[VSA] Volume Spread Analysis Part II

[wunderlich]

Sledge:

I think the same: market "will DROP".
But "Timing" for short was some bars to early (now 5 to 6 bars)?
for my taste; this is what I - also timely - would say.

By the way, if trading short, with which scenario? where Stoploss? where Profittarget? etc.

An other question: which datafeed / market do you exactly use in your chart?
w.

[CandleWhisperer]

	Quote:	brownsfan019
	........In all seriousness, my question was sincere as I enjoy lurking this thread, but have yet to see any real trading being done besides after the fact type stuff. It's REAL easy to find those S/R levels after they've been confirmed. But what about when they are forming? Is the trader in real-time jumping in to see if they do hold or not? ..............I'm just asking the questions that anyone would ask of a trading methodology.

I read somewhere that VSA is a big tent. I like that. It is clear that most of the traders on this thread do not do things exactly the same. And if you include DB (not a VSA trader per se, but a Wyckoff trader/supply/demand trader using PV) this becomes even more evident. That is, DB is doing incredible work far beyond most. It is elegant, simple and effective.

As far as drawing support and resistance in real time, there are many ways to do it. After reading the first thread and posts by Nihabashi, I prefer to look at WRBs and Long & Shadows now. There are many things I can't say about them and far more things that I do not know as yet. But what I can say is this. Those that use candles can easily see a WRB appear. The definition is simply A WRB is body (open to close) that is larger than the prior three intervals. A Long Shadow (upper) would be an upper shadow that is larger than the prior three long shadows (only). And the opposite would be true for a Long Shadow (lower).

Now, there are various was to determine what makes one WRB more significant than any other one. Two of the main things I look at is size and volume. Hence, in real time if there is a WRB that happens to have high to ultra high volume or is larger than the last three WRBs it is significant. The three prior WRBs is flexible, but once one decides on a criteria, one should stick with it. It may be different for the individual instruments traded. Subsequent price action will tell you that.

So one can easily determine what is a significant WRB, or Long Shadow. As far as trading it, it is always best to let the market prove it. Why go short simply because price is rising towards a supply/resistance area? Many "pivot" traders make this mistake. Just because price is moving towards R1, doesn't mean go short. Price can continue doing what it is doing: going up. However, one can become more attuned to price action as price approaches R1.

Take a look at the chart below. These areas were easily plotted after the appearance of the WRB or Long Shadow. As so many seem to not want after the fact learning experiences, I will say nothing about a trade set up. It is labeled and if asked I will give my $0.02

[bertg]

	Quote:	DbPhoenix
	And that may account for the difference between us. I couldn't care less about the reasons for price's movement. When I see selling drying up at support, I go long. When I see buying dry up at resistance, I short. If price is drifting aimlessly, I do nothing. No jargon. No software. No colored arrows. No indicators (bar or otherwise).

DB,

Going through this thread again and on post 183, you said the above.

You say "when I see selling drying up at support." Some see supply or demand coming in based on where the bar closes (from what I've seen, you don't care about bars or where they close). Some use bid/ask, and I don't think you look at that, either.

So, then I assume you mean volume drying up while in a down-move and while approaching support.

Ok, I'll stop interpreting/assuming and ask you directly: how do you "see selling drying up?"

Thank you for your help.
Bert

[Sledge]

	Quote:	wunderlich
	Sledge: I think the same: market "will DROP". But "Timing" for short was some bars to early (now 5 to 6 bars)? for my taste; this is what I - also timely - would say. By the way, if trading short, with which scenario? where Stoploss? where Profittarget? etc. An other question: which datafeed / market do you exactly use in your chart? w.

W-
Platform is a Metatrader4.

As far as timeframe: I actually use a much larger timeframe to get a "feel" of the overall market first and then "drill down" It was much easier to illustrate the amount of volume and those bars significance using a 15 minute chart instead of say a 4 hour or Daily Chart.

Where you decide to enter the market or how many bars you use to make your determination is strictly a matter of personal opinion. Since I use a larger timeframe and know that I am looking only for shorting opportunities (presently,) I look for particular bars or sequences of bars- when they appear I am poised and ready. You may be different. I'm learning not to be scared to let a trade ride overnight or carry over past EOD. I only care about being right with the trend.

