tawe trader

Good stuff Jaybird, I would have taken the trades like my Canadian friend JJ said. I don't know if anyone has picked up on it but I tend to have a bearish slant to my trading and tend to trade the short side a lot - not good I know ! You did well to re-enter on the 2nd upthrust, sometimes these 'double' upthrust or 'tests' are more powerful than a single upthrust. I know it's easy in hindsight but concerning the first upthrust, if you look to the background (like what Sebastian talks about) and see 'weakness' you could have run with a wider stop above the first upthrust or even traded without a stop in the marketplace but with a wide mental stop, which is what I tend to do. It results in less shake-outs but you have to be confident in your analysis of the background. I haven't been able to trade much this week but hopefully I will have a chart or two of interest next week. A big thanks also from this Welsh FTSE trader, Sebastian - excellent video's and VSA analysis. - Darren

No, I didn't jump back in, the old "anger/frustration/feeling of being unlucky" emotions had kicked in due to the fact of having my stop caught only by 1/2 pt. Yes I didn't want you all to think I was some super-duper trader with a 100% win ratio !!

I have been busy the last couple of days due to family commitments and I shouldn't have traded but I wanted to show you a MEGA 5 min UPTHRUST and a silly trade I did last Thursday which will hopefully be a lesson to myself and perhaps others can learn something from my mistakes. The first chart I have attached is a 60min chart of the FTSE Future. It has had a storming rally - up over 500 pts in 7-odd trading days due to strong US mkts and Bank of England (BoE) rate cut rumors, so the mkt is due a retracement. The next chart is a 5 min chart of the mkt last Thursday. I went short (in the FTSE cash mkt) at 11.55am, at the bar above the pink arrow 5 mins BEFORE the BoE interest rate announcement. I placed a very wide 30 pt stop-loss. There was a massive upthrust bar at 12pm which took out my stop by 0.5 of a pt - gutted. I believe the lesson here is PATIENCE - if I had waited, another 10 mins, then gone short on the break of the upthrust's low I could have banked with a trailing stop, a possible 100 pts from the low of the upthrust dotted line down to the lower dotted line. C'est la vie...............Darren FTSE Fut_60min Dec.doc FTSE Fut_Thurs 6th Dec - Mega Upthrust.doc

JJ, I would most probably have taken the trade in realtime as well. You did well to get out for a breakeven trade. I was wondering though ........... if we follow the futures charts and thus the futures 'smart money' players via VSA then do the 'smart money' sometimes get it wrong, which would lead us to be wrong ? Say in this case (your trade) the 5min futures 'smart money' were selling (and/or going short) but the larger timeframe cash mkt still had plans to keep trending up, this would have resulted in the 5 min boys being on the wrong side of the mkt. Or am I completely on the wrong track here ? I now know after PP's explanation that it looks like you mis-read the chart and there were sign's of strength not weakness. What I didn't like about the chart was the upthrust bar had the same size volume as the previous up-bar. I was thinking that maybe there was a sudden change in the mkt and there was some hidden buying in the upthrust.

JJ, a FTSE Future contract is £10 / pt, I think there may be a mini-contract of half that. I use a UK spreadbetting company for my trades and they have lower min. stake, so it suits my trading of the higher risk setups. I can risk less when going against the trend and place a large stake trade when going with the trend. I have just opened up new s/betting account this month with MFGlobal spreads (part of the Man Futures group) and they now offer daily FTSE trades (bets) with only a 1 pt spread and a £2 / pt min stake. They offer access to hundreds of mkts (I trade the Dow/S&P as well) and any profits are tax-free for UK residents. The trades are classed as bets and the UK government doesn't tax any winning bets anymore (horses, football, financial etc) they tax the profits of the betting company instead, which is great news to profitable traders !

Hello JJ, thanks again for the kind comments but all I have done is adhere to the rules of VSA / Tom Williams - haven't I ? Granted on this trade the risk vs reward was about 1:1 but I see these set-ups happening all the time and there tends to be more winners than losers. As you know, it's also very important to have the patience to wait for the correct set-up and then when in the trade not be too greedy.

