[VSA] Volume Spread Analysis Part II

[Eiger]

And we do tag 1365.50, just like a magnet. I love this stuff

[Eiger]

	Quote:	Sledge
	I'd like to ask your opinion on Pivot Points if I may? Do you take the previous day bar and utilize its high/low/close to calculate pivots for the next day- IN ADDITION to having a weekly set of pivots? So to simplify. On Saturday night you sit down and look at the Weekly Chart-you take the high/low/close from this prior week (Ending Close Friday) for the upcoming weeks pivot points (these would be your "wider net" pivots) Then you sit down at EOD every day of your market and take High/low/close of DAILY chart and have those pivots set for next day? Also there are about 4 common pivot "sets" out there- you use "Floor Pivots" then? Thanks in advance! Sledge

Hi Sledge,

I don't use pivots of any kind - sorry, I am a pretty plain vanilla, basic kinda guy . I just use the highs and lows on the daily and hourly, and note weekly S&R as well.

[Sledge]

Eiger-
So you don't use "pivot points" you just look at the weekly high/low and previous day high/low to gauge trades?

Ok, so if yesterday low was 1.999 and you see your trade right now heading towards 1.999 with increased volume you are anticipating a break through. If you see average volume, you are more on point to wait and see if this is your exit (a la bounce?)

Hoping to clarify what you use, as it seems to be simple- yet effective.
Thanks,
Sledge

[jjthetrader]

	Quote:	Sledge
	Eiger- So you don't use "pivot points" you just look at the weekly high/low and previous day high/low to gauge trades? Ok, so if yesterday low was 1.999 and you see your trade right now heading towards 1.999 with increased volume you are anticipating a break through. If you see average volume, you are more on point to wait and see if this is your exit (a la bounce?) Hoping to clarify what you use, as it seems to be simple- yet effective. Thanks, Sledge

Hey Sledge, FX is a different beast. You'll get a feel for how much volume it will take to penetrate any resistance in your market. It's just like breakout volume. You get an idea if a breaout is legitimate by it's volume.
Don't forget about spread of the bars to. Increading volume heading toward resistance is going to signal a possible reversal if the spread is narrow. "End of a Rising Market".

I use normal floor trader pivots calculated on the previous days US session only. With FX there's that controversey over when to start calculating them. But you could do weekly and monthly fine.

Zeon, it was a close support point between the previous days low and the floor trader S1 for today. That's why Eirger and I appeared to have similar numbers.

[dandxg]

	Quote:	Eiger
	FWIW, maybe this will help clarify. This is what I do for Support and Resistance. I do the same thing on the daily and weekly charts. I update them every night, and keep the hourly on the screen all the time. It is part of VSA. Tom Williams in his book, the Undeclared Secrets, says us day traders would be well served by paying attention to the daily and weekly charts. Can you see the structure of the market and how the prior resistance at the 1336.50 area has become support and has acted like a magnant for this market today? I don't know if we will actually touch it, since volitility has dropped so low, but we are within a point or so of it. When you start to frame out the market like this, you will begin to see how much we trade around the daily highs and lows, and how the hourly and even weekly S & R become so important. Eiger

Eiger, thanks so much for posting that info on S/R. I have been working on coming up with a method of just trading VSA/PV when it comes into a "relevant" area of S/R. If you don't mind sharing do you place more weight on high and lows for a given time frame or the number of times an area has hit a certain area. For example, past price action could take out a trading zone by a few ticks and then fall back into the previous zone. Would you place more weight on that new high or the zone with many hits? Hopefully, my question makes sense. I would post a chart, but I am on relative's computer for a few days.

[Sledge]

	Quote:	jjthetrader
	I use normal floor trader pivots calculated on the previous days US session only. With FX there's that controversey over when to start calculating them. But you could do weekly and monthly fine.

JJ-
Do you tend to use the US session because that is when you personally take your trades?
Since I like to get at least part of the London session in my trades- would it be wise to calculate them as I posted? I dabbled with Pivot Points for a while and did have some success. Somewhere along the line they fell by the wayside with information gathering and trying of new ideas. Maybe it is time to re-implement them!
Sledge

[CandleWhisperer]

