# New analysis technologies



## Timmy (5 November 2007)

What do you think about the value of utilising new technology in your analysis?  It’s easy to accept the value of new technology on the execution side, imagine a world without internet brokers…but what about the new technologies in analysis?

Is an OHLC bar or candlestick that updates every “x" minutes the best of analysis technology for traders using technical analysis?  Does anyone see value in using constant volume bars, range bars, change bars, market profile, footprint charts, tick charts?  Can any of these improve existing analysis, or add new, more valuable forms of analysis to your toolkit?  As an aside, does using these show up some of the inadequacies in ASX reporting of time and sales and perhaps suggest that trading different markets than the ASX could be attractive?

Any thoughts?


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## tech/a (5 November 2007)

> constant volume bars, range bars, change bars, market profile, footprint charts, tick charts?




Absolutely---some already do and there is software available for some as well,infact most.
You can chart just about everything you mention.

OHLC will always be about *the market auction *couldnt function without it.


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## Timmy (5 November 2007)

Thanks tech/a - yes the software to use other than time-based bars is out there, most I have seen are from the US, but would love to be corrected and see some from Australia/NZ.

Range, constant volume, tick, and change bars will all present the data in OHLC/Candle format (market profile doesn't and footprint does/doesn't depending on how you look at it) but don't rely on the OHLC of an "x" minute period to do so.  Anyone using these alternatives?  

I see great value in using some of these techniques to control one variable while allowing another to vary - for example, constant volume bars will print an OHLC/Candle bar every time "y" shares/contracts are traded - for example on the SPI there might be a case for using a bar that prints each time 500 contracts trade (just picking a number out of the air here), or on WBC printing a bar each time 25,000 shares trade, or whatever.  In doing so, with volume held constant each price bar can be assessed as being "equal".  Now this wouldn't work for your VSA analysis tech, but I wonder if using constant tick bars might be useful for VSA analysis - that is, print an OHLC/Candle bar each time "z" number of trades takes place, that way you would be holding the number of trades per bar constant while allowing price and volume to vary only.  Could show up large volume interest vs. smaller volume interest, based on the assumption that large volume interest is "smarter" money than small volume interest (not always a safe assumption I know).

Anyway, I didn't start this thread to hear my own voice (keyboard...) be interested to hear from the community.


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## tech/a (5 November 2007)

Think motorway uses Point and Figure sort of in this way.

I know exactly what you mean and have thought along similar lines.
I'll make some enquiries then get back to the thread.


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## motorway (5 November 2007)

Hi Tim

The mkt reality is seen in time and sales

What is that reality ( ticker tape )

How does charting that reality .. reveal somethings and make other things hidden ?

What is on the tape ?

Price , volume and time

That is the reality You want to discern changes of behaviour in...

To make that easier We use charts ( a one stock stock market, just the tape would be fine )

Ok What are We interested in , Profits ? Which can only come from movements in Price ?

Time passing on it's own = 0
Just Volume Churning  = 0

So charts usually put Price on the Y axis

So what do We put on the X axis ?

either time , Volume or Price ........... ( or some combination   = activity )

P,V & T have different attributes that can be charted


Price movements cut up into discrete units of time are linear charts
Price movements cut up into units of something else are non linear charts

To really monitor the reality of the tape

We need Both types of chart....

( The market reality is non linear by the way.... It DOES not have a fixed speed ... The old tickers sometimes went silent and sometimes could not keep up ...What matters  happens at only particular times critical junctures 
"turning points" of price volume and time....That happen before the new trends emerge )

on P&F




> Why P&F is a Great Tool
> 
> As a trader, you have developed a set of tools that work for you.  And let’s say that they work most of the time – except when the market goes flat and boring.  How do you ignore flat and boring?  Point & Figure!  P&F is always active when the market is active, and does not register when the market is quiet.  That is, only market movement beyond a certain noise level counts, making the filter non-linear.  Additionally, many P&F chartists change their box heights depending on the price level, making it adaptive.  Would you have ever expected Charles Dow to invent an adaptive non-linear smoother?
> 
> It gets better: P&F is asymmetric.  As you are rising, you keep making x’s each time you achieve a new box level.  But you don’t start a down column (making o’s) until the price goes down by your pre-determined reversal level (traditionally 3 boxes).  That is, at a given point in an up move you only need 1 up-box to make another x, but 3 down-boxes to make an o.  The combined effect of the noise filtration , adaption and asymmetry means that a  a P&F trading tool should make you money.  That helps to explain its popularity and longevity.




I don't agree with some of that
1) DOW did not invent them
2) Symmetrical charts are as if not more useful than asymmetric

however He is right..P&F By moving only when the market charted does.

Becomes a useful detector of certain forces at work

I once charted the same data as tick bars Volume bars and range bars
They tended to look not much different than P&F charts

And bought with them a negative characteristic that hid what is a
 peculiar characteristic of P&F that is it's most useful
( It is not in the quote above but follows from it )

( This is congestion analysis )

Another similar chart is renko charts

If I understand what you mean by footprint ( Like a P&F with volume in the boxes These have been around since at least 1900 )

Normal bar charts don't have volume

volume is in a separate chart placed underneath

the key to understanding 
is in the terms linear and non-linear

and that charts are only maps





motorway


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## Timmy (6 November 2007)

Thanks Motorway, thats good stuff to think through for me.  The sort of analysis I do is Wyckoff, mainly VSA but trying to integrate more of the congestion analysis side too...most (like 99%!) of the information on it I get from...you! Your postings here and elsewhere.

In addition I do some basic candlestick stuff, really basic and looking at what happened on the bar, and in the context of the wave, rather than labelling the bar.

What I am doing with some of these new presentations of the data (and like you say, thats all it is, the same data just cut up, wrapped, and presented differently) is to see if they can help me better understand the price and volume activity as opposed to using time-based bars and P&F ... that is, is this (presentation of the data) a _better _map?  

I suppose at the end of this thread we will decide to use whatever presentation of the data suits each of us best, but I hope during the journey to that end we can tease out some pros and cons of using different maps.

I will come back with some more specifics tomorrow (actually I think it is tomorrow already), thanks tech and motorway for the input so far.


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## tech/a (6 November 2007)

Timmy,Motorway

Do any of you or anyone else for that matter know where there is Market Profile/Steidelmayer software around?
Other than that which you pay a monthly lease?


