[VSA] Volume Spread Analysis

[dandxg]

	Quote:	gassah
	Hi dandxg, I also use Wyckoff PnF. I use it to find stocks that have enough potential and to estimate price targets for exits. nic

Nice. Can you recommend a source to learn Wyckoff P and F? Would the Hutson book suffice? I bought Hank Pruden's book but it's hard to learn something from just a few charts. I signed up for the yahoo group, but I don't see anyone posting P an F charts as of yet? I am willing to buy Dorsey's book if need be but he does 3 box instead of 1 I believe?

[dandxg]

	Quote:	PivotProfiler
	Short set up(s): Interesting things prior to the trade set up. A: UpThrust out of place (Polar bear in Africa). If this had been real weakness, there would be weakness in the background. B: Test. Notice that the volume is low and the close is in the middle. No sellers. C: Test. Note that the volume on this Test is even lower than the Test two bars ago. Even more evidence that at this time the path of least resistance is up. D: Narrower to equal range bar with more volume than previous bar that closes on the low and is a buying bar. That is, it makes a higher high than previous bar but not a lower low. This is a Squat/UpThrust. This candle is designed to get people in on the long side. E: Now we get what we want to see. This is a dark WRB. High volume on down bars usually means selling and this is the case here. Since this is a WRB, we know that something is changing in the supply/demand dynamics in the market. This WRB sets up our Support/Resistance zone to look for an entry point. F: This is a Test. But note that the volume here is higher than the previous two test, while being lower than the previous two candles. Hence, while we have low volume we have pretty high volume for a test. In other words, this is a failed test. It shows that there are sellers (supply) below. Also note the size of the range versus the previous two Test. G: BINGO. Low volume sign within the range of the body of a WRB with high volume after a Failed Test. This is an Up bar on volume less than the previous two bars, making a higher high , on a narrower range. This is No Demand. The Smart Money is not interested in higher prices. H: This is No Supply and out of place. More exactly, the background is full of weakness so this No Supply should not be taken as a long signal. The Pros may not be ready to take the market down, but they are not looking to go long. I: Case and point we see No Demand. Clearly the market does not want to go up. J: Higher high, closing on the lows, closing up on higher volume. This is an UpThrust. We have weakness in the background. This also occurs within the body of the Dark WRB making a good place to place a short entry. K: High volume closing down from previous bar but closing in the upper portion of its range- this is stopping volume.

Hey really nice chart with annotations. I have to ask the obvious. How did you get all of the neat indicators?

[mister ed]

	Quote:	dandxg
	How did you get all of the neat indicators?

dandxg - I will take the liberty of answering on PPs behalf (he will be along to correct me if need be!) - he wrote them himself for his charting platform. Earlier on in this thread PP generously shared the coding for the indicators he had written up - it is in here somewhere! From memory the coding is in Metastock format, but if you do not have Metastock the coding is very logical and understandable so it can be reproduced on some other platform.

hope this helps

[rocketmojo]

I'm a new user of Tradeguider (TG) and am wondering if someone might recommend a good Parent Stock Index to use for Stock Scanning in TG. Thank you.

[dandxg]

	Quote:	mister ed
	dandxg - I will take the liberty of answering on PPs behalf (he will be along to correct me if need be!) - he wrote them himself for his charting platform. Earlier on in this thread PP generously shared the coding for the indicators he had written up - it is in here somewhere! From memory the coding is in Metastock format, but if you do not have Metastock the coding is very logical and understandable so it can be reproduced on some other platform. hope this helps

Great, much appreciated. It's nice to be forum, not elitetrader, where ppl. help one another more often than they take cheap shots. So Soul Trader take that as a compliment.

[dandxg]

	Quote:	rocketmojo
	I'm a new user of Tradeguider (TG) and am wondering if someone might recommend a good Parent Stock Index to use for Stock Scanning in TG. Thank you.

Well I don't have TG, but I have read Williams' book and have read a fair amount on Wyckoff so let me attempt to give you a hand. I trade index futures.

On what exchange does your stock exist. It is S and P, DOW, NAS, Russ? The way I read it before, and correct me someone if I am wrong, is you want to get a macro view of the parent index, let say S&P 500. On a daily I feel it is down and that's as high as I need to go because I am a day trader. So then I would pick some stocks in that index using their scanner that show the greatest weakness and I wait for a signal and hit it. Some in Wyckoff use Dow Theory and look at the DJI, dow jones transports. If you determine they look weak you can then drill down to a specific stock showing the greatest signs of weakness and sell it when you have a signal. Make sense?

Conversely in a strong market you would want to look for the specific stock showing the greatest strength and trade that. It's covered in Master the Markets. Hopefully I answered your question.

[gassah]

	Quote:	dandxg
	Nice. Can you recommend a source to learn Wyckoff P and F? Would the Hutson book suffice? I bought Hank Pruden's book but it's hard to learn something from just a few charts. I signed up for the yahoo group, but I don't see anyone posting P an F charts as of yet? I am willing to buy Dorsey's book if need be but he does 3 box instead of 1 I believe?

Hi,

Wyckoff and Dorsey construct and interpret PnF charts very differently. SMI has also modified and built upon how to use the charts. The original Wyckoff course covers the topic and the SMI course has an incredible amount of material, including audio tapes (now mp3) made in the 60's and 70's by Bob Evans who ran SMI during that time.

You don't need to worry about knowing how to calculate the charts unless you end up doing them by hand. Stockcharts.com, with special settings, does the charts correctly. Here are my settings: http://tinyurl.com/2qn3fn

Bull's-Eye Broker is a program that does them too and has a little explanation on their site. www.archeranalysis.com TradeGuider's next release is supposed to do them also.

I'll PM you.

nic

[Anonymous]

	Quote:	jjthetrader
	Are you entering at market or where are you placing your orders on these bars you point to as short? thanks

Order is placed on the open of next bar as a market order.

[That One Guy]

I find some things very interesting on this weekly DJIA chart. One being the obvious, we clearly broke a key area noted with the first red arrow. Now we are nearing another key level, which was the low of last year. If the volume is correct, this week was the highest seen on this chart, which goes back to Jan. 05. Another thing I find interesting, is we retested that key level to the $ and sold straight off. The huge volume throws a flag up and the fact we are nearing 12000 and 07 low also throws a flag up. If I am to suspect this week showed some buying, I guess a test of the 07 low is in store. However, if this test fails then we could have a long way to fall. I am by no means a VSA expert, so if any of you guys with more knowledge care to comment please do so. Thanks for the time and everyone have a great weekend.

[jjthetrader]

	Quote:	Seb Manby
	ES Analysis for friday 18th jan 08 Regards Sebastian

Thank you for the comentary Sebastian. If you were trading on the 18th where did you make your trades based upon your comentary?
In your discussions you say you expect the next bar to be up or down, are you then taking a position at the close of the bar that makes you think that?

thanks