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BlowFish
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Posts posted by BlowFish
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Habi is correct in what he pointed out strictly speaking the first bar is not an upthrust as it closed high.
However you are also partly correct.... if you take that first bar and the one immediately following it the overall price action is a move up to test that area and then price falls back. Personally I would rather price falls back to the low of the first bar rather than mid (or even below it i.e. a key reversal).
Personally I try and look at he 'ebb and flow' of price and volume. Also remember that the close is entirely dependant on how you 'sample' price (i.e. what time frame you are using).
Actually time I think is a valuable component when actually trading for example if you are anticipating strength to continue and it hasn't shown up in N bars then its probably time to re-evaluate. A subject for another post but It is pretty valuable I think despite not being 'core' VSA.
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Hi Jerry,
Excellent opening post I particularly like the fact your opening described a scenario in a way that would have resulted in a loss (if traded). This is often a far more instructive way of approaching things.
You also hit on (for me) one of the key issues for this type of approach deciding whether a market is still in 'balance' so anticipate a revision to the mean, or whether it has gone 'out of balance' and so we anticipate a directional move to a new balance point.
Very much look forward to the next instalment.
Cheers.
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Walt,
If you wanted a little soundbite to some things up. It is more about effort vs result - though I don't think Williams specifically put it like that ever. There are half a dozen to a dozen 'core principles' most revolve around price moving or not moving with effort (volume) or no effort (little volume).
So a couple of examples. Price advancing on declining volume = weakness (no 'pro' support for the move)
Price declining rapidly (wide bar) on climatic volume but closing up.
VSA is based on Wycoff's ideas regarding acumulation/distribution and volume however it does go a fair way further.
Cheers.
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Three black crows - but only if I am already short :-)
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As I have said, this is a fuzzy area and can turn many people off.___large snip____
Now, to some this looks like it is after the fact. But those are the ones that are looking for buy/sell signals and do not want to actually learn how to trade...........
It is worth mentioning that 'perfection' from a technical point of view just dosen't exist. Seeking it (the Holy Grail) is unlikely to help ones trading. Having said that we can strive towards perfection in how we manage ourselves and our trades but of course that's a completely different matter.
Anyway back to VSA yes there are fuzzy areas and sometimes I have to administer a good slap and question whether this searching for 'perfection' is actually harmful (Grailittis). I'm pretty sure its not and that my understanding of VSA can be improved.
Some things that where 'fuzzy' a couple of years ago are now pretty clear some things are still fuzzy. Actually I think at certain times the market just goes 'neutral' and it is ripe for a test (or will show no demand). Put another way it can still go either way despite strength/weakness showing in the background and then getting no supply/no demand.
I think Its all relative (especially volume) and that there are various 'big guys' at work with various agendas time frames etc. A shame really other wise we would just be able to look for background weakness - up thrust /no demand and short knowing that the trade would be a winner every time :-)
Cheers.
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That's a comprehensive over view of no demand PP :-)
One thing I have noticed is you may get what appears to be no demand immediately after what appears to be a seling climax (even if its only high volume and not ultra high). This happens often...very often in fact regardless of whether the volume was enough to stop the move or merely pause the move.
This is one of those subtle areas that sometimes is just not clear to me despite looking at this very issue on thousands and thousands of charts. It apears that all the particpants have done most of thier business in the climax and everyone stands back for a bar or two.
Intresting what you have to say about looking at the next bar PP. Often it will be flat or no demand or no supply. Another thing that often hapens if the pause is longer is you will get tests in both directions.
cheers.
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<a href="http://img232.imageshack.us/my.php?image=ftse100ct5.gif" target="_blank"><img src="http://img232.imageshack.us/img232/9920/ftse100ct5.th.gif" alt="Free Image Hosting at www.ImageShack.us" border="0"/></a>blowfish,when you say on the vol 2xma. above i,m on a 15 min ma on the vol.are you saying use a 30 ma? tia.
No what I am using at the moment is a moving avergae of volume and I simply double that for a guide for ultra high volume. So if the avergae volume is 1200 contracts I will look for 2400. This is just for my programatic tinkering...nothing like just getting the 'look and feel'.
cheers.
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Just a quick point. As PP said 'pure' VSA as described by Williams does not pay any attention to the open. Williams does look at the previous close in comparison to the current close. In fact this is the basis used to determine an up bar / down bar.