As far as target and stoploss- same trading personality traits apply. If you see $200 profit plop into your lap- do you take it and close out? Do you feel strongly enough in your analysis that you know you will eventually make $1000 on that trade? I personally "roll with the punches" If I'm in on a short and I have cleared 85-100 pips at EOD, I can do one of two things- either move my stop loss to protect capital or close out and look for another entry if I anticipate a pullback. As with any system you have to realize that it MUST be flexible. YOU must be flexible. Anyone who tells you that you bailed early and are a "wuss" is a moron. If you are happy with the trade- you are the only one who makes or loses the $. No person on a message board is going to pay your bills.

When I started trading I was a blitzing moron, I got in, grabbed 4 or 5 pips and closed out. I was trading 20-30 trades a day! I did well at it, but talk about mentally exhausted!

My best advice to you or anyone new trying to learn this is the following: Learn to read the bars, what do they tell you? What does that bar with its related volume tell you? Tom Williams isn't B.S.ing you when he says all you need to do well is a chart and volume associated with it! After a while- if you stick with one or two things you trade, you will get to know that instruments "personality" (i.e. how it reacts, how it moves.)

Hope this helps!
Sledge

[Sledge]

	Quote:	CandleWhisperer
	Take a look at the chart below. These areas were easily plotted after the appearance of the WRB or Long Shadow. As so many seem to not want after the fact learning experiences, I will say nothing about a trade set up. It is labeled and if asked I will give my $0.02

Candle-
I would indeed like your $0.02. Please do tell us what you see on your chart-I think that anything you see will help people learn from the knowledge you have to offer!

Sledge

[DbPhoenix]

	Quote:	bertg
	DB, Going through this thread again and on post 183, you said the above. You say "when I see selling drying up at support." Some see supply or demand coming in based on where the bar closes (from what I've seen, you don't care about bars or where they close). Some use bid/ask, and I don't think you look at that, either. So, then I assume you mean volume drying up while in a down-move and while approaching support. Ok, I'll stop interpreting/assuming and ask you directly: how do you "see selling drying up?" Thank you for your help. Bert

Rather than take the thread off topic again, I'll suggest that you look over the running commentaries I've been making regarding each day's trading in the Dailies section of my Blog (there are only eight of them). This will enable both of us to be specific about what and where and when rather than end up with the usual bumper-sticker response.

[DbPhoenix]

	Quote:	brownsfan019
	In all seriousness, my question was sincere as I enjoy lurking this thread, but have yet to see any real trading being done besides after the fact type stuff. It's REAL easy to find those S/R levels after they've been confirmed. But what about when they are forming? Is the trader in real-time jumping in to see if they do hold or not? I'm just asking the questions that anyone would ask of a trading methodology.

Your question may not be answerable with regard to VSA since VSA doesn't address support and resistance -- other than in a general way -- except with regard to trendlines, and whether trendlines provide support and resistance or not is debatable.

But if you're asking about RT trading with the bars and bar signals, then, yes, that would be interesting to see.

[zeon]

	Quote:	CandleWhisperer
	I read somewhere that VSA is a big tent. I like that. It is clear that most of the traders on this thread do not do things exactly the same. And if you include DB (not a VSA trader per se, but a Wyckoff trader/supply/demand trader using PV) this becomes even more evident. That is, DB is doing incredible work far beyond most. It is elegant, simple and effective. As far as drawing support and resistance in real time, there are many ways to do it. After reading the first thread and posts by Nihabashi, I prefer to look at WRBs and Long & Shadows now. There are many things I can't say about them and far more things that I do not know as yet. But what I can say is this. Those that use candles can easily see a WRB appear. The definition is simply A WRB is body (open to close) that is larger than the prior three intervals. A Long Shadow (upper) would be an upper shadow that is larger than the prior three long shadows (only). And the opposite would be true for a Long Shadow (lower). Now, there are various was to determine what makes one WRB more significant than any other one. Two of the main things I look at is size and volume. Hence, in real time if there is a WRB that happens to have high to ultra high volume or is larger than the last three WRBs it is significant. The three prior WRBs is flexible, but once one decides on a criteria, one should stick with it. It may be different for the individual instruments traded. Subsequent price action will tell you that. So one can easily determine what is a significant WRB, or Long Shadow. As far as trading it, it is always best to let the market prove it. Why go short simply because price is rising towards a supply/resistance area? Many "pivot" traders make this mistake. Just because price is moving towards R1, doesn't mean go short. Price can continue doing what it is doing: going up. However, one can become more attuned to price action as price approaches R1. Take a look at the chart below. These areas were easily plotted after the appearance of the WRB or Long Shadow. As so many seem to not want after the fact learning experiences, I will say nothing about a trade set up. It is labeled and if asked I will give my $0.02

