VSA : Crock or Not?

[sdoma 10]

Crock pots (sp)

 

Those who are of the persuasion that VSA is simultaneously working on all time frames, including those that think one can find a pattern on the daily, then drop to an hourly and find a pattern, then go line one up on a 5 min (common timeframes selected for example only) for an entry trigger may be deluding themselves. In my experience, the principles the bb ‘operators’ are applying are only functional for one time frame in each situation. The other patterns that show up above or below the ‘live’ time frame are as ‘random’ as any other indicator.

 

I've actually been thinking about something along these lines, and I think it is possible to free "VSA" from time based analysis to an extent. This sounds weird but bear with me.

 

One thing I like to watch for that you could attribute to VSA or Wyckoff or even MP to an extent is the idea of volume increase and range compression. Now, is this really dependent on chart time frame, or is it something you can watch for as long as your chart is granular enough?

 

for example, I can see this in a one minute chart even if the candle or bar that shows it succinctly is the five or ten minute. I keep an internal tally of sorts on the volume at all time and I am relating it to the amount of movement. If you see the volume on one minute bars increasing and the market has started congesting, it's a tell that people are fading and/or taking profits and this move might have run out of steam for the time being.

 

Just thinking out loud, but the point is that time frame can be irrelevant if you look at it the right way.

[Tasuki 10]

sdoma, next time you see this could you take a snapshot and post the chart? Thanks.

[Bearbull 10]

. Even the Wyckoff disciples cannot provide clear rules that everyone looking at the same chart will make them come to the same conclusion. Does this mean that Wyckoff doesn't work either? Actually, since BearBull pointed out that VSA is nothing but borrowed concepts from Wyckoff and is just new jargon, this implies that Wyckoff is crock too if VSA is. I mean, how can Wyckoff "works" and VSA not if they really are the same thing with different names? And that implication is even nominated for the topic of the month by our own Wyckoff expert!

 

You really need to take lessons in logic, as you obviously have little apprehension of how to apply it.

Plus learn to examine each sentence carefully before jumping up and responding like a kid.

For a start , go and study wyckoff material on the wyckoff forum , how many times do we have to point out to you, that wyckoff has showed how markets work (laws of supply/demand etc) and how traders interact and how price action via price/vol gains relevance at relevant support/resistance, trendlines etc. All this is presented in a systematic/methodical manner by Wyckoff in his course and one of the chapters has been freely given by Dbphoenix in the Wyckoff forum.

 

Next you have been told that some of the concepts have been borrowed from Wyckoff and layers over with unnecessary jargon, this jargon is not from wyckoff but invented by VSA gurus and can be considered as crock and not the original source. Simple

Hope you get it now:crap:

[Bearbull 10]

The laws of supply/demand, effort/result, cause/effect as outlined by Wyckoff are immutable and apply to all markets, all charts, any timeframe, as to why two traders interprete a chart differently is not Wyckoff's problems, it depends entirely on how much effort and research they have each put in to study the principles and develop the skills to read and interpret price action and in the right context.

 

The price spread and volume gain importance in Wyckoff as the price approaches relevant support/resistance levels. Willaims studied some of this stuff and came up with Volume Spread Analysis (spread of the price bar) and is now being branded around as something profoundly cosmic and new, hence we have 300 pages of illustrations and still little understanding of consistent application for the signals vary depending on which timeframe chart one is looking at (compare any 30min, 15min, 5min or 1min or 5sec chart) On the other hand Wyckoff price action is independent of the timeframe. This crucial factor is totally misunderstood.:crap:

[zdo 20]

... it's a tell that people are fading and/or taking profits and this move might have run out of steam for the time being... but the point is that time frame can be irrelevant if you look at it the right way.

 

sdoma,

 

Excellent observations and description of that dynamic! Not that pertinent to classic / theoretical VSA bb operations but still I appreciate your insights. Btw, Bearbull, the following addresses your most recent comments. Not to the same extent but, imo, these following comments could apply to Wycoff patterns as well...

My point was that the real ‘tracks’ of bb’s operations only put in an appearance on one time frame, all the other concurrent (or not) tracks that happen to show up on the timeframes above and below are incidental. So while VSA is as theoretically sound as, say, more generalized ‘Wycoff’, assuming and teaching that every ‘tell’ on every time frame is indicative of the current campaign in play is crock

 

re your observations - What percentage of occurences do you find your volume studies on compressing range bars to be contrary to non volume based ‘indications’ on same compressing range bars?

 

zdo

[Bearbull 10]

sdoma,

 

Excellent observations and description of that dynamic! Not that pertinent to classic / theoretical VSA bb operations but still I appreciate your insights. Btw, Bearbull, the following addresses your most recent comments. Not to the same extent but, imo, these following comments could apply to Wycoff patterns as well...

