The Price / Volume Relationship

[cnms2 10]

Interesting to notice the difference between r5's and ehorn's charts in including the two containers from the 1040 to 1345 period in the down respectively up slower fractal container.

[ehorn 10]

A 5/26 debrief of Volume and Sequences informs me that I jumped off the midday down traverse too early. I see FTT @ 12:55PM ET.

[ehorn 10]

Sequences completed? WMCN?

[ehorn 10]

Market was kind... gives us signals that WMCN did NOT... lots of time to wash this one and mark it for debrief and review to find what one missed.

[rs5 10]

Thursday 27 May 2010

[Tams 20]

Market was kind... gives us signals that WMCN did NOT... lots of time to wash this one and mark it for debrief and review to find what one missed.

 

but... when the sequence is completed, there can be no mercy...

[rs5 10]

Friday 28 May 2010...

[cnms2 10]

These guys didn't do their MADA ...

Forums ›› Main ›› Trading ›› wtf was that?

05-28-10 10:13 AM

--------------------------------------------------------------------------------

Quote from Bob111:

 

Thank you!

nice timing..low volume, middle of the day..perfect for those "flashers" to screw you on spreads

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Everybody on CNBC and Fox Business angry about the timing. Everybody caught long!

 

Wrong psychology for the long weekend.

Forums ›› Main ›› Trading ›› Volume Spike

05-28-10 01:20 PM

 

WTF? ES just did 50M contracts in 30 min according to my chart.

 

Is this the end of session Globex auction or just a method to take out stops?

 

... Is this tradable at bid/offer?

 

What is this?

 

(edit: It happened 1545 - 1615 Eastern time)

[cnms2 10]

A different way of seeing those "goats" when the pace slowed down and a finer fractal became visible.

[emac 10]

A different way of seeing those "goats" when the pace slowed down and a finer fractal became visible.

 

Hi cnms2,

 

Thanks for posting the chart. If I read the chart correctly, the volume pane from 2:10 pm EST showed faster fractals gaussians and you had drawn maybe a fractal slower to capture the b2b.

 

I am still in the early stages of learning, and I would usually build from the smallest fractal up based on the gaussians to arrive at the price fractal. Would that be a correct approach ?

 

The pink channel container - was that drawn after PT3 at 3:35 pm and was it a WMCN anticipation ?

 

Thanks again for sharing.

[cnms2 10]

Hi cnms2,

 

Thanks for posting the chart. ...

A quick note: that was rs5's chart to which I added two annotations (in the highlighted areas), for the sake of discussion.

[emac 10]

A quick note: that was rs5's chart to which I added two annotations (in the highlighted areas), for the sake of discussion.

 

I was actually looking at the similarities and thought that both of you must be on almost exactly the same page in terms of logical thinking and visualization of the fractals and gaussians :o

 

Then this means perhaps rs5 would care to provide some comments on my questions.

[rs5 10]

Greetings emac, welcome to the thread.

 

I am still in the early stages of learning, and I would usually build from the smallest fractal up based on the gaussians to arrive at the price fractal. Would that be a correct approach ?

 

Yes, per earlier lessons in the thread. http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-30.html#post72196

 

The pink channel container - was that drawn after PT3

 

Yes, RTL is drawn after formation of P3. http://www.traderslaboratory.com/forums/f34/price-volume-relationship-6320.html

 

Happy MADA!

[colossians 10]

Hi Nkhoi,

 

How do I deal with the weekdays which are holidays ? Is there a way to remove them as they do appear as regular trading days ?

 

tnx

[drwarbuck 10]

New to this thread so please be patient.

 

My question is on any given day we are looking for completion of a volume sequence, in order to determine if a trend has completed. Since each day may be a continuation of a sequence and then completion, how common is it that one would see more then one or two completed volume sequences for an entire day?

[rs5 10]

Tuesday 1 June 2010...

[lbj 10]

I noticed that PT multistation trading terminal shows an extra little bar chart for the volume, at the bottom of the chart beneath every candle, which I find convenient, especially for scalpers.

