[VSA] Volume Spread Analysis Part II

[Eiger 10]

Too bad this thread has once again been hijacked with the same old non-VSA pap. It is truely unfortunate, as I thought this thread was getting focused and becoming useful for VSA traders.

 

Why is it that those with their own threads and blogs insist on pressuring others who don't subscribe to their world view? What is it with you people? Your own personal threads and blogs aren't enough?! If I don't swear allegiance to your ideology you will keep trying to bully me into it? This is impoverished thinking and behavior. Please stop trying to drag this thread down to that level.

[DbPhoenix 42]

Too bad this thread has once again been hijacked with the same old non-VSA pap. It is truely unfortunate, as I thought this thread was getting focused and becoming useful for VSA traders.

 

Why is it that those with their own threads and blogs insist on pressuring others who don't subscribe to their world view? What is it with you people? Your own personal threads and blogs aren't enough?! If I don't swear allegiance to your ideology you will keep trying to bully me into it? This is impoverished thinking and behavior. Please stop trying to drag this thread down to that level.

 

So there is to be no discussion of price action, candlesticks, or support/resistance? Perhaps some clarification is in order.

[Eiger 10]

Wouldn't it be easier just to read the price action?

 

... you're "reading" the candle, not the price action, and therefore using the candles as indicators, divorced to a large extent from the price action itself ...

 

... [the] bar or candle, is not the thing ...

 

... If one finds it necessary to develop elaborate schemes for entry and exit and stop placement and so forth, it's likely that he's focusing on the representation and not the thing -- price action -- that's being represented, and the lists of rules grow ever longer.

 

 

 

Please don't try to reframe this; you cannot. You keep insisting that people here pledge alliegiance to your version of "price action," or "the thing," as you call it. VSA is all about reading bars--how it closes, whether it is an up or down bar, and the width of the spread. It is also concerned with the volume on those bars, and how this occurs in the context of the background. These bars, volume, and background are read to understand how large money is influencing the market.

 

On page 12 of The Undeclared Secrets That Drive the Stock Market Tom Williams says this about VSA methodology:

 

"The price spread is the range from the high to the low in the price bar. We look at this in regard to the spreads of the other bars preceding the one under investigation and those that follow. Is the spread abnormally wide, abnormally narrow, or just plain average and how much volume has accompanied it? Again, any spread taken in isolation means little. Like the volume, it is the relative spread we must always look at.

 

We will also use the close price to determing the direction of the spread. If the market has rallied strongly during the day and has closed near the highs of the day, we say we have a wide spread up closing on the highs. Conversely, we may have a narrow spread down compared to the previous day's spread. We also pay great attention to whether the bar is an up bar or a down bar."

 

You never discuss these VSA-related things.

 

VSA has absolutely nothing to do with your personal version of "price action." Nevertheless, you persistently attempt to disuade people from analyzing charts from a VSA perspective and insist that they focus on your personal version of "price action," or "the thing," as you call it. You do this with virtually every post you make to this thread. Talk about this stuff on your personal blog; here it is quite off topic. Please stop.

Edited April 3, 2008 by Eiger

[brownsfan019 17]

Too bad this thread has once again been hijacked with the same old non-VSA pap. It is truely unfortunate, as I thought this thread was getting focused and becoming useful for VSA traders.

 

Why is it that those with their own threads and blogs insist on pressuring others who don't subscribe to their world view? What is it with you people? Your own personal threads and blogs aren't enough?! If I don't swear allegiance to your ideology you will keep trying to bully me into it? This is impoverished thinking and behavior. Please stop trying to drag this thread down to that level.

 

So what you are saying is - either drink this kool aid or leave? I thought this was an open, public forum. Maybe James changed the rules and I have not read the updated copy.

 

You've been here for just over ONE MONTH.

 

I suggest you learn what an open, public forum is like before criticizing.

 

As you'll see if you actually spend some time reading the posts on this forum, conversations can go in many directions and THAT IS A GOOD THING. That's part of having discussions on a public forum.

 

Don't like it? You can always start your own private Yahoo group.

 

So there is to be no discussion of price action, candlesticks, or support/resistance? Perhaps some clarification is in order.

 

Come on DB, what purpose would that serve?

 

Geeze. Who does DB think he is anyways?

