Anonymous

I like this pic. The trade for the day was to the upside (see next post). Thus, this would be a counter trend trade until the market falls far enough to constitute a change in trend. Also there are time of day issues to be concerned with. I really like the interaction between the 15 min chart and the 5 min chart. In this example we see signs on the 15 that there may be a top of some sort. That is, we get a No Demand sign after a healthy day's trend. The market falls and then we see a Squat. Supply is entering the market on this bar. Note that we do not see a WRB with something happening within its body here at the top. Shift to the 5. First we get a Test. The bar that confirms the Test, turns out to be a No Demand candle itself. A few bars later we see a dark WRB that closes below the low of the test bar: No result from a test/Negative Action. Simply, weakness. We then see a Squat which is also an Up Thrust. Note that we close on the low, make a higher high and have higher volume than previous bar. Supply enters here. Yet, the market claws it way even higher. Then we get a Trap Up Move, or Squat. Again more supply entering the market. Finally, we get a narrow range bar that closes up from the previous bar on higher volume and closes in the middle of its range. This is a clear sign of supply entering the market and a Squat. So we have a WRB that has high(er) volume and a high volume sign with the body of said WRB.

ON PATIENCE: I am not a fan of TG software, as many know. My reasons have nothing to do with what the most oft heard criticism is, however. This criticism has to do with "signs" showing up "after the fact" or in hindsight. More broadly, this same criticism can be laid at the foot of Volume Spread Analysis. Those who look at static charts see signs with an almost uncanny precision. That is, they see many market turns being "called" by these signs. They go as far as to say, "I can buy tops and bottoms on these incredible buy and sell signals". What the charts do not convey, is PATIENCE. Many signs of strength or signs of weakness show up as two or three bar patterns. Most fall into the two bar category. No Demand is defined as an up bar with volume less than the previous two bars on a narrow spread. This base definition, however, fails to look at the next bar where we would want to see the close LOWER than the previous bar, confirming a lack of demand. This is true of a Test. While a low volume test will close lower than the previous bar, close on its middle or high and have volume less than the previous two bars, it is not truly confirmed until we see a close higher than the test bar. This needs to come on the NEXT bar or the bar after that at the latest. That is why these will show up "one bar late" to some. In truth, what is happening is this: one bar is looked at as cause and the following bar is looked at as effect. If you see a wide spread bar on ultra high volume closing near the high (cause), but the next bar is down (effect), then there must of been SELLING in the Wide Spread bar. "..A wide spread up on high volume shows effort to go up. If the next bar is down, this demonstrates that with the high volume seen on the day before, selling overcame the demand, otherwise, prices could not possibly have fallen the next day........." Master the Markets,Tom Williams, P. 145. "If a market is moving upwards on wide spreads, accompanied by high volume and no progress is seen on the NEXT day (bar), this shows the volume contains more selling than buying." IBID, p.154 "For a market to drop, selling pressure needs to be evident, which normally shows itself as wide spreads down on high volume. If the next day is down this usually confirms that the volume seen on the day (bar) before is genuine selling. However, if the next day is up then it shows that there was selling going on, but the professional money was prepared to buy and support the market as well...." IBID, P. 166 Again, the point is that one should usually be waiting one bar after seeing the high volume or the low volume (in the case of No Demand/No Supply or Tests). Having the patience to wait one day(bar) or two allows for a more acurate and complete view of what is happening. Nice work Tasuki. You have basically "proven" to yourself what Tom has written about in the book. The name is not as important as the underlying concept. Tom says the two most important things a trader needs to understand are Volume and Support/Resistance. You seem to be on your way there. P.S. This is not unlike some candlestick patterns that have multiple candles where some come AFTER a hammer or doji line.

