The Price / Volume Relationship

[dkm 10]

.... I might want to add an accelerated pt3 at 12:40 or so for the traverse......

Yes, an accelerated traverse is probably the correct thing to do but for some inexplicable reason I didn't do it. That may have an impact upon the position of the blue p2 since the high of the 14:50 bar would be outside the rtl of the accelerated magenta traverse. The 14:35 bar would subsequently become a fanned blue traverse p3.

[dkm 10]

Just realised. I didn't accelerate the magenta traverse because there was no VE. I think I am correct in saying that there needs to be a VE in order to accelerate a traverse.

[jbarnby 10]

IMO annotating the first two down tapes the way you did would result in a tape sequence (dom, non-dom and dom) creating a completed traverse sequence on tapes ( and consequently on medium thickness gaussians as well) at 10:05 OB. The first tape is drawn to decreasing volume bar. As such it has all three Points (1,2 & 3) on the same bar - Bar 1. Bar is an increasing volume bar which makes lower low. As such we must fan to accommodate it inside the original tape trendlines ( the way dkm did on his chart that he posted). The fanned out (decelerated tape - red on dkm's chart) has it's Point 3 on Bar 3. Drawing the tape from Bar 2 to Bar 3 the way you did would result in tape having it's Point 3 on Bar 3 and consequently two trends of different slope sharing the same Point 3. I don't believe this is a possibility.

 

Thanks for the posts Roman and David. One area in which I would like to see more discussion is fractals and their effect on sequences. For instance, in the down tape from 0935 on 07/21, how does one know we did not drop to a lower fractal? Because if 1040 is a 5 min (traverse) pt 3, the initial down tape must be a 5 min (fractal) tape. TIA

[TIKITRADER 10]

1) When differentiating each component of a traverse, would we find they are all equal, built of completed sequences ?

 

2) Are points 1, 2 and 3 on two bar tape sufficient for sequences complete to build a component ( one of the sequences ) that build a traverse ?

 

3 ) In the attached chart, are each of the sequences that build the red down traverse complete of all sequences of their own ?

[NYCMB 10]

IMO annotating the first two down tapes the way you did would result in a tape sequence (dom, non-dom and dom) creating a completed traverse sequence on tapes ( and consequently on medium thickness gaussians as well) at 10:05 OB. The first tape is drawn to decreasing volume bar. As such it has all three Points (1,2 & 3) on the same bar - Bar 1. Bar is an increasing volume bar which makes lower low. As such we must fan to accommodate it inside the original tape trendlines ( the way dkm did on his chart that he posted). The fanned out (decelerated tape - red on dkm's chart) has it's Point 3 on Bar 3. Drawing the tape from Bar 2 to Bar 3 the way you did would result in tape having it's Point 3 on Bar 3 and consequently two trends of different slope sharing the same Point 3. I don't believe this is a possibility.

 

Hi romanus,

I believe you posted a valuable message. However, I have problem to understand what you mean. Could you provide a chart with notes to explain your thoughts ? TIA

[NYCMB 10]

A clear attachment for post #205.

[Ezzy 10]

Just realised. I didn't accelerate the magenta traverse because there was no VE. I think I am correct in saying that there needs to be a VE in order to accelerate a traverse.

 

When we have a VE we almost always have or get an accelerated point 3. But not sure if the reverse applies, always needing the VE, as we could just FTT instead.

 

As I take another look it might be more of an acceleration of the tape which did have a VE, but the left to right movement (lateral tape) may not have everything required for a non-dom tape - so it wouldn't be an accelerated traverse. Not sure just another view to work through.

[dkm 10]

...One area in which I would like to see more discussion is fractals and their effect on sequences. For instance, in the down tape from 0935 on 07/21, how does one know we did not drop to a lower fractal? Because if 1040 is a 5 min (traverse) pt 3, the initial down tape must be a 5 min (fractal) tape. TIA

 

I may be wrong but I think the idea here is to consider tapes, traverses and channels as the ONLY fractals. By keeping to only 3 fractals we can hopefully avoid the confusion that came from the concept of "dropping a fractal".

 

On 07/21, we begin with a 2 bar tape from 0935 to 0940. The 0945 stitch bar ve's the tape with irv and allows us to fan the initial tape to the high of 0945 and clone the new rtl to the low of 0945. The next 3 bars all close inside our tape. We then get the OB at 1005 and we draw a new tape to the OB, giving us a steeper tape rtl. Until we get a close outside our tape rtl we have to consider all of this price movement since 0935 as "one tape" moving from p1 to p2 of our traverse. The 10:20 bar closes outside our tape and begins our new tape to the traverse p3.

