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Old 03-24-2007, 06:36 PM   #25
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Re: Wide Range Bodies or 'big' candles

Quote:
Originally Posted by walterw »
sds : this is a nice and simple article on S&R Support and Resistance - StockCharts.com price action itself is the analisis of "pivots" (higher highs, higher lows, lower highs, lower lows, etc ) on the other side we are adding volume analisis this are two nice articles : Pring Research - Technical Analysis, Educational CDs, Financial Newsletters and Charting Tools PRING.COM - The site for the savvy technician. and candlesticks patterns... here is a simple introduction Chart Analysis - StockCharts.com we are combining all together, some nice S&R levels we look at are vah, val and poc wich are Market Profile levels from previous session... there is a lot here on TL, posts and videos.... take your time and enjoy the journey of learning this powerfull concepts... hope helps cheers Walter.
Thanks walterw,

Especially for the article related to the Volume.

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Old 03-24-2007, 06:38 PM   #26
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Re: Wide Range Bodies or 'big' candles

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Originally Posted by brownsfan019 »
sds - I attempted to write a response earlier and got an IE error and off it went... that is frustrating. I'll try to retype it again here...

You will probably get a few responses, so make sure to read each one and you can see what you like.

PRICE ACTION: For me, price 'action' simply refers to the amount of trading activity or lack thereof. The more 'action' the more movements we usually see. There's action going on all day, but some are more active than others.

PRICE ACTION S/R: This would mean the amount of trading taking place at important levels. Many traders use Support/Resistance Levels, Pivot Levels, etc. to define areas of possible trade setups. Usually these are areas where good 'fights' and price action may occur. Pivot provided a great chart here: http://www.traderslaboratory.com/for...-candles-2.png You can see that he annotated the first doji on high volume and then a subsequent hammer at the same level on high volume. This would show that the bulls are clearly defending this area and that the bears are not willing to push it down further. So, that would visually tell us that this level is important to many bulls. So many that they are willing to step in to a bear charge and fend them off. This in turn created the double bottom formation that many traders use. If interested in S/R levels, I would recommend reading some books from Steve Nison as he talks about S/R levels in conjuction with candlesticks quite a bit. And Pivot provided a real example here.

Speaking more on this topic, I personally use VBC charts - http://www.traderslaboratory.com/for...ofit-1414.html - in my analysis. I prefer charts like this, some like minute charts with volume broken out as in Pivot's example.

JUDGING ACTION AROUND S/R: In Pivot's example, we see a doji and hammer at the same level with high volume. That would be reason enough for me to take the trade. How you filter the action around S/R levels is up to you. Some may add an indicator, some may add market profile, etc. etc.
Thanks for your explanation, brownsfan019.

This post has definitely given me a direction to start thinking.

To be honest, it has really given me start.

btw, I love your emphasise on the simplicity in the trading.

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Old 03-24-2007, 06:41 PM   #27
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Re: Wide Range Bodies or 'big' candles

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Originally Posted by PivotProfiler »
PRICE ACTION:

For me, price action is just that-the action of price and the price bars (candles). How wide is the range of the bar? Is price up from the prior interval? Is price making higher highs or Lower Lows? Is the spread of this bar wider than the spread of the previous bar? Is the close on or near the high of the range of the bar? Are we closing higher than the open more than closing lower than the open? These are the types of things that PRICE ACTION encompasses.

A much more esoteric understanding of price action involves CANDLE FORMATION. Not candle formations, but the formation of an individual candle line. Does the candle end the period with price on the high, but actual only traded to the high in the last 10 seconds of the 3 minute bar. Did price trade down to the low of the bar and remain there the entire interval? If price immediately trades down to the low (not known till close of period) and stays there, the was more selling pressure than buying pressure (leaving volume aside for the moment). Does price move up and down through out the bar's range and then close in the middle and equal to the open? Well the action shows indecision. Note that this is a Doji, but no knowledge of candlesticks could tell you that the bar is a bar of indecision.

These are the elements of PRICE ACTION for me.

SUPPLY/DEMAND:

1. First my perspective is from VSA
2. Read selling (supply) and buying (demand).

Before you do 2, however, it is best to understand supply and demand via the stock market. Supply means the actual stock being placed into the market. Like anything, too much tends to lead to falling prices. Demand means stock being taken out of the market. If there are many people chasing few goods price will tend to rise. That is just basic Econ 101.

Now in futures and currencies we can substitute supply with selling and demand with buying. Contracts are created by both a buyer and a seller so there is always a contract created. In stocks the amount of stock is "finite".

VSA teaches that strength comes in on down bars and weakness comes in on up bars. Strength is buying (demand) and weakness is selling (supply).

One needs to look at where the close is in relation to the size of the spread, the volume on the bar, the close in relation to the prior bar and the close of the next bar. All of these need to be looked at to determine if the high volume is associated with supply or demand.

Check out Tradeguider.com if you want to learn more about VSA and the CBOT has a few webinars. Continue to read this thread and others for more understanding.
Great post pivot, very educative.
brownsfan019 and yours post really gave me direction.

