The Price / Volume Relationship

[become 10]

Actually my suggestion was meant to be taken ad litteram. I know that one of the main factors that prevent most of the pupils of this method from breaking the profitability barrier is that they don't pay enough attention to volume.

 

I avoid giving direct advice, which would be my interpretation of Spydertrader's posts in light of my experience, because I think that for each one of us the best way to crack this method is to start from the source.

 

At two months from the starting of this thread my best advice to those who care to take it is to re-read all, and only, Spydertrader's posts here, paying attention to each word, not skipping but also not adding (inventing) anything. Spydertrader chooses very carefully his words, and only when "you know" you fully understand what he meant, and what he didn't mean. One example that comes to mind: "The market defines a Traverse based on Volume."

 

The trouble with this is that volume also seems to be interpreted on the basis of channels. So we see increasing volume gaussians drawn while the volume bars are actually decreasing, and vice versa. Establishing the correct context seems a matter of judgment rather than rules.

[Spydertrader 10]

The trouble with this is that volume also seems to be interpreted on the basis of channels. So we see increasing volume gaussians drawn while the volume bars are actually decreasing, and vice versa. Establishing the correct context seems a matter of judgment rather than rules.

 

The market (any market) exists as a result of a fundamental set of priciples. These priciples do not require interpretation of any kind. By creating chart boundaries in an effort to contain various trends which correspond to several levels of line thickness, a trader has the ability to monitor the market in an effort to note the exact point in time where / when one set of events has ended and the next set of events has commenced. This order of events exists irrespective of line thickness, fractal or time frame.

 

While I clearly understand why some have difficulty in observing the phenomena described in the previous paragraph, cnms2 provides some excellent advice as to a few of the reasons for traders experiencing difficulty. Moreover, cnms2's post (which preceded yours in time) appears to accurately have anticipated your statement / observation / conclusion prior to its posting and provided you with a method for adjusting your current (and incorrect) viewpoint with respect to judgement vs rules. In short, cnms2's post directly applies to you (along with many others, no doubt.

 

In the past, I have frequently provided direct answers to specific questions. However, more often than not, many felt my answers cryptic, murky, ambiguous or (worse yet) unresponsive. In order to remove any possible orientation to personality (rather than, people doing as they should and orient to facts) I have in this thread attempted to illustrate a process by which a trader can learn everything required to see that which exists and thereby differentiate that which does exist, from that which does not.

 

Unfortuantely, some still insist on a personality orientation.

 

However, for you specifically (and anyone else following along in general), you continue to miss a major component of Monitoring. Now, this doesn't make you a bad person, and questioning whether not the fundamental priciples I have described actually do exist, represents a very healthy excercise. But the time has come for you do determine why you have arrived at this specific conclusion of yours, and in determining the 'why' of the question, you'll no doubt, understand where (and how) your thinking went off the reservation causing you to reach an improper (one not supported by facts) conclusion.

 

Remember, just because something seems to be a certain way, does not mean that the something is a certain way.

 

HTH.

 

- Spydertrader

[rs5 10]

Tuesday 8 September 2009

[dkm 10]

The market (any market) exists as a result of a fundamental set of priciples. These priciples do not require interpretation of any kind......

 

Remember, just because something seems to be a certain way, does not mean that the something is a certain way.

 

HTH.

 

- Spydertrader

 

It is self evident from all of the charts being posted here that misunderstanding and interpretation are rife, even from those that attended the NY meeting. A walk through of just a few days of real charts with a detailed explanation of how and why gaussians are drawn on 3 fractal levels would be worth a thousand posts like the above……

[Jander 10]

My take on the ES today, hampered by lack of carryover channels and general confusion :rofl:

[ptunic 10]

Tuesday, September 8, 2009

[ptunic 10]

So we see increasing volume gaussians drawn while the volume bars are actually decreasing, and vice versa.

 

 

For drawing gaussians, I have come to believe it doesn't correspond so much to literally increasing/decreasing vol bars but rather the mode, aka dominance.

 

So for example you can have increasing black volume bars but have a non-dominant mode if the closing price can't break out of a lateral etc.

 

The other thing that sometimes helps is working backward, for example if I see a b2b or r2r, then I try to make sure that there was in fact some channel that price just Broke Out of. If it didn't, it's a big red flag that something might be incorrectly annotated. Also sometimes I get very confused and just look for a new b2b or r2r later on to "reset" and I start a new channel. Then I work backwards and try to fill in the previous parts I skipped, thought process something like "Assuming this bar is a point 1 of a new channel, it MUST also be an FTT of a previous channel of some fractal. If that is the FTT, let's work backwards some more and I am expecting to see dominant movement from the point 3 to FTT. Going back a few bars earlier, there should be a b2b/r2r to start this channel, let's look for that." etc

[ljyoung 10]

I agree with romanus and ehorn that the first leg up is done. The termination was quick and clean as opposed to the schlock we have been wading through (as 5 min ES traders) for the past few days.

