CandleWhisperer

it can get a bit tricky. If the volume is less than the previous two and closes down, you may have No Supply. But you would have to wait for the next bar to find out. If the close is in the middle or high, it could be a test. Thus, what we would like to see is volume that is higher than the No Demand bar. That means it at least can't be No Supply. It can still be a test, but a test on increasing volume usually is not bullish. As for range, here too things can be a bit tricky. If the range is large and the close near the low, a personal decision needs to be made. That is, price may have moved beyond one's entry tolarence. So while the bar confirms (completes) the No Demand it may close too low to be a valid entry point. The level where a down close is too low for entry is personal. But many will find those times when a No Demand completes at the same time a short entry is invalidated. Of course some don't care and are willing to "chase" and do not consern themselves with the above. To be clear, I am talking about the amount of price change from the No Demand bar to the close of the completion bar.

When a person that is new to tradeguider looks at a chart, he sees these no demands at some very "ideal" short enter places and thinks, here it is the Holly Grail. But in truth, TG is the first to say they are not entry signals. Check out any TG chart/video or picture in the book. Usually, there will be few No Demands but many up bars that are narrow on volume less than the previous two bars. That is because the software uses a confirmation (which should be called completion) bar and a range formula. At any rate, It is important not to dismiss the concept just because the red triangle comes after the close of the second bar. It is not an after the fact signal. If you are familiar with Bill Williams, think about a fractal. For a valid fractal pattern, 5 bars are needed where the middle bar is the lowest low (for a down fractal) of the 5 bars. An indication could be placed on that bar, but only after the next two bars make higher lows. At first glance it might look like the low was called but in reality the pattern completes and then the sign is generated an placed. As for Gavin, it is true that he waits for a change of color in the price bars or the diamonds. This makes no sense to me. If you claim to be reading price and not using indicators, then why would you enter on color bar changes like any other TA user?

COMPLETION BAR -brilliant. How needs to pay thousands of dollars to join the VSAClub when we have the likes of you here?

In truth this is an inconsistency with VSA. To have a No Demand bar we need to see the next bar close down. This is the confirmation bar. Gavin, however, says one should not go short on a down bar. This is echoed by Tom in the book. But if you don't go short on a down bar, then you will be shorting prior to any confirmation of No Demand. It should be noted that the book does not make any mention of confirmation and Tom himself does not wait for any. The software program he designed, however, does not place No Demand indications without confirmation.

A Test fails in one of two ways: 1. It occurs on high volume. 2. It does not produce a preceding higher close within the next 1 to 2 bars. There is actually another way to tell if a test has failed: A Dark WRB closing lower than the low of the test bar. My previous post (1715) shows a failed test that does not have an close higher than the test bar and a dark WRB. By the time you see the dark WRB, there is no doubt the test failed. Not to complicate matters, but there is a difference between a failed test and no results from a test.

JJ, thanks for the replay. I have attached the same chart with what I see as three (3) options for trade entries. There are a couple of things I was hoping you would have addressed in your reply. 1. No Demand is defined as an up bar on a narrow range with volume less than the previous two bars. By that definition, EVERY up close with an arrow would be No Demand. But if one waits for confirmation, then the only No Demand in the black box is the last one. Which is labeled. I guess that you consider confirmation a break of the low of the Possible No Demand bar, correct? If one uses TG, a No Demand bar is confirmed (indicator generated) AFTER the close of the next bar if it is a down close. This is where I am struggling a bit. I would be inclined to wait for the close of the next bar to confirm that the prior bar was indeed No Demand rather than simply no buying pressure. What are you thoughts on this? 2. First that is not Y1, but YL which stands for Yesterday's Low. Now the problem I have is if there was no M2 on my chart, then option 1 makes the most since. However, with the confirming candle closing off its lows and bouncing off M2, I am hesitant to go short on that side of a Pivot Line. Therefore, I like the price action at option 2. Here we see M2 act as resistance which creates another No Demand candle. And that No Demand is confirmed by an Upthrust like candle. Of course, there is now the problem of distance to YL. How close to a possible PL are you willing to take a trade into it? Option 3 is the next place to enter. Again we still have issues regarding the pivot line, but now we see a dark WRB closing lower than a failed test. There is little doubt that the market is weak. Your last post had PLs, how do you deal with the above issues? BTW the prior post where I said (short maybe) deals with the same issue. Clearly there was weakness, but the question was, "is the window big enough to warrant a trade"?

