[VSA] Volume Spread Analysis Part II

[zeon]

	Quote:	TinGull
	Just wanted to post up a chart of a little trade I took today. Welcome back, right? I'm not trading more than a handful of times a month right now as I've got plenty of other things that have been keeping me busy. But, none the less, taking great trades. I decided to take a peek at the markets this afternoon during lunch and saw a nice setup pop up. So anyways...just thought I'd post it up. I won't post all the time, but will check in every week or so. Great to see this thread is still kickin'!

Hmm, the chart you posted makes my symmetrical triangle look more like a descending one. *sigh* it's so easy to see different things in the market...

[CandleWhisperer]

	Quote:	Bearbull
	Sebastian, Here is another example of strength showing on 3min, TG most likely would flash up the green indicator as well, many would go long, however once the price action is viewed on a 1min time frame, what comes to light are the true intentions of the market, prices have not found support as yet and hence not ready to turn up i.e B- buying pressure has evaporated. Comments please

Why would anybody go long at A?

Yes demand entered the market but it is not a reason to go long. Note that this bar forms a dark hammer with a long shadow. What you would now look for to go long is a no supply or test within the range of this long shadow.

If you trade hammer patterns, you would not that to go long you have to wait for the close of the next candle, which needs to engulf body of the hammer (Mark's rules). In other words, the no trade signal at A.

Also note the Ultra high volume bar with the close in the middle. This bar shows supply swamping demand. Hence, the background is pretty weak at A. You can see the trend for yourself.

[Primavera]

[quote=zeon;32053] That's why I always check my news calendar and adjust my stops if I'm in a position......

Not all news that affects the market appears on a calendar. How can you discount some event if it is entirely or largely unpredicted >

But as for technical and non-technical days, I don't know... dbphoenix said he doesn't believe there is noise in the markets, even on a 1-min timeframe. So if there is something "non-technical" occuring, I always get the sense that it's the trader who's reading the chart wrong. The markets are always right. It's whatever belief you had based on what you see or thought you had seen, that is incorrect.

Some events such as the fed's recent intervention, Northern Rock aren't just noise - they are full scale renditions of Tschkovsky's 12th with real cannon and a thunderstorm toboot.

Furthermore if you are just looking at the chart of the instrument you are trading then you will not account for these market events. Indeed as I said above it might not be possible for you to account for them - all you can do is react when they arise.


........ Didn't feel like chasing price, so I stood aside. Then I went long when the hinge formation I posted earlier on broke. False break apparently so I got stopped out.

Quite right not to chase price or setups where uncertainty exists, or if you want to try to gain from these situations then reduce risk by reducing position size.


QUOTE]

[TinGull]

	Quote:	zeon
	Hmm, the chart you posted makes my symmetrical triangle look more like a descending one. *sigh* it's so easy to see different things in the market...

thats the beauty of the markets

[zeon]

	Quote:	TinGull
	thats the beauty of the markets

and the difficulty...

[Seb Manby]

My buddie Joel Pozen sent me this video of himself trading live in his class, thought I'd share it with you. Joel studied Richard Ney and Tom Williams and is able to apply his knowledge to the real time market.

Regards S.

[rodney]

Thanks Seb
Just want to confirm what might have been going on in your analysis when you closed out the trade at that specific bar.
I might have continued the trade longer.

I saw a high volume down bar closing at the lows, followed by the exit bar -- a low volume bar with a narrower spread. And, I note this bar spent much of its time near or above the midpoint.

Is it the narrow range and midpoint activity on that bar that triggered the exit?

[Seb Manby]

Hi Rodney;

yes is the answer to your question, it appeared that strength might be returning to the market.

Regards S

[Bearbull]

	Quote:	CandleWhisperer
	Why would anybody go long at A? Yes demand entered the market but it is not a reason to go long. Note that this bar forms a dark hammer with a long shadow. What you would now look for to go long is a no supply or test within the range of this long shadow. If you trade hammer patterns, you would not that to go long you have to wait for the close of the next candle, which needs to engulf body of the hammer (Mark's rules). In other words, the no trade signal at A. Also note the Ultra high volume bar with the close in the middle. This bar shows supply swamping demand. Hence, the background is pretty weak at A. You can see the trend for yourself.

1. The question was directed to Sebastian in regards to his video on Post 430 and as to what was his thought process/reasoning on taking a short on an upbar at that particular price location was. (my post 442)
2. Post 443 was intended to expand on that via a dialogue with sebastian once he responded with his take on his trade , this has not materialised. Instead the focus has been on post 443. In a typical strong downtrend or uptrend, one encounters wide range bars on high vol and hammers , inverted hammers also on high vol, in VSA jargon these translate into sign of strength or sign of weakness and if you listen to the archived videos in TG, has been the main point of confusion, how to know when it is selling or buying climax. There are countless setups where with one of this hammers on high vol, there has been the low vol tests as a signal to go long, only to watch the prices plough through the support of the low of the hammer, the setup has to be in the right context, not anywhere on the chart, .
3. Know enough about Wyckoff to state that VSA or any other price/vol tutuoring is merely an offshoot of the central concepts/principles of Wyckoff.
4. You obviously are well enlightened but I know quite a few traders who have difficulty with what I have just outlined
5. Once again the post 443 was meant for a discussion with Sebastian in ref. to his post of 430. I do not take trades via any hammer or hanging man.
6. Attached reveals with great clarity that not all hammers or inverted hammers are made equal and one does require anybody's rules of something engulfing something else to take the trade. Reading the price action i.e in this case clear price rejection at a significant price level, and in the context of the prior price action led to a 10pt move in ER. and that is my style of trading, period.

[Bearbull]

	Quote:	Seb Manby
	Hi Rodney; yes is the answer to your question, it appeared that strength might be returning to the market. Regards S

Once again would appreciate your response in ref: to your video on post 430
what was your reason, thought process of taking a short , as there was no audio, hence the question. Ref: post 432