Anonymous

Actually, it is the 6th and 5th bars back. The 6th bar is down with ultra high volume and closes near the middle of the range with the next (5th) bar up. A transfer of ownership bar. THAT IS WHY THE TEST IS SO POWERFUL. Note that if there had been selling on the 6th bar , there was no more selling at the same price levels when the test happened. This is of course, what a test is testing for.

On the mark. A lower close and a close on the high would make this the ideal text book example, but it is nonetheless a nice example of a test. Don't forget that a test needs to be confirmed on either the next bar or the bar after that with a close HIGHER than the close of the test bar. Keep up the good work TG. You are making us all better traders and I for one say thank you.

Thanks. I have been lurking and feeling good to see the brillant work being done by yourself and others. We have something special here guys and gals. Thank you all.

While there is no point in getting bogged down in nomenclature, JJ is correct. Ideal Test: closes down from previous bar, closes on its high and has volume less then the previous two bars. The low of this bar, should ideally be into previous High volume territory. I would simply call the first one No Supply and the second one a test as price is just off the high. But what is of most import is that both candles show strength (lack of weakness) in the market.

It can, but If you're looking for a crystal ball, you need something more than Volume Spread Analysis (or any method/indicator) can give you. Learn to trade the NOW, the future will take care of itself. You do: Profit , Loss, or Break even

No. Test bars close in the middle or upper portion of the bar. Ideally they close on the high, with the next bar closing with a higher close and not a lower low. With volume less than the two previous bars, we do have a "no supply" bar. Personally, I do not consider it as such because the next bar trades lower. That really doesn't matter. What is important is to see that this down bar during an up trend comes on little volume. That is enough to tell you that at least at that point, the market doesn't really want to go down. The next bar, btw, does look as if it would be a test but it would need to be confirmed on the bar after that. I have no idea. The future is unknown and unknowable. I surrender to the market and try to trade the IS, not the SHOULD BE. ******Let's back up and look at the last four(4) bars.: 1. we have a gap up than a WRB on Ultra High volume. As there is a small top to the left, this could be absorption volume/pushing thru supply. Or the Ultra High volume could be mean supply is swamping demand. We need to look at the next bar. 2. This bar has a narrower range, close up, and volume is less than the previous two bars. This is No Demand. While the bar is up, the fact that the bar narrows and the volume drops off, tells us that there must of been some Supply in that fist bar. 3. This bar closes down on low volume (volume less than the previous two bars). So it now appears that there the Smart money is not interested in lower prices despite the supply that entered on the first bar. This bar is bullish in that it shows no Professional intent to push prices down and may signal that the supply that entered was swamped by greater demand. 4. If this bar is a confirmed test, then price should head up. This would indeed tell us that the supply that entered on the WRB was swamped by demand. Where does that leave us? Like the man said, I would wait to see something happen within the body of the WRB (like No Supply or Test). Or I would like to see the Gap tested and act as support.*************

EXACTLY !!!!!!!!!!!!!! Narrow range bars on high volume are key. The herd thinks they are getting a good fill as the range is kept narrow. But why is the range narrow? It is because the MM, who can see both sides of the market and know who the orders are coming from, see that the Smart Money is taking a position on one side or the other. For example, if prices are rising than you see a narrow range doji with Ultra High volume, The MM are keeping the range low because they are turning bearish. Bearish because there is an abundance of supply entering the market. If they were bullish, they would INCREASE the range. As the herd rushes in, it is easy to match their buy orders with an opposite sell order. On a bar like this, the question is who is on the other side of the trade. A wide spread bar on low volume basically shows no real conviction or resistance at that time. Little volume is needed to move price. But if price is being moved on little volume, than the Smart Money is not doing the moving. It doesn't matter why. What matters that without Smart Money support the price move can not continue for long, generally speaking. Now think about the first thing I said about the MM and range. If they are widening the range, they must either be bullish/bearish depending on up candle or down candle respectively. Or they simply do not see large blocks of Smart Money orders on one side of the market. Which is why the lack of volume, should be viewed as more important than the size of the range. Market makers still exist but they are on the decline. You can replace the MM with other elements of the Smart Money. Thus you have elements of the Smart Money crowd watching other elements of the Smart Money crowd.