He also looks at net change (last close -> current close) but thats a fairly secondary thing and not written about anywhere. Most of the information is there with HLC bars though perhaps not in as visually accesible form as a candle. Of course the only time that it is not is when there is a gap i.e. last bar close <> this bar open. Intraday not likely to be much of a problem. When there are gaps VSA may concider a bar an upbar where a traditional candle may concider it a downbar.
The thinking is that the close is the most imortant price point as it represents the result of the struggle between the bulls and the bears for the particular interval you are looking at.
Cheers.
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Any chance there is a YM trader who can see VSA helpful for the 3 trades noted?Another Drumond man, thats unusual. VSA on a lower time period is a great way to see if focus time period geomatery is 'holding'. (Yes/No pattern).
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traderX,
its a relative thing. Also it may not all enter on a single bar. You need to train your eye to see it really (its pretty easy). I look for 'roughly double' the volume. I also look for a volume 'hump' over a few bars. This is one of the things that indicates to me it may be a climax rather than a pause. A pause is usually a moderately high volume bar with wide spread followed by 1-3 (ocasionaly more) low volume bars. The open is usually tricky from a VSA point fo view as there is often a volume 'climax'.
If you want a simple yes/no for high volume try putting a moving average on the volume (actually 2 times a moving average works quite nicely).
Low volume is much easier generally what is required is volume that is less than the volume on the previous two bars. Thats the definition Tom always used and is still cncidered the 'norm'.
On the attached chart I have red for ultra high and pink for high. At the moment I am just messing round with a VSA study.
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VSA makes a lot more sense without that 85% concept. The way I interpret Master the Markets the professional traders are a minority only active during accumulation/distribution and upthrusts/downthrusts. As you say, the important thing is to focus on the supply and demand dynamics as you've illustrated very well in the charts you've posted.Succinctly put - you posted this in the 10 minutes it took me to compose my last post!!
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Not sure where you get your figures from.Simply, within that 85% comes a percentage of the Smart Money that is wrong.
I really don't care.
What I do not understand, is why you do?
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As you said, this is a zero-sum game. Somebody is on the other side of these high volume trades at tops and bottoms, and we want to follow that group. Call them what you want. Of course, there is much more than trying to pick tops and bottoms going on; or at least if you are doing it right, there should be.
Actually I really don't care either
I obviously had not made that clear. I am a proponent of VSA and have been since Tom published his first edition. Having said that there are some 'issues' but thats for another post. Actually my point was to illustrate why I dont care - I am not sure I acccept the figure but it is irrelavant. I guess I am saying that Kruger quoting it as some how significant is disengenious and from various posts here it clearly does not advance the VSA 'cause'. The reason for challenging and clarifying is that I feel it is hugely important to have market beliefs that are founded on fundamental truths. I get my figures where everyone else does ....the LDB.... however what I am offering is a simple mathematical truth. All I am saying is that in futures 50% of trading volume will be winners 50% will be losers. It can be know other way. If you accept 85% of trades are by profesionals (I don't particularly care either way but for the sake of argument lets say it is true). So assuming Krugers figure is correct and also asuming every single 'non professional' trader loses all the time (again from the LDB this isnt the case but hey lets run with it) if this is so 35% of the 'pros' must lose to retain the zero sum balance. 50% winners +35% losers = 85% pro.
When I looked at LDB data (just after P.S. published his first book) I could see nothing that gave much of an edge as notouch pointed out the 'pros' get it wrong almost as often as retail that was the big surprise.
To be honest I am not sure what Krugers point is when he quotes this figure? Perhaps you could elucidate? To me it seems irrelevant. Incidentally there are several old time VSAers I have met that are rather sceptical of the direction Tradeguider have gone, perhaps due to comments like that. I have to say I take what Gavin has to say with an even larger grain of salt
Anyway I am not trying to be confrontational:) ( I am pro VSA). So lets get back to VSA proper.
My big issue is acertaining if a huge chunk of volume entering the market is merely enough to pause it or possiby enough for more (accumulation/distribution to start). Context and subsequent bars hold the clue but sometimes it's quite subtle.
Cheers.
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Hey PP,
85% is not such a leap really. Even if you accept this figure the problem remains that at least 35% of those 'professionals' are goig to be wrong! Certainly in futures markets. If you asume that a few 'retail' traders are correct (even if ocasionally) then the percentage is higher.