	Quote:	brownsfan019
	I honestly do not care what it's called - hammer, doji, spinning top (actually would probably be a spinning top more than a doji ) Point is, great trade there. And it was easy - high volume bullish candle signal. I see all this stuff in this thread making trading so much more difficult than it needs to be IMO. There's one post asking if this was a trade and then another that says it was textbook... Well, if it was 'textbook' shouldn't it be obvious? I mean, there are some patterns that require discretion regardless of the trading method, but to call something 'textbook' would indicate to me it should be incredibly obvious. Not sure what was so unreliable about a spinner that produced +8 for me... I don't know, for me, that's reliable enough. It moved approx. 13.5 pts from the close, so if that's not reliable enough, then yes, candles are not good for someone that must get more. It works for me as +8 is a nice trade. My point was simple - to take something that took at least 3-4 pages of this thread to dissect that literally took about 1 minute analysis in the candlestick world. Result was the same - a long that worked well - but it did not require question after question to get there. I guess I'm that voice that won't go away in this thread b/c I see so much effort being exerted here for the EXACT same thing that us candle traders are doing, yet it's as plain as day. In other words, I have yet to see ANY advantage that VSA provides that your standard candlestick analysis does not... Oh boy... here comes the hate mail now...

First, I would put Mark's white hammer pattern (Found on elitetrader) up against any of yours or Steve Nison's. The text book/internet patterns are not reliable.

Second, unreliable does not mean on trade can't make 8 pts. It means for every 8pt trade there are 10 2pt losses. Not very reliable in my book.

You still have not shown any understanding of the Price Action. Why?

As far as "text book" VSA, we are not all on the same level. Surely a newer trader will miss an idealized set up. Even a seasoned trader misses things every now and then. If you want to go this route, you can't say with certainty that was a hammer or a doji or a spinning top. And I bet if you put a poll on the candle thread you would get many different responses. By you definition, very little is text book where candles are concerned...........

[dandxg]

	Quote:	Sledge
	JJ- Do you tend to use the US session because that is when you personally take your trades? Since I like to get at least part of the London session in my trades- would it be wise to calculate them as I posted? I dabbled with Pivot Points for a while and did have some success. Somewhere along the line they fell by the wayside with information gathering and trying of new ideas. Maybe it is time to re-implement them! Sledge

Sledge, for the longest time, about a year I used floor pivots for the ES and ER and they worked, but too often price just smoked through them without a pause. Part of problem I believe with using floor pivots is which one do you use? There are 5-6 formulas I believe.

I don't post this to rain on your parade by any means, I hope you have better luck with them than I have had in the last few months. Just some food for thought.

I do believe in using PDH and PDL and looking to supplement them with some other logical S/R areas. I have been tinkering with MP and to me the it makes sense because it based on PV which is what VSA is, but when the market gaps hard and its far from the previous day MP levels what to do then? This is what I find myself thinking. This is the reason for question above to Eiger about S/R.

[Eiger]

	Quote:	Sledge
	Eiger- So you don't use "pivot points" you just look at the weekly high/low and previous day high/low to gauge trades?

Unbelievable, isn't it? I was just taught to use the actual price levels painted on the chart. These work so well that I never felt the need to use pivots.

	Quote:	Sledge
	Ok, so if yesterday low was 1.999 and you see your trade right now heading towards 1.999 with increased volume you are anticipating a break through. If you see average volume, you are more on point to wait and see if this is your exit (a la bounce?)

Remember, I am trading the S&Ps. Cable trends a lot; the S&Ps is more of a counter trend market. Most of the time I will have my exit just below/above the resistance or support as a target for an exit. I know there will be activity there and I want to get filled. If it goes through it and continues, I just wait for a retest of that area or a retracement, and if appropriate, reenter in the direction of the origninal trade. My worries are more about price not making it to the S/R level, which sometimes happens. JJ talked about what price and volume should look like on the approach, and as usual, he is spot on.

[CandleWhisperer]

	Quote:	zeon
	What strikes me in a lot of these posts, is that pin-pointing the entry always seems fairly easy, but determining the target is hardly ever discussed. Perhaps you could tell us also a bit about where or when you would exit your long trade? Or what signals you'd be looking for to exit that trade? Thanks in advance.

Very good question. Thanks for it. I am afraid you will find my answer wanting however.

If you had asked my this as little as two weeks ago, I would of said I don't believe in price targets. I like to trail my stop and let the market take me out of a trade.

That is what I would of said then , today it is a bit different. Since I am a client of a particular site, I do not want to say anything about targets. I will give a hint: it is in a least 2 threads in this forum.

Even with that, I still like to simply trail my stop. I move my stop up based on the appearance of WRBs. This method is detailed by Mark in the WRB thread I believe.

By the way, Tom Williams says markets will trend further than one expects them too. So all the more reason to not expect and simply allow the market to do what it wants to do.