CandleWhisperer

Great question. Currently there is a poll in the Market Profile section that is based on the Trade Maven 3-2-1 method. The poll asks, which is correct: Rule#1: High Volume = S/R Rule#2: Low Volume= Price Attractor Rule#3: MoMs VSA would say the answers are not correct. Rule#1: Very High to Ultra High Volume BOTH acts as a price attractor and then as S/R levels. This is why you see many VSAers place lines from the high and the close of a Up bar on ultra high volume. They place lines on the close and the low of a down bar. Future price action tends to re-visit these areas. This is a way of "looking left to trade right". Rule#2: Low Volume tends to repel price. Low volume represents a cessation of activity by the BBs. If they are not interested in higher prices at the moment than the path of least resistance is down. Think about an ideal No Demand bar. It would not only be narrow and have volume less than the previous two bars, but it would close in the middle or low of the bar. Assume the close is the low. Now price is moved up to and no buyers are found and the interval trades back down to close on the low. Price then should show immediate results to the down side as higher prices were rejected. The opposite is true with a test. The BBs take price lower and find no supply (sellers) and price then closes on the high of the bar. Price is expected to show immediate result in the form of moving higher. Hence the low volume acts to repel price. If that is indeed the case, placing a stop 1-2 tics just above/below a low volume signal would be an ideal location for a stop.

Thanks. With all the love for Eiger, I was just about ready to take my ball and go home. :o Just kidding. If you watch the TG videos, they are now making the statement that "Markets move on Supply and Demand, and they also move on No Supply and No Demand". While there are climatic action bars that happen on high volume (Stopping volume, end of a rising market), most of the ideal entry points come on low volume (No Demands or Tests). And as Eiger pointed out, Low volume up bars after weakness confirm that weakness even when they are not No Demand bars themselves. Of course, the converse would be true; Low volume down bars after strength confirm that strength even when they are not No Supply bars themselves. That bar in your chart is a great example of a "No Selling Pressure bar". Since it is not a narrow range bar, it is not technically a No Supply bar, but the lack of selling enthusiasm by the BBs is never the less still evident. What matters most from a practical standpoint is, do we see volume less than the previous two bars?

This is VSA thread part 1, the active thread is part 2. Moreover, the general consensus among both threads is that TG sucks. Simply, you are preaching to the choir.

I continue to (LOL) Here's the link to the ask any wyckoff related question thread: http://www.traderslaboratory.com/forums/131/ask-any-wyckoff-related-question-3879-11.html#post49420

First, this was not the best place for this post. Second, MOST companies (trading related or not) that offer 30 day money back guarantees, require the product to be sent back (received by the company) within the 30 day period. So the customer does not actually get to try the product for 30 days. To be sure, there are many things to dislike about TG. That they employ the same "30 day" scam that Most companies do can't really be one of them. If they make you jump thru additional hoops, that would be a different story.

With apologies to the Supreme Court; I do not know how to define a wide range or narrow range bar, but I know one when I see it. TG uses a range formula to determine bar range. It is just as easy to simply "eyeball" it. Eyeballing it works well with the extremes to be sure. The fact is, it is the extremes that we are most concerned with. With No Demand, for the most part, you would want the bar to be narrower than the previous bar. yes, closes up from the previous bar.

Here is a good example of how I understand things. I could be totally wrong and would like to here from the experts if I am. The candle in question is the last one (hard right edge). It is a narrow (narrower than the previous candle) candle on volume less than the previous two candles, closing up and closing below the midpoint of the candle. At this point, one might call it No Demand. However, there are two things to consider: 1. The next bar could be up, which would only make this bar No Buying pressure. 2. This is the last half hour of Friday in a time where nobody wants to be long anything over the weekend. In other words, there is a natural drop off in volume at this time, so we are almost certainly dealing with no selling pressure as we go into the close. At this point, the candle is more weak than strong. But we do not know if the volume is low volume or a lack of volume because of the time of day. With that said, the location makes me think it is No Demand and the Dollar should move higher (Euro move lower) on the open.