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## Timmy (6 November 2007)

tech, I have seen a couple that plot a market profile with excel.  Must admit I haven't used any of them, not sure my excel skills are quite up to it, will try to hunt them down for you


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## tech/a (6 November 2007)

Timmy I have one but was looking for something that is auto.
As it works best with 15 min data,although not only.Havent the time to hand plot.


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## motorway (6 November 2007)

Tech The Software I am using atm does market profile

They have an Esignal version coming out soon..

Tim interesting With these type of charts
even though time is not on an axis.... it is still part of the chart

If time was not ( We freeze time ) Then everything including postings to the chart would stop...

P&F for example  it is said the boxes are woven ( or filled ) By Price Volume & Time. ( You need to think about how does a chart move what makes it move. Then You can work out how useful it would be )

Why use  these types of charts ?

To better define position

To  qualify the movement seen on a normal bar chart.

It is trend-lines that are esp different for example

On the bar chart it might only be the time axis that causes the break
or builds a base

P&F charts with log boxes are 100% adaptive
I doubt range bars volume bars can be as easily made as adaptive

A P&F 2% log chart is scalable across the whole market and across the whole
price range...

With P&F to go down to very small box sizes
You need intraday data

With all these types of chart You don't want time ( distortion or constraint )
creeping in....adaptive has to be totally adaptive


Here is something from a hedge fund

http://svquant.com/documents/ffm_paper_1998.pdf

motorway


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## Timmy (6 November 2007)

Thanks Motorway.  I wanted to hear your thoughts as I think some of these ways of cutting up and presenting the data could be very helpful with a Wyckoff approach to the analysis.

“Price movements cut up into discrete units of time are linear charts
Price movements cut up into units of something else are non linear charts

To really monitor the reality of the tape

We need Both types of chart....”

Now, this makes me wonder.  I think the linear charts, those that track price by time, can be dispensed with…  Let me rephrase that, as one of the charts I use still has time on the X axis, but not equal units of time, more bars form when the market is trading actively/heavily, than when it is not.  Price is tracked according to units of volume that trade.  These are the constant volume bar charts, example attached (each bar plots 10,000 contracts traded).  The example shows the mini S&P500 on the CME with the transition from “overnight” trading, where it can take a long time to form bars, to RTH (regular trading hours – open at 00:30 NSW time Nov. 2, 2007), where a bar can form in seconds.  

More to come ...


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## Timmy (6 November 2007)

I think the closest to P&F charts are the range bars, where a new bar is begun after the price covers a certain price range.  I wont go into the details, take too long, but a range bar chart doesn’t cut out any of the extreme prices that trade, like a P&F chart can, as it is designed to do.  

The similarities are probably more important than the differences – like the P&F, the range bar chart only moves when the price moves, by a user-defined amount.  It is not adaptive, in the sense that the range does not change as the absolute price changes, I imagine this could be done, but the jumps would be fairly large in this contract as it trades in discrete 0.25 of a point jumps.  

I think that like a P&F the range bar chart is useful for congestion analysis, with the difference that it will show more price detail, whether this is an advantage or not is probably in how the trader uses the chart.  Whether the range bar or P&F chart is generally more advantageous is again probably up to the individual trader, but the pros and cons are up for discussion.

I have attached a range bar from last night’s trading (Nov. 5, market open is now at 01:30 AEDST ).  Range size is 1 point, whether this is appropriate or not is another discussion.

Yet to read that attached article, thanks for that.


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## motorway (6 November 2007)

> The similarities are probably more important than the differences




Here is an important difference... The P&F chart is not forced to move sideways
It could be a continuous vertical column that simply pauses and resumes

This is what makes the congestion on a P&F chart significant ..

And for example trend line breaks significant..

Sideways is significant because moving sideways does  not just follow naturally. It is not a given.... Something real ( that will have an effect ) makes the chart move sideways....

I think You will like that paper....

motorway


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## motorway (6 November 2007)

> Now, this makes me wonder. I think the linear charts, those that track price by time, can be dispensed with




Here is some High level Wyckoff

What suffers the most by cutting the tape into units of time ?

Price and so the analysis of price
or Volume .........

Time separates what should be seen as one thing..

But it distorts one of these more than the other

motorway


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## Timmy (6 November 2007)

The range bar only moves sideways when the price trades outside the defined range, not with the passage of time alone.

For the contract I have posted charts for I have set the range at 1.00 point, which is 4 tics of 0.25.

So, let's say a bar starts at a price of 1500.00, then trades:
1500.25
1500.50
1500.75
1500.50
1500.75
1500.25
1500.75
1501.00
1500.75

OK, so far the range on that bar is 1 point.  Now, if we imagine the price trades between 1500.00 and 1501.00 for the rest of the day then no other bars will form, that is no other bars will be added to the chart, it will not move sideways, volume will be added to the one bar that is forming between 1500.00 and 1501.00, but no price bars will be added.

There will only be another bar start to form if the price trades outside of the range of 1500.00 or 1501.00.  Let's say the next price that trades after 1500.75, the last price on the list just above, is 1501.25, this trade begins a new bar, NOT the passage of time.

I should have explained this more fully initially sorry.


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## Timmy (6 November 2007)

motorway said:


> What suffers the most by cutting the tape into units of time ?
> 
> Price and so the analysis of price
> or Volume .........





Cutting the tape into units of time is, mostly, arbitrary.  I say mostly because I believe the closing price each day is of significance and therefore the cutting of the tape at closing time is not arbitrary.  

The "closing" price of a 5-minute bar though, for example, is not of significance, except in as much as it relates to the closing price 5 minutes ago and is therefore a regular sample.

Similarly, the cutting of the tape into units of volume is also arbitrary, same arguments go for cutting it by range, or whatever.  The market, the price, is a continuum from open to close, and dissection must be arbitrary.  However, we do it, and do it for good reason, to sample it, to compare, to make judgments, to assess risk and return.

However, by cutting the price into units of volume, one can compress periods of little activity (lunchtime market, for example, or Melbourne Cup day hehehehehe) into periods of equal volume, thus giving equality to the samples according to something that is significant - I think volumes are significant, compared to time passing.

So, back to the question you posed Motorway, what suffers/distorts more, price or volume, when the tape is cut into time periods, I would nominate my ability to analyse what the price is doing as suffering the most.  For example, the up trend line that is broken by the steady march of sideways price, with little volume, is that a signal?  Or the result of lunchtime?  Or, is the price allowed to break this up trend line at a quiet time to generate some selling activity so the trend can be reasserted after lunchtime with some shares picked up cheaply?  Or all of the above?

