[delta]

Thanks Eiger. I have copy pasted your post to save it for future reference.

[TheRumpledOne]

Would

volume * ( Close - Open ) / point

be of any use?

My thought is it shows the "force". Similar to VWAP.

If you look where price bottomed, you'll see there wasn't much downward force.

As price climbed, the downward force that appeared was also weak.

[SRspider]

Here is another chart I tried to analyze with some VSA principles. Please disregard the MACD indicator, it was not used in the analysis. Any comments are welcome.

SRspider

[VolumeJedi]

Haven't posted in a while is solidarity with CW over his treatment here, but I attended the webinar today and decided to post at least twice more...........

The below chart shows many VSA principles and ideas that it offers a great opportunity to learn from. One thing I would not first, is that this is a 1 minute chart. I consider this a "scalp" trade. Due to the timeframe, not the length of time the trade is held or the amount of pips of the trade. Tom is not a fan of the 1 minute timeframe. Beginners should just be aware of this point.


A: There are a few things that are of note on this bar. First, it is a wide spread down bar closing off its lows on high volume with the next bar up. We know that strength, when it appears, appears on down bars. If that bar was weakness and all the volume represented selling, why would the next bar be up? Also note that this green paintbar is a "selling bar". That is, it makes a lower low than the previous bar but not a higher high than the previous bar. But check out the very next bar. This bar fails to trade lower. In other words, lower prices have been rejected-a sign of strength. This is bar forms the basis of our background, but there's more......

B: This bar is mentioned as it trips up many traders. It is a narrow range up bar on volume less than the previous two bars with the next bar down. Simply, it is no demand. More correctly, it is no demand by definition, but its placement is suspect. We have just seen a major sign of strength in the background and now we see this bar. It has to be ignored in this location.

C: More information here. We see a down bar on increased volume closing in the upper third of its range. While this bar closes lower than the previous bar it still is closing closer to its high than its low. When know strength comes in on down bars when it shows up, and the close relative to the range tells us that the bulls were in charge at the end of the period. Yet again we have a "selling" paintbar that fails to have price trade lower on the very next bar. This is more background information of the strength/changing strength of the market.

D: Beautiful example of what we want to see when we want to see no demand. It is a narrow range bar on volume less than the previous two bars and closing on its high with the next bar down. Again, as far as definitions go, it is no demand, but we have far too much strength in the background to consider this a tradable signal.

E: Something has changed. At point E we get a bullish UP bar. When weakness appears it appears on up bars. However, not all up bars are weak. Here we have increased volume (but still relatively low) and a close in the upper portion of the bar, with an increasing range. This bar is also a "buying" paintbar. As it has a higher high than the previous bar and not a lower low. Take a look at the next bar, it does close down but It makes a higher high than our buying paintbar at E. This shows some acceptance of higher prices in the market. In short, we have another sign of strength.

F: This is the market hitting us with a 2x4. We have a wide spread bar on ultra high volume known as a shake out. Again, note the close relative to the low of the bar. We are pips away from the high and miles away from the low. The BBs think on more than just the 1st level. 1st level thinking says, this is a selling bar on ultra high volume so the market must be weak. In reality, we know that the close near the high on this bar (and with the next bar up) means this bar is strong. The BBs have gunned for some stops of the early longs and tried to "freeze" out those on the sidelines. For some that got short on the low volume bars (no demand), they may be convinced to stay in the market on the short side and thus be forced to buy the position back at HIGHER prices.

Those that can read a chart, have seen the elephant's foot prints and get can get long on the next bar 1 tic/pip above the high of the shake out.

[VolumeJedi]

A very interesting trade set up here.

This is another 1 minute Euro example.

Let's start by looking at the left of the chart. Where else ? In trading we are always looking left to trade right. At least we should be.

One of the best signals to start your analysis from is some type of Climatic Action bar. We see a green paintbar that is indeed a Climatic Action bar. It has a wide spread on high volume closing off its highs with the next bar down. Once again, we know that when weakness (supply) appears it appears on UP bars. So while this is an up bar and "buying" bar, we know that the volume tells us that this bar is weak not strong. The BBs are selling into the move. Take a quick glance to the right, and note how the market moves sideways after the appearance of this high volume bar. While we do not know this now at the time of the bar, this sideways motion is further signal of supply (weakness) entering the market.

The very next bar is no supply. Like the no demands in the previous post, the location makes it suspect. Moving 4 bars to the right, we see a blue paintbar that is also a buying bar. The very next bar trades higher than the high of our buying bar showing some residual strength in the market. But we don't want to get long.