Tracking the Smart Money & Event trading: I think this chart is very telling. First, I did not make any trades here and this is being done after the fact. That does not change the fact that there are obvious signs of professional money manipulation going on. Economic reports give Professional Money the opportunity to take advantage of the herd, as the increase in volume (herd) masks the intentions of the Smart Money. Take a look at the chart. This is a 15 min chart of the Euro. First thing of note is the Effort to Fall candle PRIOR to the jobs report release. The Smart Money is selling BEFORE the news is out. Do you think they know something? THIS IS KEY: before the news the Smart Money is dumping Euros into the market (dollar bullish). So they are Selling high, which means they are likely to be buying back lower. The news comes out, price gaps down. We get an Ultra Wide Spread bar that closes down, and closes off its high on Ultra High Volume. While the volume does not seem high in this chart, when you see what comes after, it was the highest volume at the time. That shadow is both profit taking and getting net LONG by the Smart Money. As the herd rush in to sell Euros, the Pros take the other side of the trade. With all that volume to the downside, one must ask why the next bar is up? It can only be that BUYING was going on in the prior high volume bar. Skip a couple bars to the right and we get the highest volume bar on the chart. Note that this candle has a smaller range than the previous bar with Ultra High volume- a squat. It also closes in the bottom half. If that candle represented buying, then the close should be in the upper portion of the bar. The Smart Money is again taking profits, this time on the long positions taken during the 0845 candle. This is confirmed by the appearance of a No Demand sign on the next bar. Thus, while price moves up, we see that Professional Money is not interested in higher prices. They were taken profits on the prior candle. Price spends the rest of the day drifting sideways...

First of all remain we all should learn to remain flexible. To candles later there is a No Demand sign. While it is not my preferred definition as the next bar makes a higher high, it is the actual base definition: Narrow range bar with volume less than the previous two bars. Moreover, it is appearing just below a S/R line. If long, one would want to be thinking about a reversal of position. The very next candle is an Effort to Fall. Note how it trades at the S/R level and then moves away. It also engulfs the prior No Demand bar...... Let's back up for a second. The base definition for No Demand/No Supply involves volume less than the previous two bars. Eyeballing the chart it seems that the candle you are looking at is NOT less than the previous two bars. Now, I do use a couple variants on this myself. This one, however, is the one I do not like: Volume less than previous volume and equal to the volume two candles back. My question to you, is why are there MAs on the chart and an indicator window if you are not going to use them? As your No Supply candle is formed, the bottom indicator is making a lower low. So there is no divergence here. Isn't this a healthy sign of weakness? Price is also below the green MA. While it is true that MAs lag price volume information, It is on your chart and thus must be of some import to you. I do not mean to sound harsh, but you have shown various charts with divergence at MP areas or Opening range levels or pivot level. These are solid times to be making trades where VSA is in conjunction with them. This trade seems almost random. Look at the next chart where you have a Test/No Supply doji right on the green MA. I hate MAs. Yet this is ideal. Price is above the MA, finds support at that level and from a VSA standpoint, the Smart Money is testing for supply at that level. In other words, shouldn't this candle work better than the one you show here just based on the fact that more of what is on your chart comes into play? As far as volume, I am moving back towards the base definition: Volume less than the previous two. P.S. I am not happy that the other thread was closed. My hope was to have the biggest VSA thread out there. I will get over it though. It is nice to see the interaction here. Keep up the good work everyone. Hope VSA is contributing to you bottom line to the good.

TG, You are the man. Very nice. As everyone knows, I have mixed emotions about using indicators. However, this VB seems to be one of the good ones. Volume Spread Analysis can be used in conjunction with various types of indicators. In Todd's article in Stocks and Commodities mag, he states, that indicators are used to tell the "when" of price movement. Whereas VSA tells BOTH the "when and the why" of price movement. In this chart I have added a few things to TG's already spot on analysis. Note that these two trades, as I seem them, do not employ WRBs in the set-up. That is, they key bars, the Test and the No Demand are not completely within the bodies of a WRB. This matters little. What we have is simply another way of trading VSA set-ups. This is what the thread should be about: multiple methods to using VSA to trade successfully. This is not a bad way to trade. TG, I hope you continue to show some of these types of set-ups. (if I could just get you to drop the MAs :o ). P.S. While I know there is a thread on indicators, some more info on the VB would be nice here. Especially from the point of view of VSA. Most volume indicators make assumptions contrary to VSA. This is why they are hard to use in concert. Remember, high volume on up bars in not bullish in and of itself. This, however, is an assumption most volume indicators make. VSA starts from the opposite view: Weakness (bearishness) enters on up bars with high volume.