Hello Ranj and welcome to the thread and the forum. I hope you have found a place to call home. Thank you for posting. While I believe in Fibs, I have not been able to apply them in trading. I never know when to apply them. So I am looking forward to seeing more posts from you showing VSA principles in action around certain Fib areas. I am sure some of the many capable readers of this thread can give you insight. Your analysis of the Ultra High Volume Bar that closed up from the previous bar and closed in its middle as a transfer of ownership bar is correct. Supply entered on that bar. HOWEVER, look at the very next bar: 1. it is a selling bar (positional relationship) that closes down, has a smaller range than the previous bar, and has volume less than the previous two bars. 2. the bar after it (the one you labeled No Demand), closes up. THIS IS KEY FOR MY DEFINITIONS OF NO DEMAND/SUPPLY. This next bars does not make a lower low and closes up, which to me confirms the previous bar was No Supply. Note that the bar trades below the 38.2, but the close is at that level. That has got to mean something to the Fib trader. From a VSA standpoint, There was supply on the Transfer of ownership bar, but that supply was actually swamped by demand as evidenced by the No Supply the very next bar. Things get a bit murky after that. While the base definition of No Demand is an Up bar with volume less than the previous two bars and a narrow range, TG looks for a close in the middle or low AND a close lower on the following bar. Personally, one way I define No Demand would also mean that this bar needs to have a close higher than the bar that follows it and not have a lower low. Hence for me, it is NOT a No Demand bar. Joel Pozen would consider that bar No Demand and the previous bar No Supply as both have the key element of volume less than the previous two bars and close up or down, respectively, from the prior close. This is not to discourage or scorn, just to point out that there are various subtle differences used by various users. Which is the greatest assets of this thread and why it is imperative that everyone participates. As to the issue of going short. I have no idea. I know that for me I see possible strength in the market. Based on the No Supply, which is supported by the Fib level. With that said, I would not be looking to go long just yet. It is possible that the No Supply can be viewed as a test. As a test it would be a low volume test (Volume less than the previous two) but also a high volume (actual) test. In this scenario, we would expect the up move to be muted, or drift sideways, as there would still be too much supply in the market. I know I haven't been of much help, but "when in doubt, stay out". Can somebody help us out here? P.S. I like to look for low volume signs within the range of high volume candles. In this case, I would like to see something happen within the Shadow of the transfer of ownership bar. Or within the body of the WRB candle which is the engulfing candle prior to the Transfer of ownership bar.

TG: Thank you so much for the post, please keep 'em coming. Great stuff. My two cents: Trade 1- I see a valid High close Doji pattern. From a VSA point of view, I see an Effort to Rise bar. Which you correctly pointed out. In short, I would of most likely gone long here too :sad:. Trade 2- I see a valid white hammer pattern which culminates with the white hammer line. You are correct with the No Supply (low volume) candle prior to the hammer line. I have also marked off another No Supply that appears within the range of a WRB as an alternative entry signal. Moving back a bit. We see the candle prior to the first No Supply has High Volume and a wide spread but closes on the upper portion of the range. Some Demand must of entered on this bar. (Strength comes in on down bars) Thanks again. We can all learn from your knowledge and skill. Very nice work.

TG, I wish you would post in the thread yourself. We are all interested in how you are using VSA. The intent of the thread is certainly not to define the only way to use VSA, it is to explore the many ways it can be used. Plus, as the thread starter and then no posts it make it seem like you were no longer interested in VSA. I am glad to know you still are and are using it. In the spirit of sharing.....................

I have a slightly different take: Although I consider VSA and WRB & Long Shadow Analysis my two primary methods, I really think WRB & Long Shadow analysis IS VSA. That is, once one adds the open to the mix, Wide Spread bars become WRBs or Long Shadows. Therefore when Tom or Todd talk about something happening in the range of a high volume bar, they actually are talking about something happening within the body or long shadow of a high volume bar. They do not mention this fact much but they do look to see low volume signs in the area of a chart where there was once high volume. Most of the time that is the same as looking for a low volume sign within the body of a WRB that had high volume. Simply, They leave out the open, but the concept is highly correlated if not the same. Understanding WHY Price Action is the way it is very important to the Price Action Only trader. We know that the Smart Money uses news events to manipulate the herd in various ways. Very astute of you Mister ed. One should ignore the news but be cognizant of when it is being released. As this is a picture of the spot Euro/Dollar market, the fact that New York traders entered the market also might of played a role in the change of the Price Action. My definition of a WRB is a candle (or bar) with a body (Open -Close) larger than the previous 3 candles. Hence there are 4 candles(bars) in the definition, not 3. While the amount of candles used in the definition can be changed to 4 or 5, 3 should be the minimum amount. This is the definition used by the man who pioneered this concept, NihabaAshi. The only thing I see as a potential problem with your definition is that it is hard to SEE that a candle(bar) is a certain standard deviation wider than other candles. That is to say, the traditional way is more Visual and thus more adaptable when one is watching multiple markets/charts. I also think you can miss a great deal of what is going on as the WRB does not have to be a set amount larger than the previous 3 candles, only on handle(pip/tick) larger. While the more significant WRBs tend to be large, they do not need to be. Mark would tell you that WRBs represent, among other things, volatility changes in the market. Sometimes that change or shift is subtle (think of three dojis followed by a candle with the open 1 pip below the close-a dark WRB by definition). In this case the WRB is not large and not all that important, but it is expected. As we would expect to see increased volatility after a period of little or no volatility. Volatility here of defined by the size of the body. Having said all that, That is not to say your way can not work. In fact I do see certain uses of it right off the bat. Please post some pics. P.S. There is a separate WRB thread you should check out.

