RAVIN

Once again thanks for your excellent analysis in terms of "If...Then" Scenario for Wednesday, 7-11, Dogpile. very profitable. After a WRD , once again we could be in for a 80/20 trade (Linda Raschke) , 20/20 of Arthur Ullirich (Tradetutor).

UPBARS AND DOWNBARS ON LOW VOL. I like to keep it simple: !. Background Weakness, upbars on Low vol - No demand 2. Background Strength, Downbars on Low Vol - testing for supply However have observed countless times that markets can keep rising on low vol, narrow bars whole day long,(crawl up) simply because there is no supply to the left, or pros are not interested in selling at those prices and waiting to unload at higher levels. Similarly prices can falling on low vol. once again pros. are not interested in stepping in and buy. Have to step out of the idea that in the vol on a single bar there are more or less buyers than sellers and vice versa, IMHO

Good to have you on board Nick, your Elliot Wave/VSA analysis on Dow was excellent. Would certainly like to hear more from you especially on your understanding of VSA concepts. Wonder if you trade major Index futures Intraday.

Good Trade PP, do you trade Dax or YM? Who is for catching a falling knife:) This morning's price action on Dax 2min, breakout of morning range with gusto, over 3000 contracts on a 2min bar, real effort to fall, cut through all pivot levels with no buyers on retracement, until final capitualtion and short covering with vol. followed by a classic test, the move after that may look small but with 25Euro per point, a very lucrative trade.

Dogpile, What software you use to generate VWAP, was under the impression that this is mostly employed by passive traders such as pension funds etc. Is there a site for more info. on strategies with VWAP my datafeed is esignal and charting software is Tradeguider.

Ditto here, believe in the power of quitting, after 1-2 good trades. What timeframe charts do you employ for dax, I normally look at 60/15/5, and enter via 2-3min . VSA principles work great in this market , however it is a volatile environment and trade management would have to quite different than say trading YM Why not post some charts of morning trades, that way we can once again kick start this thread, may draw in more Dax traders to exchange ideas with.

Good to have you back, thought you were on holidays for 2-3weeks. Question: Last Thursday and Friday were down days, so how does that make Monday a SS day, thought SS days came after a buy day and a sell day.

Dogpile, Any LV today is what I meant. Perhaps you can outline "if-then" scenarios just as you did for Monday. That is a great learning process.

Great stuff, I am trying to understand this with some logic. Interesting to note that nuance regarding LV which has to occur in the Morning for a TT buy. 1. Well we had 2 H-L days last week, and yesterday was L-H I presume, as there was a low which tested friday's low, albeit in the afternoon, prior to the high later in the day. 2. Now strictly speaking that is not a buy day, then any test of the low should be viewed as a buying opportunity. Correct me if I am on the wrong track.

As I keep saying you really do not need the software to work/trade with the VSA methodology. You can learn the principles from the book, Bootcamp CD, and from this thread, especially posts by Pivotprofiler Then get hold of Vadym Graifer's book on "Techniques of Tape Reading", here you will find the six main principles and info. on how to construct your strategies and tactics from observing a few setups. Ignore pedantic definitions of Tape Reading on other threads. We are not here talking about DOM games and Time/Sales where the shortest time frame is reflected. Go to Linda Raschke's website and download "Notes from a Swing Trader" which has a section on "Reading The Tape". As for the Tradeguider Software, there are a few glitches but overall it performs well , forget about all the indicators, the VSA indicators are the most important, as each one has a menu with explanation and "if-then" scenarios, so in that respect can boost your learning curve. Infact it is the only software which does that. Look at all other softwares with 100indicators, none tells you how to trade with them. Hope this helps

Wyckoff(supply/demand) and VSA (volume/price range) principles exist in all markets regardless of who is at Tradeguider or whether the company is there or not tomorrow. To learn the principles and their application, there is more than enough info in Tom William's book , Boot Camp CD and on this thread. Then all you require is a charting software which allows plotting of Vol. data with bars or candlesticks. If you are really concerned with vol aspects on Forex, trading currency markets via currency futures on CME is another option, it is a regulated market and the volume reported are actual contracts exchanged. There is enough liquidity there to trade and the movement is line with the spot market, except ofcourse being a futures market there is the difference in price level with added premium. plus it can be traded on a normal broker DOM rather than through any bucket shop.

