[DbPhoenix]

Originally Posted by Eiger »

These situations can be confusing. What you are seeing here is aborption. Unfortunately, you can't really see it with the 2-min chart.

Of course one can. Just zoom out.

[zeon]

Originally Posted by Eiger »

I hope this is helpful.

Eiger

Thanks, this has been most helpful. Only thing that has got me thinking now is your remark about the 5-minute chart. I've been used to trading off 5-minutes but now I'm going down to 2 or even 1-min bar charts because of the comments from dbphoenix.

Another question, excuse me if I missed this, but what's your chart provider? It's nice to have a continuous flow expanding over several days.

[Bearbull]

Originally Posted by Seb Manby »

I don't know who you are, but I think that of all the people posting to these volume analysis threads, I think you will get there quicker, because you are studying the book and applying the context to your charts, that is how I broke through the fog.
Keep going, you'll get there soon enough.

Well done
S

Then the obvious question is why is that after 7-10yrs of VSA being around, that vast majority are still engulfed in the fog, afterall you folks at TG are not exactly rocket scientists that you are in possession of such abstruse and esoteric knowledge that it cannot be explained and illustrated via charts, realtime trades etc in clear, concise, uncomplicated and logical manner rather than getting folks hooked onto expensive software and seminars and forever going around in circles with so many cutesy terms absent in the original Wyckoff's course from which VSA has been derived in the first place although never been acknowledged.

[DbPhoenix]

Originally Posted by Bearbull »

the original Wyckoff's course from which VSA has been derived in the first place

While this may be true in a general sense, it is not true when one gets down to specifics. There are important differences between Wyckoff and Williams, though there may be fewer differences between SMI and Williams (which makes sense given that Williams took the SMI course). And the differences between Wyckoff and Williams are important enough to make them practically distinct.

Therefore, anyone who reads Undeclared Secrets or any of the material put out by TG should not assume that it all comes from Wyckoff. Only in the most very general way does any of it come from there.

[Eiger]

Originally Posted by zeon »

Thanks, this has been most helpful. Only thing that has got me thinking now is your remark about the 5-minute chart. I've been used to trading off 5-minutes but now I'm going down to 2 or even 1-min bar charts because of the comments from dbphoenix.

Another question, excuse me if I missed this, but what's your chart provider? It's nice to have a continuous flow expanding over several days.

I use MetaStock with an e-Signal data feed. I use MetaStock primarilly because I use a couple of indicators that were built on this platform, plus it is easy to transfer data from text and excel files in and out of MetaStock. A lot of MetaStock people also use AmiBroker, which is a (much) less expensive option, and they seem to really like it. The TradeGuider software looks interesting, but I have never used it. There is a lot of charting software out there -- all seem to have both pros and cons. Applying Wyckoff and VSA doesn't require indicators. So, unless you wanted to go with TradeGuider, you probably don't need much more than a basic package.

The e-Signal data feed comes with charting software, which I also use and is OK. The charting software is certainly adequate for Wyckoff and VSA applications. On commodities (including index futures), however, they have an odd convention of being one day behind in the volume, so it is always off by a bar. This only occurs on the daily chart, not the intraday. But it still can be vexing at times, so i am not sure I could recommend e-Signal whole-heartedly. (I always think about Tom Williams's comments in his book about how the exchanges really don't want us to have the volume data because it is so important. They continue to lag the data and vendors like e-Signal continue to support this.) The stock data is good, though. TradeGuider says they are coming out with a less expensive data feed that will run on MetaStock, so I am waiting to see what they develop.

Maybe someone here knows of an alternate data feed that will also run on MetaStock? I do know about Rueters, but I don't know of any others. In any event, I'd be interested if someone knows of another data provider.

I'll respond to the first part separately.

I hope this is helpful,
Eiger

[habi]

Originally Posted by DbPhoenix »

While this may be true in a general sense, it is not true when one gets down to specifics. There are important differences between Wyckoff and Williams, though there may be fewer differences between SMI and Williams (which makes sense given that Williams took the SMI course). And the differences between Wyckoff and Williams are important enough to make them practically distinct.

Therefore, anyone who reads Undeclared Secrets or any of the material put out by TG should not assume that it all comes from Wyckoff. Only in the most very general way does any of it come from there.

Already all the free available education recourses from TG was very helpfull for me. I think it's more, than just interpreting single bars. I get a much better understanding of volume and price action, then I had before, but I know, that I have to learn more. Where you see the main differences between Wyckoff and Williams?

