[VSA] Volume Spread Analysis Part II

[BlowFish 10]

Glad you enjoyed it. Did you go to the Wycoff event Pruden put together too? That one sounded a lot of fun.

[tawe trader 10]

Yesterday's action was less constructive, however - a down bar after a Bottom Reversal/Spring. It would have been much more constructive to have seen an up bar yesterday.

 

The market is close to the danger point (lows), and needs to rally away from the danger point, otherwise new lows are likely. When price hugs the lows after a rally, it indicates lower prices. Price hasn't been hugging here, but nevertheless, needs to rally to give support to the Spring idea.

 

On the longer term, the second chart is a monthly chart. We are over sold on the trend channel. The 2002 lows are near. It would be surprising not to eventually at least test these lows.

 

Eiger, many thanks for the follow up analysis to your 'spring' idea. There is some similar analysis on Bloomberg this morning:-

 

 

S&P 500 May Fall More as `Retest' of Low Fails to Spark Rally ---- Nov. 18 (Bloomberg)

 

The Standard & Poor's 500 Index is poised to extend this year's 42 percent drop after a rally from last week's 5 year low lasted just one day, say analysts.

 

After rebounding 11% Nov. 13, the benchmark index for US equities slipped 6.6% during the last 2 days and will probably keep falling past 818, its lowest level since 2003, according to three top-ranked technical analysts. The S&P 500 declined below its Oct. 10 low of 839.8 before rallying last week, making it a `retest'' to chart readers.

 

`Historically you would've had a better charge from the bulls at this point, and it hasn't developed,'' said Jeffrey de Graaf, of ISI Group Inc.`The buyers haven't presented themselves in a meaningful way to show that there's a sustained move to the upside, so the concern is that you just drift here.''

 

The 11% trough-to-peak gain in the S&P 500 on Nov. 13 was one of 6 `key reversals'' in the past 40 years, according to de Graaf, who defines the term using intraday levels and moving averages. Its 4.2% retreat a day later was the worst showing after such a turnaround by a factor of 7, he said.

 

De Graaf, the highest-rated technical analyst in Institutional Investor magazine's survey the past 4 years, said other indicators suggest stocks will keep falling. They include declining stocks outnumbering rising ones; higher trading volume when the market is falling than when it's rising.

As I write this, the ES has been down to 832, at 9.10am this morning in the UK.

 

Tawe

Edited November 18, 2008 by tawe trader
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[tawe trader 10]

I know this is a technical thread but seeing as we study volume endlessly, I believe the following data is kind of relevant.

 

As we know the mkts has been hit on a continual daily basis with unprecedented selling (supply) and liquidation from very large hedge funds due to client redemption requests, take the following as a recent examples:-

 

At Tudor Investment Corp., the Greenwich, Connecticut, hedge-fund group founded by Paul Tudor Jones, fund holdings fell to $453 million from $5.7 billion. Jones said markets face more selling from managers.

 

Jeffrey Vinik, disclosed that his Boston-based Vinik Asset Management LP now held $1.8 billion at Sept. 30, down from $11.8 billion at June 30.

 

I guess it's is going to be very difficult for the mkts to put in any multi-day / week bear mkt rally until the major hedge fund selling subsides.

[Eiger 10]

Glad you enjoyed it. Did you go to the Wycoff event Pruden put together too? That one sounded a lot of fun.

 

Yes, it was called "The Best of Wyckoff" and was pretty exciting. It was a one-day event and was held at Golden Gate University. Almost 200 people attended. I got a chance to catch up with several Wyckoff folks I know, and met many others. The University and the traders' technical association there (I forget the name, TASC, I think) gave Tom Williams a Lifetime Achievement Award. Very generous of them and quite moving. Tom received a long standing ovation. That was the best part of that conference, I thought.

 

TG was a sponsor and Gavin helped put it together - lots of credit for Hank Pruden and Gavin for doing that. Because it was so successful, they have decided to make it an annual event, which I think will be terrific. Maybe I'll get a chance to meet some of you guys next year? - that would be pretty cool.

 

Eiger

[Eiger 10]

I know this is a technical thread but seeing as we study volume endlessly, I believe the following data is kind of relevant.

 

As we know the mkts has been hit on a continual daily basis with unprecedented selling (supply) and liquidation from very large hedge funds due to client redemption requests, take the following as a recent examples:-

 

At Tudor Investment Corp., the Greenwich, Connecticut, hedge-fund group founded by Paul Tudor Jones, fund holdings fell to $453 million from $5.7 billion. Jones said markets face more selling from managers.

