The Price / Volume Relationship

[ehorn 10]

  El Guapo said:

I cannot find the definitions for;

B2B 2R 2B

Or

R2R 2B 2R

 

What does "B2B", "2R", and "2B" mean/stand for?

What does "R2R", "2B", and "2R" mean/stand for?

 

What does Gaussian mean?

 

Many thanks!

 

Please review Spydertraders original post highlighting Gaussians and there formations below..

 

  Spydertrader said:

Gaussians

 

The Volume Sequences (represented by Dominant and Non-Dominant Gaussian Formation) when matched with the above drawn trend lines for each trading fractal create the B2B 2R 2B (uptrend) cycle, as well as, the R2R 2B 2R (downtrend) cycle. Increasing Volume in the direction of the current trend represents dominant Volume. We represent such phenomenon with an increasing Gaussian line in our Volume Pane with the goal of syncing our trend lines with our Gaussian lines of equal weight See Attached.

 

 

To Be Continued ...

 

- Spydertrader

 

Here is another view of the volume gaussians sequences:

Edited July 9, 2009 by ehorn

[friarwilliam 10]

Would that I had your eyes, so that I too could see the truth. I shall learn to distinguish that which I believe exists from that which the market has actually provided me.

[ehorn 10]

  friarwilliam said:

Would that I had your eyes, so that I too could see the truth. I shall learn to distinguish that which I believe exists from that which the market has actually provided me.

 

As Spydertrader describes - the process consists of a 4 part routine (MADA). He is kindly providing the framework necessary to accurately perform the first part (M)onitor. As a practitioner of these methods performs the routine, over time, the mind becomes differentiated to be able to "see" what cannot be seen at first.

 

Best wishes

[Spydertrader 10]

  NYCMB said:

I'm wondering if you changed the rule for bar coloring.

 

I have the 'default' settings (for most charting software) shown currently - where Price Bar Color results from the differences between open and close. For the 'neutral bars' (or Doji for those of a 'candlestick' orientation), I simply added a bit of coding in order to 'color' them correctly (rather than show up as a different color than the up / down Price Bars).

 

I set the bar coloration this way for educational purposes.

 

HTH

 

- Spydertrader

[Spydertrader 10]

As practiced in the previous threads I have authored, I continue to encourage liberal use of the 'report' button and / or ignore feature of this web site.

 

- Spydertrader

[NYCMB 10]

Hi Spydertrader,

 

I'm not sure about what you mean regarding your July 8,05:11 PM post (chart).

 

Do you mean there are Two Lateral Formations?

Lateral Formation A - 10:25 to 10:55 (close of bar)

Lateral Formation B - 11:00 to 11:20 (close of bar)

Please see the attached. TIA

[Spydertrader 10]

  NYCMB said:

Do you mean there are Two Lateral Formations?

 

Correct. See Attached.

 

- Spydertrader

 

[rs5 10]

  Spydertrader said:

See Attached.

 

- Spydertrader

 

 

Does the Lateral end when a bar closes outside of the first bar in the lateral? As that is the moment market leans towards that break out direction? It is not clear to me on the first yellow lateral why it ends in location shown. Please - will you clarify? Thank you!

[rs5 10]

What is a dominant vs. a non-dominant lateral?

 

At the cost of showing my ignorance, here goes

 

Lateral L1 happens earlier in the day with a wider swing (height of lateral) than Laterals L2 and L3. Thus L1 showing a more volitile condition. Without looking at the volume, I would guess that vol is higher at L1 than at L2 or L3.

 

L2 is much longer (time wise) than L1 and L3 (indicating directionless market?).

 

The first bar of Lateral L1 is an up bar after a pronounced up move. L1 is a curb of upward movement (bar 1 is up while bar 2 is down)- consolidation at the highs, while L2 and L3 are curbs of downward movement - (bar 1 in both laterals are down, b2 is up). L2 and L3 both occur after an inside bar formation, indicating that the market has already entered "pause" mode. Bar 1 in L2 and L3 both have a lower high than the bar prior to L2 and L3.

 

L1 formation of bar 1 to bar 3 is up-down-up

L2 formation of bar 1 to bar 3 is down-up-up

L3 formation of bar 1 to bar 3 is down-up-up

 

Bar 3 of L1 and L2 are inside bars compared to bar 2 while not the case in L3.

 

L1 has one upward violation testing the highs before the end of L1 as red bar closes below lateral lows. L2 has violates both upper and lower boundaries before picking a side and closes outside of L2 boundaries. L3 has no violations of boundaries before bar closes outside of L3 boundaries and L3 ends.

 

Price comes up into Lateral L1 and exits L1 down (change of direction)

Price comes down into Lateral L2 and exits L2 up (change of direction)

Price comes down into Lateral L3 and exits L3 down (continuation of prior move)

 

Outside Bar OB1 is a down bar after prior up bar.

Outside Bar OB2 is an up bar after prior down bar.

 

Both OB1 and OB2 closes near the open of the prior bar (tried to go somewhere but did not succeed)

 

Outside Bar OB1 occurs after L1 bars 1 to 3 (after a Lateral is formed), and violates the height of L1 bar 1 (swing high), but closes inside L1. OB2 is not in a lateral formation and does not violate the swing high (2nd bar prior to OB2).

 

Stitch S1 has same color bars - red red.

Stitch S2 has different color bars - black red.

 

S1 occur in the middle of a down move (down tape).

S2 occurs at the end of an up move (up tape)

[dkm 10]

  Spydertrader said:

Today's drill .....