Great stuff TG. Thank you and please keep it up. Just wanted to add a few things. First, you are correct in you analysis. Here are a few things I would mention. The first double arrow points to a wide spread bar with ultra high volume, closing up with the next bar down. Supply entered on this bar. This bar is also a WRB. Two bars later we have an up candle on volume less than the previous two bars. This is No Demand. You called it an upside test, which is NOT an incorrect way of thinking about it. Great observation about the next bar. The engulfing factor here is certainly telling. I also have shown another area to enter or add on back within the Opening range (I assume the lines are opening range lines, if not, it does not matter.) Here we have an Effort to fall candle. Volume is high and the candle is wide spread creating a WRB. Price move up and we see a No Demand candle two bars later at the upper pivot line. note that this line comes at the mid-point of the body of the WRB. Hence the No Demand finds resistance at the mid-point of the body of the WRB. For me, this is a slightly better entry point. Because the No Demand is completely within the body of the WRB and things are happening "where we would expect to see them". That is, at a known support/resistance area. If you use these type of things, they can help focus your attention. Of course, the S/R zones set up by the candles themselves are in many ways more telling. again, nice stuff here. Hope you jump aboard and made a nice profit. To repeat an important idea, on the first example, while the No Demand is not completely within the body of the WRB, the engulfing candle could be enough off-set that issue. That is, some understanding of candle sticks can tilt marginal situations.

Narrow range bar with Ultra High Volume in new territory............. Possible end of a rising market. Personally, I would not short here, but I would certainly not be getting long. Let us know what happens over the next few days. Thanks.

Great stuff TG. Thanks for the posts.

Interesting chart. Will comment on it later, just wanted to post the pic now.

When I first heard the term "one-time framing", this is what I thought it meant: Taking to timeframes and trading them as if they were one timeframe. In other words, if you placed to charts side by side, you traded as if the you were looking at one large chart. Effectively, "one-time framing" the two different chart timeframes. However, this is not what the term means. It is a Market Profile term, so you know it must have some value . If you want a definition, the extensive MP threads are filled with those who can help. Well, based on my misunderstanding of the term and my understanding of WRB & Long Shadow Analysis, one can place two charts side by side and trade as if they were actually one large continuous chart. In his brilliant analysis, Shreem has touched on this idea often. That is, when the lower volume signal occurs on a lower timeframe but is within the body of a WRB of a larger timeframe. Check out the charts below. Notice that a significant WRB is created on the 15 min @ 0345 hrs. This candle is Ultra Wide Spread with Ultra High Volume. While the next bar is down, we have to take note of the old highs to the left. These old highs tell us that we may well be dealing with pushing thru supply/absorption volume and thus the WRB is Strength, not weakness. There is also a valid dark hammer pattern completed on the candle just before this WRB. More reason to see strength. As we are predisposed to look for longs, we note that @ 0355 hrs a No Supply forms on the 5 min. This candle is within the body of the WRB and comes after an Effort to Rise candle and a push to get past an old top to the left. So we have our High volume bar that creates a WRB. Followed by a low volume sign within that body............... It just so happens that each comes on a different timeframe.

This was a part of a pm I got. To all interested, TradeGuider just sent out an email that all prices are going up by $100.00 USD. Also All foreign transaction will be done in the currency of the country the transaction originates. The book will stay the same price, but if you want to buy the boot camp, you might want to do so soon. Even with the increase in price the boot camp is worth it. I am no shill. I do not recommend the software !!!!!!!!! P.S. Todd K has a new blog out that should have some good learning examples. Has anybody checked it out yet? I also hope some of you got the specail email chart of the week on reading the chart.: understanding the bars when there are no signals (TG) present. Great. If somebody out there got it and knows how to set up a link, please post it here. I do not know how and do not want a bunch of pms or emails about it. Thanks.

