[VSA] Volume Spread Analsysis Part III

[habi 10]

I am sure a VSA'er (which I am not really) would argue that close to close will show you all you need. Anyway its pretty academic with anything less than daily bars.

 

Close to close is not enough, high an low are necessary too, otherwise you can't see any spred. Personally I prefer OHLC.

 

The main VSA principle is analysing volume and the spred for a choosen time interval. But Tom Williams also talks about support an resistance in MTM. Is it part of VSA or not? I don't care about, I use those informations, from whichsoever I think they are helpful for me. I don't want to limit my analysis, just to be a pure VSA-ler, which in IMHO not exist.

 

It's nothing academic with bars less than daly bars. In my last post I tried to show, that a chart looks different depending on the choosen time interval. If you mean, that the flow not stops after a bar closes in an intraday interval, then I think we all now it. A bar close or end for a defined time interval, but it does not mean, that the flow don't continue. A doji in a 5 min chart can be a engulfing two bar pattern in a 1 minute chart. It's most important, that we see what's behind the price movement and the accompanied volume. Not that easy, but that is what we trie to do. When I look on the current bar how it unfold, then it does not mean, that I forgot all the previous bars.

 

VSA analysis is limited to time based charts, because it looks to the spread and volume for a choosen time interval. But it's not forbidden to look on volume charts, if you think that you get some helpful informations from there.

[BlowFish 10]

Habi you missed the point. if you re read my post with the quote, I was simply commenting on VJ's statement about using open <-> close and observing that on intraday bars close <-> close would serve you just as well. No more no less.

Edited August 10, 2009 by BlowFish

[habi 10]

Habi you missed the point. if you re read my post with the quote, I was simply commenting on VJ's statement about using open <-> close and observing that on intraday bars close <-> close would serve you just as well. No more no less.

 

ok, can be, that I missed the point or interpreted it the wrong way, sorry

[BlowFish 10]

ok, can be, that I missed the point or interpreted it the wrong way, sorry

 

No problem, actually I agree with your post on the whole, bars are simply a way of sampling continuous data. How you sample (bar size and type) will change how things look. Of course it is helpful to know that "the bulls could not drive up price over the last 5 minutes" and bars help us to see things like that graphically.

[flimbo 10]

Hi there,

i want ask you how consider this chart from point of view strength and weakness.

 

 

-Main Trend is UP.

 

1. Down bar close on low with excessive vol (possible strength)

2. Up bar closing on high with high vol (this bar for me confirm buying on 1. bar) so we have background.

3. Up bar with low vol. same spread and same close on high ( weakness - no demand for me)

4. Upthrust with high vol closing on the low another weakness

 

Now more weakness appears then strength so can be this upthrust consider as a new background ?

it going with momentum that is down. but prev background was good coz it go with main trend.

now iam confused:angry:

 

can anybody make a comments for this situation

 

Thanks!

[shreem 10]

Hello guys, here is a chart of GBPJPY 15m in Asian session. First, asian session is usually slower than others sessions but can still gives some good setups if one wait patiently for some nice VSA setups to presents themselves.

 

We can see on that chart that we had a congestion channel going slightly upward but the powerhouse was not following as volume was decreasing all the way as price tried to climb up during this congestion channel. This is the first indication of weakness coupled with the fact that current intraday trend is down.

 

A and B) We see 2 No Demand bars doji like with narrow spread closing in middle of the candle with volume less than previous 2 volume bars. This further indicate weakness as price tried to go higher.

 

C) Then, look at the down bar on increasing volume piercing the support line of the congestion channel. There was a good increase in volume without being ultra high volume which could have signaled potential strenght. This show a successful breakout and indicate further weakness.

 

D) Then, 2 bars laters, we get another No demand bar.

 

VSA along with some Wyckoff principles and patience and discipline can really pay off.

 

Of course, this is just my 2cent

 

Good trading to all

 

Shreem

 

[sevensa 10]

Hello guys, here is a chart of GBPJPY 15m in Asian session. First, asian session is usually slower than others sessions but can still gives some good setups if one wait patiently for some nice VSA setups to presents themselves.

 

We can see on that chart that we had a congestion channel going slightly upward but the powerhouse was not following as volume was decreasing all the way as price tried to climb up during this congestion channel. This is the first indication of weakness coupled with the fact that current intraday trend is down.

 

A and B) We see 2 No Demand bars doji like with narrow spread closing in middle of the candle with volume less than previous 2 volume bars. This further indicate weakness as price tried to go higher.