When Todd Kruger was around at Tradeguider, his focus was primarily on Forex and held seminars almost weekly on that, the ticks represent activity which is volume, in that respect the footprints of smart money will be reflected in that and esignal provide the tick data. If you can get hold of the Bootcamp CD, you will be find a whole section devoted to Forex will comments from Tom Williams. Hope this helps

Thanks Dogpile, It is beginning to sound more logical now. You are right about getting the concepts right rather than focussing on the labels (buy day or ss day etc). o.k now we have 2 days of High to Low, hence for 5-11, Monday's probable price action, we should be looking for a Low violation to go long.

Well quite a drop on the Dow yesterday, can be considered as a SS day, in which case today would be a buy day. Basically I have lost the TT count:D OTOH as per Linda Raschke, today is most likely to be zig zag day, i.e narrow range day, testing of lows of yesterday is the place to watch.

Totally agree with the sound logic behind VSA, however as for the software, you need to remind Gavin of the glitches in it for such an expensive program and when are they going to sort out the problems and provide clients with an updated version which they have been promising now for years. May be you can persuade Nick Radge to comment here, his use of VSA principles with Elliot waves is quite revealing and once again demonstrates the ease with which VSA can be tied to other methods of TA.

You are right, Linda Raschke's take on TT appears to more pragmatic, any found the following via google search: Meaning no disrespect to LBR, she somewhat *******ized Taylor's work to some degree. George Douglass (that's right 2 S's) Taylor was primarily a floor GRAIN trader. No computers or charts involved. Just staying IN the moment with paper, pencil, and arithmetic. The only stock mentioned in his one and only book was US Steel (USX) which he apparently traded over and over since their were specific examples dating back to 1933 (the book was written in 1950). The crux of his method is measuring the swings. The high from day 1 to the low of day 2 he designated DCL. The low from day 1 to the high day 2 as RLY. Grapically, this makes an "X" Futhermore, any Day 2 high that exceeded day 1's high was quantitfied and labeled BH. Any day 2 low that was below day 1's low was designated BU Additionally the trader observes whether the high or low was made FIRST each day. In the context of being long only, the intent is to buy near the low of Day 1 and sell near the high of day 2. Day 3, was considered the short day. A buy day is LMF, a short day is HMF, and the sell day can be EITHER (what LBR refers to as a zig zag day) Putting these actions in a matrix: BH HMF..............................................Short BH LMF..............................................H old ALL day BU HMF............................................... AVOID BU LMF............................................... BUY Obviously "they" don't ring a bell telling you if today is LMF or HMF, that's where trading intution, and skill play their role. With respect to measuring swings, simply put, you cannot have a large RLY day without a small DCL.. A small DCL implies a prior day close somewhat NEAR the prior day high. The preceding is valid but Taylor's concept of a 3 day cycle Buy/Sell/Sell Short may have been more reliable in 1950 than today (due to program trading, instantaneous info, and multiple market makers). And, ............in the US, unless you have 475 tax status, trading in the same stock over and over (occasionally taking a loss albeit small loss) would run into a wash sale obstacle. Now I have no idea if this right or wrong, as you have slogged through the book perhaps you may be able to shed more light, and expand on what DCL, RLY, HMF, LMF etc stand for.

There you go, now that is making much more sense, remaining flexible as I did last Friday which was a SS day, there was a short and a long.i.e let the price action guide your trading decisions rather than getting bogged down in a bias. As waveslider pointed out the 3 day cycle is far too simplistic, there are other forces on different time frames which can enter or leave the market at any time. Tests of High and Lows of previous day is the essence of Taylor's Trading method as pointed out by Linda Raschke, after a few comments on buy day and sellshort day (p.60) and she adds "Taylor kept a rigid mechanical trading book, but he also had all sorts of quirky rules for shorting on buying days and vice versa. We do not want to get that complicated " This way it would be much more productive to monitor the markets on a daily basis via TT method. appreciate your comments.

