[torero]

Pivot, thanks for contributing to this thread, I find this method extremely useful and fascinating. I've been trying to learn the relationship between the price and volume in groups but never seen a bar by bar analysis until now.

One question about your analysis from the previous chart, I noticed that there was a stopping volume brown bar before the true bottom. Can you tell me why this was a false bottom or at least explain action between the previous pivot low to the bottom bar.

I wanted to ask you if using tick charts work in VSA or not. Thanks.

[TinGull]

Torero asked the same Q I was going to ask. And T...tick charts are harder to see the differences in volume because they're masked by bars being determined by trades instead of time.

[torero]

I thought that might be affected but had to ask. I'm still learning trying to learn VSA little by little. I think I have a pretty good idea but need more real time observation to get things rolling. Very excited to see how this fits into what I have already learned and use!

[Soultrader]

Originally Posted by PivotProfiler »

Hope you don't mind, TinGull but used your chat to show something. Just a couple of things to look for.

One note on stopping volume. Tom Williams, the father of VSA, would enter on the close of that bar. TG, however would not place a sign of strength until the next bar closes and is an up close. (2 bar pattern).

Getting in at the very bottom or top is not the most important thing. Here the best entry is after the test. Why? Because we have seen the strength come in on the stopping volume. Then we see a No Supply indication followed by a test for supply.

The Smart Money wants to make sure that there are no sellers out there to impede the mark up phase. That is why they test the market. Of course, the mark aggressive you are as a trader the earlier you would enter. But you should be looking for the bar after the volume spike (stopping volume) to confirm before entry.

Hi PivotProfiler,

Thank you for your inputs. Very much appreciated. Regarding the chart you posted,



One thing I have trouble understanding is the no buying pressure bars. I totally understand the climatic sell bar.. I was able to determine that because of the lack of supply at the next bar and less volume at the new lows on the 30min timeframe. Also the markets were one-timing down until after that climatic sell bar in which price was able to overtake the high of the previous 30min bar.

Now, after the stopping volume we encounter a few narrow range bars. I was trying to determine the direction of the market. Because I felt the market has found support my bias was to the upside. However, when analyzying price bar and volume (VSA) I had trouble deciding which direction. Volume was drying up clearly and the long candle wicks indicated supply. From the chart above, you indicated a up bar with no buying pressure then an immediate narrow range bar with no supply. So basically within two bars market action has gone from negative to positive? I find this behavior extremely tricky as it forces us to change our bias immediately. How did you interpret the third narrow range bar as test for supply? Thank you.

[Anonymous]

Originally Posted by torero »

Pivot, thanks for contributing to this thread, I find this method extremely useful and fascinating. I've been trying to learn the relationship between the price and volume in groups but never seen a bar by bar analysis until now.

One question about your analysis from the previous chart, I noticed that there was a stopping volume brown bar before the true bottom. Can you tell me why this was a false bottom or at least explain action between the previous pivot low to the bottom bar.

I wanted to ask you if using tick charts work in VSA or not. Thanks.

Good eye. As you know there is a thing called momentum. Sometimes price continues moving the way it was despite the force in the opposite direction.

After seeing a wide range bar with ultra high volume, you want to start looking for No Demand, No Supply , Tests, and Up Thrusts.

[Anonymous]

Soultrader,

The No Buying pressure is a bar that closes up from the previous bar and closes on its high but has volume less than the previous two bars (and ideally volume less than average).

Although price is moving up, the Smart Money is not involved in the push. Remember, 85% of the volume histogram represents Professional Money. So no buying pressure is coming form the pros.

The next bar is down. But here too we see a lack of Smart Money activity. Thus when we say, No Supply, we mean no supply (selling) from the Professional Money.

What is happening is this: the market is moving up, but the Pros are not yet fully interested. Why? After such a move down they want to make sure there are no more sellers left in the way of an up move. As they wait to see what happens the market moves up but then stops. The next bar is down on even less volume. The Pros did not step in and start selling (no supply).

Just to be sure there are no sellers, the Smart Money now Tests the market on the next bar. They take it even lower and find no sellers (volume is low) and thus take price back up to close on or near the high.

Once we see the Stopping Volume we should begin to look for a No Supply or Test bar. When we see the No Demand, we do not automatically look to go short. So our bias isn't changed. We see strength in the form of the Stopping volume and are looking to go long. The No Demand helps set up the subsequent No Supply and test formation.

[Soultrader]

Thank you for clearing it up. My understanding of professional operators with deep pockets is becomng alot better now. I feel like stops do not exist for them which has recently changed my trading style in using wider stops for larger profits using a slightly higher timeframe. It's a complete seesaw game for these operators and a fascinating game they play.

[TinGull]

Perfect today. Note the HUGE action happening here in the circled bar right at VAH...you can also see a diverging delta, showing selling waning, and then BAM!!! You could also notice the increasing volume coming into that VAH. While this may lead some to think that we will go lower...VSA makes you wait for confirmation

Good thing...that abnormally large volume spike with closing price in the middle of the bar is showing you right there that professional activity has come into the market.

How cool.