 

C) Then, look at the down bar on increasing volume piercing the support line of the congestion channel. There was a good increase in volume without being ultra high volume which could have signaled potential strenght. This show a successful breakout and indicate further weakness.

 

D) Then, 2 bars laters, we get another No demand bar.

 

VSA along with some Wyckoff principles and patience and discipline can really pay off.

 

Of course, this is just my 2cent

 

Good trading to all

 

Shreem

 

 

No demand bars are closing up. Neither of A, B or D are closing up and all three of them are down closes.

 

You have several no demand bars before that, that you ignore. In hindsight this is easy to see that that they gone nowhere, but how would you have known that during real time? Careful to look in hindsight at a chart and force VSA "signals" on it to match the outcome.

[bbj_anchor 10]

-Main Trend is UP.

 

1. Down bar close on low with excessive vol (possible strength)

2. Up bar closing on high with high vol (this bar for me confirm buying on 1. bar) so we have background.

3. Up bar with low vol. same spread and same close on high ( weakness - no demand for me)

4. Upthrust with high vol closing on the low another weakness

 

 

It appears to me that the trend changed with Climax up bar[bC]

so the prevailing trend is DOWN.

[4] could be an upthrust which is bearish

also the range increase also adds to the bearishness.

 

Tradeguider guy, Gavin, always waits for this that or the other to confirm. I would say down and I dont know ES at all. what happened is not something I know, but I'd take the play for downside! Thrusts are incredibly strong!

 

BillyBobJoe

[VolumeJedi 10]

Hi there,

i want ask you how consider this chart from point of view strength and weakness.

 

 

-Main Trend is UP.

 

1. Down bar close on low with excessive vol (possible strength)

2. Up bar closing on high with high vol (this bar for me confirm buying on 1. bar) so we have background.

3. Up bar with low vol. same spread and same close on high ( weakness - no demand for me)

4. Upthrust with high vol closing on the low another weakness

 

Now more weakness appears then strength so can be this upthrust consider as a new background ?

it going with momentum that is down. but prev background was good coz it go with main trend.

now iam confused:angry:

 

can anybody make a comments for this situation

 

Thanks!

 

Thanks for posting.

 

Demand did enter on bar 1. However as you correctly note, there is a weak background. The directional movement was to the downside and after 1 it is slightly up to sideways. Doesn't look like enough demand entered to soak up all the supply. Note the two up bars (2&3) have decreasing volume. Volume spikes back up for the thrust 4, but the close is near the low and down from the previous bar on a wide spread bar making a higher high: a sign of weakness. I would be looking for a narrow range up bar on volume less than the previous two bars to get short....

[shreem 10]

No demand bars are closing up. Neither of A, B or D are closing up and all three of them are down closes.

 

You have several no demand bars before that, that you ignore. In hindsight this is easy to see that that they gone nowhere, but how would you have known that during real time? Careful to look in hindsight at a chart and force VSA "signals" on it to match the outcome.

 

Hello Sevensa and thanks for the comment. Yep, you are right, they are not text book No Demand as they do no close up. However, i am not a purist VSA and do look at the open. If we take the open into consideration, they do have represent doji like candles which show pause of the market and indecision. If the current downtrend is established and there is no volume supporting any up move, the natural tendency for price will be to continue south. These No Demands that i have labelled as no demand were just extra signals that added to the weakness of the current market.

 

Also, this was not an hindsight analysis as i did take a short trade at close of bar B.

 

But you are right, they are are not classical No Demand Bars.

 

Shreem:)

[Dael 10]

Hi guys.

I'm doing first steps in VSA, so this is just my 2 cents on FOMC rate last night. Is it OK?

 

We see a large volume thrown after FOMC rate decision.

 

#1: This is wide range down bar with very high volume, so demand might came in here. After such bars we're looking for signs of supply's weakness.

 

#2: But instead of No Supplies we've seen this - narrow range up bar with volume less than last 2 bars. Classic No Demand. Would you go short on the very next bar?

 

#3: Same as #1, down WRB with high volume. Looking for No Supplies, tests, etc.

 

#4: Yeap, it is. Narrow range down bar (yeah, close NOT lower, but anyway) with less volume - No Supply. And we've seen test on even less volume after that NS bar (big boys were testing the market to go short, but there was no interest). Would you go long?

[VolumeJedi 10]

Welcome and thanks for the post. This is a great place to learn and share ideas.

