[VSA] Volume Spread Analysis Part II

[brownsfan019]

	Quote:	CandleWhisperer
	Note to self: use the words for example else your words will be taken literally. the 10 pts loss is AN EXAMPLE. Do you not understand subtext?

Well, your 'example' here has NO BASIS WHATSOEVER. That's the problem smart guy. When you say that a candle pattern fails 9 out of 10 times and that you will lose money, a little statistical evidence to support this would be nice.

Here's an example of why you can't just rattle off mumbo jumbo - While some sites that teach you trade promise the world, ALL OF THEM fail miserably, incl. the one you go to CW. Yes, some show trades that win, but they all will lose money in the long run.

Note - no evidence to support this, I just felt like spouting something off.

	Quote:	CandleWhisperer
	Funny for one with so much experience you seem to show up on every thread. Why doesn't mr. candle man stay in candle corner, if they're so great? And you're so smart?

Once again, show how often I frequent 'every' thread. It's funny how you have just shown up out of the blue and have nothing meaningful to contribute other than promoting Mark's website... Hmmmm....

Again - go ahead and show me where YOU have explained PA. I showed you where I've done it. How about you? ANYTHING meaningful to contribute here?

That's what I thought. Just another newbie that thinks by paying a vendor he now knows the world of trading.

As for where I go on this PUBLIC forum, guess what? It's public!

I simply provided some ideas to others in this thread that could HELP with their trading. You meanwhile want to get into a pissing match about who's more experienced when it's obvious who the newbie here is... Or wait, let's start a poll to see what others think...

In case anyone doesn't realize this, CW has paid for this service and we can only guess what his motivation here on TL is.

[Ricks Inn]

Sebastian - May I inquire about the tool you were using as the basis of the chart posted in #725? It looks familiar, but not exactly like anything I've seen previously...

[zeon]

	Quote:	Seb Manby
	Dow is showing weakness after the FED cut rates, this shows that the Specialist's took the opportunity to distribute stock they had bought from the public at the lows at around 11800 level, rarely at a loss to themselves of course. Point A, up bar with the high lower than the previous high, and look at the volume! remember that markets do not like high volume on upbars, unless tested immediately. Point B, there is a test and all looks rosy and looking strong at this point. C, A down bar after a test, this is weakness, well this bar says it all, I can now look forward to lower prices, look for a 'No demand' into the 12600 level to confirm the downtrend. And don't forget to post your short trades for all to study. Regards S

Thanks, great post. But why, within the context of the last couple of days, doesn't the "low volume" on the downside equate strength? There's hardly any real selling going on, and after a 500-point rise up to 12600 some kind of pause or consolidation was to be expected.

So, with all due respect, I believe we are going back up to 12600 at least.

[jjthetrader]

	Quote:	dandxg
	You can't just play John Carter's 'pivot plays' willy nilly. Why are you making assumptions about the way I trade? I have never take any education lesson from John or Hubert FYI.

Before you get too pissy I think you misread 'you' to mean YOU, dandxg. It was a broad statement to illustrate your point that you (not just dandxg)can't take pivot plays. It actually wasn't about you, dandxg, at all although you are included in the all that 'you' encompasses, ie you guys, if you happen to trade that way which I was not assuming you did if you're on this thread.

[jjthetrader]

	Quote:	Ricks Inn
	Sebastian - May I inquire about the tool you were using as the basis of the chart posted in #725? It looks familiar, but not exactly like anything I've seen previously...

If you're talking abuot the software, it's tradeguider.

[zeon]

Before the market opened today, I identified various support and resistance levels. Like I said in a previous post on another thread, support was at 1337-1339. These are the horizontal blue lines drawn across the chart.

Price opened above support and just went straight lower, like a knife through butter. It stopped around 1332 before going back to the support area, which should now act as resistance. I'm observing how the volume drops off gradually, so this looks typically like a low volume retracement after a breakout, right?

Then there's a volume peak that pierces the support level but the bar closes right down, and this is the 'shooting star' short signal I was looking for. The volume is much higher then before, so everything is according to plan.