 

But more interestingly is that ProTrader / PT multistation also shows a volume graph updating in real-time in the volume column of the watchlist for each instrument, stock, etc. - and you can easily sort that column.

[Spydertrader 10]

Since each day may be a continuation of a sequence and then completion, how common is it that one would see more then one or two completed volume sequences for an entire day?

 

As a trader begins to learn how to thoroughly annotate a chart, one's mental calibration exists at a certain observational level. By bringing into the analysis the market's fractal nature, the learning trader begins to learn to see mulitple sequences complete nested within a larger orientation. Pace often determines how many fractals one has the ability to see. As a result, it is far more rare to see only one completed order of events on any given trading day. However, many individuals (just beginning the learning process) often have yet to develop the ability to see that which the market has provided.

 

Note the ES for today.

 

Moving forward from 9:55 (Eastern Time and Close of Bar), one can 'see' a number of fractals completing - some faster and some slower - as time progresses. Once a trader determines which fractal best mirrors their skill level and trading goals, then that trader simply 'waits' until said fractal moves through the order of events.

 

As an individual gains additional experience by reaching various 'knowledge plateaus' with respect to the learning process, what once seemed obscured or 'impossible' transitions to ordinary and mundane.

 

- Spydertrader

[rs5 10]

Wednesday 2 June 2010

[drwarbuck 10]

As a trader begins to learn how to thoroughly annotate a chart, one's mental calibration exists at a certain observational level. By bringing into the analysis the market's fractal nature, the learning trader begins to learn to see mulitple sequences complete nested within a larger orientation. Pace often determines how many fractals one has the ability to see. As a result, it is far more rare to see only one completed order of events on any given trading day. However, many individuals (just beginning the learning process) often have yet to develop the ability to see that which the market has provided.

 

Note the ES for today.

 

Moving forward from 9:55 (Eastern Time and Close of Bar), one can 'see' a number of fractals completing - some faster and some slower - as time progresses. Once a trader determines which fractal best mirrors their skill level and trading goals, then that trader simply 'waits' until said fractal moves through the order of events.

 

As an individual gains additional experience by reaching various 'knowledge plateaus' with respect to the learning process, what once seemed obscured or 'impossible' transitions to ordinary and mundane.

 

- Spydertrader

Thanks for the reply. I am curious as to how you developed your personal skill. Did you have a mentor at one time?

 

I would be very interested as to how you approach the market as a trader. It is one thing to annotate a chart, another to trade it in real time. Do you trade the intraday tapes, or are you looking more to postion for traverses, and channels, or all of the above?

 

Regards

[ptunic 10]

Tuesday, June 2, 2010.

[Spydertrader 10]

I am curious as to how you developed your personal skill. Did you have a mentor at one time?

 

About ten years ago, I traded stocks using nothing but Price Action as my guide. At that time, I focused on the SPY, DIA and QQQ as my trading vehicles of choice (Hence the username - Spydertrader). After stumbling across some posts on USENET by Jack Hershey, I felt something about his writings resonated with me - in that, I had seen something (in the markets ) which appeared to correspond to the information delineated within his posts. Although quite a number of individuals within the USENET Groups of MISC.INVEST.STOCKS and MISC.INVEST.FUTURES argued (vehemently) that his verbose contributions made no sense, I felt otherwise. At that point, I began my own journey (the vast majority of which I cronicled on the Elitetrader.com web site). However, Jack has always insisted I use the market as my guide.

 

I would be very interested as to how you approach the market as a trader. Do you trade the intraday tapes, or are you looking more to postion for traverses, and channels, or all of the above?

 

I focus on remaining on the fractal best described as a 'tape' - almost exclusively. I do, on occassion, intentionally "jump fractals" because doing so remains my first recourse (based on how I originally learned these methods). When I first learned to follow the Price / Volume Relationship, I used all tools available (Coarse, Medium and Fine). As a result, a "signal for change" represented a reason to reverse (irrespective of fractal chosen for trading). It isn't an 'easier' path by any means. It was simply the only path availble at the time (to me, based on my own mental filters).