 

#2: yes this is the place to get short. Narrow range up bar on volume less than the previous two bars. You can short on the close of this bar, or you can place you sell order at the low of the candle and wait for the next candle to trade lower and bring you into the market.

 

BTW that WRB looks like an Effort to Fall, so you not only have the obvious trend to the downside, you have an immediate sign of weakness in the "near background".

 

#4: There are two candles that jump out at me. The candle after the one you labeled NS (No Supply). This is a narrow (NR4) bar that makes a lower low closes on its highs with volume less than the previous two candles. In fact, the volume is almost non-existent. This bar close up, but it is a test. This is your signal to get long.

 

The second candle is the one I have labeled KRB (Key Reversal Bar). This is a clear sign of strength in the market. It closes higher than the previous bar, higher than its open, and makes a lower low than the previous bar. Volume is lower than the previous bar but not too low.

 

The previous candle is another Effort to Fall candle. Note, however, that it does not have anywhere near the volume as the Effort to Fall at #3 or #1. Simply, effort is decreasing. Or to put it in physics terms, effort in the opposite direction is increasing. Hence we end up with effort but no result.

[Dael 10]

Really appreciate your input, VJ, thanks.

I've marked up that test, but in the post itself, not in the chart.

Thanks for KRB definition. And... what's that NR4 refer to? Is it an acronym?

[shreem 10]

Really appreciate your input, VJ, thanks.

I've marked up that test, but in the post itself, not in the chart.

Thanks for KRB definition. And... what's that NR4 refer to? Is it an acronym?

 

Hello Dael.

 

NR4 stand for a Narrow Range bar that is less than the 4 previous bar. Meaning that the high to low of the bar or candle is less the high and low of all 4 previous bar or candles.

 

Also, the test (the NR4) after the NS was a great indication for going long on close of the test bar as both the NS and the NR4 where confirmation that supply had dried out (look at their volume) and that the market was ready to auction upward. All the greater as those 2 signs of strenght appearred after a stopping volume (candle labeled 3) and and effort to fall later on, the red candle just prior to the candle labelled KRB, with the next candle up.

 

A great thing about VSA, is that those patterns repeat themselves again and again and again in all timeframes and really show who is winning the current battle between supply and demand. Even better, for entry, if the NS and following test occured at a previous POC, VAH or VAL of either a market profile or a volume profile.

 

Hope it help

 

Shreem:)

Edited August 13, 2009 by shreem
adding comments

[4rings2snails 10]

Welcome and thanks for the post. This is a great place to learn and share ideas.

 

#2: yes this is the place to get short. Narrow range up bar on volume less than the previous two bars. You can short on the close of this bar, or you can place you sell order at the low of the candle and wait for the next candle to trade lower and bring you into the market.

 

BTW that WRB looks like an Effort to Fall, so you not only have the obvious trend to the downside, you have an immediate sign of weakness in the "near background".

 

#4: There are two candles that jump out at me. The candle after the one you labeled NS (No Supply). This is a narrow (NR4) bar that makes a lower low closes on its highs with volume less than the previous two candles. In fact, the volume is almost non-existent. This bar close up, but it is a test. This is your signal to get long.

 

The second candle is the one I have labeled KRB (Key Reversal Bar). This is a clear sign of strength in the market. It closes higher than the previous bar, higher than its open, and makes a lower low than the previous bar. Volume is lower than the previous bar but not too low.

 

The previous candle is another Effort to Fall candle. Note, however, that it does not have anywhere near the volume as the Effort to Fall at #3 or #1. Simply, effort is decreasing. Or to put it in physics terms, effort in the opposite direction is increasing. Hence we end up with effort but no result.

 

 

You are a Jedi Knight in my book! Learned a ton from your breakdown. Thanks VJ!

 

Hello Dael.

 

NR4 stand for a Narrow Range bar that is less than the 4 previous bar. Meaning that the high to low of the bar or candle is less the high and low of all 4 previous bar or candles.

 

Also, the test (the NR4) after the NS was a great indication for going long on close of the test bar as both the NS and the NR4 where confirmation that supply had dried out (look at their volume) and that the market was ready to auction upward. All the greater as those 2 signs of strenght appearred after a stopping volume (candle labeled 3) and and effort to fall later on, the red candle just prior to the candle labelled KRB, with the next candle up.

 

A great thing about VSA, is that those patterns repeat themselves again and again and again in all timeframes and really show who is winning the current battle between supply and demand. Even better, for entry, if the NS and following test occured at a previous POC, VAH or VAL of either a market profile or a volume profile.

