The Price / Volume Relationship

[innersky 10]

Are they acutally labeled correctly? Isn't the first one also non-dom?

 

--

innersky

 

The Second Lateral (the 'non-dom' labled example) does not conform to the examples in The Lateral Formation Drill (and follow up). Understand why it does not.

 

- Spydertrader

[Spydertrader 10]

Are they acutally labeled correctly?

 

Yes.

 

Isn't the first one also non-dom?

 

No.

 

rs5 has labelled the laterals based on the direction (Dom vs Non-Dom) of Bar 1.

 

- Spydertrader

[innersky 10]

Yes.

 

 

 

No.

 

rs5 has labelled the laterals based on the direction (Dom vs Non-Dom) of Bar 1.

 

- Spydertrader

 

I presumed in the past that the dominant lateral always exited in the opposite direction, and the non-domainant lateral in the same direction.

 

Does the difference have something to do with the lateral boundary test?

 

--

innersky

[Spydertrader 10]

I presumed in the past that the dominant lateral always exited in the opposite direction, and the non-domainant lateral in the same direction.

 

Your statement provides an excellent example for seeing how the process of differentiation works.

 

You have created a 'working hypothesis' (presumption, thought, guess) - and one which you can look to the market to see whether or not the market concurs with your assessment. At 9:45 this morning, the market created yet another one of these example laterals (in the same fashion as The Lateral Formation Drill [and follow up]). Bar 1 (of today's formation) moved in the dominant direction. Price did exit this specific Lateral Formation in the opposite direction to Bar 1 (just as you anticipated). However, looking at The Lateral Formation Drill (and follow up), we can see that your hypothesis is not always proven correct. As such, something else must be at work here.

 

Does the difference have something to do with the lateral boundary test?

 

As humans, we use words to convey a thought or idea, but we also use words to portray certain characteristics of objects in certain ways (we attempt to 'paint a mental picture' in the 'mind's eye' of the listener). Perhaps, we can reword your statement here in an effort to paint a more accurate representation of what information is really important, while at the same time, provide an easy solution for avoiding any lingering confusion moving forward.

 

Rather than saying, "the market tests the Lateral Boundary created at Bar 1," subsitute the words, "the market creates the Lateral Boundary with Bar 1." Now, run this test across both examples under discussion (as well as other examples from The Lateral Formation Drill (and follow up). Does each example conform do this definition? Does today's (9:45 AM)?

 

Lastly, once one has determined the exact similarities of things, then one can look for the differences which indicate what must come next. Using the above (re-worded) defintion, everyone should be able to create (in their mind's eye and on paper) three possible examples of a Lateral which conforms to the examples provided in The Lateral Formation Drill (and follow up), but also represent entirely different things from each other. These differences (combined with order of events and context) tell the trader exactly what the market needs to provide.

 

HTH.

 

- Spydertrader

[sambrown 10]

Today's 9:45 lateral boundary was created by 9:55 bar with a decreasing volume. 10:05 bar tried to break the boundary but failed and price exited the other direction.

[Spydertrader 10]

Today's 9:45 lateral boundary was created by 9:55 bar with a decreasing volume.

 

Good. Now, set aside Volume (for just a moment) and determine if all of the examples under discussion form in the exact same (as our reworded definition) way. Those that do not form in such a fashion fall into a different pile. Next, look at context (VE's, declining pace or accelerating pace, etc.), and finally, check the order of events. Can you 'see' a completed Volume Cycle before the formation of the Lateral?

 

Now, bring Volume back into the analysis. Price moving in the dominant direction (after a completed Volume Sequence) on decreasing Volume tells you a very specific thing.

 

10:05 bar tried to break the boundary but failed and price exited the other direction.

 

There is no try to, attempts to, or 'makes an effort to' do something. In a binary world there is only does or does not.

 

Did the market do that which was anticipated? Then a reason must exist for it to have done so. Locate the reason (as we have done here), and you'll know exactly what to expect the very next time the market provides the same scenario.

 

HTH.

 

- Spydertrader

Edited January 25, 2010 by Spydertrader
punctuation error

[sambrown 10]

SpyderTrader,

 

Thanks for your pointers. I will look deeper into the drills to do more analysis.

