[VSA] Volume Spread Analysis Part II

[dandxg 10]

Dan-

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

Sledge

 

No worries friend. As a friend that helps me says just trade well.

[Bearbull 10]

Come on folks, is this tick-tack on VSA/Wyckoff/Candlesticks really necessary, afterall they all represent price/volume i.e supply/demand pressures, albeit from different angles.

There are some who have studied both Wyckoff and VSA and realise this, however there are others who wish to pursue the VSA path only, and if they are able to read what they post in hindsight with the same degree of efficiency/accuray in realtime, trade with realmoney and are able to keep their cash till ringing that way, fine, that is all that matters at the end of the day.

But you will find that even at Tradeguider, they have difficulty reading the market purely on VSA, that is why their charts are full of other indicators , diamonds, H stops, trendlines, channels, moving averages on vol, volume thermometer, trend clusters (have a look at their archived videos)

Hence if others wish to express their viewpoints via Candlesticks or Wyckoff, what is the problem, why not leave the egos on the mantlepiece for a change and make an attempt to understand other persons viewpoint, otherwise we are going to end up with another VSA thread with over 100 pages still with no clarity in sight, that is why in my previous posts I have requested the Tradeguider Experts to come in and sort this out, rather than make periodic appearances with a video here and there, merely to promote their products and webinars.:helloooo:

Looks like James will have to consider opending VSA III, who knows like those Rocky and Rambo movies we could make it to VSA IX;)

[DbPhoenix 42]

Come on folks, is this tick-tack on VSA/Wyckoff/Candlesticks really necessary, afterall they all represent price/volume i.e supply/demand pressures, albeit from different angles.

There are some who have studied both Wyckoff and VSA and realise this, however there are others who wish to pursue the VSA path only, and if they are able to read what they post in hindsight with the same degree of efficiency/accuray in realtime, trade with realmoney and are able to keep their cash till ringing that way, fine, that is all that matters at the end of the day.

 

But you will find that even at Tradeguider, they have difficulty reading the market purely on VSA, that is why their charts are full of other indicators , diamonds, H stops, trendlines, channels, moving averages on vol, volume thermometer, trend clusters (have a look at their archived videos)

Hence if others wish to express their viewpoints via Candlesticks or Wyckoff, what is the problem, why not leave the egos on the mantlepiece for a change and make an attempt to understand other persons viewpoint, otherwise we are going to end up with another VSA thread with over 100 pages still with no clarity in sight, that is why in my previous posts I have requested the Tradeguider Experts to come in and sort this out, rather than make periodic appearances with a video here and there, merely to promote their products and webinars.:helloooo:

 

Looks like James will have to consider opending VSA III, who knows like those Rocky and Rambo movies we could make it to VSA IX;)

 

I agree entirely, Bearbull, and, no, it's not necessary. To attempt to arbitrate what is or is not allowed in a discussion of "VSA" when several different versions of VSA are under discussion, including the TradeGuider take, is an approach that is far more likely to generate heat than light. There is, for example, no "ice" in Undeclared Secrets, nor are there any "creeks". So why are ice and creeks and springs allowed? Because TradeGuider says so? After 2000 posts, is the thread about TradeGuider after all? Or is it about analyzing price movement by means of volume and the spread?

 

I've said that I'm not interested in VSA per se, but that doesn't mean that I'm not familiar with it or that I don't understand it. I'm not interested in it because it can generate a nonproductive mindset, particularly in those who do not yet have a firm grasp of price action and how it relates to volume. Nonetheless, I am fully capable of bringing what I know to the table and explaining these charts in terms of the interaction of price and volume and time without getting into all of the extranea that a software program brings.

 

As you say, whether using Wyckoff or candles or VSA or even MP (which has and could again provide much needed added perspective), it's all about price and volume and why they behave the way they do and how one can profit from those movements. To insist that one must use a 5m bar, for example, even when Undeclared Secrets rarely does so, suggests a lack of understanding of just what VSA is all about. Yesterday's activity was a good example of where such a lack of understanding can lead. And the thread was oddly silent during the 80pt (NQ) upmove on Tuesday when the market was "supposed" to be declining.

