BlowFish

I was a bit ambivalent towards this one. As others have said I was a little disapointed on the whole. It seems that Vlad is quite discretionary in his aproach, while he points odd reasons why there might be something he 'does not like' in a setup this side of trading is always hard to get across. I thought as a beginner book it probably would not be enough to get you trading based on 'reading the tape'. A more experienced trader would probably be familiar with most concepts anyways. Having said all that I still enjoyed the book as I like reading another traders take on things. It also is based on (what I believe) are solid market principles.

The PoC does change abruptly as it is the modal point. So for example if there is a base with a PoC at 432 and price moves up to 478 and builds a new base as more volume is done (or more TPO's pass) at this point the PoC will jump as it becomes higher than the old point. Cheers.

I love Boston Legal too. I'd wager they are guzzling a decent Cognac it looks too dark for a single malt scotch. I'm off to Cognac for a blues festival shortly I guess between wine and beer a few cognacs will be sunk.

Good stuff Jerry. I have a few questions and observations but I'm going to try and hold my tongue until until you are a bit further along. Its tough but I'm gonna try :-)

Dunno - I thought ABCD corrections where the 'norm' with B & D being the two lows. Actually I found Elliot's stuff fundamentally flawed having said that if you re-write the whole lot with 'move correction move' as the smallest building block (123) it makes much more sense. A standard elliot 12345 then becomes two 123's in the same direction one after the other. Doing this makes everything far more 'fractal' and symetric in nature. The Mclaren stuff still looks intresting but I am a sucker for price action and market strucure type aproaches. Cant help feeling its all been covered by Gann & Dunnigan et. al. Of course this dosen't diminish the value and should be taken as praise rather than critiscm.

Actually it thinking a bt further it looks to share much with Wlaters flip trade.

Had a quick look at hs web site. Looks interesting and prety much 'in alignment' with my own aproach. I'd quite like to hear a bit more about it Cyotte if you have a moment. Actualy there are a couple of things thave caught my interest recently its hard to be selective sometime.

I can't help feeling that it could be useful. Knowing that the high/low of the day is put in during the first 15 minutes of trading 75% of the time (figures made up on the spot) should be exploitable. Knowing that price trades withing 5 ticks of yesterdays floor pivot 70% of the time likewise. Knowing that if price travels yy points above last weeks high that it is likely to go on and close (daily) above this value xx% of the time etc. etc. etc. I guess what I am saying is things should be statisticaly significant (i.e. a good high number personally I'd like to see 70% or even 80%+). And that the 'thing' you are measuring should make some sense based on market structure. I guess you have to be pretty careful that you are uncovering some fundamental structure rather than curve fitting some random numbers of course. I have only ever tried a data mining exercise once as the tools are a little unwieldy (I used Excel). If there where simple tools I might be inclined to try more. Cheers.

Hows this for a technique :- lets assume the Russel is in a reasonable tight range and you are anticipating a move down out of it. Sell 2 units at the top of the range and cover 1 at the bottom lets say at +1.2 for arguments sake Move stop to -1. If price approaches the top of the range sell 2 more and rinse and repeat. I have not used this technique for a while but it is possible to build a large multiple position that is essentially risk free (if you count the whole exercise as a single trade). long tight boxy ranges are good for this.

A quick question if I might - do you solely use yesterdays volume for the profile you watch today? Do you add in today's volume as it occurs? Do you ever look at N day volume. Forgive me for getting somewhat specific and technical at this early stage but I have been playing with different sample periods and it makes quite a difference. My personal favourite is probably a 'sliding window' of the last 24 hours from the current moment in time. Cheers.

Habi is correct in what he pointed out strictly speaking the first bar is not an upthrust as it closed high. However you are also partly correct.... if you take that first bar and the one immediately following it the overall price action is a move up to test that area and then price falls back. Personally I would rather price falls back to the low of the first bar rather than mid (or even below it i.e. a key reversal). Personally I try and look at he 'ebb and flow' of price and volume. Also remember that the close is entirely dependant on how you 'sample' price (i.e. what time frame you are using). Actually time I think is a valuable component when actually trading for example if you are anticipating strength to continue and it hasn't shown up in N bars then its probably time to re-evaluate. A subject for another post but It is pretty valuable I think despite not being 'core' VSA.

Hi Jerry, Excellent opening post I particularly like the fact your opening described a scenario in a way that would have resulted in a loss (if traded). This is often a far more instructive way of approaching things. You also hit on (for me) one of the key issues for this type of approach deciding whether a market is still in 'balance' so anticipate a revision to the mean, or whether it has gone 'out of balance' and so we anticipate a directional move to a new balance point. Very much look forward to the next instalment. Cheers.