- Spydertrader

see attached chart for differences on OB's and stitches.

I don't see anything conclusive that differentiates the lats.

[Spydertrader 10]

  rs5 said:

Does the Lateral end when a bar closes outside of the first bar in the lateral?

 

When I authored this post (quoted below), I had just these sort of questions in mind.

 

  Spydertrader said:

Today's drill involves determining what answer best describes the differences, and once located, by using the information provided by the Price Pane and / or the Volume Pane, applying that answer onto other chart days in an effort to 'see' if your answer 'works' for every other exact same scenario - irrespective of market day.

 

You've developed an answer which states "a lateral ends when a bar closes Outside the Lateral Formation." Now apply this answer onto the attachment of Post #57 - specifically, the 'pink' highlighted lateral formation. Does your answer 'work' in this specific example? If the (pink) Lateral Continues beyond the point in time where your answer develops, then perhaps, a different answer better describes the phenomenon in question.

 

Such is how learning the process of differentiation begins.

 

  rs5 said:

At the cost of showing my ignorance, here goes...

 

Everyone, from a neophyte just today deciding to investigate the potential for earning a living by trading markets, all the way to the most seasoned investors and traders - such as Wareen Buffet - began their journey the exact same way. We all remember what it was like to be new. Nobody choosing to participate in this thread need concern themself with "showing their ignorance" in a post. Mistakes and errors occur. Learning from those errors represents one of the best opportunities to move forward.

 

It is the process that matters as success represents a consequence of the the learning process.

 

  rs5 said:

Price

Price

Price

 

Do you see that you are only using half the available data, rather than the entire data set?

 

HTH.

 

- Spydertrader

[Mr_black 10]

P/V in action ......(only P3 trades)

[rs5 10]

You've developed an answer which states "a lateral ends when a bar closes Outside the Lateral Formation." Now apply this answer onto the attachment of Post #57 - specifically, the 'pink' highlighted lateral formation. Does your answer 'work' in this specific example? If the (pink) Lateral Continues beyond the point in time where your answer develops, then perhaps, a different answer better describes the phenomenon in question.

 

I am confused. It looks like the pink lateral ends when the internal green lateral ends. And the internal green lateral ends when a bar closes outside of that green plus pink lateral??

 

Do you see that you are only using half the available data, rather than the entire data set?

 

Do you mean I am only looking at price now while I should be looking at price plus volume?

[dkm 10]

Attempt at lat differentiation:

 

1st lat, starting 09:50, begins with dominant black volume, but this changes to dominant short volume on the OB bar at 10:05. Lat ends with bo short.

 

2nd lat, starting 12:00, begins with dominant red volume, which changes to dominant long volume at 12:15 but this is followed by a change to dominant short volume at 12:30 (still inside the lat) and a further change to dominant long volume at 12:55. Lat ends with bo long.

 

3rd lat, starting 15:15, begins with dominant red volume and there is no dominant change within the lat. Lat ends with bo short.

[Spydertrader 10]

  rs5 said:

I am confused. It looks like the pink lateral ends when the internal green lateral ends.

 

If you apply your answer as to when one ends a Lateral Formation, your answer 'ends' the Lateral far sooner than where the lateral actually ends. In other words, please locate the "first bar to exit (close out of) the lateral formation" (your answer) and determine whether or not the lateral actually ends at such a point. I've market the correct end point. I think you'll see how your answer incorrectly would end this lateral several bars prematurely.

 

  rs5 said:

Do you mean I am only looking at price now while I should be looking at price plus volume?

 

As outlined in this post ...

 

  Spydertrader said:

Today's drill involves determining what answer best describes the differences, and once located, by using the information provided by the Price Pane and / or the Volume Pane, applying that answer onto other chart days in an effort to 'see' if your answer 'works' for every other exact same scenario - irrespective of market day.

 

HTH.

 

- Spydertrader

[Spydertrader 10]

  Mr_black said:

P/V in action ......(only P3 trades)

 

Nice to see you still doing well.

 

- Spydertrader

[Spydertrader 10]

  dkm said:

Attempt at lat differentiation:

 

Right House; Wrong bed. Or as they say in the Southern USA, Right Church; Wrong pew.

 

- Spydertrader

[ehorn 10]

A timely lesson on Laterals Spyder

[rs5 10]

9 July 2009 - Continuing monitor and annotate

[jbarnby 10]

07/09 Tapes

[jbarnby 10]

I'll give the lats from 07/06 another go:

 

0950 lat begins with price moving higher on dec black vol (non-dom). Price exits this lateral in the opposite direction on increasing red volume.

 

1200 lat begins with increasing red volume (increasing over the first bar of pennant 1150) and the r2r2b2r sequence completes within the lat. Price exits the lat in the opposite direction and returns to increasing black volume.

 

1515 lat begins with increasing red volume (but decreasing volume when compared to 1505 first bar of pennant). r2r2b2r completes but the pennant remains active until 1555 bar. 1540 bar does not terminate the lateral because we require 3 consecutive outside closes when a pennant formation is involved.

[Mr_black 10]

6 points today...........

[ehorn 10]

Differentiation Drill for today...

Edited July 10, 2009 by ehorn
Added a few additional notes

[rs5 10]

10 July 2009 - the tapes are easier to identify now.

 

Will be away for a couple of weeks. Looking forward to continuing the journey when I return.

 

Good Trading!

[NYCMB 10]

Hi Spydertrader

 

Could you comment on the placement of Tapes and Traverse? Any corections are appreciated! TIA