 

Hope it help

 

Shreem:)

 

Shreem, thanks brother, very informative. Your input combined with VJ's was quite insightful. Thank you.

[4rings2snails 10]

Ya know, I was thinking, I'm curious if this setup would have been quite as visible on the 3 or 5 min chart.

 

I would of missed it completely on the 5 minute. I usually never look below 3 minutes as there's usually a ton of noise, but this one minute chart was rather clear.

 

Anyone have any thoughts on this?

[shreem 10]

Ya know, I was thinking, I'm curious if this setup would have been quite as visible on the 3 or 5 min chart.

 

I would of missed it completely on the 5 minute. I usually never look below 3 minutes as there's usually a ton of noise, but this one minute chart was rather clear.

 

Anyone have any thoughts on this?

 

Hello 4rings2snails. Thanks for the post. Yep, mutli timeframes analysis is really important. When i am ready to start looking for a trade setup, i always do a top down analysis beginning with the 4 hours charts to look for the current dominent trend of the pair i am looking at and also to look if there is major signs of either an accumulation, a mark-up, a distribution or a mark-down phase going on in that particular market. For doing this, Wyckoff waves analysis is really great. Also, I look in the 4h chart if there is major signs of strenght like a stopping volume or a selling climax bar or shakeout or major signs of weakness like buying climax or an upthrust. If i spot one of those, i will pay particular attention when price will revisit those zones where those high volume bars occurs as it will show clearly what was the intention of those BB going against the herd in that bar.

 

As an exemple, if we get a no demand bar after a buying climax or following an upthrust, that will give us good clue for a short position possible. Same thing, if seeing a successful test or a no supply bar following a stopping volume or a selling climax.

 

Then, i will go to the 1h hour chart and will go look what i see there. Is there anything in the 1h chart that gives me some clue what is happening, at a slower rate, in the 4h chart? Like, as the exemple of a buying climax, if there was a buying climax on the 4h that has just formed, what does the 1h chart is telling me about the immediate result of that buying climax?

 

Is there an immediate response to it? That would be seen as a rapid mark-down of price with either low, medium or high range bars. The clue, will be found in the relationship of the volume bar with the spread of the bar in question. If the technical response that immediatelly follow the buying climax is making lower lows with either low. middle or wider range bar but volume is not really supporting this technical reaction caracterized by this down move, we have signs that this reaction is only a natural effect of the implication of this high volume bar that represent a buying climax but that the real clue will come from the volume. If we see low volume on those down bars, this would imply and tell us that the true turn in the market is not there yet.

 

Then, if that is the case, will look even more carefully when the price will go retest the buying climax bar area and particulary its high and see what price does there.

 

If when price go there and we see volume drying up as price is making higher high, then it will give us a great clue that supply has really swamp demand on the buying climax and that a reversal of the current trend can be in the making.

 

I will then wait to see either an upthrust, a bull trap move and no demand bar as confirmation signals before even considering of going short.

 

As I am an intraday trader, when the hourly price will be in the zone of the of the previous 4h or 1h buying climax, i will then switch to the 15m or 5m chart to look for entry. The best kind of entry would be an upthrust followed a little later by a no demand bar. Could then go short on close of the no demand bar. To keep my short position, market will need to prove to me that the following down move as some "steam" or power by looking to see if normal increasing volume is appearing as price is moving down.

 

So, to make a story short, for me, muti time frame analysis is key to successful trading using VSA. Larger timeframes gives us the background and the main reason why we should either go long or short depending on what the laws of supply and demand are telling us.

 

So:

 

4h chart: medium to long term intraday trend direction and the main graph for seeing the background.

 

1h chart: short term intraday trend direction and more immediate background action.

 

15min or 5min chart: main charts to look for signs of strenght or weakness to look for VSA setups so to get an entry. I should also emphazise that more power if those setups occurs in the zone of the high volume bar which was the buying climax in that exemple. Why? As this high volume bar represent a strong indication of the presence of the participation of the BB, it is the best area to look if there is a followthrough in that same area or not. When price return there, we can see if we get the same kind of "intensity" by looking at the volume when price probe the high or the entire spread of that buying climax.

 

So, in a nutshell, this is just an exemple of how i do tend to analyse the market using my learning of wyckoff waves analysis and his others teachings and the VSA setups going along with it.

 

Main point of all this, patience, discipline and really following one's trading plan is the really the key in successfully trading.

