The Price / Volume Relationship

[Spydertrader 10]

Sesame Street actually points out the correct answer.

 

In the exact same fashion as Sesame street, the market provides all answers required of the trader. One simply needs to go and look.

 

To set tasks and never give an explanation is no way to achieve transference.

 

I have designed the tasks / drills in such a way as to provide for everyone the initial steps toward differentiation - to learn how to see the differences between that which people believe they see from that which actually exists. I have not designed the tasks as a 'quiz' for receiving grades.

 

Some have found this process (of learning differentiation) extremely helpful. A few have experienced a lightening strike as a result.

 

Transference results from a fully differentiated mind. In other words, people don't need me to provide answers for them, nor do they need another thread full of posts. They only need the market and their own brain.

 

As such, already have you that which you need.

 

- Spydertrader

[cnms2 10]

I guess ... a useful discussion would be to compare contexts: like 1335 and 1550 laterals, or 1120 and 1210 outside bars, or 1140 and 1525 spikes, etc.. Coming with clear examples, clearly explaining your thought process and conclusions, then asking for comments, would get everybody much more from this thread.

[ljyoung 10]

I guess ... a useful discussion would be to compare contexts: like 1335 and 1550 laterals, or 1120 and 1210 outside bars, or 1140 and 1525 spikes, etc.. Coming with clear examples, clearly explaining your thought process and conclusions, then asking for comments, would get everybody much more from this thread.

 

That's a great idea cnms2. IMO, one of the most important providers of context is the position of price in respect of the fractal on which the trader is trading, i.e., where am I in so far as points 1, 2, and 3 are concerned. If you know 'where' you are, then you know what must come next. If you don't know 'where' you are, then your ability to appreciate the correct context of a particular construct/situation will be zero. As we all know, this sort of confusion can be exquisitely frustrating. On the other hand when you 'know' WMCN, the battle while far from being won, is considerably more in your favour.

 

Bottom line, IMO. You MUST know WMCN or forget about context.

 

lj

[rs5 10]

28 July 2009 - Spydertrader, please comment on the gausian lines, are these the correct interpretation?

[rs5 10]

See Attached.

 

 

- Spydertrader

 

Thank you. It looks like all formations that stalls the flow is a flaw. Is that correct?

[cnms2 10]

28 July 2009 - Spydertrader, please comment on the gausian lines, are these the correct interpretation?

Let me remind you about the fractal structure of the market. With the gaussians you've drawn, can you build the next level of gaussians using only r2r2b2r and b2b2r2b sequences? If not, you've probably jumped fractals. Also, where does the through of the r2r or b2b happen?

[Soultrader 12]

Moderated Message:

Please keep this thread on topic. Any issues should be addressed in the support forum or by private messaging the mods or myself. Its a good thread and would like to leave it that way. Thank you.

[rs5 10]

Also, where does the through of the r2r or b2b happen?

 

Thank you for the reminder to not jump fractals. What does this last sentence mean?

 

What is the best path to building the gausian lines?

Edited July 29, 2009 by rs5

[rs5 10]

FTP, FBP, SYM drill for Friday's chart 7/24

 

 

 

I'll start you off with one ...

 

Two of the three Pennants already have a 'built in' way to draw a trend line. The third example requires another bar in order to determine which trend line presents a correct view of the market.

 

FTP and FBP have one horizontal trendline connecting one end while the trendline of the other end appears to be directional. So I would expect the next bar after FTP and FBP to be in the direction of the non-horizontal line.

 

For FTP: price moved with greater vol in the direction of the non-horizontal line in three out of five instances (3, 4, 13). Price moved with lower vol against the non-horizontal line in one instance (6). Price moved with greater vol against the non-horizontal line in one instance (11)

 

For FBP: price moved with greater vol in the direction of the non-horizontal line in one instance (15). Price moved with lower vol against the non-horizontal line in two instances (9,12). Price moved with greater vol against the non-horizontal line in one instance (10)

 

FBP only occurred in the retrace traverse of the up-channel.

 

FOR SYM: Price reversed in direction with smaller vol (1,2,5). Price continued in direction with greater vol (7, 8, 14, 17, 18).

