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jjthetrader
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Posts posted by jjthetrader
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I guess I just need to jump in and learn from my own experience instead of listening to everybody elses thoughts.
One poster also recommended me to return to the original source i.e. study Wyckoff and I think this is a good idea.
Mark, you got it! That's not only a mantra to trade by but to live by.
Regarding Wyckoff, I found VSA much easier to adapt to daytrading. Plus VSA was born out of Wyckoff so it's methodology is sound.
To Bearbull, I don't think these guys actually think they have the holy grail. In no way am I defending them but if you had a method that's 80% accurate would you mortgage your house to trade it? Todd Kruger himself only claimed 70% accuracy. It's just a way to help you trade and with the proper risk to reward 70% is more than enough. But not enough for a second mortgage.
Lets not mistake VSA for tradeguider.
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The worry I have as an aspiring VSA trader is that in Sebastian's vidoes, a LOT of the bars are called incorrectly when analysing live, including a lot of classic VSA principles and indicators. My immediate thought was: "if an experienced trader like Sebastian is making this number of mistakes AFTER many years of experience, is there any point in me even entering the arena?!"
Mark
Mark, welcome. Don't get too caught up in the way Sebastian "trades" this. He may or man not actually even trade. A lot of trading educators don't actually trade (Joel Pozen). You just don't know. Also, the bar by bar commentary is a style unique to Sebastian. It's not the only way to trade the principles. When I started out trading with VSA I thought it was something I was doing wrong because their methods didn't work all that well. Once I found my own style the methodology became brilliant.
In a way it kinda sucks that TradeGuider has monopolized VSA. There is truth there but when you start to trade you start to see which aspects are the truth and which you can actually apply.
Many traders have turned their trading career's around by adopting VSA. I'm one of them.
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Dear JJ,I have one question for you. If you see an no demand bar appears in your resistance area, but it close at the high and the next bar take out the high of the no demand bar first , will you still sell at the low of the bar ?
Thanks for your time
Winnie
Winnie, this would be even better because you'd then have the potential for a trap upmove to form.
My morning session goes from 9:30am EST to 12pm EST.
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Speaking of styles, niches ..JJ,
What markets are you trading ... and why?
Intraday or EOD?
And how many VSA trades do you take on any given day etc..
And has the above influenced your current take on trade entry (i.e, completion bar).
sleepy
Well I don't care much for working full days so I only trade the morning session. On the 3 min I can expect at least 3 good setups in the morning. The ES is the only thing I trade at the moment. It's volatile enough to make your money in the morning. One of the reasons I like it is because the biggest traders in the world are trading it and since we're trying to follow them it makes sense to be where they are.
Not that they aren't anywhere else, they're just in the ES in high proportion.
With the recent volatility I've actually gone down to a tick chart because for a while I couldn't afford the stops needed on the 3 min. It's back to a reasonable speed now so the 3 min works for me again. However I took a liking to the tick chart so am still using it.
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it can get a bit tricky.If the volume is less than the previous two and closes down, you may have No Supply.
To be clear, I am talking about the amount of price change from the No Demand bar to the close of the completion bar.
What do you want to bet in the next Tradeguider event they start using our term 'completion bar'? lol.
Candle, one thing I'd like to point out in the way I trade VSA is that if there's weakness in the background, especially if it's proven, that I discount low volume downbars. I don't do the whole bar by bar thing. That method isn't really tradable to me. What I look for is strength or weakness and then try and pinpoint my entry with a signal such as a no demand. Have you ever notices that the completion bar of a no demand reversal is almost always low in volume? This happens because it's an area where people don't really know if it's going up or going down because it's moving so slow in both directions. So at that point downward pressure doesn't really exist even though we know that it will because of our background. Then the volume will usually pick up on the bar after the completion bar.
But the way you're reading it is technically correct and if you were emulating Sebastians technique then you'd probably be spot on. I'm jsut pointing out how I read it and make it easier on myself.
Then there's TaweTrader who has a completely different way to read VSA but just as good or even better. It's a wonderful methodology that gets adapted by your style.
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Dear JJ ,Thank for sharing your trading idea. Would you close the short position if the immediate close after the no demand bar is an up close instead of down close ?
Thanks
Winnie
No. It all depends what happens next really. A second low volume upbar might be a good thing because it's showing you a no demand on a higher timeframe. But this is an individual thing. I'd probably tighten up my stop.
