Original subtitles

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.