[Spydertrader 10]

I guess ... a useful discussion would be to compare contexts: like 1335 and 1550 laterals,

 

Actually, this would be a very good discussion for people to have. Do these two areas represent the same thing or different things? If different, why? If same, what does one know about WMCN based on this context?

 

or 1120 and 1210 outside bars,

 

Another set of areas which represent a very good focus for discussion exist here. However, for a far different reason than one might think. These two areas, on my chart, do not present as Outside Bars. Instead, they appear as 'stitches.' Knowing this, does anything change in terms of analysis? Why? or why not?

 

or 1140 and 1525 spikes,

 

Again, these two areas represent great points where 'something' has changed in terms of market direction. Between the two examples, do they represent 'sameness' or something different in each? If same, why? if not, why not? Also, the word 'spike' might represent a 'murky' way of describing these two events. In other words, one might not fully realize at what point something that is not a 'spike' becomes a spike? Perhaps a better, more precise, description exists here (one which includes both areas, but represents more binary [than gradient] thinking) - and a description which might help to clarify what actually takes place.

 

Coming with clear examples, clearly explaining your thought process and conclusions, then asking for comments, would get everybody much more from this thread.

 

For me, it comes down to a very simple set of choices - either these pages have value, or they do not. If value does not exist, then people should stop reading immediately, and find something worthwhile to do with their extra time. If value does exist, then did it devlop by accident, or by design?

 

Perhaps (just a small possibility, mind you), the reasons, behind why the format for this specific thread differs from all others, exists just outside everyone's current level of vision.

 

Perhaps, I want everyone to learn a much bigger, more important lesson.

 

While I understand the frustration which can devlop when someone struggling to locate answers fails to see the overall design and intent of my posts, just because an individual cannot 'see' something, doesn't mean that something isn't there.

 

Learn the process of differentiation, and the answers everyone seeks reveal themselves as a result.

 

- Spydertrader

[jbarnby 10]

Actually, this would be a very good discussion for people to have. Do these two areas represent the same thing or different things? If different, why? If same, what does one know about WMCN based on this context?

 

Could it be that they are similar in that both laterals formed from a bar (1435 and 1550) which ve'd a tape?

 

Or, could it be that they are the same in that they are both dominant laterals?

Edited July 29, 2009 by jbarnby

[jbarnby 10]

Sorry...scratch the above post. I was looking at the wrong lats.

[jbarnby 10]

OK...let's try this again with the correct bar times. 1335 is a non-dominant lat and 1550 is a dominant lat. Since 1335 is non-dominant we expect it to take us to pt 3 of our goat (tape, traverse, whatever). 1550 is a dominant lat which suggests we're still making our way to pt 2 of the goat we're building.

 

1120 and 1210 stitch bars. The only thing I notice here is that both of these bars appear to take us to a point 3 of a tape. I note that after each stitch bar price and volume return to the dominant trend.

 

1140 looks like an FTT of a tape to me. 1525 I'm unclear about this bar. While is "looks" like an FTT, it occurs on decreasing volume. Technically, can an FTT occur on a dec vol bar?

[dkm 10]

... 1335 is a non-dominant lat and 1550 is a dominant lat.

 

It is my understanding that all laterals represent non-dominant movement. Could you please explain how you see dom and non dom lats?

 

TIA

[jbarnby 10]

It is my understanding that all laterals represent non-dominant movement. Could you please explain how you see dom and non dom lats?

 

Sure David, I will try to explain my understanding. I believe 1335 to be a non-dominant lateral because it was formed from a non-dominant bar....meaning that price had begun to move in the non-dominant direction. It is also my understanding that non-dominant laterals usually take us to pt 3 of whatever we are building. 1550 appears to be a dominant lateral because price was moving in the dominant direction on the forming bar. As such, I understand that these laterals often tells us we have yet to arrive at point 2. I also understand that there are different kinds of dominant laterals - ie; some which allow for sequence completion within the lateral itself. But, as hard as I've tried, I cannot see how to differentiate between the two types of dominant laterals, though I suspect volume on the forming bar may play a role.

 

Now, I may have context all screwed up. If so, I hope Spyder will shed some light. However, I am confident that both dominant and non-dominant laterals exist.

 

I would truly welcome more discussion on this topic as I feel understanding these laterals would help us all.