 

If any of this is incorrect I am hoping that spyder will clarify.

[ljyoung 10]

David,

 

It's driving me nutz. The 'dashed line' channels that you have on your snippet, are they drawn using Pepe's tool or something else? If Pepe's tool is the source, how did you do this?

 

Sorry all for the software question. A bit off topic but hopefully perceived as practical.

 

TIA

 

lj

[jbarnby 10]

I may be wrong but I think the idea here is to consider tapes, traverses and channels as the ONLY fractals. By keeping to only 3 fractals we can hopefully avoid the confusion that came from the concept of "dropping a fractal".

 

David, thanks for your response. I get the three fractal concept of tapes, traverses, and channels. And I too would like to avoid the confusion of dropping a fractal. But it seems inevitable to me that there are occasions when we have to consider that there are multiple fractals that must complete before we have a completed 5 min tape. IOW, I thought that's why we cannot go by appearances alone, ie some tapes look like traverses etc because we're waiting for faster fractals to complete. I may have wondered off the reservation here, and if so I hope Spyder or others will chime in and set me straight.

[Spydertrader 10]

I hope Spyder or others will chime in and set me straight.

 

As stated in this post...

 

Three choices exist, and we call these three choices tapes, traverses and channels (skinny, medium and thick; or L1, L2 & L3 if you prefer different nomenclature).

 

No more 'Chubby' tapes.

No more 'Faster Fractal' Traverses.

No more Lateral 'Movement.'

 

Tapes build Traverses and Traverses Build Channels.

 

HTH.

 

- Spydertrader

[ljyoung 10]

David, thanks for your response. I get the three fractal concept of tapes, traverses, and channels. And I too would like to avoid the confusion of dropping a fractal. But it seems inevitable to me that there are occasions when we have to consider that there are multiple fractals that must complete before we have a completed 5 min tape. IOW, I thought that's why we cannot go by appearances alone, ie some tapes look like traverses etc because we're waiting for faster fractals to complete. I may have wondered off the reservation here, and if so I hope Spyder or others will chime in and set me straight.

 

I agree. "Tapes" may have 'kinks' which is what I believe Spyder said in the post following your most recent post.

 

lj

[ljyoung 10]

I may be wrong but I think the idea here is to consider tapes, traverses and channels as the ONLY fractals. By keeping to only 3 fractals we can hopefully avoid the confusion that came from the concept of "dropping a fractal".

 

On 07/21, we begin with a 2 bar tape from 0935 to 0940. The 0945 stitch bar ve's the tape with irv and allows us to fan the initial tape to the high of 0945 and clone the new rtl to the low of 0945. The next 3 bars all close inside our tape. We then get the OB at 1005 and we draw a new tape to the OB, giving us a steeper tape rtl. Until we get a close outside our tape rtl we have to consider all of this price movement since 0935 as "one tape" moving from p1 to p2 of our traverse. The 10:20 bar closes outside our tape and begins our new tape to the traverse p3.

 

If any of this is incorrect I am hoping that spyder will clarify.

 

This is not Spyder. Let me repeat - this is not Spyder.

 

Question. Why is no attention being paid to the honking big OB at position 7? If you fan the RTL out to include this bar (romanus posted this somewhere else) then bar 9 becomes an 'LTL' bar, not a 'VE' bar though, and definitely not an FTT of any 'expanded, tape-like structure' drawn up to bar 9. Per romanus' take on things, this can't be a P2 of a 5 min ES traverse, IF an LTL bar is to be treated like a VE bar.

 

If it is, then what we have is a muy grande downtape which finally bugs out in the opposite direction at 13:10.

 

FWIW it has been my experiece with Spyder that if everyone on the thread is tearing their hair out in frustration, he will step in. Similarly if someone actually answers one of his questions, he will step in. Otherwise what will usually, but not always happen, is a restatement of the obvious, which in this case means something that was said tens of posts ago.

 

lj

[Spydertrader 10]

"Tapes" may have 'kinks' which is what I believe Spyder said in the post following your most recent post.

 

Spyder said no such thing.

 

The market has no anomolies, kinks, irregularities or unresolved circumstances.

 

B2B 2R 2B

R2R 2B 2R

 

That's it.