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.

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.

There's so much in this chart, I just had to post it. We see a few Patterns here. In my opinion, where one enters is an individual thing involving personality and risk tolerance. The first pattern on the chart is a Two bar bottom reversal. This happens to occur at the Pivot Range Low. The nice thing about PLs (pivot lines) is that they focus our attention. That is to say, as price nears a PL, we start to look closer at the chart (and stop surfing the web ). Anyway, this two bar pattern is better when both the bars are Wide Spread bars as is the case here. I have often missed this pattern to be honest. What I like to see, when I do see it, is a Test or No Supply sometime after. In this case we do get that Test. This Test is very interesting however. Just prior to the Test we get another Possible Two bar reversal pattern in the opposite direction. The thing to note here is that the volume on this pattern is higher than on the first pattern. This higher volume is immediately tested. Hence, we have a test that both confirms the first pattern and negates the second. Also of note is that the second pattern happens @ the pivot and the test is @ M2. The next pattern(s) to focus on are inside the black boxes. This pattern happens all the time. The basic pattern here is: 1. No Demand or No Buying Pressure 2. No Supply or No Selling Pressure 3. Test 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. The first one is a nice entry @ the Pivot. But notice that in each case the Test candle is actually a 'Test in a Rising Market' type of Test. And we know from MTMs a 'Test in a Rising Market' is a powerful type of Test. Stepping back a bit and shifting gears, take a look at all the Tests candles on the chart. Note that the second test (From left) is a failed test. Take a look at the high volume on that Test. If we look at the first test, we do see high volume but in this case is less than the previous two. By the time we see the Test in the first black box, the volume has dropped off considerably. There is indeed a lot here. I hope it helps some. Please if you see something you look at that I have missed, let me know. I am learning just like the rest of you.

Here's a couple of charts with some nice VSA action. Let's look at the chart on the left first: A: The Euro is in an obvious up trend (5 min timeframe) since after the fed lowered rates. Price move up to R2 and we see Ultra High Volume on an up candle that closes off its highs. In fact, it closes lower than its midpoint with the next candle down. Before we see the next candle, however, we have to ask, "If all that volume was bullish, why is the close less than the midpoint?" There most of been some selling in that candle. This candle appears where we would like to see supply enter: R2. B: The next candle is down. This candle has volume less than the previous two candles and closes down. This is no supply. But we just had a wave of supply enter. What's going on? Is the market now weak or still strong? Not sure. Neither are the BBs, so they will "test" the waters. C: This is a Test. Note the volume is high on this Test. There is indeed supply underneath. The high volume tells us that the test has failed. The BBs went looking (testing) for supply and found some. When the BBs test, they do not want to find supply, which is why the volume should be low on successful test, not high. D: Large dark WRB that engulfs and closes lower than the Test candle. Weakness confirmed. E: Two candles later, we see a narrow range up candle with volume less than the previous two candles closing on the bottom half of its range-No Demand. The market is weak. Get short young man (maybe?). The question is now this: will we revisit R1 or find support at M4? If you're quick enough, you can take a trade down to M4. If the market blows thru M4 on the downside as it did on the upside, then we can look to R1 for support. Resistance becomes support. The second chart shows what happened. M4 did indeed act as support as of the capture.

Yes, it is nice that the SCT boys and gals have not made their way here. I am surprised BF that you did not mention VSA.