 

:o

[DbPhoenix 42]

Uh, Eiger, you may want to look over the initial posts to the original VSA thread, which incorporates candles and MP. Is none of that now, according to you, appropriate? Are 5m bars the only bars that are allowed?

 

As to "my version" of price action, (a) I was addressing CW and some of his remarks re candles and (b) if you believe that VSA has nothing to do with price action, then I suggest that you review the material.

 

Perhaps both parts of this thread should be renamed "TradeGuider" so that everybody knows what the "thrust" is.

[Eiger 10]

Well, Brownfan, why would anyone expect anything different from a person who tries to pesuade me to use candlesticks because they are so much easier? And, that's right, db, continue to try to reframe. It's not about what has been talked about on this thread, it's that you keep trying to persuade others to not use VSA on the VSA thread! BTW, I like that you bring in the 5-minute chart - very on track with the discussion at hand. I didn't quite read how your version of "price action/the thing" is relevant to the volume, spread, close, background, i.e., VSA? Must have missed it. Doesn't matter, it is all intellectual masturbation, to me. I'd rather analyze markets and make trades, anyway.

 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

 

Speaking of the 5-minute chart, here are two trades from this AM:

 

1 - Premarket: a wide spread down bar, closing in the middle, indicating large interests were buying as others were selling as a reaction to the 8:30 AM news.

 

Price drifted lower retesting the 1361.50 rally high from March 24th. Note the Shortening Of Thrust at support indicating a lack of downside follow through.

 

A - Fairly wide spread dipping lower but closing on the opening - more buying.

 

B - After the open, a drive lower back to the support area, but not much volume comes out for such a wide spread. Next bar recovers all that was lost on B and then some, and closes on its highs. Buying.

 

C - A Test on low volume (less than the previous two bars) and entry on the close. Trade exit just below first resistance.

 

D - Wide spread up bar closing onthe lows with ultra high volume. Next bar unable to advance on high volume. Weakness came into the market, and price falls lower.

 

E - A no demand UpThrust and entry for short on the close. Note No Demand 2 bars earlier.

 

F - Above average volume comes in and price closes in the middle, indicating possible climactic or stopping action. Next bar is down on volume less than the previous two bars, showing supply has suddenly dried up. Although I was playing for a retest of the lows, trade exited on close. Market rallies.

 

Eiger

Edited April 3, 2008 by Eiger

[DbPhoenix 42]

And, that's right, db, continue to try to reframe. I like that you bring in the 5-minute chart - very on track with the discussion at hand. I didn't quite read how your version of "price action/the thing" is relevant to the volume, spread, close, background, i.e., VSA? Must have missed it.

 

Clearly. You may want to begin by reviewing your take on the market outlook on 3/27, which incorporated no understanding of price action and was consequently somewhat off the mark, then review habi's and dandxg's posts, which accurately assessed what was happening within the context of price action and provided forecasts which were considerably closer to the mark, perhaps because they are actively striving to understand the nature of price action and thus enliven their understanding of VSA and any other approach that shares a similar basis.

 

You can, of course, sing lalala as much as you like. But doing so will not deepen your understanding of VSA nor Wyckoff.

 

BTW, love the hindsight analysis.

[zdo 20]

re: "…The "WRB", in other words, disappears when the price action is displayed in another interval. The price action is the same; the only thing that's changed is the means by which it is displayed." Yes that is true. But, in other intervals, a run up into resistance (etc) does not disappear. Please be careful here - and I know we've had to deal with this issue before on T2W. You are again questioning the other's representation system without really fully explaining how yours is different / better. Even though I could see how you might feel you have explained it ad infinitum elsewhere, there are aspects to it that you are possibly so 'unconsciously competent' at seeing that you don't even realize they are a part of but not explicit your processing of price action.

 

I'm not making you wrong. And please don’t let anyone run you off. I’m asking you to explain the difference – besides the obvious fact of different representations of the same market action. Everything we see on our screens is a representation of the market – not the market itself. It is all at least a once removed map of the auction – whether one is looking at T&S, MP, Ohlc, Candle, Tic, CRB, P&F, MarketDelta, or lord knows what else.

