GCN pt 15

More Development of the pattern !

What pattern ?

The pattern of PRICE , TIME , VOLUME , WORK & ACTIVITY

Line of Seven .04s now !

:"A friend to whom I have given some points in Tape Reading once asked if I had my rules all down so fine that I knew just which to use at certain moments. I answered him this way: “When you cross a street where the traffic is heavy, do you stop to consult a set of rules showing when to run ahead of a trolley car or when not to dodge a wagon? 

No. You take a look both ways and at the proper moment you walk across. Your mind may be on something else but your judgment tells you when to start and how fast to walk. That is the position of the trained Tape Reader”. The difference between the Mechanical Player and the Tape Reader is therefore about as wide as between day and night." RDW ( Adapted )

"The lights dim, a spotlight reveals a lovely oil painting center stage,

and the auctioneer begins his rhythmic pitter-patter banter. The excitement

in the room is palpable. “We start the bidding for this remarkable landscape

at nine hundred,” he says, “nine hundred . . . nine hundred? Do I have nine

hundred for this beautiful work?”

You stare at the painting and think it might make a nice addition to

your living room. No one has yet bid, and so the auctioneer lowers the

price, looking for that first paddle to rise: “Now eight fifty . . . eight fifty? Do 

I have eight fifty for this unique oil painting—I have eight fifty. Do I have

nine? . . . .”

Because no one responded to the initial price, the auctioneer quickly

lowered the bid until he found a level at which participants began to respond.

Now that the ice is broken and the auction is underway, the bid

quickly exceeds the initial, unaccepted $900 bid: “I’m bid nine hundred. . .

now nine and a quarter nine and a quarter. I’m bid nine and a quarter . . .

now nine fifty, nine fifty, I’m bid nine seventy-five.”

The bid races to a thousand dollars, and you feel your adrenaline surge,

as you really like the painting. You lift your paddle and the auctioneer nods

and his patter speeds on, the price ratcheting rapidly higher as he creates

excitement with the intensity of his voice. 

Once bidding gets underway,

it’s quite common to have bidding begin to build. Just like in the financial

markets, very few individuals want to accept the risk of being first and

being wrong, which might be seen as foolish by peers.

The price of the painting climbs past $1,500, and you decide the green

of the fields might actually clash with your living-room rug. The auctioneer’s

rapid-fire delivery continues unabated, sustaining the excitement in the room. 

But being a careful listener, you note that he is beginning to add

quite a lot of “filler” to his patter to make it appear that the auction is still

proceeding higher. This process continues until the last bidder bids, and

the rant is capped with a hearty: “SOLD at eighteen seventy-five!” You’re

glad you didn’t get caught up in the hype, and you turn your attention to

the next piece being unveiled on stage.

In the preceding example, there was only one item to be auctioned.

If this were the everflowing process of a financial market, however, the

auction would have begun again in the opposite direction once the upward

auction had discovered the last bidder. From the price at which the auction

finally got under way—$850—there was only a brief price/time relationship

because price moved quickly. As price began to climb steadily higher, 

a congestion area  was established as multiple bidders actively 

engaged in the auction at prices they believed to be fair.

 At the level where the price advance began

to slow, and the auctioneer began to pad his banter in order to make

it seem as if the auction were still healthy, an extended price/time relationship

developed; bidders in the top quadrant of the price range were most

probably engaged in an overreaction to the momentum of the auction.

In the art auction, there was a lone bidder at the bottom and a lone buyer at the top,

and of course the highest number of bidders in the middle; volume was high

in this range because the auction process revealed an area where differences of opinion were greatest ( think about it )

Our art auction example, of course, doesn’t represent the complexity

of the auction process in financial markets. Daily markets are comprised

of several continuous two-way auctions that establish a range for the day,

including a high and  low ( where Differences of Opinion were  at a minimum - again think about it !  ) .

 These indications  do not occur in any

particular order—the high for the day can be established at the opening

bell, right at close, or anywhere in between—and are not fully defined until

the day’s trading is concluded .

 However,with enough training, concentration, and practice, you will be able to

visualize these  patterns as they  develop.  James Dalton ( Adapted )

You take a look both ways and at the proper moment you walk across.

with your judgement  telling you when to start and how fast to walk.

We need a clear understanding of the reality of the MARKET

But we need DOING as WELL

This is the ONLY way of developing EFFECTIVE SKILL.

One without the other is simply UNREAL.

Can you hear the  pitter-patter banter ?

The changing price/time relationships ?

Consider this quote carefully

"This is how you detect the change. In a down move, it happens when the buying waves begin to increase in time and distance, or the selling waves shorten. 
Either or both will be an indication of the change in the immediate trend." RDW

Time and Distance

The and is very important !

CHANGE of BEHAVIOR

EASE of  MOVEMENT

what are JUDGED  

Relationships !

Motorway