The Price / Volume Relationship

[Mr_black 10]

Some scalping ......................................

[cnms2 10]

I believe you mean container from 1 & 2 and container from pt3 to ftt, no? This rule is a tough one for me... I've tried using it but I never got to where I trusted it. Is this a hard or soft rule for you? (on a scale of 1 to 10).

...

Is this good analysis?

I really meant 1-2 and 2-3 are built the same way, and 3- was not yet built that way after those 3 black bars (11:35). See attached.

I don't do the kind of analysis you're proposing, so I have no opinion on it.

[saturo 10]

I really meant 1-2 and 2-3 are built the same way, and 3- was not yet built that way after those 3 black bars (11:35). See attached.

I don't do the kind of analysis you're proposing, so I have no opinion on it.

 

Understood.

 

So is your rule:

 

IF 1-2 AND 2-3 are built in the same manner THEN 3 - end will also be built in that manner

 

OR

 

Given 1-2 being built in a certain manner THEN 2-3 AND 3- will be built in the same manner as 1-2

 

OR some other variant

[cnms2 10]

Understood.

 

So is your rule:

 

IF 1-2 AND 2-3 are built in the same manner THEN 3 - end will also be built in that manner

 

OR

 

Given 1-2 being built in a certain manner THEN 2-3 AND 3- will be built in the same manner as 1-2

 

OR some other variant

I'd word it like this: a container is made of three sub-containers, and three containers form a super-container, keeping in mind that at faster paces a container might look like a sub-container, and at slower paces it might look like a super-container. This is not my rule, it is one of the basic principles of the market operation that this method is based on. Others observed this fractal structure too, e.g. the Elliott waves.

 

In the discussed example, after those three black bars you had what looked lika just a sub-container.

[saturo 10]

I'd word it like this: a container is made of three sub-containers, and three containers form a super-container, keeping in mind that at faster paces a container might look like a sub-container, and at slower paces it might look like a super-container.

 

Yes. To re-state as a rule: as pace decreases the likelihood of seeing faster fractals increases... and as pace increases the likelihood of seeing faster fractals decreases.

 

In the discussed example, after those three black bars you had what looked like just a sub-container.

 

I don't like "looked like" I like IS. So ...is this the logic:

 

On the day of our example a B2B container formed on our trading fractal at the highest pace levels. This B2B had clearly articulated sub-containers (faster fractal movement). Therefore we can assume that for THAT DAY containers forming on our trading fractal at all pace levels will result in faster fractal movement being articulated.

 

(Sorry I tried to make it as concise as possible... best I could do).

[saturo 10]

Attached are hindsight annotations for 2 traverses from today's ES. 3 levels of price and volume gaussians are annotated. Hopefully the color coding is obvious (all of the fastest fractal things are gray on price).

 

The TLs for the carryover short have been degapped.

 

I don't have my pace lines in place because I recently switched to ninjatrader and I still need to code 'em up.

 

Please critique.

[Ezzy 10]

I don't like "looked like" I like IS. So ...is this the logic:

 

On the day of our example a B2B container formed on our trading fractal at the highest pace levels. This B2B had clearly articulated sub-containers (faster fractal movement). Therefore we can assume that for THAT DAY containers forming on our trading fractal at all pace levels will result in faster fractal movement being articulated.

 

FWIW, I don't believe that will prove to be a reliable hypothesis. Careful with assumptions.

[saturo 10]

FWIW, I don't believe that will prove to be a reliable hypothesis. Careful with assumptions.

 

OK - I think we all agree that pace regulates how much or how little faster fractal "stuff" one sees during the day. How would you phrase a rule regarding pace and visible/not visible sub-fractals?

 

No "tends to" No "looks like" - I mean an ALWAYS rule.

[Ezzy 10]

OK - I think we all agree that pace regulates how much or how little faster fractal "stuff" one sees during the day. How would you phrase a rule regarding pace and visible/not visible sub-fractals?

 

No "tends to" No "looks like" - I mean an ALWAYS rule.

 

You're not going to like this, but rules will get you into trouble. There are too many examples to go into, here's one:

http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-144.html#post116745

 

For this case IMO you need to observe what the market is doing. Not that it conforms to a specific rule set. We've been warned against making rules vs. guidelines because rules don't allow you to account for other contexts you may not have considered.

 

So more questions: If you see sub-fractals on one leg is it a requirement that you see them on all legs? Or see the same amount (or levels) of sub fractals on each leg?

 

That may or may not be helpful as you test your theory:

This B2B had clearly articulated sub-containers (faster fractal movement). Therefore we can assume that for THAT DAY containers forming on our trading fractal at all pace levels will result in faster fractal movement being articulated.

[saturo 10]

You're not going to like this, but rules will get you into trouble. There are too many examples to go into, here's one:

http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-144.html#post116745

 

IMO PV trading is 100% rules based... it's just that the rules can seem complex because they employ deductive logic. Also the rules are extremely context sensitive and I believe this is the point you are trying to make.

