BlowFish

Great stuff Walt price action at its simplest - much clearer than all that squiggly line stuff!! Those interested might also look for posts by oattrader at the old Yahho financial groups he was a venerable trader who put this forward as a really simple way to trade. From memory the method he described was pretty much identical. I think you can also find indicators and money management ideas at NQOO's trading naked site. For a similar but almost contrary technique (its essentially a failure of this). Check out trader vic's 2B's summarised here http://www.dacharts.com/2b.htm. I may be mistaken but I believe Dunnigan used something similar too. Certainly worth reading for those interested in stuff based on pure price action. Cheers.

Quite agree that 'delta' type stuff is probably better in a separate thread to the VSA stuff. Bed time here I'll go through your post a bit more carefully tomorrow. Cheers.

Hi Tasuki, Friendly debate rather than throat jumping from here! If I understand correctly what you are looking at is volume @ bid and volume @ ask. Red prints vs green prints from the tape. I looked at this extensively a while back along with market delta and footprint charts. I have just started experimenting with a constant range chart 1 tick wide with a volume @bid/ask histogram to see 'walls' build at different levels. Trevor published some of my observations on the old markedelta website so maybe it had some value. Probably still buried in the blog area. Heres the thing, while delta & volume@bid/ask are useful tools I think there are lots of mis-apprehensions about them. (volume on upticks vs downticks gives very similar results to volume@bid/ask too). Let me just throw out some ideas. 1) In futures markets for every print on the tape there is a buyer and a seller. This can be buying/selling to open/close so there are 4 types of participant. I am not aware of how you can differentiate between people opening or closing until we get real time open interest, that would be something! We need to remember at all times there is always a buyer and seller. Always. 2) Traders that hit the bid or the ask can be considered 'aggressive' buyers or sellers, those wiling to pay at market if you like. Stops will show up as aggressive as they convert to market orders. What these indicators measure is aggressive (at market) buyers and sellers. 3) One of the core premises of VSA is that the smart money/ (for smart read big) sells into rising markets and buy falling markets. This is the only way they can shift the size they need too. Hence weakness showing up on up bars and strength on down bars. I think 1) 2) & 3) are probably 'facts' now a bit of conjecture. If we accept 3 then the smart money has the luxury of selling on the ask in an up move. To stop a move they aren't going to hit the bid again they are going to just keep refreshing the ask until more aggressive sellers show up. This dosen't jive well with the whole market delta volume@ask thing. Well not in the way its often presented i.e red 'selling' green 'buying'. In fact the only time this holds true is when the market is trending in a nice controlled fashion. The Smart money does not often need to buy/sell aggressively except perhaps to kic start a move. Now I'm not saying these tools aren't useful but you have to be careful how you interpret the info. The problem they present for me is that it tends to draw me into the micro fluctuations and I tend to get 'wiggled out' by them. Thats not a problem with the tools but personal discipline! Cheers.

(b) Sure, Im in London currently but the book currently lives in Somerset. Should be spending Xmas there if you hit me with a PM round that time I'l have a flick through. Not really qualified to answer the other two questions. Cheers.

This is a scenario to be very careful of. I have posted in the past about it - clearly there where sellers stepping in but there was still demand. I would say the upthrust showed there was still demand (very high volume). It was kind of a continuation of the other bar. For an upthrust or test I like price to fall off first. I also tend to anticipate (in a trend at least) that these types of set up are going to be pauses unless there is very clear evidence its over. VSA is a great tool but its not a magic bullet. I have said in the past that its nice to see some 'failures' or supply shift to demand shift to supply again senarios. This ebb and flow happens all the time at the hard right edge. Sometimes supply enters heavy but the bulls pick up the pace to overcome it. Sometimes they withdraw but re enter at a lower level. there's all sorts of players with many agendas. Thanks for sharing the chart hopefully we can all learn from it. Was it yesterdays ES? Cheers

Could always look at Narrow Range bars (NR) which after all are a contraction of volatility. We all know what usually follows! I think getting a handle on price action in general is perhaps the most valuable lesson a trader can learn.

Yeah the typos actually helped. You thought hang on that's not right and would actually think about it then correct in the margin. A hidden test. Actually it was only a couple of charts with a letter missing and I think there where also a the odd instance of accumulation switched with distribution. Cheers.