First, Take a look at Eiger's excellent post. Very nice job. A few definitions: No Selling Pressure: A narrow range or wide range bar with volume less than the previous two bars that closes down from the previous bar. Generally, strength enters ( or shows itself) on down bars. No Buying Pressure: A narrow range or wide range bar with volume less than the previous two bars that closes up from the previous bar. Generally, weakness enters (or shows itself) on up bars. No Supply: A narrow range bar with volume less than the previous two bars that closes down from the previous bar. With the next bar up. Therefore, ALL No Supply bars are No Selling Pressure bars, but not all No Selling pressure bars are No Supply bars. No Demand: A narrow range bar with volume less than the previous two bars that closes down from the previous bar. With the next bar down. Therefore, ALL No Demand bars are No Buying Pressure bars, but not all No Buying Pressure bars are No Demand. During an Accumulation phase one can see both No Buying Pressure bars and No Selling Pressure bars. This is what we see at the right side of your chart. What Eiger calls a spring, VSA would call a high volume test. Markets can move up on a high volume test, but not very high (there is too much supply holding it down). What usually happens after such a test, is a move back down and a test into the area of the previous test (high volume area). Hence, we get the second test, which Eiger has correctly labeled on his chart as point D. The volume on that second test is still high, although lower than the first test. This is not a good sign. We would really like to see a test with volume less than the previous two bars. At that point the market would be poised to move up. If we were to see a dark WRB closing lower than that last test bar, then that would be a sure sign of weakness and the market would likely fall from there.

No it would not "prove" a thing, but it would be fun for the whole TL community . In fact, this would be the "Main Event". Other events could be: Traders with less than 2 years trading experience. Traders with less than 4 months on the board.

LET'S GET READY TO RRRUMBLE !!!!!!!: Contestants: *Representing the VSA crowd-Eiger. *Representing the candle crowd-Brownsfan *Representing the Market Profile crowd-SoulTrader *Representing the Wyckoff crowd-DBphoenix *Representing the Taylor Method- as yet unknown *Representing the Wolf Wave method- as yet unknown * Other methods/market ideologies welcome as long as there is a thread or the contestant is willing to start a thread focusing on the method. The rules: Each competitor has a $50,000 demo account and can trade on any timeframe they choose, but the market traded well be the same. The emini s&p futures contract. Points are awarded for overall account increase. Points are also awarded on the basis of the analysis that goes into a trade decision. Therefore, a contestant can be wrong on the trade but still make points for the analysis that went into it. Points are awarded by ratio of trades to winners and losers. Therefore a person that makes one trade on the monthly chart and sits thru the end of the contest with just one winner doesn't get as many points as a trader who makes 10 trades with 9 winners. What say you all? The rules are just a starting point. Soultrader it would be up to you to get this competition off the ground if you are game.

Funny how things work sometime. Take a look at the chart on the left. It is a 30 min chart. Note it was taken yesterday (Sunday night/Monday). What we have is a large WRB that appeared as trading began on Sunday. This created a nice Volatility breakout pattern and a WRB Supply/Demand Resistance Zone. Which I now term Supply/Demand Delta Zone. Anyway, Price moves down from that point. Skip forward to today (Tuesday). Price made a large move down on Monday and then began to move back up. At this point we do expect price to move up and back into the Delta Zone. Moreover, we would like to see signs of strength or weakness within this zone to initiate positions. While the zone is created in one timeframe, it has an effect on smaller timeframes as well. Now, look at the chart on the right. Price moves up towards the bottom of the Delta Zone. Price enters and then we see a Test before it moves back into the Zone and higher. Note that the Test is not within the zone so we would not be going long on anticipation of a move to the upper end of the zone. We then see volume drop off and we get an up narrow up bar on volume less than the previous two bars: No Demand. This No Demand bar is also a churn bar. That is, the range, while narrower than the previous bar, is high for the actual amount of volume on that range. This is like a squat and further evidence of weakness (selling) on this candle. Just another way to see the influence of higher timeframes on your trading frame.