However - and I can't get my head around why this is happening so often lately - price continues higher. I would almost get paranoid, but this would have been the 14th losing trade in a row. I stopped trading for real after 7 though. Perhaps I need to go short when I go long and the other way around. Certainly looks like that could work

I posted this chart elsewhere to, but as other people asked me yesterday to post it here, I did so because it looks like I might be getting more feedback here.

[jjthetrader]

	Quote:	zeon
	Before the market opened today, I identified various support and resistance levels. Like I said in a previous post on another thread, support was at 1337-1339. These are the horizontal blue lines drawn across the chart. Price opened above support and just went straight lower, like a knife through butter. It stopped around 1332 before going back to the support area, which should now act as resistance. I'm observing how the volume drops off gradually, so this looks typically like a low volume retracement after a breakout, right? Then there's a volume peak that pierces the support level but the bar closes right down, and this is the 'shooting star' short signal I was looking for. The volume is much higher then before, so everything is according to plan. However - and I can't get my head around why this is happening so often lately - price continues higher. I would almost get paranoid, but this would have been the 14th losing trade in a row. I stopped trading for real after 7 though. Perhaps I need to go short when I go long and the other way around. Certainly looks like that could work I posted this chart elsewhere to, but as other people asked me yesterday to post it here, I did so because it looks like I might be getting more feedback here.

I pointed out this phenomena a couple days ago. An upthrust isn't an upthrust without weakness in the background. Just forget S&R for a minute and look at this from a VSA perspective. See the Selling climax at the bottom? That's your background. The bar you point out is merely a bar with supply on it. S&R traders may have their orders to sell there and this creates a bit of resistance but there was no follow through. This is why you can't follow 'shooting stars' alone.

[dandxg]

	Quote:	zeon
	Before the market opened today, I identified various support and resistance levels. Like I said in a previous post on another thread, support was at 1337-1339. These are the horizontal blue lines drawn across the chart. Price opened above support and just went straight lower, like a knife through butter. It stopped around 1332 before going back to the support area, which should now act as resistance. I'm observing how the volume drops off gradually, so this looks typically like a low volume retracement after a breakout, right? Then there's a volume peak that pierces the support level but the bar closes right down, and this is the 'shooting star' short signal I was looking for. The volume is much higher then before, so everything is according to plan. However - and I can't get my head around why this is happening so often lately - price continues higher. I would almost get paranoid, but this would have been the 14th losing trade in a row. I stopped trading for real after 7 though. Perhaps I need to go short when I go long and the other way around. Certainly looks like that could work I posted this chart elsewhere to, but as other people asked me yesterday to post it here, I did so because it looks like I might be getting more feedback here.

Zeon, a bit of constructive feedback, but it's easy for me to do in hindsight, so take that for what it's worth.

1. I would have the previous day's high and low on any chart, I have found them to work well for S/R. 1334 was yesterday's RTH low.

2. As it approached that area there is what appears to be a selling climax about 32 so that shows strength. Market has a ton of selling volume at the low, but the candle close well of the low.

3. Then the market begins to stair step higher so I wouldn't short that ( ie. market making higher highs and higher lows ).

4. I am not sure if you generated those S/R areas off that time frame , but I would suggest maybe using a higher time frame to generate S/R if they came of that 5 minute chart. Eiger had some good ideas earlier IMO.

5. Lastly you might want to consider drawing a trend line connecting the highs when in a down trend and when broken, which it was no more shorts.

Hope it helps.

[CandleWhisperer]

	Quote:	brownsfan019
	..... In case anyone doesn't realize this, CW has paid for...

Soultrader or any other moderator. Please note that I have never mentioned the name of the site, the link, or implied if I was sent a pm I would give it. Mark has never done it either. That is not the way he does business. Out of respect to him, I ask that you delete the link to his site.

Also since we cannot ignore a moderator, at least they should be required to act like one.

[zeon]

Eiger, two days ago you asked me post some charts explaining what I meant.
Right now, there's a very good example of what I was talking about then. This is decreasing volume, on support. So is this strength (no sellers left?) or weakness (no buyers left to pick it up)?

This is where I'd take a long trade. Given the odds of my trades, this will probably go down now.