Thanks for the feedback - invaluable.


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## nizar (6 November 2007)

Alot of good stuff on here.
Thanks motorway, Timmy, for your contributions.

I will review it properly tonight.


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## tech/a (6 November 2007)

Tim and M/W.

While I understand what your doing.

Time is still an important factor for me. It allows me to have some idea when a short term move I'm trading is likely to complete.
While not entirely accurate I know wether a move is shaping up as it should or stalling.
Just anther aspect of the analysis.
Very fast moves normally indicate a fast and sharp correction to the mean.


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## Timmy (6 November 2007)

Nizar, thanks for that, and feedback welcome.

Tech, I know what you are saying, and I think using time-based charts is going to depend on what is being traded and how.  My experience with this stuff so far is entirely in a live day-trading only market (for me), where I am not using time-bars at.  Time is still tracked, though, the bars print at differing rates depending on volumes going through, the speed of printing measures time.  

I can imagine if you are trading an equity with a multi-day timeframe then any of this is going to be used quite differently.  If at all?  I wonder at its usefulness beyond day-trading.

---

Below is a post I prepared earlier!


---

OK, there seems to be a lot to discuss here regarding the use of using bars cut up by volume or range as opposed to time.  I don’t think we have scratched the surface, but nevertheless, onwards.

What about cutting up the volume according to different measures?

The title of this thread is “new analysis technologies”, so can I introduce another new one (well, it was to me)?

The first chart attached to this post has volume posted below it, but volume presented in 3 ways.  The bars are constant volume, in this case each bar is formed from the trading of 4,000 contracts.  It is a quick-forming bar, and is of value for short-term trading.  The first chart is a blow-up to explain the components of volume.

Now, because it is a constant volume bar, the volume for each price bar is the same, in this case 4,000.

The volume bar labelled “1”, and coloured the darker of the green, shows the amount of volume that traded at the offer price over the course of the bar forming.  In the case of the bar labelled with the “1” this is about 3,200.  

What is meant by trading at the offer is this is 3,200 contracts over the course of the bar where the buyers were “impatient” enough to jump in to buy at whatever the sellers were asking.  I would refer to this as “aggressive” buying.  

By implication, 800 contracts (4,000 minus 3,200) were bought by more patient buyers who had their bid hit.  Also by implication, 800 contracts were sold by sellers impatient enough to sell at the bid (aggressive sellers), and also again by implication, 3,200 contracts were sold by sellers sitting patiently on the offer.

Anyone with an interest in VSA might be sitting up a little straighter in their chairs at this stage – in electronic markets the ability exists to see what the buyers and sellers are doing within each bar (at each price actually) in real time.  The implications are not linear – “more aggressive buyers therefore I will buy too” is not necessarily a profitable tactic – but certainly they are interesting?

The lighter, or brighter colour green, labelled “2” in the first chart is the “aggressive” buying done by buyers trading 100 or more contracts in one hit – big, aggressive buyers.  (Now, this needs to be monitored carefully, what if one buyer pays the offer for 150 contracts at one go, but the sellers are made up of a 20, 15, 25, 80, 5 and 5, I don’t know if this is reported as one trade of 150 or 6 trades of the amounts I detailed, I would love to hear more info on this).

The hollow red is the aggressive sellers, those sellers trading in hits of 100 or more.  This is labelled “3”. 

Of course these definitions of 100 or more are my definitions, you can choose whatever you wish.  By the way, this stuff exists in many different softwares, I am not pushing any particular one.  

OK, is this information of value, and if so how can you use this information?  Well, that’s for you to answer, not for me to say.  I am using it, but still haven’t settled on the one true approach (for me).  Hence this thread, feedback appreciated.

Second chart attached shows the first 2 hours of regular trading hours of a 4000 volume constant bar chart, with volumes cut up as described.


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## tech/a (6 November 2007)

Tim I like it!

I can see that the trend stalls when less agressive buyers just sit and wait.
Moves both ways are supported by in patient volume either sellers of buyers.

What software does the Volume bars?
Do you know if this can be done for equities?

I see this as supportive of VSA analysis and even deeper inside a bar than what is available with VSA now.


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## julius (6 November 2007)

Time is convenient but often secondary to volume with respect to confirmation of price action, since price/time is generally underpinned by assumptions about volume/time.

Mean reversion occurs when price moves too fast for volume; demand temporarily outstrips supply, price corrects as supply recovers. This depends on the degree to which the market resembles imperfect competition - another interpretation of volume.

There are occasions when time will dictate price action, I think mostly on higher time frames, but for most situations I agree with volume > time.


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## Timmy (6 November 2007)

Tech,

A lot of the software out of the states does this now.  Including:

Ensign
Sierra Charts
Investor R/T
Market Delta
MultiCharts
NeoTicker
TradeMaven
TopGun
Tradestation (more via user-built ELDs than the in the software itself)
ESignal

I think Amibroker can do some of this stuff, but again driven by the users designing studies.

Some allow the user to customise the presentation more than others, some I am more familiar with than others.  Some have free trials.  Some are much more expensive than others, sometimes you get what you pay for, other times I am not sure.  The ranking above is in no particular order.   

This stuff can be done for any electronic market with a live data feed - different software allow for different feeds but an eSignal feed is common across all of them, as you would expect they seem ubiquitous.  So, yes, equities can be presented in this way.

Something to be aware of in equities is the uptick rule can skew the volume at bid / offer numbers.  Quite apart from the uptick rule the prevailing bias (both individually as well as the institutionalised bias such as the short-sale list) to go long over short will also skew volume results in equities.


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## Timmy (6 November 2007)

Julius, thanks for that, thats important info.

And why do I feel like an icecream now?

---

Tech, sorry, further - it was the potential of the application of this stuff to VSA that got me excited about it initially.  Motorway will have more to say, but I think its a no-brainer that the volume break-up is _directly _ and immediately applicable to effort/result analysis...


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## tech/a (6 November 2007)

Tim to me at least from the chart presented thats very clear in that where price stalls waiting volume gets filled.Chasing volume dries up.


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## nizar (7 November 2007)

Timmy said:


> OK, there seems to be a lot to discuss here regarding the use of using bars cut up by volume or range as opposed to time.  I don’t think we have scratched the surface, but nevertheless, onwards.
> 
> What about cutting up the volume according to different measures?
> 
> ...




Tim,

Wow, interesting stuff.

I must admit I wasn't aware of any software that could do this (volume bars).

