Topic Of The Month June, 2009

[Topic Of The Month June, 2009]

I found this post on "CouldaWouldaShoulda (The Wyckoff Forum)" interesting and have nominated it accordingly for "Topic Of The Month June, 2009"

[[VSA] Volume Spread Analysis Part II]

Note first the NQ. You've got the aforementioned climactic volume and blended bars that create a hammer (that's the blended bar to the left of the two bottom climax bars). Then you've got the retest, which makes a higher low on lower volume. These two bars also form a hammer when blended (you can do that in your head).

 

 

Now the ES. Here you have essentially the same dynamic except that the retest is a lower low, not a higher one. Also the blended bars do not form hammers that are quite so in your face.

 

 

Other than that, the principles are the same: climax, retest, Go!

 

Sorry if I gave anyone a headache.

 

.

 

 

Db ,

Can you be more precise about the "go" part on these charts-- a preferred entry level?

 

When trying to find a balance between what you call "information risk" and "price risk,"

 

1 Is entry taken at the open of the bar following the retest?

 

2 Or, at the point where the bar following the retest moves above the close of the re-test bar?

 

3 Or, at the point where the bar following the re-test moves above the high of the re-test bar?

[[VSA] Volume Spread Analysis Part II]

Thanks Db

You answered extremely well.

[[VSA] Volume Spread Analysis Part II]

It's not a question of being precise and perfect. It's a matter of locating support and resistance accurately, then monitoring traders' behavior when those levels are approached. If one monitors that behavior in terms of where a bar closes, then he is inserting one or more filters between what is happening and his perception of it.

 

If one can't read the signals, it's most likely because he's trained himself to focus on bars rather than on price movement

 

Hi Db

I have quoted above from 2 different posts you have made - and could have picked a couple more. There is something you are saying that I would like to focus on - if you are willing to elaborate.

 

 

First, in what specific ways are you " monitoring traders' behavior when those keys levels are approached." ?

 

Second, if I hear you correctly, you choose again and again to focus on market flow, and not dwell on a particular bar interval or bar close. That makes sense.

 

If I interpret VSA correctly and can oversimplify VSA, then "market flow" is composed of a balanced interpretation of what is happening in the background as compared to what is happening as the current bar forms.

 

Can you elaborate some more on how you read "market flow" as price approaches support and resistance?

 

 

 

One determines an expectation according to the information that is available to him at the time he determines the expectation. In the next instant and the following instants, more information becomes available which may, all or in part, change the expectation, all or in part.

 

 

I don't want to over complicate this. On the other hand, I don't want to miss what you are saying.

 

As you approach a "decision point," is there some over-riding anchor point from which you are interpreting this constant flow of new price information?

 

When you say to yourself, - based on this new flow of information - my earlier expectation is not developing. Or when you say to yourself, my earlier expectation is developing. What are the decision-time "signs of flow" that you are looking at ? Are there specific signs that must be in place?

 

Is your "decision time" interpretation of flow any different than the classic VSA signals - such as volume, range, close, prior swing highs, etc that are discussed so much on this board?

 

Picking up on on one of Eiger's recent posts, our brains [ emotions ] are "hard wired" and vulnerable to odd behavior at "decision time" - and especially vulnerable when facing a constant assault of new information.

 

Rodney

[[VSA] Volume Spread Analysis Part II]

In fact have the highest respect for Tom Williams who made a great effort over 10yrs back to reveal all the market manipulation in his "Undeclared Secrets........."

 

BearBull

I have the BootCamp CD and Master the Markets.. Did you find that the "Undeclared Secrets" added new value to the more recently published CD and Book?

 

My intent has been to highlight the fact that there is enough material on Price/Vol, VSA in these forums and in the numerous highly informative threads by Dbphoenix elsewhere (also from relatively inexpensive books , Justin Mamis, Marcel Link, Lukeman, Vadym Graifer) for anybody to learn and with hard graft, come up with setups/Strategy/tactics, test them out thoroughly in realtime and then apply with consistency and discipline, there is absolutely no need to throw away their hard earned cash on expensive software or private tutoring.

