Sam Seiden-Understanding The Exact Process Behind The Movement In Price

[doubletop11 10]

If there was NO DEMAND in the area that Sam marked as such, why is it that price bounced off of that area 20$-40$ effectively doubling the stock price.

It looks like a DEMAND area to me.....

 

I totally agree with you and from my observations and trading with zones. Here's what's going on. Sam sees this area as being tested 5+ times. That would be a gray zone on APA zones as well. We really expect that area would be used up if you are looking at that one monthly time frame chart. However, we always have to consider multi-timeframes in our analysis. So you can see that there was still support in that area at the very bottom, and I'm willing to bet that you could even find a zone down there on a daily, 4 hour chart or smaller time frame. So while that zone has been hit a lot. If it goes that far into the zone, and then comes back out. Take the confirmation trade as it comes back out!!!! Or better yet jump into a tend trade by buying a pullback from a smaller timeframe demand zone that it creates as it comes out of the zone. So that way you don't have to put a monthly level worth for a stop loss. That's just how I look at zones that have been retested a lot.

No, you don't know what's going to happen in the future but if the zone there why not. Nobody is right 100%. A confirmation trade is also a very strong trade.

I think that's why he might not have answered is because the 1st retest is always the best and that's all we can really count on for GREAT small loss/high reward trades. The other thing is he might not have see the R/R ratio there. I like a 5:1 ratio at least. If you don't see it, then pass on the trade. It's always better to stay out then get into some trade that your like "we'll see how this goes". Don't trade those trades. Look at price action; look at support becoming resistance; watch multi-timeframes for confluence. Just my two cents on what happened.

[Peterthemonkey 10]

Just an example of Sam Seiden's manipulative and inconcistant method. Not to talk about lack of customer service skills.

On the left is one of Sam's charts and on the right is my question to him which he never answered.

If there was NO DEMAND in the area that Sam marked as such, why is it that price bounced off of that area 20$-40$ effectively doubling the stock price.

It looks like a DEMAND area to me.....

 

I have watched some of Sam's videos, they appear consistent to me. Obviously I am not an expert of his precise methods. I'll take a go at it based on the charts provided, hopefully others here can chime in with a more definitive response.

 

The level in question here arises out of a Rally - Base - Rally. He considers these to be weak demand zones that occur in the middle of rallies, not at turning points, which are stronger demand levels.

 

There are several pullbacks to level in question that do qualify as Drop - Base - Rally. However, since these reversed at the prior Rally - Base - Rally weak level, and not a fresh unencumbered price level, he probably passes on them. The issues of sufficient profit margin and multiple touches make taking any of these pullbacks even more unlikely.

 

Out of curiosity, does the lower demand level at the bottom of the chart occur after a price drop? Are you with one of Sam's paid services?

[VTK 10]

Just an example of Sam Seiden's manipulative and inconcistant method. Not to talk about lack of customer service skills.

On the left is one of Sam's charts and on the right is my question to him which he never answered.

If there was NO DEMAND in the area that Sam marked as such, why is it that price bounced off of that area 20$-40$ effectively doubling the stock price.

It looks like a DEMAND area to me.....

 

I have to agree with you,Sam is bit notorious about email replies.On other hand his inbox is stuffed with emails like yours.

About your question..Doubletop is right about number of level retest...as i draw levels i would say that price barely touched level once in 2003 with strong reaction of price.Just look at the wick.

In mine book that's sing of big imbalance as price couldn't penetrate deeper into level than touching it and level is still fresh especially because of timeframe which is monthly.

Notice that price went much deeper second time when it came into level in 2009.Also notice how strong reaction was.So when it came third time back into level in 2010,level definitely was not fresh anymore.It's like chopping the tree.With every chop there is less and less "meat".

That doesn't mean that one couldn't pull out a day trade when price came third time into level.Going long from something like 2 min chart would be option for me if i see quality level.

Regards!

[joshdance 10]

I just mean noticing the difference between the Bid and Ask. and then on the "level II" in NinjaTrader. You can see the different levels like this.

 

Not sure what that has to do with tape reading, but it's off subject anyway, I'll stick to the topic at hand.

[Gabe2004 10]

Out of curiosity, does the lower demand level at the bottom of the chart occur after a price drop? Are you with one of Sam's paid services?

 

Attached is a chart for BP going back to 1984.

You can see that there was nothing special with the DEMAND zone of Sam.

Not to mention that this is a monthly chart and I don't know too many people who trade off the monthlies.

I am not with any of Sam's paid services.

[Peterthemonkey 10]

Gabe2004,

 

Thank you for replying.

I agree, an explanation from him would be nice. Maybe someone in this thread can elicit one from him.

