[VSA] Volume Spread Analysis Part II

[Sledge 13]

Ok, I have an elementary question that I have been scratching my head about lately in real-time trading. It is about a "No Demand" bar or more certain a bar that looks like an upthrust in a downward move. I am borrowing the chart from the "VSA - No Demand/No Supply & Squats" Thread to illustrate below.

 

My question is on the "No Demand Bar" is WHY IS THIS NO DEMAND- we clearly see the market rise in the next few bars- and not only rise- but rise ABOVE where the supposed "no demand" bar ends.

 

Can any veteran VSA'ers out there give me a technical breakdown of THIS particular bar? I see it quite often and it is termed "no demand" but the market always rises above it.

Thanks!

Sledge

 

[Eiger 10]

  Sledge said:

Ok, I have an elementary question that I have been scratching my head about lately in real-time trading. It is about a "No Demand" bar or more certain a bar that looks like an upthrust in a downward move. I am borrowing the chart from the "VSA - No Demand/No Supply & Squats" Thread to illustrate below.

 

My question is on the "No Demand Bar" is WHY IS THIS NO DEMAND- we clearly see the market rise in the next few bars- and not only rise- but rise ABOVE where the supposed "no demand" bar ends.

 

Can any veteran VSA'ers out there give me a technical breakdown of THIS particular bar? I see it quite often and it is termed "no demand" but the market always rises above it.

Thanks!

Sledge

 

[ATTACH]5485[/ATTACH]

 

It is No Demand, but you have no background for the No Demand to be meaningful. To be meaningful, you would need to see supply hit the market. Once you see supply, then you look for No Demand. You have an up trend on this chart. With the overall background bullish, this particular bar has no real meaning. If you are in need of a resource on this, the TG Boot Camp DVD set goes into this in great detail, and is quite worthwhile to study if you are interested in learning more on how to use these signals and when they are meaningful.

 

Hope this is helpful,

 

Eiger

[dandxg 10]

  Eiger said:

Ticks are the net number of shares on the NYSE trading on the up-tick or down-tick (i.e., trading at a higher price than the immediate last price or at a lower price than the immediate last price). They can be helpful. The S&Ps have most of the biggestest, most important stocks of the NYSE - sort of a sample of the NYSE, so Ticks are fine to use with the S&Ps. It is the only other indicator I use when trading the ES.

 

You can use the Ticks kind of like an oscillator. Usually, when the market hits an extreme of buying or selling, the ticks will show an extreme. Typically, these are in the +1,000 to -1,000 range, but it all depends on the day. At the Selling Climax at noon today, Ticks hit -1229. That was pretty extreme, given that they didn't crack below -1,000 throughout the morning downtrend until the climax.

 

They can be useful for timing an entry, too -- sometimes showing an extreme reading (like that buying climax yesterday during the noon hour) and sometimes giving a divergence. For an example of divergence, look at the last swing high on the attached chart before the Selling Climax. It is not labled, but if you look closely, you will see that price rose higher at the top of the rally; Ticks did not, and that action resulted inan upthrust. Plot them on the same chart as price and volume and you will begin to see the possibilities.

 

Here is a 3-minute chart of the ES with Ticks at the Selling Climax and Spring today. Note how ticks showed an extreme on the Selling Climax (the market was one-sided). On the Spring (L), ticks were considerably above the climax lows (K), indicating a lack of selling pressure. The same indication was seen in the volume.

 

Here's a pretty good article on trading the S&Ps with Ticks: http://www.lbrgroup.com/images/terry_april_2002_AT.pdf

 

Eiger

 

A question if I could please. For those that use $tick to confirm PV signals do you use the 2 on the same time frame. I ask because a friend of mine uses A/D on a 1 minute but trades the ES off of a 3 min? I guess that would be some attempt to front run? Anyway that's why I ask. Thanks much Eiger for sharing that. It would definitely give me more confidence to truly buy low and sell high with PV. Currently I would wait for a breakout of the range and buy/sell a pullback on lesser volume.

[DbPhoenix 42]

  dandxg said:

A question if I could please. For those that use $tick to confirm PV signals do you use the 2 on the same time frame.

