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I am not a profitable trader of this method, and I don't wish to clutter up this thread with "frivolity". Any post is done in the spirit of seeking understanding. I also wish to say that I am pleased that Gucci's efforts have bought a bit of life back to a long dormant thread. I think most people in my position have/had just given up. Now, with somebody who has been through similar struggles, and yet who has finally made it (work), and who is willing to try and help others, there is the thought of maybe just giving it one more try, maybe some more pennies will drop. (Excuse the pun). Pardon me if a think aloud, what follows might be obvious, but I am trying to clarify things in my own mind. Price is a continuous variable. The most accurate graphical representation of the market, (leaving volume aside for the moment), would be a continuous line graph, with time on the horizontal axis and price on the vertical. It is not practical to have the time measured in seconds (say), but if we did we would get a very long graph, showing all the tiny up and down variations/waves in price over the period. So price is like a video. We have chosen to use a 5 minute OHLC bar graph. This like a series on photographs taken at 5 minute intervals from the video. I think that perhaps we should not mistake the photo for the substance which is the video, and to bear in mind that when we look at the photos we are getting a simplified view of the video. That being said: In a uptrend FBP – two bar formation, with second bar having an equal high and a higher low. Price fails to advance in the trend for a least 5 minutes, some movement in the opposite direction of the trend (down) EH – two bar formation, with second bar having an equal high and equal low. Price fails to advance in the trend for at least 5 minutes, some movement in the opposite direction of the trend (down) SYM – two bar formation, with second bar having a lower high and a higher low. Price fails to advance in the trend for a least 5 minutes, some movement in the opposite direction of the trend (down) FBP – two bar formation, with second bar having a lower high and equal low. Price fails to advance in the trend for at least 5 minutes, some movement in the opposite direction of the trend (down) IBGS (down) – two bar formation, with the second bar having a higher high and higher a low (if not an outside bar), with closing price lower than opening price. Price does advance in the trend, but the net result of price movement is that price is lower than it was 5 minutes before, therefore, some movement in the opposite direction of the trend. I agree that for an FBP, the movement in the opposite direction of the trend (down), maybe a bit more pronounced than in the case of a FTP, but essentially you have a 5 minute period where price does not advance in the direction of the trend (Up). There is downward movement in price. Thinking in terms of Wyckoff, who I have been reading, this is either due to a reduction in buying activity, or an increase in selling activity. A stall (from Jack) Stalls are longer hitches and the volatility may not be less than prior bars. Picture it as a definite pause and dwell period that occurs not too close to the left fractal channel line. Volume will oscillate somewhat by flagging and then refreshing and flagging again. Hitch As dominant traverses proceed the price change there is, at first, an almost continuous advance. Therefore, from bar to bar, the offsets and the bar length repeat one after another. Progress can soften after a period of time and it shows up as a momentary one or two bar repeat. Repeat means that consecutive nearly identical bars show up. The bars often do not have the volatility of the prior advancing bars. Volume will flag somewhat preceding this phenomena. Then the price resumes its prior advance. The market has momentarily caught its breath, so to speak.

I'll have to disagree with you on this one. Not that it makes much difference, the market will decide. Our charts are a graphical record of transactions by thousands of buyers and sellers, divided (arbitrarily) in 5 minute periods. If one of those buyers or sellers transacted one second later or earlier, it might effect the shape of our formation, but would not fundamentally alter the overall market situation. So for me it does appear logical to place the FTP with the others. Maybe we should look out for examples in the market.

Hi Gucci, This is an old quote. Is the shape of the containers i.e "equal weight" important? If your first dominant movement (R2R) in this case consists of a down tape, then up tape and then down tape, must the third dominant movement (2R) have the same shape. I suspect this is not the case and that I misunderstood. This is not the case in the brown container referenced in my previous post, (the B2B has a SYM pennant, but the 2B, has no non dom formation, at least none that is visible on the 5 minute time frame).

Thank you for your reply. The above being the case with can't you include a FTP in your non dom formations (for an up trend) , as there could be only a one tick difference between a FTP, and an IBGS or a sym pennant?

Here is my effort in adding Gaussians.

Hi gucci, Thanks for your efforts. Here is a snippet of one of your charts. (Excuse the manual annotations). The purple container (I) consists of three, "equal weight" bbt tapes. The next container is brown. 1. My first confusion is that the point 2 on the price pane does not match the point 2 on the volume gaussian. I thought that gaussians should match trend lines. 2. My second confusion is that the movement of price to point 2 (corresponding to the gaussian) is a "complex bbt". It contains a sym pennant corresponding to the volume trough. However the movement for price from this point 2 to point 3 and then from point 3 to the end are simple bbt's. So I don't understand how the concept of equal weight containers applies.

