[Anonymous]

Something different.

I was going to post something but changed my mind. Instead, I would like to hear from some of you. Where would you enter (if at all ) and why?

[Gordon G.]

Hi PivotProfiler,

if you mean "where would you have entered", I would reply at the close of the black candle following the 1st No Demand bar.
However my stop would probably have been hit and I would have closed my position with a loss.

Best regards.

[flatwallet]

Pivot,

I would have entred during the black candle but at the lows of the first No Demand bar - .01. My stop wouldn't have been hit beacuse I usually place my stops at the highs/lows of a 5 channel. That being said, I would consider myself lucky.

flatwallet

[Anonymous]

Originally Posted by flatwallet »

Pivot,

I would have entred during the black candle but at the lows of the first No Demand bar - .01. My stop wouldn't have been hit beacuse I usually place my stops at the highs/lows of a 5 channel. That being said, I would consider myself lucky.

flatwallet

Nice. Thank You for the reply. Please post some charts with examples, we can all benefit from your knowledge.

Originally Posted by Gordon G. »

Hi PivotProfiler,

if you mean "where would you have entered", I would reply at the close of the black candle following the 1st No Demand bar.
However my stop would probably have been hit and I would have closed my position with a loss.

Best regards.

First, Hello GG. I am glad you joined me here. You seem to be making good progress. Keep posting.


***********

From a pure VSA point of view the ideal entry is when the No Demand is confirmed. We have a lot of weakness behind us in the form of a failed test and supply entering on up bars with high volume. For me, however, I like the No Demand within the two support/resistance zones: the WRB and the Long Shadow. For some it is a bit late, but note that here a stop just above the No Demand would never be in jeopardy. Moreover, here we are actually using the low volume sign that appears in the range of high volume candles.

[Anonymous]

No Result from a Test

"No immediate results from a previous test can show weakness is present in a bear market. However, you should remain observant for a second test in a strong market. If you can see a what appears to be a successful test, the market makers, or specialists will also have seen the indication. If there is not an immediate up-move, or the up-move fails over several days (or bars, if on a shorter timeframe), this now becomes a sign of weakness. The professional money has not responded because at that moment they are still bearish.", Master the Markets, Tom Williams, P. 155.

A while ago myself and BrownsFan got into a discussion about "knowing when you are wrong, or at least early into a trade". He argued that he does not know he is wrong until his stop is hit. My point at the time was that one can see if he is wrong, or wrong on timing, prior to the stop being hit. Therefore, like the POP said, there is no need to wait for the stop to be hit. Don't wait for the market to prove you wrong, look for it to prove you right.

What neither of us mentioned was something NihabaAshi is a proponent of: a Contingency plan. Basically, a contingency plan is a price action pattern used to tell you something has changed and the prior signal is no longer valid. Once this pattern appears, a long is reversed into a short. Note this is different than a simple stop and reverse procedure as it is possible for the contingency plan to be triggered before one's initial stop is hit.

If you are interested in contingency plans, NihabaAshi is the one to talk to.

What this chart shows is based on the concept however.

First we see a good test. The volume is not low, but it is not high either. It is confirmed on the next bar with a close up. This is where you go Long. My stop would be just under the low of the test bar.

Note what happens next. price moves down and a dark WRB is formed. From that point, another test candle appears. On this test, the volume is lower than the first test, and the candle is at the same range of the first test. Again, this test is confirmed on the next bar. Two bars later, we see a No Demand sign. Not a good sign for the longs.

This No Demand is completely within the bodies of Two WRBs (hint).

But the bar that confirms the no demand sign is key. It is another large dark WRB. What is most important is that this candle (Dark WRB) closes below both test candles' lows. A dark WRB closing below the low of the test candle should trigger a trader to at least re-evaluate the long position. Note here that it would have stopped many traders out, but not all.

With the appearance of a No Demand and a dark WRB that closes lower than the low(s) of the test candle(s), we have no doubt that we are seeing No Result from a Test. Our contingency plan would thus be triggered and a short is placed on the next bar. Again, understand, these are not failed tests, they are good test with no results. Simply, we have negative action.

Negative Action: "If you observe a positive indication, but you do not observe the expected results, then we refer to this as 'negative action'...." P. 152

[flatwallet]

How would you read the following chart?

[BlowFish]

Here's a chart showing where I would consider entries. Apologies for the clunky annotation MSpaint is not that great for the job!