Many of these live private tutoring classes are by those who have mastered the art of creating illusion , make general remarks on expectations where price would go, same time continue babbling on previous support/resistance, the mouse continuously moving all over the chart, prices meantime move on, if it is in the desired direction claim the status of the all knowing messiah, if not point out why, the audience so much want to believe, they do not notice the illusion;) very similar to those Psychic (clairvoyant, contacting the dead etc) shows you see on the TV;)

 

Well said.

As a beginner, I too am leery of the many gurus who are so eager to exploit a beginner's need to learn. Hmmm... does this form of salesman exploitation sound a bit like the manner in which deep pocket investors exploit the sheep in the live market - with patterns such as shakeouts, holding the bag, etc ?

 

At any rate, I am deeply grateful for the owners of this website, and especially the VSA thread. It is the only place i visit.

 

One of the things I especially appreciate about this VSA thread, is that the same concepts as taught in the original books and Cd's are discussed in this thread with so much more clarity.

So many contributors here are not only doing an outstanding job at explaining VSA, and patiently giving so much of their time to us.

But, these master contributors also seem to enjoy helping beginners like me.

 

I follow along [stumble along ?]. Studying their examples over and over, I feel that I am tracing their hard-won footsteps through a steep and winding learning-curve.

 

Like learning to ski from a master skier.

 

Rodney

[[VSA] Volume Spread Analysis Part II]

great, sounds like your making progress, keep it up.

 

Regards S

 

Thanks. On my real time simulator I am making great progress, and importantly consistent progress.

I now have a small account ready to trade live - as well. Just have not pulled the trigger there.

 

Juggling the concept of immediate "back ground" with "what is now developing", and then add to that what might be anticipated is kind of like surfing.

I know what is in my immediate background - the size and shape of the wave swell which is pushing me forward. I know what is now developing - as I can feel beneath my feet and the board things like the current strength ,current speed and angle.

And, of course, I must anticipate what is straight ahead.

 

So there's my crude metaphor.

However, the part of VSA that I find most elusive to master is the relationship between the background [and background volume] in comparison to the newly developing action in the current bar, and current volume.

 

Sometimes it seems that a small change in the current bar action being made on relatively lower volume than the huge volume found in the background, can bring a sudden end to a significant turn that recently formed in the background and that so recently occurred on huge volume.

 

This can be such a subtle shift to detect.

 

Does this observation make any sense?

[[VSA] Volume Spread Analysis Part II]

Hi Rodney;

 

yes is the answer to your question, it appeared that strength might be returning to the market.

 

Regards S

 

Thanks Seb.

amazing what can go through one's mind in such a short time bar. Just wanted to be sure I was basically on the same page as you intended.

 

I like your silent videos.

 

But I also liked a video in which you spoke about what you might "anticipate" - not predict - what the next bar will be.

 

That anticipation - with price action background as the foundation - helped me to focus on what I would anticipate. A helpful eye opener for me.

 

Thanks again,

Rodney

[[VSA] Volume Spread Analysis Part II]

Thanks Seb

Just want to confirm what might have been going on in your analysis when you closed out the trade at that specific bar.

I might have continued the trade longer.

 

I saw a high volume down bar closing at the lows, followed by the exit bar -- a low volume bar with a narrower spread. And, I note this bar spent much of its time near or above the midpoint.

 

Is it the narrow range and midpoint activity on that bar that triggered the exit?

[Exclusive Joel Pozen Webinar on Feb. 20, 2008]

Hi,

 

We will be hosting an exclusive trading webinar on Feb. 20, 2008 from 9:30am with Joel Pozen from http://www.tradingrealization.biz.

 

Important note: All registrants will need to call-in to gotomeeting to receive audio. Phone fees will apply based on gotomeeting rates accordingly. I would recommend skype minutes as the previous webinar cost me $3 for a 2 hour presentation.

 

 

I am new to this.

 

Can I just dial in directly through my own telephone - TW Digital Phone ?

 

That would cost me zero dollars and zero cents??

 

Thanks.