The Price / Volume Relationship

[traverse 10]

seemed like an easy day until 1300.

what did I miss?

[Tams 20]

seemed like an easy day until 1300.

what did I miss?

 

everyday is an easy day... if you pay attention to the volume.

 

 

 

 

p.s. did you see the pkv?

[trader1109 10]

[traverse 10]

everyday is an easy day... if you pay attention to the volume.

 

YES, thats why I was looking for other opinions, I did not see the volume sequence complete yet at the tape level. BBT, yes but not tape. Obviously I missed something. please enlighten me with something i can use

 

 

 

p.s. did you see the pkv?

 

saw that too and change on the ym after it had a complete cycle. It all depends on which fractal one chooses. Either the tape or traverse level I did not think we were done.

[trader1109 10]

The thumbnail attachment was a mistake on my behalf. I only wanted to post the chart for today.

 

Trader1109

[traverse 10]

seemed like an easy day until 1300.

what did I miss?

 

what i missed has been differentiated. :doh:

thanks

[MKTr 10]

My work for Friday 27 Nov 09. Seems like progress. Feedback welcome.

 

MK

[FerdinandAlx 10]

My work for Friday 27 Nov 09. Seems like progress. Feedback welcome.

 

MK

 

Before I give any feedback I have a question myself: At the end of the first sequence that you labeled there is a bar on lower volume that you've marked as SFC:JW. What do you mean by JW?

 

You have a sound understanding of sequences. The gap down after a market holiday and the early close must be taken into account however in your anticipation of future sequences. The open and close each day are traumatic interruptions that have the effect that markets aren't perfect nested fractals. The open and the close events are traumatic in the sense that they provide market partcipants with an extra risk factor that wouldn't be there if trading hours would be continuous. Because of this interruption you can't always extrapolate the existing sequence into your anticipation analysis. The effect of this interruption is amplified by the early close and the weekend that follows. It wouldn't surprise me if friday's dominant sequence doesn't carry over at all.

 

- Ferdinand

[MKTr 10]

Ferdinand,

 

Thanks for taking time to comment. I greatly appreciate it.

 

SFC: JW is my shorthand for "Sequence For Change: Jokari Window". In other words: price continues in the L1 dominant direction but volume is fading indicating anticipated change in direction.

 

I am really trying to synchronize fractals in my head and in my annotation. IMO gaps have two aspects to consider: how they affect intraday charts and how they 'fit' into the big picture of longer timeframes. I try very hard to learn from Jack and Spyder's posts as well as other students efforts but I often have to reinvent things for myself in order to truly 'get it'. This is why I seldom post. Most concepts and ideas are already well articulated. Having said that, I may be slaughtering the gap stuff. I agree that to some extent ending and starting operations must feel like a heart attack to the market (ha ha). In a short term point of view this is potentially traumatic (discontinuity) and potentially no big deal from a long term point of view.

 

My thoughts for Friday were that a holiday gap might be different than a normal overnight gap. Same for an early close due to a holiday. Wednesday ended on an up tape and if you close the gap between Wed close and Fri open it appears that long dominance is continuing. It is also my understanding that "closing the gap" applies to volume analysis not price (I could be wrong) so I drew a new up tape and monitored for sequence completion then a sign for change etc. Big picture we had a VE for down channel that started 16 Nov. My hope here is to someday be able to operate on the 5 minute time frame when I able then smoothly shift to overnight trading (daily data) when I cannot monitor during RTH.

 

Thanks again.

 

MK

[Ezzy 10]

It is also my understanding that "closing the gap" applies to volume analysis not price (I could be wrong)

Actually it refers to the price gap. You may find it makes quite a difference on your sequences. Regards - EZ

[nkhoi 10]

I wrote 2 price no gap indicators; one for current day and one for the previous day go to the et thread software for JH to download them.

[MKTr 10]

nkhoi and Ezzy,

 

So literally connect the previous days close with the current day's open and continue the volume Gaussian sequences and price channels without pause while ignoring the actual price values from the previous day? That is a bit a bit different than I understood the use of gaps but I will reconsider and attempt to add it to my bag of tricks/differentiation.

 

I stubbornly cling to TradeStation for my platform. I will attempt to write a gap removal app, if I can, or consider changing platforms, eventually.

 

Thank you both!

 

MK

[cnms2 10]

... So literally connect the previous days close with the current day's open and continue the volume Gaussian sequences and price channels without pause while ignoring the actual price values from the previous day? That is a bit a bit different than I understood the use of gaps but I will reconsider and attempt to add it to my bag of tricks/differentiation. ...

See Spydertrader's post:

... 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). ...

[TIKITRADER 10]

 

I stubbornly cling to TradeStation for my platform. I will attempt to write a gap removal app, if I can, or consider changing platforms, eventually.

 

Thank you both!

 

MK

 

That can be seen here on this post I made recently

 

http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-102.html#post81017

 

The previous day close is connected to the current day open.

Tams has donated the code and is called Shifted found here on TL

[Tams 20]

Shifted

(EasyLanguage)

 

 

http://www.traderslaboratory.com/forums/f46/shifted-5949.html

 

 

 

 

 

Edited November 29, 2009 by Tams

[MKTr 10]

Thank you all. Tams you're awesome.

 

I installed gap removal and few other widgets. I have reread posts related to gaps and looked at several charts to correltate all of this to what I think the market says about it. Of course I did all of this earlier but am now viewing it all with a much different appreciation/POV.

