[VSA] Volume Spread Analysis Part II

[Sledge]

	Quote:	zeon
	Unfortunately as I'm typing this, price has just come down again, approaching the entry-point hmm.

Since I'm literally trading this blind, my assumption was that if it is waivering a bit up and down- don't panic.
A. People who went short may be closing out of positions
B. Trailing stops or Stop Losses are being triggered

So this will pop a tad bit of supply into the market. It may range around down on that bottom for a while. How low was the volume on the shakeout?
If it was HIGH, it may test again (They will be looking to see if the floating supply is gone!)

I'd hang tight- without seeing the chart- I'd say you are sitting pretty on a long!
Sledge

[zeon]

	Quote:	zeon
	Unfortunately as I'm typing this, price has just come down again, approaching the entry-point hmm.

What the ****? 12300 right now... it just broke lower like nothing.

[brownsfan019]

	Quote:	Nvesta81
	I'm just a newbie compared to you guys but from my observations I'd say candle formations and VSA compliment eachother very nicely. They sort of go hand-in-hand, no use comparing one against the other. Use both and things become much clearer. I'm sure there are plenty of trades that can be taken just by using candles alone, but VSA can give you a greater understanding of the potential of certain moves. Just my humble opinion...

I couldn't agree more. That's all I was trying to do - help some guys out with a little thing that could aid in their trading.

Then it turned into a pissing match of what the candle was called... what a joke. The name of the pattern is useless but that was falling on deaf ears.

[zeon]

	Quote:	Sledge
	Since I'm literally trading this blind, my assumption was that if it is waivering a bit up and down- don't panic. A. People who went short may be closing out of positions B. Trailing stops or Stop Losses are being triggered So this will pop a tad bit of supply into the market. It may range around down on that bottom for a while. How low was the volume on the shakeout? If it was HIGH, it may test again (They will be looking to see if the floating supply is gone!) I'd hang tight- without seeing the chart- I'd say you are sitting pretty on a long! Sledge

I wish that was the case.
Here's what happened next.


ym_wtf.GIF

[Sledge]

	Quote:	brownsfan019
	I know this is not standard VSA work, but just take a look and see if it can help in your trading at all.

Bf-
It ALL helps. Luckily for me I started trading with candles and later switched to Bar Charts, so I feel lucky I can look at a Candle Bar and still see a Bar Chart form in my brain.

As far as VSA- I see a WSB down, closing on the high with Ultra High Volume-looks like stopping volume to me and a "licking my chops" point of entry to go long!

I'd ask you keep posting what you see, this is the second one of these you posted, in as many days, and it just keeps it "top of mind" in my brain (hopefully other posters as well?!) To be able to "See it, know what it means, react"
Sledge

[Sledge]

	Quote:	zeon
	I wish that was the case. Here's what happened next. Attachment 5705

Zeon-
Ok well with the initial chart you posted, you knew to look out for the Downward test (which came in around 12330) So you see the test, and enter your long at 12330. You ride that to the 12420. You hang on and let that bar form and when it forms into an upthrust, that would have been my signal to exit for now.

At very worst, utilize what Tom Williams says, you see TWO DOWN BARS IN A ROW (in this case) you would have exited at 12370 and still made profit.

One other point, look at the volume on the down move that headed towards the resistance- it was decreasing- yes, but look at it in perspective to the PREVIOUS down move that didn't break it- it is higher, it had a great chance to break that resisitance- and indeed it did!

Hope you got in low and exited on that upthrust! Or shorted after it!
Sledge

[zeon]

	Quote:	Sledge
	Zeon- Ok well with the initial chart you posted, you knew to look out for the Downward test (which came in around 12330) So you see the test, and enter your long at 12330. You ride that to the 12420. You hang on and let that bar form and when it forms into an upthrust, that would have been my signal to exit for now. At very worst, utilize what Tom Williams says, you see TWO DOWN BARS IN A ROW (in this case) you would have exited at 12370 and still made profit. One other point, look at the volume on the down move that headed towards the resistance- it was decreasing- yes, but look at it in perspective to the PREVIOUS down move that didn't break it- it is higher, it had a great chance to break that resisitance- and indeed it did! Hope you got in low and exited on that upthrust! Or shorted after it! Sledge

I take it you mean "support" when you said resistance?

And no, I didn't exit because the plan is to ride the trade till the next resistance level. Doing anything else would mean I'm just greedy and taking profits quickly.

I'm sorry, but I don't know how much worse this can get now.

[Sledge]

	Quote:	zeon
	I take it you mean "support" when you said resistance? And no, I didn't exit because the plan is to ride the trade till the next resistance level. Doing anything else would mean I'm just greedy and taking profits quickly. I'm sorry, but I don't know how much worse this can get now.

Well, I'm not sure--if the market is as a whole (larger timeframe) is in a downward trend, and it is looking for lower prices, I'd say resistance is appropriate.

My personal trading style may differ from yours, but I honestly would not think that taking your money off the table when you saw such a drastic retreat is greedy- it is smart.

Sledge

[CandleWhisperer]

I may be talking out my backside here, but I think you are across the pond. If so then 1230 on your chart equates with 830 NY time. My analysis is based on this assumption.

a: This is the key candle. WRB formed when there was a news release about Jobless claims.

b: High volume up bar that closes in the middle of its range. The close in the middle of the range shows that supply has entered. If all the volume was buying (demand), then the close should not be in the middle.

c: this is a test. It is also a squat. Some demand comes in here.

d: The very next bar is weakness as we have an up bar on volume less than the previous two bars closing in the middle of its range. This is no demand.


e: Price moves up a bit however. Yet we get a wide spread bar that closes on its highs on volume less than the previous two bars. This is no buying pressure. Again weakness.

f: Up thrust. Closing on the lows of the bar on greater volume and making a higher high than the previous bar. Note the close is now equal to the level of the close on the test.

h: the chart says hidden selling, however there is nothing "hidden" about it. We have a widespread down bar on high volume. Most down bars on high volume are selling. If the next bar had been up then there would of been hidden buying.

edit: sorry neglected to say that the first sign of supply was on a.

[brownsfan019]

	Quote:	CandleWhisperer
	I may be talking out my backside here, but I think you are across the pond. If so then 1230 on your chart equates with 830 NY time. My analysis is based on this assumption. a: This is the key candle. WRB formed when there was a news release about Jobless claims. b: High volume up bar that closes in the middle of its range. The close in the middle of the range shows that supply has entered. If all the volume was buying (demand), then the close should not be in the middle. c: this is a test. It is also a squat. Some demand comes in here. d: The very next bar is weakness as we have an up bar on volume less than the previous two bars closing in the middle of its range. This is no demand. e: Price moves up a bit however. Yet we get a wide spread bar that closes on its highs on volume less than the previous two bars. This is no buying pressure. Again weakness. f: Up thrust. Closing on the lows of the bar on greater volume and making a higher high than the previous bar. Note the close is now equal to the level of the close on the test. h: the chart says hidden selling, however there is nothing "hidden" about it. We have a widespread down bar on high volume. Most down bars on high volume are selling. If the next bar had been up then there would of been hidden buying. edit: sorry neglected to say that the first sign of supply was on a.

So is there any actual trading taking place here or just a bunch of observations after the fact? Where are trades actually taking place on your analysis CW? I've laid out where I enter and the potential profit. Even told you when I took +8 and it ran for more.

Just curious if there is real t