When it all comes together: 15 min chart. Valid White Hammer (open>close) Pattern. The whit hammer line completes at 0930. 5 min chart. Dark hammer line creates a Long Shadow. We see a doji, which in VSA terms is a Test bar. Now the hammer closed in the upper portion of its range on higher volume and closed equal to the previous bar-there must of been Demand entering on that bar. The next bar is a test for Supply. Technically a test is confirmed by a close higher than the close of the test bar one to two bar later. One bar later we get that. The time is 0930. So as the trade-frame is confirming a test within the range of a Long Shadow bar where demand swamped supply, the trend-frame completes a Bullish White Hammer Pattern.

You're correct and that is why MY charts color volume based on the relationship to the previous bars volume amount. This is a "stock" chart from an internet source.

Mister ed, again, nice work and thanks for the post. This thread is only strong when ALL participate. In contrast to Mister ed, I define Effort bars as follows: EffortU1:=If(H>ref(H,-1) and L>=ref(L,-1) and (H-L)=ref((H-L),-1) and O<=((H-L)*0.1)+L and C>=((H-L)*0.9)+L and C>ref(C,-1) and Mp()>ref(H,-1) and V>ref(V,-1) and V>VolAve and V<=2*VolAve and WRB=1,1,0); EffortD1:=If(L>ref(L,-1) and H<=ref(H,-1) and (H-L)=ref((H-L),-1) and O>=((H-L)*0.9)+L and C<=((H-L)*0.1)+L and C<ref(C,-1) and Mp()<ref(L,-1) and V>ref(V,-1) and V>VolAve and V<=2*VolAve and WRB=1,1,0); EffortU2:=If(H>ref(H,-1) and L>=ref(L,-1) and (H-L)>ref((H-L),-1) and O<=((H-L)*0.2)+L and C>=((H-L)*0.8)+L and C>ref(C,-1) and Mp()>=ref(H,-1) and V>ref(V,-1) and V>2*VolAve and V<=4*VolAve and WRB=1 and C<ref(C,+1),1,0); EffortD2:=If(L>ref(L,-1) and H<=ref(H,-1) and (H-L)>ref((H-L),-1) and O>=((H-L)*0.8)+L and C<=((H-L)*0.2)+L and C<ref(C,-1) and Mp()<=ref(L,-1) and V>ref(V,-1) and V>2*VolAve and V<=4*VolAve and WRB=1 and C>ref(C,+1),1,0); EffortU3:=If(H>ref(H,-1) and L>=ref(L,-1) and (H-L)=ref((H-L),-1) and O<=((H-L)*0.1)+L and C>=((H-L)*0.9)+L and C>ref(C,-1) and Mp()>ref(H,-1) and V>ref(V,-1) and V>2*VolAve and V<=4*VolAve and WRB=1 and C<ref(C,+1),1,0); EffortD3:=If(L>ref(L,-1) and H<=ref(H,-1) and (H-L)=ref((H-L),-1) and O>=((H-L)*0.9)+L and C<=((H-L)*0.1)+L and C<ref(C,-1) and Mp()<ref(L,-1) and V>ref(V,-1) and V>2*VolAve and V<=4*VolAve and WRB=1 and C>ref(C,+1),1,0); EffortU4:=If(H>ref(H,-1) and L>=ref(L,-1) and (H-L)>ref((H-L),-1) and O<=((H-L)*0.2)+L and C>=((H-L)*0.8)+L and C>ref(C,-1) and Mp()>=ref(H,-1) and V<VolAve and V>ref(V,-1) and V>ref(V,-2) and WRB=1,1,0); EffortD4:=If(L>ref(L,-1) and H<=ref(H,-1) and (H-L)>ref((H-L),-1) and O>=((H-L)*0.8)+L and C<=((H-L)*0.2)+L and C<ref(C,-1) and Mp()<=ref(L,-1) and V<VolAve and V>ref(V,-1) and V>ref(V,-2) and WRB=1,1,0); EffortU5:=If(H>ref(H,-1) and L>=ref(L,-1) and (H-L)=ref((H-L),-1) and O<=((H-L)*0.1)+L and C>=((H-L)*0.9)+L and C>ref(C,-1) and Mp()>ref(H,-1) and V>VolAve and V>ref(V,-1) and ref(V,-1)>ref(V,-2) and WRB=1,1,0); EffortD5:=If(L>ref(L,-1) and H<=ref(H,-1) and (H-L)=ref((H-L),-1) and O>=((H-L)*0.9)+L and C<=((H-L)*0.1)+L and C<ref(C,-1) and Mp()<ref(L,-1) and V>VolAve and V>ref(V,-1) and ref(V,-1)>ref(V,-2) and WRB=1,1,0); Beautiful shot showing No Result from an Effort to Rise/or Negative Action. Note how price fails to close above the close of the Effort candle.