 

I will redraw Friday based on gap removal and hopefully start Monday as squared away I am capable of at this point.

 

While I am working on that I have a related question. I have the input for integrating gap removal for intraday use but how is it integrated on longer timeframes like daily data? For example: what if the 5 minute gap removal made the difference between breaking or not breaking a RTL on a daily chart?

 

What if Napolean had a B-52? Perhaps my question will answer itself as I learn more about the 5 minute application.

 

Thanks again.

 

MK

[NYCMB 10]

Hi folks,

 

Jack Hershey is teaching how to differentiate Retrace from Reversal.

Good trading to everyone!

[FerdinandAlx 10]

In my view removing price gaps is fundamentally unsound and indefensible. The method we use is based on deduction: our fundamental assumption is that markets come into being from their rules and that from those rules we can build a functional system. Part of those rules are the limited trading hours. This presents us with a problem since the p/v sequences we use to build up a picture of the market are discontinued at some point.

 

The removal of price gaps adresses the problem inductively since it does not follow from the market's operating rules. It attempts to present continuity in our sequences through the tinkering with price. The universal problem of induction applies here so that even if it has worked in the past there is no sound reason to assume that it will work in the future.

 

In my view there is no way to address this problem deductively. We cannot soundly carry over yesterday's sequences and we will simply have to wait until we see new sequence being formed. We're just forced to accept that markets do not follow ideal theory and do not contain perfect nested fractals.

[become 10]

Hi folks,

 

Jack Hershey is teaching how to differentiate Retrace from Reversal.

Good trading to everyone!

 

Where is he doing this?

[PointOne 10]

In my view removing price gaps is fundamentally unsound and indefensible.

 

Jack has addressed this here:

 

As time passed, I nested fractals in pragmatic ways. Then we developed the viewpoint that SA (Systems Analysis) was the true underlying. By this simplification and focus, it was possible to deal with whatever questions were brought up by the market.

 

Fractals relate to each other as building blocks. The single pattern that emerges early on from the market, dictates how completion is reached from the smallest to the greatest building block.

 

To examine an instrument like ES or YM it is necessary to use only one set of characterisitcs of that instrument. During RTH's the characteristics are completely defined in a systemic way.

 

While the ES market is not ammenable to being described using continuous functions, it is describable in terms of its characteristics. By using a given set of characteristics that are measurable for each instrument, it is possible to tell various instruments apart by their characteristics. I suggest that the description of ES during RTH is very different than what is describable in non RTH's. While there may be only one data stream over a 24 hour period; it is important to differentiate how two instruments are created by dividing that data stream into two interleaved but not in any way characterisitcally overlapipng.

 

I know my statement is difficult to process at first. As the consideration of the common elements of consideration that form characteristics are put on the table, this mechanism is what is most useful for defining instruments.

 

The systems analysis tests of system quality comes down to being able to apply a system to many markets and on many fractals all of which have sufficient liquidity for applying the system.

 

...

 

as part of trading intraday, a person keeps track of several of the nested fractals. commonly, this includes: BBT, TAPES, TRAVERSES and CHANNELS. Most people consider the sub BBT fractal and a price bar as well. There is no Gap re ES during RTH. Within about 30 seconds of open the gap is handled.

If this is an opening for the defense, feel free to cross examine and develop your counter argument further. I don't think anyone has properly challenged gap removal.

 

I must admit that it makes no sense to me to ignore the price volume sequences outside rth that go into forming a gap. The whole world doesn't care if the Hamptons and Greenwich smart money isn't up yet. Stuff happens outside rth.

 

Hit me!

[FJK 10]

Mind you that your view differs from almost everyone here. Am I the one to tell you that you are way off base? No. Why? Discussing if gaps intra-day gaps should be removed or not is like discussing if volume leads price or not. To me, it is simply not worth my time.

 

Don't take my word for it (which I'm sure you won't anyway). As mentioned many times before, the market tells you everything you need to know. If the market hasen't told you that intra-day gaps dosen't exist, then you have other things to worry about. :helloooo:

 

In my view removing price gaps is fundamentally unsound and indefensible. The method we use is based on deduction: our fundamental assumption is that markets come into being from their rules and that from those rules we can build a functional system. Part of those rules are the limited trading hours. This presents us with a problem since the p/v sequences we use to build up a picture of the market are discontinued at some point.

 

The removal of price gaps adresses the problem inductively since it does not follow from the market's operating rules. It attempts to present continuity in our sequences through the tinkering with price. The universal problem of induction applies here so that even if it has worked in the past there is no sound reason to assume that it will work in the future.

 

In my view there is no way to address this problem deductively. We cannot soundly carry over yesterday's sequences and we will simply have to wait until we see new sequence being formed. We're just forced to accept that markets do not follow ideal theory and do not contain perfect nested fractals.

[Tams 20]

... Tams you're awesome.

 

 

I have more goodies...

 

Stay tuned !

[traverse 10]

clarity ended and uncertainty appeared with pace drop after 1235.

[traverse 10]

clarity ended and uncertainty appeared with pace drop after 1235.

 

I have no idea that the traverse level is correct, rather doubt it is. When I do have clarity it is at the tape level. One would think they could build the traverses from that. (wishful thinking). I imagine they will fall into place much like the subfractal and tapes are.

[FerdinandAlx 10]

ES chart including trades for Nov 30. 9.5 pts net of commissions. I decided to carryover friday's channel. I'll return to that in a later post.