I disagree. Whilst it is true that it is not no supply, it is no selling pressure. That is because of the low volume with the next bar down. It has nothing to do with timeframe. That prior no demand is valid but its on this timeframe. The difference is the close of the next bar is down after the no demand. If that had been a true No supply, the next close would be up and we would then see an immediate test and/or no demand. Timeframes are independent. That is, valid signs can be seen on any individual timeframe. As for tests, you are correct when you say they come in all forms. And some of those will be up closes rather than down closes. Tom says, pay more attention to the ones that close down. He does not say ignore them and blame it on timeframe. Remember, VSA states that professionals are at work on all timeframes. And, they are competing against themselves and others that can read a chart. P.S. AWSOME Post and pic. I am always glad to see you post. PS.S. Here is a test that closes equal to the previous bar but fails. Not because of timeframe but because there is no upside action after it. Moreover, we get a Dark WRB that closes below and engulfs it.

Take a look at the chart. The first bar you identified is a wide spread down bar on ultra high volume with the next bar up. It is true that Demand did enter on this bar. The next bar does not have volume less than the previous two bars and therefore IS NOT No Demand. The bar after does have volume less than the previous two on a down bar and is No Supply. Two bars later, we see a Test, but the volume is a bit high. Markets can rise slightly on high volume tests and then come back and re-test that area. Thus, after we see this test, we can expect to see price come back into this area if it moves up. Six bars later, we move back down into this same area and have a down bar with volume less than the previous two bars, closing off its lows. While it is not a test, it is a No Supply bar. The BBs are finding no more supply in an area where there once was (high volume test). Thus the market is now poised to take off. Also not the very next bar. This also looks like a test. Notice that the volume is up from the previous bar, but LOWER than the first test.

There are two types of UpThrusts. TYPE1: High volume UpThrust. TYPE2: UpThrust on low volume which is an UpThrust in the form of No Demand. But what you really need to understand is the purpose of an UpThrust versus a Test. UpThrusts are intended to rapidly mark price up to get the herd to go long or to gun for stops. Tests are intended to rapidly mark price down to look for supply(selling) by the BBs. So in other words, one is looking to create/find activity, while the other wants none. One is looking to bring in the herd, while the other is looking to see if the Smart Money is done selling. I have attached a chart with a nice UpThrust. Notice the high volume as the BBs try to entice the herd to go long. In a perfect world, this candle would close up, but it does make a higher high and close near its lows. The astute among you might pick up on the fact that this is a squat also. An UpThrust in the form of No Demand will have low volume (volume less than the previous two bars/candles). No Demand would mean there is no/little BB activity on the side of higher prices. If you must, you could think of this type of UpThrust as an upside test. But that is only because of the low volume. This is important, since a test on high volume will either be a failed test, or result in little upside movement (which will come back into that area for a re-test). But a high volume UpThrust remains valid as an UpThrust. It merely moves from a TYPE2 to a TYPE1. Simply, it is not a test.

Well, A No Demand bar has volume less than the previous two bars. A Squat is a narrow range bar with volume greater than the previous bar. Pretty simple. First, on a test the BBs mark the market down (this is manipulation). Price closes back on the high, not because buyers come in and push it up, but because it was manipulated down in the first place. Second, it is bullish when the volume is low because there are no sellers when price is manipulated down. High volume implies sellers willing to enter the market on the down move, not the up close. I suggest you re-read the book. TG also has a number of videos you can watch.

The range of the bar/candle is wider than we would want to see with a test. If that candle was narrower and the volume the same, then I would see it as a failed test. Failed tests still ideally close in the middle or on the highs. What is a test? It is the BBs looking to see if there is supply still in the market. Prices can not rise substantially if there is still supply in the market. The volume need be low because that means as the price was marked down, NO SELLERS (SUPPLY) WERE FOUND. Price is marked down to find sellers and marked up to find buyers. This is why, to answer another of your questions, why a test can not be to the upside. With that said, however, an UpThrust in the form of No Demand can be seen as an upside test if you like.

