The Price / Volume Relationship

[gosu 10]

Gosu,

 

you wrote "Nowadays I rarely go back to review the recordings."...then why do you record (if not to review/ debrief)?

 

Thanks,

 

Vienna

 

I like to have them just in case I do need to review something. Who knows when the next screwup occurs that I need to go back and thoroughly debrief?

 

If I had the time, I would love to review the entire session at the end of the day or evening. Unfortunately, I have to consider mundane things like eating, exercising, resting, taking care of day to day living chores, etc. There's only so much one man can do in a day.

[xioxxio 10]

I would like to hear comments from others how they handle pt3 and fanning out. What strategies do you use?

 

Very often I trade pt3 with all the correct “tell tale signs” i.e increasing volume only to be stopped out

 

I have attached an example , you can see the frst pt3 on increasing black volume and it was an ftt. Two bars later was the “correct” pt3.

[cory 10]

I would like to hear comments from others how they handle pt3 and fanning out. What strategies do you use?

 

Very often I trade pt3 with all the correct “tell tale signs” i.e increasing volume only to be stopped out

 

I have attached an example , you can see the frst pt3 on increasing black volume and it was an ftt. Two bars later was the “correct” pt3.

everything looks good the big black bar must be news related, avoid news time or if in, wash.

[vienna 10]

I would like to hear comments from others how they handle pt3 and fanning out. What strategies do you use?

 

Very often I trade pt3 with all the correct “tell tale signs” i.e increasing volume only to be stopped out

 

I have attached an example , you can see the frst pt3 on increasing black volume and it was an ftt. Two bars later was the “correct” pt3.

 

First, if you wait for inc. Volume, you will be too late in many cases. You have to enter before and confirm with inc Volume.

 

That's the way I would see it:...you had a 'Lateral Movement' (for sure some kind of Flaw/ Internal) at a point 2, so you know you are traversing to Pt. 3...you knew that at the line marked "A" (2 bars close within first bar). You know it should mean continuation, but I have often seen weird gaussians (Inc Dom Vol) at Lat FBO's. If you know you are in a Lat at Pt. 2, you could try to enter at the bottom of it (the 2nd fbo would have been the great hindsight spot), and you could either exit at the top or move the stop to be at the top... the lat movement turned into a Lateral Traverse, fanning your up RTL.

 

Please note that that is just my interpretation....

 

hth,

Vienna

Edited October 12, 2011 by vienna

[vienna 10]

Xio,

 

notice how a very similar situation developed in the ES today...first, had you entered when you saw inc vol at the green Pt 3,you would have been late and at the top....

 

Second, see how confusing things get when you don't know you are in some kind of lateral...see the big red bar b 17? Perfect R2R, looking for a short, right? ...as Ivo would say, this is the market trying to f**k you....

 

If, however, you know that you are in a Lat, you wait to get a low-risk entry at the bottom (b 19 in this case)...

 

hth,

Vienna

[ivob 10]

I always fan out, just like you. Also I rotate my pt3's and use them as new pt1 and find it useful.

 

In this case..indeed it was a taped FTT that you took. You can be stopped out but not at a loss if you're fast/tight.

 

Most of the time price resides in a non-dominant traverse.It often takes time to make a pt3. As long as price does not make a new high you can expect a pt3 down. If you draw that channel which you didn't then you see a VE and FTT. We do not actually see an attempt after the VE bar to touch the LTL but....well....this could even have taken place in the last 2 seconds of the VE bar no? So it depends how that bar went.

 

Anyway...this is all hindsight. Price goes up if it cannot go down anymore. Often points on a 1-2-3 are formed by FTT's

 

Ivo

 

 

 

 

I would like to hear comments from others how they handle pt3 and fanning out. What strategies do you use?

 

Very often I trade pt3 with all the correct “tell tale signs” i.e increasing volume only to be stopped out

 

I have attached an example , you can see the frst pt3 on increasing black volume and it was an ftt. Two bars later was the “correct” pt3.

[xioxxio 10]

everything looks good the big black bar must be news related, avoid news time or if in, wash.

 

It was during lunch time.

[Corey 10]

more thought on volume

Steidlmayer Volume Strips: A New Method to Analyze the Markets

-Why the Market Profile legacy analysis of price and time has changed

-How electronic market order flow contrasts to open-outcry order flow

-Analyzing volume and price

-How the influence of supply (volume) effecting price is the new paradigm

-Presentation is approximately 94 minutes long.

