[VSA] Volume Spread Analysis Part II

[zeon]

	Quote:	Ricks Inn
	Check this for a rare main-stream-media reference to this activity: http://business.timesonline.co.uk/to...cle3587090.ece (The first sentence in particular -- this usually doesn't get out, and Tom Williams has spoken of having witnessed this very behaviour within the syndicate he worked for in the 1960s.)

I think that's a different kind of manipulation than the one we were talking about. For example, remember all the spam mails where you are advised to buy this or that stock (usually crap penny stocks)? Apparently it does have an effect on the stocks price, to a certain extent that those who are spreading the rumour can take profit from it. I suppose that's manipulation too.

[DbPhoenix]

Thank you, RI.

If I understand you, then, specialists et al implement the maneuvers that are described by Williams and Ney. But Williams as quoted by Nvesta appears to be saying that they do not exert that level of control. While one may not call this a paradox, it does seem to qualify as an inconsistency.

[Sledge]

	Quote:	zeon
	This is one of the major problems I have with VSA. Last week or so I posted a chart where I saw a long opportunity. However the market reversed before I took profits. When I posted the chart here, I got the response that 'after seeing two down bars' you should've exited. But on what timeframe? Two down bars on 5-minute might not even show up on a 15-min chart, etc, etc. I don't mean any offense to anybody here... I hope I can still receive constructive criticism because I am still trying to find out how best to approach the markets. Everybody's input is appreciated.

Zeon-
Although it may have come across harsh to you, I really was trying to help you. You stated that you thought that taking your profits and banking them was "greedy." Taking the win when you see that turn of events is smart- but that is how I trade. I personally, take what the market gives me. I don't set targets without flexibility. Say I would like 100 pips on a particular trade. That is a target. If it gets to 98 pips and stalls or starts to reverse- you bet your ass I take my 98 pips-bank that money and am happy. Do I feel like some failure that I couldn't get the 100 pips I wanted? Hell no, I'll console myself with the 98 pips of cash I DID make!

No one here or any other message board can tell you how to trade for yourself. No one can mimic anyone elses style or comfort level. I have had some very nice conversations with JJTrader and Eiger. All 3 of us are successful traders in our own right, we all follow parts of VSA, some of us are weighed more heavily in VSA than the others. AND THAT IS OK. No one says you have to take Master the Markets as a Bible, no one says- if you deviate from one word from it- you can't call yourself a VSA purist. No one says you can't question something in VSA- but question it, test it and prove it.

The 7 steps I posted on the board I have seen take shape hundreds of times- HUNDREDS. After that happens over and over- it validates what Tom says- I didn't take his word as bond when I started- I took his concept- watched it in a live environment and said- WOW this guy is for real.
Sledge

[BlowFish]

	Quote:	zeon
	This is one of the major problems I have with VSA. Last week or so I posted a chart where I saw a long opportunity. However the market reversed before I took profits. When I posted the chart here, I got the response that 'after seeing two down bars' you should've exited. But on what timeframe? Two down bars on 5-minute might not even show up on a 15-min chart, etc, etc. I don't mean any offense to anybody here... I hope I can still receive constructive criticism because I am still trying to find out how best to approach the markets. Everybody's input is appreciated.

This answer from a VSA point of view (and from the point of view or most methodologies that employ charts of bars/candles
) would be 'the chart you are trading'. Or in the case you mention above the chart you posted. having said that know one can tell you how to exit all they can do is say what they may have done.

More sophistication can be added by looking at longer periods (bars) for 'context' and shorter periods (even approaching real time) to 'trigger' a trade. For some this can add confusion rather than clarity.

You need to think about what you want to achieve and pick suitable resolution tools. For example a trader trying to capture monthly swings is unlikely to be bothered by price moving against him for 10 minutes or for a few points. Likewise a scalper is unlikely to be prepared to have price move against him for more than a few seconds or few ticks.

