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Old 07-05-2009, 07:22 PM   #17

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Re: The Price / Volume Relationship

Quote:
Originally Posted by euclid »
And price continues in a straight line while these "volume sequences" complete?
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.

Quote:
Originally Posted by euclid »
I'm questioning your terminology here.
Always a good idea to understand the vocabulary words before moving forward.

Quote:
Originally Posted by euclid »
You've not shown any volume sequence that isn't coloured by price
Perhaps, viewing Volume Bar coloration through the lense of Price bar Open and Close isn't the path you should be taking.

Quote:
Originally Posted by euclid »
For me that's a price and volume sequence.
Default settings on charting software do not necessarily provide the best view of all the information the market conveys.

Quote:
Originally Posted by euclid »
Do you understand what I am saying?
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.

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Old 07-06-2009, 05:43 AM   #18

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Re: The Price / Volume Relationship

Thank you for the clarification. You have confirmed that you are actually using price. In fact, in every example you have shown here the volume pane is entirely redundant. I doubt you will be able to see that, so it would be pointless for me to further divert your thread.
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Old 07-06-2009, 06:28 AM   #19

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Re: The Price / Volume Relationship

Firstly good luck with the thread. You wont need it, nonsense isn't courted here.

I have always thought that the labelling of volume sequences one of the areas that could have increased clarity. The volume segments 2R and 2B have different meanings depending on context. To make sense of any element or pair of elements in the sequence you need to look back until you discover B2B or R2R.

Of course things aren't going to change, but If you labelled each segment in the sequence with a 'vector' things would be much clearer imho. So each term would have

Volume annotated
(D) Diminishing or
(I) Increasing

Direction annotated
(R) Down
(B) Up

So a down trend would be

DR IR DB IR

An uptrend would be

DB IB DR IB

The beauty of this is it allows you to look at any part of the sequence and know where you are without having to 'look back'. You could bracket (DR IR) to signify that the sequence has changed direction if you like. When I studied the material I went as far as ditching R and B in favour of (U) up and (D) down. After all the colours are a visual aid. You then have DD ID DU ID. It 'sounds' better in my head too, of course it makes communication with other practitioners difficult as you need to 'translate'.

Anyway I don't want to derail things but back in the day when I was trying to figure out this approach I found this difficult, partly because I found that particular annotation counter intuitive. Most of the rest of the terminology I thought was well chosen and so, intuitive.
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Old 07-06-2009, 07:18 AM   #20

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Re: The Price / Volume Relationship

'Vocabulary' and 'words', I understand, but not 'vocabulary words'.
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Old 07-06-2009, 07:36 AM   #21

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Re: The Price / Volume Relationship

I think what is meant is 'lexicon' which is a languages words and common expressions
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Old 07-06-2009, 10:17 PM   #22

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Re: The Price / Volume Relationship

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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Old 07-06-2009, 10:56 PM   #23

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Learning to Draw Tapes

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.

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Old 07-06-2009, 11:09 PM   #24

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Re: The Price / Volume Relationship

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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