Steidlmayer Volume Strips: J. Peter Steidlmayer

[gosu 10]

I would like to hear comments from others how they handle pt3 and fanning out. What strategies do you use?

 

Very often I trade pt3 with all the correct “tell tale signs” i.e increasing volume only to be stopped out

 

I have attached an example , you can see the frst pt3 on increasing black volume and it was an ftt. Two bars later was the “correct” pt3.

 

Welcome to the world of trading.

 

What is it that you are trading? I see horizontal lines in your volume pane but I don't see the values.

 

If you trade the ES, what is the day of the chart? I might be able to provide a more thorough response.

[vienna 10]

 

notice how a very similar situation developed in the ES today...first, had you entered when you saw inc vol at the green Pt 3,you would have been late and at the top....

 

 

hth,

Vienna

 

 

Just saw that my blue point 3 was misplaced on the chart I posted...it had migrated and I forgot to move it.. a pt 3 obviously has to come after a pt 2, not before ...

Moving too fast,

Sorry for that,

 

Vienna

[patrader 10]

I would like to hear comments from others how they handle pt3 and fanning out. What strategies do you use?

 

Very often I trade pt3 with all the correct “tell tale signs” i.e increasing volume only to be stopped out

 

I have attached an example , you can see the frst pt3 on increasing black volume and it was an ftt. Two bars later was the “correct” pt3.

 

Suggest you take vienna's advice and annotate laterals plus what jack calls bookmarks.Just these two annotations would have given you more insight.The green pt 2 bar's high came just short of the slow down container's rtl that you have annotated.Would also suggest that you leave the slow down rtl extended to the right until it is broken on increasing black volume.It is not unusual for the market to find resistance at a slower down rtl and go sideways(lateral) or have slight retrace to pt 3(depends on mode and context of the market).If you had the extended slow down rtl in place then your first pt3/ftt bar would have tested both the rtl and bookmark on its high.Also two bars before this pt3/ftt bar the low of that bar created a boundary(matches low of bar before the pt2 which is start of lateral) on the bottom of the lateral.The market luvs to setup these traps on both sides of the market right before another dom move(the "correct" pt 3 as you call it).Many times the market will use a combo of a lateral with a slight retrace(which is also called a fbo of the lateral) right before the pt 3.With more monitoring experience you can learn to anticipate this.Now look closely at the volume pane.After the pt 2 there is no increasing red volume.Each price move down is on decreased volume.This is a major heads up that this move is non dom.hth

Edited October 13, 2011 by patrader

[xioxxio 10]

Welcome to the world of trading.

 

What is it that you are trading? I see horizontal lines in your volume pane but I don't see the values.

 

If you trade the ES, what is the day of the chart? I might be able to provide a more thorough response.

 

It is the Australian SPI

[xioxxio 10]

I was looking through elitetrader forum to see how Spyder does it and there are plenty examples of pt3 fanning out. He creates a new 1,2,3

 

Jack puts a dotted line for the old pt3 and uses the new one as pt 3 ie fans out. I will look for the chart

 

I have circled the area in question with a white circle.

Edited October 13, 2011 by xioxxio

[ivob 10]

You would not believe how I screw up sometimes. Especially in chop.

Getting much better in that BTW. Sometimes got to switch to "fade" mode or "seeing change very fast" Spyder would say.

 

But...... today.... so far I am nailing every turn :-)

Trading very much in the zone today ;-)

 

Ivo

Edited October 13, 2011 by ivob

[Corey 10]

You would not believe how I screw up sometimes. Especially in chop.

Getting much better in that BTW. Sometimes got to switch to "fade" mode or "seeing change very fast" Spyder would say.

 

But...... today.... so far I am nailing every turn :-)

Trading very much in the zone today ;-)

 

Ivo

maybe public posting helps to put you in in the zone.

[Jleon 10]

What ever happened to reading the time and sales and d.o.m. Can you really sleep ok putting a trade of size on with FTT etc? I have read the tape for years and would not trade with out it and certainly not sleep while having a trade on if I wasnt in the know. I also see people using the histogram bars and such. Can you really get market direction from this? The only way i know if im on the right side of the market is order flow and a little bit of price action. Purest form the 11 years I have spent looking at things. For example: if a 500 lot is taken on the offer in Cotton and the market grinds higher I know it is still strong. If a 500 lot is taken on the offer and the market drops I know its really weak. Dont really know if I could get this probing info from those histogram?