Thanks Eiger. Take a look at that 3 min bar for a second. What we haven't yet mentioned is the close. with a close near the middle of the range, we do have more reason to assume it is worth going for prior to the next bar. More broadly, you are correct. The fact that the market is moving up on low volume (volume less than the previous two) confirms the previously seen weakness.

If you wanted to get technical, No Demand is a narrow range up bar on volume less than the previous two bars. Which is confirmed with the next bar down, or the next bar equal and the bar after that down. No Buying pressure/No Demand up-bar is a narrow range up bar on volume less than the previous two bars where the next bar is not down (up). It still shows weakness as the market is rising on low volume. Remember: * bearish volume is either increasing volume on down bars or decreasing volume on up bars. From a trading standpoint, the less you rely on multiple timeframes/ background information, the more you need to wait for confirmation. In Eiger's excellent example, a trader with knowledge of the background could indeed go short on the appearance of the up bar on a narrow spread with volume less than the previous two bars. If a traders was simply looking at the 3 min, it would be better to wait for the next bar to close down. Of course, there are other ways also. For example if you use Pivots and that bar was at a pivot line, you might be inclined to not wait for confirmation. This is a really key point to understand and leads to much of the negative reactions people have to both VSA and TG in particular. Most bars can only be correctly analyzed by looking at what happens on the bar after the one being looked at. And in some cases, the bar after that. Just like many two or three interval candlestick patterns.

I don't look at the background as much as I should. But there are two things to remember: *These are not buy/sell signals, they are indications of strength or weakness. * These indications of strength or weakness, come in various degrees of intensity. Don't forget about confirmation. While the definition of No demand is a narrow range up bar on volume less than the previous two bars, it is confirmed only if the next bar is down. In TG, in fact, a sign will not fire off unless the next bar is down or if the next bar is equal and the bar after that is down. Admittedly, Tom does not wait for confirmation but he is the father of VSA. In fact, Tom does not need to look at more than 10 bars at any one time. With that in mind, the first yellow area would not be No Demand but the second one would be.

At the top of a rising market, it is called "end of a rising market". At the bottom, I do not believe it is called "end of a falling market". However, it is indeed a sign of such. Tom mentions it in his check list for going long pg. 112. If you think about it, is should be the same both ways. The high volume is needed by the BBs to get into or out of the market. High volume allows them to do so without marking the price up or down against themselves. Within that high volume we likely have the herd acting en mass. And when the herd is acting en mass, it is usually a good point to do the opposite. The fact that the spread is narrow shows that the players that can see both sides of the market are more bullish (in the case of a down move). Why? Well if they were bearish, they would be willing to let the range expand. But since they can see the Smart money orders on the buyside, they keep the spread narrow and let the herd think they are getting a good price.

I may have more to say about this chart later, but just wanted to put it here to show one of our core principles: Strength (demand) enters on down bars. Note the Ultra High Volume down bar that closes off its lows with the next bar down. The market makes a quick (counter thrust up) after that bar. If all that volume had been selling then the next bar should not be down. Nor should there of been the subsequent rise in prices. Also note that the bar's range is narrow for the amount of volume. There is "churn" in this bar. Demand is swamping supply. My entry signal would actually be the test bar within the body of the WRB. Two bars later there is a dark WRB but it does not close lower than the test bar. Therefore, a contingency plan would not be in effect (reversal of long into a short position). However, my stop would of been triggered on that Churn bar. :doh:

His thread on Elitetrader.com under the name VSATrader is a MUST read. And best of all, it is free. He also has videos here on TL. There is no need to spend the that much money, at least not at the beginning of your educational process. * You can download the Master the Markets book for free. * You can watch all Tradeguider archives for free. * You can watch CBOT (CME Group) webinars for free. * You can read all the posts here for free. * Then I would spend the money on the bootcamp first. After that the London symposium.