Though I was excited at first impression (lol), I'm not quite convinced about the application of this analysis.

ie. is it just another tool to "confirm" price action. 

But nevertheless, its definately worth looking into and I'll be following this discussion with interest.


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## doctorj (7 November 2007)

nizar said:


> I must admit I wasn't aware of any software that could do this (volume bars).



Here's a start:
http://www.amibroker.com/guide/afl/afl_view.php?name=TimeFrameMode


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## nizar (7 November 2007)

doctorj said:


> Here's a start:
> http://www.amibroker.com/guide/afl/afl_view.php?name=TimeFrameMode




Thanks Doc

I must say, I think Its amazing how AmiBroker can do all sorts of things such as the above, but then it fails when it comes to incorporating a crucial tool required for backtesting which is monte carlo analysis.


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## Timmy (7 November 2007)

Thanks Doc and Nizar re Amibroker.  The link doc provided is for constant volume bars, range bars and tick bars.  As far as I know Amibroker does not do the break-up of volume into aggressive buyers and sellers - yet.  No doubt some of its users are working on that.

Nizar, your question "ie. is it just another tool to "confirm" price action" is a good one.  Looking at the volume break-up it appears that an up bar is generally accompanied by more activity at the offer (aggressive buying), while a down bar is generally accompanied by more activity at the bid (aggressive selling).  This makes sense, but it also puts this use of the volume at bid or offer into the category of a co-incident "indicator" (I don't think of volume as an indicator at all, but for the purpose of my point here, let's call it one).  So, Nizar, it would appear that maybe it is just a confirming tool.  But there is more to it than that, it is when it doesn't behave in concert with the price that its usefulness expands....


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## tech/a (7 November 2007)

> it is when it doesn't behave in concert with the price that its usefulness expands....




The central core I believe.
As examples

(1) Aggressive buyers/Sellers little/no increase in range (Either buying or selling climax)
(2) Increase in range no aggressive buyers or sellers ( look for a slowing/stop to the move)

Should be incorporated in Tradeguider.
I'll have a chat.


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## Timmy (7 November 2007)

tech/a said:


> The central core I believe.
> As examples
> 
> (1) Aggressive buyers/Sellers little/no increase in range (Either buying or selling climax)
> ...




(1) I think this is spot on.
(2) This one I will watch for thanks Tech.


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## julius (29 November 2007)

Just re-read this thread more thoroughly and it is fascinating.

I don't have much knowledge of this kind of tech analysis, other than my own observations from my study of economics.

In my opinion, TIME is an arbitary division of price: price is not dictated by time, but rather by volume. The quantities that are demanded and supplied by market participants faciliate shifts in equilibrium or demand/supply balance.

Assessment of market 'imperfection' allow us to draw conclusions about the stability of shifts in market price. 'Perfect competition' describes a market where no individual buyer or seller is able to influence market price: of course this situation is a purely theoretical  - all markets resemble imperfect competition to some degree. Imperfection is characterised by liquidity, depth, market impact, etc.

These market characteristics  are dynamic; the number of participants (bid / offer) varies day by day and this gives rise to situations where buyers can outweigh sellers ( or vice-versa) and a market can become 'overbought' or 'oversold'.  Other times volume might precede a shift in price, etc ,etc.

Price with respect to volume is more relevent to some markets than others, same goes for range bars, I think for the same reasons as above.

It's a very interesting area, would like to hear more from others (tim,mw,tech) who have more experience in this area.


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## Timmy (30 November 2007)

Hi Julius, good to see this thread brought back to life!


“I don't have much knowledge of this kind of tech analysis, other than my own observations from my study of economics.”

This kind of analysis is new to me too, using volume bars, range bars etc. instead of time-based bars and using the break-up of volume into volume dealt at the bid and volume dealt at the offer.  I think some of the traditional ideas of technical analysis can be applied to this stuff, but with modifications; but to be honest I think using your own observations is going to be even better; and I think a background in economics is a great advantage.

Using OHLC bars based on divisions of time is the method that technical analysis has grown up using.  There is a vast store of knowledge built up around time-based bars and I will not dismiss all of this knowledge.  I have a bias about what sort of analysis I prefer, I think everyone does; for me it is Wyckoff-type analysis as opposed to using indicators.  I don’t pretend to be an expert and I really look forward to posts by Motorway – has taught me a lot.  A subset of Wyckoff is the VSA analysis, and we are lucky to have the posts of Tech/a to learn from.  VSA, for me, is a difficult art; I think partially because it uses time-based bars and reconciles changes in volume, changes in range (high minus low), and changes in the last price on the bar all within the “background”, or context, or wave, within which the bar forms.  It’s a challenging task.  

This is where I think some of these new presentations of the data can be helpful, at least to me.  A constant volume bar, by its definition, holds volume at a fixed level, while allowing the range and the “closing” price to vary (and time to vary also).  I think there is scope to develop an analysis of the wave formed from constant volume bars.  Wyckoff states that a wave will persist as long as it can attract a following; using constant volume bars shows the level/volume of that following in a consistent format.

Of course, there are range bars too – where the volume and “close” vary only (and time).  There is scope to develop an analysis technique here too.

While I am not a big fan of technical indicators I think many of them can be improved by using these different bar types.  For example, the RSI (I only picked the RSI because I have a soft spot for it) measures the difference in the close price between successive bars over some time period; the default period used is 14 time periods (days, hours, whatever).  One of its weaknesses is the close price may move higher on very low volume, but this movement will be counted as equal to a close price movement on high volume.  I would have thought the high volume movement would be of more relevance to the calculation, but it is treated as equal to a low volume movement.  But lets instead calculate the RSI using constant volume bars, here each “close” price is taken after “x” number of shares/contracts has traded, not each time some “x” period of time has passed.  I haven’t done any comparison between the two methods, as I say indicators are not really my thing, but I would have thought there is fertile ground for research and developing methods here.

Of more interest to me is the bid/offer volume analysis – combining this with constant volume bars and/or range bars can give some great insights into what is going on.  One thing that struck me very strongly with this break-up of the volume is the extent to which the price is driven by volume, most times by aggressive volume but, tellingly, sometimes by the passive side of the volume, I guess it is something I always knew was true but to see it so clearly demonstrated has given me a new perspective.  And also recognising when volume is driven by price, the flip side of the relationship.  

Having said all this I wouldn’t discount existing forms of chart presentations and analysis.  Hunt down Motorway’s posts on point and figure charts, on the ASF forum and others, there is great value to be found in these charts too.