Thank you for posting. Please keep them coming. I kid the short bus squigglely line crew, but the truth is when indicators are used correctly the can help clear the murky water. Especially if they are used to define the IS not the "should be".

The Fed has only two mandates: 1. Control the money supply. (increases in money supply can result in increases in prices-inflation is however defined as an increase in the supply of money) 2. Unemployment The Fed's job is not to rigg the stock market. If there is a buyer for every seller, than that means somebody (ies) has been doing very well as the market goes down. Why should their gain be targeted because Ma & Pa are dumb enough to only purchase long only mutual funds?

First, thank you for your post. As you are new I do not want to confuse you. However, I pay particular attention to Buying and Selling bars. Buying/Selling bars refers to a positional relationship and NOT an assessment of who was in charge for that bar. That is, a Selling bar is a bar that makes a lower low than the previous bar but not a higher high. What you have is a bar/candle where the low is not being supported but the high is acting as resistance. Many people would say that the bears must be in charge of the period. Note also that the close is lower than the open and lower than the previous day. All these things belie the fact that the bar is more strong than weak as there is little volume on the bar. In VSA terms, the Smart Money is not interested in lower prices at that time. Hence it is No Supply. There are many traders (in the herd) that call such a bar a Selling bar and think it signals weakness. This is how the Smart Money likes it. Without volume, the truth is not so opaque.

LOL. Looks like someone already stole my thunder (Apple Doji)............ $Idnu valid High Close Doji Pattern. Some things to note: 1. Stopping volume on the doji line. We have Ultra High Volume on a Wide Spread candle that closes near its high and down from previous bar. If the volume was selling, then the close should not be in the upper portion. Also the next day should not be up. * T1: possible first target- midpoint of the WRB. * T2: possible second target-obvious top. Look for High volume wide spread bars PRIOR to this level if we are going to go thru. Or a Wide Spread Bar that trades thru this level on Ultra High Volume (pushing thru supply).

Well, my post did not generate the controversy I had hoped (I lost that bet). I have no real intention of joining the short bus squigglely line crew. BF: PM me and we can continue our shared journey. This thread is pissing me off. I don't know about the high/low tick, but being able to see stopping volume helps. Note that there is a Long Shadow formed by the Stopping volume bar, and that the mid point of that shadow acts as a support level with in the larger support/resistance zone formed by the entire shadow. On top is where my questions are: Why is the No Demand within the Long Shadow a better trade than the No Supply within the Range of the WRB body?