You will get to a point where Douglas recommends an exercise (I think its in Zone and not his first book). One book I really like that deals with the ego and trading is http://www.amazon.com/Zen-Markets-Edward-Allen-Toppel/dp/0446518107/ref=sr_1_1?ie=UTF8&s=books&qid=1196960670&sr=1-1 its pretty slim but quite a powerful message.

Yup there is quality stuff elsewhere its just the signal to noise ratio that I have yet to see bettered! Cheers.

Far superior as you can focus on the chart while listening. With text you have to scroll back and forth and it breaks the flow. Thanks:applaud:

I have thought for some while for many traders (if they are reasonably capitalised) that it is actually the fear of being wrong and ultimately failure that is the real mind killer. For me this manifests itself as just not entering (occasionally) but more often closing good positions for no good reason. The subconscious says 'I can make you right here, lets just bank a few ticks'. I think a lot stems from the ego. Would you rather be right or be 'rich'? I think the ego would rather be right. Its a tough one to crack thats for sure.

Indeed :beer: pretty solid throughout.

i think thats accounted for by the rules I proposed MA up close down so white "As you can see in the attached pic, point A should be "green" (mine are blue) because it's the 2nd close above the MA. But it closes below the previous bar which keeps the diamonds white. Then point B closes level to A which also keeps it white. If that would have closed up it would have been green. Then we see Point C is white as well because it closes below the MA after a close above it. But then look at the next bar. It's wide range up and goes straight to green (blue in my case) because of my MA envelope theory."

Ahh 2008....I should get new glasses. Still looks pretty liquid but I already switched to ES.

Just had another thought...we still haven't explained 2 whites. I'm confident in guessing (not even going to look at the chart again!) that if the MA is up and you close below you get white and will continue to get white until the MA turns down (red) or you get a close back over the MA (Green). I think that will make it identical. Its not a bad little indicator though I rather like a 3 period SMA. Cheers.

The very first trade I ever took I doubled up rather than closing.:crap: Of course being a newb I was over leveraged to start. Not tallying up properly and taking stuff 'home for the weekend' none to clever either.

Yup India & China are markets to keep an eye on thats for sure.

AHh I think I see what's missing! If the MA goes from down to up then it goes red to green immediately. If it is still down but close is above then it will go white.

I Think there's more to it than that. Just after 9.30 there are 2 white despite 2 closes below. 11.30 & 12.15 you get red to green and green to red with no white. Have I missed something? Cheers.

Blu, I have had 6 points slippage on a DAX protective stop. Cant remember if I have had more. Mind you I have seen it spike -40 points +40 points and back to where it started in a few seconds:doh: I should take some time out and make sure you know the nuts and bolts of the exchange & your broker. Find out exactly what orders are handled by the exchange natively, those held on your brokers platform, and those that are held at your client (if any). Understand exactly how each order works. There are many permutations and different things you can achieve. I also like to know a bit about the matching procedure the exchange uses and about block trades and other wrinkles. Up until recently several exchanges would not support some basic order types natively and brokers platforms simulate them. Simulated orders are likely to not work out well with the DAX. There are all sorts of things that can happen that are a lot worse than a stop being hit. My worse was when the connection from my broker and the exchange went down. It happened just as my order was filed I thought it was cancelled. It cost me many thousands of $'s (and that was as a small lot trader). As a scalper it was painful. Now normally you would want your stop/limit held at the exchange not at the broker or on your PC, however it would not have happened with a simulated order at the brokers for example. S^!t will happen its not if, its when - knowing exactly how everything works wont necessarily prevent it but it will help. Cheers.

As a small aside I just noticed ER2 is still trading on Globex. I thought it was moving?

Yeah usually you enter them just like the electronic ones and they beam it to there floor guys hand-held. Cheers.

I think you mis undertand stop orders. When a stop order is elected (market trades at your stop price) it becomes a market order. No queues. Unless you are using stop limits of course (which means that you are not completely protected as price can trade through you and you'll never get filled).

So you stop into the BO of the bar you get a signal on for example? Nice thing with this sort of entry is momentum often takes you away from your entry pretty quick. Downside is I guess your stops are a little further away.

There's always the currency futures too. I heard EFX & MBT where giving access to the actual 'market' hows that working out? Do you really see a good chunk of those trillions of $'s of liquidity? Always made me chuckle the old snake oil salesman bigging up the market with no way for the retail trader to participate. With EFX & MBT do you get like a nasdaq LII display with who's bidding and offering what? BTW enjoying the few currency threads as a lurker