 

Jeffrey Vinik, disclosed that his Boston-based Vinik Asset Management LP now held $1.8 billion at Sept. 30, down from $11.8 billion at June 30.

 

I guess it's is going to be very difficult for the mkts to put in any multi-day / week bear mkt rally until the major hedge fund selling subsides.

 

Not all the Springs work out, and they do tend to be lower odds in a downtrend, whether on a daily or intraday basis. The same is true for Up Thrusts in an uptrend; they also tend to be lows odds or stimulate only a small reaction.

 

It's instructive to compare this current Spring with the one that occured in mid-March and look at the differences. Look for clues on the daily chart for why that one worked (even though it also occured in a downtrend) and why this one may not.

 

-----

 

I saw a similar report this morning about the unwiding of some of the larger trading firms and hedge funds, including Steve Cohen's firm, SAC. Sebastian showed me a report on Cohen in SFO that talked about his ability to manipulate the markets. It was pretty interesting. They described in some detail how he will drive price down to shake others out of the market to acquire their holdings, push price up to attract buyers and unload, use multiple brokerage firms, etc. We don't get to see these kinds of reports too often because these folks are so secretive about their activities, but it is the same kind of things Wyckoff and Williams describe.

 

It's a good idea to pay attention to these kinds of data, even though not strickly technical or depicted on a chart. At some point, all that cash they are now raising will have to be put back to work. Because they operate in such large quantities, we will be able to see their footprints in the volumes and price bars when they do

 

Eiger

[tawe trader 10]

Now he's one big player (Steve Cohen) who you don't want to be trading against, you could call him smart money. I guess his firm SAC, trades such large size and volume, he's got to resort to using mulitple brokers just like good ol' Jesse Livermore did over a hundred years ago, to try and hide his actions and cover his tracks.

 

Here's another interesting Bloomberg report regarding hedge fund closing / selling:-

 

London Hedge Fund Alley Rents Fall as Firms Close

 

Office rents in Mayfair and St. James's, the London districts with Europe's biggest concentration of hedge funds, are falling for the first time since 2005.

 

Demand for space is falling as at least 350 funds in the $1.7 trillion hedge fund industry have closed this year amid the global financial crisis. Client redemptions and forced asset sales have given investors losses for five straight months through October, the longest streak since 1990.

 

Tawe

[tawe trader 10]

There may be a bullish situation developing on the FTSE and this mkt has been relatively stronger than the SPX recently, due to the fact it has stayed well above it's late Oct lows.

 

Attached is the current chart of the daily FTSE future with the snapshot taken just after the important FTSE 100 cash mkt close at 4.30pm.

 

Yesterday we had narrow range bar, closing down with less volume than the previous two days - no supply (NS) ?

 

Today the mkt went lower and dropped below the channel but rallied this afternoon to close up and back up, inside the channel (which may need re-drawing).

 

Today looks like a possible low volume test which confirmed yesterday's no supply bar by closing up. Where the FTSE goes from here will mostly probably depend how the US session pan's out tonight.

 

Tawe

[taks1990 10]

WHERE DID I GO WRONG?!

 

Many thanks to Tawe for posting this chart. I am based in the UK so look at the FTSE a lot and have been looking to go long for some time.

 

I did so last night which turned out to be a BIG mistake so I would really like to learn where I went wrong. I am only spread betting at this point and I don’t trade intra day because I don’t have the software to do so - just end of day.

 

My logic to go long was based the following:

 

1.Stopping volume coming in early Oct and again in mid Oct, and again on 6.11 where market drifted sideways – looks like start of accumulation phase to me

2.Narrow spread down day on very low volume on 17.11.08 respecting trend line (as shown in Tawe Trader chart)

3.We are in an uptrend – confused about this point though as we seem to be in an uptrend and down trend at same time (see point 3 below)

 

I am becoming fearful because even through I know VSA works, all of my last few trades have been losers and has knocked my confidence. I am thinking about going back to basics and paper trading for a while.

 

I would really appreciate your thoughts on this trade, and Tawe Trader, why you didn’t choose to jump in like me?

 

How do you guys take a position if you were trading end of day – would you still wait for confirmation on the intra day charts IN THE MORNING before going long i.e. do you think I was stupid to go long the night before without having access to intra day charts or is it OK to take a position based on end of day data only?

 

I might start paper trading intra day before or after work – would you say this is a good idea? If so which instruments/markets would you suggest I concentrate on?