It's all about READING the chart. When elephants walk thru your front lawn, they leave tracks. This was an nice little counter trend trade set-up with very little advanced VSA knowledge needed. Key concepts: 1. Ultra High Volume and Ultra Wide Spread candles (bars) 2. Ultra High Volume and Narrow range candles (bars) 3. If you see an Ultra High Volume candle with an Ultra Wide Spread, that closes off its high. It is likely that some selling went on in that bar (assuming the bar was up, opposite if down). However, we still need to look at the next bar. If this bar is down, then there MUST of been selling in the first Wide Spread candle (bar). 4. If you see an Ultra High Volume candle with an Ultra Wide Spread, that closes off its high and the next bar is up BUT on HIGER volume and a narrower spread, there might of been some selling on the Wide Spread bar, but there certainly was selling on the narrow range (squat). Note: while on both chart the Ultra Wide Spread candle creates both a Long Shadow support/resistance zone and a WRB support/resistance zone, the entry signs are contained only within one. That is, they come in the Shadow rather than partially within the range of the WRB's body.

VSA always works. As traders that are human, however, we can fail in our interpretation of what we see. * Things happen in different levels of intensities. The trader always needs to be mindful of this. * I have shown some examples were a contingency plan was used. By definition the initial position is incorrect and the market moves in the opposite direction. Contingency plans allow the trader to take advantage of the market reality rather than bemoaning the "Power, or lack thereof, of VSA". * Note the attached chart. A valid long signal is on the chart. It makes sense. After we have an effort to rise, price falls but then we have No Supply within the body of our WRB (Effort to Rise) candle. Bigger picture the market was in an uptrend. However, If one is looking at another timeframe, the reason to go long is less compelling. In fact, there is a No Demand sign that comes in after the signal on the lower timeframe. Now if one waits for something to happen on the higher timeframe before acting on the lower, then this is the time to be actively looking for a signal on the lower. Ultimately, the market is dynamic. One minute the Smart Money may not be willing to support higher prices (No Demand) and the next minute they are (Effort to Rise). There are times when an Up-Thrust appears out of place. In the Boot Camp, Tom talks about a "polar bear in Africa". Understanding where and why things appear is important. Using multiple timeframes, contingency plans and stops are important. Core supply/demand make up is always true. That dynamic, however, can change bar to bar.

Great to have you back Shreem. I enjoy reading your posts. It does pain me to post this. Your interpretation of the chart is incorrect. You are correct about the critical candle (WRB). This candle, however, is an example of Pushing thru Supply. While weakness comes in on up bars, this is a strong bar. Basically, the Smart Money wants to lock in the traders who just hope to get out at break even at that old high. They went long and were wrong and have been holding on trying to not take a loss. (a loss is not a loss until you take it: bad thinking. Herd thinking. FORMER trader thinking.) Smart Money is willing to buy up the supply at this level. If they are willing to buy high, they must believe price is going higher. The next bar, while some supply does enter, actually shows the strength of the first bar and is not an Up-thrust. Up-thrusts will have closes closer to the bottom of the range. A perfect Up-thrust will close on the low. As for the second candle you have labeled as an Up-Thrust, it is not one either. Also note that it is not within the shadow of the Long Shadow. Simply, not a candle to look to go short.

Suppose I trade 3 contracts on a trade if it is in tune with the daily chart. That is, for example, the daily trend is up so I trade 3 contracts when going long. On a short signal I only trade 1. 1. Subconsciously I have told myself to trust my long signals 3 x's as much as my shorts. Conversely, I have told myself to distrust my short signals in such a way as to trade 1/3 the position. 2. If I am 1/3 less confident in my short signals, why am I taking them at all? If I believed it to be a good trade, then it should not be relocated to a lesser position size. Hence I have already added a negative bias to my trading and a self-fulfilling prophecy. 3. If you can't trade with the same size on both signals, why trade the lesser one? You are setting up a hierarchy for trade signals. But why trade anything less than the top of the ladder? Need more trades, or more money? TRADE MORE MARKETS. And trade them only in the direction of the trend. This is the problem, form my point of view with using a daily chart to trade smaller timeframe intra-day. If you believe that trend is one of the small edges afforded the retail trader, it makes little sense to go short when the daily trend is clearly up. But we know that an up trend can have down days. It can have down weeks for that matter. It takes away ones ability to make money if he is only trading on the side of the daily trend. Movement is important and that movement can be counter to the larger daily trend and still be tradable. I prefer to keep my trend-frame small: 15 mins. and my trade-frame smaller: 5mins. I can thus trade counter to the larger daily trend, while still acknowledging the power of trends and fractal market structure. As for the daily chart, its use in intra-day trading should be confined to support/resistance levels.