The yellow lines are S/R zones they are more or less where I see supply and demand entering though most are clearly confirmed within a couple of bars as the level is 'proved' by the level holding against attack. A quick aside - as I have mentioned before I have a bit of an issue with using WRB's (and wicks alone for that matter). I certainly do not want to take away from PP's excellent work here so I'll put that in a paragraph at the end so those who wish to can ignore it.

The first black bar on the left is the first correction in the move the high and low represent the start and end of that correction. The first visit back there I would for sure have taken a long (probably ). You would have had to jumped in pretty much on faith but getting in on a test is a very rewarding entry when it comes through.

The first cyan dot is a pretty perfect entry I'd probably have had a crack if my longer term bias was short. Second pair of dots would be a good entry also though it would have been nicer a bit later so it was at the trend line or a bit higher with an upward test type bar.

Toward the end things are starting to look iffy for shorts (again depending on longer term context). I would be a little wary as the trend line is broken. I have no issue with re-drawing a trend line though. Who needs momentum indicators!! you can see we are still moving down but the momentum has slowed.

OK a quick bit on WRB's - the open and close that define a WRB are single 'ticks in time' they don't really represent any consensus or behaviour. They are simply a function of how you sample time to draw the candles. They are determined at an arbitrary single point in time. Now to take a point in time (the open of a bar) and another point in time (the close) and say they are far apart does have value to me however the specific price at those split seconds in time don't. Further more there is no shift in the over all dynamic if a bar opens it low and closes on it high even though supply must have been present it has not caused the price rise to abate. You may well get 1 2 3 or more of these candles. I believe there is are candlestick patterns (not near my books now) maybe called 3 black crows & 3 white soldiers. They are in essence 3 WRB's in a row.

Now using highs and lows is altogether different they represent where supply has overcome demand and caused the price direction to change. While this occurrs at a point in time it is significant over a range of time. More over every time price bumps against that level and is repelled it adds confidence to that level. From the attached chart you can see that happens often.

Finally WRB's are often caused by stops cascading, people jumping on to breakouts or the 'smart money' moving price through a level. If you go behind the WRB you will usually See the true S/R in the case of the chart here the congestion bottom left and the congestion up top after price has been run up. This I guess Wycoff's basic accumulation mark up distribution 'model'.

Finally don't listen to me listen to PP! Seriously. This thread is gold dust and I really don't want to detract from that. Actually I feel like an interloper coming in once every few pages with my paltry offerings.

Cheers,
Nick.

[Anonymous]

Originally Posted by flatwallet »

How would you read the following chart?

Hi Flatwallet. We are all interested to know how you see it. The more perspectives given, the more we all can learn. Thanks for the chart and keep 'em coming.

The key bar is obviously the Ultra Wide Spread bar with Ultra High Volume. I notice that the volume is painted powder blue. So I am sure this catches you attention.

I can not look a this bar without using the Highly related concepts in WRB & Long Shadow Analysis. Thus, forgive me for some non-VSA ideas that follow.

First note that this bar closes down from the previous bar, has Ultra High Volume and closes in the middle (or slightly above). As soon as this candle is created, one should think Transfer of Ownership bar. That is, the strong hands are buying (demand) from the weak hands. The Smart Money is either buying back their shorts, or simply buying in anticipation of a future rise in price.

Next we get a No Demand bar. This tells us that while the Professional Money was buying on the Wide Spread Candle, they are not yet interested in higher prices. It is also possible, that all that High volume meant that there is still supply (sellers) in the market. Price does indeed continue south. Now, even though there was buying (demand) on the Ultra Wide Spread candle, there is such a thing as momentum. It does appear that the trend was moving down at this point, so the momentum created by the move can take prices lower even in the midst of demand. Nevertheless, I am looking to go long.

To go short, I would want to see a No Supply sign in the shadow of this Long Shadow and then either the No Demand or an Upthrust.

The market heads south, the we get a No Supply sign. For me, still not a point to get long. Note that this candle is up against the support/resistance zone created by the Long Shadow, but not within it. It is, however, within the body of a large dark WRB. I WOULD LIKE TO SEE A LOW VOLUME SIGNAL WITHIN THE RANGE OF THE SHADOW. The market starts moving up and we get a Test bar. This is a low volume test in the ideal area for me. Again, we have a low volume sign within the range of a previously high volume candle.

Note that the volume on the test candle is not less than the previous two candles. It is, however, lower than the previous bar and the second lowest since the Wide Spread candle (Long Shadow).

Also note that this Test is within the body of a large dark WRB.