 

Looking at the volume from end of last Friday, today started with decreasing volume going into the lateral which was a non-dom retrace going from PT2 to PT3. There must be a increasing down volume to complete the cycle. This is what happened when the price broke downward with increasing red volume.

[Spydertrader 10]

I will look deeper into the drills to do more analysis.

 

Just be careful not to overcomplicate things. Review the posts over the last 24 hours while looking at a screen shot of the various examples. Everything should fall right into place with respect to which of the things belong together - and which do not. For now, we want to stay focused on this specific type of Lateral (from the Lateral Formation Drill (and follow up) setting aside (for another day and time) those which do not conform.

 

Step by step, and piece by piece, one can then learn to differentiate that which one believes exists from that which the market has actually provide.

 

- Spydetrader

[Ezzy 10]

10:05 bar tried to break the boundary but failed and price exited the other direction.

 

Not to throw this off topic, but the OB broke (FBO) the bottom boundary 1st, then reversed up to the top of the lateral, and closed below the open.

[dkm 10]

Can you 'see' a completed Volume Cycle before the formation of the Lateral?

- Spydertrader

Unfortunately, no. Would you be kind enough to point it out?

 

Thanks

[Ezzy 10]

At 9:45 this morning, the market created yet another one of these example laterals (in the same fashion as The Lateral Formation Drill [and follow up]). Bar 1 (of today's formation) moved in the dominant direction. Price did exit this specific Lateral Formation in the opposite direction to Bar 1 (just as you anticipated).

 

I don't understand why the 1st bar of this lateral is dominant, and had categorized it as non-dominant because it was a 2 to 3 of the previous down move ending 16:05 Friday. And it closed in the presumed non-dom direction.

 

Are you saying 16:05 to 10:05 was a dominant move and not a non-dom retrace, with the lateral's 1st bar closing dominant (long)?

 

Or is it Dominant for it's fractal only?

 

Or Dominant because the first part of the bar made a lower low 1st (and 16:05 to 10:05 was non-dom) in the dominant direction?

[Spydertrader 10]

Can you 'see' a completed Volume Cycle before the formation of the Lateral?

 

Unfortunately, no. Would you be kind enough to point it out?

 

Start with 16:05 PM (of the previous market day) and (of course) remove the overnight gap.

 

Everyone should then have the ability to walk through Points 1, 2 & 3 (B2B 2R 2B), or at bare minimum find B2B. If anyone cannot perform this task, then they do not fully comprehend this post and its accompanying attachment.

 

Focus on the words, and not just the picture.

 

Please note: I did not provide a 'word' associated with this particular container. Since the market exists within a fractal framework, we shouldn't need to. Please resist the urge to define the container itself. Instead focus on that which must build all containers, and then (at some point in the future) differentiate the containers from each other (just as we did this morning with a lateral).

 

- Spydertrader

[dkm 10]

Start with 16:05 PM (of the previous market day) and (of course) remove the overnight gap.

 

Everyone should then have the ability to walk through Points 1, 2 & 3 (B2B 2R 2B), or at bare minimum find B2B.

- Spydertrader

 

Is this the B2B2R2B to which you refer?

[Spydertrader 10]

I don't understand why the 1st bar of this lateral is dominant, and had categorized it as non-dominant because it was a 2 to 3 of the previous down move ending 16:05 Friday. And it closed in the presumed non-dom direction.

 

Isn't context a wonderful thing?

 

Certainly you'll agree (based on the fact that the market itself exists on a fractal basis) that even a non-dominant move (of a slower thing) must be built by a Full (Dom to Non-Dom to Dom) Cycle of a faster thing. Unless (and until) the faster thing completes its required order of events, the slower thing cannot continue.

 

Are you saying 16:05 to 10:05 was a dominant move and not a non-dom retrace, with the lateral's 1st bar closing dominant (long)?

 

I have simply attempted to remind you of that which you already know - a Non-Dominant move (Up) must contain components which complete a certain order of events - irrespective of the number of fractals faster it creates across the entire movement. The Lateral in question represents a Dominant lateral because it develops in the same direction in which the market has shown dominance (in this specific case, B2B) and prior to the completion of the order of events required for this specific fractal.