 

If the thread is to be about TradeGuider, then that answers a lot of questions. However, both threads should be retitled in order to clarify exactly what it is that the content should address. On the other hand, if it is to be about volume spread analysis, then I suggest that those who insist that it must be defined in a particular way that isn't necessarily the same as that defined by someone else who sees it in some other particular way ought either to pull themselves together and open a few windows or else make liberal use of the Ignore button.

[mister ed 10]

OK with that said I hope this is the end of the navel gazing. We have had enough of the distractions, now back to VSA and Wyckoff in this thread. Traders Laboratory has almost unlimited resources for starting new threads. Let us keep the focus here please and generate new threads as we generate new ideas or delve more deeply into related areas.

[habi 10]

Db, Bearbull

 

I think, we are all interested in VSA as a whole. And since VSA is based on Wyckoff, we are interested in this theorie too. The point is not, that we are not interested in other versions how to read price/volume action, but it seems, that we are not able to follow exactly what you mean.

 

Let's look at yesterday's price action. Price went down near 1360-support, then up to close the regular session gap and then down again on lower volume. As Db mentioned, this was the point to find an entry. Once you have taken the long position, you follow the price action. Is it possible to describe, what you are doing now? Do you follow the price action just in a 1 minute- or any other chart? What are your thoughts, when you see the higher volume between 1371 and 1375? Db said, that support was on 1360 and resistance 1380. Do you saw some weakness when we reached 1377.50 or was it just resistance from yesterdays high to close the position, assumed, that it was closed there? In my view, this trend was of good quality until the top and also the following downmove was not that worse.

 

Please give us some examples, how you read the price action, there is no need to post them in realtime. Just, that we have a better understanding what you mean.

[DbPhoenix 42]

Db, Bearbull

 

I think, we are all interested in VSA as a whole. And since VSA is based on Wyckoff, we are interested in this theorie too. The point is not, that we are not interested in other versions how to read price/volume action, but it seems, that we are not able to follow exactly what you mean.

 

Let's look at yesterday's price action. Price went down near 1360-support, then up to close the regular session gap and then down again on lower volume. As Db mentioned, this was the point to find an entry. Once you have taken the long position, you follow the price action. Is it possible to describe, what you are doing now? Do you follow the price action just in a 1 minute- or any other chart? What are your thoughts, when you see the higher volume between 1371 and 1375? Db said, that support was on 1360 and resistance 1380. Do you saw some weakness when we reached 1377.50 or was it just resistance from yesterdays high to close the position, assumed, that it was closed there? In my view, this trend was of good quality until the top and also the following downmove was not that worse.

 

Please give us some examples, how you read the price action, there is no need to post them in realtime. Just, that we have a better understanding what you mean.

 

Providing commentary in hindsight is difficult if for no other reason than one knows what happens. One can put oneself into a state of complete ignorance when, for example, replaying a day at a later time to analyze his moves (or failure to move, as the case may be), but it's not easy.

 

Therefore, when going over charts such as these, one has to rely on principles and not take the easy Oh, yeah, well, I would have done so and so.

 

So.

 

As I mentioned on the RT thread a few days ago, 1370 was the S/R level to watch since this went all the way back to January. Once that was reached at the end of the day on the 1st, one had only to sit on his hands and wait to see what price did there.

 

The following day, price extended itself either side of this line, like a dog on a leash.

 

WARNING! Market Profile Will Be Mentioned Here!

 

While I'm not expert on MP, this is what I believe is called a tentative search for a new value area, or what Wyckoff would call a search for equilibrium. If all of this were the result of short-covering, the buying would have dried up abruptly and there would have been nothing to sustain the market at this level. If it were distribution, the market would have reversed since whatever other buying had taken place would have been weak. However, price stayed up here, hovering between 1363 and 1377, at least initially. Later in the day, resistance at 80 was confirmed, as was at least preliminary support at 63.

 

The following morning, given the reaction to the jobs report, one could expect at least a test of 60 since price was only a point or two away. If price had not reached that level, one could use 61 (life is not quite so exact as we would sometimes like). In any case, price poked just below that level at 09:15. Using the chart posted, this occurred at point A. Using the 5m OHLC bar, note the position of the "open" and "close" of the bar. (Tune noted yesterday elsewhere that price does what it does regardless of what bar interval we choose or what type of bar we use or even if we use a bar at all; therefore, a rejection of 60 is a rejection of 60, whether it's a tick or a 1h candle.)