 

Over the years, I've attempted to make life somewhat easier (some may argue that I haven't succeeded in that regard) by encouraging people to focus on one tool (Coarse) before moving onto another.

 

While I agree, actually trading these methods involves far more than simply drawing lines on a chart, profitable trading represents the consequence of a fully differentiated mind. In other words, unless one knows why someone has placed a specific line on a specific chart, at a specific point in time, then one might as well flip a coin. However, a complete and thoroughly annotated chart does indeed provide all the answers anyone ever needs.

 

HTH.

 

- Spydertrader

[drwarbuck 10]

Again, thanks for the reply.

Your answer is very interesting to me. I met a fellow in a trading room about a year ago, who seemed to be ahead of my curve, and that gentlemen was kind enough to lend some direction. First, he told me that the 5min chart was the chart to use, and he focused on price and volume. Up to that point, I had always believed volume held the key, and that any attempt to predict price in a vacuum from volume seemed irrational. So his comments resonated with me.

 

But little is written about volume, and of course most of what is written about trading is just wrong. But what really struck me about your thread, was your method of teaching, because this guy was exactly the same way. He would answer a question with a question, always making me seek the answer myself. His style is so similar to yours, that I wondered if perhaps both of you were mentored by the same individual.

 

You said you trade the "tape" almost exclusively. Do you always wait for a 5min candle to complete before acting, or will you close or open a position sometimes in anticipation of the candles outcome? I would think that as price reaches a target, one might want to exit even though a candle has not closed. Or do you ever drop down to a 1 or 3 minute chart?

 

Thanks for your time.

[Spydertrader 10]

You said you trade the "tape" almost exclusively. Do you always wait for a 5min candle to complete before acting, or will you close or open a position sometimes in anticipation of the candles outcome?

 

While I often enter prior to the close of a five minute bar, doing so certainly isn't a requirement. "At some point" before the close of a 5 minute bar, the market 'locks into place' the next step in the order of events. While the "at some point" time develops at a different point in time (relative to the close) for every bar, one can learn to correctly anticipate 'what must come next' by using medium and / or fine level tools. However, on most days I trade, I am in no rush, and since I prefer to chat on the phone or sit outside, rather than, glue myself to a computer chair, I'm perfectly content to wait until the close of a bar before I take action.

 

I would think that as price reaches a target, one might want to exit even though a candle has not closed. Or do you ever drop down to a 1 or 3 minute chart?

 

I don't use 'candlestick' charts. I use OHLC 'Bar' Charts.

 

I don't set 'Price Targets' before entering a trade. I have no idea how long a particular trend will last, nor any clue as to how far Price will move when I enter. I only know how trends begin and how they end. Trends begin and end in the exact same fashion, it turns out. Of course, this answer also depends on 'context'. For example, if I see the market has reached 'Point Two' of a specific container at 3:50 PM Eastern Time, well, I'm going to exit, rather than hold between Points Two and Points Three.

 

With respect to 'dropping down' to faster time frames, unless I have the Medium Level Tools on my computer screen (two minute YM / STR - SQU), I have no need to use anything other than an ES 5 minute chart. Remember, this whole deal works (quite effectively) on a daily chart (and any other time frame for that matter). Effectiveness and Efficiency come into play once one has mastered the initial steps needed to see that which the market has provided.

 

HTH.

 

- Spydertrader

[drwarbuck 10]

That makes good sense. One of the demons I have been trying to rid myself of is exiting winning trades too soon. I know I am exiting based on reasons other then what is being provided by the chart. It is not that I don't know how to read the chart, I just need to better learn to control myself, which is all anyone can control once in a trade.

 

Do you have any reason why you prefer OHLC bars to candles? Doesn't seem to me an important difference, but you seem to feel that candles may obscure the message of the markets?

 

Thanks again

 

drwarbuck