To answer this question, I have added another chart from now. The candle in question is marked A. Right after a Shake Out we have a narrow range candle, closing down and just below the middle of its range, on volume less than the previous two bars. What I do not like about this bar/candle is that it makes a HIGHER HIGH than the previous bar/candle. Therefore, it is both making a higher high and closing lower than the previous interval. The down close on low volume is a good sign of strength. However, the fact that the market made a high then was taken back down is NOT strength. It signals SUPPLY above the price and thus negates the bar/candle as No Supply.

Continued. Therefore, with WRB analysis we are not looking for direction but rather trade location. From a VSA perspective, we see the Ultra High volume close off the low with the next bar up and know that demand entered the market. We now want to see a low volume signal like a test within the range of this bar/candle. From a WRB perspective this range is more acutely defined as the body (open to close) of this high volume bar/candle. Take a look at the chart below. The area where we are looking to see the change is supply/demand manifest itself is marked on the chart. Let's look at each interval after the WRB. Before we do that, however, one thing must be remembered. This is only 1 timeframe analysis. To better understand the background, we should be looking at a higher timeframe (at least 1). 1. The WRB on Ultra High volume is followed by an up candle showing us that some demand entered. The very next candle is down candle on volume less than the previous two. This is No Supply. Personally, I do not like it as it makes a higher high than the previous candle. For the hyper aggressive, this could be a buy sign. 2. The next candle close up on even less volume. An up bar/candle with volume less than the previous two would be No Demand. We have had strength enter on the WRB and seen low volume on a down bar, This No demand might be out of place. (NOTE : here is a good example of where looking at a higher timeframe would be helpful). 3. If you wait for confirmation, on the No Demand, you see that the next bar/candle is an UpThurst. It makes a higher high and closes on its lows. The fact that it makes a higher high than the No Demand bar makes me not like the No Demand (especially since the volume is not the lowest volume in the last 20 intervals). As for this UpThrust, we have to wonder about it because we saw strength come in on the WRB, not weakness. Plus, it does not close up from the previous bar, which would be ideal. 4. The next bar/candle closes down but on reduced volume. Just as importantly, it fails to close below the close of the WRB, nor does it make a lower low than the WRB (Ultra High Volume interval). 5. The proceeding interval is an up close with increasing volume. The previous bar was indeed supportive of price and now we can lean towards trades to the upside. For some, this qualifies as a two bar reversal and is a place to entry long. 6. Skip ahead 3 bars/candles. This is a low volume bar/candle within the range of an Ultra High Volume bar/candle. This is No Supply. Note how this bar/candle also closes within the Long Shadow of the UpThrust. Admittedly, looking at just this one chart is tricky and seemingly contradictory. This is why Eiger and other continue to emphasize multiple timeframe analysis. For example, suppose that you also looked at a 15 min chart. If that chart was showing demand entering at around this same time, you would be predisposed to ignore the No Demands and UpThrusts right off the bat.