 

zdo

 

There are no pattern trading per se in Wyckoff, it is a study in market and trader behavior which can manifest repeatedly in certain patterns and the principles operate in any timeframe.

Also there is no such jargon as smart/dumb money and for that matter any cutesy terms:crap: once again just refer to all the material posted on the wyckoff forum, it is all there in plain language.

[zdo 20]

bb

 

... was not attacking or making you wrong

 

... was speaking very generally

 

... in this thread not required to adhere to wycoff threads jargon rules

[Bearbull 10]

bb

 

... was not attacking or making you wrong

QUOTE]

 

Yes I know that:) I was trying to make a general statement as well, Wyckoff is not about what "Works" and what does "Not Work" as has been pointed out a number of times now.

 

Anyway enough of this, have better things to do.

[sdoma 10]

Also there is no such jargon as smart/dumb money and for that matter any cutesy terms:crap: once again just refer to all the material posted on the wyckoff forum, it is all there in plain language.

 

Wyckoff has jargon, come on. There are alternate definitions of jargon, I am using the term to mean technical terminology used within a group.

 

For example, a Wyckoff spring, or the Composite Man. I often call the market a hive mind or collective intelligence, it's all the same thing, but you need a term for it.

[BlowFish 10]

As I have pointed out repeatedly, though VSA is based on Wyckoff, they are not the same thing, any more than a lunar rover is the same as a tricycle. Beyond that, the idea of "works" is irrelevant to Wyckoff.

 

Could you elucidate (I am not being facetious ). Is this because Wyckoff dosen't 'predict' that it can not be demonstrated to 'work' or 'not work'?

[BlowFish 10]

You really need to take lessons in logic, as you obviously have little apprehension of how to apply it.

Plus learn to examine each sentence carefully before jumping up and responding like a kid.

For a start , go and study wyckoff material on the wyckoff forum , how many times do we have to point out to you, that wyckoff has showed how markets work (laws of supply/demand etc) and how traders interact and how price action via price/vol gains relevance at relevant support/resistance, trendlines etc. All this is presented in a systematic/methodical manner by Wyckoff in his course and one of the chapters has been freely given by Dbphoenix in the Wyckoff forum.

 

Next you have been told that some of the concepts have been borrowed from Wyckoff and layers over with unnecessary jargon, this jargon is not from wyckoff but invented by VSA gurus and can be considered as crock and not the original source. Simple

Hope you get it now:crap:

 

One could argue that both Wyckoff and VSA are based on the same 'fundamental laws of supply and demand'. In my opinion (and it is just an opinion) VSA 'borrows' from Wyckoffs work but purports to be based on the same fundamental laws. Williams makes no secret of this of course it is clearly stated ad nauseam in the early stages of his book. Wyckoff obviously made a great contribution to this form of analysis, but didn't 'invent supply and demand'.

 

'Pointing out something' doesn't give it more veracity, really all this stuff requires a leap of faith to some degree. Of course presenting it consistently over the years can help people make this leap. The VSA boys could claim the same that in and of itself does not make one more 'correct'.

 

I wonder if the question asked in this thread should be 'laws of supply and demand crock or not?' Personally, I have accepted them as a fundamental truth. There have been several discussions of this over the years but they tend to draw less interest. i think most people accept it (supply/demand).

 

The next question that should be asked is "VSA, a useful framework to examine supply and demand in the market?". That self same question could be asked of Wycoff's material.

 

Tradeguider have raised the profile of VSA but destroyed its credibility at the same time, a double edged sword. One of the things tradeguider have done is 'jargonise' things and big up all this 'smart money' BS. It's a shame as I think some of (the few) principles have merit and are quite complementary to Wycoffs work. Really, in a nutshell, VSA tries to identify and quantify the patterns of supply and demand. Broadly the 'jargon' is the same as Wycoff introduced but VSA introduces a couple of extra terms how are things like 'no demand' jargon but 'test' is not?

 

Anyway I am not particularly pro or anti but it is important to be even handed and apply the same criteria for evaluation as you would any other method. Unfortunately since TG got involved that means stripping away several layers of BS to discover if there is a pearl at the centre.

[Head2k 10]

'Pointing out something' doesn't give it more veracity, really all this stuff requires a leap of faith to some degree. Of course presenting it consistently over the years can help people make this leap. The VSA boys could claim the same that in and of itself does not make one more 'correct'.

 

I wonder if the question asked in this thread should be 'laws of supply and demand crock or not?' Personally, I have accepted them as a fundamental truth. There have been several discussions of this over the years but they tend to draw less interest. i think most people accept it (supply/demand).

I dont think that the law of (expressed) supply/demand needs any kind of faith. It is logical law based on how markets work, or market microstructure.

