Tasuki

Putative plan of action: 1) you keep the background weakness in mind--I guess we don't know exactly how much supply is present, but we can maybe guess that there is at least some supply left over from previous displays of weakness. 2) when you see a seemingly strong bar showing up at some obvious resistance level, you stick your front paws under your buttocks until you see how the NEXT bar turns out. Sounds like a plan?

For the record, I'm not attacking anybody here. I've found it very helpful to share basic information about trading, such as how to use common indicators, or the pros and cons of breakout trading, or how to understand Volume Spread Analysis. However, when I come up with something special that required a vast amount of trading time to develop, I do not share it. As an example of what happens when you do share something special, a well-known trader named Larry Pesavento, who spent years working on the Gartley and Butterfly trades, decided to publish his results to the wider world. No sooner had he published them than a group of savvy programmers figured out the code and put the code on the Tradestation World website, thereby compounding LP's mistake. If you look at the percent success of these trades before and after they became common knowledge, you will see than they worked amazingly well prior to publication, and now they work so poorly that you might as well flip a coin to decide if price will follow the prediction made by the patterns.

Here's another example, this time from a weakly (sic) chart. You see, this pattern is no respecter of timeframes--you find it all over the place. So, two questions: 1) Like last post, is there a name for this thieving deceiver in VSA? 2) See attachment--how do you determine what "weakness in the background is?" Would the price action in June constitute such weakness?

OK, folks I'm back. Not sure if I should post here or that other forum. I'll start here. I like the name "Traders Lab" better. See attached chart. I see this type of bar all the time and it doesn't seem to fit any of the standard VSA definitions of weakness because it isn't, after all, a weak-looking bar--spread's not too wide, volume's not too high or low, doesn't close on its lows. It's the PERFECT fake-out bar. The one constant is that the bar pretty much always (well, usually, well, frequently) appears as price is nudging up against some sort of resistance, and the bar is designed to suck in the gullible. There probably is what VSA folks would call "weakness in the background" but I'm not clear on how you determine that (maybe a topic for another post). So my question is, whaddya call this bar? Is there a name for it in traditional VSA?

shreem, Thanks for the link to MoneyTec. Funny how it looks like a clone of Traders Lab. It also looks as if KP on MoneyTec is our old friend PP on TradersLab. Also seems like some of the other posters are the same between boards. Not sure why they'd do that--create two nearly identical bulletin boards. Have you found any advantages or disadvantages between them? In any event, to answer your question, yes there certainly are folks on this forum (and that one too, I'm sure) who use VSA in their analyses. We seem to go thru "spurts" of posting, and then folks get tired and take a break.

What the heck is a "wiki"?

The simple answer is: NO. A friend of mine traded with them, and they seemed fine until he realized that their platform mistakenly failed to get him out of a position he was in. When he called them, they put him on hold for 45 minutes while the price moved against him. This is just one of a dozen horror stories I've heard with IB. Best to play it safe and find a more responsible broker.

Walter, the "pro gap" vs "amateur gap" are just terms from Pristine's methodology. They don't *know* who's causing the gap, but they assume so by the price action. If you see a gap that breaks out of a trading range, Pristine says that this is most likely professional money that's causing the gap. The reasons they (Pristine) give are the same as you'd find in VSA--they pros are trying to run the stops of traders who thought the range would resolve in the other direction and simultaneously convince traders who are already in the trade and making money from liquidating. If you see a gap that extends an already-existing trend, Pristine says that this is most likely the retail traders who are all jumping in late in the game, driven by greed--they don't want to miss the boat. These gaps are often the last gasp of the bulls before the trend reverses, and thus they are called "exhaustion gaps." Hope I've made this relatively clear.

Walter I'm not sure what you mean by the second pivot being lazy so it doesn't want to "swing" the first one. Could you maybe paraphrase? Or perhaps, what would it look like if it DID swing the first one? Thanks, Taz

coyotte, I can't find the symbol PNA which you used in your example. Has it been renamed?

Given my handle (Tasuki) I'll say I'm partial to the Tasuki continuation gap patterns, although I will only take them if the third candle is small, and I prefer to see something of a nice tail on it. The gap also needs to be a professional gap, not an amateur gap (professional gaps initiate moves, amateur gaps continue moves and are sometimes called "exhaustion" gaps).

PP, Thanks for the info on squats--enlightening! Taz

Brilliant analysis, PP. Sorry to backtrack a few posts, but in your post on p. 28 (permalink #278), you show a chart with the words "Squat (test)". What the heck is a "Squat"? Is it the the same as a "test", or is Squat a subset of tests, or are tests a subset of Squats or what? Thanks, Taz

habi and Blowfish you are both most assuredly correct. See attached 10 minute and 20 miinute charts of the same region as I posted yesterday. As you can see, on both a shorter timeframe, 10 minutes, as well as a longer timeframe, 20 minutes, the "upthrust" appears in its more classical form--closing down. What I am suggesting is that it is valuable to free your eyes from the "tyranny of the timeframe" and look at the "ebb and flow" of the market. Good call, you guys.

See attached 15 minute ES chart. I'm not sure what the proper definition of "upthrust" is, but I show [at vertical dotted magenta lines] what I consder to be two types of upthrusts--one that ends on the high, and one that ends on the low. In both cases, the highs of the bar were the highs of that pivot cycle, and prices dropped significantly afterwards. In both cases, the highs of the bar pierced the resistance formed by the previous bars. In both cases, the volume was higher than previous bars, but still below the average volume (represented by the yellow line of the 50 period moving average of volume). My thinking is that the volume is just enough to get the retail traders excited, and sucker them into going long at just exactly the wrong time, but not so high that the pros are throwing alot of money at this game of deception. Comments welcome. As an added attraction, I'm sure you'll notice some beauiful "No Demand" bars on either side of these Upthrusts.

