[VSA] Volume Spread Analysis Part II

[jjthetrader 10]

hi jjthetrader

 

 

sorry for not post the image. Looks like your image is the correct point. It was the previous top, yesterday (23/12) 1 hour time frame. 08:00 GMT bar.

 

and i need to say that talking in private with another VSA expert (from another forum) i am even more confuse. So, please help me. :crap:

 

thanks for reply.

 

Ok, I finally found the bar you're talking about. Pleae post a chart next time you have a question. Yes a spike came in at 3am EST. I wouldn't call this the best setup of the day.

Again, not sure what you're actually asking. You thought a selling climax came in there? Technically the next bar should be down to indicate a selling climax. This had the following bar up. It wasn't actually a no demand becuase the volume wasn't less than the previous two. There was less demand but still a bit of momentub buying I imagine.

Please ask what you'd like to know specifically and someone may be able to help you out.

[samhollander 10]

:)Sledge, I see that you mentioned "bootcamp" in one of your posts.Can you enlighten me on this.Is it a course?

[HAKUNA 10]

Bootcamp is a recorded CD of a seminar held on 2 saturdays over 4-5yrs back when Todd Krugger was the main tutor at Tradeguider.

[samhollander 10]

Please see todays ES video. Thanks

 

The videos with discription is the way to go.As someone who has just opened the door to VSA.

[VolumeJedi 10]

Not trading at this time of day or this time of the year. However, I continue to watch the market. While watching the market there was a beautiful set up here.

 

WARNING: FOREX HAS NO VOLUME, SO THIS CAN'T WORK

 

Just kidding.

 

Some background information. The first thing to note is that the trend is down. We know the trend is down as price is below the Volume Weighted Average Price (VWAP). Those that have read Jerry's super threads will note that skew exists to the upside as the VWAP is above the PVP. The primary concept at this point would be to only take longs (trade in the direction of the skew). There is a lot more to it than that. Please see his threads for more information. Here, the trade is based on the trend, which as previously noted, is down because price is below the VWAP.

 

A: At A we see a somewhat wide spread down bar on ultra high volume. Bars like this usually mean selling. This is confirmed as the next bar is down. This bar is an effort to fall bar. When strength appears, it appears on down bars, but in this case the down bar is weak. The ultra high volume should get our attention though.

 

B: The next bar closes down on even higher volume than A. But look at the differences.

 

1. It closes higher off its low than A closes of its low.

2. The next bar is up.

 

The increased volume closing off the lows with the next bar up are sure signs of strength (demand) entering the market.

 

C: Narrow range up bar on equal (Ultra High) volume. This is a form of squat. The narrow range tells us that something is keeping the range narrow: over head supply (weakness).

 

D: Narrow range up bar on volume less than the previous two bars. This is no demand. We note that this also a NR4 bar making a higher high and not a lower low. In other words, a Dunnigan bar. We also note that the BBs are not interested in higher prices as we move up towards the Peak Volume Price (PVP). It's time to get short:

 

1. The trend is down.

2. We see an up bar on low volume. This gives us a low volume bar in the range of a high volume bar. This price area brought in buyers the first time, but is now failing to do so.

3. Price is finding overhead resistance at the PVP Hold Up Price (HUP).

 

What's our price target? Well, it would be SD-1. This is the first standard deviation of the VWAP and another HUP. There are a couple of HUPs before then in the form of VWAPw (5 day/weekly) and VWAP2w (10 day/ 2 week), but the target should still be at SD-1.

 

Where can we place a stop? The logical place to do so would be at the VWAP. Personally, I do not believe in adding to a losing position. So the VWAP is a good stop and not a place to look to be scaling in.

 

Price slides through the 2 VWAPs and does indeed get held up at SD-1. Volume spread analysis and Volume distribution statistics....but this is forex. LOL

[Marsupilami 10]

 

WARNING: FOREX HAS NO VOLUME, SO THIS CAN'T WORK

 

Just kidding.

 

 

VolumeJedi,

 

I don't use the TG software, is there a way of showing "tick volume" for e.g. the S&P E-Mini futures ? This way, one could compare both volumes to another and see whether the number of ticks per bar is an adequate substitute for real volume.

 

I use Metatrader for FX and it does show tick volume, but I have a feeling it's not very reliable as almost every wide spread bar has a high tick volume.

 

Thank you and Happy New Year,

Mars

[VolumeJedi 10]

" Under-trading in both size and frequency."