 

Possible problem areas for people to perfom a mirror check ...

 

1. Do I understand the definition of the word fractal?

2. Do I apply said defintion onto the market in a consistant fashion?

 

HTH.

 

- Spydertrder

[romanus 10]

Hi romanus,

I believe you posted a valuable message. However, I have problem to understand what you mean. Could you provide a chart with notes to explain your thoughts ? TIA

See attached. Also see Tiki's and dkm's charts I referenced in the original post.

Edited July 23, 2009 by romanus

[romanus 10]

...

Question. Why is no attention being paid to the honking big OB at position 7? If you fan the RTL out to include this bar (romanus posted this somewhere else) then bar 9 becomes an 'LTL' bar, not a 'VE' bar though, and definitely not an FTT of any 'expanded, tape-like structure' drawn up to bar 9. Per romanus' take on things, this can't be a P2 of a 5 min ES traverse, IF an LTL bar is to be treated like a VE bar.

 

...

 

Drawing a down tape from Bar # 6 TO the OB (Bar # 7) and fanning it (decellerating) to include increasing red volume Bar # 9 will produce an LTL which Bar # 9 failed to reach.

 

For an FTT to exist there must be a valid LTL which that FTT failed to reach. The definition of the valid LTL is supplied by the market itself. It appears to me that the tape drawn to increasing volume bar meets that definition (perhaps because Points 1 and 3 reside on separate bars - and therefore one can consider it a trend, versus a tape drawn to decreasing volume bar, which has points 1 and 3 on the same first bar of the tape).

[ljyoung 10]

Spyder said no such thing.

 

The market has no anomalies, kinks, irregularities or unresolved circumstances.

 

B2B 2R 2B

R2R 2B 2R

 

That's it.

 

Possible problem areas for people to perfom a mirror check ...

 

1. Do I understand the definition of the word fractal?

2. Do I apply said defintion onto the market in a consistent fashion?

 

HTH.

 

- Spydertrder

 

The kink I am referring to is a geometric construct composed of collections of parallel lines with angles between sets of parallel lines. You can then draw a another set of parallel lines around those sets of points and lines and construct a tape.

 

There is no argument about the Gaussian series.

 

There is no statement by me intended or implied about anomalies, irregularities or unresolved circumstances with respect to what plays out in the market.

 

lj

[ljyoung 10]

Drawing a down tape from Bar # 6 TO the OB (Bar # 7) and fanning it (decellerating) to include increasing red volume Bar # 9 will produce an LTL which Bar # 9 failed to reach.

 

For an FTT to exist there must be a valid LTL which that FTT failed to reach. The definition of the valid LTL is supplied by the market itself. It appears to me that the tape drawn to increasing volume bar meets that definition (perhaps because Points 1 and 3 reside on separate bars - and therefore one can consider it a trend, versus a tape drawn to decreasing volume bar, which has points 1 and 3 on the same first bar of the tape).

 

I'm talking about fanning from bar 1 to bar 7. Although not shown on the snippet there is a CO RTL which lies below bar 9. There are other considerations which further permit one to consider the possibility that bar 9 is not an ES 5 min P2.

 

lj

[innersky 10]

It appears you continue to miss my point.

 

Whatever something "looks like" in the Price Pane falls under the catagory of unimportant because a tape does not ever look like a traverse (or anything else) when observing the Volume Pane.

 

You can call something a tape, traverse or channel (hell, call it a goat if you like) by looking at a Price Pane, but Volume always indicates exactly what the market has built for you to see.

 

Without exception.

 

Three choices exist, and we call these three choices tapes, traverses and channels (skinny, medium and thick; or L1, L2 & L3 if you prefer different nomenclature).

 

No more 'Chubby' tapes.

No more 'Faster Fractal' Traverses.

No more Lateral 'Movement.'

 

Tapes build Traverses and Traverses Build Channels.

 

Again, whatever something "looks like" in the Price pane does not matter in the slightest. The Gaussians always tell you what the market has created.

 

Without a doubt, if asked, a roomful of traders would provide as many answers with respect to what the market created across most of today (7-20-2009). Again, if one chooses to look at what today's 'something' "looks like" by observing the Price Pane, a variety of opinions develop. However, only one possible accurate answer exists, and it resides in the signals the market has provided in The Volume Pane.

 

HTH.

 

- Spydertrader

 

 

While I do understand that volume is the most important part of a chart, do we still need price for context? ie price must leave a traverse on increasing volume, and pt2 must be outside the previouse traverse (and gaussians still have to match channels)

 

Is anything below a traverse considered a tape?

