MA1

First thanks to Fire Walker for starting this topic, to Zdo for asking hard questions and not being content with the KISS answers, and to Soul Trader for allowing the discussion to continue with the LATC questions.. Can you say what market you mean, are you meaning the futures market, and which one? The CL contract is 1,000 barrels of oil, no? Is that not a good? Maybe it is hopes and dreams for small retail trader, but what of other players (who make up most of the trading volume?), they might be more calculated and rational? Or is this thread only about the ES contract? How does the market for oil (I use as an example) be not very different as the market for fine art? Then how does the market for SP and ES be not very different to that for fine art (each piece of fine art is unique, a futures contract is a standardized product)? Not very different, how is it not very different? No differences, some, lots, what are they? Sorry for all of the questions, but respectfully the post does not make too much sense in that it does suggest something but then not explain. My idea is the fine art market and futures market are very different in many ways (similar in some, of course, but so is a lemonade stand); very, very different nature of product, very different structure (double auction futures mkt, trades nearly all day 5 days a week, fine art market the occasional auction after much marketing and publicity), and so on. I am willing to try to understand your point if you could explain on what you mean? But changes in the price is due to hopes and dreams? Maybe for the small retail trader, but most of the volume is not the small retail player is it? Most of the volume is from colder, more rational players. Never entirely rational, as humans always some hopes and dreams, but only minimal for these players, too firm a grasp on reality for hopes and dreams to play too much of role in the decision-making. Hopes and dreams model of supply and demand … not very precise and back to simplification because not understand reality? (but nothing wrong with not understanding reality, it is hard work, but a trap is dismissing it with an incomplete explanation?). Smwinc – your basket-ball example, your lego example. But I disagree. It is not the basketball (the traded good) that changes, it is the perception of the value of the basketball that is changing. In a futures market, it is not the CL contract that is changing (standardized contract) but the perception of value of the contract that is changing. Different perception to different traders & different perception depending on where it is in the ‘pattern’. The ES a bit more difficult to understand =, it is cash settlement, physical dollar bills if you like. Lego example is nice, lego shapes can change (like you say “A 'double bottom' at 1300 after the market has fallen for a week, is a different object to a market which has rallied all week to hit 1300.”) but it I say it is still a lego (still CL, still standard contract). Change in the shape made from the lego changes the perception of value, but doesn’t change the lego. My point is this does not explain price change and supply and demand in the financial markets. I think as the shape changes you (that is smwinc) will recognise that maybe it is a changed ‘good’ but few other players will recognise the exact same thing, others will think of something different, and each will value the lego different but it is still lego (easier to use the CL contract, it is 1,000 barrels of oil). Change in perception (lego changed shape, but different shape to different traders) --> change in perception of value --> trade --> change in price. I hope this is not seen as a pedantic argument, but I think this ‘the contract is now something different’ is the wrong idea smwinc, so disagree with respect. I understand you say you are trading the pattern and demand and supply varies according to the pattern in effect, but you are really trading the contract, the pattern is what is giving the perception of value, it is not changing the good (contract) itself. Hope my post furthers the topic (and is not too KISS for you Zdo ;-) ). – Mary.

Eiger - thank you so much for your post covering the main points of the VSA analysis. I have printed out a hard copy to refer to when studying VSA and for using even in live markets, it is very, very helpful and clear.

Thank-youall, jjthetrade, Eiger, and Seb Manby for your responses. Eiger, please do not post more in response I have plenty of reading in the threads and the replies to be getting on with and I think I will find a lot of answers in there. I am very thankful for the responses you all have posted so far and will have more questions so do not want to wear out a welcome.

Hello, thank-you all for these great threads on VSA. I am reading through both 1 and 2, so much to learn. If I may have a question, how much relevance do people place on the close price, specifically on the intra-day charts where it is not really a close at all? What would be the effect of using this sort of analysis if there was no close price placed on the intra-day chart and traders only looked at the high/low range with volume, no open or close? Would the VSA/Wyckoff method lose much if 'close' on intra-day bars was not considered? Thankyou - Mary