Thank you for this. Complex = a container (BBT) within which we are able to annotate non dominant trend lines as per the 10 x 2 bar cases. Non dom trend lines in an up BBT = FBP, EH, SYM, and also IBGS and OB. I don't understand how to annotate a non dominant trend line in the case of an ibgs (say in up BBT), which makes a higher high and higher low relative to the previous bar. It seems similar to the FTP. Spyder made no reference to bar open and closing prices in the 2 bar cases.

no danger of that !

Hello NYCMB, Spyder was commenting about a trade by LittleMac. The trade was in a stock named MELI. See http://http://www.elitetrader.com/vb/showthread.php?s=&postid=1973881&highlight=take+care+with+your+MELI+trade#post1973881

Thanks cnms2 ... I'm sorry too:bang head: I am a secondary Maths teacher. I have always found that Maths came easy to me, and I am amazed sometimes at how some of my students struggle with things that to me are so easy. But its seems that with regard to trading, I am ironically in a similar situation, after years of reading threads and staring at charts :doh: I read a quote from Spyder about the maths of trends, quote "The second derivatives of Price and Volume define a trend". The second derivative of a function changes sign well in advance of the function value (which only changes direction when the first derivative changes sign) and I don't know how the second derivative of volume let alone both together would work... but thats not my main question. I am posting an old chart of Spyder's from ET, with the tapes and traverses annotated (by Spyder). I have annotated the Gaussians. I would like to know if my Gaussians are correct and if not what I should do differently. Secondly, Spyder's point 3 of the blue traverse occurs on an IBGS, WITHOUT INCREASING VOLUME. My understanding is that for a point 3 to be a point 3 there must be increasing volume, I would appreciate any comments about this i.e. am I being too rigid, what about the bar before with increasing volume and decrease volatility, ibgs means "guassian shift whether on increasing volume or not etc. I started reading some of Spyder's posts at the beginning of the thread. He says "unless and until the Volume Cycle Sequences reach completion, the current Price Trend cannot end". I understand volume sequence (up trend) to mean b2b2r2b with the last 2b being increasing volume after point 3". I cannot reconcile my understanding to the attached chart:confused:. If somebody could enlighten me I would be most grateful. TIA.

Thanks for your comment. This was done end of day in an effort to get the basic/"bigger picture" correct, because I found myself totally confused during the day with faster fractals. Of course this is by no means a "thoroughly annotated chart", I guess what I want to know is do the trend lines and gaussians that I have drawn accurately reflect the market or is there something that I have missed.

This is my attempt to annotate yesterday (done end of day). I would be grateful if one (or more) of the more experienced traders could take a look and let me know what's right (if anything) and what's not.

From me too ... here's wishing everyone a happy and successful 2011:)

Hi emac According to my understanding, if you have a faster fractal b2b2r2b establishing the first dominant leg of a traverse (B2B) and taking you to the traverse point 2 (as here according to cnms2), then you should anticipate a similar volume sequence (b2r2b) in the second dominant leg of the traverse (from the traverse point 3). As this second volume sequence has not completed at 1325, I don't think that your r2r is valid as this implies change in dominance and we don't have permission to look for change until the faster fractal volume sequence of the 2B (from point 3) is complete. I have tried annotating some more faster fractal traverses. What I find interesting is that after the blue traverse container under discussion, the R2R annotated does not consist of a faster fractal r2r2b2r (at least not one that I can see). It is as if the market "jumps fractals" - I seem to recall Gucci using that phase:) But this is followed by a faster fractal r2b2r for the second dominant leg 2R (from point 3).

Thanks so much for your response cnms2. Would the attached gaussian annotations, (fraster fractal and traverse) be more accurate?

Hi Gucci, I was very encouraged by your response to my last post ... getting there ... I am also still trying to learn the language of the market. A previous quote ... "The market moved to its point 2 (first dominant leg) creating the faster fractal thing underway. Such being the case you should anticipate the second dominant leg (2R) being created in a similar way." I am trying to see how this quote applies to the blue container in your chart (attached) from 12:30 to 13:50. On the attached chart I have annotated on the Gaussian how I see the faster fractal b2b2r2b which forms the traverse B2B. We then have the traverse 2R, (which does not break the rtl, and therefore the rtl is not formed by the point 3 of price), but then I don't see the second dominant leg (2B) being created in the same way as the first dominant leg; I can't see the faster fractal here. Any help in understanding the language of the market would be appreciated.