 

While I do understand what fractals are, it seems real hard to apply this principle consistently to volume.

 

--

innersky

[Spydertrader 10]

While I do understand that volume is the most important part of a chart, do we still need price for context?

 

Correct.

 

Is anything below a traverse considered a tape?

 

All poodles are dogs, but not all dogs are poodles. Better to learn to define something by what it is, rather than, by what it is not.

 

While I do understand what fractals are, it seems real hard to apply this principle consistently to volume.

 

The very same sequences repeat over and over again, every day, all day long. Nothing changes. You've known them for years.

 

No need to overcomplicate things.

 

Take it step by step, and you'll soon begin to see how the subtle differences create monumental changes in the information signalled to you from the market.

 

- Spdyertrader

[dkm 10]

....one possible accurate answer exists, and it resides in the signals the market has provided in The Volume Pane.

 

- Spydertrader

 

Do you mean signals provided by the Gaussian sequences or the the volume bars themselves?

[Spydertrader 10]

Do you mean signals provided by the Gaussian sequences or the the volume bars themselves?

 

Depending on the context, the answer comes from the former, the latter or both.

 

- Spydertrader

[BlowFish 10]

Spyder said no such thing.

 

The market has no anomolies, kinks, irregularities or unresolved circumstances.

 

B2B 2R 2B

R2R 2B 2R

 

That's it.

 

Possible problem areas for people to perfom a mirror check ...

 

1. Do I understand the definition of the word fractal?

2. Do I apply said defintion onto the market in a consistant fashion?

 

HTH.

 

- Spydertrder

 

I wonder about 1. I have spent a fair amount of time trying to undertand fractals and there application to financial data series. It seems pretty clear that a single fractal dimension can not describe financial data series. They are in fact multifractals i.e the fractal dimension is not constant.

 

I wonder if it actually matters or not but refering people to investigate fractals is likely to add to their confusion rather than bring clarity. It might help to spell out which properties are the important ones?

 

Another one is Gaussian. Not only was Gauss prolific himslef many theories have 'gauss' in the title as subsequent mathmaticians honoured him. I wonder if it is to do with guassian distributions? (which would tie in with fractals). Financial data series absolutely do not have gaussian distributions.

 

It may well have no baring on the effiacy of the method but it perhaps is no wonder people loose track when things are tied into reoneous 'pseudo maths'.

[Spydertrader 10]

I wonder about 1. I have spent a fair amount of time trying to undertand fractals and there application to financial data series. It seems pretty clear that a single fractal dimension can not describe financial data series.

 

Fractal One: Thin Lines - "Short Term Trend" (aka 'Tape')

Fractal Two: Medium Lines - "Intermediate Term Trend" (aka 'Traverse')

Fractal Three: Thick Lines - "Longer Term Trend" (aka 'Channel')

 

Each of the above three fractals does in fact describe, in a crystal clear fashion, a financial data series. Since trends overlap, so too do we see each of the above three fractals overlap.

 

They are in fact multifractals i.e the fractal dimension is not constant.

 

See Attached.

 

R2R 2B 2R or B2B 2R 2B always remains constant. By definition, the components of one fractal exist on all fractals - irrespective of scale. Applying the fractal rules in a consistant fashion represents a challange most people face.

 

I wonder if it actually matters or not but refering people to investigate fractals is likely to add to their confusion rather than bring clarity. It might help to spell out which properties are the important ones?

 

I have not "instructed people to investigate fractals." I have instructed people to "understand the definition" of the word - a definition I posted several times - including linking to pictures of same (for those more visually oriented).

 

I wonder if it is to do with guassian distributions? (which would tie in with fractals). Financial data series absolutely do not have gaussian distributions.

 

If the word "Gaussian" provides you difficulty, replace the word with another. Hiking up and down Volume Mountains provides the same mental picture. However, take care not to add words which did not exist in the original discussion. The word Gaussian stands alone, and does not require, nor should one include, the word 'distributions' in the discussion.

 

HTH.

 

- Spydertrader

 

[dkm 10]

Drawing "correct" gaussians continues to be a headache. Unsure as to when this morning's B2B actually ended (i.e. we have arrived at p2). Now thinking that maybe 11:20 is the real p2. Unsure what to do regarding the gaussians at any level through the lat from 11:20. I think a gaussian lesson or two is in order.