 

And Eiger - I can say with certainty that all these posters you are chiding for going off topic are actually here in this thread to learn VSA and also that there is no way on earth they can suddenly divorce their old representation systems and ‘think’ pure VSA just like you or Tom or… Taking those same time periods and showing the VSA interpretation of the same market activity, rather than make others wrong for the way they represent the action to themselves is the best way to keep them on track.

[DbPhoenix 42]

re: "…The "WRB", in other words, disappears when the price action is displayed in another interval. The price action is the same; the only thing that's changed is the means by which it is displayed." Yes that is true. But, in other intervals, a run up into resistance (etc) does not disappear. Please be careful here - and I know we've had to deal with this issue before on T2W. You are again questioning the other's representation system without really fully explaining how yours is different / better. Even though I could see how you might feel you have explained it ad infinitum elsewhere, there are aspects to it that you are possibly so 'unconsciously competent' at seeing that you don't even realize they are a part of but not explicit your processing of price action.

 

I'm not making you wrong. And please don’t let anyone run you off. I’m asking you to explain the difference – besides the obvious fact of different representations of the same market action. Everything we see on our screens is a representation of the market – not the market itself. It is all at least a once removed map of the auction – whether one is looking at T&S, MP, Ohlc, Candle, Tic, CRB, P&F, MarketDelta, or lord knows what else.

 

My initial post was directed toward CW. It was not intended to fluff anyone, most of all Eiger. And based on the content of both parts of the thread, it was not off-topic.

 

However, to pursue this subject on this thread would very likely become off-topic rather quickly. Therefore, I'll respond to your question on your volume thread.

[Eiger 10]

 

And Eiger - I can say with certainty that all these posters you are chiding for going off topic are actually here in this thread to learn VSA ..

 

 

I am sorry to question your certainty, Zdo, but it is unfounded, as you can see here:

 

Given my general lack of interest in VSA and your devotion to it, I am sure that those who are equally interested in VSA and in learning how to implement it would greatly appreciate your opening up a blog ...

 

...

 

... if you want to learn VSA, learn VSA the VSA way, and that includes avoiding the interval that I use.

 

.....

 

As for the "classic VSA signals", assuming you mean VSA rather than TG-VSA, whatever has to do with a bar is not all that important to me, much less where it closes. Once one gets into all that, he may as well trade candle patterns and save everybody a lot of time ...

 

 

And that is my complaint. As happened earlier, someone posts a VSA-based chart, and then gets chastized for using VSA principles. This thread gets derailed by people who state they have no interest in VSA, have their own blogs, but just can't seem to control themselves. They have a different agenda. And, when this is raised, all kinds of nonesense comes out, none of which has to do with VSA.

[zdo 20]

Eiger,

re

Given my general lack of interest in VSA...

Point taken... ok - almost everyone :shocked:

Actually even that 'client' may be processing the material in the closet

Anyways "A variant popular in the time of Samuel Pepys was 'auction by candle' in which the winning (highest) bid was the last one to be made before a small piece of lit candle died out.[2]" http://en.wikipedia.org/wiki/Auction

 

 

Speaking for myself only - I really do appreciate your posts.

 

zdo

Edited April 3, 2008 by zdo

[Eiger 10]

Here is a failed trade. I'm not sure why it didn't work?

 

I went long at M on a No Demand bar at pretty good support.

 

I did not read any major supply, unless the bars at 2 & 3 were distribution, but I still don't think that would be enough to take the market down. Maybe the two bars before M were signaling "stay out," I don't know? It is still early in the afternoon and I would think that yesterday's high, being so close, would be a tempting magnant? Maybe not.

 

Anyway, if anyone has any VSA insights, i would love to hear about them.

[zeon 10]

Here is a failed trade. I'm not sure why it didn't work?

 

I went long at M on a No Demand bar at pretty good support.

 

I did not read any major supply, unless the bars at 2 & 3 were distribution, but I still don't think that would be enough to take the market down. Maybe the two bars before M were signaling "stay out," I don't know? It is still early in the afternoon and I would think that yesterday's high, being so close, would be a tempting magnant? Maybe not.

 

Anyway, if anyone has any VSA insights, i would love to hear about them.

