The Price / Volume Relationship

[dkm 10]

Differentiation Drill for today...

Still looking forward to seeing the answers for the first drill........

[Spydertrader 10]

Could you comment on the placement of Tapes and Traverse?

 

Perfect.

 

Nicely done.

 

- Spydertrader

Edited July 10, 2009 by Spydertrader
formatting

[Spydertrader 10]

Still looking forward to seeing the answers for the first drill........

 

If you cannot apply your answer onto other exact same scenarios on additional market days (and arrive at the exact same conclusion), then perhaps, you did not arrive at the correct answer. The goal with this thread remains moving people to seek their answers from the market, rather than, from an individual.

 

Place some traverse lines on your chart, and see if things don't look clearer for you.

 

The market provided seven laterals today (7/10/2009). Try dividing them into two seperate groups.

 

- Spydertrader

Edited July 10, 2009 by Spydertrader
formatting

[NYCMB 10]

Hi Spydertrader,

 

Could you comment on Orange Down Traverse? It's probably a Down Tape. Points One, Two and Three are all overlapped. TIA

[rs5 10]

The market provided seven laterals today (7/10/2009). Try dividing them into two seperate groups.

 

- Spydertrader

 

Revised chart to include missing lateral. If you see any mistakes or corrections needed, please comment. Thank you!

 

How should the laterals be grouped? I noted C for laterals that appears to continue in the same direction, versus the those R that appears to change in direction coming into the lateral and leaving the lateral. Should L6 and L7 be the same lateral (double laterals) or 2 separate ones? It is the only lateral combination which has volume that increases in the middle of the lateral. Volume reduces in the middle of all other laterals.

Edited July 11, 2009 by rs5
additional notes

[Spydertrader 10]

Could you comment on Orange Down Traverse?

 

We define Tapes, Traverses and Channels by each having certain characteristics which represent various geometric shapes. Unfortuantely, many people attempt to compare and contrast based on a visual derived from the Price Pane. Such a paradigm, quite frequently, creates opportunity for error. I recommend the lower portion of your chart in order to determine whether or not one has a Tape, Traverse or Channel.

 

- Spydertrader

[deanz 10]

The market provided seven laterals today (7/10/2009). Try dividing them into two seperate groups.

 

- Spydertrader

 

Through Spytraders posts I have decided that a Lateral ends at the last bar that touches the Lateral, I did not use volume in this finding and I am not sure if my definition is correct.

 

 

Here are my lateral findings for today, I grouped then into..... Break Out volume that exceeded all previous volume in the Lateral and called it HVB [High Volume Breakout] and LVB [Low Volume Breakout] where the Break Out Volume was less that all previous Volume in the Lateral.

 

Dean.

[Spydertrader 10]

By adding the correct Gaussian Formations within the Volume Pane, a trader can know when the market has reached Point Two of the particular trend, Point Three of the particular trend, as well as, the Point in time where the current trend fails - and the next trend begins.

 

See Attached.

 

- Spydertrader

 

[VolumeJedi 10]

I was wondering what took you guys so long to get here. LOL

 

good luck with your thread.

[NYCMB 10]

We define Tapes, Traverses and Channels by each having certain characteristics which represent various geometric shapes. Unfortuantely, many people attempt to compare and contrast based on a visual derived from the Price Pane. Such a paradigm, quite frequently, creates opportunity for error. I recommend the lower portion of your chart in order to determine whether or not one has a Tape, Traverse or Channel.

 

- Spydertrader

 

Hi Spydertrader

 

I look at the lower portion of my chart and found the additional infomations;

1. After 11:00 bar (oprn of) which breaking the RTL of olive up traverse and closes outside of Lateral Formation on IRV, I don't see any tiny tapes in different direction.

2. 11:30 OB (open of) begins a Lateral Formation, then Volume of Black and Red is decreasing.

3. Price bars are running inside the green up tape created by OB.

 

Besides the above obsevation, I rechecked Ten scenarios too. Still, I can't find the characteristics of a tape or a traverse. Do you have a better way to teach a slow person? TIA

[Mr_black 10]

Here is complete slow Fractal (channel) ... note the Volume sequence R2R2B2R on Channel Level

[Tams 20]

Spyder:

 

Can you describe "Stitch"?

 

How does it fit into our analysis?

 

TIA

[NYCMB 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.

 

Hi jbarnby

 

The analysis you did for "1st bar on Increasing Volume forming Dom-Lateral: and, 1st bar on Decreasing Volume forming Non-Dominant Lateral" is very helpful. It seems I don't complete understand your concep so far, especially OB for 1st bar involved. If it's not too mush for you, could you do the same kind of analysis for the seven Lateral Formations on july 10 ES chart? TIA

[jbarnby 10]

Hi jbarnby

 

The analysis you did for "1st bar on Increasing Volume forming Dom-Lateral: and, 1st bar on Decreasing Volume forming Non-Dominant Lateral" is very helpful. It seems I don't complete understand your concep so far, especially OB for 1st bar involved. If it's not too mush for you, could you do the same kind of analysis for the seven Lateral Formations on july 10 ES chart? TIA

 

Well, I'm not sure I can be of much help as I'm also working to differentiate these laterals. Since Spyder did not comment on my post I assume I did not provide the correct answer...so I continue to work.

 

I know that there are two kinds of laterals, dominant and non-dominant. I believe that dominance is determined by how the lateral is formed, ie dominant bar or non-dominant bar. I also know that there is further differentiation required on the dominant side because some dominant laterals allow completion of the sequence within the lateral, whereas other dominant laterals require a BO or FBO. I've yet to find absolutely certainty as to how to differentiate the two types of dominant laterals, but I believe it may have something to do with the peak of the dominant bar. I've worked on these laterals for a long long time...but it has been a difficult and challenging process for me.