 

An invalidated turning point (incompletion in the face of completion) is frequently due to a neglected IT or LT RTL which as best I can ascertain was the case here.

[innersky 10]

Tuesday, September 8, 2009

 

Imho, your first down traverse is not valid as the RTL gets broken (10:15) on decreasing volume...

 

--

innersky

[Tams 20]

Imho, your first down traverse is not valid as the RTL gets broken (10:15) on decreasing volume...

 

--

innersky

 

 

can you post an alternative?

 

TIA

[become 10]

For drawing gaussians, I have come to believe it doesn't correspond so much to literally increasing/decreasing vol bars but rather the mode, aka dominance.

 

 

Yes, but if you're using dominance / non-dominance to determine the direction of the volume gaussians, what are you using to determine dominance / non-dominance?

[rs5 10]

Wednesday 9 September 2009

[Jander 10]

Something is amiss, cant quite put my finger on it

 

Most troublesome between 11:30 - 2pm, the old shallower traverse trick

 

EDIT: Also, Bar 1 WTF??

[romanus 10]

Wednesday, September 9, 2009.

[innersky 10]

can you post an alternative?

 

TIA

 

This was September 9 for me.

[sscott 10]

Yes, but if you're using dominance / non-dominance to determine the direction of the volume gaussians, what are you using to determine dominance / non-dominance?

 

From my understanding of dominance/non-dominance. Always assume non-dominance until proven otherwise. Then;

 

1. A dominant bar must have Increasing Volume.

2. Price must close outside the range of the previous bar.

 

Exceptions: The first bar outside of a Lateral/Pennnant.

A Spike bar.

Bars within Lateral formations/Movement.

 

If anyone has any corrections or additions, please let me know.

[sscott 10]

chart for Sept 10, 09

[Avi 8 10]

chart for Sept 10, 09

Notice anything about the low volume on your chart?

 

Check the next contract and see if that looks better.

[innersky 10]

September 10th 2009 chart

[rs5 10]

Thursday 10 September 2009

[romanus 10]

September 10th 2009 chart

 

I also thought 1310 was skinny b2b. LOL:doh:

[NYCMB 10]

I also thought 1310 was skinny b2b. LOL:doh:

Hi romanus and all friends who are in Price/Volume Relationship,

 

First of all, I assumed romanus's chart was accurately annotated. I have difficulty read the Market regarding Sequence completion and Dominance/Non-dominance:

1) Under what condition of context,10:25 Spike bar (non-dominance) on Increasing Volume is qulafied to complete the ES 5 min Down Traverse?

2) Why the 14:05 bar was not the point 2 of ES 5 min Up Traverse which started at 10:35?

3) Two scenarios regarding sequence completion of ES 5 min up traverse which started at 10:35--

a) 15:30 bar completed the ES 5 min Up Traverse because this bar on IBV was beyond the red tape (started at 15:05): and,15:35 bar was a continuation.

b) 15:35 bar completed the ES 5 min Up Traverse because the close of 15:30 bar was inside the 15:10 bar.

 

Comments and your thoughts are greatly appreciated. TIA

[ehorn 10]

...Comments and your thoughts are greatly appreciated. TIA

 

FWIW, I had a VE in that area....

[romanus 10]

First of all, I assumed romanus's chart was accurately annotated.

My 'direct' advise to you is not to assume it ever - I myself do not assume that it was correctly annotated. Some time tomorrow I may settle on this particular view until I am proven wrong attempting to apply the same though process to a different chart. The lines I drew on the chart represent a hypothesis that will be validated or invalidated when tomorrow comes. And even then some ambiguity may still remain as to what is actually a correct view.

 

 

1) Under what condition of context,10:25 Spike bar (non-dominance) on Increasing Volume is qulafied to complete the ES 5 min Down Traverse?

I had a lot of working theories regarding spikes, but none of them seemed to work consistently for me. The only one that seems consistent so far is that spike bars are different from non-spike bars. I suspect it wouldn't be helpful - sorry about that

 

2) Why the 14:05 bar was not the point 2 of ES 5 min Up Traverse which started at 10:35?

I can't tell you where the Point Two of the traverse is, may be tomorrow will add more data that would allow to make an argument in favor of one particular place. But I can explain why I drew lines of various thickness on the chart. My hypothesis is that point two of what I think is a traverse would be where medium B2B end.

 

3) Two scenarios regarding sequence completion of ES 5 min up traverse which started at 10:35--

a) 15:30 bar completed the ES 5 min Up Traverse because this bar on IBV was beyond the red tape (started at 15:05): and,15:35 bar was a continuation.Pretty much what I thought.

b) 15:35 bar completed the ES 5 min Up Traverse because the close of 15:30 bar was inside the 15:10 bar. I don't believe it is relevant

 

[innersky 10]

I also thought 1310 was skinny b2b. LOL:doh:

 

Romanus,

 

when/how did you know to fan the blue up traverse? It looked like a completed sequence to me at 14:05.

 

--

thanks,

 

innersky