 

The test of this occurs at "B", at 09:45, and one can see even with the 5m bar that this level is soundly rejected once again. Those who use candles and are used to blending them in their heads will also note that B and the bar following create a "hammer-type" candle. Whether one enters here or not is a matter of whatever his trading strategy happens to be.

 

Thereafter, the situation is tossed due to the ISM report. But any entry would already have been taken, so the scrambling around would have had no effect unless price had gone the opposite direction. Instead, one notes that price hit the midpoint of the S/R range -- 70 -- within a tick. Since he's already in, there's nothing for him to do.

 

If he isn't already in, he can wait for the retest. There may be no retest, in which case the trader can elect to do nothing or look for a less-than-ideal entry. But, in this case, there is one, in the "F" area. The only volume of note inbetween is at 10:25 (the volume bars in the posted chart are offset by one). This results in a bar with a "close" that suggests buying coming into the market. It's not climactic and it's not "stopping" volume, but it does retard the decline. When price does get around to testing support, there's nothing remarkable about the volume, but the close is well off the low. The drama is provided by the following volume bar and price bar at 11:05. This says, "Yes, you were correct."

 

Thereafter, volume is largely irrelevant. What matters to the trader is whether or not price makes higher highs and higher lows. There are many bars that might be considered troublesome, but if he focuses on traders rather than on bars, he has no reason to be concerned until at least the midpoint is reached, here near lunchtime. At that point, he notes the near-term potential S&R that have been established and remembers that lunchtime is often a time for consolidation or simply drift. The line drawn on the posted chart at "G" addresses this, and price does in fact find support there in the "J" area. When price then resumes its advance thereafter, the trader has nothing to do but wait for a test of resistance. This occurs at 13:25 when we get as near as 78, two points away from 80.

 

At this point, the trader has several choices. He can draw a demand line from "J" across the bottom of the 13:10 bar and exit on a breach of that. Or he can wait for a breach of the last swing low at "K". Or he can wait for a breach of the demand line as drawn under "M". It all depends on how much confirmation he requires that the market is done and how well he's dealt with any tendencies he may have toward hope.

 

As to alternate entries, he understands that there is a trade-off between information risk and price risk, i.e., the more he wants to know, the further away from the ideal entry he will be and the more price risk he will assume. If, for example, he chooses to wait until he can draw a tentative demand line, which would be drawn here under the bar following "F" and the bar marked "H", he would then later be faced with having to juggle the seeming support provided by the swing high at "G" and the fact that his demand line had been broken (though he would also remember that a demand line of that angle would be begging to be broken). He could go ahead and take the risk of entering around "J" and would be proven correct in that it wound up being a profitable entry. But it would have been worth up to six or seven points less. Plus he'd be very near the midpoint and potential reversal. Or he could wait for a pullback, here at "K". But then he'd be entering very near the top (which is not unheard of).

 

Thus entering off trendlines or channel lines is by definition a later entry than entering off retests -- preferably at support or resistance -- since the lines can't be drawn until price has made a substantial amount of progress. Again, it's a trade-off between information risk and price risk.

[Bearbull 10]

Well, habi , you will be hard pressed to get a better explanation than what Db has posted.

You do not have to manage your trade via 1min or tick chart, if you are comfortable with 5min , stick with it, the key is to be consistent, where you move stops etc depends entirely on your risk tolerance. You could adopt Tom Williams advice of moving the stop below a bar which closes above the previous close in case of a long trade and keep doing so as long as there is only one down bar, 2 downbar and you are out. Prices then may or may not keep going up. It all depends on how thoroughly you have tested your setup, entry, trade management, rewards/risk etc.

[DbPhoenix 42]

It all depends on how thoroughly you have tested your setup, entry, trade management, rewards/risk etc.

 

Also depends on whether conditions are ripe for a trend day. Breathes there a trader with soul so dead who hath not banged his head against the wall and said "Why did I insist on shorting the whole way up? Why? Why? Why?" ( or why did I exit with only 5 points.....)

Edited April 4, 2008 by DbPhoenix

[habi 10]

Thanks Db for the elaborate explanation. I have to reread it tomorrow once again. What I'm most surprised about is your statement:

"Thereafter, volume is largely irrelevant"

I see often, that when high volume comes in, at least a retracement occur. Today e.g., short after the highest volume spikes in a 3 and 5 minute chart we saw the start of the largest move for the day. o.k., at this time we could not know, that it will be the highest volume for the day, but it was at least the highest volume since the "open".