[DbPhoenix]

	Quote:	BlowFish
	This answer from a VSA point of view (and from the point of view or most methodologies that employ charts of bars/candles ) would be 'the chart you are trading'. Or in the case you mention above the chart you posted. having said that know one can tell you how to exit all they can do is say what they may have done.

Not exactly. A methodology which places so much importance on bars and the position of the close and the context -- i.e., the surrounding bars, multiple bar intervals, etc -- ought to be able to tell the individual exactly where to exit, or at least tell him in detail what two or three options that are consistent with the methodology are available to him. If it can't, then the methodology is not sound.

[Eiger]

	Quote:	Ricks Inn
	Tom Williams is, of course, not the only one who's written about market manipulation as fact. Though no longer in print, all three of Richard Ney's books books document this (the first two in great detail). Tom has also pointed out that "smart money" is not monolithic, does compete among themselves, and does not consist of everyone who works in the financial sector as a career. Bank investors, retirement fund managers, retail brokers, individual financial planners at places such as HSBC and UBS --- all control very large funds, but almost invariably part of the "herd" (I've been a customer of these in years past, and my HSBC account manager disputed manipulation being a significant factor.) So there is a distinction here. Not till you get to the so-called syndicate, specialist, or market-maker level do you find the folks who have 1) the funding, and 2) the inside knowledge (e.g. where stops are placed, pending large block orders being distributed) which are needed to implement the maneuvers Tom and Richard -- and others -- speak about. I don't THINK this is a paradox; maybe unseemly, borderline illegal, winked at by the revolving door regulators --- but extant none the less. Check this for a rare main-stream-media reference to this activity: http://business.timesonline.co.uk/to...cle3587090.ece (The first sentence in particular -- this usually doesn't get out, and Tom Williams has spoken of having witnessed this very behaviour within the syndicate he worked for in the 1960s.)

I think Ney's books are OOP, and may be somewhat hard to find. Check on e-Bay, though. I just bought Wall Street Jungle for $0.75. Probably my best trade this week

Isn't it in one of Ney's books that the mobster Lucciano said he got into the wrong mob after seeing market makers at work?

Nice post, Rick

Eiger

[Eiger]

	Quote:	BlowFish
	Lets not forget Reminiscences of a Stock Operator by Edwin Lefevre .... Not only that its a cracking good read.

One of my favorite books, and a great study in pool/syndicate manipulation.

A "cracking" good read? I had to chuckle at that. What a great descriptor, and one I hadn't heard before. Is it British?

Eiger

[Ricks Inn]

	Quote:	DbPhoenix
	If I understand you, then, specialists et al implement the maneuvers that are described by Williams and Ney. But Williams as quoted by Nvesta appears to be saying that they do not exert that level of control. While one may not call this a paradox, it does seem to qualify as an inconsistency.

Thanks for that, Db. Maybe the best way to think about this issue is as a continuum -- from interest-to-influence-to-manipulation-to-control. The "smart money" isn't so smart that it always wins! They battle each other (though we retail traders are much softer touches) and win some / lose some. It's not a light switch labelled "Market Control ON/OFF", and while all syndicates attempt manipulation, none (individually or collectively) have the power to fully control. IMO, at least...

[Ricks Inn]

	Quote:	Eiger
	I think Ney's books are OOP, and may be somewhat hard to find. Check on e-Bay, though. I just bought Wall Street Jungle for $0.75. Probably my best trade this week Isn't it in one of Ney's books that the mobster Lucciano said he got into the wrong mob after seeing market makers at work? Eiger

Yeah, my three Ney books reside in the high-mildew section of my library (bought through the used book Amazon partners). <SmileySneezing emoticon>

The Luciano story is a hoot (even if apocryphal, but I THINK true). Ney also is supposedly one of two celebrities (along with Corvair-era Ralph Nader) who was dis-invited as a guest from Johnny Carson's "Tonight" show, since they were supposedly just too dang incendiary. Thx, Eiger.

[DbPhoenix]

	Quote:	Ricks Inn
	Thanks