One could argue that both Wyckoff and VSA are based on the same 'fundamental laws of supply and demand'. In my opinion (and it is just an opinion) VSA 'borrows' from Wyckoffs work but purports to be based on the same fundamental laws. Williams makes no secret of this of course it is clearly stated ad nauseam in the early stages of his book. Wyckoff obviously made a great contribution to this form of analysis, but didn't 'invent supply and demand'.

While both Wyckoff methodology and VSA are based on the same roots they differ in approach to these roots. Wyckoff points out merely principles and guides, while VSA tries for semi-mechanical approach based on bar-after-bar, and is more oriented on concrete signals. I think VSA is an attempt to transform Wyckoff to concrete semi or fully mechanical setups. Then bar-to-bar analysis and extra terminology for defining nuances is a must. But I think this attempt has failed, because it is simply wrong even in its idea. In the end VSA brings more confusion to Wyckoff than good things.

All IMHO, of course. I am not an expeienced VSA practitioner nor experienced Wyckoff practitioner.

[BlowFish 10]

I would agree Head. This is further evidenced by Williams obvious interest in computerisation.

[zdo 20]

crock part? BigBoys (hereinafter referred to as bb’s) .

I don’t really know what Wycoff’s position is on bb’s. I do know he lived in a time of blatant ‘operators’, but whether he ‘controlled’ for that (in the scientific experiment use of the term) or participated / capitalized on it - I don’t know. We do know for sure that vsar Williams started with a strong ‘syndicate / operator’ campaign orientation. Might vsars, including Williams himself, have unconsciously turned what was to be a way of identifying ‘campaigns’ into a ‘simple’ trading technique? That gradually, users (both wetwired and computerized) are ‘crocking’ up the underlying premises of vsar ?

 

In this forum; s&d posters, db in particular, have made a good case over and over that the “who” doesn’t matter – or more accurately perhaps, that knowing the ‘who’ is not necessary to trade s&d. For general trades, I can buy that. Activity is activity - especially for short holding periods. But having observed in real crazy people that there is some truth underlying each paranoia… I wonder ??? Here is a story…

 

Arriving at the Exchange amid frantic speculation on the outcome of the battle, Nathan took up his usual position beside the famous 'Rothschild Pillar.' Without a sign of emotion, without the slightest change of facial expression the stony-faced, flint eyed chief of the House of Rothschild gave a predetermined signal to his agents who were stationed nearby.

Rothschild agents immediately began to dump consuls on the market. As hundred of thousands of dollars worth of consuls poured onto the market their value started to slide. Then they began to plummet.

Nathan continued to lean against 'his' pillar, emotionless, expressionless. He continued to sell, and sell and sell. Consuls kept on falling. Word began to sweep through the Stock Exchange: "Rothschild knows." "Rothschild knows." "Wellington has lost at Waterloo."

The selling turned into a panic as people rushed to unload their 'worthless' consuls or paper money for gold and silver in the hope of retaining at least part of their wealth. Consuls continued their nosedive towards oblivion. After several hours of feverish trading the consul lay in ruins. It was selling for about five cents on the dollar.

Nathan Rothschild, emotionless as ever, still leaned against his pillar. He continued to give subtle signals. But these signals were different. They were so subtly different that only the highly trained Rothschild agents could detect the change. On the cue from their boss, dozens of Rothschild agents made their way to the order desks around the Exchange and bought every consul in sight for just a 'song'!

 

http://www.rumormillnews.com/cgi-bin/archive.cgi/noframes/read/39506

[darthtrader2.0 10]

crock part? BigBoys (hereinafter referred to as bb’s) .

I don’t really know what Wycoff’s position is on bb’s. I do know he lived in a time of blatant ‘operators’, but whether he ‘controlled’ for that (in the scientific experiment use of the term) or participated / capitalized on it - I don’t know. We do know for sure that vsar Williams started with a strong ‘syndicate / operator’ campaign orientation. Might vsars, including Williams himself, have unconsciously turned what was to be a way of identifying ‘campaigns’ into a ‘simple’ trading technique? That gradually, users (both wetwired and computerized) are ‘crocking’ up the underlying premises of vsar ?

 

My problem with all this stuff is that its viewing the micro structure in a form that simply has nothing to do with reality at this point.

With fragmentation and millisecond algo execution, the size of of a print contains literally no information about the size of the capital behind the trade.

The ironic thing to me with all this is a 30 lot YM print is probly "dumber" money than alot of the machine gun single prints, because alot of the single prints are guys like Rentech doing their thing.

I really can't see how it makes sense to operate from the idea of "operators" or "Syndicates"...we don't trade in a world of Goldman and Rentech colluding to take traders on traderslaboratory.com's money..We trade in a world of Goldman, Rentech and a bunch of other 5 ton elephants trying to take eachothers money, we are all just in the way of that battle and either get stepped on without notice or pick up a few scraps off the table without notice.