You may have hit the nail on the head, anybody trading TT method in realtime with real money should be able to provide unequivocal response. WHY? emphasized the need to determine the cycle, well it was established that: 1. Wed, 24-10 was a Buy Day 2. 25-10 was a Sell Day 3. Hence Friday 26-10 ideally would be a Short Sell Day with market expected to close lower than the open, this did not materialise. 4. Fine, so we rephase, and look for Monday 29-10 as a Short Sell Day, once again this does not happen, so the question is how was this day traded from the open. Here clearly there is a need for "If....then" scenarios as you point out. 5. Have we now moved from 3 day cycle to a 4day or a 5day......??? 6. So now Today 30-10 should be Short Sell day, Dow is already showing signs of weakness on the Globex, plus we have consumer confidence report around 10a.m EST and FOMC meetings etc., Are we once again looking for price above previous day's highs to short??? confusing??? you bet. Now before somebody jumps in with smart a.... remarks like go and read the book, that can be applied to any thread on any methodology, then what would be the point of opening a discussion in the first place:)

It has been over 5-6yrs since I looked at ROC etc, Last week pulled out my old spreadsheet and plugged in YM values. have attached it here, from the way I read it, the close on Friday is higher than the pivot, so today should be LONG or was it going Long from Friday and selling today. Would it be possible to see your spreadsheet values on ES ROC.xls

Refer to POST 561, you can get a free download of e-book, the Bootcamp CD is highly recommended as there are many hours of seminar with comments by Tom Williams and will really help in absorbing the VSA principles which at first appear to be counterintuitive especially when we have gotten accustomed to the traditional price based maths. indicators (RSI, CCI etc) However the software is not at all necessary to work with the methodology in realtime trading. Hope this helps

Sounds like a great idea. My scientific background compels me to find some logic in any methodology, sometimes it can be a drawback for many would state that since the market reflects human behavior, it is futile to seek logic there:) , however when I first approached VSA at first it was counterintuitive e.g strength appears on down bars, weakness appears on upbars. But dig deep and the light comes on especially in the light of how professional money operates. Linda Raschke in her excellent article (available free on her website) "Notes from a Swing Trader , 1993 lecture) has placed great emphasis on this aspect including those of watching price action around previous high, low, support and resistance created by previous swing highs/lows., relationship of close and open etc 1) From what I can gather it appears that on a Buy Day - prices are marked down at the open , this provides opportunity for the Smart Money to step in and buy (sounds very much like an accumulation phase and also consistent with the VSA adage, strength appears on falling bars especially on heavy vol) - Linda states that ranges also expand on these days . 2) This is followed by Zig Zag days (Linda's term) or Sell Day for pros to start unloading (distribution) 3) Ideally the 3rd day is a SS day, where the market is taken up (bull trap) and then off to the races south. Linda then refers to 4 or 5 day cycles and ofcourse whether the market is trending or in congestion From reviews it looks like Taylor's book is unreadable, however surely this is not exactly rocket science. If an effort can be made to start analysising each day starting from today which would I guess be a SS day as Friday was not, then I am sure we all can benefit and come to our own conclusion as to whether or not there is some merit in this methodology and can be incorporated in our existing strategies to create that extra edge. IMO this would be much more productive that engaging in establishing who is right or wrong or who possesses the secret codes or the key to unlock the secrets:)

LOOK FORWARD TO THAT As you so aptly put it aim to capture the meat of the move. However it is not necessary to get wedded to the initial bias, afterall the market is always right. attached, YM 45min , shows the initial fall and then support at the 38.2% level which previously was a resistance. The YM 5min flags up the setup (down move followed by a test on low vol) to go long if you so wish, others players have stepped in to buy, there is nothing right or wrong about it. Just go with the flow. YM 3min exhibits this aspect even better with the classic heavy vol on a down bar with similar vol on a dragonfly indicating entry of demand offering a low risk, high probability trading opportunity especially around the lunch period where we often observe reversals.