Thanks BlowFish for your posts, you got thinking of some real important issues. Trying to catch tops and bottoms is NOT the best way to trade with or without Volume Spread Aanalysis. Trying to get in on the bottom with VSA is no different than trying to get in on the bottom with CCI. Sure, VSA is better in that it tells more of the truth about what is going on, but it is still predictive and not surrendering to the market. If the trend is down, then one should be looking to trade from the short side. Prior to a real sustainable change in trend there is usually an Accumulation or Distribution phase (this is key). This means many of the best moves come AFTER a sideways period and not a "V" shape hard down, hard back up. Check out the chart on the left: It was clear that the trend was down on the day. Why fight that? The market gives us a Dark WRB followed by a No Supply bar. A few bars later, we get a Valid Test. Taken together this is a time to get long. More precisely, taken in isolation, this is a time to get long. Isolation because it ignores: multiple timeframes, current trend (a trend in motion tends to stay in motion), lack of any accumulation phased needed to make a sustainable rise possible. Now, suppose one went long. As previously mentioned, a contingency plan should be in place. Once there is a Dark WRB that closes below the low of the Test bar, it is time to reverse position and get short. At that point we see Negative Action or No Result from a Test. This is weakness. True that the No Supply is strength and the Test is strength, but what results from their existence proves to be weakness. If one was trying to surrender to the market, one would not be looking to get long in the first place. Now the No Result from a Test/Negative Action is actually a Signal to get short. I used to call Walter (and other indicator traders) the short bus-squigglely line crew . Now I am one of them. The Balance of Power Line was signaling bullish control as the PRICE ACTION SET- UP was appearing. While the indicator is NOT used to signal a trade, it is used to nullify a Price Action signal. There is no need to worry how much volume is needed to change the trend-create a bottom or top. Tops and bottoms can pick themselves. The chart on the right. This chart shows two more great short Price Action Set-ups. We get our WRB and then a VSA sign within the body of the WRB. In both cases the No Demand comes when the Bears our in power (red). Multiple timeframes can help us know that the trend is down. Traditional use of indicators probably would have none looking for an "oversold" signal and a way to get long....... Note that there is a Price Action Long Set-up in-between the two shorts. Good in isolation, but we don't trade in isolation. The Balance of Power favors the bears. More importantly, once we get that Dark WRB that closes below the low of the test bar, we know we have Negative Action/No Results from a Test. In other words, weakness. Once again, thanks BF and TG for the help/ inspiration. This is why an interactive thread is so important. As this is not one, this is likely my last post.

"Up-thrusts can be recognized as a wide spread up during the day (or during any timeframe), accompanied by high volume, to then close on the low. Up-thrusts are usually seen after a rise in the market, where the market has now become overbought and there is weakness in the background. Up-thrusts are frequently seen after periods of selling, just before a down move. Note the day must close on or very near the lows; volume can be either low (No Demand) or high (supply overcoming the demand)...", Tom Williams, Master The Markets, P. 78. Simply, the background is not conducive to calling that an UpThrust. Yet, even if one does consider it an UpThrust, it is not enough in and of itself to cause a short trade. And the points you make about the area being the same as the first #4 and a pivot area are worth noting. From my point of view, It all goes back to the wide spread bar. We know that demand entered on that bar. Ultimately, we get a test within the range of this bar. The Upthrust, is not contained within the range of the wide spread bar (#1).

You need to look at the book again. Your #1's are wrong. They are not weakness. I only see one test: the second #4. Note that it closes closer to its high and closes down from the previous bar (the ideal test bar closes on its high and closes down from the previous bar, has a narrower range and volume less than the previous two bars). That is NOT a good place to see an Upthrust (#5). It is like seeing a polar bear in Africa. That bar is in fact more bullish than a bearish Upthrust would be. Please keep posting charts. I can be wrong here and do not take offense.

To play devil's advocate, one could argue that it is a Doji. The relationship (width) of the open and close versus the actual range of candle fits. There is a valid low close Doji pattern. This is a very good pattern and not what one finds in the books. Most patterns,found in books, do not work that well................I am waiting for Mark to put in his two cents here. Understanding the PRICE ACTION that creates the candle line or pattern is more important than what one chooses to call the candle.