 

So a rule about rules Rules will get you in trouble if you are not mindful of the context.

 

About the snippet you referred to... IMO there was nothing wrong with Breakeven's application of rules in principle. The problem was that his rule for lats is too simplistic... there was no lat in the B2B (Ezzy I believe this drives home the point you and gucci were trying to make - mindless application of rules can get you in trouble).

 

For this case IMO you need to observe what the market is doing. Not that it conforms to a specific rule set.

 

By "this case" are you referring to the 5 bar sequence I highlighted in earlier posts along with the question of why we can't put a thick gaussian over it?

 

So more questions: If you see sub-fractals on one leg is it a requirement that you see them on all legs? Or see the same amount (or levels) of sub fractals on each leg?

 

Both of these are pretty easy to trivially reject because of the word requirement.

 

So - you can't be telling me that pace is useless as a BINARY/DIGITAL/Yes/No operator!?

 

What I was getting at in my original rule may have been too obfuscated. Let me rephrase it:

 

ON THAT DAY (i.e. for the given context) a trading fractal B2B formed on extraordinary pace (highest level) and exhibited 1 level of observable sub-containers. THEREFORE unless there is a dramatic shift up in pace to extra-extraordinary we KNOW that the 2R and 2B portions on the trading fractal will AT LEAST show 1 level of observable sub-containers.

[Ezzy 10]

IMO PV trading is 100% rules based...

With my current understanding I disagree. Binary yes, rules no. But some may argue that it's a set of binary rules.

 

About the snippet you referred to... IMO there was nothing wrong with Breakeven's application of rules in principle. The problem was that his rule for lats is too simplistic... there was no lat in the B2B (Ezzy I believe this drives home the point you and gucci were trying to make - mindless application of rules can get you in trouble).

It was in reference to a different chart that didn't have a lateral.

 

In the other chart with a lateral, following the lateral rules there are two places they can be drawn in. Whether they are valid or at what point they end was a part of the issue.

 

Many times I was told "do not make this into a rule." I understand that now, trying to pass it along. The rules upon rules with qualifiers thing was a hindrance.

 

By "this case" are you referring to the 5 bar sequence I highlighted in earlier posts along with the question of why we can't put a thick gaussian over it?

 

Because you were creating rules to apply to this section, yes, but also in general. Could remove "this case."

 

Start the thick from the get go because it's what you are building next regardless of how many sub fractals show up.

 

Both of these are pretty easy to trivially reject because of the word requirement.

 

So - you can't be telling me that pace is useless as a BINARY/DIGITAL/Yes/No operator!?

No, not saying that.

 

What I was getting at in my original rule may have been too obfuscated. Let me rephrase it:

 

ON THAT DAY (i.e. for the given context) a trading fractal B2B formed on extraordinary pace (highest level) and exhibited 1 level of observable sub-containers. THEREFORE unless there is a dramatic shift up in pace to extra-extraordinary we KNOW that the 2R and 2B portions on the trading fractal will AT LEAST show 1 level of observable sub-containers.

 

I have seen too many examples of certain sacred unbreakable rules being broken to state something so absolute. If you find that it works for you, great, go with it. It might work out that way most of the time.

 

For me it immediately brings to mind a chart where I know it doesn't work out. So maybe another rule is added to account for that, or you find a different way to look at it. Just my worth what you paid for it.

 

Regards,

 

EZ

[saturo 10]

Comments much appreciated EZ...

 

Many times I was told "do not make this into a rule." I understand that now, trying to pass it along. The rules upon rules with qualifiers thing was a hindrance.

 

OK - yes this statement gets at the heart of the matter... advice taken. The talk about rules was slipping into semantics... so I'll be more careful with word choice.

 

Start the thick from the get go because it's what you are building next regardless of how many sub fractals show up.

 

So let's get back to square 1. We agree that we can draw a thick line in. cnms2 suggested that pace tells us to expect a sub-fractal. I postulated that bar-by-bar analysis says that the first tape didn't actually have a dominant black in it so it could not constitute FTT.

 

How would you personally handle that decision point? ..what are your tells from the market?

[saturo 10]

Anyone here have a degapping script for Ninja Trader they'd like to share?

[innersky 10]

Anyone here have a degapping script for Ninja Trader they'd like to share?

 

Should be in this thread somewhere : Forums - Software Used to Trade Jack Hershey Methods

 

--

Innersky

[Corey 10]

...

 

I don't have my pace lines in place because I recently switched to ninjatrader and I still need to code 'em up.

 

Please critique.

you plan to re-code all p-v indicators?

[saturo 10]

you plan to re-code all p-v indicators?

 

I pieced together most of it from scripts others have contributed... I didn't mind redoing some stuff because the original code was not written to my liking and I wanted to get my hands dirty with ninja script.

