VSA Entries and Stops

[Sanook 10]

Hello,

 

I've been looking into VSA for a few months now. I find the story VSA tells of what's happening on a chart quite fascinating, but I'm still yet to find any solid agreement on how to actually trade VSA.

 

Even watching the videos TG have put out, the story is wonderful, and it all makes sense on the left side of the chart, but I often ask myself where's the actual trade? Where do you enter and where do you place the stop on the right edge?

 

When I try to answer this, I usually get caught in no demand after no demand, perplexed as to which one is actually the trigger. Or an upthrust that a few bars later is taken out by another higher upthrust. Similar to what happens with basic price action trading and death by a thousand stops.

 

Would any VSA traders be kind enough to post some real trades in this thread, or show some options to consider before making a trade.

 

Thanks.

[Eiger 10]

There have been numerous live trades, options, and considerations shown on the main VSA thread here: http://www.traderslaboratory.com/forums/f151/vsa-volume-spread-analysis-part-ii-3428.html. Yesterday, I detailed both considerations and entry options here: http://www.traderslaboratory.com/forums/f151/pure-vsa-5357.html.

 

Why not take the bold step and post a chart or two where you were confused in pulling the trigger. People here will be glad to help you. But, without the context, it's hard to respond in a way that will be helpful for you.

 

Eiger

[Sanook 10]

Thanks Eiger,

 

I'll put some charts together.

 

Meanwhile, you (or anybody else) could greatly clear something up for me by answering this. On your first 3-minute ES chart from the recent Pure VSA thread, you say, 'Good locations to initiate shorts were at F, G & H.

 

Could you explain why C, the no demand bar, is also not a good location to short. If I could finally get my head around this problem of seeing no demand bars and instantly thinking short, I'll be making progress.

 

With regards to F, would I be correct in thinking that you'd enter a tick below and place the stop a tick above.

 

With regards to G and H, I'll assume again entry is a tick below, but is the stop placed above G and H, or is it left above F. I personally would leave it above F, but if that is seen as being unnecessary then I'll reconsider.

 

Thanks.

[Eiger 10]

Hi Sanook,

 

I posted an answer to your questions on the Pure VSA thread, as your questions pertianed to the post and charts on that thread.

 

Eiger

[Sanook 10]

Why not take the bold step and post a chart or two where you were confused in pulling the trigger. People here will be glad to help you. But, without the context, it's hard to respond in a way that will be helpful for you.

 

Eiger

 

There are a few things that confuse me on this 15m chart.

 

1. I'm reading and re-reading MTM, but I still don't really get the entries. All I can see on this chart are the two no supply bars. The first is maybe not great as it closes on it's lows, but the second one looks valid. Even placing a stop behind the high volume down bar would result in a loss. The only other entry I see, but I'm not convinced in the slightest, is the green arrow that could be a test.

 

I see these high volume bars quite often now and what they often lead to. As Tom Williams has called it recently in the VSA webinars, it's this 'churning' period after that totally confuses me. The only solution I can see is to not actually use a stop.

 

2. Again, from the recent VSA webinars, both Tom and Sebastian have said that the bar I have marked is not no demand, as there is strength in the background. However, re-reading the VSA 1 and 2 threads here, it is often stated that these bars are no demand. Quite confusing.

 

3. Again, from the VSA 1 and 2 threads here. Is it standard practice to place these S/R levels that are derived from the wide range bars? I have used one and the green arrow bar does seem to react to it. Is this just coincidence?

 

Thanks.

[Eiger 10]

Here's a quick response to your chart & questions:

 

A - Climactic action - highest volume, wide spread close off the lows at the end of an accelerating downtrend

 

No Demand? Yes, this is technically a No Demand bar as it is an up bar that has volume less than the previous two bars. However (and this is the important point), it occurs after potenetial strength, i.e., the selling climax. No Demand and Test bars occur all over the charts. They must be in the right place to be significant. Always, always, always look to the background first. When there is a SOW in the background, we look for No Demand. When there is a SOS in the background, we discount No Demands

 

1 - market reacts into the high volume area of A and is unable to draw supply - bullish.

 

2 - wide spread up bar close on the highs on strong volume - bullish.

 

B - A higher high is put in - bullish.

 

C & D - Testing occurs at the line you drew. This is candlestick analysis. VSA shows by volume and spread that there is no supply at this level. D is a Hidden Test or Reversal Bar in the right place - this is bullish a chioce entry location.

 

E - Another Test - bullish and a nice entry.

 

3 - Higher high

 

F - Shake Out followed by a bullish up bar

 

G - Test and another choice location for an entry

 

Hope this is helpful,

 

Eiger

[BrunoHammerstorm 10]

F - Shake Out followed by a bullish up bar

 

sure eiger... keep your little dream pillow going.... i'd love to see you call that a shakeout as it is printing...

 

good luck with your real trading.... after all you still need luck trading this brand of guess-ology

[HAKUNA 10]

Bruno,

On VSA Eiger and others are merely trying to get across the main concepts and principles via static charts, realtime is always going to be tough even if you look at any other method ie. candlesticks, woodie cci, taylor, wyckoff, rsi divergence, elliot, gann etc.

 

attached is a similar analysis via wyckoff as taught at http://www.ltg-trading.com, you can clearly see that this is the only way to illustrate the principles , what is pointed out is what to look for, they don't tell you enter here, exit there etc. it is upto us to learn how to read price/vol in realtime and exploit the moves.

 

If you have concluded that there is no value at all in VSA, best to leave it, why read about it when you could be making progress learning some other way of trading. It will only lead to unnecessary arguments.

 

However if there is anything specific that you do not understand on VSA, put up the question and then if somebody is awkward you have a valid reason to contend.

Have gone through that experience myself recently;)

Edited February 11, 2009 by HAKUNA