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sds
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Posts posted by sds
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Hopefully, attached should be an example of "no demand" (at least as I understand the term)I am not able to understand one thing.
Consider the right hand side of the dotted vertical line. There is move down till 1420.
But if instead of a move down, had there been a move up then I would have said there is no supply, at the dotted line.
Things happened in the past could easily be analysed and concluded. But I am not able to apply logic on the current scenario.
Perhaps PivotProfiler can throw light on this.
sds.
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No matter what style you trade and position management techniques you use, if its a low odds trade, you will lose more money in the long run. Medium odds trades can either make or break your trading profitability. And high odds trades are usually the trades that are the emotionally scariest to take. However, if entered properly will provide the easiest and most rewarding profits.Hello lrushing,
Could you explain me what exactly you mean by Low, Medium, High odd trades?
sds.
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Staggered... hm, a new word for me (I'm not native English speaker). I called it ladder stop. Did I get you right and this is what you call staggered (see image below)?
Trailing stop?
Hi al_sellatmarket,
Yes, you got it right.
The idea behind this is to avoid a loss when market takes the obvious stops out before making the move.
Instead of applying a particular price as a initial stop loss, have a zone.
generally useful for position traders.
sds.
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Hi there,Wondering how I could practice my focus? I see great things when I look at a chart as it's happening, but for whatever reason I'm not paying attention to a setup as it's happening as best as I'd like. I'm seeming to be looking for one particular setup, and all else is being blocked, while other great setups happen. Just curious what you folks do to practice your focus?
THANKS!
Yoga and Pranayama (Breathing exercise).
Without breathe, you will not alive. Breathe controls us (If you are angry, anxious then respiration increases).
How about controlling breathe to control yourself. This is what Pranayama is which helps me a lot.
sds.
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I will attest to trading a single car vs multiple cars. Basically, my story is such. I started day trading after realizing I wasnt the kind of guy that liked holding a position overnight. When I started, I said...I will trade 1 car until I felt comfortable, then trade 2.That was about 6 months ago. Then, one of the board members (actually a few) taught me about the wonderful thing that is trading with multi-contracts. Money Management starts to become amazingly wonderful, and if I had done this from the get go...then I'd have saved a LOT of cash on losing positions.
This is how I do it right now. After 5 YM points, I cut one car off and move my stop to breakeven - 5. Now I'm in a scratch trade at the worst. Then, my other I will take off at +10 if the market conditions warrant that, or I will take it off at +15. Many of my ultimate 10 point losses in the past would have been avoided had I used this strategy.
Thanks TinGul,
If the position moves against you, do you exit out of it at once?
Cut the loses down and let the winners run. This is okay. But have you or anybody tried applying staggerred stop losses?
sds.
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sds - I trade multiple contracts, but simply to get the returns that I am looking for. With that being said, I used to do something like Tin illustrated for us here, but after a real hard look at arbitrary fixed profit levels, I am focusing my efforts on exiting based on 'what the market is telling you' vs. holding and hoping... I started a thread here in case you did not see it - http://www.traderslaboratory.com/forums/f34/wide-range-bodies-big-candles-1480.htmlI have found that having set profit levels out there is great when they are hit, but you really can 2nd guess yourself when they are almost hit. For example, I remember a trade that was last week or the week before on the YM. My profit target was at +20 based on the strategy being used at that time. It was a short and looked great! The move went exactly 19 points and not one more. My order was just sitting there - an MIT order actually. It just had to move one more point and I was out with a nice trade. Well, that one more point never happened... Talk about kicking yourself in the ass over that...
I am following the thread " Wide Range Bodies or 'big' candles " started by you. (very nice thread, thanks.)
I have read nearly all the posts those you had posted. Based on that what I feel
is that you have an exit strategy that is perfect for you.
The idea behind this thread is not to find the best position management
strategy, but to know the different position management strategies that traders are
applying (preferably with the type of trading style).
based on the style of trading and personal comfort, a person can
- Exit all of the positions at once.
- Exit partly and then with trail stop.
- Go on adding up position by keeping risk the same.
Again the entire thing depends on the person and his comfort level.
In my case,
I do not fear of holding the position overnight. Because I am risking the money
which I am comfortable to loose (which does not affect me financially and
psychologically).
Based on this statement, initially I used to trade single contract. Then I
started trading multiple contracts.
Brownsfan019, Read your example of +20 target.
Based on my psychology:
e.g. I am long at certain contract.
My feeling is, after +19 if market is telling (giving a clearcut signal) that it will no
may not go on in my favour, then I will liquidate half the position and move the stop to breakeven.
If any signs/patterns do not suggest the downmove, but still not moving in the direction of my favour, I will move the stop to breakeven.
What I want to see is the balance of fear and greed.
sds.
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Gaps are filled.Interesting early morning action in the Euro.
Check out the chart below.
First we see a dark WRB followed by a GAP in price. Note the first candle with a double arrow. Notice that the volume is ultra high and the bar closes lower than the previous bar and off of its low. VSA teaches that this is a bar that may have buying within it. Now the next bar is key. It turns out to be a WRB, but the fact that the bar is up means the prior bar MUST of had some buying contained within it.