 

 

"the key is to be consistent"

 

Yes Bearbull, I fully agree with your statement, I'm working on it.

[DbPhoenix 42]

Thanks Db for the elaborate explanation. I have to reread it tomorrow once again. What I'm most surprised about is your statement:

"Thereafter, volume is largely irrelevant"

I see often, that when high volume comes in, at least a retracement occur. Today e.g., short after the highest volume spikes in a 3 and 5 minute chart we saw the start of the largest move for the day. o.k., at this time we could not know, that it will be the highest volume for the day, but it was at least the highest volume since the "open".

 

You're leaving out the most important part: "Thereafter, volume is largely irrelevant. What matters to the trader is whether or not price makes higher highs and higher lows."

 

If you're not getting higher highs and higher lows, then of course volume assumes a much more important role. Taking your example above, there was nothing special about volume until 10:15. At that time, you had what was clearly climactic volume, even though price was at least ten points above support. The blended bars also formed a hammer. Price then rallied and came back down for a retest with a slightly higher low and lower volume, again forming a blended hammer. This was in principle (otherwise I wouldn't bring it up) just the sort of setup one is supposed to take, even though there is no apparent reason for it to take place at that particular level (or at least none that I could see).

 

However, again, once price is in gear and you begin making higher highs and higher lows, volume is largely irrelevant. Only when the momentum begins to curve and price begins to hesitate does one need to pay attention to volume. Even then, though, unless the volume is climactic in nature, the more important focus is demand lines and previous swing points. If price maintains its course, there's no reason to exit. Today, for example, price made it to 83 without ever breaking stride (no pun intended, Wyckoff fans).

[DbPhoenix 42]

Taking your example above, there was nothing special about volume until 10:15. At that time, you had what was clearly climactic volume, even though price was at least ten points above support. The blended bars also formed a hammer. Price then rallied and came back down for a retest with a slightly higher low and lower volume, again forming a blended hammer. This was in principle (otherwise I wouldn't bring it up) just the sort of setup one is supposed to take, even though there is no apparent reason for it to take place at that particular level (or at least none that I could see).

 

For those of you who are wondering what the hell is he talking about, apologies are in order. It has been brought to my attention that neither habi nor I provided a chart of today's activity. Perhaps if I had, I would have noticed that I was offering commentary on the ES chart while staring fixedly at the NQ. The differences are negligible, but unless I offer both, the post above makes no sense.

 

So.

 

Note first the NQ. You've got the aforementioned climactic volume and blended bars that create a hammer (that's the blended bar to the left of the two bottom climax bars). Then you've got the retest, which makes a higher low on lower volume. These two bars also form a hammer when blended (you can do that in your head).

 

 

Now the ES. Here you have essentially the same dynamic except that the retest is a lower low, not a higher one. Also the blended bars do not form hammers that are quite so in your face.

 

 

Other than that, the principles are the same: climax, retest, Go!

 

Sorry if I gave anyone a headache.

 

.

[Sledge 13]

It was a wicked ride today on the GBP. Posting a 1 hr Chart.

 

Last night London Marked the Market up as a primer to the forthcoming pathetic NFP #'s (est -50K, actual -80K)

 

1. You can see on the chart volume that EOD Thursday into Thursday evening we had a rash of "No Demand" bars noted by the "X's"

 

2. You see that in the opening hours of London the professional $ Marked the market up significantly to "set the trap" on the would be bulls. Note the trendline drawn on the chart- this is drawn on a DAILY timeframe and was drawn 3 days ago. Look where the upthrust/hidden potential selling bar (no such thing- but hey.. it is what it is) reaches. Beautiful!

 

Once again proving the VSA theory that with the bad news for the USD looming- if the supply and demand are in the right position- they will use it to their advantage and make the "herd" pay dearly!

 

Sledge

 

[zeon 10]

... even though price was at least ten points above support.

 

[...]

 

This was in principle (otherwise I wouldn't bring it up) just the sort of setup one is supposed to take, even though there is no apparent reason for it to take place at that particular level (or at least none that I could see).