Now this dosent matter in my mind but as you may know from my odd posts in other threads I do think it is important getting core beliefs sorted out (which includes verification I guess) and of course making reasonable assumptions based on your own 'reality'.
Actually I have rather oversimplified the argument. On any trade there can be a winning player liquidating, a losing player liquidating, or someone opening. Jankovstky talks about who is on each side of a trade in his book (reviewed elswhere on the forums I believe).
This 3 legged equation kind of makes things hard, but the outcome over time is total winning capital = total losing capital it can be no other way. If all the losers are retail then they need to make up 50% of liquidity.
Final thought - we need a better term than smart money (we might get noTouch on board then
) JAJ talks about 'order flow' (though this term has existed way before he coined it). Perhaps this is a better term to describe money entering a market on a particulear side?Cheers,
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Tasuki thanks for reviving one of my favourite threads. I am a long time student of VSA but still have some niggles. I am about to travel so will have to be brief.
I do wonder about whether the smart money is always right or even if they 'know' a lot of the time. Often you will see a struggle going on and it is not clear who is in control (bulls or bears). There is also smart money operating on many different time frames (hence the 'fractal' nature of markets). This also makes it difficult to get a 'read' sometimes. For example if a large fund is accumulating millions over a period of a week or two you are unlikely to see this on anything less than daily bars....perhaps hourlies at a pinch.
Perhaps it dosen't matter if the money is smart or not - money is money :-) Actually if we believe that 85% volume is professional then there must be a large percentage of losers amongst those pros (35%) (certainly in futures which are zero sum).
The main thing I struggle with on a technical level is whether there is enough volume to stop a move and cause the market to go sideways/the opposite direction. Or whether it just causes a pause (2,3 or more bars 'rest'). as other pointed out the chart Tasuki posted is classic supply entering on the first bar followed by what Tom might call a 'hidden test' bar 2. I have seen very similar patterns where the buyers will re-assert themselves on bar 3 or bar 4. Now I know the theory tells us the next few bars hold the clues but often both buyers and sellers will withdraw and price will just drift only to have buyers step back in after a breather.
Another problem of course is that the open tends to be high volume anyway as the overnight paper is dealt with. I believe that was a chart of the open?
Cheers.
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My frustration comes largely from impatience, forex moves a turtle speed.
Yes it is all in the mind isn't it?
Maybe not all :-) I am a little loathe to say this as you have identified the most important thing (the mind). This is a point it takes many traders (me included) years to get to.
Having said that from your original post it does sound as if you where trying to 'force' a non trending market. Now there is nothing wrong with trading congestion but it requires a pretty different approach to when the market is trending. Quickly identifying whether a market is trending/non trending or put another way whether the direction is up down or sideways.
This may be the mind again of course - I know that sometimes I suffer perceptional bias. But it might also be a more easily dealt with 'tecnhical' problem.
Cheers.
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blowfish, you have reiterated what classical philosophers refer to as the concept of "egoistical hedonism".Ahh OK
I guess I am a bit of a 'closet bar room' philosopher. While I would never assume that my thoughts where original I am a little surprised to find that there is a 'school of thought'. Whether this adds credibility (or indeed diminishes it) I am not sure. It seems reasonable from my own observations.Anyway thanks for pointing that out time to head over to Wikipedia to check these guys out I guess.
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I cant help wondering if it is difficult to learn things because of limiting beliefs. I am looking forward to reading the Carol Dwek book. A friend recommended it before I saw it reviewed here. From what I understand here main premise is that fixed mindsets (akin to limiting beliefs I guess) is what holds us back and that ...err...I think she calls them 'growth mindsets' allow great things. Forgive me I haven't read it yet.
Anyway look forward to the next Ahha moment and enjoy working towards that :-)
It would be interesting to know if something did change in your thinking that allowed you to 'get it'?
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I guess I am a terrible cynic but I think the reason anyone does anything is essentially selfish. There is nothing wrong with being selfish imo. Put another way people do things for others because it makes them feel good. Or as has been said they hope to learn something through the exchange (self interest). Or they just want to 'show off' (look at me aren't I clever). I think even when we do things for our children or loved ones it is because when they feel good we feel good (so a selfish action even if for another). Even when we do things out of a sense of responsibility or guilt it is to assuage feelings within ourselves.
btw Isn't a speculator simply someone that assumes risk for a potential reward. Not quite sure how that fits in (yet).