 

I've been working on this method for 2.5 yrs. Perhaps others who also have a considerable amount of time invested can chime in here with their ideas. I'm hopeful that through collaborative effort we can learn to see what the market is telling us.

 

John

[Spydertrader 10]

Do you have a better way to teach a slow person?

 

Focus on creating Gaussians across three trading fractals. In other words, pay close attention to Volume.

 

Can you describe "Stitch"?

 

These represent stitches ...

 

 

A Two Bar formation where Bar Two has increased Volatility compared to Bar One. In addition, the two bars have an equal high, or an equal low between them - but not both.

 

How does it fit into our analysis?

 

The answer here depends on context. However, by differentiating the various examples of stitch formations which develop on any market day, a trader can know the context provided by the market, and as a result, know the answer for each specific scenario.

 

- Spydertrader

[NYCMB 10]

Focus on creating Gaussians across three trading fractals. In other words, pay close attention to Volume.

 

- Spydertrader

 

Hi Spydertrader

Thank you for advise me to focus on Gaussians for three trading fractals.

 

May I ask you for the following help?

a) Do I have orange Tape or orange Traverse? Please see the attached.

b) Could you kindly place Gaussians across three trading fractals for the attaehed chart?

TIA

[dkm 10]

 

The market provided seven laterals today (7/10/2009)....

 

- Spydertrader

Using the definition that bars 2 and 3 must be inside bar 1 to form a lateral and that a lateral requires 2 closes outside of it to end the lateral, then I only see six laterals on the 10th July. I guess it could be data differences..........

 

I presume by "two groups" you mean continuation or change?

[dkm 10]

We define Tapes, Traverses and Channels by each having certain characteristics which represent various geometric shapes. Unfortuantely, many people attempt to compare and contrast based on a visual derived from the Price Pane. Such a paradigm, quite frequently, creates opportunity for error. I recommend the lower portion of your chart in order to determine whether or not one has a Tape, Traverse or Channel.

 

- Spydertrader

An example or two would help a lot of people.

[Mr_black 10]

There is complete sequence for Up Channel so far....... today can be, a down trend day:)

[Mr_black 10]

Nice 6 point profit.....

[NYCMB 10]

We define Tapes, Traverses and Channels by each having certain characteristics which represent various geometric shapes. Unfortuantely, many people attempt to compare and contrast based on a visual derived from the Price Pane. Such a paradigm, quite frequently, creates opportunity for error. I recommend the lower portion of your chart in order to determine whether or not one has a Tape, Traverse or Channel.

 

- Spydertrader

 

Examples which define Tapes, Traverses and Channels will be very helpful. TIA

[Spydertrader 10]

I only see six laterals on the 10th July.

 

 

I presume by "two groups" you mean continuation or change?

 

As a set, the seven laterals each fit into one of two subsets. How one chooses to define these subsets enables the trader to determine, in real time, what context the market has provided. However, we do not define these subsets by what happens after a lateral has ended.

 

- Spydertrader

[dkm 10]

However, we do not define these subsets by what happens after a lateral has ended.

 

- Spydertrader

So how do we define them then? Dominant and non-dominant?

Edited July 13, 2009 by dkm

[Spydertrader 10]

Do I have orange Tape or orange Traverse?

 

You already know the answer. Should you not believe that you actually do know the answer, simply apply the exact same construct used for your orange lines onto another area of the same chart or another chart from a different day.

 

If you believe you have a certain thing, and after applying the same construct onto another day it appears as if your original idea doesn't work, then perhaps you need to apply a different construct. If things do work as expected, then the market has provided the answer you seek - as it always does.

 

Could you kindly place Gaussians across three trading fractals for the attached chart?

 

I've done this many, many, many times in the past. The fact that questions still exist in this area tells me that having me draw lines fails to transfer the importance of process to those with an interest in learning.

 

Therefore, this time around, I plan to create an environment where the answers come from the market itself, rather than, from me. In such a fashion, the individual learns the process involved with learning how to learn.

 

Everyone must learn to differentiate that which actually exists, from that which, they believe exists.

 

- Spydertrader

[Spydertrader 10]

So how do we define them then? Dominant and non-dominant?

 

You may define them (to start) in any way you choose. It doesn't matter if you stumble onto the correct answer the first time through, or even if your definition represents some wacked out theory straight out of left field. The whole point is to begin a process of learning to narrow down the possibilities until you arrive at the only possible answer - which just happens to be the correct answer.

 

For example, let's assume someone decided to define the two groups of Laterals by using Bar 1 'color' (Bar 1 as 'Up' or 'Down' based on the color of the Price Bar). Easily, one could place all seven laterals into one of two groups - using such a defintion. However (as we all know), the Price / Volume Relationship operates with respect to a neutral bias, and as as result, 'Up' or 'Down' does not represent a correct orientation.

 

So, the trader learns 'Up' / 'Down' doesn't 'work' with resepct to differentiation, and a such, also learns the market requires another (more accurate) defintion.

 

You've chosen to define the Laterals as either dominant or non-dominant.

 

All that now remains is for you to check with the market in an effort to see whether or not such defintiions accurately represent all seven laterals on this specific day, as well as, on any other day.

 

HTH.

 

- Spydertrader

Edited July 13, 2009 by Spydertrader
fixed spelling error