 

I use the same interval for both, 1m for each (the NQ, that is, but the idea and process are the same). Apparently I use the TICK(Q) differently than most. When I first played with it years ago, before Wyckoff, I couldn't see what everybody was so excited about. Now it makes more sense, or at least the way I use it makes more sense to me.

 

Anyway, I posted charts of what I saw in yesterday's action here, yesterday evening: http://www.traderslaboratory.com/forums/31910-post117.html

[Seb Manby 11]

Hi All;

 

I am checking out some code I put into MS, I will use TradeGuider for the rest of my trades, I think that it is easy to post text onto charts that have come and gone, and I just thought you might find this video interesting, I thought you might like to see VSA in action instead of yap,yap,yap. This one has no sound,

 

Dax trade on 3m chart with eSignal and MS

 

Regards Seb

Live trade.wmvFetching info...

[DbPhoenix 42]

  Seb Manby said:

Hi All;

 

I am checking out some code I put into MS, I will use TradeGuider for the rest of my trades, I think that it is easy to post text onto charts that have come and gone, and I just thought you might find this video interesting, I thought you might like to see VSA in action instead of yap,yap,yap. This one has no sound,

 

Dax trade on 3m chart with eSignal and MS

 

Regards Seb

 

Nice to have something with moving bars. They show the struggle between buying pressure and selling pressure so much more clearly, esp that "unchanged" bar.

 

Thanks, Sebastian.

[Sledge 13]

Eiger-

So this is a "Polar Bear in Hawaii" then? To be completely disgarded- yes?

Thank you- that is helpful!

Sledge

 

  Eiger said:

It is No Demand, but you have no background for the No Demand to be meaningful. To be meaningful, you would need to see supply hit the market. Once you see supply, then you look for No Demand. You have an up trend on this chart. With the overall background bullish, this particular bar has no real meaning. If you are in need of a resource on this, the TG Boot Camp DVD set goes into this in great detail, and is quite worthwhile to study if you are interested in learning more on how to use these signals and when they are meaningful.

 

Hope this is helpful,

 

Eiger

[dandxg 10]

  Sledge said:

Eiger-

So this is a "Polar Bear in Hawaii" then? To be completely disgarded- yes?

Thank you- that is helpful!

Sledge

 

 

Hi Sledge, I hope Eiger doesn't mind as I own the boot camp video, the answer would be yes. I think it would be similar to if you had an upthrust immediately after a springboard, esp if that springboard showed up to the right after capitulation selling. Hopefully, Eiger can confirm for you. Good trading to all.

[zeon 10]

Ok guys, I've opened a blog, for anybody who likes to participate they are more then welcome to do so... I could use some help

 

Today I was short and things were looking good but totally out of nowhere came an upmove, I had a trade nicely in profit and was about to trail price, but then it happened. My stops were still at their original place. Instead of a profit I'm now sitting on a loss. Not to mention how I feel :bang head:

[dandxg 10]

Zeon, don't feed bad we have all been there.

[zeon 10]

  dandxg said:

Zeon, don't feed bad we have all been there.

 

I don't know what else to feel. I can't think of anything else I've ever speant so much time in, with so little in return. Sorry if I'm sounding like a whiner. I suppose the markets are different now than a year ago. I've given back a whole lot in the last two months, and not just because I have been long. In fact, most of my trades have been shorts.

[heretodaygone... 10]

  zeon said:

Ok guys, I've opened a blog, for anybody who likes to participate they are more then welcome to do so... I could use some help

 

Today I was short and things were looking good but totally out of nowhere came an upmove, I had a trade nicely in profit and was about to trail price, but then it happened. My stops were still at their original place. Instead of a profit I'm now sitting on a loss. Not to mention how I feel :bang head:

 

Perhaps you should take your profit quicker. Also I see that you have drawn in a resistance line but yet, I don't see any support lines on your chart.

A trader that I respect once told me "The market gives you what you want".

It took me a long time to figure out what he meant.Hopefully, it won't take you so long.