[ljyoung 10]

An earlier post from ehorn on laterals (and some other stuff): The Price / Volume Relationship - Page 10 - Traders Laboratory

 

lj

[jbarnby 10]

Here's a question for anyone who wants to take a stab at context. Is the 1550 lateral on 07/28 a dominant lateral in an up tape? Or is it a non-dominant lateral in a down tape with the down tape pt 1 at 1435 and pt 3 at 1605?

 

The reason I ask is because this is the sort of "context" issue which often gives me grief. I can annotate it both ways, but fail to understand which MUST be the correct answer and why.

[sscott 10]

Perhaps, I want everyone to learn a much bigger, more important lesson.

 

While I understand the frustration which can devlop when someone struggling to locate answers fails to see the overall design and intent of my posts, just because an individual cannot 'see' something, doesn't mean that something isn't there.

 

Learn the process of differentiation, and the answers everyone seeks reveal themselves as a result.

 

- Spydertrader

 

Thanks Spyder, If I may I could relate a story that may have some bearing on what you are saying. There were two brothers that inherited two horses from their father. But, they had trouble telling which horse was which, so they had the idea of cutting one of the horses tail off so they could tell the difference. After they did that they stood back and patted themselves on the back admiring their brilliance, when one of the brothers said "Earl, we didn't have to cut that tail off!!! That red horse is three inches shorter than that black one!!!....... Aaahhhhh.....

Color (price) height (volume). Hmmmm..

[Spydertrader 10]

I am confident that both dominant and non-dominant laterals exist.

 

If I understand your post correctly ....

 

After careful, thorough and purposeful obervation (Monitor), you notice subtle differences between two different types of laterals (Analysis) determining a dominant and non-dominant correlation exists (Decision) which results in holding one's current position (Action).

 

Hmmm. Doesn't appear at all you need me to shed any light on anything.

 

Nicely done.

 

- Spydertrader

[TIKITRADER 10]

This is how I observe laterals and where they may develop within sequences.

[rs5 10]

struggling with b2b 2r 2b and r2r 2b 2r.......

[romanus 10]

This is how I observe laterals and where they may develop within sequences.

I note 3 types of laterals: (a) Point 2 to Point 3 movements, (b) post Point 3 movements into the trend, and © Point 1 to Point 2 movements [e.g. 15:15 on 7/23]. I suppose, both (b) and © can be classified as non-dominant. [As in one thing is dominant entering the lateral and then another thing is dominant exiting the lateral]. Other than their location in the gaussian sequence, I can't think of any other way of differentiating them.

[FJK 10]

Regarding laterals;

 

If we take Spyders recommendation for grouping laterals in two groups into consideration, one could for example label them:

 

- change and continuation

 

or

 

- dominant and non-dominant

 

If one choose the latter, how do we define dominant and non-dominant movement?

Is it, like jbarnby mentioned in post#265 "moving in the dominant direction on the forming bar" or do we define it as the forming bar has to be a dominent bar before the lateral can be defined as dominant?

 

If we take contexts into consideration, one also has to define which fractal that is to be analyzed. This is especially important if one choose to label them dominant and non-dominant.

 

I think it would be wise to start "simple" with what is known to be fact without any doubt. There are two "groups" according to Spyder, and we all know that context (i.e. where we are in the sequences) is a dealbraker. Then take it from there.

[Tams 20]

I note 3 types of laterals: (a) Point 2 to Point 3 movements, (b) post Point 3 movements into the trend, and © Point 1 to Point 2 movements [e.g. 15:15 on 7/23]. I suppose, both (b) and © can be classified as non-dominant. [As in one thing is dominant entering the lateral and then another thing is dominant exiting the lateral]. Other than their location in the gaussian sequence, I can't think of any other way of differentiating them.

 

 

 

can you post a diagram to illustrate your description?

 

TIA

Edited July 30, 2009 by Tams

[gucci 10]

Lateral movement of price (in a lateral formation) comprises the left to right flow of the market (price). How can this movement be dominant? If one calls it dominant, one simply missed an FBO (SOC) in this lateral (due to an unintentional fractal jumping perhaps). I would be glad to see an example of a dominant lateral.

Edited July 30, 2009 by gucci
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