Obviously, this is hindsight. The first thing that catches my eye is the Wide Spread Bar that is the first bar in the shaded area. I do not know where the bar opened, but my feeling is that this is a WRB. Even without that knowledge, one must see that this is the largest bar on the chart shown. The volume is also very high. It is higher than the red line which I assume means it is a certain deviation above average volume. The next bar is up. Clearly there must be Buying (demand) within that first wide spread bar. The appearance of this widespread bar is an immediate differing point from the first "bottom". The next bar is down and a Selling bar (positional relationship) on volume less than the previous two bars: It is No Supply. Now we move to the next bar with a purple arrow and it is No Demand. If that wide spread bar also represented an effort to fall, this would be bearish. It would mean those who were trying to push the market down are not "racing to cover". It would also indicate that there is not a rush of new Bulls into the market. However, on the very next bar, two bars to be exact, we see less volume on bars that are closing near the high. These are tests. We have seen stopping volume (the wide spread bar on high volume with the next bar down.) We saw a No Supply sign right after that, and now we are testing for supply on lower and lower volume. In short, there are reasons in the background to take the test bars as signals to get long. I would mention the location of the test bars: low volume bars within the Possible body of that possible WRB. If you add in the higher timeframe, the only time one would be looking to go long is at this "second bottom"-your term. In sum, the situations are, in my opinion, very distinct. And that distinction starts with a WIDE SPREAD DOWN BAR on HIGH to ULTRA HIGH VOLUME.

You are correct. You also bring up a fatal error that most traders make. They paint volume green (or blue) when the close is higher than the open and paint volume red when the close is lower than the open. OR they paint the volume green when the close is higher than yesterday's close and red when the close is lower than yesterday’s close. Weakness comes in on up bars and Strength comes in on down bars. An up bar being defined as a closer higher than the previous close and a down bar being defined as a close lower than the previous close. Hence, the green, which connotes buying, is erroneous and misleading. As far as close above the open, Volume Spread Analysis does not look at the open so this would technically be mute. I do look at the open, yet I paint volume as BlowFish does: higher volume is blue, volume less than the previous volume is red. Now we can look at a basic volume concept: BULLISH VOLUME IS INCREASING VOLUME ON UP BARS & DECREASING VOLUME ON DOWN BARS. BEARISH VOLUME IS INCREASING VOLUME ON DOWN BARS & DECREASING VOLUME ON UP BARS. Of course that volume can not be excessive as it may mean hidden buying or selling depending on the bar in question.

Blowfish; Thank you for the charts, please keep them comming. I am sure somebody here will be able to make a comment soon.

15min chart for trend 5min chart for trades

Thank You. Thank You for providing me, and everyone else, a safe place to explore new ideas, share thoughts, and interact with others on the trader's journey. This is truly an community worth belonging to. I feel honored to be a part of it. But enough of this mutual admiration society .......... let's get back to learning to surrender to the market. The market is full of abundance The market will provide

ON GAPS The old adage is that "Gaps are filled". Here is an example of a Gap play on the open of the day. The market opens up with a gap to the downside. The first bar we see is a dark WRB. (Note: while it is beyond the scope of this post, this dark WRB actually forms another larger "gap" and is thus even more reason to be thinking that price should move higher in order to fill the gap.) Things start to get interesting when we see the first labeled No Supply bar. The appearance of this bar itself is something to note, but there is another No Supply bar a few bars prior, and price continues down. What makes this one of note is that a previously mentioned pattern occurs. That is, one to three bars later, we see an Effort to Rise bar. We have now seen low volume on a down bar followed by an Effort to Rise. Is the path of least resistance changing? The volume on the next bar increases and the range narrows. This is a Squat. Supply is entering the market. Again, we see another pattern show itself as the very next bar after the Squat is a No Supply bar. The low volume tells us that Demand must of been swamping Supply on the previous bar (Squat). Now we have are signal. We have a low volume sign within the range of a high(er) volume bar (the Effort bar), which is also a WRB. Things are fine until we get to the No Demand bar. Note that the market does not completely fill the gap at this point. But now we have something happening within the range of the Support/Resistance Zone created by the Gap. On the next bar we see a No Supply bar. Time to move stop to just below this bar. This is an example of playing the gap to fill. We were always looking to go long. It thus becomes a matter of "how and when do we get long" not "if" we get long. We did not try to get in on the bottom, but top and bottom pickers become cotton pickers.

Underneath your cynicism is real truth. First, there is no real reason to be looking to go long on the appearance of the bar itself. Second, there are certain things to look for as price moves towards trend lines/resistance and support lines/previous market tops. For example, the spread usually widens and the volume increases PRIOR to reaching the level when the market is going to penetrate that level.