Walt, If you wanted a little soundbite to some things up. It is more about effort vs result - though I don't think Williams specifically put it like that ever. There are half a dozen to a dozen 'core principles' most revolve around price moving or not moving with effort (volume) or no effort (little volume). So a couple of examples. Price advancing on declining volume = weakness (no 'pro' support for the move) Price declining rapidly (wide bar) on climatic volume but closing up. VSA is based on Wycoff's ideas regarding acumulation/distribution and volume however it does go a fair way further. Cheers.

Three black crows - but only if I am already short :-)

It is worth mentioning that 'perfection' from a technical point of view just dosen't exist. Seeking it (the Holy Grail) is unlikely to help ones trading. Having said that we can strive towards perfection in how we manage ourselves and our trades but of course that's a completely different matter. Anyway back to VSA yes there are fuzzy areas and sometimes I have to administer a good slap and question whether this searching for 'perfection' is actually harmful (Grailittis). I'm pretty sure its not and that my understanding of VSA can be improved. Some things that where 'fuzzy' a couple of years ago are now pretty clear some things are still fuzzy. Actually I think at certain times the market just goes 'neutral' and it is ripe for a test (or will show no demand). Put another way it can still go either way despite strength/weakness showing in the background and then getting no supply/no demand. I think Its all relative (especially volume) and that there are various 'big guys' at work with various agendas time frames etc. A shame really other wise we would just be able to look for background weakness - up thrust /no demand and short knowing that the trade would be a winner every time :-) Cheers.

That's a comprehensive over view of no demand PP :-) One thing I have noticed is you may get what appears to be no demand immediately after what appears to be a seling climax (even if its only high volume and not ultra high). This happens often...very often in fact regardless of whether the volume was enough to stop the move or merely pause the move. This is one of those subtle areas that sometimes is just not clear to me despite looking at this very issue on thousands and thousands of charts. It apears that all the particpants have done most of thier business in the climax and everyone stands back for a bar or two. Intresting what you have to say about looking at the next bar PP. Often it will be flat or no demand or no supply. Another thing that often hapens if the pause is longer is you will get tests in both directions. cheers.

No what I am using at the moment is a moving avergae of volume and I simply double that for a guide for ultra high volume. So if the avergae volume is 1200 contracts I will look for 2400. This is just for my programatic tinkering...nothing like just getting the 'look and feel'. cheers.

Just a quick point. As PP said 'pure' VSA as described by Williams does not pay any attention to the open. Williams does look at the previous close in comparison to the current close. In fact this is the basis used to determine an up bar / down bar. He also looks at net change (last close -> current close) but thats a fairly secondary thing and not written about anywhere. Most of the information is there with HLC bars though perhaps not in as visually accesible form as a candle. Of course the only time that it is not is when there is a gap i.e. last bar close <> this bar open. Intraday not likely to be much of a problem. When there are gaps VSA may concider a bar an upbar where a traditional candle may concider it a downbar. The thinking is that the close is the most imortant price point as it represents the result of the struggle between the bulls and the bears for the particular interval you are looking at. Cheers.

Another Drumond man, thats unusual. VSA on a lower time period is a great way to see if focus time period geomatery is 'holding'. (Yes/No pattern).

traderX, its a relative thing. Also it may not all enter on a single bar. You need to train your eye to see it really (its pretty easy). I look for 'roughly double' the volume. I also look for a volume 'hump' over a few bars. This is one of the things that indicates to me it may be a climax rather than a pause. A pause is usually a moderately high volume bar with wide spread followed by 1-3 (ocasionaly more) low volume bars. The open is usually tricky from a VSA point fo view as there is often a volume 'climax'. If you want a simple yes/no for high volume try putting a moving average on the volume (actually 2 times a moving average works quite nicely). Low volume is much easier generally what is required is volume that is less than the volume on the previous two bars. Thats the definition Tom always used and is still cncidered the 'norm'. On the attached chart I have red for ultra high and pink for high. At the moment I am just messing round with a VSA study.

Succinctly put - you posted this in the 10 minutes it took me to compose my last post!!