It seems, that there are several resources available based on Wyckoff. If I interpret some statements correct , then some people see e.g. SMI or TG as an ajusted Wyckoff version to todays market relations, but you and BB seems to have another view. Can you give me some educational resources (books, courses ...) which you think teach the original Wyckoff material?

[Eiger]

Originally Posted by zeon »

Thanks, this has been most helpful. Only thing that has got me thinking now is your remark about the 5-minute chart. I've been used to trading off 5-minutes but now I'm going down to 2 or even 1-min bar charts because of the comments from dbphoenix.

It seems like nearly every post I have made recently draws a response about time frame. Some seem to want to argue about time frame and promote their position on it. There is a vigorous advocacy of the 1-minute bars. Apparently so vigorous that you doubt your own wisdom. That is not a good thing for a trader. The time frame you choose to trade from is your decision, no one else’s. Please understand that I don’t really care what you choose. I have nothing invested, nor do I want to invest in whatever time frame you choose (sounds silly to even say that, doesn't it?). What I mean to say is that it is your choice, and it is a personal choice based on a variety of factors that are strictly personal to you. Don’t let others (including me) unduly influence you.

I found from my own experience that the small time frame is not helpful to my trading. As I said earlier, we have more of a tendency to “see” something that isn’t there on small time frames. Because the time frame is small, if what you see is a misperception, it will quickly disappear and cost you money. You run the real risk of getting whipsawed a lot. Sebastian Manby says he uses a 15-min chart to help reduce the whipsaws. The other major problem with the small time frame is you miss a lot of what is there. Again, Sebastian Manby said earlier that you don’t get meaningful VSA indications like no demand on a 1-minute time frame. So, if you are interested in developing proficiency in VSA, well, I would think about what he is saying. He is a master.

We were discussing absorption, which was missed on the small time frame chart. When Wyckoff discussed absorption, he did it with a DAILY chart. He analyzed the NY Times Average from late 1930 to late 1931, and it is a brilliant analysis full of chart reading techniques. But he did not use a 1-minute chart, and to my knowledge never used a 1-min chart.

Ask yourself whether or not the advocates of the small time frame talked about absorption. Nope. Totally missed it. In fact, if you look at the blog, there was discussion about where to take a short position during this time! Same with the Spring on March 19. The blog took a short position in the midst of strength, yet later said that from a Wyckoff view, traders would have gone long on that day. Why go short, then? Because of the fundamental problem with the small time frame – you have a very strong tendency to miss the forest while hugging the trees.

Should the 1-min chart be condemned, then? I don’t think that at all. Sometimes it can be useful. I was confused about price action and a 1-min chart would certainly have been helpful. No doubt about it. If you are trading in and out for small scalps, you probably need a tick chart. But, this is about VSA, not scalping. On balance, I personally have found that it is more a liability than an asset. That was all I said and it sure seemed to rattle the cages, didn’t it?

One more thing raised is the notion that the 1-min chart lets you see the flow of the market. I don’t buy that. You do not need a 1-min chart to read the flow. In fact, Wyckoff developed a wave chart as a way to read the flow of the market. He was very focused on the wave movement of the market and always talked about how the market moves in waves. When the waves start to change in length and time, you can anticipate a change in market direction. You definitely do not need a 1-min to read the waves. Although not strictly VSA, if interested we can talk about this useful aspect of Wyckoff.

Zeon, you may find the 1-min chart suits you well, and that is terrific. If you can trade well with it, then use it. But you need to come to your own conclusion on this. Don’t take what I say or what others say as gospel. It ain’t. Think about this: a little while ago I posted about a potential Spring in the Naz. That was immediately countered with a triangle pattern and an opinion about the downside. Do you remember what you had said? Compare that with where we are now. Go with your own counsel, man. You know more than you may think you do.

Eiger

[DbPhoenix]

Given your references to "the blog", and given that my blog is the one you're referring to, I feel compelled to respond to some of these remarks.

Originally Posted by Eiger »

I found from my own experience that the small time frame is not helpful to my trading. As I said earlier, we have more of a tendency to “see” something that isn’t there on small time frames. Because the time frame is small, if what you see is a misperception, it will quickly disappear and cost you money. You run the real risk of getting whipsawed a lot. Sebastian Manby says he uses a 15-min chart to help reduce the whipsaws. The other major problem with the small time frame is you miss a lot of what is there. Again, Sebastian Manby said earlier that you don’t get meaningful VSA indications like no demand on a 1-minute time frame. So, if you are interested in developing proficiency in VSA, well, I would think about what he is saying. He is a master.