 

Many thanks for your help

 

Mark

[tawe trader 10]

Hello Mark,

 

I wouldn't be too hard on yourself. Overall the mkts are still in a vicious bear mkt and downtrend, so going long is going against the major trend.

 

Yes the FTSE was / is looking fairly bullish on a daily chart and the no supply (less selling pressure bar) on Monday was confirmed by yesterday closing up but technically speaking, yesterdays 'test' still hasn't been confirmed, as yet.

 

As for entries, considering the overall downtrend, it may have been more prudent to wait for a low volume pullback on say a 30 or 60 min chart today, instead of just placing a long trade last night after the cash mkt closed, because we have got to keep an eye on the US pre-mkt futures and seeing as they are down this morning, it's dragging the FTSE down as well.

 

Also we have been seeing recently some massive intraday ranges, so the daily FTSE could still be bullish but also be down over 100 pts intraday which could be considered 'noise' in todays environment. Maybe small stakes and really wide stops are required, especially for EOD trading.

 

I was long the FTSE yesterday and closed out 33% of my position at yesterdays cash mkt close due to a very high volume upbar finish. I held the remainder overnight but I also hedged it with a SPX short spreadbet as I see the SPX currently as the weaker mkt.

 

I hope the above is of some help and watch the SPX or Dow if you are trading the FTSE.

 

Regards

Tawe

[jjthetrader 10]

I'll let Tawe take the technicals on this one since he's the resident FTSE trader AND spread better.

 

First thing, you're not stupid for taking a trade ever. You could be wrong but not stupid.

 

Second, you can trade just off of EOD data but you'll have to be comfotrable with bigger swings against you. If I were trading EOD then yes I would have intraday data to narrow down my entry.

 

Lastly, you said we're in an uptrend. On a daily chart we're actually in a pretty bad downtrend and that's the chart you're trading off of.

 

Now over to Tawe.....

[tawe trader 10]

JJ,

 

You will have to get up earlier in the morning, if you want to get a reply in before me

 

I bet it's a struggle getting out out of your nice warm cosy bed on any cold Canadian mornings - lol

 

All the best

Tawe

[taks1990 10]

Thank you for your very quick replies guys - I really aprreciate it.

 

All your comments are really useful and will be added to my Big Book of Errors for future study!

 

Thanks

 

mark

[JeremyGoh 10]

Can someone please explain to me more about no demand bar in VSA. I read many many times, but I still cannot fully understand.

 

How come bar I is not a test for supply yet a no demand bar? I read from MTM - page 32 - No demand bar = low volume up-bar, on narrow spread. I can understand Bar N is no demand bar but I cannot understand bar I at all.

 

Can I consider bar J a test for supply bar? and consider it a successful test?

 

I; A no Demand up bar, volume clearly low, and it at the same level as bars C, D, indicating that prices will not push through this old high, and this is bearish. Next bar down.

 

J; this is a down bar closing very close to the open and look at the volume, very very low, you do not want to be short with this bar at it's close. The next bar is up also on low volume, but this could be that there are very few sellers and this is known as a vacuum.

 

Jeremy

[taks1990 10]

hi Jeremy

 

i'll have a go at explaining but may need some help!

 

with regard to the test, as its name implies generally goes down into an area of previous supply (high volume) to the left of the chart. if the test goes down into this area on low volume (and ideally closes high) you have to assume that the test has been succesful i.e. the supply has disappeared (in practice you have to wait until the next bar confirms whether or not the tes was sucessful.

 

note the key word is down into an old area of supply - Tom Williams states that true tests always appears on down bars - this is logical when you think about the purpose of the test. and this is the reason that bar J is a tes but I is not - although I looks like a test like bar, is it performing its intended fuction i.e. to test supply and the answer is no because it is an up bar.

 

"Can I consider bar J a test for supply bar? and consider it a successful test?" - in answer to your question therfore i would say, yes, you can regard it as a test bar and yes it is sucessful because the following bar is up vaildating the test.

 

no demand is much more striaghtforward - if the market is going up on low volume, the pros aren't interested in the upside. generally a better indication if approaching old resistance area/old top to the left/weakness in the backgroud, supply, upthrusts etc.

 

one exception, as Tom Williams states - you may see low volume on the first few bars in the breakout from an accumulation area however this is not necessarily a sign of weakness - just that the pros have absorbed so much stock during the buying phase that there is relatively little stock at that price level to trade.

 

hope this helps and hope the more experienced guys don't rip my explanation apart too much!

 

mark

[jjthetrader 10]

Can someone please explain to me more about no demand bar in VSA.