 

The only other thing that i also look at is market profile charts or volume profile charts as they are a great way to see key support and resistence levels to look for.

 

Meaning, if there is a VSA setup possible entry occuring in the zone of a previous high volume area and that same area also contain either a POC, VAH or VAL lines or zone, more power to the setup.

 

Sorry for the long rant and hope it is helpful

 

Sincerely

 

Shreem:)

Edited August 15, 2009 by shreem

[Tasuki 10]

Returning to the above chart, I've got a question about how you know when the trio WRB/KRB/ND gives a bullish signal and when a bearish signal. Any insights?

 

This is a standard dilemna for VSA traders: you could wait for confirmation, that would clear up the picture, but then you might have lost the meat of the move.

 

Is there any clear difference between these two candle trios that would signal bearishness or bullishness without having to wait for confirmation?

 

Thanks,

Tasuki

[habi 10]

Returning to the above chart, I've got a question about how you know when the trio WRB/KRB/ND gives a bullish signal and when a bearish signal. Any insights?

Tasuki

 

Good question, I thougt exatly the same when I saw this chart. I think, that I wouldn't go short on the no demand bar in box A for the follwing reason. I see some strenght in the background, with two high volume bars closing off of their lows. Bar 1 and 2 formed a potential reversal pattern. I don't like to go short within this range, though it came out as a succesfull trade. Volume on bar 2 was very low compared with bar 1, this could be a hint, that the reversal is not that strong.

 

Pattern B give a much better entry as described by VJ. If you scroll back one day, then pattern B was in a stronger support area as A from a support/resistance standpoint.

 

 

@ shreem

 

I find it important too to look on charts with different time intervals. But you have to be careful, if you compare volume from the main session with activity outside this time range. I look more for support/resistance and trend strenght in the higher interval charts and go down to lower intervals to check the activity. A 1h bar for ES or NQ that start at 9:00 and end 10:00 contain 30 min of premarket- and 30 min of the regular session volume. Thats why I prefer a 30 min chart. May be a little different for forex futures.

[VolumeJedi 10]

Returning to the above chart, I've got a question about how you know when the trio WRB/KRB/ND gives a bullish signal and when a bearish signal. Any insights?

 

This is a standard dilemna for VSA traders: you could wait for confirmation, that would clear up the picture, but then you might have lost the meat of the move.

 

Is there any clear difference between these two candle trios that would signal bearishness or bullishness without having to wait for confirmation?

 

Thanks,

Tasuki

 

Hi Tasuki. Great question.

 

From my perspective there are 4 major differences in the two areas.

 

Let's look at B:

 

1. The first thing of note is the Ultra High Volume down candle marked #3. Although this candle closes on its lows, the next candle is up. So some demand(buying) must of been "hidden" in all that selling.

 

2. There are 3 more candles prior to the trio in question. Note that these are NOT the same type of candles prior to the trio in the first set (A). As I mentioned, the first candle is up. It is a very narrow range and volume drops off. It is not no demand, however, as we have just seen strength enter. The next candle closes down but in the upper portion of its range with a long lower tail. Here volume has increased. So we have a down candle on increasing, but not excessive volume closing in the upper portion of its range. This is strength. The next candle actually is an engulfing candle. Not VSA but another sign of strength.

 

So we have more evidence that there is strength in the market prior to this trio of candles in B. Now look at the volume of the dark candle that starts the trio. It is not as high as the volume marked #1 in A. Nor is it as high as the first down candle in B. Wide spread down bars are decreasing in volume. Another sign of strength.

 

The KRB basically shows professional support in the market and negates any weakness that might be seen on the next candle, which is narrow and up on volume less than the previous two candles.

 

Let's look at A;

 

1. There is a lot of weakness in the background. Just prior to the large dark candle we have an up thrust type candle with follows a low activity narrow range down candle. Notice how this candle dropped from the previous candles close? This looks like a test candle. With the next candle closing down and lower than the low of the test candle, it is a failed test. Weakness. The very next bar is an Effort to Fall with high volume but not as high as some prior bars and not as high as the bars in B. The volume on the "KRB" is very low, not showing that much professional support. To get technical, we would actually like to see the KRB not close on its highs. So for some it is not even a key reversal candle.

 

But that "technical" definition is of little import. The next candle is no demand. A narrow range (NR4) candle closing up and off its high on volume less than the previous two candles. We have seen and Effort to Fall and now we see little activity to the upside as we retrace that area. The BBs must not be interested in higher prices.

