[kidpwrtrader]

I have a quick question regarding PRV. Pardon me if this is a concept that is too remedial for this thread. If it is, I am happy to hold off on it while I search for it myself.

Is there a "too early" to use PRV. Obviously, at the start of every bar we have people who initiate due to various systems. This is especially true for the start of day where things "synch" up.

Therefore, is there perhaps a certain threshold one should be using of DU for instance (if trading stocks) so that these effects are countered?

This is not mentioned in journals one nor journal 2 on the equities thread so maybe this is a non-issue completely. Obviously, its not a pre-requisite.

[vienna]

Attached please find Jack Hershey's Document "Clean page 4", but for a down-channel...perhaps somebody finds it useful, HTH

[pr0crast]

Originally Posted by BillyRay »

Great post. I am a 25 year student of volume and range analysis and I would urge that all volume is not created equal. In other words, volume seems to have some analytical or predictive value only when the volume correlates to an instrument that is not dependent on the price movement of another instrument. For instance, the ES (Emini S&P 500)--when the S&P 500 Cash Index is increasing in price, the ES will follow, regardless of the volume. A multitude of program traders assure the price of the two instruments stay within fair market value of one another. But this cannot mean that the ES volume holds predictive value for the cash index it follows. With that said, it can reasonably be argued that the ES influences the cash market prior to the cash market opening. But that influence is shortly lived. In the end, and as the old saying goes, cash is king.

The people here can get a little touchy Thanks for posing an extremely interesting question. Though volume is always useful, I have found it useful in oddly different ways depending on the instrument being traded (i.e. tick volume on Forex). This tells me that there is a fundamental difference in what's going on, but I don't really know what. I guess I don't really care either, but it's interesting to think about.

Something to ponder: Despite the fact that there are arbitrage systems out there keeping the cash and futures in line, you can admit that there are traders of ALL TYPES on the ES, trading for entirely different reasons and using different techniques. This means that there are all kinds of orders floating that may or may not be paying explicit attention to the cash index. When price MUST pass through an area because an arbitrage opportunity, it has to pass through those floating orders. That prints as "volume". If we see a lot of that, we know which direction the market is moving in, resistance be damned. Thankfully, the market tends to move in waves, which creates opportunities if you are confident in its current direction.

[islandboyz]

I'm stuck. Today, March 23, at 14:50, the 2 min YM began a run up that lasted for about 8 minutes. At the same time volume was decreasing. This was indicative of a black non dom retrace in a red channel, but it was a dom move in a black channel. Therefore, this would suggest I was on the wrong fractal. But if there is another larger red fractal that makes sense of this, I can't find it. What am I missing? Any explanation of this would be helpful to me. TIA.

[pr0crast]

Originally Posted by islandboyz »

I'm stuck. Today, March 23, at 14:50, the 2 min YM began a run up that lasted for about 8 minutes. At the same time volume was decreasing. This was indicative of a black non dom retrace in a red channel, but it was a dom move in a black channel. Therefore, this would suggest I was on the wrong fractal. But if there is another larger red fractal that makes sense of this, I can't find it. What am I missing? Any explanation of this would be helpful to me. TIA.

Look at the range, open, and close of each of those bars on decreasing volume. The range is getting smaller, and the close is getting lower and lower on the bar. In other words, the 2m bars are becoming less and less "black" as the balance between buyers and sellers shifts. If you were looking at 30 second bars, you'd probably see a B2R2B2R2B2R2B-ftt-2R2R. Not that you should look at 30 second bars... but the price action is telling a story.

Looking at 5m ES bars, you see the same thing play out all the time.

[Ezzy]

Originally Posted by islandboyz »

I'm stuck. Today, March 23, at 14:50, the 2 min YM began a run up that lasted for about 8 minutes. At the same time volume was decreasing. This was indicative of a black non dom retrace in a red channel, but it was a dom move in a black channel. Therefore, this would suggest I was on the wrong fractal. But if there is another larger red fractal that makes sense of this, I can't find it. What am I missing? Any explanation of this would be helpful to me. TIA.

Gaussians must match your trend lines. Even though volume peaked early in the move, price continued in the dominant direction. There hasn't been any change yet. Continue the gaussian to match the price peak or price trough.

On the flip side sometimes you may be drawing a decreasing gaussian to or through an increasing volume bar. For example if you went B2B pt1 to pt2, and then in the middle of going 2R (decreasing volume with decreasing price) you get an increasing volume bar, would you change your decreasing red gaussian to increasing red? Or draw in an R2R for that leg? No. There may be a dominant red on a lower fractal, but not on the same level you're annotating.

One suggestion. Posting a larger section of the YM chart and the ES would have been helpful.

Annotating gaussians to the max/min of price movement is different from some of the older charts you may have seen on another site.

[pr0crast]

Originally Posted by Ezzy »

Gaussians must match your trend lines.

In case this seems arbitrary or counter intuitive, since gaussians are supposed to define the channel -- not the other way around, this statement reflects the often inexact nature of our 5 minute market lens and the need to account for that rather than blindly go by what the chart says. If you use your imagination to look into the 5m bar and think through what happened, and where the dominant volume was, your gaussians will match your trend lines.

[CDNpatriot]

Just wanted to clear up somethings with Journal 1 and Journal 2 that Spydertrader was involved with at ET.

A programmer has some questions for me.

Are the indicators used (MACD, Stochastic) based on daily bars, if not on what are they based?"

Are they basd on daily bars, but entries are end of bar based on 30 minute bars?

With the 30 Minute bars, so are buys and sells only on 30 minute close of bars or intrabar? If intrabar, do we need the 30 minute bars for something?

Thanks!