[VSA] Volume Spread Analysis Part II

[Sledge]

	Quote:	DbPhoenix
	Yes, that's what I meant. I'm more concerned with why Sledge did what he did than with what I would have done, at least partly because I don't follow forex. However, Sledge may also have imposed a contingency which he didn't mention, i.e., that if price did not move immediately in the expected direction with no retracement of any kind, then he'd exit the trade. If this contingency were not determined in advance, then more likely he just freaked and got spooked out of the trade.

Db-
I think it is fair to say that I did exit the trade because the results were not on par with my goal. Unfortunately, I work a day job and am not able to trade full time (yet) so my wisest course of action is when I am available to trade and get screen time, I have to base decisions upon what I have in front of me.

Since the drop did not have the strength I desired, I basically took the profit, instead of having a once winning trade, become a losing trade (which it would have, had I let it run all day long)

I think it is more of a trading style. One thing I learned fairly quickly in this business is that you will see many a websites posting people who want to brag about "I scored 230 pips on this trade" To them it is more important to feel as they are some trading guru than it is to have consistancy- and if that works for them, that is spectacular. I have had my share of "Home Run" days- even working for 8 hours while the NY session is in full swing and I am stuck at a desk somewhere being away from my trading platform. But I tend to go for more "base hits" than "home runs."

Long of the short is this on this trade:
In 9 hours (all while I slept) I made $400 before going to work.
In working 8 hours yesterday at my day job- I cleared a little over $100.

To me it was a good day. My main question was- why did it not drop as expected? Why with such a strong reversal signal did it not drop as I had anticipated?
Sledge

[erierambler]

	Quote:	Soultrader
	I agree to an extent Tasuki. I havent really studied VSA closely as most traders here.... but the psychology/effort/result behind the bars and volume is what makes sense to me. I am not familiar with the VSA jargon as well. Anyways... wanted to post ES chart for Feb. 28, 2008. Please see attached.

Nice effort , should you have put the day in context, regarding previous days with potential support and resistance areas , the chart would be complete.
erie

[DbPhoenix]

	Quote:	Tasuki
	DB, actually, the answer is yes, they matter alot, at least to the style of trading that I'm trying to develop. The idea is to understand, as clearly as possible, the reason for the market's move in a direction. I can only speak for myself, but I was allowing myself to be seduced by the idea of sinister "smart money" that was out to get me (the "retail trader"). Listen to Joel Pozen or Tom Williams or Todd Krueger if you find that idea far-fetched. These guys really believe that the big operators are intentionally moving the markets to outwit the retail trader. If you follow this notion too closely, as I was doing, then you start to ascribe every market move to professionals whose motives you can only guess at. Fortunately, there are much better explanations. At any turning point in the market, you can observe the forces of fear and greed and weigh their relative strength by looking at support and resistance. You can also assess the central notion of "fair value" as described in the philosophy of Market Profile. By carefully weighing in your mind each of these forces, you can get a much clearer picture of where the market is likely headed than if you indulge in the paranoid fantasy of "smart money" that is supposedly manipulating the markets. Frankly, I think this notion is actually detrimental to a trader's mental edge.

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).

The whole manipulation thing may be nonsense or it may not. Either way it has no effect on my trading. What to me is nonsense is unnecessary complication.

[erierambler]

	Quote:	erierambler
	Nice effort , should you have put the day in context, regarding previous days with potential support and resistance areas , the chart would be complete. erie

forgot to attach the chart

[DbPhoenix]

	Quote:	Sledge
	Db- I think it is fair to say that I did exit the trade because the results were not on par with my goal. Unfortunately, I work a day job and am not able to trade full time (yet) so my wisest course of action is when I am available to trade and get screen time, I have to base decisions upon what I have in front of me. Since the drop did not have the strength I desired, I basically took the profit, instead of having a once winning trade, become a losing trade (which it would have, had I let it run all day long)

And there's nothing wrong with that, as long as you've planned it all out in advance along with your other contingencies and you're trading according to that plan. Otherwise, you're trading scared, i.e., gambling.

As for scalping via EOD charts, this is not something I'd recommend.

	Quote:
	My main question was- why did it not drop as expected? Why with such a strong reversal signal did it not drop as I had anticipated? Sledge

Because it wasn't such a strong reversal signal.

[Sledge]

	Quote:	DbPhoenix
	Because it wasn't such a strong reversal signal.

Fair enough.
Sledge

[jjthetrader]

	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). The whole manipulation thing may be nonsense or it may not. Either way it has no effect on my trading. What to me is nonsense is unnecessary complication.

Gotta love DB. He's to all of us VSAers what Simon Cowel is to American Idol. He cuts straight to the point, is brutally honest and is the kick in the pants we all need to become better at what we do and drop what's not working.
Thanks for the clarity DB.

[DbPhoenix]

	Quote:	jjthetrader
	Gotta love DB. He's to all of us VSAers what Simon Cowel is to American Idol. He cuts straight to the point, is brutally honest and is the kick in the pants we all need to become better at what we do and drop what's not working. Thanks for the clarity DB.

I hope not brutal. But I do find that people commonly get all wrapped up in the literal after a while and forget the fundamental principles of whatever it is they're so desperately adhering to. And this is as much the case with religion as with approaches to trading.

I don't want to piss off the VSA people nor the MP people (the SMI people I don't care so much), but come on. When it gets to counting bars, much less measuring them, it's time to go sit down in a darkened and quiet place and think long and hard about where it all went wrong.

At the risk of repeating myself, it's not about bars and indicators and jargon and schematics and software and academic erudition. It's about buying pressure being more insistent than selling pressure, or vice versa. That's where it begins. If one is not attuned to that dynamic, then all the jargon in the world is not going to enlignten him.

[jjthetrader]

DB, I didn't mean brutal as in pissing people off. I meant brutally honest as in no sugar coating the truth.

[DbPhoenix]

	Quote:	Sledge
	Fair enough. Sledge

What I mean is, who says so? And why? Does this person have any evidence to support his contention?

Try to get past the "bar". Find an interval that enables you to see the waves, even if you have to go sub-minute. Granted you may not see the relevance of this to EOD, but keep in mind that all of this is going on, even if you can't see it in the bar interval you've chosen. But just like termites in your walls, you'd better be aware of the nature of this activity or you'll sink into the madness of such like "candlestick patterns".