[Sledge 13]

  dandxg said:

Hi Sledge, I hope Eiger doesn't mind as I own the boot camp video, the answer would be yes. I think it would be similar to if you had an upthrust immediately after a springboard, esp if that springboard showed up to the right after capitulation selling. Hopefully, Eiger can confirm for you. Good trading to all.

 

dandxg-

Thank you! Just want to be sure I'm on the right learning track! All beginning to sink in!

Sledge

[zeon 10]

  heretodaygone... said:

Perhaps you should take your profit quicker. Also I see that you have drawn in a resistance line but yet, I don't see any support lines on your chart.

A trader that I respect once told me "The market gives you what you want".

It took me a long time to figure out what he meant.Hopefully, it won't take you so long.

 

I thought of taking profits quicker, but I don't want to be a scalper and the purpose of trading is to cut your losses short, not your profits right? I mean I had no exit signal on this particular trade... no volume peak to indicate buyers were coming in, I had no support in the vicinity and everything looked okay to continue selling. Still don't know what happened back there, but it sure swept me of my feet.

[heretodaygone... 10]

  zeon said:

I thought of taking profits quicker, but I don't want to be a scalper and the purpose of trading is to cut your losses short, not your profits right? I mean I had no exit signal on this particular trade... no volume peak to indicate buyers were coming in, I had no support in the vicinity and everything looked okay to continue selling. Still don't know what happened back there, but it sure swept me of my feet.

 

Buyers had already bought. This morning's action was seeing if their was any more sellers. There wasn't anymore SO, back up we go.

[heretodaygone... 10]

Some MP targets

[Bearbull 10]

  Seb Manby said:

Hi All;

 

I am checking out some code I put into MS, I will use TradeGuider for the rest of my trades, I think that it is easy to post text onto charts that have come and gone, and I just thought you might find this video interesting, I thought you might like to see VSA in action instead of yap,yap,yap. This one has no sound,

 

Dax trade on 3m chart with eSignal and MS

 

Regards Seb

 

Interesting trade, taking a short on an upbar on high vol, presume your reasoning was that the prices had just broken down from a congestion area, and then the prices were reversed , those who shorted had to run for cover, normally after this a No demand bar appears on smaller time frames, which as per the VSA is the ideal place to short. here is 1min chart perhaps you have some comments.

[Bearbull 10]

Sebastian,

Here is another example of strength showing on 3min, TG most likely would flash up the green indicator as well, many would go long, however once the price action is viewed on a 1min time frame, what comes to light are the true intentions of the market, prices have not found support as yet and hence not ready to turn up i.e B- buying pressure has evaporated.

Comments please

[Seb Manby 11]

Trade 1 shows how volatile the DAX can be, and yes you can make money but you have to keep your whits about you.

 

Trade 2 shows money management, the volume was higher on the bar that I entered, but in an uptrend at that time I thought the trade was valid.

 

The next videos will be retained for the symposium, but will later appear on the web site. I prefer to make videos like this as it shows in real time where I would get in, and where I would exit on either side up or down.

 

Regards Sebastian

Live trade 1.wmvFetching info...

Live trade 2.wmvFetching info...

[Seb Manby 11]

  Bearbull said:

Sebastian,

Here is another example of strength showing on 3min, TG most likely would flash up the green indicator as well, many would go long, however once the price action is viewed on a 1min time frame, what comes to light are the true intentions of the market, prices have not found support as yet and hence not ready to turn up i.e B- buying pressure has evaporated.

Comments please

 

I would never be interested in a trade at point A, you would be giving your money away. On the 1 minute chart you have a closer picture of supply and demand, too close for me, but when the opportunity's arise, you will see them on a 3 minute chart as well, and you won't be whipsawed all over the place. Point B is a down bar, the previous bar is no demand. 4 bars prior to A is where I would have shorted on the 1 minute chart.

 

Regards Sebastian

[Bearbull 10]

  Seb Manby said:

Trade 1 shows how volatile the DAX can be, and yes you can make money but you have to keep your whits about you.

 

Trade 2 shows money management, the volume was higher on the bar that I entered, but in an uptrend at that time I thought the trade was valid.