I think you have made an invaluable contribution on a subject that most find it difficult and frustrating to come to terms with including me. Some may lose patience and then the inevitable confrontation. It would be a great shame if you decided to depart, I was hoping we could work over a week or two and take each day to develop some synergy between TT and VSA. Hope you would be gracious enough to overlook some adverse remarks against your efforts. Back to YM: Despite the apparent bullish fundamentals, positive advance/decline, and Trin aroud 0.7-0.8, market ran into resistances outlined before. and that coupled with a SS day on TT (Hats off to you WHY?) The short was on YM 5min chart and pivot resistance which lined up with others, with a 50pt move in favour of the trade.

As I mentioned previously I used to engage in all this next day forecasting via EOD charts, even had a couple of subscriptions for ES trading, proved counterproductive for me , as it formed a bias in my mind and found difficult to detach from that. I do not use those anymore, however 45/60/120min charts provide previous 10-12 days of action in view from which I am able to gather enough info. for intraday trading i.e support/resitance, fib numbers, high/low of previous 2days, daily pivots etc and then it remains for the market to show its hand. The market is always right and the price/vol provide the necessary info. during intraday on lower time frames i.e 15/5min at these relevant levels on which action to take. As for today, I have attached 45min YM charts , as this is a TTT thread, don't want to get into VSA in depth, however you have highlighted the market manipulation component in TTT methodology, and in that sense there is a synergy with VSA analysis. 1. Have to learn to combine vol, with price patterns (red arrows on chart 1) 2. Red arrows point to resistance levels on chart 2. There is a confluence of resistance levels. i.e Fib retracements of the fall from 11th oct - 22nd Oct of nearly 600pts. plus the resistance offerred by upper trend line of the trend channel (blue) and the high of Yesterday. Tom Williams emphasizes the need to employ previous levels of support and resistance in reading via VSA. 3. Hence there is a lot of supply to work through, above there is the gap of 19th and then massive supply at higher levels. 4. So obviously there is weakness there. However the pros. are not all going to decide to go short because these lines are there on Ravin's Computer charts:) There might be syndicates on sidelines with different agenda who have yet to show their hand, hence I remain totally flexible. 5. The 15min chart shows the interplay between price patterns and vol with greater clarity. However this is no way diminishes the value of TTT method as it also takes in account market manipulation and would provide added confidence if the right setup exhibits itself and is consistent with the EOD analysis, one can then enter with size. Anyway this is my personal way of trading, each has to find an edge which they can exploit, there is no right or wrong way.

Greatly appreciate your detailed explanation. You are so right, in the beginning we all have this tendency to look for ideal buy, sell days. Prior to my VSA days, I was into index trading, stocks etc , EOD and intraday charts, multiple monitors, the desktop look very impressive, with all the calculations from Linda Raschke's ROC, Pinball buy, etc, umpteen horizontal lines on the multiple charts, ended up with information overload and analysis paralysis. Now I have learnt to keep it simple, one can make a good living by focussing on a few setups , trade a few hours during times of liquidity and increase size. I only trade Dow and Dax and no longer have EOD charts, however 120min or 240min charts provide the necessary support and resistance levels to work from and observe the price action/vol at those relevant prices. I have read about Taylors method in Linda's book and also in Angell but your posts on this thread are the first which highlighted the play of Smart Money and it was that which drew my attention , as you know market manipulation is at the core of VSA. So coming back to that, you have emphasized the need to determine the cycle. As I have not slogged through Taylor's book, I would have to request you to elaborate on that, how do I do that. 10-24 was a buy day, 10-25 was a sell day, so 10-26 is a SS day, I will try to follow up from Monday with this line of analysis, hope you will take out time to guide for a week or so, at least that way it would be possible to get some insights and as you say be pleasantly surprised:) it was very much the same way with VSA, in the beginning it can mess you up as we are so much used to the traditional way of thinking and looking for buy and sell signals via price based indicators. will reply to your query on Fridays take via VSA separately