 

Happy trades.

[xioxxio 10]

Today's SPI market. Comments appreciated.

[gosu 10]

I was looking through elitetrader forum to see how Spyder does it and there are plenty examples of pt3 fanning out. He creates a new 1,2,3

 

Jack puts a dotted line for the old pt3 and uses the new one as pt 3 ie fans out. I will look for the chart

 

I have circled the area in question with a white circle.

 

If you use a new p1 it wouldn't be "fanning" but the drawing of a new channel. The chart you posted shows the fanning off the original p1.

 

Learning as much as you can about fanning is time well spent. If you can reach a level of understanding where you not only anticipate fanning to occur but can annotate potential RTLs before the "new p3" forms, you will be advancing into territory beyond Hersheyland.

[ivob 10]

There's no need to move "beyond" hersheyland. Understanding the basics is enough, and even a requirement to move further.

 

What happened to Spyder? Why doesn't he or other experienced JHM traderts post anymore here?

 

Ivo

 

 

 

 

If you use a new p1 it wouldn't be "fanning" but the drawing of a new channel. The chart you posted shows the fanning off the original p1.

 

Learning as much as you can about fanning is time well spent. If you can reach a level of understanding where you not only anticipate fanning to occur but can annotate potential RTLs before the "new p3" forms, you will be advancing into territory beyond Hersheyland.

[gosu 10]

There's no need to move "beyond" hersheyland. Understanding the basics is enough, and even a requirement to move further.

 

What happened to Spyder? Why doesn't he or other experienced JHM traderts post anymore here?

 

Ivo

 

Your implication to stick to the literal word of Jack is a bit odd seeing that you are dismissive of using volume.

 

As you say, there is no "need" to add anything to understand the basics. Nonetheless, a lot of things have been added over the years by Jack himself to help understand the basics, and some things have been discarded (maybe "replaced" is a better word).

 

What can be more basic than anticipating a point 3, or for the person asking the question, a new point 3 after fanning?

 

Since you seem to look upon Spyder as an authority, I recall seeing Spyder using a 20-period moving average on the 5m chart which is heretical to the Hershey script. The point is, if it helps to understand the basics better, use it.

[stepan7 10]

There's no need to move "beyond" hersheyland.

 

It's true. Keep it simple.

 

Happy Trading,

 

Stepan

[wilddog 10]

Anyone trading the EURO STOXX 50? If so what leading indicator are you using? Thanks

 

ie. YM to ES

[Corey 10]

Anyone trading the EURO STOXX 50? If so what leading indicator are you using? Thanks

 

ie. YM to ES

ym is a subset of ES, try to look for some most trade stocks in stoxx.

[wilddog 10]

ym is a subset of ES, try to look for some most trade stocks in stoxx.

 

Sure it is a subset, but the main reason for the YM leading the ES as an indicator of change is because the YM is a price-weighted average index and the ES is capitalization-weighted index. Now look at the weights of the YM in the ES. The answer should be clear to you.

 

Hope this helps.

[ivob 10]

Your implication to stick to the literal word of Jack is a bit odd seeing that you are dismissive of using volume.

 

I didn't say that.... If you know 10% of what he knows it's enough... as long as it is the 1st 10%..... the basis. It explaines it all...that having said, unexpected things happen sometimes. At least for me. You have to find your own method in the end.

 

I trade forex so there is no volume..but...come on... It's not that hard to figure out the volume behind the bars. Bars getting shorter: you bet volume is decreasing.... One can also see it in the way the individual bar ticks....(actually forex has tick-volume...but I don't plot it).. The FTT bar is never a very "nervous" high volume bar. It's relaxed. Not attracting too much attention. Also I don't use OHLC bars but candlesticks.

 

Since you seem to look upon Spyder as an authority, I recall seeing Spyder using a 20-period moving average on the 5m chart which is heretical to the Hershey script. The point is, if it helps to understand the basics better, use it.

 

So what? I use it as well. 20 EMA though. But I don't "look upon" anyone.

 

For me it's about: change, screentime, FTT (entry), right trendline, left trendline (exit), VE, fractals. (1-2-3 setups inside 1-2-3 setups), following rules, getting out at choptime. All you have to see is the change. (FTT). After that the market will take you whereever it wants to take you.

 

Ivo