Now we move to the white WRB itself. Note that this bar creates a zone or range where we get a change in the supply/demand dynamic. We also know that the market does not like wide spread up bars on ultra high volume because of the possibility of hidden selling. In this case, however, the volume actually fell from the previous bar and is not ultra high.
We move to the next candle with a double arrow below. This is a doji that closes equal to the previous bar and in the upper portion of its range. Volume on this bar is Ultra high. There is SUPPLY in the market at this stage. Price moves down from here.
Next candle, closes in the upper portion of its range and higher than its open. Volume again is extreme. Here we have Demand showing itself. In other words, Demand is swamping Supply on this bar. SOMETHING HAS CHANGED. Notice that the next bar closes in its middle, has an equal close and volume drops off.
The Last bar closes on its high on volume that is less than the previous two bars. Although it does not make a lower low, this is a 'test' bar. The Smart Money is testing for supply and finds none. Now price is poised to go up and fill that gap.
Hello PP,
As I said earlier, I am quite new and learning price action.
Could you commnet on my take on the chart you had posted.
Can I say that within the range of white WRB, there is demand and also there is
a selling pressure. If the demand had not there we would have got close at the
lower end of the candle.
At the later stage the white candle (which you have marked with double arrow)
might be indicating change in buying/selling pressure.
sds.
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We move to the next candle with a double arrow below. This is a doji that closes equal to the previous bar and in the upper portion of its range. Volume on this bar is Ultra high. There is SUPPLY in the market at this stage. Price moves down from here.Hello PP,
Nice post and analysis.
But I did not understand, the statement which I have marked in the Bold.
Could you explain, how did you arrive at this point that there is supply in the market?
sds.
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PRICE ACTION:For me, price action is just that-the action of price and the price bars (candles). How wide is the range of the bar? Is price up from the prior interval? Is price making higher highs or Lower Lows? Is the spread of this bar wider than the spread of the previous bar? Is the close on or near the high of the range of the bar? Are we closing higher than the open more than closing lower than the open? These are the types of things that PRICE ACTION encompasses.
A much more esoteric understanding of price action involves CANDLE FORMATION. Not candle formations, but the formation of an individual candle line. Does the candle end the period with price on the high, but actual only traded to the high in the last 10 seconds of the 3 minute bar. Did price trade down to the low of the bar and remain there the entire interval? If price immediately trades down to the low (not known till close of period) and stays there, the was more selling pressure than buying pressure (leaving volume aside for the moment). Does price move up and down through out the bar's range and then close in the middle and equal to the open? Well the action shows indecision. Note that this is a Doji, but no knowledge of candlesticks could tell you that the bar is a bar of indecision.
These are the elements of PRICE ACTION for me.
SUPPLY/DEMAND:
1. First my perspective is from VSA
2. Read selling (supply) and buying (demand).
Before you do 2, however, it is best to understand supply and demand via the stock market. Supply means the actual stock being placed into the market. Like anything, too much tends to lead to falling prices. Demand means stock being taken out of the market. If there are many people chasing few goods price will tend to rise. That is just basic Econ 101.
Now in futures and currencies we can substitute supply with selling and demand with buying. Contracts are created by both a buyer and a seller so there is always a contract created. In stocks the amount of stock is "finite".
VSA teaches that strength comes in on down bars and weakness comes in on up bars. Strength is buying (demand) and weakness is selling (supply).
One needs to look at where the close is in relation to the size of the spread, the volume on the bar, the close in relation to the prior bar and the close of the next bar. All of these need to be looked at to determine if the high volume is associated with supply or demand.
Check out Tradeguider.com if you want to learn more about VSA and the CBOT has a few webinars. Continue to read this thread and others for more understanding.
Hello PivotProfiler,
You had already given some great examples, e.g.
http://www.traderslaboratory.com/forums/34/vsa-volume-spread-analysis-1369-7.html
Could you post some examples of your analysis of WRB, VSA in the TREND.
sds.
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Position Management plays an important in the successful trading.
Still, you visit any trading related forum, you get least information/discussion regarding this topic.
This forum is already helping me out in understanding market dynamics.
I think, its not a bad idea to learn about position management from experienced traders out here.
Please educate me with regard to position management.
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PRICE ACTION:For me, price action is just that-the action of price and the price bars (candles). How wide is the range of the bar? Is price up from the prior interval? Is price making higher highs or Lower Lows? Is the spread of this bar wider than the spread of the previous bar? Is the close on or near the high of the range of the bar? Are we closing higher than the open more than closing lower than the open? These are the types of things that PRICE ACTION encompasses.
A much more esoteric understanding of price action involves CANDLE FORMATION. Not candle formations, but the formation of an individual candle line. Does the candle end the period with price on the high, but actual only traded to the high in the last 10 seconds of the 3 minute bar. Did price trade down to the low of the bar and remain there the entire interval? If price immediately trades down to the low (not known till close of period) and stays there, the was more selling pressure than buying pressure (leaving volume aside for the moment). Does price move up and down through out the bar's range and then close in the middle and equal to the open? Well the action shows indecision. Note that this is a Doji, but no knowledge of candlesticks could tell you that the bar is a bar of indecision.