How come bar I is not a test for supply yet a no demand bar?

Can I consider bar J a test for supply bar? and consider it a successful test?

 

 

Bar I is an upbar, that's why it's a no demand. You put the defenition right from MTM and it fits perfect. Second reason, the next bar closed down.

 

Yes J would be considered a test. In futures tests can be high or low volume. They don't necessarily have to test high volume but rather test for selling. In an uptrend they'll constantly test for sellers before they continue the next leg up. This would be a test in a rising market.

 

This is reading VSA bar by bar though and not a great idea. Know your background and trend and look to enter on those bars that confirm it.

[Eiger 10]

Can someone please explain to me more about no demand bar in VSA. I read many many times, but I still cannot fully understand.

 

How come bar I is not a test for supply yet a no demand bar? I read from MTM - page 32 - No demand bar = low volume up-bar, on narrow spread. I can understand Bar N is no demand bar but I cannot understand bar I at all.

 

Can I consider bar J a test for supply bar? and consider it a successful test?

 

I; A no Demand up bar, volume clearly low, and it at the same level as bars C, D, indicating that prices will not push through this old high, and this is bearish. Next bar down.

 

J; this is a down bar closing very close to the open and look at the volume, very very low, you do not want to be short with this bar at it's close. The next bar is up also on low volume, but this could be that there are very few sellers and this is known as a vacuum.

 

Jeremy

 

As JJ says, it's vital to understand the background and let the market tell you what it is likely going to do next.

 

Part of knowing the background is understanding where support and resistance are when coming into a market. We don't know that from this chart. Keep a higher time frame chart handy and look for areas of S/R, trend channels, and the overall structure of how the market has been trading. It makes life easier.

 

Even though we don't have good background info (see above paragraph), the chart is still readable. Demand came in at A, B, and the bar after B. I labled these with Ds. Although demand was evident, it rallies only to C and at D, there is No Demand. Caution is needed, but there has been no significant sign of weakness.

 

The market reacts. Although F looks ominous, volume does not significantly increase. There was better volume earlier when buying was occuring. The bar after F is a Spring, and volume increases to the upside - more demand. H is a No Supply/Test-like bar that tests the volume on the Spring bar. There is no supply, demand is in control. This is a good entry for a long.

 

The very next bar shows some supply due to the close as price tried to negotiate the old top at C. Next bar, I, is No Demand. It is saying that it will not advance above the resistance. But again, no significant SOW exists at this level.

 

Bar J is a good test and indicates another attempt at the resistance will be made. At K, price breaks through resistance but closes off the highs. Volume indicates there wasn't much fuel behind the move. Next bar is down, and we would expect a reaction. L shows no supply, M is a Bottom Reversal - both indicate strength, though this looks like it might be occuring during the noon hour in the US, and not much is likely to happen when everyone is out to lunch. N is No Demand, but there is no weakness in the background. Instead of weakness, higher lows and higher highs are made. O is No Supply, and the next bar is another Bottom Reversal with good demand.

 

P, Q, and R all show supply where the market is oversold in the trend channel. Note the overall background: this market has been trending up, but there has been no ease of movement up. It has struggeled to go up for most of the trading day. R is an UpThrust and the market sells off. Note the bar after R - it looks like the largest spread on the chart - certainly for a down bar. Volume for the first time also increases on a down bar. Supply has overcome demand.

 

Again, as JJ said, first and foremost, have a keen eye on the background. Then apply bar-by-bar analysis. Most traders trying to use VSA ignore the background and focus on the bars. This is a quick way to lose money and then wrongly discount VSA. Train yourself to see the background.

 

Wyckoff said, "The most important thing to know about the market is the trend." And, it is. You can't know the trend, however, without first looking at the background. So another way to think about it is this: "The most important thing to know about the market is the background."

 

I don't know how much more I can emphasize the background, but there it is. The key to reading any chart is understanding the background.

 

Hope this is helpful,

 

Eiger

[JeremyGoh 10]

Hi Mark,

 

True test appear on down bar, what if it close the same as the open or 0.25 above the open? do you still consider it a test?

 

Take Bar J(New chart - 12 Nov) for example, isn't it a test of the previous bar? and bar M is also a test? can I also consider it a down-thrust?

 

Thanks for your explanation on no demand and supply. As you mention, about up move with No demand. Is it easier to look for No demand on down move trend and when the No demand sign appear it will be a buy signal? It is better to look for No supply on up move, whenever no supply appear, it will be a buy signal.

