[TPTrader]

Hi All,

I'm new here and new in VSA. First of all, thanks very much to everyone for sharing your knowledge here.

I have a question for CW's post.

Originally Posted by CandleWhisperer »

There are of course slight deviations. In the first box we see No Demand followed by No Supply and then the Test. In the second box we see No Buying Pressure then No Selling Pressure followed by a Test. We could see No Demand followed by No Selling Pressure and then a Test.

Why do you call the "test" in the second box a test instead of a no demand bar which would have an opposite mean? I am confused here. How do you tell them apart?

Thanks.

TPT

[tawe trader]

I am off to San Franscico in the AM to the Best of Wyckoff and then to the VSA Summit. I am really looking forward to these. Gavin Holmes put both together and has done an excellent job attracting great talent to both. I'm quite excited to be meeting Sebastian and, of course, Tom for the first time, as well as Hank Pruden -- I can't wait. It will be fun.

TG have made a fine move bringing you onto their seminar team. I'm sure the audience will really appreciate your Wyckoff / VSA technical skills and chart reading, just as we do.

Enjoy yourself but don't forget about returning to your old mates on this VSA thread, once in a while

All the best
Tawe

[tawe trader]

The 12.26pm bar that I marked yesterday as a high volume wide spread bar could also be called an 'END OF A RISING MKT' which was formed during an economic news announcement in the US. Crafty ol' buggers these pro's !!!!

Why an 'end of a rising mkt' bar ?

1. It came in after a good sized rally.
2. It was a very high volume upbar.
3. The mkt closes off it's highs, which indicates supply was present.

Also, if volume is ultra high, there is additional weakness in the mkt.

Once we have seen weakness in the background, which in this case was signalled by an 'end of a rising mkt' bar, it pays to look for a no demand or upthrust as an entry point for a short trade.

As I write this the FTSE hasn't been above that bar, so maybe we have seen a short-term mkt top.

If anyone has seen anything I've missed or overlooked, please let me know.

Tawe

[CandleWhisperer]

Originally Posted by tawe trader »

The 12.26pm bar that I marked yesterday as a high volume wide spread bar could also be called an 'END OF A RISING MKT' which was formed during an economic news announcement in the US. Crafty ol' buggers these pro's !!!!

Why an 'end of a rising mkt' bar ?

1. It came in after a good sized rally.
2. It was a very high volume upbar.
3. The mkt closes off it's highs, which indicates supply was present....Tawe

Tawe Trader;

That bar is definitely a TRANSFER OF OWNERSHIP type of bar as the volume is ultra high, the close is up and close is in the middle of the range. Not surprisingly, it comes on a news release. As you say, crafty ol buggers .

But it is not an "end of a rising market" bar. An "end of a rising market" bar will always be a narrow range bar on ultra high volume into new high ground.

"Likely End of a rising market is hallmarked by a narrow spread, on an up-day (or bar), accompanied by very high volume. Ideally, the market should close on the high-this 'capping' action adds extra significance to the weakness and the price should fall immediately in this situation. If prices are into new ground, this will usually mark a top." Tom Williams, Master the Markets, p.149.

"End of a rising market" bars are rare. Ultra high volume bars that stop an up move are much more common.

[CandleWhisperer]

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.

[jjthetrader]

Originally Posted by CandleWhisperer »

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.

[sw9]

Originally Posted by tawe trader »

Yes Steve, it is something you need to look out for and be aware of.

Whilst low volumes are essential for test bars in the underlying cash index (showing a lack of supply), futures markets can create similar test bars on higher volume (because traders pile into the future on sight of the cash index test bar), so this is not necessarily a negative indicator. - THE WELSH WIZARD (Aug 2007).


Tawe

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

[jjthetrader]

Originally Posted by sw9 »

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.