See attached chart, which is my original 15 minute ES (permalink #252) annoted first by PP (magenta arrows, permalink #257)) and now by me (points A, B and C). The problem I see with both points A and B is that, while they may fit the classical definition of "no demand", the fact is, demand came in with these bars. Ergo, I would like to propose that we (somehow) come up with a new definition of "no demand" that would exclude these false readings which often come in after a selling climax, as Blowfish described (permalink #259). This new definition, however it is forged, should, I suggest, also INCLUDE at least some of the bars highlighted by my cyan downarrows, because they did seem to represent a loss of demand. Perhaps a simple addition to the standard criteria of "no demand" would be sufficient--they must appear after a buying climax, not a selling climax. Perhaps that's too obvious to mention? Perhaps there should be some either/or provision, such that a widespread bar must close near the low, while a bar that closes above its midpoint must be on lower volume and perhaps also close below the close of the previous bar in order to qualify as representing "no demand". I'm looking at my second and third downarrows (from the left side)--the second one has a narrow spread but it closes above its midpoint, yet it also closes below the close of the previous bar. Maybe that should qualify as "no demand"? The third bar is a real doozy--it closes on its low and it closes below the close of the previous bar, but it has a wide spread. Maybe that wide spread can be forgiven (not disqualify it from being "no demand") because of its other two points in its favor? Just some ideas to chew over.

See attached 15 minute ES chart from today and yesterday. Just a short question on "no demand". I seem to see it every time the market starts going up, which can't be right, so if somebody would kindly straighten me out and show me which (if any) of my putative "no demand" bars are the real McCoy, I'd be most grateful. Tx, Taz

just an observation, FWIW: Looking at the 15 minute chart of the same time as my last post (see attachment), it seems (to my eyes at least) that the 15 minute is so much clearer than the pattern on the 5 minute chart. I know that VSA, like everything else, is supposed to work better the longer timeframe you look at, but there's a point of diminishing returns, especially if you're an intraday trader. I mean, sure VSA (even MACD or RSI) would give better signals on a weekly chart than a 5 minute chart, but the weekly isn't all that useful (except as general direction) for daytrading. The stopping volume and the successful test on this 15 minute chart are so clear they reach out of your computer and smack you in the face. I haven't seen that kind of clarity with shorter timeframes, although I know that some folks use them (including me, up 'til now).

Please see attachemnt. Five minute chart ES today (Monday 6/18/07). Question is typed on the chart--When you see a WRB with high volume, do you always think, "Ah, reversal in price is in the near future"? In other words, is this type of bar really nothing more than "stopping volume", or is there more to it than that? I can't find an example now because the situation is rare, but I swear I've seen one of these type of bars followed by a continuation of the price in the direction it was originally going (oftentimes, or maybe always, on even higher volume), and I coined a term, "pausing volume" instead of "stopping volume". Are there any rules in VSA to help you determine whether price will continue or reverse after a WRB on high volume?

Pivotprofiler, Thanks for explaining about why the market doesn't like high volume upbars (or downbars I presume)--I never got that clear in my head before. Technically, I can't be wrong if it's true (as you said in an earlier post) that 85% of the volume of any bar is professional money. On that bar in my chart, the high volume upbar, it would appear that 85% of the professionals were wrong, yes? If they represent most of the money, then by definition, most of them were wrong to go long as the market was about to retreat. I don't see any way around that. BTW, be as harsh as you like. I've got a tough hide, and there's no doubt that you're the master of VSA here. I'm just here to learn, so I throw stuff out as I see it.

I'm sure VSA does have some merit, but there are times, it seems, when the pros are dead flat wrong. See attached chart. Tradeguider, and some other people, present the pros as always being on the right side of the trade. I'm postulating here that they're wrong more than we'd like to admit. If I'm right, this would limit the value of VSA and would explain why it seems to work best in hindsight. Someone on this forum suggested that we call live trades here, and nobody took him up on it. Hmmm. OK, so you couldn't intraday trade from signals posted here because we're all busy trading. But swing signals--predictions of where various markets are going to go---if VSA can pass THAT test, then I'll become a believer.

Cooter, I'd be very grateful if you could explain what "tick delta volume" is and how you get an RSI that's based on it. I've got Tradestation (seems like your chart is a TS chart) but I've never heard of tick delta volume. The TS user's guide didn't have anything on it, nor did the support center. Real curious what this is. Thanks, Taz

Hopefully, attached should be an example of "no demand" (at least as I understand the term)

Hmm, something wrong, my chart didn't post.

Sorry, PP, did I sound like I was a shill for Tradeguider? Didn't mean to if I did. I'm not sure if they really will drop the book buyers from their customer seminars. You may know more than me, but I've heard several of Todd's webinars, and he's started off every one of them threatening to dump the book and bootcamp buyers. So far, it's just been alot of hot air. We'll see. I posted my initial comments in the hope that we could maybe look at the VSA somewhat systematically, analyzing which signals work best, and in which contexts ("backgrounds"). I'm new to Traders Lab, so I'm not sure I'll get this posting right, but I'm going to try to post a chart I prepared during my free Tradeguider trial which shows a basic test followed by a shakeout. This is a pattern that seemed to work well.