This thread is really helping me to understand the dynamics of the market.
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Old 03-26-2007, 02:03 AM   #28
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Re: Wide Range Bodies or 'big' candles

Quote:
Originally Posted by PivotProfiler »
PRICE ACTION:

For me, price action is just that-the action of price and the price bars (candles). How wide is the range of the bar? Is price up from the prior interval? Is price making higher highs or Lower Lows? Is the spread of this bar wider than the spread of the previous bar? Is the close on or near the high of the range of the bar? Are we closing higher than the open more than closing lower than the open? These are the types of things that PRICE ACTION encompasses.

A much more esoteric understanding of price action involves CANDLE FORMATION. Not candle formations, but the formation of an individual candle line. Does the candle end the period with price on the high, but actual only traded to the high in the last 10 seconds of the 3 minute bar. Did price trade down to the low of the bar and remain there the entire interval? If price immediately trades down to the low (not known till close of period) and stays there, the was more selling pressure than buying pressure (leaving volume aside for the moment). Does price move up and down through out the bar's range and then close in the middle and equal to the open? Well the action shows indecision. Note that this is a Doji, but no knowledge of candlesticks could tell you that the bar is a bar of indecision.

These are the elements of PRICE ACTION for me.

SUPPLY/DEMAND:

1. First my perspective is from VSA
2. Read selling (supply) and buying (demand).

Before you do 2, however, it is best to understand supply and demand via the stock market. Supply means the actual stock being placed into the market. Like anything, too much tends to lead to falling prices. Demand means stock being taken out of the market. If there are many people chasing few goods price will tend to rise. That is just basic Econ 101.

Now in futures and currencies we can substitute supply with selling and demand with buying. Contracts are created by both a buyer and a seller so there is always a contract created. In stocks the amount of stock is "finite".

VSA teaches that strength comes in on down bars and weakness comes in on up bars. Strength is buying (demand) and weakness is selling (supply).

One needs to look at where the close is in relation to the size of the spread, the volume on the bar, the close in relation to the prior bar and the close of the next bar. All of these need to be looked at to determine if the high volume is associated with supply or demand.

Check out Tradeguider.com if you want to learn more about VSA and the CBOT has a few webinars. Continue to read this thread and others for more understanding.
Hello PivotProfiler,

You had already given some great examples, e.g.
http://www.traderslaboratory.com/for...is-1369-7.html

Could you post some examples of your analysis of WRB, VSA in the TREND.

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Old 03-26-2007, 04:37 PM   #29

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Re: Wide Range Bodies or 'big' candles

Per NihabaAshi's request, I will include a few screenshots for review of WRB's.

Chart #1: YM 450 VBC Chart with Visual WRB's highlighted

In this chart, if you are short heading into the down move and subsequent WRB's (highlighted in white), I think exiting at the 2nd and/or 3rd WRB is a great exit. I would have even considered the first one, but as I mentioned in another thread, I am not interested in WRB's that occur shortly after entry. Taking a YM trade for +3 or +4 is not going to cut it for me. So, once the position reaches at least +5 (on the YM) then I will consider a WRB for exit purposes.
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Old 03-26-2007, 04:42 PM   #30

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Re: Wide Range Bodies or 'big' candles

Chart #2: YM 450 VBC Chart with Visual WRB's highlighted

This chart is a little more 'interesting'... If short into the first down move on the left, I see one possible WRB for exit purposes. It's not the low of the move, but still a good exit (for me). Then we get a push move up in the middle of the chart, and two possible visual WRB's. For me, to go against the downtrend may be more aggressive, but still a nice little long trade with WRB's. Lastly, if short (from initial short or a new one) we have a couple WRB's appear.
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Old 03-26-2007, 04:47 PM   #31

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Re: Wide Range Bodies or 'big' candles

Chart #3: YM 450 VBC Chart with Visual WRB's highlighted

I like this example - we have a nice down move on the left and if short, 3 possible exits with WRB's. The first one would probably not pass my 'is this into profit enough' test, but the 2nd and/or 3rd would for sure.

Now the key for me is this - let's say you were sitting on a fixed profit target that was not quite reached. What do you do? Sit and wait thru all that chop and see what happens or bail on the trade? That's what I always struggled with. As you can see, using the visual WRB's, the 2nd and/or 3rd WRB are great exits in my opinion b/c:
1) You get out during the momentum and the move, so you are not waiting around (and can then look for other trades, call it a day, etc.).
2) If using a trail stop, I would have inevitably been taken out during the chop, if using a set target it would not have been hit & then retraced and/or get to watch the chop for hours to see what happens...
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Old 03-26-2007, 04:49 PM   #32

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Re: Wide Range Bodies or 'big' candles

Chart #4: EC 450 VBC Chart with Visual WRB's highlighted

Here's an EC chart with Visual WRB's in white. To me, the WRB's were excellent for exit point(s) if long into that move. As you can see, price popped and then retraced back to the starting point.
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