Herkfsu; Welcome. Before I get to the question, there are a couple of things that we need to take into consideration. Element #1: There are two main types of price action traders. Type 1 looks at price patterns or signals to define the price action. Type 2 looks at the price action prior to and in conjunction with the price patterns or signals. So for type 2 price action traders, the price action defines the patterns or signals and not the other way around as it is for type 1. Element #2: WRB analysis is not the same thing as VSA. VSA does not look at the open. My contention, however, is that if Tom Williams did look at the open he would have come up with WRB analysis. WRB is also independent of Japanese Candlesticks. Thus WRB analysis can be done on OHLC bar charts. Now I will try to answer your question. I will attempt to show the direct relationship (sameness) of WRB analysis and VSA as I answer your specific question. VSA: The first thing a VSAer should be asking on that bar/candle is, "Was there a news event associated with that Ultra High Volume?". This is using price action to define the pattern/signal. Upon seeing a wide spread bar/candle, VSAers should be asking the same question. Simply, weather we see that wide spread ultra high volume candle/bar in hindsight or at the right edge of the chart, the question is "what caused that?" This is why every VSA trader should have ForexFactory, or some other site with news release times up on their computer. WRB: The first thing WRBer should be asking on that candle/bar is, "Was there a news event that created that WRB?". ***As this is not my chart or market, I do not know what caused this WRB. But that does not matter for our purposes here. We will assume some news release, like durable goods came out.*** VSA: VSA sees a wide spread bar/candle on ultra high volume that closes off its lows. If all that volume was selling, then the close should be on its lows. Yet, we need to see the next bar to be sure. However, had the close been greater than the midpoint of the bar/candle, we could be certain that demand did indeed enter. That would not mean we could be buyers at that point though. The Ultra High volume tells us that the BBs were in the market on this interval doing something. WRB: WRB tells us that a Wide Range Body represents a possible shift or change is Supply/Demand dynamic. The WRB tells us that for some reason the price area represented by the body of the interval is important to the BBs. It is important to them because they are the big players; the ones that can change the supply/demand dynamic. WRB make no distinction about the close being off the lows. Nor does WRB analysis say which way price should move. THE KEY IS THAT AN OPTIMAL AREA TO BOTH SEE THE CHANGE IN THE SUPPLY/DEMAND DYNAMIC AND TAKE A TRADE WILL BE WITHIN THE BODY OF THE WRB. VSA: VSA STATES THAT THE IDEAL SIGNAL IS A LOW VOLUME BAR WITHIN THE RANGE OF A HIGH VOLUME BAR (No Demand, No Supply. Tests). ALTHOUGH UPTHURSTS AND HIGH VOLUME NARROW RANGE BARS (squats) COUNT ALSO. ***Simply, BOTH are looking for something to occur within the range of this high volume bar/candle. WRB re-defines range to mean body (open to close). So both are looking at more or less the same area for a pattern or signal that has been defined by the price action and not the other way around. Also with WRB analysis you would need to wait for the next bar to know if you have a valid significant WRB. This is a two part answer so please see next post for conclusion.

Looks to me like the "hammer" is an example of No Supply. It closes down from the previous candle, closes near the middle of its range and has volume less than the previous two candles. (BTW this is not a "hammer") The WRB you identified is an Effort To Rise candle. Note that the volume is not that high. Markets do not like very high volume on up candles, but here the volume is relatively low. What we see after this Effort To Rise, is NO RESULT from an Effort To Rise. This shows the general weakness in the market. Moreover, two candles later we have a Test. This is a good test as the volume is less than the previous two candles and the close is in the middle. The market does close up the next candle. But then price moves down. This is weakness: no result from a Test. If you count 4 candles forward, you see a dark WRB closing lower than the Test bar. Again this shows weakness. Simply, the market is weak. Some buying entered on the candle before the No Supply "Hammer" which was followed up by an effort to move higher. That effort, however, is soon negated as price moves down. There has not yet been enough CAUSE for higher prices.

This is why we have missed you JJ. Very nice. Thanks.

Tasuki, The owner of the site, who also posts here on TL as NihabaAshi, does not do business that way. That is, as he is not a sponsor of this forum, he does not mention his site in his posts (or signature line). Because he does not do this, I do not want to do it either. With that said, many people know what site I am talking about and if any non-client wants to post the site name and address, I hope they do.

Better Volume Radar. Since I like to paint volume bi-color with blue for greater than the previous bar and red for less than or equal to the previous bar, I use better volume as a "Radar" line. See some of my charts with the dots above the candles. Red (climatic action) means Highest high value of Range*Volume of the last 20 bars. White means low churn (range vs. volume). see emini-watch.com for more details. BTW if you see a red dot/bar and it is a WRB, then that would likely be a WRB to use for Supply/demand zone. Same with white. **edit** Just added another pic to show how Better Volume Radar can point to what WRBs to use. Note here how the low volume churn WRB is also the part a complex volatility pattern.

