The Price / Volume Relationship

[cnms2]

Originally Posted by gucci I still can not see the difference. I think this is very important to understand, so bear with me. The fractal nature of the market should suggest that every Price Bar on every timeframe represent a fractal. I mean 15min Bar, 5min Bar, 1hour Bar and so on. When our channel contains six 5min Bars for an example, it represents simply one 30min Bar. How else can you "magnify" or "reduce" the market? ...

If I may ... Price waveform has a fractal nature, and exists out there, whether you open your charting program or not. To look at that waveform you choose a time frame, a resolution, for your chart. Your 1, 5 or 15 min bars represent that resolution, that gives you the possibility to see a subset of those price fractals. It's like you measure an object's dimensions using a ruler. Your ruler may be marked in whatever units (inches, centimeters, whatever), independent of that object's shape. Obviously, you need to appropriately choose a ruler that allows you to measure whatever you want to.

[gucci]

Originally Posted by cnms2 If I may ... Price waveform has a fractal nature, and exists out there, whether you open your charting program or not. To look at that waveform you choose a time frame, a resolution, for your chart. Your 1, 5 or 15 min bars represent that resolution, that gives you the possibility to see a subset of those price fractals. It's like you measure an object's dimensions using a ruler. Your ruler may be marked in whatever units (inches, centimeters, whatever), independent of that object's shape. Obviously, you need to appropriately choose a ruler that allows you to measure whatever you want to.

Let me clarify my confusion (or ignorance) by comparing the fractal nature of the market to a fractal nature of a snowflake. Snowflake has a certain pattern whether you look at it or not. If you take just a part of a snowflake and enlarge it, this enlarged part will exhibit the same pattern which the whole snowflake showed. You take just a tiny spot on a snowflake and use a microscope to discern the pattern, the result will be the same - you'll see the same pattern. Now the snowflake has a static nature,whereas the market has a dynamic one. So instead of a microscope you'll need different (faster) timeframes to behold the cycles of the price movement.

[romanus]

Originally Posted by Spydertrader No.

Thank your for the answer.

Originally Posted by Spydertrader Currently, I do not use the YM as part of my M-A-D-A (nor STR-SQU, Tic Charts nor DOM). While in the past, I used the entire arsenal of medium and fine tools, today, I no longer have a desire to work that hard. As such, I now only use the ES.

As it relates to my own personal pursuit of understanding, I stopped looking at YM quite some time ago. However after your recent suggestion to look at YM within the specific context of the lateral discussion for one specific purpose (WWT inside the lateral), I started thinking that perhaps occasionally (as in very rare), the YM could possibly provide me with the answer where I can't seem to find the answer on ES itself.

An example of what I mean is the ES sequence in the attached. Even after the market built the sequence in an opposite direction, I am still unable to determine the correct annotations (A or B in the attached). After looking at YM, in my own personally subjective opinion, the scenario A on ES seems to be highly unlikely.

The above was a long background for the actual question that I wanted clarify -- would I be correct in stating that points 1, 2 and 3 on ES correspond to those same points on YM building the same sequence on 2 min bars?

Thank you for any light that you can shed on the subject.

[cnms2]

Originally Posted by gucci Let me clarify my confusion (or ignorance) by comparing the fractal nature of the market to a fractal nature of a snowflake. Snowflake has a certain pattern whether you look at it or not. If you take just a part of a snowflake and enlarge it, this enlarged part will exhibit the same pattern which the whole snowflake showed. You take just a tiny spot on a snowflake and use a microscope to discern the pattern, the result will be the same - you'll see the same pattern. Now the snowflake has a static nature,whereas the market has a dynamic one. So instead of a microscope you'll need different (faster) timeframes to behold the cycles of the price movement.

The 1, 5, 15 bar chart is like your microscope's set resolution, and cannot be referred as the market's / snowflake's fractal. You can't say "5 min fractal of the market", as you can't say "x10 fractal of the snowflake". You can talk about the price or snowflake fractals you can see through your chart or microscope chosen resolution.

[romanus]

Originally Posted by gucci Let me clarify my confusion (or ignorance) by comparing the fractal nature of the market to a fractal nature of a snowflake.

The objects in price pane exhibit self-similarity but lack the fractal dimension and as such can not represent fractals in mathematical sense using the definition (1.Self-similarity + 2. Fractional dimension + 3. Formation by iteration). Correct annotations in volume pane (which are abstracted from both price and volume bars), however, meet all necessary and sufficient conditions of being "fractal" in mathematical sense. Correct annotations in volume pane require an ability to interpret the context which involves among other things the ability to differentiate, and some other abilities (which currently elude me, both in a sense of lacking the ability itself as well as in a sense of being unable to define which specific ability is lacking).
This is just my own personal theory, which could be wrong.
P.S. Everything in italics was meant as an attempt to be humorous.

[Spydertrader]

Originally Posted by gucci I still can not see the difference.

I (quite often) encourage people finding themselves thwarted by an obstacle to look at the problem in question from a different point of view - other than from the standpoint upon which they currently base their observations.

Originally Posted by gucci How else can you "magnify" or "reduce" the market?

Tape, Traverse, Channel

Originally Posted by gucci We've learnt a number of various SOC. So I just thought, that points 2 and 3 may represent important contexts for different SOC on a faster timeframe to materialize,hence the question.

Signals of change matter only at the completion of the trader specific fractal Order of Events.

- Spydertrader

[Spydertrader]

Originally Posted by romanus would I be correct in stating that points 1, 2 and 3 on ES correspond to those same points on YM building the same sequence on 2 min bars?

You have accurately differentiated between Option 'A' and Option 'B' in terms of 'correctness.'

- Spydertrader

[Spydertrader]

Originally Posted by cnms2 Price waveform has a fractal nature, and exists out there, whether you open your charting program or not.

Which is why Price Bars no more make a trend, than standing in one's garage makes one a car. Standing in a garage might allow a person to 'see' a car - just as looking at a chart might allow a trader to 'see' the trends.

- Spydertrder

[Spydertrader]

Originally Posted by romanus I stopped looking at YM quite some time ago.

In 1957, The YM didn't exist. In 1957, the ES did not exist. In 1957, Intra-DAY data did not exist. However, one could obtain information about the day's events from a newspaper at the end of a day - while sitting in a diner eating a plate of eggs.

If (out of al the various markets around the world) I randomly picked a chart and (while removing the Title, Time and Price levels from the axis) asked you to tell me what market did the chart represent? and what time frame does the chart show?

Could you tell me the answers? Could anyone?

More importantly, does it matter? Of course it doesn't matter which market or which time frame the chart represents.

Any market. Any Timeframe - provided sufficient liquidity exists, right?

Now, (after removing the items listed above) what do we have left? Price and Volume.

These matter. Everything else becomes a matter of efficiency and effectiveness (making more money per unit time). However, until we can always see that which exists, we must avoid any temptation to (consciously or unwittingly) focus on efficiency and effectiveness.

In 1957, someone discovered they had the ability to understand the language of all markets. We all now have way more tools at our disposal than to anyone in 1957. Make sure these tools don't obscure that which can be seen by a patron at a diner eating eggs while reading the daily newspaper.

- Spydertrader

[gucci]

Got it now. I just unwittingly added one more dimension to the definition of a fractal. Thank you guys for the explanations.