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Spydertrader
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Everything posted by Spydertrader
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Correct. See Attached. - Spydertrader
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As practiced in the previous threads I have authored, I continue to encourage liberal use of the 'report' button and / or ignore feature of this web site. - Spydertrader
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I have the 'default' settings (for most charting software) shown currently - where Price Bar Color results from the differences between open and close. For the 'neutral bars' (or Doji for those of a 'candlestick' orientation), I simply added a bit of coding in order to 'color' them correctly (rather than show up as a different color than the up / down Price Bars). I set the bar coloration this way for educational purposes. HTH - Spydertrader
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Before one can learn how to learn to thoroughly and correctly annotate a chart, one must learn the process of differentiation. In other words, every trader must learn to distinguish that which he / she believes exists from that which the market has actually provided. Attached, please find an example of Monday's (07/06/2009) ES 5 minute chart. I have marked several areas which, at first glance, appear similar, or to the untrained eye, even look exactly the same. However, subtle differences do exist among the various areas annotated. Today's drill involves determining what answer best describes the differences, and once located, by using the information provided by the Price Pane and / or the Volume Pane, applying that answer onto other chart days in an effort to 'see' if your answer 'works' for every other exact same scenario - irrespective of market day. Feel free to use your own charting software for this exercise. I snipped down the chart in an effort to make it 'fit' this space. - Spydertrader
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See Attached. - Spydertrader
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All lateral formations develop out of a three bar Series. Bars Two and Three sit 'inside' Bar One where the Highs of Bars Two and Three sit no higher than the High of Bar One and the Lows fall no further than the Low of Bar One. The 'second' example shows Bar Three with a Higher High than Bar One of the three bar series. As Such the second example cannot form a 'Lateral Formation.' After completing the 'tape drawing' drill, and after one begins to 'merge' the individual 'two bar' tapes into longer trends which continue the current 'tape fractal,' stop annotating 'tapes' within Lateral Formations. Begin to note the significant shift in Pace which develops inside every Lateral Formation. Note as well the changes which develop as Price moves from inside a Lateral Formation to an area where the Lateral Formation ends. The market provided a very nice example today (starting with the ES 11:25 [close of] Bar). - Spydertrader
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For now, annotate every tape you can on your chart. Then, begin to 'merge' the various tapes together into a trend. - Spydertrader
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The 'red arrow' bar is part of the down tape, but it also creates the first bar in the next UP tape. All trends over lap, and they do so on every fractal. They overlap at Point One. - Spydertrader
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Nicely done. - Spydertrader
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Nice Automation, but you might want to review your code for 'Lateral Formations.' See Attached. - Spydertrader
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You'll kindly note that none of the ten examples contain an 'open' nor do any of the examples contain a 'close.' The examples show how to anotate an RTL based off an Outside Bar. Note the divergent trend lines. These are LTL's. But they still need an RTL for each. Now note the green RTL. Bar Seven Close.. +++++++++ Remember, the goal of this exercise is to 'get the feel' for drawing tapes - bar by bar - so you can know how to annotate any two or three bar combination. Once you learn this skill, you'll move onto combining 'tapes' in order to see the fast trends as they build the next fractal - the traverse. For now, simply apply the template (tentapes attachment) onto your charts - anywhere you can draw a tape. In the very near future, you'll apply the fractal nature of the market onto your chart while developing the ability to see all three fractals in an effort to consistantly apply the trend line drawing rules onto every trading fractal in the exact same fashion. - Spydertrader P.S. Everyone should read that last sentence again and again to see if it applies.
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See Attached.