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## Timmy (2 December 2007)

Below is a 3-minute chart (each candle is 3 minutes of market activity) and a 5000 contract constant volume (each candle is 5000 contracts).  The two charts represent approximately the same time, the first two or so hours of  RTH on the ES Z7 on Friday Nov.30.

Comparing the two charts will show similarities and differences.  The most important similarity is they both show where the support and resistance forms.  This is critical, IMO, and raises the question of what value then does a constant volume bar chart add?  Good question I think.

Differences - no volume histogram on the 5000V chart - each candle is the same volume.  There are more bars on the 5000V chart for any time period - this is a function of the activity in the market, in a contract or equity with less volume there could be more 3-minute (or whatever time period) bars formed than 5000V bars.

The Constant Volume chart I have heard referred to as a "momentum" chart, or "Momentum bars" - interesting nomenclature and I think it makes sense.  If each bar forms with the same volume, then the relationships between the high, low, open and close of each bar, and the relationship between bars, gives a perspective of where the momentum is  in the market.


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## Timmy (2 December 2007)

This chart shows the 5000V chart for the first hour of the above contract with the "buy" and "sell" volume histogram; the green volume bars are "buy" volume (volume dealt at the asking price) and the hollow red volume bars are the "sell" volume (volume dealt at the bid price).

Quality of image is not great but I think its readable.


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## Timmy (2 December 2007)

For completeness, here is the 3 minute chart with the buy/sell volume histogram below.


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## Timmy (2 December 2007)

And below is a 1-minute chart with the buy/sell volume histogram, this might be a better comparison with the 5000V bars.

Any comments/questions/ideas gratefully received.


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## motorway (2 December 2007)

> The Constant Volume chart I have heard referred to as a "momentum" chart, or "Momentum bars"







> Momentum bars Document Type and Number:United States Patent 20040030623  http://www.freepatentsonline.com/20040030623.html
> 
> Abstract:An improved method and system for displaying financial information using a computer is disclosed. A technical analyst chooses a user defined range of data to study and displays the user defined range of data comprising indicia of four transaction prices along a y-axis. The display of the user defined range of data changes only when a transaction price appears outside the user defined range of data. The x-axis comprises a time independent variable in order to discount price distribution patterns that evidence little change, systematize patterns that reveal large changes, and display patterns in a simplified visual summary that reveal when the market is in genuine distribution and development.





And halfway down this page

http://www.ensignsoftware.com/tips/tradingtips49.htm



> Trading Tip:
> Momentum Bars
> by Howard Arrington
> Two articles in the Stocks, Futures & Options magazine (www.sfomag.com) introduced a new charting concept.  The first article was 'Paradigm Shift Lights the Way to Momentum Bars' by Desmond MacRae, SFO Feb 2003.  The follow-up article was 'Momentum Bars: The Sequel ...' by Desmond MacRae, SFO Apr 2003.  These articles describe a charting concept developed by Danton Long called Momentum Bars.
> ...







> I don't have much knowledge of this kind of tech analysis, other than my own observations from my study of economics.




julius here are somthings that I have taken a little note of


Cobweb Theory + Problem of adverse slelection + winners curse

are some economic observations that would underpin a technical approach to markets



> THE BASICS OF COBWEB THEORY
> Three tenets of cobweb theory need to be understood. First,
> there is the idea of “anchoring,” which means that expectations
> of future prices are heavily influenced by recent extreme
> ...




 Problem of adverse selection  ( Or information is really valuable )



> When a trading opportunity is presented to a group of traders, Those who accept are on average less smart




( eg it is the lemons that seem ( are made ) attractive to buy . The good uns are not offered for sale)


winners curse



> At any time the final winning bid often exceeds true value




( All those breakouts that are bad buys , upthrusts etc )

Just a few things that make economics relevant

as Timmy says identifying support and resistance is one of the most important things to do .

Momentum then is an important measure of the changes in support and resistance .....These changes allow one to anticipate and confirm ..

momentum ( and volume ) reveal how supportive and how resistive 
Buying pressure and selling pressure are and how they are changing..

The actual levels that they  become active reveal demand and supply unfolding ( trends )

Cobweb theory focuses on patterns of contracting and expanding volatility
That lead to turning points....


A price volume vs time  chart in a Wyckoff sense is an effort vs result chart
A Price (volume) non linear chart is a cause and effect chart...

This could suggest what uses the charts best have...
Tim I just see you have added some charts since I have been writing

Look at the buy vol on the 1 min chart ( the largest green )
If I understand Your chart that was ( dumb ? ) buy volume ?

Adverse selection + winners curse 

Support and resistance , Strong and Weak hands
motorway


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## motorway (2 December 2007)

> Comparing the two charts will show similarities and differences. The most important similarity is they both show where the support and resistance forms. This is critical, IMO, and raises the question of what value then does a constant volume bar chart add? Good question I think.
> 
> Differences - no volume histogram on the 5000V chart - each candle is the same volume. *There are more bars on the 5000V chart for any time period - this is a function of the activity in the market, in a contract or equity with less volume there could be more 3-minute (or whatever time period) bars formed than 5000V bars*.




Here are Some Richard Wyckoff comments that might be of interest
charts are either linear or non linear with respect to time
Just read non linear where Figure chart is used.

motorway



> The most valuable feature of Figure Charts, however, is their
> horizontal formations,
> It is in these horizontal formations, or congestion areas that we find the greatest aid
> For example the figure chart may show many fluctuations on the
> ...




full figures refers to the filter
what range (  with volume bars ) what volume

the changing speeds are an indication of the changing importance of support and resistance ....

changes relative to the time based bars



> (a) in determining how
> far a stock should go; (b) when it meets opposition, viz., when it
> has about reached the end of its move; and with the help of the
> vertical chart (c) determining the trend, and (d) when a stock is on
> the springboard.





There would be fewer momentum bars( constant range bars ( much like P&F ) )
In a congestion zone compared to constant time based bars

All indicators should work better with CRB than with CTB
with clearer signals and less whip saws

That is if you want to use indicators 

Support and resistance

is not the same either ( hence trend lines )

The constant speed on the CTB chart
can take the price series through support resistance zones
and more obviously through trend lines

The movement on a CRB chart is a real cause
likely to have an effect...