 

The next videos will be retained for the symposium, but will later appear on the web site. I prefer to make videos like this as it shows in real time where I would get in, and where I would exit on either side up or down.

 

Regards Sebastian

 

Realise this is on a simulation platform, but where would your stop loss would be on these trades and exit strategy i.e target

[Seb Manby 11]

Stop-loss below the previous low away from the current price, as in trade 2, and exit strategy would be when strength entering the market.

 

Regards S

[Primavera 10]

  zeon said:

I don't know what else to feel. I can't think of anything else I've ever speant so much time in, with so little in return. Sorry if I'm sounding like a whiner. I suppose the markets are different now than a year ago. I've given back a whole lot in the last two months, and not just because I have been long. In fact, most of my trades have been shorts.

zeon

 

There are technical days and non-technical days. Whatever form of analysis you use whether it is VSA, S/R, indicators etc, they are generally applied against the specific instrument you are trading.

 

Although VSA mentions the effect of news on an individual instrument i.e. professional money may make use of it e.g. good news breaks out and they sell, there is also the effect of news on the market as a whole.

 

What may be happening is that your perfectly good and well-reasoned analysis of the specific instrument is overshadowed by the market as a whole. If for example the fed injects funds into the market then the whole market will be bouyant - weak and strong stocks alike. Professional money might temporarily withdraw from accumulation for example.

 

So don't beat yourself up about it - perhaps take steps to look at how the market as a whole is acting or consider going cash until the market stabilises.

To regain confidence consider comparing your strategy across stocks and see if, on a relative basis, your analysis would have been correct if it had not been for stronger market forces acting. Consider how you might adjust your analysis or strategy to take account of such forces.

 

Primavera

[TinGull 10]

Just wanted to post up a chart of a little trade I took today. Welcome back, right? I'm not trading more than a handful of times a month right now as I've got plenty of other things that have been keeping me busy. But, none the less, taking great trades. I decided to take a peek at the markets this afternoon during lunch and saw a nice setup pop up.

 

 

So anyways...just thought I'd post it up. I won't post all the time, but will check in every week or so. Great to see this thread is still kickin'!

[zeon 10]

  Primavera said:

zeon

 

There are technical days and non-technical days. Whatever form of analysis you use whether it is VSA, S/R, indicators etc, they are generally applied against the specific instrument you are trading.

 

Although VSA mentions the effect of news on an individual instrument i.e. professional money may make use of it e.g. good news breaks out and they sell, there is also the effect of news on the market as a whole.

 

What may be happening is that your perfectly good and well-reasoned analysis of the specific instrument is overshadowed by the market as a whole. If for example the fed injects funds into the market then the whole market will be bouyant - weak and strong stocks alike. Professional money might temporarily withdraw from accumulation for example.

 

So don't beat yourself up about it - perhaps take steps to look at how the market as a whole is acting or consider going cash until the market stabilises.

To regain confidence consider comparing your strategy across stocks and see if, on a relative basis, your analysis would have been correct if it had not been for stronger market forces acting. Consider how you might adjust your analysis or strategy to take account of such forces.

 

Primavera

 

 

Thanks primavera. I realize that news or other unexpected events may cause something to happen which couldn't be anticipated or wasn't in the chart. That's why I always check my news calendar and adjust my stops if I'm in a position. If I'm in a trade, I'll see what happens, there's a 50:50 chance it'll go my way but I like to lighten my position.

 

But as for technical and non-technical days, I don't know... dbphoenix said he doesn't believe there is noise in the markets, even on a 1-min timeframe. So if there is something "non-technical" occuring, I always get the sense that it's the trader who's reading the chart wrong. The markets are always right. It's whatever belief you had based on what you see or thought you had seen, that is incorrect.

 

Today, everything went according to plan but despite that I didn't make a profit. The plan was to short but as early as a couple of minutes before the session opened price already started to move lower and I had missed my entry. Didn't feel like chasing price, so I stood aside. Then I went long when the hinge formation I posted earlier on broke. False break apparently so I got stopped out.

 

That's it for me today. As you say primavera, regaining confidence will be important because right now it's at a low point.