 

 

Hi Eiger, my comments are probably not much worth, but I don't see it as a trade that failed. If you placed your stop a bit lower, you would've stayed in. You mention "pretty good support". Have a look at the overnight, there's a congestion area between 71 and 73, it looks to me as if price has indeed found support there and is now looking to test the previous day's highs.

[Eiger 10]

Hi Eiger, my comments are probably not much worth, but I don't see it as a trade that failed. If you placed your stop a bit lower, you would've stayed in. You mention "pretty good support". Have a look at the overnight, there's a congestion area between 71 and 73, it looks to me as if price has indeed found support there and is now looking to test the previous day's highs.

 

Your comments are always appreciated.

 

You could be right, maybe I got in just a little early. But I would not have especially wanted to sit through all the sideways action. It is failing to hold that little pop, and may now be putting in a lower high. We'll see.

[DbPhoenix 42]

 

You could be right, maybe I got in just a little early. But I would not have especially wanted to sit through all the sideways action. It is failing to hold that little pop, and may now be putting in a lower high. We'll see.

 

Actually, you got in quite late. Long entry at double bottom off support and no supply at 11:00. Perhaps someone can put this in official VSA terms. Otherwise, it's pure Wyckoff.

[dandxg 10]

Here is a failed trade. I'm not sure why it didn't work?

 

I went long at M on a No Demand bar at pretty good support.

 

I did not read any major supply, unless the bars at 2 & 3 were distribution, but I still don't think that would be enough to take the market down. Maybe the two bars before M were signaling "stay out," I don't know? It is still early in the afternoon and I would think that yesterday's high, being so close, would be a tempting magnant? Maybe not.

 

Anyway, if anyone has any VSA insights, i would love to hear about them.

 

I am guessing you meant long on a test bar at support? As I recall ND's are shorts only, although I am no expert, by any means. One of the methods I am tinkering with for S/R show significant R at 1377.

 

 

As I side note it's my sincere hope we can all be friends? We are trying to get to the same place just with different tweaks on price and volume IMHO. I have learned a lot of good things from a lot of folks on this thread. Each method or variation, like life, has it's pros and cons. Some are very specific which makes it easier to memorize and sometimes that causes one to look for a tree and not see the forest, both have their pros and cons IMHO. It's times like these when I reminded of a saying from a trading educational room, use what works for you and leave the rest. Al least we can all agree that trading with price and volume are key right?

 

Good trading to all.

 

Dan

[Eiger 10]

Actually, you got in quite late. Long entry at double bottom off support and no supply at 11:00. Perhaps someone can put this in official VSA terms. Otherwise, it's pure Wyckoff.

 

Once again, you want to derail the thread. When someone posts about VSA, you want to take it to your version of the world. Just like you chided CW for his post, now you chastize me for my trading. This isn't the first time I have posted a question and you have jumped in with critical comments. I don't know what your problem is. You don't think much of VSA, yet you want to put your nose into everyone else's business and show them your way of trading. There is a pattern here.

 

What makes it so difficult for you to understand that this thread is about VSA? This is not about "pure Wyckoff." I've read your posts on Wyckoff, and, frankly, they are a pretty poor rendition of it. You have made numerous misstatements concerning Wyckoff. You would do yourself a favor by reviewing those with the Wyckoff text in hand. And, if you need a place to start, go to your post about the "bearish triangle" you saw on the day the market had a Spring. Wyckoff specifically cautioned traders about following patterns like triangles, head & shoulder, flags, and other chart patterns. When I posted the chart of the Spring, you posted your triangle. I was being kind to you then, and didn't say anything. But, you clearly have a poor understanding of Wyckoff.

 

This is the last post I am going to make regarding you and your nonesense. Jump out of your pants to make posts to try to show others how much you think you know, if you want to. I will simply ignore you. Actually, maybe the better thing to do is just to sit back and sing "Lalalalala" at your mindlessness.

Edited April 3, 2008 by Eiger

[Eiger 10]

I am guessing you meant long on a test bar at support? As I recall ND's are shorts only, although I am no expert, by any means. One of the methods I am tinkering with for S/R show significant R at 1377.

 

 

Dan

 

Yes, I did mean a Test. My mistake. I guess it might have turned into a failed test. I still don't have a good grasp on failed tests and how to use them. Back to the book, I guess.