[VTK 10]

Attached is a chart for BP going back to 1984.

You can see that there was nothing special with the DEMAND zone of Sam.

Not to mention that this is a monthly chart and I don't know too many people who trade off the monthlies.

 

If you don't understand this strategy than it's your own problem.Don't throw it on anyone else:helloooo:

..."nothing special" about that rally-base-rally based on what?Your experience with this strategy?

If level is marked on monthly it doesn't mean that trade was took from same chart.

So next time before you jump in front of gun think twice.Trying to understand something before a priori shitting on it is good thing.

[Gabe2004 10]

If you don't understand this strategy than it's your own problem.Don't throw it on anyone else:helloooo:

..."nothing special" about that rally-base-rally based on what?Your experience with this strategy?

If level is marked on monthly it doesn't mean that trade was took from same chart.

So next time before you jump in front of gun think twice.Trying to understand something before a priori shitting on it is good thing.

 

Since you started this thread I will not respond to your insulting reply in the same manner.

If you understand Sam's idea, good for you.

If you can make money with it, more power to you.

 

On second thought, why don't you explain the discrepancy - since you are soooooooooo smart.

Edited September 12, 2011 by Gabe2004

[VTK 10]

On second thought, why don't you explain the discrepancy - since you are soooooooooo smart .

 

I am not "soooooooooo smart"...just more patient and less frustrated than you are.

I don't see any "discrepancy".If you could be specific i would be more than happy to give mine best to clear out any misunderstanding.

Regards...

[JohnHL 10]

Attached is a chart for BP going back to 1984.

You can see that there was nothing special with the DEMAND zone of Sam.

Not to mention that this is a monthly chart and I don't know too many people who trade off the monthlies.

I am not with any of Sam's paid services.

 

According to your chart, a demand zone created in early '03 was revisited in early '09 and worked amazingly well. This, and other examples, demonstrate the incredible ability of these zones to sometimes retain their validity even after a period of years. That is something I would never have believed prior to encountering Seiden and other price action traders like him.

True, there doesn't appear to be many other examples that I can see on that monthly chart. But, as others have pointed out, if we look at shorter time frames, we would most likely find more.

Of course Seiden isn't right ALL the time; but then who is?

[Peterthemonkey 10]

I don't see any "discrepancy".If you could be specific i would be more than happy to give mine best to clear out any misunderstanding.

Regards...

 

I understand the multiple time frames and different degrees of strength at demand levels, although not necessarily by Sam's definitions.

 

Regarding the level in question that is marked as "no demand" in that particular chart. In that particular chart - is it a demand level or not? Why?

 

What about the lower "demand" level at the bottom of that chart. Why?

 

Just want to learn.

[Gabe2004 10]

I am not "soooooooooo smart"...just more patient and less frustrated than you are.

I don't see any "discrepancy".If you could be specific i would be more than happy to give mine best to clear out any misunderstanding.

Regards...

 

Sam's DEMAND ZONE does not look different than some time before it was marked as such whereas my demand zone (or what i would call a demand zone shows significant support or DEMAND as price bounced off of it many times over the years.

What gives?

[Gabe2004 10]

According to your chart, a demand zone created in early '03 was revisited in early '09 and worked amazingly well. This, and other examples, demonstrate the incredible ability of these zones to sometimes retain their validity even after a period of years. That is something I would never have believed prior to encountering Seiden and other price action traders like him.

True, there doesn't appear to be many other examples that I can see on that monthly chart. But, as others have pointed out, if we look at shorter time frames, we would most likely find more.

Of course Seiden isn't right ALL the time; but then who is?

 

 

No offence but if I would be a turtle an event occuring every 6 years would be OK but as I am not, I would like to see things happen more frequantly during my life time.

[joshdance 10]

No offence but if I would be a turtle an event occuring every 6 years would be OK but as I am not, I would like to see things happen more frequantly during my life time.

 

You should use the 5 minute or hourly time frame then, not a monthly chart.

[Gabe2004 10]

You should use the 5 minute or hourly time frame then, not a monthly chart.

 

Sam was using the monthly or biweekly. I just used it as a common ground.

[Gabe2004 10]

Here is another example.

The chart with the white background is Sam's. The one with the black background shows a larger span and Sam's chart area is marked in blue and his DEMAND ZONE is white.

I cannot see why he would call that a demand zone.

The only thing that might stand out is that price broke above a previous peak and then returned to it.

Why the other retracements are NOT considered DEMAND is beyond me.

[joshdance 10]

Here is another example.

The chart with the white background is Sam's. The one with the black background shows a larger span and Sam's chart area is marked in blue and his DEMAND ZONE is white.