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The Horizontal Line represents a boundary which the market needs to break in order to create the RTL, rather than, representing an RTL or LTL. See Attached. I simply neglected to add the Bar 12 Annotations. Thanks for pointing it out. HTH. - Spydertrader
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For those interested in Volume compared to Volatility, please see the attached results. Anyone interested in replicating these results can do so in the following fashion: Take 20 days of ES 5 minute data using Volume and Volatility (around 1600 bars). Sort the data from highest to lowest (by Volume) - in descending order. Now break the data into deciles. Extreme represents the highest decile with VDU (Very Dry Up) representing the lowest decile (or lowest 10% of all Volume Bars). Fast, Medium, Slow and DU (Dry Up) each have 2 deciles as shown on the attached. Record the Volatilty levels for each decile and the number of bars at each Volatility level within each decile. As one can see on the chart, as Volume increases (from bottom left to top left) the individual bell curves for each decile shift to the right (increasing Volatility). - Spydertrader
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We begin the process of learning to annotate tapes (skinny lines) onto a chart simply by applying the template shown in the 'ten tapes' attachment posted earlier in the thread. As the focus is about learning to contain Price at the fastest trading fractal (and since the focus, at this point, is to develop the skills required to annotate correctly and consistantly) No need to focus on volume at this time. Simply, go along - bar by bar - in an effort to place tapes across the entire trading day. No need to build traverses or channels at this point. For now, just focus on tapes. Since the market was kind enough to provide at least one example of every type of tape, we have all the possible combinations of two bars shown in one trading day. For practice, Do the entire day. - Spydertrader
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Attached, please find an ES five minute chart for today (07/06/2009) containing Highlighted Areas where the market formed some of the formations outlined within the 'ten tapes' attachment posted earlier in the thread. - Spydertrader
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I don't recall mentioning anything about Price moving in a 'straight line.' Price continues within the trend unless (and until) the Volume Sequences complete. Always a good idea to understand the vocabulary words before moving forward. Perhaps, viewing Volume Bar coloration through the lense of Price bar Open and Close isn't the path you should be taking. Default settings on charting software do not necessarily provide the best view of all the information the market conveys. I think so. It appears as if you 'see' these Volume 'colors' as a function of Price (however one's software chooses to color the individual bars). If using 'color' causes a roadblock for you, another set of vocabulary words also provides sufficient direction. In the attached, substitute 'deceleration / acceleration & deceleration / acceleration' for 'B2B 2R 2B' or 'R2R 2B 2R' in the Volume panes. The vocabulary words used to describe the Volume Sequences do not play as important a role as the sequences themselves. Some have even described the sequences as "hiking up and down mountains." HTH. - Spydertrader
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Unless and until the Volume Sequences complete on each and every fractal then (and only then) can the Price trend change. 1. Sequences Complete. 2. The market provides a signal for change. 3. The trend changes direction. 4. The process repeats - this time in a different direction. Volume leads Price. Always. - Spydertrader
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You are most welcome. As I indicated in the "Open and Free discussion on Volume" thread, as long as an interest exists, I'm happy to provide a more detailed description of how I trade each day. I have always been a strong proponent of learning to crawl before choosing to walk, run or fly. All things in due time. I have yet to talk about taking actions, or even seeing the sequences unfold in real time. I've simply offered a way, by which, people can learn to see that which the market provides each and every day. I don't plan on continuing on with this same thread, post after post, a year (or even a month) from now. However, if, during that time, my words, actions or posts bother people, and whip them into a lather, then I encourage those individuals to stop reading my posts. - Spydertrader
