The P, V relationship for equities and commodities is known to those who use it daily.
The two If, Then statements in Boolean algebra deal with volume in the hypothesis (the If part).
For instance, when trading stocks using PVT, the relationship is spelled out by the attached chart.
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2060691" width=800>
The timing of price and volume is fairly clear on lists or on charts on the 30 minute fractal. One of my foils makes it possible for me to bring out these details.
The time from the volume signal to the price beginning to move for equities makes it a very comfortable experience when trading price movement in PVT trading.
This phenomena is was used long ago, and crudely, by the SEC to detect "insider trading" in large and multiple accounts in large brokerages.
So the chart is a way to use sorting of lists to make money by using a leading indicator of price. It simulates "insider trading" as defined on SEC monitoring computers long ago.
If you look at charts of equities on a 30 minute fractal you get to see the bars of volume that appear on equities chart for the PVT type Universe. Having this repeatable and consistent catenary formation is very helpful.
By normalizing it (turning the distribution into a decimal fraction series), it works for any stock in the sorted universe. For example on the new platform the slection of the "hot list" is done in the evening automatically every night. The Universe is also selected automatically using the FA requirements.
The chart is used on lists on the platform automatically also. By touching the stock symbol on the list a chart comes up immediately as well.
This all provides guidance for beginning equities traders. the OP wants to see how various players participate in making money on particular stocks. Here he gets to see a list generated automatically for a Universe of high beta stocks. High beta stocks move with several times more volatility than any other stocks on the exchanges, especially the index stocks which are a trading trap, performance wise. See trader666's equity curve of losers from the S&P.
By using FA to get a universe and using TA to get timely potential trades ahead of time, the scene is set for using PVT to make money all of the time.
The compound interest formula dictates how to trade to make money. Most important is turning over trading cycles. As we saw in NTES even after a gap up after entry, if the attached chart says "EXIT" the high velocity trader exits because the market is always right. As trader666 implied, holding 1,000 round lots only made 200,000 dollars before the market said take profits and get out.
I applied the chart to 14 stocks simmultaneously in the write up for 09OCT06. The objective was to to 100 turns annually where 20 turns at 10% approximates an oerder of magnitude increase in capital, compounded. Roughly 8 turns are required to double capital.
Each of the 30 snagits taken during the day show the chart in use to sort by volume, how the each of the equity's gives the trading signals for entry befor price begins to move and for exits before and as price peaks at the end of the 2 1/2 day hold.
Here you get to see that it is a trading requirement to build a system based on how the market works. The attachment is simply a distillation of differentiated knowledge.
To debate the market's operation or to not know how the market works is foolhardy.
On the attachment are all the rules used. They and the columns are color coded for convenience and reliability. some people insist that a person must be able to expression their system in one page or, if they don't, they do not pass the test of having a clear mind. The attachment, humorously fills that mistaken notion that comes from the smartass types.
As you see by viewing the write up of 77 pages; you see, pragmatically, that volume is leading price. This is not nor will it ever be a proof. The proof comes from elsewhere as all critically thinking people realize.
The attachment, the preparation of lists, and its use on one platform automatically are just tools for high velocity traders who extract capital from the market's offer all the time.
There is a similar chart for SCT as you would expect. It is called the Sweeps Chart and it is comprised of 9 tables instead of just one. Here there are many leading indicators of price which is traded.
For cross wired people who suffer the consequences of their past decisions, none of this is possible and it is unbelievable and astonishing. In actuality the markets are always offering, it is always possible for the mind the have PERCEPTION (100%) of ehat is being SENSED (10%) using a routine, IF the person's memories (INFERENCE 90%) is operational and rationally built.
Traders fail by learning FAILURE. SAYING THAT VOLUME DOS NOT LEAD PRICE IS AN EXAMPLE OF A PRONOUNCEMENT OF A MIND THAT HAS BECOME CROSS WIRED IN THE PROCESS OF LEARNING FAILURE.
The path of this particular mind which is cross wired is well documented under up to 50 or so alias's. The failure to understand the P, V relationship is but a small part of the learning failure that occured for him moslty in ET. All members document their histories; were a person to do longitudinal studies of these people, he could get a lousy cross section of why so many people fail at trading but there are some outstanding models of just what not to do.