 

 

Why isn't the 57.50-60 area support on the futures? I agree there's another support level 10 points lower, but according to how I define S (and that might not be the right way to do it), that particular level was very significant to me...

 

On the attached charts, I've annotated all the "action" around that level: 3,4,5,6,7,8,9. Please tell me if I'm just imaginening things here

 

The levels are 50-52.50 because this is a chart of the cash market, but apart from the offset, it's the same on the futures (57.50-60).

[DbPhoenix 42]

See my previous post, above.

[zeon 10]

See my previous post, above.

 

 

Ehm, sorry? I don't see any references to what I mentioned in my post about S/R at that particular level.

[DbPhoenix 42]

Within the context of VSA, it really doesn't matter. The important things are the degree of volume, which suggests professional activity, the length of the climax bar, the rejection of the low by the next bar, the volume on the retest, and the length and positions of the closes on the climax and retest bars.

[rodney 10]

Note first the NQ. You've got the aforementioned climactic volume and blended bars that create a hammer (that's the blended bar to the left of the two bottom climax bars). Then you've got the retest, which makes a higher low on lower volume. These two bars also form a hammer when blended (you can do that in your head).

 

 

Now the ES. Here you have essentially the same dynamic except that the retest is a lower low, not a higher one. Also the blended bars do not form hammers that are quite so in your face.

 

 

Other than that, the principles are the same: climax, retest, Go!

 

Sorry if I gave anyone a headache.

 

.

 

 

Db ,

Can you be more precise about the "go" part on these charts-- a preferred entry level?

 

When trying to find a balance between what you call "information risk" and "price risk,"

 

1 Is entry taken at the open of the bar following the retest?

 

2 Or, at the point where the bar following the retest moves above the close of the re-test bar?

 

3 Or, at the point where the bar following the re-test moves above the high of the re-test bar?

[Bearbull 10]

Thanks Db for the elaborate explanation. I have to reread it tomorrow once again. What I'm most surprised about is your statement:

"Thereafter, volume is largely irrelevant"

I see often, that when high volume comes in, at least a retracement occur. Today e.g., short after the highest volume spikes in a 3 and 5 minute chart we saw the start of the largest move for the day. o.k., at this time we could not know, that it will be the highest volume for the day, but it was at least the highest volume since the "open".

 

 

"the key is to be consistent"

 

Yes Bearbull, I fully agree with your statement, I'm working on it.

 

Well habi, you are not going to get these kind of details provided by Db on entries and trade management in any of the tradeguider webinars, bootcamp cd or in their books and it is freely given, with all the negativity directed , another guy would have walked away and not given a toss. This really is the essence of Wyckoff, take my word for it, I have studied both.

 

You really need to pay attention to Db's comments on :

once you are in the trade, then it has to managed via observed higher highs, lows etc along with demand, supply lines and finally vol on violation of these.

There is no point going ga-ga on every twist and turn and forcing to inject meaning into every bar thereafter, the VSA experts are adept at doing just that in hindisight;)

[milliard 10]

Last night London Marked the Market up as a primer to the forthcoming pathetic NFP #'s (est -50K, actual -80K)

 

2. You see that in the opening hours of London the professional $ Marked the market up significantly to "set the trap" on the would be bulls.

 

Once again proving the VSA theory that with the bad news for the USD looming- if the supply and demand are in the right position- they will use it to their advantage and make the "herd" pay dearly!

 

Could I ask a couple questions regards your post here Sledge please? It’s an interesting view of events.

 

I don’t in any wish to distract this thread or disrupt the flow, but am (casually) curious as to your meanings/definitions on a couple points.

 

What or who is the ‘professional $’ you refer to, & who are these Bulls that they’re setting a trap for?? Are you tick boxing Funds, Leveraged money or 2nd tier accounts here?

 

And what do you mean by “proving the vsa theory” blah blah? In the context of yesterdays pre-NFP activity, what is it supposed to be highlighting? and who are "the herd" ?

 

I'm not attacking your commentary or anything, just curious.

 

You'll have to excuse me, but I've only ever seen this vsa stuff mentioned on retail boards, I don't know any of the heavyweight, serious money who pays attention to this stuff & we speak to quite a few folks over the course of an avg business week.

 

I think you’ll find that the only money playing tag yesterday, especially pre-NFP, was dumb or gambling money. Funds, accounts & serious leveraged players will have jobbed & worked their positions into the box into Thursdays NY trade & wouldn’t be participating again until next week.