The market meanders sideways for awhile showing various "deceleration" sings, that is, no demands and no supplies/tests. With the background weakness, we are not looking to take the no supplies/tests. With the evidence of some residual strength, we don't want to take no demands. More over, notice that the no demands are not ideal. The second one, for example, makes a lower low and not a higher high. That is, it is a Selling bar. We would rather it be a buying bar.

Finally, we get a better no demand after price has risen from a test. Notice that this no demand is narrow. It does not make a higher high, but does close on its high (which is equal to the previous bar). At any rate, we have a narrow range up bar closing on it highs with volume less than the previous bars. More over, the next bar is down and an Up Thrust. Up Thrusts often follow directly after no demands. This sets up an aggressive entry to the short side. I think it is aggressive as we have seen some residual strength in the market after the initial sign of weakness.

Moving two bars to the right, we see another no demand. This no demand sets up another aggressive entry. What is key here is the confirmation bar. The very next bar which confirms the no demand, turns out to be a paintbar and a balance area. More importantly, however, it is a selling bar that is confirmed with price trading lower than the low on the very next bar. This counter acts the prior buying paint bar and now we are convinced of the market weakness. Not to mention that this bar is an effort to fall.

In order to get short we would like price to move back into the area of our Effort to Fall bar (in this case balance area). Price moves down and then moves back up. We than get a no demand bar that is narrow, closing on its highs, and a buying bar.

Our ideal entry comes a few bars later in the form of an Up Thrust. Note how the bar makes a higher high but closes on its lows and down from the previous bar. This is a text book example of market "manipulation". Once again we see an example of a Buying bar that is actually weakness (supply).

What is key about this chart is the residual strength, as shown by the buying paint bar followed by prices trading above it; is eventually countermanded by a selling paint bar followed by prices trading below its low.

Some may ask, why not short the no demand. Notice that the market does not trade below the low of that no demand before it forms the Up Thrust. In other words, if you placed a sell order below the no demand, it would not of been hit. In addition, the no demand followed by the up thrust is one of the 3 main set ups.

[TheRumpledOne]

Thanks for sharing VolumeJedi.

I don't know much about the CW battles on this forum but I know the ones I have to fight elsewhere. Such a waste of time but one has to defend their reputation.

[VolumeJedi]

Here's another chart for you viewing pleasure.

There's a few things that are really interesting here. First, what we can't see on the left of the chart is the fact that we are in a down trend at this time. This information is obviously important as most traders would want to be shorting in a down trend and going long in an uptrend (more on this later).

Note the pink paint bar on the left side of the chart. This bar has ultra high volume with a close off the lows and the next bar up. VSA tells us this type of bar shows buying (strength) by the BBs. Also note that this bar is a "selling" bar since it has a lower low than the previous bar but not a higher high. Once again, we need to use second level thinking and realize that this is a bar of strength despite what the masses are oft to think.

What we can do here is use Gavin's trigger number concept. A yellow line was placed at the close of the bar and drawn into the future. This level, or number, should be an area where price will react in the future.

As noted, the trend was down at this time and the high volume that entered moved the market to the sideways a bit, but there was no demand for higher prices at this time. Note the blue paint bar (Effort to Fall) that shoots thru the yellow line and below the low of the pink paint bar. The next bar is a narrow range up bar on volume less than the previous two: No Demand. Although it is not marked, this is a good place to take a trade or add on whichever the case may be.

Things get interesting later on. Note that a Balance Area forms where there are two successive blue paint bars. Because the low is made before the high, we know that this balance area was made by buyers. Looking closer at the first bar of the balance area, we note that the close is in the upper portion of the bar on a down bar on increasing volume. Buyers have to be stepping in here or the close would be lower on the bar. This is the spread analysis of volume spread analysis (LOL). For the aggressive counter trend/scalper type of trader a long sets up as we see a no supply bar that trades down to the midpoint of the balance area. With the blue paint bar, two bars earlier showing some price acceptance to the downside we know the market is ultimately still weak. Any pop in prices is expected to be short lived when we couple this with the actual direction of the trend.

The really interesting thing is what happens as price pops higher. Price hits a resistance point and bounces. The resistance point is the yellow line, our trigger number. Gavin would say, "There are no accidents". As price bounces off this level we see a narrow range up bar on volume less than the previous two bars followed by a down bar that makes a higher high on increased volume. This is an up thrust. BINGO

We see what we want to see and in the location we want to see it. Time to get short. This trade is in harmony with the market.

The real take away here is, if you can define ultra high volume bars you can use these to create your trigger number (support/resistance lines).

[2trade]

Hi the bars you show as no demand after the stopping volume are not ND they are low volume upbars because there is now strength in the background the bar you have as a shakeout is a reverse upthrust or in wyckoff terms a spring -- hope this helps.