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With regard to the 'Completion bar' are we simply looking for a lower close (ie., down bar) cf to the previous no demand bar . Or should we also be mindful of the volume, spread etc on the 'Completion bar'.sleepy
I would just be mindful of the close. The fact that a bar closed down after a no demand bar tells us our story.
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The above thread in the TradeStation Forum discusses the concept of the Klinger-Goslin, Klinger-Goslin-ATR and related indicators that appear to be the forerunner and fondation for VSA.
This stuff is not the forerunner or foundation of VSA at all. An indicator that incorporates volume doesn't make it VSA. Maybe you should start at the beginnig of this thread to find out what VSA is.
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Id also agree this is very important ... but have yet to find anywhere this is discussed in-depth. Or do I need to look harder/further?
sleepy
Well, Winnie, CandleWhisperer and I have been discussing this over the last 5 or so pages. Have a look over it and you'll see our discussions about entry specifics. TaweTrader posted some really nice trades with commentary and specific entry levels.
TradeGuiders intermediate trend is just average true range. It's way too slow in my opinion. You can't count on it.
There are people however who use it in their trading plan. If it works for you then go for it.
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jjthetrader.
Pivotprofiler also argues that confirmation of no demand occurs over two bars (i.e, close LOWER than the previous bar).
Just been re-listening to the Boot Camp DVDs and Todd makes the comment that No Demand bars (and Up Thrusts) are confirmation bars when serious weakness is in the background. However, he also mentions he couldn't trade without TradeGuider which (If candlewhispher is correct) does not show No Demand bars unless confirmation has alreadly occurred. A slight but important distinction, nonetheless between those using TradeGuider and those reading VSA directly from the charts.
I have also heard of one successful?? trader (using TradeGuider) who when seeing secondary signs of weakness (i.e, No Demand/ Up Thrust bars) waits until AFTER a trend change occurs (i.e, indicated by diamonds) before entering the market (ie., Short) ... which appears similar to your momemtum type play you mentioned in your previous post.
sleepy
Yes again we're kind of getting lost in the word confirmation. What you're talking about are secondary signs of strength or weakness entering the market (confirmation). What I'm talking about is the confirmation of the confirming sign ;-) I'm looking at how and where to enter on this confirming sign. A test is a secondary confirmation of strength in the background and this test isn't actually complete until the second bar forms. So we may not want to call the second bar a confirmation bar but a completion bar. Does that make things less confusion?
To complete a no demand signal the next bar must close down. And a test must do the opposite.
It's true that TradeGuider takes 2 or 3 bars before it'll signal and it will print it's signals 2-3 bars back. It's a useful tool for beginners to learn all this stuff but as you get on it becomes a hinderance.
If you want to trade with that diamond approach it's just a 5 period moving average. It tells you very little.
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In truth this is an inconsistency with VSA. To have a No Demand bar we need to see the next bar close down. This is the confirmation bar. Gavin, however, says one should not go short on a down bar. This is echoed by Tom in the book.But if you don't go short on a down bar, then you will be shorting prior to any confirmation of No Demand.
It should be noted that the book does not make any mention of confirmation and Tom himself does not wait for any. The software program he designed, however, does not place No Demand indications without confirmation.
Agreed. My trading finally started picking up when I started shorting on downbars. In this was you get the momentum to move you into profit faster.
If you enter short on an upbar who is to say the next bar won't be up?
So you're right Candle. I think a nice thing about this thread is that we take VSA and actually trade it. In this way we see what's real about it and what's smoke and mirrors to sell software.
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JJ, thanks for the replay. I have attached the same chart with what I see as three (3) options for trade entries.There are a couple of things I was hoping you would have addressed in your reply.
1. No Demand is defined as an up bar on a narrow range with volume less than the previous two bars. By that definition, EVERY up close with an arrow would be No Demand. But if one waits for confirmation, then the only No Demand in the black box is the last one. Which is labeled.
I guess that you consider confirmation a break of the low of the Possible No Demand bar, correct?
If one uses TG, a No Demand bar is confirmed (indicator generated) AFTER the close of the next bar if it is a down close. This is where I am struggling a bit. I would be inclined to wait for the close of the next bar to confirm that the prior bar was indeed No Demand rather than simply no buying pressure.
What are you thoughts on this?
Therefore, I like the price action at option 2. Here we see M2 act as resistance which creates another No Demand candle. And that No Demand is confirmed by an Upthrust like candle. Of course, there is now the problem of distance to YL. How close to a possible PL are you willing to take a trade into it?
