The Price / Volume Relationship

[NYCMB 10]

Those interested in using The Automated Gap Removal Tool will need to contact the friendly folks over at Genesisft.com in order to have their account flagged once The Automated Gap Removal Tools comes out of Beta Testing.

 

- Spydertrader

 

Hi Spydertrader

 

I know we have to move Gap for ES (or YM) trading. Is it suggested to move Gap for equities trading? TIA

[Spydertrader 10]

I know we have to move Gap for ES (or YM) trading. Is it suggested to move Gap for equities trading?

 

Correct.

 

- Spydertrader

[symmetrics 10]

if you think the market is fractual good luck with that, volume does not always show show trend, volume can and does lessen in strong trend moves just the same as high volume no price.

 

thanks

[entelechy 10]

if you think the market is fractual good luck with that, volume does not always show show trend, volume can and does lessen in strong trend moves just the same as high volume no price.

 

thanks

 

both possibly indicating a change in trend?

 

decreasing volume and increasing price = change.

increasing volume decreasing price (velocity)= FTT.

Edited March 8, 2010 by entelechy

[MKTr 10]

5 minute ES for 8 Mar 2010.

 

MK

[double eagle 10]

I'll chime in with a response to treeline and NYCMB's questions.

http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-160.html#post91418

 

I'm sorry that I didn't respond earlier, but I had personal things I needed to take care of this past week. First of all, as treeline wrote the line weights and numbering on my chart imply that I viewed those several thin weight guassian trends in question as being on the same fractal. I suppose the confusion arises from one not seeing a full volume cycle in those cases. Let me propose a different way of looking at things. This will give you insight into why I annotated this area the way I did.

 

1. Volume cycles always complete across all fractals.

2. The market's volume cycles are not bound to the bar duration that we choose.

3. Therefore, the volume cycles don't always "look" like we think they should look like. Even though two volume cycles are on the same fractal one might exhibit the traditional "look" and the other might not.

4. If we can differentiate what the volume cycle "looks" like in these varying situations we can arrive at certainty in real-time (with just our ES 5 min chart).

 

So here is my rationale behind the first two containers of the day (11/24) that are in question. Let's call the thin green container from 11/23 16:00 to 11/24 10:00 “thin green 3 container” (the third move of the medium weight trend) and the thin brown container from 11/24 10:00 to 10:25 “thin brown 4 container” (the fourth move of the medium weight trend).

 

thin green 3 container:

I see a volume trough at 11/23 16:10 and a volume peak at 11/24 9:35 which gives me a thin weight b2b. Next we have an IBGS bar (11/24 9:40) and an EH bar (11/24 9:45) on decreasing volume which gives us our 2r. Finally we have our increasing volume peak at 9:50 giving us our 2b. Is the problem that you don't see a red bar in the price pane or volume pane to draw in the 2r like you would think you should have? Because of the fixed bar duration you might not see any red in the IBGS bar, but it surely must be there. Likewise I see red volume in the EH bar as price at some point travelled down to the low of the previous bar. It just so happens that it closed above the open and the software is coded to color this as a black bar.

 

So if we make an assumption that the thin green 3 container indeed warrants a thin weight guassian cycle, what do we make of the thin brown 4 container? In hindsight, one would have to conclude that a thin weight guassian is warranted for the thin brown 4 container because of the simple fact that the 10:50 bar exceeded the 10:00 bar. Here's why I is see a completed volume cycle in thin brown 4 container even though it doesn't "look" like one would think it should.

 

thin brown 4 container:

There was a 10:00 new homes sales announcement that one should have been aware of. One should anticipate declining volume into the announcement (9:55-10:00) followed by increasing volume at the announcement. We get that on the 10:05 bar giving us our thin weight r2r. Notice that the 10:05 bar had more volume than the highest volume of the thin green 3 container. In my opinion, this is further evidence that the thin brown 4 container is on the same fractal as the thin green 3 container. We went from increasing black to increasing red in the relative peaks between the two containers. I just don’t see the thin green 3 container and thin brown 4 container area as being part of one big thin weight guassian when the 2r is has a higher volume peak than the b2b. However, I would propose that you could see this phenomena across equal weight containers as we make our way, for example, through a typical U shaped volume day. Therefore, I pegged them as being separate volume cycles of equal weight. The next question is where is the 2b of the thin brown 4 container. I view two things happening at once transposed on one another. You have a declining volume from the 83k 10:05 bar mixed with the thin weight volume cycling. The 83k volume news bar could be anticipated to be unsustainable volume wise. One would anticipate declining volume going forward especially since there was a 10:30 crude announcement which we should have a volume trough before. Sometimes the declining volume masks (or dominates) the cycling and we don't see the 2b trough to the 2r peak. What we do see is the 10:15 IBGS bar giving us our 2b. You can also see the volatility compression and then expansion across the 10:05-10:20 bars to see the retrace. One can further take into consideration bar overlap on the 10:10 to 10:20 bars to see the retrace. The 10:20-10:25 bars show price coming off the point three and into the trend. WMCN doesn't come though (increasing red) which indicates change and by implication tells you there was a completed volume sequence. The 10:35 increasing black OB after the crude announcement and the following bars bear out this hypothesis as the 10:50 bar breaks the high of the 10:00 bar.

 

You might agree or disagree with what I wrote, or more importantly the market might agree or disagree with some or all of what I wrote. However, this at least gives an insight into why I drew what I drew on the chart. Hope it helps.

[rs5 10]

Tuesday 9 March 2010

Edited March 9, 2010 by rs5

[saturo 10]

Tuesday 9 March 2010

 

Very nicely done rs5.

[ptunic 10]

Tuesday, March 9, 2010.

[Spydertrader 10]

For those individuals who have an interest in using the Trade Navigator ' Automated Gap Removal Tool' (and the 'Freeze Trend Line Slope' Function) please see the instructions below.

 

Step One

 

Phone Genesis Customer Service and indicate you wish to enable the Spyder String for the Gap removal tool.

 

Step Two.

 

Click the telephone icon located in the upper left corner the Trade Navigator Software.

 

 

Step Three.

 

Within the 'Update Data' Dialog Box, select the 'Download Special File' Option. If not already there, type the word 'Upgrade (without the quotes) into the box. Clcik Start.

 

 

At this point, the Upgrade Process Begins. Once completed (and after Trade Navigator has restarted), move to the next step.

 

Step Four.

 

"Right Click" any chart and choose ' Edit Chart Settings.' Within the 'Chart Settings Dialog Box,' Highlight the word "price" directly under Pane 1. Next, check' 'Remove Overnight Gap' located in the bottom Right Corner of the Dialog Box.

 

 

Click 'OK.'

 

Once completed, the TN Software will automatically remove all overnight gaps enabling each day's opening print to occur exactly at the previous day's (16:15) closing price.

 

Also, to use the 'Freeze Slope' Function, simply grap the end of any trend line while holding down the 'Control (CTRL) Key' on your keyboard. Doing so will allow any trader to lengthen (or shorten) any trend line without changing the slope of the trend line itself (remains exactly as annotated).

 

HTH.

 

- Spydertrader

Edited March 10, 2010 by Spydertrader
Formatting

[Spydertrader 10]

Just a Quick note for those who may have already read my previous post. I have edited the post instuctions in order to have 'Calling Genesis' appear now as Step One - instead of Step Four.

 

HTH.

 

- Spydertrader

[Ezzy 10]

Once completed, the TN Software will automatically remove all overnight gaps enabling each day's opening print to occur exactly at the previous day's (16:15) closing price.

 

Also, to use the 'Freeze Slope' Function, simply grap the end of any trend line while holding down the 'Control (CTRL) Key' on your keyboard. Doing so will allow any trader to lengthen (or shorten) any trend line without changing the slope of the trend line itself (remains exactly as annotated).

 

HTH.

 

- Spydertrader

 

The tools work great. The charts are so much cleaner than when using the copy pattern tool.

 

One little glitch when using the freeze slope tool. It works fine for trend lines. But if you use TN's trend channel, sometimes the channel will rotate at a fast rate, instead of extending/shortening. If it does that use the end of the other trend line instead.