 

Or is it Dominant for it's fractal only?

 

With nested fractals, all dominance changes prior to the completion of a slower fractal apply to the specific (faster) fractal being built.

 

Or Dominant because the first part of the bar made a lower low 1st (and 16:05 to 10:05 was non-dom) in the dominant direction?

 

Bar 1 (9:45) of this specific example closed in the same direction that the market provided dominance (in this specific case - B2B) for this specific fractal. The market did so prior to the formation of Bar 1 of this specific lateral.

 

Hence, we have a dominant lateral.

 

Now, in the words of Mr. Miyagi, show me B2B.

 

HTH.

 

- Spydertrader

 

Edited January 25, 2010 by Spydertrader
Spelling and Punctuation

[Spydertrader 10]

Is this the B2B2R2B to which you refer?

 

Close, but not quite. Your annotations progress into the next set of events

 

To give yourself a hint. Take a look at the YM for this period of time. Does it make things clearer?

 

Please note, this is not a recommendation to use the YM for trading signals (at this time), but rather, a suggestion to use the YM as a tool for locating that which some might find difficult to see.

 

- Spydertrader

[TIKITRADER 10]

Is this the B2B2R2B to which you refer?

 

 

I have attached a blank chart with the gap removed. ( cookie all in fun )

 

There is a new code for this written by nkhoi for ninja ( no gap ) and can be found in the software for jh thread.

 

 

Edited January 25, 2010 by TIKITRADER

[dkm 10]

Close, but not quite. Your annotations progress into the next set of events

 

To give yourself a hint. Take a look at the YM for this period of time. Does it make things clearer?

- Spydertrader

YM suggests completion of a sequence at 09:54 but I fail to see how I should "see" a sequence completing on the ES at 09:55. At that time I have not had increasing B for the 2B.

[Ezzy 10]

Now, in the words of Mr. Miyagi, show me B2B.

 

HTH.

 

- Spydertrader

 

How's this for b2b? Sequence ending at 9:55.

[dkm 10]

How's this for b2b? Sequence ending at 9:55.

 

I see the b2b2r but not the 2b.

[TIKITRADER 10]

This is what I have thrown together for that full cycle

Price did head higher before it closed lower than its open on bar 1 today

[Spydertrader 10]

YM suggests completion of a sequence at 09:54 but I fail to see how I should "see" a sequence completing on the ES at 09:55. At that time I have not had increasing B for the 2B.

 

I refer you to this post earlier today ...

 

Price moving in the dominant direction (after a completed Volume Sequence) on decreasing Volume tells you a very specific thing.

 

Also, See Jokari Window.

 

- Spydertrader

[Spydertrader 10]

How's this for b2b? Sequence ending at 9:55.

 

Nicely done, daniel san.

 

As long as your Gaussian line weights have indicated nothing more than direction (Dom to Non-Dom to Dom), then yes, you have outlined the correct order of events.

 

Remember, we have not given a name to this specific container as of yet. Make sure your Gaussian annotations do not inadvertantly give an incorrect name to something, which in reality, exists as an entirely different thing (thereby sending you mentally 'off fractal').

 

- Spydertrader

Edited January 25, 2010 by Spydertrader

[Spydertrader 10]

This is what I have thrown together for that full cycle

 

I assume (do to the differences in shading [red vs gray] of your example laterals) you understand the second lateral represents the current discussion lateral example (whereas the first example does not).

 

Price did head higher before it closed lower than its open on bar 1 today

 

Winner. Winner. Chicken Dinner. A subtle difference for sure.

 

- Spydertrader

[dkm 10]

This is what I have thrown together for that full cycle

Price did head higher before it closed lower than its open on bar 1 today

 

I thought that the 2r had to close outside the b2b..... this is getting very subjective if we are going intrabar

[dkm 10]

I refer you to this post earlier today ...

 

Also, See Jokari Window.

 

- Spydertrader

Unfortunately that post did not help me in any way because I have yet to understand what it is you are alluding to with respect to differentiating laterals. It now seems that the boundary of a lateral is defined by a bar within the lateral and something is implied by whether or not it has incr or decr volume. This could take forever..............