Option 3 is the next place to enter. Again we still have issues regarding the pivot line, but now we see a dark WRB closing lower than a failed test. There is little doubt that the market is weak.
Your last post had PLs, how do you deal with the above issues? BTW the prior post where I said (short maybe) deals with the same issue. Clearly there was weakness, but the question was, "is the window big enough to warrant a trade"?
Candle, waiting for the next bar down still gives you a giid entry. If the no demand looking bar is just lack of buying for the moment then the professionals will still support it's low. So if the lows are broken then probability is on your side that it will continue, especially with weakness in the background.
Regarding pivots, one of my favorite place to take shorts, no demands, are after an automatic bounce off of a pivots. Of course temp support will come in there, you'll get profit taking, and then a no demand will show up. You look to see how much support came in at that pivot. Was it enough for a bottom to be put in? At the very least you'll get a retest of the pivot. SO if your R:R is at least 1:1 to that point I would take it. If you were unsure then you could always short the retrace to it after it broke.
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Hi jjthetrader,When you say to a 'confirmation bar' are you referring to any VSA signal that occurs over the one bar only (be it a 5min or 1 Week timeframe).
For example, if you see weakness in the background and then get an Upthrust or No Demand they can be regarded as confirmation .... as opposed to say Top Reversal which occurs over two bars.
Or am I getting that wrong?
sleepy
You're right in your theory there. That's not what I was refering to but that is part of VSA. What I meant was that in VSA when you get a test looking bar it's not actually considered a test until the following bar closes up. That's the confirmation bar.
For a no demand the confirmation bar would be the next one as well. If it closes down then you've confirmed your no demand. I don't like to wait that long which is why I put my orders where I do.
But what you're speaking of is a great point. These multiple signs of weakness all confirm the supply in the market.
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Thanks, My mistake.... what I meant to say was, "you really never know in the moment if it is a VALID test or not, your basically buying a pullback and taking your chances".No not really. You've got to have strength in the background before you'd consider taking a test. The test is your entry into the strength.
On a trading note, you never know what a trade is going to do. You take the high probability ones and even the perfect looking setup can fail. Buying a pullback in a rally with strength in the background is high probability.
You've got to find an entry and a test is your best bet.
Candle, I agree with your options. I like Option2. Not just because you had your resistance there but because you couldn't even get as high as the last no demand and that bar you pointed out goes up and comes back down to close on it's low. With no demand/weakness in the background this is an awesome entry.
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So you really never know in the moment if it is a failed test or not, your basically buying a pullback and taking your chances.Thanks, Steve
If you're a gambler that's one way to trade. This is why VSA always wants to see a confirmation bar. That test only fails if you break it's low.
Instead of the confirmation bar you could just as easily take the break high of the test bar. If a test bars low is going to be broken then chances are good that it's high won't and thus trigger you into a position.
Tom Williams and the lot teach to enter on the close of a bar. If you actually trade then you know this is foolish. Trading strategies can be adopted around the methodology.
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JJ (and anyone else who wishes to chime in);Please tell me where/when and why you would have entered (short) on the chart below.
I will make a few observation that are very interesting indeed.
The first candle in the black box is a wide spread candle (dark WRB) on high volume that closes down. The next candle is up, confirming that some demand showed up on the previous candle. This next candle has even HIGHER volume. This candle closes well off its highs and has a narrower range than the previous candle. Weakness (supply) entered.
Now things get interesting. In short, we see successive up candles with successive narrower ranges on decreasing volume (volume less than the previous two) and closing up.
Well Candle, that which catchs my eye first is the no demand you have marked within the box. I'd take it's break low and be prepared to get out, at what you have labeled Y1, if necessary.
Forex is a much different beast than futures. Knowing how your market reacts when you get the signals you like to see is very important. So for this I think your opinion would carry more wight than mine.
Having no centralized exchange to report data makes me a bit nervous being a volume trader. Having strong price action skills if a must in FX and my guess is you have them.
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Great advice JJ ... although I think many will have missed this piece of wisdom.Based on your experiences to date ...
Which setup would you recommend starting with?
... and in order, if possible the others you'd recommend?
Was thinking of starting with Upthrusts but would also welcome others opinions.
sleepy
Hey Sleepy, my number one is no demand just like CandleWisperer pointed out. There's a few reasons for this.