 

I see a Supply Line on the daily that needed to be negotiated, so that area is resistance.

Edited April 3, 2008 by Eiger

[DbPhoenix 42]

Once again, you want to derail the thread. When someone posts about VSA, you want to take it to your version of the world. Just like you chided CW for his post, now you chastize me for my trading. This isn't the first time I have posted a question and you have jumped in with critical comments. I don't know what your problem is. You don't think much of VSA, yet you want to put your nose into everyone else's business and show them your way of trading. There is a pattern here.

 

What makes it so difficult for you to understand that this thread is about VSA? This is not about "pure Wyckoff." I've read your posts on Wyckoff, and, frankly, they are a pretty poor rendition of it. You would do yourself a favor by reviewing those with the Wyckoff text in hand. And, if you need a place to start, go to your post about the "bearish triangle" you saw on the day the market had a Spring. Wyckoff specifically cautioned traders about following patterns like triangles, head & shoulder, flags, and other chart patterns. When I posted the chart of the Spring, you posted your triangle. I was being kind to you then, and didn't say anything. But, you clearly have a poor understanding of Wyckoff.

 

This is the last post I am going to make regarding you and your nonesense. Jump out of your pants to make posts to try to show others how much you think you know, if you want to. I will simply ignore you. Actually, maybe the better thing to do is just to sit back and sing "Lalalalala" at your mindlessness.

 

First, I'm not "chastizing" you for your trading. I'm only pointing out that the correct entry was at "F". This is considerably earlier than your entry, which you felt was "too early".

 

Second, I don't recall ever using the term "bearish triangle". Perhaps you could provide a link to the post. Or you may be referring to your own use of the term. As for Wyckoff counseling against patterns, he incorporated hinges and springboards as an important part of his analysis. A hinge is a triangle only if you don't understand what a hinge is.

 

Second, the "spring" does not come from Wyckoff. It comes from SMI.

 

Third, if the thread is not to tolerate mention of Wyckoff, either, then you are essentially barring that which VSA is based on.

 

Fourth, as I mentioned to zdo, given that I was invited to participate in the Best of Wyckoff conference this fall along with Pruden, Raschke, Weis, and Fullett, someone is of the opinion that I have at least a feeble grasp of the subject.

 

If James wants to make you a moderator and give you the authority to determine what is or is not posted on this thread, that's his prerogative. Otherwise, I suggest that you put me on Ignore.

[DbPhoenix 42]

I'm only pointing out that the correct entry was at "F". This is considerably earlier than your entry, which you felt was "too early".

 

For those who are interested but afraid to ask, see chart #12 in Chapter Two of Undeclared Secrets.

 

Have a nice evening.

[Sledge 13]

As I recall ND's are shorts only, although I am no expert, by any means.

 

Dan-

Actually a No Demand bar as defined by VSA is an UP bar with less volume than either of the previous two bars. It MUST be an up bar.

 

Sledge

[Sledge 13]

Here is a failed trade. I'm not sure why it didn't work?

 

I went long at M on a No Demand bar at pretty good support.

 

 

Eiger-

Chart on Post #812

Ok are you talking about the 10th bar in from right? If that is the bar I think is "M" I see a TEST that closes in the middle of the bar- which IS an indication of higher prices to come, and yes I would have gone long as well.

 

Sledge

Edited April 4, 2008 by Sledge

[dandxg 10]

Dan-

Actually a No Demand bar as defined by VSA is an UP bar with less volume than either of the previous two bars. It MUST be an up bar.

 

Sledge

 

Right understood. I just meant you would not go long on a no demand referring to Eiger's previous post, a simple miscommunication.

[Sledge 13]

Dan-

Heh, it appears you had it cleared up and I threw more miscommunication in the mix. :doh:

Sledge

[Eiger 10]

Eiger-

Chart on Post #812

Ok are you talking about the 10th bar in from right? If that is the bar I think is "M" I see a TEST that closes in the middle of the bar- which IS an indication of higher prices to come, and yes I would have gone long as well.

 

Sledge

 

You are right, it is a Test, not No Demand - my mis-speak. I thought it was a good buy location, too, as there was a small spring and we were trading at the Demand Line. I was just wondering if anyone saw anything that would have indicated that there was supply in the market that I didn't see.