 

A good percentage of them have upper (2.0100 to 2.0220) & lower (1.9975 back to 1.9710) boundaries snagged & tagged where the real supply-demand clips lie.

 

Most of the activity inside those vibration channels are jobbing or averaging levers depending on which side of the fulcrum (& their relevant trend) the respective money is geared. But then, there are very different agenda's & scenario's playing out...which makes me wonder bout the validity of all this disecting & autopsy procedures on specific bars etc.

 

Still, whatever gets you thru the day I guess.

 

I’m not suggesting any of your work or research is low key or anything, because I don’t know which angle you’re coming in off, but there was very little activity y’day from the real money. Well certainly not in the cash (spot) mkt anyhow.

[zeon 10]

Last night London Marked the Market up as a primer to the forthcoming pathetic NFP #'s (est -50K, actual -80K)

 

 

...

 

You see that in the opening hours of London the professional $ Marked the market up significantly to "set the trap" on the would be bulls.

 

 

I'm not sure to what extent this was "a trap". This looks like a springboard to me with a typical volume dry-up. I doubt professional money has any knowledge of these figures before the are released...

[DbPhoenix 42]

Db ,

Can you be more precise about the "go" part on these charts-- a preferred entry level?

 

When trying to find a balance between what you call "information risk" and "price risk,"

 

1 Is entry taken at the open of the bar following the retest?

 

2 Or, at the point where the bar following the retest moves above the close of the re-test bar?

 

3 Or, at the point where the bar following the re-test moves above the high of the re-test bar?

 

This isn't an off-the-shelf trading system; it's a way of looking at the market, based primarily on the law of supply and demand and the principles of cause & effect and effort & result. The chief thrust of it is to minimize risk. So your overriding concern should be how you can minimize risk.

 

If you're very aggressive and very good, you can enter off the climax low. But where? And where are you going to place your stop, i.e., what will the market have to do to show you that you were incorrect? What are the probabilities that such an entry will succeed (and you'll have to look at all the instances in which this exact same setup resulted in a losing trade in order to answer that for yourself; these two worked because of the context, or the "background").

 

Or you could enter off the retest. Doing so increases the probabilities that the setup is genuine and that the trade will be successful, in which case wherever you enter is largely irrelevant, though you still have to address the question of what the market has to do to show you that you were incorrect. If the distance to that point is too great for you and you don't yet have the confidence to assume the risk, then you either pass or you sweat. If the latter, then you'll likely exit far earlier than you should in order to halt the anxiety. (In this particular case, going long off a lower low is higher-risk than entering off a higher low; however, if you're monitoring both markets and see that one is making a higher low, as here, that may give you the added confidence to go ahead and take the lower-low trade; if it doesn't, then you're entitled to pass and paper-trade it instead.)

 

You could even wait until price has exceeded the intervening swing high, thinking that this would be the safest point. However, at this point, many professionals are already beginning to sell, or shortly thereafter, and the odds of price returning to your entry point are quite high. Whether or not you hold depends to a large extent on your confidence in the trade (and you won't have any if this is new to you) and in your skill at reading the volume on that retracement to your entry point. (And if anyone recognizes the so-called "Ross Hook" in all of this, very little that is original has been offered since Dunnigan.)

 

The market couldn't care less how you display price, nor does it care where you enter. Keep in mind that price and volume are continuous and that they move in waves. Some people translate those waves into bars, some into candles, some into lines. But even with bars, you can detect changes in pressure from selling to buying and back again, gauging the strength of each, gauging when one or the other becomes exhausted. This is most easily done in real time or thru replay, but it can also be done using EOD charts. People did it for centuries, in fact. But if you view the bar as nothing more than a notation on a page, you'll never get it. That bar/whatever is the consequence of behavior. Understand the behavior.

Edited April 5, 2008 by DbPhoenix

[habi 10]

You're leaving out the most important part: "Thereafter, volume is largely irrelevant. What matters to the trader is whether or not price makes higher highs and higher lows."

