[VSA] Volume Spread Analysis Part II

[jjthetrader]

	Quote:	Sledge
	Ok folks- LIVE TRADE SET-UP: GBP/USD On the 1 hr charts you see 2 wide spread up bars today- very nice sign of weakness. Before the NY close you saw selling on the "upthrust" bar, you then saw a "test" on the next followed by the next few hours of jockeying. You then see no demand bars to confirm downside potential (Marked with X's) I'm setting up for a Short tonight on the GBP, a slug of weakness came in today and rapidly overbought the market, should be a nice buckle under the weight of all of that coming in: Sell Stop at 1.9872 Target-1.9830 The Sell Stop is 10 pips below the low of the last "test" As well as--If it is a true breakout, the 1.9830 with the time lapse will be above the trendline off the down trend we are coming out of so that trendline can act as support now. See you in the AM! Sledge Attachment 6085

Sledge, wether FX volume is accurate or not lets look at your example. You saw your high volume bars as bearish. Here's why I see them as bullish (temporarily anyway). Check out the bar marked. That high volume was tested immediatly. That was not weakness. Tom Williams says high volume will be tested within the next couple bars if it's bullish. This passed!
I see what you were pointing to and it would have been a good call if you weren't looking at polar bears in Hawaii
Background is important bro!

[gassah]

	Quote:	jjthetrader
	You saw your high volume bars as bearish.

Those bars were trying to break out of a range. How about the possibility of absorption volume from "pushing up thru supply" (MTM)?

[Sledge]

	Quote:	jjthetrader
	Sledge, wether FX volume is accurate or not lets look at your example. You saw your high volume bars as bearish. Here's why I see them as bullish (temporarily anyway). Check out the bar marked. That high volume was tested immediatly. That was not weakness. Tom Williams says high volume will be tested within the next couple bars if it's bullish. This passed! I see what you were pointing to and it would have been a good call if you weren't looking at polar bears in Hawaii Background is important bro!

You are indeed correct. I missed that completely! Thank you for yet another lesson oh wise one!
I even called it a Test in my post- Duh!
Sledge

[Sledge]

	Quote:	gassah
	Those bars were trying to break out of a range. How about the possibility of absorption volume from "pushing up thru supply" (MTM)?

I considered that as well, but the volume made me scratch my head, they were fairly good volume bars, but I wasn't sure if they would hold. Basically, it could have poked through the top of the range and plunked back down- Overall, it may have been a very dangerous trade to take in either direction the more I discuss it!

[Seb Manby]

Test on the Dow Jones Daily, Monday 21st April 08

If Tuesday is an up day, then today Monday was a test and indicates a potentially strong market. Expect higher prices. If Tuesday is a down day, then the market is weak, but I think the market is strong now for this week.

Regards Sebastian

[Seb Manby]

Tuesday 22nd April 08.

I expected today to be an up day, but the market decided otherwise, there was no distribution at the end of the market, so it was not so easy to know that Tuesday would be down. Today on the Sp Emini there was distribution at the end of today, and so I expect Wednesday to open down on the open.

Yesterday on the Dow cash market, we had a test, this failed today, meaning the market is weak, there was a test Thursday and Friday was up, so there was strength last week, but the market has turned bearish today so I now wait for a low volume up day or 'No Demand' to confirm that the market is weak.

There is an image of me with some clerks outside the Chicago Mercantile Exchange in Chicago for you to view.

Regards Sebastian

[Sledge]

LIVE TRADE SET-UP:
GBP/USD
4/23/08

Attaching two charts (1 hr and 4 hr.) We see our friendly consolidation zones tonight showing a very nice accumulation phase --Buying on the lows at the bottom of the "zone" and testing of supply.

Current trade: Long at 1.9786
Target: Conservative at 1.9927 --below the bottom of the last supply area.

4_23_08_setup.jpg

4_23_08_setup4.jpg

[Sledge]

UPDATE from My Prior Post (#1117) on:
GBP/USD Long
Long 4/23/08

Went long in the last "Hot Zone" (Blue bar on left of chart)on 4/23/08
Wednesday night market needed to further test for supply as well as throughout the NY session. It appeared as if upon entry that testing was done- apparently it was not

No worries because in Thursday London and NY session you saw even stronger signs of testing than in the "Hot Zone." To make allowance for the "dip" and test of supply, My S/L was moved down to accomidate for the "dip" and further testing. This is why I advocate that you "take what the market gives you." My target was much higher and right now it is in a resting state and may be achieved ultimately, but by taking what the market gives instead of demanding it from the market, I woke up to a wonderfully executed trade.

Result:
Long @ 1.9790 on 4/23/08
Target (T/P) Moved from 1.9927 to 1.9860
Results: Friday AM London Session- Target Achieved

Notice on this 4 hr chart that the 4 hr bar that on the secondary test is a HUGE volume bar, if you watched it form in real time (or drilled down) you would have seen that it was of very low volume (relatively) as it touched bottom and worked its way up to open before shooting off the launchpad.

Chart with Results:
4_25_08_update.jpg

[Bearbull]

Anybody attend the VSA weekend symposiums or the webcast, Sebastian stated here that they would be talking about exact strategies/tactics i.e trade entry, management etc using VSA principles rather than the eternal hindsight bar by bar analysis which was being read with uncanny accuracy

[NAVEEVIa]

Anybody have the KPCurrency moneytec thread on VSA.
i am unable to find it.
thanks in advance
Naveen