Compare the clarity of trends , trend lines
hence support resistance
on your CRB and CVB charts
compared to CTB charts

CRB constant Range Bars
CVB constant volume bars

using something other than time as filter


> show price movements have a structure irrespective of time frame ,motorway




CTB constant time bars  .. are esp important when the volume shows them to be important .....effort Vs result.....VSA ?

problem of periodicity of a price series ( cobweb ? )

All aspects of Wyckoff method

P&F might still be the best non linear chart 
columns are neither constant price, volume or time
adaptive is real

P&F chart is almost a constant nothing
no limits on how many columns or how long the columns

When We can use log box sizes then scalable across any price range and any instrument
ferreting out the largest ""cause"



> and with the help of the
> vertical chart (c) determining the trend, and (d) when a stock is on
> the springboard.




as well..


motorway


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## Timmy (2 December 2007)

Wow!  Thanks Motorway - there is heaps to work through there.

I have attached a 1 point constant range bar chart below, with the volume break-up and also total volume in grey behind.

I have also attached a 1 point box size (4 tics) by 1 box reversal, also with volume break-up histogram below.  This maybe not a fine enough detail chart compared to the other charts I have posted today, so I attached an 0.5 point (2 tics) x 1 box reversal, as two charts, one covering the first hour, the next covering the following hour - it is a fine-grained chart.

These should provide some good comparison and hopefully future discussion of the points you have raised.


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## motorway (2 December 2007)

more later
But what should stick out
is clear trend
and a clear periodicity ( an aspect of support and resistance )

contraction and expansion ( dead centre, springboard , turning points)

motorway


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## Timmy (2 December 2007)

Motorway - thank-you also for correcting my reference to constant volume bars as momentum bars - this refers to constant range bars of course as you pointed out.


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## motorway (3 December 2007)

To understand what a chart is best able to reveal

will be best understood when you have a clear understanding  of what causes each bar/column to be drawn ( what sort of map is it )

CTB.........each bar is drawn when a arbitrary amount of time passes
CVB......... When an arbitrary amount of volume is aggregated
CRB.........  When an arbitrary amount of range is exceeded

Point......... excess weight is given to one particular unit ( of time , volume, or range ) The decisive unit is the one that starts drawing the next bar

 So while these charts are maybe hugely significant,,, They can miss the forest for the trees....They do not grasp the reality that matters , on its own terms in a purely adaptive way.... ( This does not mean that they are not very important types of maps )


Timmy ........You made the point that support and resistance was important to determine....( and when properly understood ...maybe they are the ALL ? )

P&F ..........what draws the columns ? When does a column change  ?
Not with  any criteria divorced from the reality of support and resistance.
Not with anything that is arbitrarily set..........

Regardless of the box size and type

It is support and resistance always and only... That draws and changes the columns.......

So P&F is different

Now if support and resistance properly understood is the ALL
It follows that in a real way P&F is the cause and effect chart.

Trading range or trend ......It is Support and  Resistance that are the driver.

higher  highs & higher lows , lower lows & lower highs
broadening and contracting patterns etc..

Who creates this support and resistance ?
It is created by the interaction and dance between  the more and less informed....By Smart Money
By the "Composite Operator"  ( Wyckoff term which means all those things )

Sure .... The P&F can have different Box size... But that is only a change in degree of magnitudes, of resolution, of the scale of support and resistance.

The columns will be still drawn from this dance that matters , unfolding in its own time..........
The old proviso was "with the noise across the buy sell spread removed" .

P&F fell into disuse because software could not draw it as well as bar charts
and people forgot what it was that made it special and saw it as a sort of deformed bar chart..

P&F chart is 100% adaptive ...Columns never change with an arbitrary tic of volume, range or time........
100% adaptive to support and resistance .

To the actions of the "Composite Operator".........

OK , But when the volume comes in at a particular time ? Then ( and all along in coordination ) The CTB chart reveals the effort and result at that particular time ...

I am not saying P&F charts are more important .. Just that they are different.

 Being different They can inform and qualify the other types of charts.
The P&F chart will always be moving differently...

motorway


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## nomore4s (3 December 2007)

Very interesting Motorway, your depth of knowledge constantly amazes me.

As you know I've been spending a bit of time working on getting a better understanding of P&F charts, and as I get more familiar with them and come to understand more of your posts about P&F charts I'm constantly amazed at how powerful a tool they can be.

Thanks for sharing your knowledge.


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## motorway (4 December 2007)

> The cobweb model or cobweb theory explains why prices could be subject to periodic fluctuations in certain types of markets





> Role of expectations
> One reason not to believe this model's predictions is its assumption that producers are extremely shortsighted; they are fundamentally unable to judge market conditions or learn from their pricing mistakes that result in surplus/shortfall cycles. In other words, producers in this model have adaptive expectations, which react in a fixed way to past observations, rather than rational expectations, i.e. expectations consistent with the actual structure of the economy. The cobweb model serves as one of the best examples of why expectation formation is so important for economic dynamics, and therefore so controversial in recent economic theory.




Cobweb theory was developed from observations of cycles in prices of Pigs and Grain ( hog cycle ) in the 1930's

Role of expectations
One reason  to believe this model's predictions is its assumption that investors are extremely shortsighted; they are fundamentally unable to judge market conditions or learn from their pricing mistakes that result in boom/bust cycles. In other words, investors in this model have adaptive expectations, which react in a fixed way to past observations, rather than rational expectations, i.e. expectations consistent with the actual structure of the economy. The cobweb model serves as one of the best examples of why expectation formation is so important for economic dynamics, and therefore so controversial in recent economic theory.

From Agriculture to the stock market eg

Predicting Turning Points With Cobweb Theory by Chris Satchwell, Ph.D.
Copyright (Economics plays a role in the markets. Here’s how the
underlying premise of point & figure theory is consistent with
the tenets of cobweb theory.)

The first quote questions if Farmers are shortsighted enough
My adjustment suggests that traders and investors ( or at least a major subset ) Are.........Weak hands



> Adverse selection, anti-selection, or negative selection is a term used in economics, insurance, statistics, and risk management. On the most abstract level, it refers to a market process in which bad results occur due to information asymmetries between buyers and sellers: the "bad" products or customers are more likely to be selected.







> The Stock Market
> Here, the risk of adverse selection is generally when you do business with people of whom you have no knowledge. This is one of two main sorts of market failure often associated with stocks. (The other is moral hazard.) Adverse selection can be a problem when there is asymmetric information between the seller and the buyer; in particular, a trade will often produce an asymmetric premium for buyer or seller, if one trader has better/more complete information (e.g., about what other traders are doing, the complete trading book for a stock, etc.) than the average. When a buyer has better information than does the seller (or conversely), a trade may occur at a lower (higher) strike price than otherwise. Ideally, trade prices should be set in an environment in which all the traders have complete knowledge of ambient market conditions (or, at least, equal knowledge thereof) .
> 
> When there is adverse selection, people who know there is an above-average probability of a certain favorable price move - more than the average investor of the group - will trade, whereas those who know there is a below-average probability of a favorable price move may decide it is too expensive to be worth trading, and hold off trading. In this way, the 'better informed' investors will obtain a trading advantage (i.e., a trading premium) over the others.
> ...