Hi Gucci, When studying the chart under discussion, in real time I would have probably taken the (15:35) IBGS on increasing volume, which is also a lateral BO/FBO, as a major signal for change. (This would have been too early as it turns out). Then I thought of this previous quote of yours in response to a post. "The market moved to its point 2 (first dominant leg) creating the faster fractal thing underway. Such being the case you should anticipate the second dominant leg (2R) being created the similar way. So annotating REAL TIME at 10:25 (your provisional point 3)you anticipate the second dominant leg. This second dominant leg should be created by a faster fractal thing. So there is no way you should look for a signal of change at 10:30-10:40 area. Now try to work forward from here using the same logic in conjuction with volume sequences and you will also understand why we do not have a faster fractal thing annotated from 10:25 onward. (see the chart with the clue)" Would a similar argument apply here. The 15:35 IBGS cannot be a signal for change because the faster fractal sequence of the second dominant leg (2R) has not completed yet. We can only start looking for a signal for change after the 15:45 bar (the faster fractal sequence for the second dominant leg of the pink container is now complete), and that signal for change comes on the very next bar in the form of another increasing volume ibgs/ob? I hope I am on the right track.

When the price moves above the point 1 of the thing confined by the deep pink lines, you know that fanning is impossible and that the thing confined by the pink lines is definitely over. I too am curious, Gucci, about how you made the breakthrough from confusion and frustration to clarity. Anyway, thanks for your efforts.

The FBP breakout bar is outside the last dominant tape of the up traverse (hope my fractal descriptions are accurate), but is still INSIDE the up traverse-container carried over from the previous day (with whitish trend line and light green point 3). A point 2 must always break the rtl of the previous trend, so that's why our point 2 is not on the cards yet? With regard to questions 2 and 3: I would have annotated the increasing red Gaussian up to the last red bar after the annotated pink point 2 (I think the time is 10:15), and then the point 3 on the black ibgs at 10:25 which you say is wrong. It is not clear to me, but the only thing I can think of is that although we have a point 2 with red dominance established, and thereafter an up-tape that breaks the rtl of the down tape, the volume is not perhaps 2b, in the sense it must be DECLINING BLACK after the R2R. This occurs on the way to the actual point 3 that you have annotated. But the 10:20 black bar IS declining, so I don't find my argument very convincing, but I don't have any other.

First question: "Why should one know, 35 minutes into the day, that our point two is not on the cards yet?". Gucci, is that because the increasing red volume that occurs is on a bar that is a pennant break out, which does not change dominance (from black to red)? Question 2 and 3 have me stumped, but I will keep thinking ...

Hello Spyder, I have attached one of your charts from early last year. I know that you have said we should be cautious about using older charts because emphasis/conventions were different then, so my first question is, Is this chart annotated according to the conventions that you are seeking to transfer in this thread? If the answer to this question is "yes", then my question concerns the Gaussians and fractals annotated that some of us find difficult to understand? The chart clearly shows (at certain times, but not always) thin, medium and thick Gaussians. However, at times we do not have 3 levels of Gaussians. For example, at 12:40 an increasing red (thick) Gaussian starts and simultaneously we have a medium (r2r2b2r). The two end at 13:25. There is no annotated thin Gaussian whatsoever for this period, and I cannot see how it would be possible to annotate a thin level sequence over this period. (It is almost as if, as Gucci said, the market "jumped fractals!") After that we have a b2b where only thick level Gaussians are annotated (at least in the beginning, no medium and no thin, and again I don't see how they would be possible in the context.) Thats why I find if confusing when you say that we always want to annotate 3 fractal levels .... or am I wrongly equating fractal levels with Gaussians lines of different thickness In a nutshell, does always annotating three fractal levels imply always and everywhere having 3 (thin, medium and thick) sets of Gaussians. I think this is a misconception that I have had for a long time, and which the recent productive discussion has begun to dispel, but I would like confirmation. Your patience and support is much appreciated.

9bbts - I presume this stands for 9 building block tapes Hello Spyder, thanks for the thread. I have used EHorne's chart as a foundation, and tried to annotate in more detail the tapes and traverses (syncing with the Gaussians). Please tell me if I am on the right track and where I can look at improving. TIA.

My thanks to you as well, EHorn .... I always enjoy studying your charts... Please confirm for me that the first 3 blue containers are each 5-minute traverses, together building the green up "channel". This seems to be born out by the Gaussians. But if I follow the Gaussians for the next 3 blue containers, they seem to be 3 "tapes". Is this correct. TIA.

Peazip also extracts/uncompresses these files well, (its totally free) and avi media player is another good free media player which plays them without any problem. Best wishes to everyone and thanks for all the contributions.