Actually I really don't care either I obviously had not made that clear. I am a proponent of VSA and have been since Tom published his first edition. Having said that there are some 'issues' but thats for another post. Actually my point was to illustrate why I dont care - I am not sure I acccept the figure but it is irrelavant. I guess I am saying that Kruger quoting it as some how significant is disengenious and from various posts here it clearly does not advance the VSA 'cause'. The reason for challenging and clarifying is that I feel it is hugely important to have market beliefs that are founded on fundamental truths. I get my figures where everyone else does ....the LDB.... however what I am offering is a simple mathematical truth. All I am saying is that in futures 50% of trading volume will be winners 50% will be losers. It can be know other way. If you accept 85% of trades are by profesionals (I don't particularly care either way but for the sake of argument lets say it is true). So assuming Krugers figure is correct and also asuming every single 'non professional' trader loses all the time (again from the LDB this isnt the case but hey lets run with it) if this is so 35% of the 'pros' must lose to retain the zero sum balance. 50% winners +35% losers = 85% pro. When I looked at LDB data (just after P.S. published his first book) I could see nothing that gave much of an edge as notouch pointed out the 'pros' get it wrong almost as often as retail that was the big surprise. To be honest I am not sure what Krugers point is when he quotes this figure? Perhaps you could elucidate? To me it seems irrelevant. Incidentally there are several old time VSAers I have met that are rather sceptical of the direction Tradeguider have gone, perhaps due to comments like that. I have to say I take what Gavin has to say with an even larger grain of salt Anyway I am not trying to be confrontational:) ( I am pro VSA). So lets get back to VSA proper. My big issue is acertaining if a huge chunk of volume entering the market is merely enough to pause it or possiby enough for more (accumulation/distribution to start). Context and subsequent bars hold the clue but sometimes it's quite subtle. Cheers.

Hey PP, 85% is not such a leap really. Even if you accept this figure the problem remains that at least 35% of those 'professionals' are goig to be wrong! Certainly in futures markets. If you asume that a few 'retail' traders are correct (even if ocasionally) then the percentage is higher. Now this dosent matter in my mind but as you may know from my odd posts in other threads I do think it is important getting core beliefs sorted out (which includes verification I guess) and of course making reasonable assumptions based on your own 'reality'. Actually I have rather oversimplified the argument. On any trade there can be a winning player liquidating, a losing player liquidating, or someone opening. Jankovstky talks about who is on each side of a trade in his book (reviewed elswhere on the forums I believe). This 3 legged equation kind of makes things hard, but the outcome over time is total winning capital = total losing capital it can be no other way. If all the losers are retail then they need to make up 50% of liquidity. Final thought - we need a better term than smart money (we might get noTouch on board then ) JAJ talks about 'order flow' (though this term has existed way before he coined it). Perhaps this is a better term to describe money entering a market on a particulear side? Cheers,

Tasuki thanks for reviving one of my favourite threads. I am a long time student of VSA but still have some niggles. I am about to travel so will have to be brief. I do wonder about whether the smart money is always right or even if they 'know' a lot of the time. Often you will see a struggle going on and it is not clear who is in control (bulls or bears). There is also smart money operating on many different time frames (hence the 'fractal' nature of markets). This also makes it difficult to get a 'read' sometimes. For example if a large fund is accumulating millions over a period of a week or two you are unlikely to see this on anything less than daily bars....perhaps hourlies at a pinch. Perhaps it dosen't matter if the money is smart or not - money is money :-) Actually if we believe that 85% volume is professional then there must be a large percentage of losers amongst those pros (35%) (certainly in futures which are zero sum). The main thing I struggle with on a technical level is whether there is enough volume to stop a move and cause the market to go sideways/the opposite direction. Or whether it just causes a pause (2,3 or more bars 'rest'). as other pointed out the chart Tasuki posted is classic supply entering on the first bar followed by what Tom might call a 'hidden test' bar 2. I have seen very similar patterns where the buyers will re-assert themselves on bar 3 or bar 4. Now I know the theory tells us the next few bars hold the clues but often both buyers and sellers will withdraw and price will just drift only to have buyers step back in after a breather. Another problem of course is that the open tends to be high volume anyway as the overnight paper is dealt with. I believe that was a chart of the open? Cheers.

Maybe not all :-) I am a little loathe to say this as you have identified the most important thing (the mind). This is a point it takes many traders (me included) years to get to. Having said that from your original post it does sound as if you where trying to 'force' a non trending market. Now there is nothing wrong with trading congestion but it requires a pretty different approach to when the market is trending. Quickly identifying whether a market is trending/non trending or put another way whether the direction is up down or sideways. This may be the mind again of course - I know that sometimes I suffer perceptional bias. But it might also be a more easily dealt with 'tecnhical' problem. Cheers.