Yes if you trade off 30min bars you do have wider stops but the possible gain of pts is greater also. He would patiently wait for the 'perfect' set-up and there would sometimes be a couple of days without a trade. For the month of July the record he showed me had 14 trades based on a 30min chart for a total gain of over 420 pts with no losers ! One trade netted him 101 pts. Don't forget he is also taking into account the larger timeframe ie Daily chart.

Hello all, here's another trade I just carried out on the FTSE Future via a 5 min chart, this morning. The market was up strong this morning and above R1. 1. There was a wide'ish up bar (yellow arrow) at 9.30am on high volume (marked with a yellow arrow). 2. The next bar (pink arrow) was up into new higher ground but it closed down on less volume (marked with a pink arrow). Now I can assume that there was no demand for higher prices at this point and the previous bar contain some selling (into strength). I went short when the low of this no demand/upthrust bar was broken. I had a price target of the previous low (dotted yellow line). The trade was successful and I managed to bank 15 pts. FTSE Fut_Wed 5th Dec - Short.doc

Ah monad, it's the million dollar question........... I am not trying to take anything away from Sebastian as I am very impressed by his commentary and I would be chuffed to be able to read a chart half as well as him one day, BUT there is a big difference in being able to understand VSA and then trading (successfully) in realtime on the hard right edge of the chart ! If you can grasp the concept of VSA then perhaps you can build your own trading method around it, with the timeframes that suit you and your trading account. The chap who introduced me to VSA back in the summer used the FTSE daily chart as his trend direction tool, then he would drop down to 30 min bars for his VSA entry signal. It seemed to work for him and he wasn't glued to the screen all day. He would return every 28 mins just as the 30 min bar (and volume) was forming. If there was no signal he would walk away and wait another 28 mins.

Hello monad, I'll try and answer your questions. As I live in the UK I trade through a spreadbetting company, they do supply free live charts but there is no volume so I use Sierracharts with a DTN IQFEED, which I am very happy with. I haven't had many problems getting filled through the s/bet company and there's plenty of liquidity in the mkt. I also don't find it that spiky. I believe the tick value or pt value is £10 through a Futures broker. I will post some more charts (in a word doc) as I now know how to upload them to this forum.

I meant to say possible rate cut. -------------------------------------------------------------- Thanks Ravin and JJ for your kind words of encouragement. Great quick-in-and-out trade JJ, I know you may be kicking yourself for giving up a further 9 pts but even with the understanding of VSA we still can't predict the future with 100% certainty. We can only be patient and wait for low-risk setups to appear before acting. After I got out of my trade the mkt went sideways for about 45mins before turning back up and past R2 level. I wouldn't have made more than another pt or two if I had stayed in.

I have attached todays FTSE Future 5 min chart. The uptrend today has been strong due to US futures being up due to the possible rate rise. I have been patiently waiting for a place for a quick short. Reasons for taking a short trade. 1. Upthrust bar at R2 resistance level (green arrow) at 12.35 pm UK time. 2. Under this bar there is the highest volume (green arrow) since the opening bar at 8am - selling ? 3. The volume in the bars leading up to this point has been rising - possible selling into the current high of the day and R2 level. I did enter a small stake short trade once the low of the upthrust bar was broken and I had a target of just above the R1 level. I decided not to be too greedy due to the strength of the uptrend. After 25 mins I exited around the yellow dotted line for a 20-odd pt gain. Any thoughts anyone. FTSE Fut_Fri 30th Nov - Short at R2.doc

This is my kind of low-risk set-up, I would go short after the low of 'C' is broken (Upthrust bar), with a stop a couple of pts above it. Isn't the whole purpose of the Upthrust bar in this situation is to bring in new longs just when the mkt is looking like it's ready for a down move ?

