[VSA] Volume Spread Analysis Part II

[CandleWhisperer]

	Quote:	Bearbull
	Some charts to illustrate your point: 1. Basic upthrust : sign of weakness is it not? TG signal afterall, ideal place for short, chart 1 2. Dogs did not bark chart 2, again End of Rising Market on huge vol, bar closing in the middle, supply swamping demand, short again???? 3. chart 3, wrong again.

1. First, I do not like TG software. I will however, say in their defense that triangles are not as strong of signals as rectangles.

1a. There is no weakness in the background. This is a "Polar bear In Hawaii".

1b. There are not obvious areas of resistance on the chart. Even a basic pivot level might add some value to the sign of weakness.

1c. These are NOT buy and sell signals they are signs of strength and weakness. If you are using them as signals to go long or short you are no better than the guy following RSI signals.

2. End of a rising market is a narrow range bar on ultra high volume closing on the high into new ground. Simply, this in NOT that. It is a Transfer of ownership type bar that does not result in downside price action. Hence we have effort with no result (this is strength).

3. These thing happen in various levels of intinsity. What may be happening here is mere profit taking.

3a. I hope you are not looking for that holly grail method that neve takes a loss. Losses happen. Methods are wrong. ALWAYS USE STOPS AND DON'T GET MARRIED TO A POSITION.

[Bearbull]

	Quote:	CandleWhisperer
	3a. I hope you are not looking for that holly grail method that neve takes a loss. Losses happen. Methods are wrong. ALWAYS USE STOPS AND DON'T GET MARRIED TO A POSITION.

Thank you so much for the enlightenment on VSA, I borrowed the charts from a colleague who uses TG to illustrate what Db was trying to explain.
I do not trade via VSA signals, period, have enough Wyckoff sense to realise that no holy grail exists outside of ourself

[DbPhoenix]

So lest the original point not be lost, where was the "background of weakness" that prevented the trade discussed in post 477 (which is what prompted this arc in the first place)?

[Eiger]

	Quote:	DbPhoenix
	On the other hand, however many points one "wants to make" have nothing to do with the number of points that are available, which is a chief reason why so many traders cut their profits short.

It's more complicated than that. Humans aren't really very good at handling risk; it doesn't come naturally. As a result, we as traders have to fight natural tendencies to cut gains short and let losses run. It is one of the things that make trading so difficult and keeps many from success.

Eiger

[DbPhoenix]

	Quote:	Eiger
	It's more complicated than that. Humans aren't really very good at handling risk; it doesn't come naturally. As a result, we as traders have to fight natural tendencies to cut gains short and let losses run. It is one of the things that make trading so difficult and keeps many from success. Eiger

The process of making the most of a given move may not necessarily be easy, simple though it may be. However, whatever personal idiosyncracies prompt one to take only a portion of the profits available have nothing to do with what profit opportunities the market provides.

[Eiger]

	Quote:	DbPhoenix
	However, whatever personal idiosyncracies prompt one to take only a portion of the profits available have nothing to do with what profit opportunities the market provides.

The point I was making is that it has little to do with person idiosyncracies. People, on average, have a difficult time letting profits run. It is refered to as the "disposition effect" by psychologists. Our decision-making processes may have evolved in this way. Evolution may have favored those who secured the "one in the hand" over those who sought "two in the bush." Evolution or not, we seem to be mentally organized in this way, which works well most of the time, but not so well in trading. Thus, we as humans have a very strong tendency or bias in taking profits quickly. It has little to do with personal attributes.

Eiger

[Eiger]

The odds may be favoring a Spring on the daily ES & NQ charts.

[DbPhoenix]

	Quote:	Eiger
	The point I was making is that it has little to do with person idiosyncracies. People, on average, have a difficult time letting profits run. It is refered to as the "disposition effect" by psychologists. Our decision-making processes may have evolved in this way. Evolution may have favored those who secured the "one in the hand" over those who sought "two in the bush." Evolution or not, we seem to be mentally organized in this way, which works well most of the time, but not so well in trading. Thus, we as humans have a very strong tendency or bias in taking profits quickly. It has little to do with personal attributes. Eiger

I won't argue the point. But whatever is "on average" is of no relevance to one's success in overcoming these tendencies unless one uses it an excuse not to try.

Again, a "small" bar interval does not necessarily demand a small target and small profits. The task is to buy support and sell resistance unless something intervenes that forces one to change his tactics. If one grabs small profits, it will have to be because he wants to and not because he has to or because everybody does it.

[brownsfan019]

Ok, I have to ask (time to stir the pot) - as a lurker of this thread and reading some great things (esp DB) I have one question to ask...

Is anyone here actually using this in real-time and making money?

I see a lot of 'after the fact' analysis, which is fine for learning, but I'm really curious if anyone outside of DB can do this when it counts - real-time and real money...

Just curious, not meant to piss anyone off.

[mister ed]

	Quote:	brownsfan019
	Is anyone here actually using this in real-time and making money?

If by 'this' you mean Wyckoff analysis then yes.