!!!

 

 

thx gucci

Edited November 13, 2010 by zt379

[Boux 10]

. The first one lets you anticipate a new point 3. The second one doesn’t. Jack explained that very thoroughly in his post, link to which was posted by cnms2 in this thread.

 

Funny how the chart of Spydertrader with two VEs didn't evoke much interest.(the chart Spyder posted in this thread)

 

 

I'm still struggling with what to "anticipate" with regard to VEs. I finally came to grips with the chart that Spy refered to---I was sloppy with accel the container and the 2nd VE clearly failed in that container. But in your example the bars following the accel's. seemed to do exactly the same thing except the 2nd was higher volatility and nearly the same volume-----so a 2x4 in my general direction would be much appreciated

[gucci 10]

Firstly, my apologies for the questions about the P2.

I just wasn't sure about it but now understand, so thank you,

and as you say, your drill was about VE differentiation.

 

 

No need to apologize. The thing is, there is no point for me to prove something the market told was the only possible solution.

 

Thinking that we needed some sort of criteria like as you say a mold so that we knew what we had and how to build things.

Like a brick looks like this and these bricks build a house etc...

and incorrectly that a brick will always be the same.?

 

The brick IS always be the same. Using your analogy, what about the bricks around the windows or doors? What about the bricks at the corners of the house? What about the bricks where some water or drain pipes have to be laid? Can you build a house without matching some of the bricks? Just add the context.

 

 

Would I be close to say the only mold we really need is to recognize dominance and non-dominance wrapped up in lines so we know where our P's are and an FTT to start/end the thing at the right bar ?

 

Why do you think the system is binary?