[Tams 20]

I pieced together most of it from scripts others have contributed... I didn't mind redoing some stuff because the original code was not written to my liking and I wanted to get my hands dirty with ninja script.

 

in the spirit of community,

you should share your enhancements.

[saturo 10]

in the spirit of community,

you should share your enhancements.

 

I use the standard PV bar coloring, PRV and pace... that's it. I'm a software guy so my "enhancements" are purely code style issues.

 

Is there a need for an automated pace script for NT? I didn't find one but I also didn't look very hard (took about 10 minutes in between forming bars)

[gucci 10]

This is a VERY informative chart to study the interlocking of various fractals. Remember, noise does NOT exist.

 

When studying the chart keep in mind:

 

 

"The pattern has a defined ending after point 3 and the three iterative refinements are part of dealing with the end effects. Any trip across the parallelogram on dominant volume after point 3 prolongs the parallelogram if and only if the volume dominates and price responds to "traverse". A signal is generated when volume no longer "pushes" price to a better place in the traverse. This occurance is an ftt." (Quote from Jack)

Edited May 13, 2011 by gucci

[gucci 10]

This chart can also clear a lot of things up.

 

http://www.elitetrader.com/vb/attachment.php?s=&postid=2133515

[saturo 10]

"The pattern has a defined ending after point 3 and the three iterative refinements are part of dealing with the end effects. Any trip across the parallelogram on dominant volume after point 3 prolongs the parallelogram if and only if the volume dominates and price responds to "traverse". A signal is generated when volume no longer "pushes" price to a better place in the traverse. This occurance is an ftt." (Quote from Jack)

 

So... the quote is in reference to the 2X portion of X2X 2Y 2X... see attached attempts to apply the logic to your posted chart. Have I applied the logic correctly?

 

I do not understand what the highlighted phrase refers to... what are the "three iterative refinements" ? ...maybe the 3 levels of Gaussians and corresponding levels in price?

[saturo 10]

This chart can also clear a lot of things up.

 

http://www.elitetrader.com/vb/attachment.php?s=&postid=2133515

 

Very interesting chart! Thanks for posting.

 

I understand the slower fractal orange and blue objects.

I understand the faster fractal pink object.

I do NOT understand the green object (highlighted on attachment)

 

Point 3 of the slower fractal orange thing overlaps with Point 2 of the faster fractal green thing... I thought this was "invalid" ... it's like the slower fractal thing is ending inside the faster fractal thing before the faster fractal thing completes. It's like a snake eating itself

 

Is there a good reason to even bother annotating the green thing? .. or is it essential to seeing where we are in the sequence of things.

[Ezzy 10]

So let's get back to square 1. We agree that we can draw a thick line in. cnms2 suggested that pace tells us to expect a sub-fractal.

 

It's good advice. He also said:

 

The way I understand this method, one trades only what one sees, and not what one expects to happen. Also, as volume leads price, sequences pictured by my volume annotations lead sequences pictured by my price annotations.

 

I postulated that bar-by-bar analysis says that the first tape didn't actually have a dominant black in it so it could not constitute FTT.

 

Maybe a similar thing is going on with your analysis?:

 

About the snippet you referred to... IMO there was nothing wrong with Breakeven's application of rules in principle. The problem was that his rule for lats is too simplistic... there was no lat in the B2B (Ezzy I believe this drives home the point you and gucci were trying to make - mindless application of rules can get you in trouble).

 

How would you personally handle that decision point? ..what are your tells from the market?

 

See my first reply.

[saturo 10]

Thanks Ezzy for your reply... you are trying to help me and I appreciate it!

 

As is often the case with this method the words can get in the way... soo I'm going to try a slightly different approach.

 

In my attachment I've numbered some bars.

 

The market has provided B2B 2R on the "THICK" fractal. We KNOW and can EXPECT that it will give us 2B on the THICK fractal... with 100% certainty.

 

On which bar # do you KNOW that as the market is forming the 2B it is articulating B2B on the MEDIUM fractal (1st sub-fractal) and why?

[cees 10]

This is a VERY informative chart to study the interlocking of various fractals. Remember, noise does NOT exist.

 

When studying the chart keep in mind:

 

 

"The pattern has a defined ending after point 3 and the three iterative refinements are part of dealing with the end effects. Any trip across the parallelogram on dominant volume after point 3 prolongs the parallelogram if and only if the volume dominates and price responds to "traverse". A signal is generated when volume no longer "pushes" price to a better place in the traverse. This occurance is an ftt." (Quote from Jack)

Hi everybody

 

I am new to this method and after reading and studying this thread and also a lot on ET forum , I am somewhat stuck on the way to draw gaussians.

Gucci I looked over your chart and tried to establish the same on my own.

Between bar 10 and 20 I am doing something wrong .

Do I mix fractal levels ? if so how do i recognize that.

Or am I drawing these gaussians completely wrong .

TIA