All language subtitles for 4. The volume of structures

The volume of structures.

Tying in with the previous point, we are
now going to add some more variable to

our reasoning.

Volume. According to the law of cause
and effect, for an effect to occur, a

cause must first have taken place in
direct proportion to the size of the

The issue here is how to measure the
size of the cause.

Wyckoff and his early students used the
point and figure chart to determine this

aspect of the cause.

Even today, There are some experienced
Wyckoff traders who continue to trust

predictive ability of this tool.

To me, trying to measure the capacity of
said cause using the point -and -figure

chart seems unsound, as it does not
account for the most important factor

this issue, which is volume.

Let's take a step back.

As we know, volume tells us about the
participation of the agents.

Thanks to the analysis of both the
traditional vertical volume and the

horizontal volume profile, we can
identify the level of interest that the

structures have generated from their
beginning to their completion.

In essence, the volume traded in each
structure is the cause that will have

generated the subsequent trend effect.

This cause, the origin, will greatly
influence the general context of the

market. In other words, the more volume
that has been generated in a structure,

the more power and influence it will
have on future price action.

This seems a much more logical approach
to me.

So the idea is simple. We are going to
measure the volume traded throughout the

structure to objectively determine what
the size of its cause is in terms of

volume. However, even doing this won't
enable us to estimate the effect of said

cause with certainty.

That said, it can be useful when
comparing structures, as we saw in the

point. And why am I going on about this
so much? Well, because you may have

already realized, the variables of time
and volume do not go hand in hand.

What do I mean by this?

You can have two structures that have
consumed exactly the same amount of

but the volume traded in each of them
may be different.

Taking the example further, we may see a
structure that has taken a long time to

develop completely, let's say 100 days,
with a certain volume, let's say 100

,000 contracts traded.

Under this principle, it would suggest a
lower capacity than another structure

that has developed in fewer days, let's
say 50.

but in which a greater volume of
contracts have been traded, let's say

Interesting, right?

The final reasoning is simple. The
volume tells us about the participation.

If one structure has more volume than
another, it means that there has been

interest in it and that the effect of
the cause will have greater capacity,

regardless of the time it took to build.

Going back to the previous example, in
this case, yes.

I would evaluate the possibility that
this structure, although shorter in

has sufficient capacity to overturn the
accumulation below, reverting the

control of the market from bullets to
berries. On this last slide, we see a

example happening at Comico.

To make the measurement, we are going to
use the measurement tool that we can

find in the left panel of TradingView.

We select from the beginning of the
structure to the end and it offers us

information we are looking for.

In addition to the number of traded
contracts, it shows us the number of

and bars it covers.

As we can see, the accumulation
structure has traded 2 .895 billion

1 ,806 days, while the current structure
has already traded 2 .428 billion in

just 518 days.

The difference in comparative terms is
quite striking.

The accumulation pattern is very
genuine.

but we know that anything can happen in
the market at any time.

We have just observed a sideways
movement that does not meet the

that we would like to see in
accumulation patterns at the moment,

decrease in volume during its
development.

Instead, we have seen a significant
increase in volume, which has remained

and constant, as well as unusual peaks
in the middle of its development.

These characteristics are at least worth
taking into account, since if it

continues to develop in this way, a
distribution cost significant enough to

overturn the accumulation below and send
the price to lower levels could be

generated.