 

There's no rhyme or reason, sometimes the LTL does it, sometimes the RTL. And it's not the top or bottom one consistently. Couldn't nail down any consistent pattern. So if grabbing one line is a problem, use the other.

[rs5 10]

Wednesday 10 March 2010

[Gregor_S 10]

My chart for Wednesday 10 March

[MomentumMike 10]

Wednesday, March 10, 2010

 

Today's chart attached. I focused on marking the volume of all lats as non-dominant. Sorry about the dots in the volume pane. I'll try to remember to remove them from now on.

 

What's the general consensus about acting on signals only at the close of a 5-minute bar? It seems like, due to the nature of the market and the ability to trade on various fractal levels, one could find a fractal level where acting on the close of a 5-minute would be acceptable/profitable. If that is the case, I'd like to find out if that acceptable fractal level is the "traverse level", i.e., where I would not be trading RTL or LTR movements within tapes, but the RTL or LTR tapes themselves of the next higher fractal. (Please note that I'm not saying that I would enter and exit only on tape breakouts.) Sorry if this is confusing. It's difficult to explain. Thanks for any advice.

[saturo 10]

This is a follow up to a question I asked Spyder privately about picking off gaussian transitions. I've written up a "literal" bar by bar gaussian log for that trend that started at 15:30 on 3/9 and ended at 11:05 on 3/10

 

(all times end of bar eastern)

 

I've identified a few problem areas - and I'm looking for clarity.

 

At 16:05 we've seen B2B 2R 2B. OK - no prob!

 

16:10 - 16:15 looks like falling black - rising red - which doesn't fit into our "mold" so I'm not sure what to do with it.

 

Then we get a rising black followed by a bunch of falling black. Again - not sure how to fit this into our mold. Falling black *always* happens after rising red - is it possible that 16:15 to 10:00 is a down volume sequence? Price is definitely rising over that period so it's hard to "accept" that. There is also no completing 2R.

 

10:05 - 10:40 looks like 2B 2R 2B - there isn't an initial B to make B2B.

 

10:45 - 11:05 completely confuses me

 

15:30 - IBGS - red to black volume shift

15:35 - falling black

15:40 - rising black

15:45 - rising black

15:50 - falling red

15:55 - rising black

16:00 - ???

16:05 - rising black

 

16:10 - falling black

16:15 - rising red

9:35 - rising black

9:40 - falling black

9:45 - falling black

9:50 - falling black

9:55 - falling red

10:00 - IBGS

 

10:05 - rising black

10:10 - rising black

10:15 - rising black

10:20 - falling red

10:25 - falling red

10:30 - falling black

10:35 - rising black

10:40 - ???

 

10:45 - falling red

10:50 - rising red

10:55 - falling black

11:00 - falling red

11:05 - rising black

 

Comments appreciated

[Spydertrader 10]

Today's chart attached.

 

If you have an automated program drawing your tapes on the chart you attached, you might want to re-think the logic used.

 

I focused on marking the volume of all lats as non-dominant.

 

How did that work out for you?

 

What's the general consensus about acting on signals only at the close of a 5-minute bar?

 

I have always provided advice which espoused the wisdom of learning to crawl, walk and run, prior to, learning to fly. However, should one choose to forgo such a conservative approach, one can act on signals from finer level tools before the actual close of an ES Five Minute Bar.

 

It seems like, due to the nature of the market and the ability to trade on various fractal levels, one could find a fractal level where acting on the close of a 5-minute would be acceptable/profitable. If that is the case, I'd like to find out if that acceptable fractal level is the "traverse level"

 

If a trader uses exclusively Coarse Level Tools (i.e. only an ES Five Minute Chart), then trading at the 'Traverse Level' provides the answer you seek.

 

HTH.

 

- Spydertrader

[Ezzy 10]

I've identified a few problem areas - and I'm looking for clarity.

 

At 16:05 we've seen B2B 2R 2B. OK - no prob!

 

16:10 - 16:15 looks like falling black - rising red - which doesn't fit into our "mold" so I'm not sure what to do with it.

Look at the time of day. That's not unusual.