 

Hi JJ,

 

Thanks for reminding me the important of looking at the background and trend.

 

Currently I treading this way, First look at the trend of the market. If the trend is moving up, I will constantly look for no supply for entry. However, if there’s weakness in the background before no supply and down-thrust, I try not to buy. Same goes for down move, keep a look out for up-trust for entry provided there isn't any strength in the background. Is it correct to trade this way?

 

Hi Eiger,

 

Thanks for taking your precious time to do a close analysis on this chart.

 

I don't fully understand S/R, trend channels. Do you have any recommendation where I can learn more basic stuff like S/R, trend channels etc. Btw, I have only read MTM by Tom William, and DTB by Wyckoff and many and many chart analysis by Sebastian and many posting from VSA forum. I don't want to spent time reading stuff not relevant to VSA but now I feel I need more basic stuff.

 

Can you roughly show me where will be your entry point be? I read chart by Sebastian but he didn't mention about entry point. Can I know more stuff like what is your stop losses 0.25 or 0.5? and your run? usually how long does it run? 2 to 4 to more and what is your best run? I just using your number as a guide so I know if I’m doing the right thing. Currently, I trying to stop losses at 0.5 and 1 and my closing max is about 3, usually 1 or below. I'm trading using 3min and 5min chart most of the time. Still trying to using 60 mins chart as a guide.

 

I have read a few chart by you from this forum. Still busying reading and testing out what I read and learn.

 

It really confuse me, Bar L and O is no supply? Why bar L is no supply because it close in the middle? Bar O is no supply because O close on the low with narrow spread?

I got more questions to ask regarding no supply and demand again. Sorry for asking such basic questions. Please help me get this right, if not I don’t think I can ever fully understand VSA.

 

 

 

 

 

 

 

 

For Nov 12,

Sebastian mention about

Bar D is No demand. Doesn't it look like a up-thrust?

Bar J is also no demand why? Because is close higher than the previous bar?

Bar N is no demand doesn't it look like a up-thrust?

 

What exectly is no demand and no supply?

Close higher than previous bar on up bar and close above the open is no demand on low volume?

 

Jeremy

[jjthetrader 10]

Hi Mark,

 

True test appear on down bar, what if it close the same as the open or 0.25 above the open? do you still consider it a test?

 

Hi JJ,

 

Thanks for reminding me the important of looking at the background and trend.

 

Currently I treading this way, First look at the trend of the market. If the trend is moving up, I will constantly look for no supply for entry. However, if there’s weakness in the background before no supply and down-thrust, I try not to buy. Same goes for down move, keep a look out for up-trust for entry provided there isn't any strength in the background. Is it correct to trade this way?

 

For Nov 12,

Sebastian mention about

Bar D is No demand. Doesn't it look like a up-thrust?

Bar J is also no demand why? Because is close higher than the previous bar?

Bar N is no demand doesn't it look like a up-thrust?

 

What exectly is no demand and no supply?

Close higher than previous bar on up bar and close above the open is no demand on low volume?

 

Jeremy

 

Hey, a test can have an upclose. This is where things get tricky. It would be a hidden test. Tom Williams says there's about 10 different kinds of test. For now look at the volume and low of the bar. Did we go down further than the previous bar then come to close up? Could be a test. But this is all in the context of the background. You'll get it once you see it more. As bars form you get an idea of what's happening. This is something you can't see from a historical chart.

 

Bar D closes up and off it's high. This is no demand.

Yes, Bar J closes up making it a potential no demand. The following bar doesn't close down though so it's really just a low volume upbar.

Bar N, sometimes no demands will resemble thrusts but in the defenition of no demand is a narrow spread. Thrust are usually wider than the average.

 

You've got the defenition correct for the no demand. The close in relation to the open doesn't come into play in the VSA methodology. This isn't to say it's not important, it's just not part of a no demand's defenition.

 

ND = low volume, up close, narrow spread, next bar down

NS = low volume, down close, narrow spread, next bar up

[Eiger 10]

...

I don't fully understand S/R, trend channels. Do you have any recommendation where I can learn more basic stuff like S/R, trend channels etc. Btw, I have only read MTM by Tom William, and DTB by Wyckoff and many and many chart analysis by Sebastian and many posting from VSA forum. I don't want to spent time reading stuff not relevant to VSA but now I feel I need more basic stuff.