Even if everyone on this board pooled their money, our "syndicate" would get utterly destroyed if it tried to play games with the market.

[BlowFish 10]

My problem with all this stuff is that its viewing the micro structure in a form that simply has nothing to do with reality at this point.

With fragmentation and millisecond algo execution, the size of of a print contains literally no information about the size of the capital behind the trade.

 

VSA samples the data and makes comparison to previous samples. Lots of trading approaches do this in some way or other. So for example at one extreme you would compare this months (or years) volume and spread with the last couple. VSA does not deal with absolute values but relative values. Tick by tick data has no range, but VSA absolutely requires range. Of course what size sample period makes sense to each trader is another matter. You would need to ask 'is an X period sample sensible to look at with regards to drawing meaningful conclusions about range and volume'. Not many would disagree that a daily or weekly sample period is 'meaningful'.

 

 

P.S. youve been kinda quite lately Darth what have you been working on?

[Bearbull 10]

Well Blowfish, you are in luck .

Incase you did not receive the latest email, with archived video of yesterday

Another master seminar to be held in March in Chicago, first day 18 setups will be revealed, and 2nd day, wait for it........

 

folks will be separated in groups of 10, then given a computer with a demo account of $20k to trade and those who win the most paper trading will be win special prizes. Isn't that absolutely wonderful:cool:

 

You will then be unleashed on the unsuspecting trading world, armed with the super duper knowledge of how the professional/dumb money works and rack in the dosh;)

So Hurry, do not miss this once in a lifetime opportunity. if you missed the previous one of Las Vegas.

[HAKUNA 10]

It is better to get hold of Bootcamp CD and London symposium DVD if you can at a discounted price from anybody willing to sell , ebay might be worth checking,(mine are already sold) all the necessary info. is there , then ignore all the email promotions and spend time on the screen, forget the software.

[samhollander 10]

I believe there is a link on the VSA thread to Sebastian Manbys videos [on Elite trader site]

[HAKUNA 10]

Manby alas attempts to analyse every bar on the chart, sound good on hindsight charts but when he tried it on realtime, it was 50/50 at best.

Price/Volume via VSA/Wyckoff has value at relevant support/resistance levels, rest of the time price is travelling from one level to the other and trying to read meaning into every bar is pretty futile.

[VolumeJedi 10]

Manby alas attempts to analyse every bar on the chart, sound good on hindsight charts but when he tried it on realtime, it was 50/50 at best.

Price/Volume via VSA/Wyckoff has value at relevant support/resistance levels, rest of the time price is travelling from one level to the other and trying to read meaning into every bar is pretty futile.

 

 

6Ws and 6Ls will get you into a bowl game.

 

Batting .500 will get you into the Hall of Fame. (batting .300 will get you in-that's NOT getting a hit 7 out of 10 times).

 

It is not about being right; it's about winning big when you are right and getting out quickly when you appear to be wrong.

Edited January 8, 2009 by VolumeJedi

[samhollander 10]

Well, I guess my search for the "Grail" continues.Back to 3 MA, Bol. Bands, Macd, Stochastics.

[DbPhoenix 42]

6Ws and 6Ls will get you into a bowl game.

 

Batting .500 will get you into the Hall of Fame. (batting .300 will get you in-that's NOT getting a hit 7 out of 10 times).

 

It is not about being right; it's about winning big when you are right and getting out quickly when you appear to be wrong.

 

I could be wrong, but I believe the point that Hakuna is trying to make is that if superior hindsight analysis cannot be translated into trading the hard right edge, then there is likely a disconnect somewhere.

[jjthetrader 10]

I could be wrong, but I believe the point that Hakuna is trying to make is that if superior hindsight analysis cannot be translated into trading the hard right edge, then there is likely a disconnect somewhere.

 

Yes, and like you have said before DB, Wyckoff never did the bar by bar thing. I wonder if the original VSA did either. I don't recall Todd Kruger teaching bar by bar or Tom Williams. They point out bars of interest but I think it's Sebastian who's brought his own style in and made TradeGuiders VSA bar by bar.

I think this thread should more aptly be called "TradeGuiders version of VSA: Crock or Not?"

I think those that have found VSA to be so helpful have also found a different way to apply it than tradeguider does. I use it everyday but I don't do bar by bar analysis. So maybe it's not VSA I'm using at all.

[Tasuki 10]

jj, I like that idea: "Tradeguider's version of VSA, crock or not?" Yup, that seems to make sense. Believe it or not, but this sceptic (yours truely) has recently been successful in applying VSA principles, but NOT bar-by-bar. That's beyond me. The bars-of-interest does seem to work, however.

Taz