 

Then we get a rising black followed by a bunch of falling black. Again - not sure how to fit this into our mold. Falling black *always* happens after rising red - is it possible that 16:15 to 10:00 is a down volume sequence? No Price is definitely rising over that period so it's hard to "accept" that. There is also no completing 2R. The rising gaussian is drawn to the top of price movement regardless of the volume slowing down, giving a heads up for the short term change.

 

10:05 - 10:40 looks like 2B 2R 2B - there isn't an initial B to make B2B.

There are a lot of B2B2R2B levels "nested" in this up move. 10:00 is a trough of "a" B2B, the third or fourth one.

 

10:45 - 11:05 completely confuses me

 

I had trouble here as well, still don't have it worked out.

 

 

Gaussian annotation should go to where the peak or trough of price is. Sometimes volume peaks before or after this, but that's the way to annotate.

[MomentumMike 10]

16:00 - ???

16:05 - rising black

16:10 - falling black

16:15 - rising red

 

I thought this group of bars was falling red, figuring that the lateral indicated non-dominant movement. I believe I learned this in the Futures Journal. But, based on Spyder's response to my post and Ezzy's response to yours, it seems that I either misunderstood or misapplied what I learned. From my interpretation of Ezzy's response, this appears to be rising black, continuing on until 9:50. Is that correct?[/color]

 

10:00 - IBGS

 

It seems like this bar could have been a retrace, with price continuing lower. I thought increasing volume was a characteristic of IBGS. No? Or maybe you saw it intrabar?

[Boux 10]

Thanks Spyder for pushing this through---looks great----such a cleaner chart now.

Appreciation!

[MomentumMike 10]

Thanks for the reply!

 

If you have an automated program drawing your tapes on the chart you attached, you might want to re-think the logic used.

 

I consider it an "assistant", as Barney Fife as it may be at this moment.

 

I'm experimenting with 1) taping through lats, where I almost always lose the Gaussian pattern, and 2) pausing taping while in lats and resuming after the lats terminate.

 

On this chart, I didn't tape through lats. Otherwise, I thought the tapes were OK. I'm accelerating on increasing volume and fanning on decreasing volume. If I'm not getting this right, I have a feeling I'm in trouble.

 

How did that work out for you?

 

I'm not exactly sure. :rofl:

 

My assessment of marking all lats as non-dominant movement:

1) It seems to work when there are no overlapping lats

2) I need to make sure my Guassians reflect the price action when the lat exits

3) I'm considering price action and Guassians while in a lat to be subfractal

 

If a trader uses exclusively Coarse Level Tools (i.e. only an ES Five Minute Chart), then trading at the 'Traverse Level' provides the answer you seek.

 

Great. I'm quite content to work with Coarse Level Tools and take this one logical step at a time.

[Ezzy 10]

I thought this group of bars was falling red, figuring that the lateral indicated non-dominant movement. I believe I learned this in the Futures Journal. But, based on Spyder's response to my post and Ezzy's response to yours, it seems that I either misunderstood or misapplied what I learned. From my interpretation of Ezzy's response, this appears to be rising black, continuing on until 9:50. Is that correct?[/color]

 

 

 

It seems like this bar could have been a retrace, with price continuing lower. I thought increasing volume was a characteristic of IBGS. No? Or maybe you saw it intrabar?

 

It's very possible I incorrectly annotated this area and 15:45 to 16:05 is a dec red sequence ending at 16:05. You have to go fine to see this, but there could be an R2R2B2R sequence there. It will really mess with your 5min gaussians if you try to draw that in . I didn't annotate a lateral as we didn't have the volume drop off that usually accompanies one. But again that could be an error, end of day volume being questionable. Somewhere between 16:05 and 9:35 is another B2B.

 

However you slice it 9:35 to 9:50 is inc black. Even with volume slowing the cycle is continuing higher.

 

I don't have 10:00 as an IBGS. But they can happen on decreasing volume.

[rs5 10]

Thursday 11 March 2010

[Gregor_S 10]

My chart for Thursday 11. March.

[become 10]

I have a question regarding Thursday's ES chart, for anyone.

How could we know that 13:50 wasn't the FTT ending the up channel?

 

- become