Looking left to trade right. Good lesson in how multiple timeframes can be useful. What is really key here is the No Demand on the 15 min. Once we see that we have a better understanding of the5 min. Specifically, we see Negative Action/No Results from a Test. While we do get the dark WRB that engulfs the test bar, it closes equal not lower. Lower would be better. However, on the very next bar we get that lower close. At this time, the 15 min confirms a No Demand sign (next bar down). Jump in short? No. But if you were long on the test a reversal of position is the option. If you were not in the market, now you have evidence of its weakness on two timeframes. You can now look to get short. Note the No Supply bar that is marked and comes just prior to the No Demand. This No Supply of course is a WRB itself. But notice that it is not within the body of a WRB. Hence, even without an understanding of what is happening on the 15, we would not want to go long here. The very next candle is No Demand. It is within the body of two WRBs: the prior No Supply and the Large white WRB (this is the more significant WRB, as size does matter-sorry some of you ). The WRB thread talks about what makes WRB more important than others. See that thread if you have questions, or just ask here. Also, if you have been reading Shreems' excellent posts, you would not that the No Demand is in the Long Shadow of a candle on the 15 min. Confluence. Thus one question that must be asked," what on the 15 min would make you want to go long on the Test that happens on the 5 min"? But the rub is, if you understand how to read the chart and employ a contingency plan, you can get short recoup the loss and be in the black. Two trades, one for two, but an expanding account size. (Did I mention size does matter?)

I do not want to steal this thread, but since TG uses VSA, I would just point this out. The first bar in this 2 bar reversal pattern has volume less than the previous two bars, closes lower, closes on its low and has a narrower range than the previous bar. Simply, It is No Supply. Note two other points: 1. This No Supply is in the range of a High Volume Candle. That is within the body of a high volume WRB to be exact. 2. The close of the No Supply candle is supported by the opening range. Understanding volume and support/resistance are keys to successful market trading. As price moved down towards that area (opening range) it becomes a good time to pay attention. It does not make much sense to go long, or short, just because price is moving towards an possible support/resistance area, but it does make sense to start looking for Smart Money involvement, or lack thereof.

Just wanted to post this chart 'cause I like it.

Very Nice. You've been holding out on us Shreem. LOL. Please keep the posts and the analysis coming.

As promised a trade for the day. This is an add on if already long from a trade prior to this time. That is, if your day starts when London opens, you might already be long. However, if you start your day around the NY open here is a way to get in. We don't have to feel as if we missed the bulk of the move and can't trade the action. Here we have a nice set-up on the 15. This is the type of set-up to look for on the 5 (the trade frame). However, it comes on the trend frame. As markets are fractal, we know that the higher timeframe has a bearing on what the lower timeframe is doing. We can keep our risk lower, by moving to the smaller timeframe as well as get a more precise entry point. In this case, the 5 min does not have a trade set-up per se. But we do see that the market is attempting to rise. There is a No Supply candle and three Effort to Rise candles. By 10:30 we know we want to get long. We have just had a valid set up via the trend frame (15 min). At 10:45 we get an Effort to Rise bar. Notice the difference on the next bar. This bar is narrow range Doji on low volume. While not a No Supply bar, it does have lower volume and a narrow range. It is also contained within the body of the WRB. Again, we already know we want to get long, the question is simply when. Here. The trend is up, we have a valid set up on the higher timeframe and now we have a down bar on low volume after an Effort to Rise candle. As if we needed another reason, we also know that there is more Bullish volume in the market than Bearish volume at this time. Markets can rise on high volume but they can also rise on low volume. In this case we know that the volume does support the move : up move on increasing volume.