What Sebastian does or does not say -- or anyone else, for that matter -- is not particularly relevant to the content of my blog since I make no effort to teach "VSA". It is only logical that one misses what he doesn't see, and one misses a great deal by focusing on summary bars, and the longer the interval of the bar, the more he misses. But, again, whatever bar interval one chooses is entirely up to him.

We were discussing absorption, which was missed on the small time frame chart. When Wyckoff discussed absorption, he did it with a DAILY chart. He analyzed the NY Times Average from late 1930 to late 1931, and it is a brilliant analysis full of chart reading techniques. But he did not use a 1-minute chart, and to my knowledge never used a 1-min chart.

Ask yourself whether or not the advocates of the small time frame talked about absorption. Nope. Totally missed it. In fact, if you look at the blog, there was discussion about where to take a short position during this time!

First, "absorption" was not missed on the "small time frame" (which is distinct from a short bar interval) chart. I'm more interested in addressing what's happening in the chart, not what buzz word to call it. And unless I'm mistaken, you didn't bring it up at all until after the fact. This is of no benefit to anyone having to make a RT decision.

Second, Wyckoff for intraday trading used a tape reading notation system, a form of P&F, the interval being determined by price behavior. He did not use 5m charts or 15m charts or 60m charts. In fact, unless one considers his intraday notation system to be a chart, he did not use intraday charts at all. What he was focused on was buying and selling waves, not bars.

Same with the Spring on March 19. The blog took a short position in the midst of strength, yet later said that from a Wyckoff view, traders would have gone long on that day. Why go short, then? Because of the fundamental problem with the small time frame – you have a very strong tendency to miss the forest while hugging the trees.

No, because short off an upwave to resistance and long off a downwave off support is the nature of intraday trading, a central tenet of Wyckoff's. As for making the point "later", I said at the time that I was stopping for the day because I had other things to do. I also pointed out in my commentary IN CAPS that the comments made for the period of my absence were hindsight remarks. Your "spring" (not a Wyckoff term) began on the 17th. Of what relevance was it to intraday trading on the 19th?

Should the 1-min chart be condemned, then? I don’t think that at all. Sometimes it can be useful. I was confused about price action and a 1-min chart would certainly have been helpful. No doubt about it. If you are trading in and out for small scalps, you probably need a tick chart. But, this is about VSA, not scalping. On balance, I personally have found that it is more a liability than an asset. That was all I said and it sure seemed to rattle the cages, didn’t it?

You are again confusing a small bar interval with scalping. Again, the small bar interval enables a more precise entry, assuming that one has done his homework with regard to support and resistance, and the position is held until the wave ends, whether that occurs in minutes or in hours.

One more thing raised is the notion that the 1-min chart lets you see the flow of the market. I don’t buy that. You do not need a 1-min chart to read the flow. In fact, Wyckoff developed a wave chart as a way to read the flow of the market. He was very focused on the wave movement of the market and always talked about how the market moves in waves. When the waves start to change in length and time, you can anticipate a change in market direction. You definitely do not need a 1-min to read the waves. Although not strictly VSA, if interested we can talk about this useful aspect of Wyckoff.

You're once again confusing intraday trading with EOD trading. Wyckoff's intraday trading was via the tape. He read the flow continuously since the flow is itself continuous.

Think about this: a little while ago I posted about a potential Spring in the Naz. That was immediately countered with a triangle pattern and an opinion about the downside. Do you remember what you had said? Compare that with where we are now.

And you apparently missed the "spring" in both the ES and the NQ that occurred shortly after the open yesterday and which resulted in a 40pt move in the NQ. Though perhaps you posted your notice of it somewhere else.

Clearly you don't understand the point of my blog, which is to call attention to the features of the territory so that whoever is trying to draw an accurate map can do so. It is not to make calls or to tell people where to enter or where to exit or what their targets should be or otherwise teach How I Trade. Most of all, it is not hindsight quarterbacking, telling them what they should have done or ought to have done, what was "classic" or "textbook" or "obvious".

Given my general lack of interest in VSA and your devotion to it, I am sure that those who are equally interested in VSA and in learning how to implement it would greatly appreciate your opening up a blog yourself and explaining to interested traders what is going on in VSA terms throughout the day in real time.