There are some excellent and very relevant observations currently coming through on this thread. I am learning something new every time I visit here. Please keep up the stunning work. To be able to 'read' a chart with just price bars and volume is priceless........it's exactly like reverting back to the old times of Livermore and Wyckoff and trading as a craftsman, chart reading is a art and it's not something you can learn over a weekend. VSA combined with self-discipline with give you an amazing edge in todays Financial mkts. Price + volume hasn't changed over the years and can't be hid. In today's world of supercomputers, PhD Quants and complex indicators I believe VSA is the route to take, even if it takes a very long time to master. I like to thank all who contribute to this thread, combined with T.W.'s book it is very, very educational - cheers Darren

Due to the very important remark PivotProfiler made - "I am not concerned with picking tops and bottoms; I let them pick themselves" I need to re-write the above.........if the mkt is bouncing around without any major news (or in a trendless environment) you can quite successfully trade the turns based on VSA techniques. Thanks for the reminder PP. Darren

Where I find VSA very worthwhile is in a situation where a lot of indicators fail, ie an intraday trading range. If the mkt is bouncing around without any major news you can quite successfully pick tops and bottoms. Over the last couple of days though, I have found it to be quite unsuccessful trading the long side of any of the major index Futures based on a VSA 'buy' signal. On numerous occasions there has been very high volume coming in on down-bars, but there have only been very small bounces before the mkt turns back down again. The bad news has been over-riding most VSA long set-ups. On the opposite hand if I had only acted on VSA 'sell' signals (ie a no demand up-bar after a small rally) over the last couple of days then my trading would have been a lot more profitable. It has confirmed to me, that I need to have a trend direction tool in the background to help filter my VSA signals. So if I am trading off a 5min timeframe, I really should only take signals in the direction of the 60 min trend or if I do go against the trend, only risk small amounts, use a tight stop-loss and take any quick profits. Darren

No probs tech/a we are all prone to our blond moments............. I think the biggest eye-opener for me after being introduced to VSA is that it show's that the mkts are definately not random and it is one big game. 'Those in the know' will push the mkt around to suit their own interests, which is perhaps why most T.A. fails. 'They' will take the mkt to a level they want it go and just because some indicator has made a crossover (or flashed a buy signal) doesn't mean it is going to stop it. They will let the mkt fall (or drive it down) during bad news, like the last week or so, whilst quietly accumulating positions. They need all the weak holders and major sellers to be forced out and they check by 'testing'. They take the mkt down again, past their pain threshold. If there are no more sellers coming in then there is obviously less/no resistance to any rises. If anyone believes what I have said above is wrong, please feel free to correct me, as I am still learning everyday.

If you are looking to go long you want a lack of supply, otherwise as the mkt rises, supply will come in and possibly swamp the demand which would lead to a premature end to the rally.

Here is something to think about when trading Futures and looking for low volume 'tests'. The following quote is taken from a very successful FTSE Futures trader. However, 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.

Yes, it isn't until you have a understanding of VSA that you see how and why double bottoms occurs. A successful double bottom is where the mkt has had a successful test ie another low but on lower volume than the first low. If you have a failed test the mkt has to go back down again for a third time to 'test' for any excessive supply. If there is none, the mkt is 'free' to be taken up and thus you see a Triple bottom (or a low and two more slightly rising lows).

I'd like to say that recently I've had more success using VSA to get me out of a trade than using a trailing stop. i.e. If I take a LONG entry on 5 min charts and the mkt goes up, I drop down to a 3 min chart and look out for a wide spread up-bar on VERY high volume during a rally. If after seeing this, I wait for the next 3 min bar to form and if it is of smaller range and on less volume than the previous bar - I get out of the trade and bank my gains. Over the last couple of months I have found this way of exiting a trade has given me more pts than using a trailing stop. I did go through a period of getting out too quickly, I was wary of seeing any up-bar on increasing volume, but know I know this is still demand coming in. It's the ULTRA high (relative) volume you need to look out for. Regards Darren

Hello all, I have just stumbled across this forum this afternoon, this is a great thread and I have read through most of the posts this afternoon. I have been a trading for a few years and a member of the T2W forum but nobody there seems to follow VSA. I was shown VSA back in August (by a complete stranger) and he was also running Tradeguider software. I didn't fancy the software but I bought Tom Williams book and read it from cover to cover. Since August I have had live FTSE Future and Mini-Dow (YM) charts running and I have been watching these mkts all day and everyday since. Watching price and volume throughout the day and how it reacts around pivot points and S/R. VSA is not the holy grail but I couldn't trade without it now. I also believe you don't need to have the Tradeguider software to successfully trade as you can teach yourself the main signals. I still have a lot to learn but hopefully I can contribute something to this thread.