 

Can you roughly show me where will be your entry point be? I read chart by Sebastian but he didn't mention about entry point. Can I know more stuff like what is your stop losses 0.25 or 0.5? and your run? usually how long does it run? 2 to 4 to more and what is your best run? I just using your number as a guide so I know if I’m doing the right thing. Currently, I trying to stop losses at 0.5 and 1 and my closing max is about 3, usually 1 or below. I'm trading using 3min and 5min chart most of the time. Still trying to using 60 mins chart as a guide ...

 

 

S/R and trend lines are best learned from studying the Wyckoff course materials. Tom Williams also discusses how to construct trend lines in his Undeclared Secrets book as well as what to look for as price approaches trend lines and S/R.

 

As for stops and exits, both of mine are much wider than yours. What I do really isn't relevant to what you do in this area. Stops are a function of your account size, risk parameters, and the individual trade set up. You need to first understand risk, how to calculate it, and how that relates to your account size. Then you can translate that into a plan and test it out thoroughly with a fair amount of practice. You will not get all you need to know just from the sources you mentioned. You must go outside these threads and study other sources. For risk and money management, start with Van Tharp.

 

Hope this is useful,

 

Eiger

[Eiger 10]

Two trades from This AM:

 

The first was on the 3-min chart. We opened gap down this AM, with volume & ticks increasing to the downside - weakness. The rally into 10:00 was also weak. A nice No Demand at A was the entry. The market became less able to make downside progress as it approached B. Note the cluster of closes on the 3rd - 5th bars back from B (starting with B as #1). This was some strength coming in, but price was still making new lows at that point. On the bar before B, no new decent low was made, and B was a Bottom Reversal - like bar and a good place to run for the exit.

 

The 2nd was on the 5-min chart. We rally back to yesterday's low (resistance) and at C, high volume comes in on a narrow spread. Next bar is a Top Reversal (so, 2 SOWs at resistance). The market falls and gives a nice No Demand at D, which was the entry. On the bar before E, high volume came in and the next bar makes no new progress. It is also noon hour. I expected more weakness, though, and took off 1/2 at E. I was wrong about further weakness and was stopped out with no profit on the second half.

 

These were the only trades I took this AM. Both take into account the background first, including S/R. I looked for further Signs Of Weakness after assessing the background (confirming ticks followed by a weak rally on the 3-min); a high volume narrow range bar at C (like an End of Rising Market, but not quite) and Top Reversal on the 5-min. Then I look for entries, which this AM were both No Demands that set up properly.

 

 

Eiger

[jjthetrader 10]

Eiger, nice trades. I took the exact same one this morning on the no demand. The added bonus to that one was it was right on S1. I love those.

Thanks for sharing. I like how you use the tick.

[Eiger 10]

Eiger, nice trades. I took the exact same one this morning on the no demand. The added bonus to that one was it was right on S1. I love those.

Thanks for sharing. I like how you use the tick.

 

Good to see you posting again. I've got lots of tricks with ticks - been studying and trading with those a long time.

[Eiger 10]

Trend Lines from This AM

 

Here are trendlines from today. You couldn't draw them until the low at E was established. A Demand Line is drawn from the first low and the low at E. A parallel Supply Line is drawn at C. Note how the high after E was contained by the Supply Line (this was also in the area of yesterday's low - resistance). Thus far, the lows at F-G are being held at the Demand line. There is supply in the market on this last leg, however, and the Demand Line may not hold. Can you detect the supply (not just at F & G)?

 

Eiger

[Eiger 10]

That trend line did break.

 

Here's what I saw:

 

A - Ultra high volume on an up bar (as was the prior bar). It closes in the middle, signaling supply. Again, we are at yesterday's lows.

 

B - Another ultra high volume up bar. With all that volume, you would expect it to rocket higher.

 

C - A 2-bar Up Thrust/Top Reversal. It is best when the 2nd bar closes below the low of the 1st bar, but this one was telling of supply anyway.

 

D - Volume and spread increase to the downside - supply.

 

E - No Demand. I took a short trade on this and was stopped out at a loss by the hidden UT.

 

F - a bounce off the Demand Line on ultra high volume. The next bar is down - supply.

 

G - another down bar with high volume. There is still quite a bit of supply here. (The bar prior to G was a No Demand)

 

H - A nice Top Reversal/2-Bar UT. Compare with the earlier one. The increased volume said this would take out the Demand Line, and it did.

 

I - No Demand and another good location for a short entry for a try for at least a piece to retest the AM lows.

 

Eiger

[tawe trader 10]

I've got lots of tricks with ticks

 

Eiger,

 

It's a good job you didn't mis-type the above as:-

 

"I've got lots of ticks"

 

Best regards

Tawe