While one can choose any "length" for the WRB, I am using Mark's standard of a WRB having a larger body than the three(3) prior intervals. So you need four (4) intervals where the fourth has a body (open-close) greater than the previous three consecutive intervals. Again, there is no law that says it has to be 3. One can use any number. However, it is not recommended to use less than 3 periods.

Well, it took longer than I had hoped and did not come from anybody new, but that's correct. Nice pick up Eiger.

This is in response to a PM I got. I am posting the answer here as I hope it will spark life into a dying thread. Yes, it is true that many posts here deal with looking for entry points. VSA does not directly speak to trade management plans. That is , how to get in and then exit. Which would also include where to place stops and or trail them. Tom does talk about what he does. As I understand it, he "allows" for 1 up bar in a down trend and 1 down bar in an up trend. Hence, if there are 2 consecutive up bars, he would be getting out on the close of the second up bar. The chart below shows such an exit. Assume we enter short where the arrow is. I do not really like this method. One thing I do not like about it is that you must be able to re-enter and re-enter and re-enter. In other words, you run the risk of over trading (not to mention the commissions involved ). I prefer the use of WRBs. On the chart you see numbers. Here is how it works. Once there is a WRB, you place a stop at the top of the body (plus 1 or 2 tics/pips/handles) but ONLY AFTER there is another WRB. So, the WRB with the 1 is where the stop is placed but only after the appearance of the WRB with the 1/2. When there is another WRB, we can move the stop down to the second WRB. Granted this method works well in highly trending markets, but that is the point. The trend is my friend. When the market is moving directionally, all I want to do is be with it. PP talked about surrendering to the market. I like that idea. Here, one could of also simply trailed a stop using the No Demands also. I have shown a few post with profit targets using WRBs, but that was for the benefit of other members as I do not use targets. Plus it further shows the power of WRBs in general. Hopefully, other members will add their methods of exiting a trade. P.S. If you look at the first example of where Tom would be getting out, you have a No Demand sign within the body of a WRB. That is to say, an ENTRY signal.

Couldn't you just get the top of the line gamming computer? Lots of speed and great graphics. I don't know but an Alien Ware.

Been watching some of the Trade Guider videos. Here is a great example of one of TG's favorite set-up. This particular set-up was discussed in great detail at the London workshop I believe. I also believe our man Seb Man really likes it. First, I would point out the non VSA part: Simply this fact that this pattern takes place within the body of a WRB (as I would argue every good set up does or should). The Background: We see a wide spread up candle on good volume with the next bar down. While markets do not like wide spread candles on high volume, because there could be hidden selling, the volume here is not that high. However, we note that the range and the volume together are more than we have seen in some time. This is climatic action. The next candle has a smaller range and higher volume. A squat. It makes a higher high, and closes lower just off its lows. This is a selling squat. The range is kept narrow as the BBs expect lower prices to come. Next candle closes below its midpoint and makes a higher high. Supply enters on that high and pushes price down to where it closes. Volume is lower than the squat and about equal to that of the Wide Spread candle. One can call this an Up Thrust. The next bar is a narrow bar with a lesser range. If you thought it was no supply, you would know you were wrong on the next candle which is a dark WRB that closes lower. Instead, one should of noted that this bar actually has a great deal of volume for the size of its range. Volume is churning in that small range. This is another form of a squat. So we have weakness in the background. The Pattern: This is the "Top/Bottom Reversal Pattern". Ideally, the first candle (bar) will close on its high. The next candle ideally would make a lower low and close on its low. This candle would also not make a higher high. This "top" is also called an Up Thrust over two bars. Of course, the opposite is true for the Bottom Reversal. First bar down and closing on its lows. Next bar up, making a higher high, and closing on its high. Those would be the "text book" examples. Here you can see that the candles do not close on the highs and lows, but just a bit off. Close enough for Government work. LoL.