 

If you're not getting higher highs and higher lows, then of course volume assumes a much more important role. Taking your example above, there was nothing special about volume until 10:15. At that time, you had what was clearly climactic volume, even though price was at least ten points above support. The blended bars also formed a hammer. Price then rallied and came back down for a retest with a slightly higher low and lower volume, again forming a blended hammer. This was in principle (otherwise I wouldn't bring it up) just the sort of setup one is supposed to take, even though there is no apparent reason for it to take place at that particular level (or at least none that I could see).

 

However, again, once price is in gear and you begin making higher highs and higher lows, volume is largely irrelevant. Only when the momentum begins to curve and price begins to hesitate does one need to pay attention to volume. Even then, though, unless the volume is climactic in nature, the more important focus is demand lines and previous swing points. If price maintains its course, there's no reason to exit. Today, for example, price made it to 83 without ever breaking stride (no pun intended, Wyckoff fans).

 

Db, thanks for your posts, this gives me a much better understanding what you mean, I highliy appreciate this information.

:)

 

And yes Bearbull, I will keep your comments im my brain

[Seb Manby 11]

Come on folks, is this tick-tack on VSA/Wyckoff/Candlesticks really necessary, afterall they all represent price/volume i.e supply/demand pressures, albeit from different angles.

There are some who have studied both Wyckoff and VSA and realise this, however there are others who wish to pursue the VSA path only, and if they are able to read what they post in hindsight with the same degree of efficiency/accuray in realtime, trade with realmoney and are able to keep their cash till ringing that way, fine, that is all that matters at the end of the day.

But you will find that even at Tradeguider, they have difficulty reading the market purely on VSA, that is why their charts are full of other indicators , diamonds, H stops, trendlines, channels, moving averages on vol, volume thermometer, trend clusters (have a look at their archived videos)

Hence if others wish to express their viewpoints via Candlesticks or Wyckoff, what is the problem, why not leave the egos on the mantlepiece for a change and make an attempt to understand other persons viewpoint, otherwise we are going to end up with another VSA thread with over 100 pages still with no clarity in sight, that is why in my previous posts I have requested the Tradeguider Experts to come in and sort this out, rather than make periodic appearances with a video here and there, merely to promote their products and webinars.:helloooo:

Looks like James will have to consider opending VSA III, who knows like those Rocky and Rambo movies we could make it to VSA IX;)

 

Hi Bearbull;

 

I do read the bars individually, and I wish I had more time to contribute to this thread, but I am in Chicago at the moment, and the horizon won't clear until after the 17th. After that I will try to spend more time answering your questions.

 

Best

Sebastian

[DbPhoenix 42]

Db, thanks for your posts, this gives me a much better understanding what you mean, I highliy appreciate this information.

:)

 

Lest there be any misunderstanding about my comments on short-covering, weak hands, etc, though, I sometimes forget that not everyone carries the same baggage when reading this stuff. I don't make "calls", and I'm not calling for higher prices. There's a lot of resistance up here, and too many people are getting too excited about the "double bottom".

 

Up and down aren't the only possible directions. After the initial easy credit thrust in 2003, the market spent two years drifting sideways. Two years. The market could as easily drop back toward the recent lows as work its way toward all-time highs. The key to determining where we are and where we're going will be, as its always been, the relationship between volume and price.

[DbPhoenix 42]

Well habi, you are not going to get these kind of details provided by Db on entries and trade management in any of the tradeguider webinars, bootcamp cd or in their books and it is freely given, with all the negativity directed , another guy would have walked away and not given a toss. This really is the essence of Wyckoff, take my word for it, I have studied both.

 

You really need to pay attention to Db's comments on :

once you are in the trade, then it has to managed via observed higher highs, lows etc along with demand, supply lines and finally vol on violation of these.

There is no point going ga-ga on every twist and turn and forcing to inject meaning into every bar thereafter, the VSA experts are adept at doing just that in hindisight;)

 

While I appreciate the comments, take care that you not paint all the varieties of VSA -- from the original to the latest TG incarnation -- with the same brush. The concepts underlying VSA are sound, even if most of them aren't particularly original, and those are what I address. The various developments and modifications and tweaks over the years haven't made the original approach any better, though they have definitely transformed it into a product. There's a vast difference between teaching somebody how to understand the relationship between volume and the price spread and teaching somebody how to use a software program.

 

I'm not clear on why TG does not have its own thread, but it doesn't, and that's a shame, because, again, the concepts underlying VSA are sound. What TG does with them, however, is something else.