 

Many traders strive (correctly) to under trade in both size and frequency. The focus here is on the latter.

 

One way to under trade in frequency is to employ a method that does not generate signals very often. One can define certain trade set-ups that have minute details that rarely happen. The thought being , the more rare the situation, the better the result will be. If a market is doing something it usually does, then the result should be usual. But if the market is doing something it rarely does, then the result should be exceptional.

 

Another way to under trade in frequency is simply to become comfortable being in the market. As Jesse Livermore said, "Being right and sitting tight; that's where the money is".

 

This trade developed over a rather long stretch of time. Again this was a New Year's Eve "called" trade and not a trade taken.

 

The first chart shows the set up and the second shows the result.

 

Like so many VSA set ups, we start with an ultra wide spread bar on ultra high volume. At the time the volume was the highest that can be seen on the chart. But the next bar is up and not down. Also there are some tops to the left so this could be pushing thru supply. If it is, the market will test immediately. The next bar has even more volume as the range narrows. This is a squat. This signals supply (weakness) on both this bar and the prior bar. The next bar is even narrower and the volume is higher. Another squat. Something is keeping the range of the last two bars narrow. Could it be over head supply?

 

The next bar is down and on volume less than the previous two (actually three) bars. Is this no supply? We have seen a lot of weakness on the last three bars, this should be ignored. What we really want to see to get long is a test. A down bar closing near its high on volume less than the previous two bars. This was not a test. The next bar is labeled as an up thrust. In fact it is an up thrust in the form of no demand. Note that it makes a higher high, closes up, and closes near its low. All attributes of an up thrust. But look at the volume. It is less than the previous two bars. That means this up bar on volume less then the previous two is also a no demand bar.

 

The most aggressive might take a short here on the up thrust (in the form of no demand). Currently we are being supported by VWAP3d, but what we are looking for is another up bar on even less volume. That is, another no demand to enter.

 

We don't get that just yet. Instead price does move down. Did we miss our opportunity? The wide spread bar that takes price down is an effort to fall. The next bar has some demand (strength) in it as price closes down on very high volume and closes near its high. This strength takes us right where we want to go: the VWAPd. At this Hold Up Price (HUP) we get a narrow range (NR7) up bar closing near the middle of its range on volume less than the previous two bars. This is no demand fails to make a higher high than the previous bar and is nestled up against the VWAP.

 

The Shapiro Effect tells us that if a trade looks good on one bar it should look good on the next bar. In practice this would mean looking for a violation of the low of the no demand bar. But here in the VSA thread this is called JJ's completion bar concept. . The next does indeed complete the no demand, adhere to the Shapiro Effect and bring us into the market.

 

Here is where being comfortable being in the market takes effect.

 

The second pic shows how long we have to actually wait for this trade to move in our favor. Note that price never moves against us and never move beyond the Yellow line, but the lack of movement in either direction can be too much for some to sit through. For those who have not yet entered, there are a few chances to get on board as we see narrow range up bars on volume less than the previous two bars: no demand. If you are already in the trade, theses signs of weakness give you comfort.

 

As the market is on its own timeframe and not any individual trader’s, price moves sideways and then in on fell swoop, rockets down to our price target more than an hour after our entry. Being right and sitting tight, is indeed where the money is.

[samhollander 10]

Jeddi, thanks. Trying to get a handle on VSA,Wyckoff.

[Tasuki 10]

towards the Peak Volume Price (PVP).

... Price is finding overhead resistance at the PVP Hold Up Price (HUP).

LOL

 

VJ,

Your teaching skills are exceeded only by your trading skills. Could you please define for us the PVP and HUP?

Also, (this might be a bigger question) you mentioned in a previous post that there are 9 types of tests. I can only think of two---failed ones and successful ones. What are the others? Do failure tests come in different flavors, or is it only successful tests have different characteristics?

Thanks, Taz

[Tasuki 10]

To anyone,

 

Whatever happened to Todd Krueger? The top Google searches of his name describes an NFL Quarterback, and a doll maker (!). Below that is a link saying that TK is the CEO of TG, and below that is a link to a lawsuit between TK and TG. Curious what gives. Is he still in the business?

Tx, Taz

[VolumeJedi 10]

To anyone,

 

Whatever happened to Todd Krueger? The top Google searches of his name describes an NFL Quarterback, and a doll maker (!). Below that is a link saying that TK is the CEO of TG, and below that is a link to a lawsuit between TK and TG. Curious what gives. Is he still in the business?