1. You can flip the whole setup upside down for long positions. Now you're playing both sides of the market with one setup.
2. The narrow spread affords you a tighter stop on the other side of that no demand.
3. They're alway showing up after a couple signs of weakness so they're easier to confirm.
Upthrusts are cool but I'll be trading the no demand that follows them. I'm not saying what I do is right, I'm just saying it's what I do.
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D: Large dark WRB that engulfs and closes lower than the Test candle. Weakness confirmed.
E: Two candles later, we see a narrow range up candle with volume less than the previous two candles closing on the bottom half of its range-No Demand. The market is weak. Get short young man (maybe?).
Hell ya get short! This is one of my favourite setups.
Yes there was potential support down below but in trading we're never looking for the market to continue in one direction forever. There was enough there to have a good risk to reward trade.
Nice example.
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I am just a novice in VSA ,but I would like ask what do you think about this trade?? I took it ( paper) on the close of B bar in 3 min TF . Is very aggressive ??Thank
Agressive? lol, of course. We always take more agressive trades when its paper trading. Would you have considered that with real money?
It was a nice double top but that bar closing on it's low, could that just as easily have been support and resistance traders at the double top area?
I would have at least taken the trade (not that I would have taken that one) when the low of B was broken.
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can u pls tell me in which topic is trend being discussed...i was not enquiring abt vsaNot sure, you could start a new one though if this is something you're interested in.
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the easiest question : wht is a trend ????the answer is the most difficult 1...
when does the trend start, when it ends , when does a new trend start in the opposite directon????
i can bet many many people here dont know it...
i like to hear from experienced people how they do it???
Well I basically answered your question. The only reason I was willing to go into this topic here is because Winnie is trying to learn VSA.
Are you making your inquiry with regards to VSA or just a basic trend question becuase a whole discussion on trend belongs in another topic. If you start one I'd be glad to contribute.
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My problem in using VSA is I always focus on the recent bars. When I see an upthrust, I always wait for short trade and ignore the whole bull trend.
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This is very common. It's called counter trend trading and you can scalp it if you're fast but better to stay with the trend.
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Also I have problem in identify the trend. I really don't know how to define the trend. How would you define the trend. Am I too stupid ? :doh:Well, don't tell your subconscious you're stupid too often. You're new, not stupid.
Trend is pretty easy actually. Don't get yourself confused with too many timeframes first off all. They'll alll be pointing in different directions and confuse you.
First, what timeframe do you like to trade? Personally I trade the 3min. I don't ever look at a chart higher than 30min. I'm not a swing trader so it doesn't really impact my trade. I'm trading off 'mini' supply and demand pockets. A 30 min chart will tell you the story of the bigger picture to if you need it.
Just look at the timeframe you like to trade off of. Are the bars forming higher highs and higher lows? When we have a run up are the pullbacks shallower than the advance? If so we're in an uptrend.
If we're in an uptrend then it's good to be able to tell if there's strength in the background. The uptrend will last much longer if there is.
Yes you could use a trend channel to tell you the trend but depending on the timeframe you trade, this could really lag.
Bottom line, look for bars to form higher highs and higher lows and for each swing low to be higher than the previous. That's the simplest way I think. It's a great subject and I'd like to hear from others as well.
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Winnie, lets just think about an upthrust logically. Price moves up, hits an area of supply and comes back down to close on it's low. All the ones on your chart appear to be upthrusts but they're not all tradable.
If you've got strength in the background, and you're heading up, then all of a sudden you get a thrust, look left. Chances are you're breaking an old top and support and resistance traders had their orders parked there. Yes that is supply but it won't change the trend, it'll pullback a couple bars.
Typically we like to see upthrusts after major supply has hit the market. Once the big boys dump their load then you have a perfect spot for an upthrust to be tradeable. This is their one last push to shake everyone out before they move down.
Upthrusts in a downtrend are perfect to unless demand has entered. If there's no sign of demand then take the one half way down. Price went up and tested, there's still supply and it closed on it's low.
What market are you looking at?
[VSA] Volume Spread Analysis Part II
in Volume Spread Analysis
Posted
Why point to VSA rather than Wyckoff? Because it's much simpler and way easier for daytrading. And I'm not pushing it on anyone or asking anyone to struggle through anything. In essence you're encouraging a newcomer to give up because TG's sales pitch is heavy or you think it doesn't work becuase you can't make it work? I'm encouraging someone to move forward because I know it works from experience.