I cannot see why he would call that a demand zone.

The only thing that might stand out is that price broke above a previous peak and then returned to it.

Why the other retracements are NOT considered DEMAND is beyond me.

 

You should consider the context of the chart you posted, it can shed a lot of light on what is going on. Sunday's globex session opened and buyers asserted themselves, taking the price higher. From Sunday night all the way until Monday's RTH open, price was in a 4 point range. Immediately at the pit open on Monday, buyers took the price higher. It then consolidated and retraced, and was up from there for the rest of the day.

 

So, the breakout from consolidation at the Monday open is what made that first area special. On the chart I've attached, I've also included the profile for the move up. You will notice that the activity is concentrated around 88.50 to .75 -- this is the area where there was the most volume, the most participation, the most interest in trading. Also, it is the value area low for the day. On Tuesday morning, after a slow and steady retrace overnight, traders go in search of value, and find it at the low of the value area for the prior day. Not that this is part of Seiden's method, but it shows that this area is significant, compared to the rest of the trading day.

 

Now--could price have gone lower, even to the consolidation area, or could it have found more buyers willing to buy in the middle of the day's range instead of near the low? Yes, but anything can happen.

[BlowFish 10]

Here is another example.

The chart with the white background is Sam's. The one with the black background shows a larger span and Sam's chart area is marked in blue and his DEMAND ZONE is white.

I cannot see why he would call that a demand zone.

The only thing that might stand out is that price broke above a previous peak and then returned to it.

Why the other retracements are NOT considered DEMAND is beyond me.

 

As someone said earlier in the thread they are not drop, base, rally they are rally, base, rally. There was supply and demand anywhere a trade has occurred (a buyer met a seller) not all make sense as potential trade locations.

 

I don't think its beyond you, you just need to dig a bit deeper. If you look at the wealth of free Sieden stuff it is all described in some detail. Actually the problem is sifting through the reams and reams of it and extracting the nuggets. For example the drop base rally stuff is described (as someone told you earlier in the thread). Another important thing is 'how the train left the station', strong momentum indicates that there is a greater imbalance in supply and demand. Risk reward is another important thing....ahh you might say that's just a money/trade management thing....no it also indicates how far the buyers/sellers could push price from where supply/demand was in balance. Another tip he gives is to look back to the origin of the move, that pretty much rules out pull backs.

 

You also mention multiple touches, Sieden will only take the very first touch of a zone (second touch too if lots of other odds enhancers line up). Sure multiple touches indicate that the zone was strong but the first touch the imbalance is much more likely to still exist, every subsequent touch is likely to weaken the zone and diminish your odds.

 

Sounds like you have made up your mind Gabe maybe Whyckoff would jive better with you? Personally I think Sam adds a couple of useful ideas to the supply/demand S/R, however I think if you are prepared to persevere a bit and dig deeper you might be rewarded.

 

Incidentally I met him once and talked at some length about discretion and consistency in defining zones, guess that's a post for another day.

Edited September 13, 2011 by BlowFish

[VTK 10]

Sam's DEMAND ZONE does not look different than some time before it was marked as such whereas my demand zone (or what i would call a demand zone shows significant support or DEMAND as price bounced off of it many times over the years.

What gives?

 

"...what i would call a demand zone..." is pretty much toasted in context of sup/dem levels as price went thru it in 2010.Don't mix conventional concept of support and resistance with supply and demand areas.

Conventional sup/res says that more times area is tested stronger it is.For me it is same as saying that i would be more fine if get 4-5 punches into my head than just one.

Think about orders at those levels.Every time price visits level orders are filled.So eventually it will go thru it.

What you have marked as "Sam's DEMAND zone" is fresh level,it worked just fine and i don't see what's your problem with it.

 

Here is another example.

The chart with the white background is Sam's. The one with the black background shows a larger span and Sam's chart area is marked in blue and his DEMAND ZONE is white.

I cannot see why he would call that a demand zone.

The only thing that might stand out is that price broke above a previous peak and then returned to it.

Why the other retracements are NOT considered DEMAND is beyond me.

 

Drop-base-rally is picture of demand on chart.On black chart in marked area you can clearly see that picture.That's why he calls it demand,simple as that.Other retracements marked on his chart were low or lower probability and one that he took was highest probability area which you can see based on price reaction.How to "distill"

levels based on probability of outcome is the trick that makes or breaks.For that we are using odd enhancers.

"Why the other retracements are NOT considered DEMAND is beyond me"....because you didn't study this stuff enough to get it and that's fine.But don't spit anger on others if problem lies within you.That's why i called you frustrated:2c:

Hope this helps Gabe...