Tx, Taz

 

I was just thinking the same thing.

[VolumeJedi 10]

VJ,

Your teaching skills are exceeded only by your trading skills. Could you please define for us the PVP and HUP?

 

The place to get the definitions is in the Market Statistics threads by JPearl. The PVP is what many call the Poc (Point of control) in Market Profile. PVP stands for Peak Volume Price. HUPs, Hold Up Prices, are places where the market tends to stall, reverse, possibly bounce, and sometimes ignore. They cover static areas like Yesterday's high or low, or S1,S2. HUPs are also dynamic areas like VWAPs and SDs of the various VWAPs.

 

I have been using the dynamic HUPs in a static fashion. That is, my HUPs while based on the dynamic VWAPS do not change throughout the day. They are measured at the end of the day and projected forward like one would do with pivot points.

 

 

... Also, (this might be a bigger question) you mentioned in a previous post that there are 9 types of tests. I can only think of two---failed ones and successful ones. What are the others? Do failure tests come in different flavors, or is it only successful tests have different characteristics?

Thanks, Taz

 

I recently watched a TG video where a Wyckoff expert asserted that there are 9 tests. In another video Tom himself echoes that there are 9 types of tests. Unfortunately, neither goes into depth about each 9. But one is a narrow range down bar, closing on its high with volume less than the previous two bars. Another type of test actually closes up, and has volume less than the previous two bars, and with a narrow range that trades lower than the previous bar. Eiger is the resident Wyckoffian here so maybe he can illuminate us on all 9.

[Tasuki 10]

 

I have been using the dynamic HUPs in a static fashion. That is, my HUPs while based on the dynamic VWAPS do not change throughout the day. They are measured at the end of the day and projected forward like one would do with pivot points.

 

.

 

 

Thanks for all the great info. So, if I'm understanding the dynamic/static HUP that you're using based on VWAP, let me see if I can recapitulate:

At the end of the trading day, the VWAP and its various Standard Deviation values get fixed at various values above and below the last price traded as the trading day closes. Then, for the next trading day, you take the fixed values of SD1, SD2, VWAP, SD3 SD4, etc from the previous day's close, and use these values as horizontal lines of S/R on your chart as the next days' trading unfolds. Have I got that right?

[VolumeJedi 10]

Thanks for all the great info. So, if I'm understanding the dynamic/static HUP that you're using based on VWAP, let me see if I can recapitulate:

At the end of the trading day, the VWAP and its various Standard Deviation values get fixed at various values above and below the last price traded as the trading day closes. Then, for the next trading day, you take the fixed values of SD1, SD2, VWAP, SD3 SD4, etc from the previous day's close, and use these values as horizontal lines of S/R on your chart as the next days' trading unfolds. Have I got that right?

 

Correct. At 1700 EST the values are taken and plotted "forward" just as you would calculate the floor pivots at the close and plot them for the next day. Actually, it is the value at 1700 that is used, you can plot them anytime before the next day, but they continually update (which is how they are presented by JPearl).

 

I should note that I said they continue to update after the close. I am speaking of 24 hr market like forex. If you trade the E-mini, the you could choose to ignore the globex session all together.

[HAKUNA 10]

To anyone,

 

Whatever happened to Todd Krueger? The top Google searches of his name describes an NFL Quarterback, and a doll maker (!). Below that is a link saying that TK is the CEO of TG, and below that is a link to a lawsuit between TK and TG. Curious what gives. Is he still in the business?

Tx, Taz

 

Todd Krugger was the main Tutor with VSA and also a real time trader, largely responsible for promoting and marketing the company. GH was all mouth but owns rights to TG, and Todd had bought a slice of it. Tom W. is a chairman only in name.

Todd was preparing an advanced course in VSA I believe and then due to ego clash with GH, was left out in the cold, hence was suing the company for rights to the course. So Sebastian has been brought in now(initially he was sidelined for Todd ) don't think he will last long as GH has already got his brother and wife on board, plus a guy from Australia etc, pure marketing and a right circus as couple of others have pointed out.

[kuky969 10]

In attached document you can find a few words about Wyckoff nine tests ( from page 8)

MTA_Journal_Issue_44_Coppola.pdf

[larsdelgars 10]

did a quick search of the archives and located this...