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The Journey Begins What sequences the market requires completing today often continues over from the previous day. As such, placing ‘carryover’ tapes, traverses and channels from the previous trading day alerts the trader as to which sequences the market still needs to produce / complete. Since these Volume Sequences continuously move from one day to the next (as well as throughout an entire trading day), for all intents and purposes, ‘gaps’ do not exist. Sure, anyone can plainly see Price gap one direction or another, but in terms of Volume Sequences markets represent a continuous stream of information. In order to create the proper visual ‘scene’ for viewing the Volume Sequences, simply mentally (or use software which automatically adjusts the market for you) slide the Opening (current day) Price up to the previous trading day closing Price (16:15 Eastern Time). While some might consider my comments on gaps utter heresy, logically, one can show many examples of trends which continue from one day to the next (Wednesday to Thursday last representing one such example). In addition, one can, quite frequently see the market begin the first part of the day heading off in one direction, only to reverse course and spend the rest of the day heading in another (See Wednesday morning until 10:35 Eastern Time for a recent example). Again, unless and until the Volume Sequences complete, the current trend cannot end, nor can the next trend begin. Therefore, if trends have the ability cross a multi-day boundary, logically, the sequences of the Price / Volume relationship must also have the ability to continue across the EOD. This ability of the Price / Volume Relationship to extend beyond close of business renders gaps unimportant and irrelevant. As such, they do not exist. To reiterate, with respect to ‘gaps’ in Price, I realize a number of trading methodologies exist, and a significant number of authors have written books describing, the exact opposite of what I have written here. We are not discussing those methodologies here. I am not saying one cannot develop probability based methodologies which can produce profit (hell, I used to trade an ‘opening gap’ strategy years ago). What I am saying is, for the purposes of ‘seeing’ the Price / Volume Relationship at work, gaps (and any probabilistic methodologies associated with them) serve no purpose and play no role in how one views the ‘right’ side of the market. Finally, when a trader begins the process of learning to differentiate that which they believe exists from that which actually does exist operating under the ‘correct’ mental state augments the learning process. In other words, ‘learning to learn’ begins with observing the market (almost in a scientific sense) in order to see that which exists, rather than, in an effort to prove or disprove pre-conceived notions. I do not expect anyone to blindly follow along, nor to I demand any great ‘leap of faith’ in order to participate. I’ve simply shown you how and where to go and look. Whether or not one chooses to actually go and see for themselves, remains a matter of individual choice. Should any of the above posted information seem unclear, or if anyone requires additional clarification, please do not hesitate to let me know. More to come as we move forward, and Good Trading to you all. - Spydertrader
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Steer and Focus While additional tool sets allowing for finer and finer granularity can be used in an effort to perform the M-A-D-A Process Intra-Bar, for the purposes of this discussion, one only need annotate at the end (or close) of a ES 5 minute Bar. Feel free to practice on static (EOD) if need be, but ultimately, the goal needs to be real time annotations which alert the trader to what must come next in terms of Volume Sequences. Remember, much more information exists in a Price Chart than what most people readily notice. Through the process of differentiation a trader can learn to see that which they have missed (and what many claim doesn’t even exist). To Be Continued ... - Spydertrader
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Gaussians The Volume Sequences (represented by Dominant and Non-Dominant Gaussian Formation) when matched with the above drawn trend lines for each trading fractal create the B2B 2R 2B (uptrend) cycle, as well as, the R2R 2B 2R (downtrend) cycle. Increasing Volume in the direction of the current trend represents dominant Volume. We represent such phenomenon with an increasing Gaussian line in our Volume Pane with the goal of syncing our trend lines with our Gaussian lines of equal weight See Attached. To Be Continued ... - Spydertrader
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Tapes Attached, please find ten scenarios which cover the number of two bar (or more) formations (the smallest tape) possible as formed by the market. The market creates each trend (skinny, medium and thick [or fast, medium and slow, if you prefer]) by forming a Point One, Point Two, Point Three trend between the Right and Left Trend Lines. To Be Continued ... - Spydertrader
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Trend Lines Accurately drawn trend lines in a chart Price Pane represent ‘containers’ of trend on the three trading fractals. We represent the fastest trading fractal using skinny lines (described as ‘tapes’) which, in turn, build the next slower fractal (represented by ‘medium’ weight lines) – known as a Traverse. These Medium fast trends (Traverses) build the slowest fractal (thick line weight) known as a ‘channel.’ To Be Continued ... - Spydertrader
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Vocabulary Some Vocabulary which might come up from time to time … LTR – Left to Right RTL – Right to Left LTL – Left Trend Line RTL – Right Trend Line BO – Break Out of a Trend FTP – Flat Top Pennant FBP – Flat Bottom Pennant Sym – Symmetrical Pennant Fractal – a geometric pattern that is repeated at every scale VE – Volatility Expansion – ‘pushing out’ of the Left Trend Line To Be Continued ... - Spydertrader