 

Obviously this is completely hindsight but I hope it helps.

[shreem 10]

@ shreem

 

I find it important too to look on charts with different time intervals. But you have to be careful, if you compare volume from the main session with activity outside this time range. I look more for support/resistance and trend strenght in the higher interval charts and go down to lower intervals to check the activity. A 1h bar for ES or NQ that start at 9:00 and end 10:00 contain 30 min of premarket- and 30 min of the regular session volume. Thats why I prefer a 30 min chart. May be a little different for forex futures.

 

Hello Habi and thanks for the comment. Yep, you are right, if you trade instrument like ES or NQ who have their main activity between the market hours, it is less true for spot forex which is the market i do trade. In spot forex, there is not really anything such as the overnight activity as it is a 24 hours market where one time zone replace the others and so on. It is more like a continuous market. There is not really a single point in time that we can label the open or the close of the trading day as in future market like for the ES, NQ or YM. We see them more like sessions overlapping the others like asian session merging in the european session which will merge in the us session which will then merge in the new asian session.

 

So, for spot forex and even for future currency market, volume activity in one session can definitely serve as a gauge in the next or two sessions coming as there is no definite open and close of the market itself like in the future market for instruments like ES, NQ or others.

 

Also, i do even look closely at the "tranquil" asian market session where volume activity usually become a lot more quiet. If i see some surge in volume or lack of it, espcially if it is in the range or area of the previous high volume area, i will definitely pay close attention what is happening there.

 

That said, you are spot on that higher timeframe are great areas to look for support and resistence areas and that is why if, as in my previous exemple, there was a buying climax on the 4h, that area or range of that buying climax (specially the high) will be a resistence that i will pay close attention in the lower timeframe.

 

Again, thanks for your comment

 

Shreem:)

[4rings2snails 10]

 

Let's look at A;

 

1. There is a lot of weakness in the background. Just prior to the large dark candle we have an up thrust type candle with follows a low activity narrow range down candle. Notice how this candle dropped from the previous candles close? This looks like a test candle. With the next candle closing down and lower than the low of the test candle, it is a failed test. Weakness. The very next bar is an Effort to Fall with high volume but not as high as some prior bars and not as high as the bars in B. The volume on the "KRB" is very low, not showing that much professional support. To get technical, we would actually like to see the KRB not close on its highs. So for some it is not even a key reversal candle.

 

But that "technical" definition is of little import. The next candle is no demand. A narrow range (NR4) candle closing up and off its high on volume less than the previous two candles. We have seen and Effort to Fall and now we see little activity to the upside as we retrace that area. The BBs must not be interested in higher prices.

 

 

VJ, respectfully, please read through the above portion of your reply to Tasuki and tell me if you notice anything that's off. The reason I'm inquiring is because I read your response word for word and I'm a little lost when you start writing about specific bars. I think, but stand to be corrected, that you got a few of the bars mixed up in your explanation of them and which ones you are referring to. So would you kindly go over that paragraph and doble check it for me becasue things aren't adding up for me.

 

TIA,

4r2s

[VolumeJedi 10]

Area A begins with the large red candle.

 

I am refering to the three candles prior to this that are not contained within the area marked A.

[4rings2snails 10]

Anyone want to take a stab at showing us how they would have played the ES today? Holy smokes! This is going to be a tuff sell, if anyone's even willing to try and show us proper entries/exits and truly justify them.

 

The thing that confused me most was the first 30 minute of the regular session. If anyone would kindly chime in I'd really appreciate it as the volume divergence from the first up bar (5 min.) to the second as well as the divergence in vol. from the 4th to the 5th and sixth bars while price continued to skyrocket really perplexed me. Volume dropped off in those situations, yet we saw major jumps ups. WTH?

 

Anyone?

 

FWIW: I foolishly used the 3 minute more than the 5 minute chart and the read on the 3 minute killed me (it was like a bad dream that I couldn't wake up from). I WILL NEVER USE THE 3 MINUTE CHART ever again... Only the 5 minute chart from this day forward.

Edited August 20, 2009 by 4rings2snails

[Dael 10]

FWIW: I foolishly used the 3 minute more than the 5 minute chart and the read on the 3 minute killed me (it was like a bad dream that I couldn't wake up from). I WILL NEVER USE THE 3 MINUTE CHART ever again... Only the 5 minute chart from this day forward.

 

Why that? Is it more noisy? How about the state that there's more info (price, volume, moves and action) on lower TF?