I think there might be several ways of defining S/R but there is only one place where 'true' S/R resides, and that's the price level/zone/area where most of the action took place. For me, this usually means a congestion area of some kind, although it's not always that visible.

I used to think S/R can be found in calculated pivot points or levels from the previous day, like the high and the low. Basically I spent a whole lot of time studying charts and noticed some peculiar reactions to those price levels. But perhaps they were only coincidential? I have also observed price bouncing off a trendline, but dbphoenix' point of view I believe is that trendlines don't provide S/R.

Yours is apparently yet another way of viewing this concept. I'm sure a lot of traders will say "whatever works for you". But why would a WRB be any more significant than a not so wide body? Forgive me for saying, but when I see WRB and price is rapidly falling or rising, its my impression that there is a LACK of S/R in that area. Price seems to move from one area to another and these areas in between where price plunges or skyrockets don't provide any S/R for the reason that there's nothing but "air" in between.

This is my view, don't shoot me now please I'm just stating my opinion and although I thought I had a good feeling in trading (based on my results last year), since this bear market started I'm kinda lost... so perhaps I got it wrong after all. Comments appreciated!

PS: Oh and sorry if all of this is off-topic, but I'm just replying to another post. Seems like a whole lot is off-topic so perhaps we need to (a) change the name of the topic or (b) start a new thread?

[port80]

I was wondering if you folks could provide some insight with what is going on with this stock using VSA. CPHD. I am a newbie at this just starting to pour over master the markets so please forgive my ignorance. I originally found this stock using float analysis which I find iffy at best except in some cases where stocks are bottoming or topping and the float turnover is obvious to someone even like me.

Sure enough this stock had a float turnover at the top and the bottom dropped out. Its reached a support level but I am confused as to what is going on. I feel like this stock is definitely being marked up or down by professionals. However it almost seems like there is a buyer/seller battle now going on. Any insight would be greatly appreciated. I'm unsure where this stock is going at this point. So I've exited most of my position at a profit but I still have some longer term puts open.

[heretodaygone...]

	Quote:	zeon
	I think there might be several ways of defining S/R but there is only one place where 'true' S/R resides, and that's the price level/zone/area where most of the action took place. For me, this usually means a congestion area of some kind, although it's not always that visible. I used to think S/R can be found in calculated pivot points or levels from the previous day, like the high and the low. Basically I spent a whole lot of time studying charts and noticed some peculiar reactions to those price levels. But perhaps they were only coincidential? I have also observed price bouncing off a trendline, but dbphoenix' point of view I believe is that trendlines don't provide S/R. Yours is apparently yet another way of viewing this concept. I'm sure a lot of traders will say "whatever works for you". But why would a WRB be any more significant than a not so wide body? Forgive me for saying, but when I see WRB and price is rapidly falling or rising, its my impression that there is a LACK of S/R in that area. Price seems to move from one area to another and these areas in between where price plunges or skyrockets don't provide any S/R for the reason that there's nothing but "air" in between. This is my view, don't shoot me now please I'm just stating my opinion and although I thought I had a good feeling in trading (based on my results last year), since this bear market started I'm kinda lost... so perhaps I got it wrong after all. Comments appreciated! PS: Oh and sorry if all of this is off-topic, but I'm just replying to another post. Seems like a whole lot is off-topic so perhaps we need to (a) change the name of the topic or (b) start a new thread?

So you believe 'true' s/r has to be accompanied by volume(action). Does the amount of time price stays at a particular level/zone/area irregardless of action hold any s/r for you? Does price/volume s/r that happens overnight come into your s/r calculations? Do you include "news announcement" volume in your calculations? good post.