These are the elements of PRICE ACTION for me.
SUPPLY/DEMAND:
1. First my perspective is from VSA
2. Read selling (supply) and buying (demand).
Before you do 2, however, it is best to understand supply and demand via the stock market. Supply means the actual stock being placed into the market. Like anything, too much tends to lead to falling prices. Demand means stock being taken out of the market. If there are many people chasing few goods price will tend to rise. That is just basic Econ 101.
Now in futures and currencies we can substitute supply with selling and demand with buying. Contracts are created by both a buyer and a seller so there is always a contract created. In stocks the amount of stock is "finite".
VSA teaches that strength comes in on down bars and weakness comes in on up bars. Strength is buying (demand) and weakness is selling (supply).
One needs to look at where the close is in relation to the size of the spread, the volume on the bar, the close in relation to the prior bar and the close of the next bar. All of these need to be looked at to determine if the high volume is associated with supply or demand.
Check out Tradeguider.com if you want to learn more about VSA and the CBOT has a few webinars. Continue to read this thread and others for more understanding.
Great post pivot, very educative.
brownsfan019 and yours post really gave me direction.
This thread is really helping me to understand the dynamics of the market.
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sds - I attempted to write a response earlier and got an IE error and off it went... that is frustrating. I'll try to retype it again here...You will probably get a few responses, so make sure to read each one and you can see what you like.
PRICE ACTION: For me, price 'action' simply refers to the amount of trading activity or lack thereof. The more 'action' the more movements we usually see. There's action going on all day, but some are more active than others.
PRICE ACTION S/R: This would mean the amount of trading taking place at important levels. Many traders use Support/Resistance Levels, Pivot Levels, etc. to define areas of possible trade setups. Usually these are areas where good 'fights' and price action may occur. Pivot provided a great chart here: http://www.traderslaboratory.com/forums/attachments/34/1137d1174681663-wide-range-bodies-big-candles-2.png You can see that he annotated the first doji on high volume and then a subsequent hammer at the same level on high volume. This would show that the bulls are clearly defending this area and that the bears are not willing to push it down further. So, that would visually tell us that this level is important to many bulls. So many that they are willing to step in to a bear charge and fend them off. This in turn created the double bottom formation that many traders use. If interested in S/R levels, I would recommend reading some books from Steve Nison as he talks about S/R levels in conjuction with candlesticks quite a bit. And Pivot provided a real example here.
Speaking more on this topic, I personally use VBC charts - http://www.traderslaboratory.com/forums/f34/volume-based-candles-how-profit-1414.html - in my analysis. I prefer charts like this, some like minute charts with volume broken out as in Pivot's example.
JUDGING ACTION AROUND S/R: In Pivot's example, we see a doji and hammer at the same level with high volume. That would be reason enough for me to take the trade. How you filter the action around S/R levels is up to you. Some may add an indicator, some may add market profile, etc. etc.
Thanks for your explanation, brownsfan019.
This post has definitely given me a direction to start thinking.
To be honest, it has really given me start.
btw, I love your emphasise on the simplicity in the trading.
sds.
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sds : this is a nice and simple article on S&R Support and Resistance - StockCharts.com price action itself is the analisis of "pivots" (higher highs, higher lows, lower highs, lower lows, etc ) on the other side we are adding volume analisis this are two nice articles : Pring Research - Technical Analysis, Educational CDs, Financial Newsletters and Charting Tools PRING.COM - The site for the savvy technician. and candlesticks patterns... here is a simple introduction Chart Analysis - StockCharts.com we are combining all together, some nice S&R levels we look at are vah, val and poc wich are Market Profile levels from previous session... there is a lot here on TL, posts and videos....
take your time and enjoy the journey of learning this powerfull concepts... hope helps cheers Walter.Thanks walterw,
Especially for the article related to the Volume.
sds.
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BF, have you thought about exiting a portion on the first WRB and then another portion on the next WRB. Mark (NihabaAshi) goes to a higher timeframe after the first WRB. This allows one to get the most out of the trade.Currently, I am not moving up a timeframe but still look to scale out in thirds. That would mean 3 profit targets.
I take a portion off as soon as the bar becomes a WRB. As I become more skillful, I know I can wait a bit get a feel for the PRICE ACTION of the bar itself.
As far as what is going on during a WRB or what we can take away from them, I will defer to the master................
Hello,
You guys are very experienced. Could you please help me in understanding the basic concepts.
Price:
Everywhere I read "Price Action". "Price Action in S/R zone". etc
What does exactly it mean? Could anyone exaplain me with example?
Supply/Demand:
When I see a S/R zone being penetrated with high volume (not ultra high), then how to judge whether it is really a demand coming or supply coming?
sds.
[VSA] Volume Spread Analysis Part I
in Volume Spread Analysis
Posted
Hello Horus,
I have not read any material on VSA. My knowledge of it is limited to what is present in this forum.
Could you read my earlier post on this forum. When I try to apply concept to what has happenned in the past, its okay. What about the present tense? It is very difficult to apply logical. Could you comment on this?
sds.