Tasuki; First, let's be clear. I am talking about WRBs (Wide Range Bodies) not Wide range candles. The distinction is two fold. one, since we are talking open to close (Body) we don't need candles. Two, there can be a WRB on a relatively small candle. For example, picture three equal range dojis in a row, the next candle has an equal range but a body of 3 ticks. By definition, that would be a WRB. Yet the range is no greater than the previous three candles. The candle you highlight is a WRB. As for when/which ones we should be using, this is a bit tricky. Actually it is not tricky at all, but there are some things I am bound not to mention as a client of a particular website. What's not tricky is what we learn from VSA. VSA tells us that the BBs use news events to take, or add to, a position against the herd. VSA tells us that the BBs like to be active during Fed announcements. We know that jobs reports and other key economic event reports are "market moving" events that the BBs tend to use. Therefore, we can logically extract from VSA ALONE that a WRB constructed on a news event should be important. If there is not one on the release of the news, than the first one after the news should be looked at. Again, I stress that this is a logical conclusion from VSA and not proprietary information. Therefore, the first question I asked myself when I looked at your chart, was: "was that WRB created by a news event?". A VSA trader not using WRB analysis or candles, would simply ask; "was that wide spread bar created by a news event?". Clearly, high volume plays an important role in VSA. A WRB created on ultra high volume could be one worth paying attention to. For example, a dark (close< open) that closes down from the previous candle on ultra high volume with the next candle up. With that next candle trading even lower but closing above its midpoint. This is a clear sign that we are at some type of inflection area, and hence the body of the WRB will become the area to see the change in the Supply/Demand dynamics. Sometimes there will be a low volume WRB that is the largest WRB that you see on your chart. This is likely to be an important WRB that could be used to judge the Supply/Demand dynamics. The Gap Sandwich: If you see a two WRBs with an actual price gap (hint) in-between, this is a good area to look for signs of strength or weakness. With this pattern, we do not care where we are. In other words, this pattern does not have to come at the top or bottom of a trend.

While the question says experts, I will give it a shot never the less. " Testing is by far the most important of the low volume signals" " Testing is a good sign of strength (as long as you have strength in the background). Usually, a successful test (on low volume) tells you that the market is ready to rise immediately, whilst a higher volume test usually results in a temporary up-move, and will be subject to a re-rest of the same price area again at a later time." "Any down-move dipping into an area of previous selling (previous high volume level), which then regains to close on, or near the high, on lower volume, is a loud and clear indication to expect higher prices immediately." Tom Williams, Master The Markets,pgs. 34-35. The ideal test will be a narrow range bar that closes down from the previous bar on volume less than the previous two bars and closes on its high. There are, however, many types of tests that while not ideal are tests none the less. Take a look at the chart below. I have identified several tests to talk about. Let's start with the last one and work our way backwards. D: Test in a rising market. We see a candle that is equal range to greater range than the previous candle. It closes near its high and down from the previous candle. But check out the volume. While it is greater than the previous candle, it is low in relation to most of the candles that precede it. C: This is the key test. Notice first that we had Strength (demand) enter on a wide spread down candle on very high volume that closed off its lows. Now notice that the test candle trades down into that range and does this on volume less than the previous two bars. This is a low volume signal within the range of a high volume bar. While the close in not on the high, it is roughly in the middle of the range. And also note that the candle is wider than the previous candle. Simply, not everything about this candle would meet our ideal definition of a test, but this is a test. It is the test. B: Narrow range candle with volume less than the previous two bars , closing near its high. But it closes UP not Down from the previous candle. That not withstanding, this is a test. Note how the market jumps immediately after this test. Why a test here? Two candles earlier there is a No Demand. If a large contingent of BBs is not interested in higher prices, the BBs who are need to see if there is supply still left in the market. How do they see? A test. Again, note that we do not close down here but rather up. A: Narrow range candle closing near its highs, but with volume that is NOT less than the previous two bars. We see this type of test very often. Directly after seeing a low volume sign (No Demand or No Buying Pressure), we get a test as the BBs who are interested in higher prices check to see why the other BBs are standing aside. How do we know they are standing aside? The volume is low.