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I made the above quote. Here on this chart is what happened. How does the market appear now after this last bar. What is it telling us for the next session?
This last bar is an up bar, closed high, below average range, low to average volume. What does that mean? Be glad for some input. It doesn't matter of we are wrong or right lets just try to figure it out. What is the market saying to us? |
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Best to drop the idea of being right or wrong? It gets linked up with forecasting and ego which has absolutely no place in realtime trading.
Keep it simple, get away from all this talk about professional and smart money as if they were a single entity. These folks operate on all different time frames with their own agenda just like you have natinal , regional, city, area wholesalers and various levels of retailers on our streets.. Trying to figure out what each of these groups is up to will drive one round the bend.
1. When the market is rising and there is sudden invrease in vol. it indicates resistance to higher prices. There is nothing like selling vol or buying vol. in a single bar. Vol is number of contracts exchanges, ie. buyers = sellers. Better to think in terms of demand/supply or buying and selling pressure. If sellers are falling over each other to hit the bids rather than sit on their offers, this suggests selling pressure and resistance and vice versa(buyers are meeting the offers rather than lowering their bids providing support). Now whether or not this selling pressure is enough to keep driving the prices down will depend upon potential buyers, which effectively is an unknown , until they play their hands.
2. Tom williams keeps emphasizing this, that there is nothing written in concrete when you read
VSA principles in live market, a sign of weakness or strength can be immediately negated and one has to remain totally flexible.
3. Now coming back to your chart, If I was trading this instrument intraday, I would have the floor pivots market out of that narrow range inside day.
Watch where the price opens near the high, moves to the pivot and rejects that, the most likely outcome is the break to the upside. Can observe the price action at the pivot and take a trade expecting resistance around 118.
That will be the target.
4. Now time to observe what happens there, if it forms a sideways range, mark the high/low of that and take the breakout from there. If price drops back towards the High of the inside day with vol, it will go to the pivot and to the low of that day.
5. ofcourse if the price opens below the pivot, you can play it in the opposite way, expecting support around 105 and so on.
So effectively intraday you have a choice of quite a few ways to take advantage of various strategies, ie. breakout, reversals.
Anyway this is how I would do it, and it is time tested methodology.