If You ever think you know more about something than everyone else
If you ever think you are the smart money ...*Stop Trading*

*Never Buck Trends*  at an extreme... You would never buy what someone would sell
never sell what someone would buy ( at least on the stock market)..Call it the Groucho Marx investment method... Of course if You can trade in harmony with trends ?

Then You are not joining or even  fading the crowd caught in the cobweb...But aligning with the real Smart Money the ...Composite Operator...




> The winner's curse is a phenomenon akin to a Pyrrhic victory that occurs in common value auctions with incomplete information. In short, the winner's curse says that in such an auction, the winner will tend to overpay. However, an actual overpayment will generally occur only if the winner fails to account for the winner's curse when bidding. So despite its dire-sounding name, the winner's curse does not necessarily have ill effects.






> The winner of an auction is, of course, the bidder who submits the highest bid. Since the auctioned item is worth roughly the same to all bidders, they are distinguished only by their respective estimates. The winner, then, is the bidder making the highest estimate. If we assume that the average bid is accurate, then the highest bidder overestimates the item's value. Thus, the auction's winner is likely to overpay.




OK our markets are "Double Auctions" So there is a losers curse......

Someone buys at the highest tic 
Someone sells at the lowest tic .....On moves of all sizes

Out of harmony...........However someone must have done  the opposite..



> If we assume that the average bid is accurate




So watch the reaction... Where are those half ways points

After a SOS is there a LPS ... After a SOW is there a LPSY

Identify real ( as in effective ) SUPPORT and RESISTANCE


In this type of market........How important then to uses charts 
And to measure.

Once a market is full of speculators
Then having enough shortsightedness in not a problem
And smart money should standout a mile high...

Back to the charts

motorway


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## IFocus (4 December 2007)

> Someone buys at the highest tic
> Someone sells at the lowest tic .....On moves of all sizes





Unfortunately I remember a time that some one was me LOL 


Focus


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## Timmy (4 December 2007)

IFocus said:


> Unfortunately I remember a time that some one was me LOL
> 
> 
> Focus




Focus, its all of us at some time or another...


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## julius (6 December 2007)

motorway,

That's the first I have heard of Cobweb theory but from what I can gather it fits with my understanding/observation of market dynamics.

For those who might not be familiar with economics : adverse selection is a one brand of market failure characterised by an information asymmetery between buyers and sellers. 

The textbook example of this phenomenon is the insurance industry - the insurer (seller) offers a product to the market (insurance policy) at a particular price with the expectation that each potential buyer is statistically the same. The result: those who anticipate consuming the insured service the most (ie. health care) buy the insurance policy, while those who expect to need the insurance the least don't. In effect, you attract the lemons.

Of course the insurer is able to discriminate potential customers by analyising individual characteristics - much more difficult to differentiate between traders since each buyer / seller is essentially identical.


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## motorway (6 December 2007)

> Adverse selection occurs when a buyer in the market would be better off, on average, trading at random than they are in the trades made available to them in the market.




Don't leave home without an edge 

other wise You will end up with the lemons.

motorway


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## motorway (6 December 2007)

And If there is asymmetric information
and if there is smart money

Then where that edge is to be found becomes clear ?



> Traders respond to input based on the model of the market they have built for themselves. A positive response grounded in Wyckoff's
> theory of the Composite Operator will have distinctly different--and I
> would argue, consistently more profitable--outcomes than will a
> negative response to input based on the theory of Contrary Opinion.
> ...




It is using ( new analysis technologies ? ) analysis to identify the actions of that smart money and then ( working with the Composite Operator ) keeping in harmony.

Rather then worry about the public either trying to fade or follow..

If there is no smart money at best there is only a cobweb of moves.
mere appearances that can be profitable but will often ensnare..
Because it is just a  following of nothing... I buy/sell because you buy/sell because  I buy/sell...........



> Let us call him the Composite Operator, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not
> understand the game as he plays it; and to your great profit if you
> do understand it.
> Richard D Wyckoff







motorway


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## Timmy (6 December 2007)

I started this thread to get some feedback and ideas about the value or otherwise of some of the new methods of presenting market-generated data (price and volume basically).  Constant volume bars, constant range bars, change bars, then breaking up the volume into "aggressive" buy and sell elements.

I have summarised what, for me, are the most significant points.  Some of these points may seem obvious, and indeed some of them are(!), but stating or re-stating them is valuable to me, so I have.

I have only summarised the first 1.5 pages (approximately), it is going to take me a bit longer to assimilate the next 1.5 pages (so far).  It is basically up to where Motorway has started talking about some of the theories of market imperfection and how they relate to the use of TA.

Thanks to all contributors so far, this has been very valuable to me, let's hope it can continue.

--------------
MW:

The market reality is non linear by the way.... It DOES not have a fixed speed ... The old tickers sometimes went silent and sometimes could not keep up ...What matters happens at only particular times critical junctures 
"turning points" of price volume and time....That happen before the new trends emerge

I once charted the same data as tick bars Volume bars and range bars
They tended to look not much different than P&F charts
And bought with them a negative characteristic that hid what is a
peculiar characteristic of P&F that is it's most useful
(It is not in the quote above but follows from it )


Why use these types of charts (P&F) ?
To better define position
To qualify the movement seen on a normal bar chart.
It is trend-lines that are esp different for example
On the bar chart it might only be the time axis that causes the break
or builds a base.
Here is an important difference... The P&F chart is not forced to move sideways
It could be a continuous vertical column that simply pauses and resumes
This is what makes the congestion on a P&F chart significant ..
And for example trend line breaks significant..
Sideways is significant because moving sideways does not just follow naturally. It is not a given.... Something real ( that will have an effect ) makes the chart move sideways....

----------- 
TechA:
Time is still an important factor for me. It allows me to have some idea when a short term move I'm trading is likely to complete.
While not entirely accurate I know wether a move is shaping up as it should or stalling.
Just anther aspect of the analysis.
Very fast moves normally indicate a fast and sharp correction to the mean.