This chart is for Browns Fan. Rather than muddle up his new thread I have put it here. VSA is all about volume and news events. Both of which exist in forex. Interesting action in the Euro. Notice the Ultra High Volume candle closing off its lows with the next bar up. If that candle had been selling, then it should have closed on its low. It did not. Strength enters on down bars. This was a down bar. Price shoots up as the vote seems to suggest that the bill will not pass. This is a high volume up candle, but the volume is less than the previous candle. However, if one looks at the range and the volume and compares it to the last x amount of candles, it is high. The highest in fact. So there is a bit of "Climatic Action going on in this bar". Also note that this candle is a WRB. Next candle is the kicker. The market catapults up on the realization that the bill has flamed out. BUT look at where the candle closes. Off of its highs and in fact below its midpoint. Supply must have entered this bar. Why else would the close be less than the midpoint? The BBs that were buying on the first candle are doing some selling here. While volume is high, it is not higher than the first candle we looked at. With said volume and an extreme range, we have an interesting thing happening. The range is larger than one would expect with the amount of associated volume. This is Low Volume Churn. Put another way, the range is not indicative of buying pressure, but rather the opposite. A great place to take a trade would be within the shadow of this Long Shadow. After the down candle, price does move up. Yet price moves up on less volume (no demand). We do see at the top an up bar on volume less than the previous two candles, closing off its high. This is VSA's low volume sign within the range of a high volume bar. From a news trading point of view, we don't want to trade the reaction (news) we want to trade the reaction to the reaction.

Nice to have you with us, keep the charts, analysis and questions coming. I have attached your chart with a few observations. Overall the chart shows much strength. Let's start at the first double arrow. 1) Up bar on very high volume that closes on its high with the next bar up. Markets do not like up bar on high volume, because they can contain hidden selling (supply). There is supply in that bar, but we go up further. Moreover, we ultimately move sideways and not down. In other words, the supply can't move us down because there is demand (strength) supporting the market. 2) Double arrow two. Down bar that closes in the middle of its range with volume less than the previous two bars. This is No Supply. 3) Double arrow three. Another down bar, but this time the close is closer to the high of the range and the volume is up. If this bar was selling, why would the close be near the highs rather than the lows? There most be demand in that bar. 4) Double arrow four. An up bar with a narrow range, closing near its low and with volume less than the previous two bars. This is No Demand. A sign of weakness. However the market is not weak, just not yet ready to move up. 5) Double arrow five. We see a narrow range up bar that closes in the middle of its range on volume greater than the previous bar. This is a Squat. Selling enters on this bar. However........ 6) Double arrow six. Two bars later we see a Test. The market is testing for supply. The volume is less than the previous two bars and the range is narrow with the close near the high. The supply from the squat bar was actually absorbed by the market, otherwise this test would have move volume and be a failed test. Yet again we have strength in this market. The next arrow points to a No Supply bar after the appearance of a squat and the two large wide spread up bars on ultra high volume. The first wide spread up bar is Pushing thru supply and thus a sign of strength. The last arrow is a Test right after the No supply bar. Volume is equal to the previous bar ,but still low.

Hi Kuky969; Volatility expansion and contraction are not in the Master the Markets book. These concepts are directly related to WRB analysis. Whilst it is true that there is a relationship between volatility and volume, VSA doesn't delve into volatility. One thing to remember is that not all WRBs are created equal. As I have said, those with high volume are more significant than those with little volume. WRBs created as the result of news releases are more significant than a "random" WRB. VSA tells us that news release are used by the BBs to manipulate the herd, and that the BBs need high volume to mask their trades and not bid up/down the price against themselves. VSA also teaches us that the BBs try to hide from amongst themselves and the public that can read a chart. One way they hide is to attempt to keep volume low. Which is not an easy task because of the size they trade. Never the less, understanding WRB analysis and thus volatility analysis helps in such areas. Note how the amount of volume is relatively low during both the expansion and during the contraction phases that lead to the WRB which creates the Supply/Demand Delta Zone. Bringing it back to the Book, "So by simple observation of the spread of the bar, we can read the sentiment of the market-makers; the opinion of those that can see both sides of the market", pg. 28. So even a wide spread bar on low volume tells us something. And WRBs are just a specific type of wide spread bar in many ways.