 

Wyckoff Tests - Nine Classic Tests for Accumulation (Pruden)

Wyckoff Tests - Nine Classic Tests for Accumulation (Pruden).pdf

[Tasuki 10]

Todd Krugger was the main Tutor with VSA and also a real time trader, largely responsible for promoting and marketing the company. GH was all mouth but owns rights to TG, and Todd had bought a slice of it. Tom W. is a chairman only in name.

Todd was preparing an advanced course in VSA I believe and then due to ego clash with GH, was left out in the cold, hence was suing the company for rights to the course. So Sebastian has been brought in now(initially he was sidelined for Todd ) don't think he will last long as GH has already got his brother and wife on board, plus a guy from Australia etc, pure marketing and a right circus as couple of others have pointed out.

 

Thanks, Hakuna. This still leaves the question as to what Todd is doing now (when he's not in court). He had told me something about striking out on his own, starting a new advisory service which blended VSA and other techniques, but I've heard nothing more about it, or about him (unless he's gone into the business of making miniature fantasy dolls......

[Tasuki 10]

In attached document you can find a few words about Wyckoff nine tests ( from page 8)

 

Well this was an eye-opener. If there's such a thing as a Wyckoff Foundation, they should definitely sue Tom Williams and Tradeguider for intellecual property theft. Every single Tradeguider term is there, but this article presents the Wyckoff method in such a way that it appears that Wyckoff takes a "birds-eye view" approach, rather than the bar-by-bar approach which gets so many VSA people in trouble. Frankly, if this article is representative of Wyckoff's material, it should be required reading for anyone interested in VSA. I know I'm gonna check it out.

[BlowFish 10]

Thanks, Hakuna. This still leaves the question as to what Todd is doing now (when he's not in court). He had told me something about striking out on his own, starting a new advisory service which blended VSA and other techniques, but I've heard nothing more about it, or about him (unless he's gone into the business of making miniature fantasy dolls......

 

Or perhaps hes just trading!<gasp>!

[HAKUNA 10]

Thanks, Hakuna. This still leaves the question as to what Todd is doing now (when he's not in court). He had told me something about striking out on his own, starting a new advisory service which blended VSA and other techniques, but I've heard nothing more about it, or about him (unless he's gone into the business of making miniature fantasy dolls......

 

Think the last time I heard, he was suing TG for copyright to his course which included all his material i.e. playing field, multiple time frame etc , which he wants to publish independently, but doubt if TG will let him do that, think Manby is taking up where Todd left off, you can call him perhaps.

Anyway all this is really irrelevant to trading with VSA principles, thankfully they operate in the market without any dependancy on personalities:)

[BlowFish 10]

Well he appears to have been writing. http://www.traderslaboratory.com/forums/f104/follow-the-smart-let-candles-and-5211.html

 

Hakuna, It could be argued that that TG are irrelevant to trading with VSA principles. (if you are mischievous ) On the one hand TG have brought VSA into the limelight on the other they have tarnished it's credibility with all there 'colourful' marketing claims. Personally I am not thankful they operate at all as the damage far out weighs the benefits imo.

Edited January 6, 2009 by BlowFish

[tawe trader 10]

BF, thanks for the link to Todd's recent post. Has he 'invented' a new form of TA ....... WCVA - Wyckoff candle volume analysis ????

 

I look forward to seeing his new website up-and-running:- http://www.traderscode.com

 

Personally, I still like only HLC bars on my charts and the candlestick Doji's that Todd's has highlighted can be spotted fairly easily on intraday HLC charts. The bars close will be at a similar level to the previous bars close.

[BlowFish 10]

I am not sure...time will tell no doubt.

 

I too like HLC you get to see the result of the struggle over the time period of the bar. Close (in reference to something else) is probably the most important price. If it is at the hard right edge that is the price. I do quite like candles to see price rejection...long wicks jump out at you, having said that you can see it with HLC. Mind you just reducing the number of bars you have on a chart or manipulating chart scaling changes perception. Visualisation is an interesting topic in its own right. I think candles do visually emphasise things but whether that adds clarity is down to individual perception.

[CandleWhisperer 10]

I don't want to toot my own horn but..........

 

TOOT!!!!!!!! TOOT!!!!!!!!!!!! LOL.

 

PP and I have talked about the power of a no demand that is also a doji for a long time. Will he dare to mention WRBs next?