Personally I always wanted to be hugely succesful at trading (10's or even 100's of millions). Apart from satisfying my Ego I'd really like to make a big difference in the world (money affords that opportunity). The reason? to make me feel good. (Who wouldn't feel good about improving society?) Personally I see no conflict between altruism and selfishness.
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Hi Steph,
You may have already recognised something important (sounds like you are well on the way). That is that succesful trading has little to do with depth of technical knowledge. Of course some basics are handy but that is not the key factor.
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Ive been messing round with some VSA indicators. Sometimes I think they are helpful other times I think just plain charts with volume and nothing else may be the way to go. heres a snap I just took.
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I wonder this myself and asked somewhere else. As this thread is fresh I will post here
It is my view if you pick up one nuance that helps your trading it would be worthwhile however I would also be interested if it offers real value?
Cheers.
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Thanks for the link Rolange (is that an anagram it sort of resound in my head as Lo Range and no I am not oriental).
I think Ego is a pretty huge chunk of it. That and of course fear (which seems like a huge umbrella emotion for most trader ailments).
Cheers,
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This reminds me of a thread I keep meaning to start somewhere about R:R (not sure where yet maybe on Van Tharpes forums). It is very much in the 'concept' stage and may well lead to a dead end.
It is my contention that one way of viewing R:R is as changing with every uptick/downtick, as the relative distance to stop and target change. Certainly it seems to me if you enter with a 1 point stop and price moves 1 point in your favour you essentially have more at risk at that point in time. (lets allow open equity to be included) Further more if you have a fixed target of say 3 points when you open the position now this will be 2 points to target from the current price. Essential you start with 1:3 but some way into the trade you are now 1:1.
Anyway I don't want to go into much here as it is hardly anything to do with WRB's but i cant help wondering if re-assesing RR through the life of a trade might help improve results?
The underlying idea seems intuitively correct but I am not sure how it could be used to improve results. Maybe as the basis of a trailing stop methodology.
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Great catch Cooter. Thank you. I do think your interpretation may be a wee bit off but great observation. (I am not sure yet I haven't thought about it enough).
I think it is at least partly do to with the 'work ethic' you get as a youngster. You know the whole 'renumeration is commensurate with the time and effort you put in' thing. I wonder if deep down I still feel guilt that the days business is over in an hour or two (or can be)?? Actually I often trade the Europe open. 1.00pm gmt news (if there is any) US open and sometimes the US afternoon session. Its lucky that Asia doesn't really open until gone midnight my time or I'd probably trade that. I think I trade long hours because I love watching the markets unfold. However, It is almost certainly also because I feel a little guilty that I am not working hard enough (sometimes at least).
I do certainly work hard, in the past way too hard. Sometimes (in the past) 18 hours a day seven days a week for a months at a time. I realise now I was working hard but not smart. Certainly not all bad as I have built up a good amount of knowledge about the markets and how they work. Also a set of beliefs that I sincerely think are based on fundamental truths. You certainly reach a point where more market knowledge isn't going to help you as a trader but I still enjoy spending time learning that stuff.
Recently my energy is more directed at 'self' and my working hours are much more reasonable too! (see above for details) One thing is for sure I am passionate about trading. I guess I am trying to say I am not lazy or undereducated when it comes to trading.
I am still not sure why I wrote the phrase you picked up on like that. Whenever friends and family call I will tell them I'm working but at the same time it sometimes does not always feel like work. I could say that it is more than work its a vocation a passion even, but people might gag on there breakfirst cereal if I did that.
And a final thought. Maybe I'm a little embarrassed to refer to myself as a trader. I know I am not doing as well as I should at the thing I am passionate about, the thing I have poured blood sweat and tears into. The thing I have worked so hard at. And this neatly links back into the thrust of my original post.
Cheers.
Trading With Market Statistics I. Volume Histogram
in Market Profile
Posted
A quick question if I might - do you solely use yesterdays volume for the profile you watch today? Do you add in today's volume as it occurs? Do you ever look at N day volume.
Forgive me for getting somewhat specific and technical at this early stage but I have been playing with different sample periods and it makes quite a difference. My personal favourite is probably a 'sliding window' of the last 24 hours from the current moment in time.
Cheers.