[VSA] Volume Spread Analysis Part II

[jjthetrader]

	Quote:	habi
	This is a view or opinion too. You need to have an opinion/view. If you say the market is strong or weak, or it has some potential to rally/fall, then you have allready a view or opinion about the market condition. Since may 5 (in the dow possibly earlier) the Dow and SPX turned bearish and we have to find out, how long this is valid. If we see some strengt at one point then we have to change our view.

I agree with Habi. We all take a view or opinion. Observing something and then stating something from your minds filter is your view. Thus Seb has an opinion no matter what he thinks. In order to take a position we have to have an opinion and be confident in it. But as Eiger pointed out we need to be able to trun on a dime.
Being interested in VSA we have to be careful not to be part of another herd, the tradeguider kind that is borderline fundamentalists of their views.

[jjthetrader]

I'm not sure if anyone trades the ER2 here but I do so I'll post a nice example that gave us a hint at which direction the news would take us.

We gap up this morning, above value, and point "A" looks like it might be a top reversal. But then we see that the two bars before "B" dip into yesterdays value area and are rejected closing in the upper half of their range. This is the first hint.
Then look at the volume on Point "B". That is no interest to the downside (no supply) at the moment and the next bar closing up would be further evidence that you should be long. The no supply could have been an entry even without the next bar up in my opinion.

Just thought this was a good example and someone may enjoy it.
Cheers.

[jtbirk]

Hi everyone,

I'm interested in learning more about VSA and am amazed at the volume (no pun intended) of information in parts one and two of this thread. I'm a futures emini trader and am looking to implement this methodology but have no idea where to start my educational process. Do I need to just buckle down and start with post #1 in part one of this thread or is there an "understanding and implementing the basics" checklist or something I can start with? I also got an email from a subscription service touting the benefits of their VSA signals but I'm guessing I'll be able to learn it on my own with some help from those on this thread who have more experience than I with VSA. Your thoughts and direction are much appreciated. Have a great trading day.

Jeff

[Seb Manby]

Hi everyone;

I wish to clarify something, I allow the market to tell me it's immediate future, which is what Wyckoff stated, I do not form opinions or views, I state what I can see and what I expect to happen next, based on what the market is telling at that point, if it does not happen, then I wait until the next development or change in conditions, the professional money will always show their hand to those who can read it, usually just before a move in one direction or another, also, no one can control the market, but those who can read the laws of supply and demand can adjust their trading strategies. There is manipulation in all markets, but this can only be for a very short time, else it will be traded out of the market by other big traders watching.

In posting my charts, I was not clear as to what to look out for, this is why there was confusion, when I said the Dow had the potential to rally, I should have said the next day should have been up, but it was down instead, this would have wiped out any temporary sign of strength, a down bar on a narrow range indicated that the Dow was potentially supported on that day, meaning that it was not allowed to fall through the floor, this did not appear on the SP Emini, also, on the chart that I posted, there was a small selling climax right at the end of the session (5m chart), this usually means a rally for the opening of the following session. this did not materialize, again an effort to support the market for the following day, but there was too much weakness around which I also observed, again I allowed the market to tell me it's likely direction, but I would be foolish to cling to opinions or views. The market is like a pool of water at the top of a hill, it will not run straight down the hill, it will meander and twist and turn until it finds the path of least resistance to the bottom.

I hope this clears up the confusion of my previous posts.

Regards Sebastian

[Sledge]

	Quote:	jjthetrader
	ER2 Just thought this was a good example and someone may enjoy it.

VERY NICE example JJ! Thanks for posting this up for the rest of us to learn from!

Aaron

[Sledge]

Seb-
I know you use smaller timeframes at times. Do you generally look at the market from a Daily or 4 hr chart and apply VSA principles to them? Or do you trade smaller timeframes?
Aaron

[jjthetrader]

	Quote:	jtbirk
	Hi everyone, I'm interested in learning more about VSA and am amazed at the volume (no pun intended) of information in parts one and two of this thread. I'm a futures emini trader and am looking to implement this methodology but have no idea where to start my educational process. Do I need to just buckle down and start with post #1 in part one of this thread or is there an "understanding and implementing the basics" checklist or something I can start with? I also got an email from a subscription service touting the benefits of their VSA signals but I'm guessing I'll be able to learn it on my own with some help from those on this thread who have more experience than I with VSA. Your thoughts and direction are much appreciated. Have a great trading day. Jeff

Hey Jeff, Master the Markets ebook or "the undeclared secrets that move the market" ebook (same book less TG advertising) is the best place to start really. These forums will complement that.

[tawe trader]

	Quote:
	Hey Jeff, Master the Markets ebook or "the undeclared secrets that move the market" ebook (same book less TG advertising) is the best place to start really. These forums will complement that.

Hello Jeff,

As JJ as pointed out, the books mentioned above are an excellent starting point. Master the mkts is currently being given away free on www.tradeguider.com/book.

There is an ton of priceless info on these two VSA threads but they could be a bit hard to follow without knowing the basics.

I suggest you read either one of these books and then come back to TLab.

Also any books to do with Richard Wyckoff are well worth reading (as VSA is based on Wyckoff principles). There is a nice (cheap) book called Charting the Stockmarket - The Wyckoff Method by Jack Hutson.

Regards
Tawe

[Eiger]

	Quote:	Seb Manby
	Hi everyone; ... I allow the market to tell me it's immediate future, which is what Wyckoff stated, I do not form opinions or views, I state what I can see and what I expect to happen next, based on what the market is telling at that point, if it does not happen, then I wait until the next development or change in conditions ... Regards Sebastian

A lot of value in that statement, and quite worth adopting as an approach to analyzing the market. Thank you, Sebastian.

Eiger

[jjthetrader]

Here's a 15 min ER2. This gives an excellent picture with VSA signals that the upside was limited.

"A" was a top reversal and this set our background.
"B" is a confirmed no demand
"C" is a second no demand chance to short if you missed the first one.

Today was a beautifully clear VSA day.

In my previous example we get a hint at which way the news would take us and this was a perfect opportunity for the professional money to sell into. But their longer term actions showed up on the 15min.