[disperados-x]

Originally Posted by monad »

Laurence
I am not a guru.
I have studied and use both Wyckoff and VSA concepts.

Understand this: VSA is derived from Wyckoff.

In wyckoff there is nothing like
"markets do not like upbars on high vol" and "professionals lurking in the background to pounce on you". This is all hype in VSA. Context is the what matters.

There are some very useful setups in VSA , again based entirely on Wyckoff but presented in somewhat simpler way and that is all you require. Drop the rest, especially the urge to figure out who is moving the market, each bar in the right context reveals if there is Buying or Selling pressure. Vol is activity, on each bar selling and buying contracts are equal, what the price does tells you who is in control and that is all you need to know. Anything else is just distraction.

In your quote ref P39 chart 7, the explanation is confusing: The context is "Pushing through Supply", There are lots of traders who were long and are itching to get out at breakeven if price reaches the level at which they bought after a fall. To absorb this vol, the demand has to be greater than supply ie. buying pressure is in control, there are more contracts on the bid, totally forget about professionals))

If you wish to progress without getting mired into lot of VSA jargon, get hold of the latest Al Brooks Book "Reading Price Charts Bar by Bar", Preface alone will set you on the right path. and is worth the price of the book

Attached is a pdf : The first section of the book on "Price Action".

Next go to the Wyckoff forum, there is enough there to guide you further on how to read vol which is Effort and price move which is Result. You really do not need any more, no fancy software, seminars, etc period.

End of day, Your choice.

Good Luck

You has a full Al Brooks book? Will Be able its here show? Long ago want to look her. But while on the first part me she did not like on interpretation of the material. Wanted hear whole she such.

[BlowFish]

This thread http://www.traderslaboratory.com/for...book-6008.html is about Brooks work.

[rako]

Quote:


Taken from Master the Markets p39, Effort vs Results

If the additional effort implied in the higher volume and wide spreads upwards had not resulted in higher prices, we can draw only one conclusion: The high volume seen must have contained more selling than buying. Supply on the opposite side of the market has been swamped by demand from new buyers and slowed or stopped the move.


This has me scratching my head. If the high volume contained more selling than buying then doesn't this imply that there is more supply than demand? The quote above from MTM suggests that the opposite is true and that supply has been swamped by demand. If supply is being swamped by demand then wouldn't we expect to see higher prices and a continuation of an upward move?

Im new but here's my humble opinion : I think there's no typo:

you have higher volume,wide spreads UPWARDS (green) and NO HIGHER PRICES (doesnt mean lower prices). why ? cause there was selling there , supply, which then got swamp by demand caused by new buyers who stop or slow the (down) move. it means weakness, the market may go up but not very far, we should wait to see some no demand bars, then an up thrust and.............go short !!!

[rako]

It is how they artificially mark prices down and conversely how they artificially mark prices up that I was enquiring about.

Im not sure about how they exactly do that but think that market makers are supossed to fill orders at every price level, HOWEVER... the amount of orders they trade at every level its up to them...what would you do if you were them and wanted the price to go up??? or down ???

please any VSA experts out there correct me if Im wrong, I wouldnt like to missinform anybody.

[BlowFish]

Originally Posted by rako »

Im not sure about how they exactly do that but think that market makers are supossed to fill orders at every price level, HOWEVER... the amount of orders they trade at every level its up to them...what would you do if you were them and wanted the price to go up??? or down ???

please any VSA experts out there correct me if Im wrong, I wouldnt like to missinform anybody.

Dunno about that, the only market that I can think of where the market maker (specialist) is expected to 'facilitate an orderly market' is the NYSE. Even so I don't believe that there is any requirement on them to fill orders at any particular level. In short I think you have probably been misinformed

[VolumeJedi]

Originally Posted by rako »

Im not sure about how they exactly do that but think that market makers are supossed to fill orders at every price level, HOWEVER... the amount of orders they trade at every level its up to them...what would you do if you were them and wanted the price to go up??? or down ???....

First, we must admit that times have changed. In Wyckoff's and Tom's day, every market had market makers. Today is a different story with electronic trading. Where there were once floor traders, there are now streams of data in cyber-space.

With that said, the principles remain the same.

According to VSA bearish market makers would do this:

1. first we understand that they are bearish becuase they can see both sides of the market. And the market players. If they are bearish, therefore, it is because they see a large number of sell orders from the players in the know.

2. Price is allowed to rise slightly as the buyers (the people ultimately on the wrong side) enter the market.

3. The range is kept artificially narrow. The herd (buyers) thus think they are getting a good fill. In reality, however, they are buying into a "flood" of smart money selling. In other words, the presence of a lot of supply, allows the market maker to match the orders easily and keep the range small. Econ 101 would tell us that a lot of buyers (high volume) would bid the price up. What is really happening is that the buyers are buying into a lot of selling (supply). The smart money will have more supply than the herd. So ultimately price will fall on the abundance of supply in the market. But you would at some point see that narrow range up bar on high volume.........

This is the type of bar Bill Williams called a squat. Tom calls such a bar "end of a rising market", when it is into new territory and closes in the middle or high of the bar.