Cheers!

[joshdance 10]

Conventional sup/res says that more times area is tested stronger it is.For me it is same as saying that i would be more fine if get 4-5 punches into my head than just one.

Think about orders at those levels.Every time price visits level orders are filled.So eventually it will go thru it.

 

Though I agree with most of what you said VTK, I disagree slightly here. Orders are filled of course, but new orders can be placed. Potential buyers may in fact see a level holding and become more convinced that it will continue to hold, and put more orders in, so that the price level becomes more solid. More visits to a price area really only objectively indicate one thing--interest in that area. The future probability of an area to either hold or break could be statistically measured, and I would give some weight to this, but conceptually, it's a toss-up.

 

All levels will eventually be broken, yes, but the argument that a level which is touched once, which is not as important, is more likely to hold than a level that has proven multiple times to be important, is not a sound argument, unless it is backed up with some data. Visually on my chart I see many "peaks" which are simply ignored the next time they are visited. Yet, I see many bases, or proven areas, which continue to provide that support. Visual testing as this is pretty useless, but I would like to see some actual statistical data that would give weight to the concept.

[Gabe2004 10]

"Why the other retracements are NOT considered DEMAND is beyond me"....because you didn't study this stuff enough to get it and that's fine.But don't spit anger on others if problem lies within you.That's why i called you frustrated:2c:

Hope this helps Gabe...

Cheers!

 

You did not answer the question and you keep up with your insulting replies so make up your mind. Do you want to explain in a civilized way like Blowfish for instance or you want to show off.(and BTW Sam is using Supply/Demand and Support/Resistance interchangeably - just look at some of his charts).

Also I am not spitting my anger on others (I wonder who they are) I am just pointing out that Sam is inconcistant at times and when there is a conflicting point or an ambiguous point, he does not respomd to questions.

[doubletop11 10]

You did not answer the question.

 

Hey Gabe2004, I would like to help you out a little bit if you would like. Please look me up on Skype and I'll give you an hour of my time. We can go over any zone theory questions or inconsistencies that you would like to have answered. I really believe in zone theory and it works so well and more often then not it will be able to answer the "why" behind the market's movement. It does take some time to understand and get the logic. I have met a lot of OTA people because of my appoach on software and for the newer ones it really can be HARD. Yet, I also trade with OTA/zone people that are making 30k+ a month. Just let me know if you would like to talk and if you would like to be in that live trade room! PM or skype. Trading can be simple, but it is always hard! We all have our own worst enemy inside our head all the time.

[VTK 10]

You did not answer the question and you keep up with your insulting replies so make up your mind. Do you want to explain in a civilized way like Blowfish for instance or you want to show off.(and BTW Sam is using Supply/Demand and Support/Resistance interchangeably - just look at some of his charts).

Also I am not spitting my anger on others (I wonder who they are) I am just pointing out that Sam is inconcistant at times and when there is a conflicting point or an ambiguous point, he does not respomd to questions.

 

Which question did i not answer?

Are you bit slow pal or it's just denial-anger-acceptance when it comes to you?

Me insulting you!?What i said was obvious from your posts.People doesn't like to hear truth and it makes them mad.

Was looking on his charts for couple of years and he always told us to call things as they are-supply and demand.Sup/res can mean fib.ret. MA,pivot point or whatever.

I don't see any inconsistancy in his work.If you do and you are interested into subject-study harder.Always someone other is guilty:roll eyes:

I have paid for OTA XLT and yes he didn't answer any emails that i have send to him

but i did not come to forum to cry about it.Steve Misic was there to reply on my mails and he is also great guy and student of Sam for more than a decade.

And what a wonder!Even without Sam's replies i am doing fine!

[Gabe2004 10]

Which question did i not answer?

Are you bit slow pal or it's just denial-anger-acceptance when it comes to you?

Me insulting you!?What i said was obvious from your posts.People doesn't like to hear truth and it makes them mad.

Was looking on his charts for couple of years and he always told us to call things as they are-supply and demand.Sup/res can mean fib.ret. MA,pivot point or whatever.

I don't see any inconsistancy in his work.If you do and you are interested into subject-study harder.Always someone other is guilty:roll eyes:

I have paid for OTA XLT and yes he didn't answer any emails that i have send to him

but i did not come to forum to cry about it.Steve Misic was there to reply on my mails and he is also great guy and student of Sam for more than a decade.

And what a wonder!Even without Sam's replies i am doing fine!

 

You foul language is reason enough to put you on my ignor list.

[VTK 10]

You foul language is reason enough to put you on my ignor list.

 

Although you can't see it-God bless you Gabe:)