The central core I believe.
 (1) Aggressive buyers/Sellers little/no increase in range (Either buying or selling climax)
(2) Increase in range no aggressive buyers or sellers ( look for a slowing/stop to the move)

-------------------- 

J:
In my opinion, TIME is an arbitary division of price: price is not dictated by time, but rather by volume. The quantities that are demanded and supplied by market participants faciliate shifts in equilibrium or demand/supply balance.
Assessment of market 'imperfection' allow us to draw conclusions about the stability of shifts in market price. 'Perfect competition' describes a market where no individual buyer or seller is able to influence market price: of course this situation is a purely theoretical - all markets resemble imperfect competition to some degree. Imperfection is characterised by liquidity, depth, market impact, etc.

-------------------- 

MW:
identifying support and resistance is one of the most important things to do .
Momentum then is an important measure of the changes in support and resistance .....These changes allow one to anticipate and confirm ..
momentum ( and volume ) reveal how supportive and how resistive 
Buying pressure and selling pressure are and how they are changing..
The actual levels that they become active reveal demand and supply unfolding ( trends )


------------------------------------------------------------


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## julius (6 December 2007)

motorway, 

could you elaborate on the application of this form of supply/demand analysis to trading?


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## motorway (6 December 2007)

julius said:


> motorway,
> 
> could you elaborate on the application of this form of supply/demand analysis to trading?




Everything in general ?
Something in particular ?

The general theme of elaboration ?

motorway


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## julius (6 December 2007)

maybe a recent trade set up that incorporates a number of the elements you've discussed in this thread ?


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## Timmy (7 December 2007)

As I said in my most recent post I am still assimilating in my mind all this stuff about market imperfections and its applicability to trading - Cobwebs, adverse selection, and so on.  I think it is going to take me a while, but in the meantime I will continue to focus on support & resistance, momentum, understanding "the wave" and where we are in it - I suppose technical analysis, as I see it, as it can be applied to trading. 

What can the charts - be they time-based OHLC/candles, non time-based OHLC/candles, P&F, volume delta - tell me about S&R, momentum, the wave?  

If I may be so bold, this is the track I would suggest we continue to focus on in this thread, should it indeed continue to attract interest, with an emphasis on the "newer" forms of presentation of the price and volume data - volume, range, change, footprint, volume delta charts, while certainly not excluding time-based OHLC/candles and P&F.  I think the thread needs re-focusing, anyone who wishes to post about using these newer forms of analysis, be it a question, a comment, a chart, a trade, will contribute to this refocus and to our store of knowledge about these new analysis techniques.


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## motorway (7 December 2007)

Tim .. Yes it probably has drifted 

But they are all ways of looking at support and resistance

I like to start from principles...
eg  Why is there support and resistance ?

trading range How the hell do you get a trading range
what does it mean when you have one etc

Tim .. There is price, volume time...We want to see changes in behavior that herald a change in the subsequent wave... This is how We get into harmony

looking at the yin in the yang........

So all those charts could help

Julius.....Most of my posts on the forum have been circling around the main issue ( as I see it )

If you want to see a stock that is displaying

adverse selection.. a cobweb etc ( They are only other ways of looking at Wyckoff insights by the way ) and slowly coming under the sway of the CO ..
Have a look at MCU....

How far to markup ?...

Tim what is the best way to chart changes in behavior of price volume time
( That is what will pick up changes in the relationship of these primary yardsticks  of demand and supply ? )

VSA is often presented as focusing on high volume
But where is the real hinge ?

( think of a door swinging on a hinge ... The high volume everyone notices is the far edge of the door.. where the violent move is.. The swing that hits you .. the swing that bangs.. none of it happens with out the hinge. At the hinge is relative stillness... On the chart it is where the volume isn't.. it is the little move in the wrong direction that leads the way )

MCU is a similar chart to BPT
but maybe all the charts are the same

DYOR

motorway


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## motorway (8 December 2007)

julius said:


> maybe a recent trade set up that incorporates a number of the elements you've discussed in this thread ?




Trading ranges = prices caught in a cobweb
Adverse selection = seen at the edge

winners and losers curse =  seen at the points of reversal

Some important things marked by lines
arrows and one count...

non linear chart

periodicity through what ?
ratio of what to what ( vertical - horizontal )

speed of what ?

non linear chart... dissolves time frames.. trade magnitudes

non linear bar charts...have come about in part because not many softwares can draw non bar charts well ( eg P&F )
They scale them like bar charts

congestion
speed
ratio







motorway


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## Timmy (8 December 2007)

Hi Motorway

Let me start at the start…

That chart shows a 0.025 x 1, so 2.5 cent box and 1 box reversal, just as an aside there are only “X” and no “O”, haven’t seen a P&F without the “O”.

There is an explanation of “Cobweb theory and diagram” as it applies to economics on YouTube (I am glad I have finally found a use for YouTube beyond watching funny cats and music videos…),  There is also a video on Adverse Selection, but the presentation of the visual is appalling.  

The red lines you have marked are all at 45 degrees (and 135 degrees for the pedants) – the numerous lines through the big congestion (basically the entire width of the chart example), how would these be used?

The red arrow (left of chart) shows the highest point and reversal.
The blue arrow shows the lowest point on the chart and reversal.
Given it’s a P&F chart, non-linear, a reversal can only occur through supply/demand, or buying/selling, changes.  Periodicity (bar – in this case column - interval) is derived from change in direction, not time.  All the way through the chart there are changes in the buy/sell or supply/demand pressure; there is no sustained directional move arising from this congestion area - yet.

The blue writing 0.975, what does this refer too, and why it is where it is?

There is no volume on the chart, would you include volume on a P&F?  Would adding volume aid in assessing if this congestion is accumulation or distribution, or is it assessable from the price moves alone?

Given this share is in a range for the area presented on this chart, would you be trading it or waiting for a trend to develop out of this congestion?


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## Timmy (8 December 2007)

Motorway - I am preparing a post with some questions/comments/random thoughts etc. which compares the P&F with a Constant Volume chart, both at roughly the same scale, or at least both trying to represent the same thing.

I am chuckling as I type because I keep trying to talk about these new techniques and you keep on coming back to the P&F, which is interesting because although the P&F is a very old technique it will be new to many people brought up solely on OHLC with P&F barely registering as an alternative, if at all.  I am here to learn and your postings on the P&F are forcing me to do just that - thanks a lot for the postings!

Anyway, new post coming soon comparing and conciliating P&F with CV bars.


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