[VSA] Volume Spread Analysis Part I

[dandxg 10]

I have been studying P/V full time for the last 3 months approx. I definitely helps. I like Graifer's book, but I have found the most useful thread from db phoenix on ET. It's here. http://www.elitetrader.com/vb/showthread.php?threadid=29005&perpage=6&pagenumber=1

 

The reason I suggest it is because it has a lot of nice chart with different market structures, more pics than MTM or Graifer's book. I bought TG's bootcamp, it's good, but it's crummy that they will only let you use it on 1 computer! I am not trying to burn copies I just like to travel with it, on a plane or so. I feel that the $50 they ask for a webinar is frankly excessive. No one else I have received instruction charges that for ongoing webs, esp. after I just spent $500 with TG. BTW Sebastian does fairly regular updates for free on ET, look him up as VSA trader, just like Trade2win dot com. For now I am just focusing on retests of high or lows and pullbacks with the correct corresponding volume. I plan on attending LTG's free webinar thing in 1/2 hour.

 

 

For those of you better at Wyckoff than I, can you remind me of the importance of a level close on a test bar?

 

Anyway just wanted to drop in since I have been lurking on this thread for some time without posing. It's a nice thread on PV

 

P.S. A couple of other sources you can see P/V education is Hank Pruden and Tom O'brien ( he has a fee radio show for stock tfnn dot com ). And no I am not an affiliate of anyone's just trying to help where I may. Good trading to all of you.

[Anonymous 11]

I have been studying P/V full time for the last 3 months approx. I definitely helps. I like Graifer's book, but I have found the most useful thread from db phoenix on ET. It's here. http://www.elitetrader.com/vb/showthread.php?threadid=29005&perpage=6&pagenumber=1

 

The reason I suggest it is because it has a lot of nice chart with different market structures, more pics than MTM or Graifer's book.....

 

Nice of you to join us. I have stated on one of these many pages that the best thread on the internet bar none is this one. Everyone should take a look at it. However, I sure hope we get back to VSA soon and end the TG bashing (and you know how much I hate TG)....

Edited March 29, 2008 by mister ed
sp.

[monad 10]

For me, the most disturbing part of Tradeguider's marketing strategy is the fact that Gavin has quite insightfully figured out that Asia is the new "main event", where their up-and-coming prosperity is breeding a massive population of inexperienced traders who swallow Gavin's sales pitch hook line and sinker. In my estimation, the folks at TG see no economic reason to upgrade their software (I found it intolerably buggy when I tried it), because they have literally millions of potential customers throughout Asia who are as gullible as they are inexperienced. Why bother upgrading the software when you can just swell your ranks with newbies from other countries? I really feel for the Asian traders who are being taken for suckers.

 

You are spot on Tasuki, It was sickening to watch that Malaysian Video, as you say all those gullible suckers nodding their heads at every word of Gavin who has no previous trading experience whatsoever, apparently they love any westerners with a gift of the gab. Todd was largely responsible for keeping the company afloat in US. Whilst he was around, Sebastian was dumped, Tom Williams is Chairman in just a name, Gavin is the real opportunist running the show. After Todd was gone he looked around for support, found Nick Radge in Australia and saw an opportunity in the East. Now once again he has enticed Sebastian and Tom back into the game, 3 seminars/retreats during April, aim for 100 attendees, average cost of $2500, do your maths,

why bother with any upgrading the sloppy TG for the existing customers:o

 

The customer event last saturday frankly was a total fiasco.:doh:

[BlowFish 10]

Hi Folks

 

Please find todays ES Analysis for tuesday 8th Jan 08, I have managed to get the file size down without losing too much quality.

 

Regards Sebastian

 

Happy new year and a profitable one too, to you all.

 

Quality was great! Interesting day too. Particularly like that you did not 'sugar coat' things. Often happens that price can carry that little bit further on low volume (just enough to stop me out with the other weak holders!) before finally cracking. Also the fight between bulls and bears can be fairly even before one side wins out.

 

Cheers.

[jjthetrader 10]

 

I bought TG's bootcamp, it's good, but it's crummy that they will only let you use it on 1 computer!

 

 

If you own the original you can play it on any computer. It plays on all my computers fine.

[gassah 10]

The Vista version of the Boot Camp doesn't seem to have limitations either.

 

nic

[jjthetrader 10]

PP wants some VSA so lets get back into it.

 

Here's a daily chart of the ES. Check out yesterdays action on low volume. Now this morning we're opening lower and right on the lower trendline of the downward channel.

Does yesterdays action not look like no supply or is the spread too wide?

 

A side note about trading the ES. Those of you who trade it intraday, what size of stop do you use? I've been using 2 pts and it's uncanny how the price will go exactly the 2 pts, stop me out and then go back in the direction I was positioned for.

When trading using VSA would it be more wire to jump back in or use a wider stop?

[jjthetrader 10]

Forgot to attach chart

[zdo 20]

A side note about trading the ES. Those of you who trade it intraday, what size of stop do you use? I've been using 2 pts and it's uncanny how the price will go exactly the 2 pts, stop me out and then go back in the direction I was positioned for.

When trading using VSA would it be more wire to jump back in or use a wider stop?

 

some strange suggestions:

If entering on limit (buying into weakness and viceversa) –

1 start placing your orders where you were previously placing your stops

2 place your stops wider

3 then never let these stops be hit

 

If entering on stop (buying into strength and viceversa) –

1 put initial stop under most recent swinglow (vv for shorts)

2 after n bars start moving it in aggressively twd breakeven

(whether price ‘momentumd’ for you or not)

3 almost never let these stops be hit

 

[jjthetrader 10]

some strange suggestions:

If entering on limit (buying into weakness and viceversa) –

1 start placing your orders where you were previously placing your stops

2 place your stops wider

3 then never let these stops be hit

 

If entering on stop (buying into strength and viceversa) –

1 put initial stop under most recent swinglow (vv for shorts)

2 after n bars start moving it in aggressively twd breakeven

(whether price ‘momentumd’ for you or not)

3 almost never let these stops be hit

 

 

You know what? Those are great suggestions. I like your style.

[jjthetrader 10]

Could I get some people's volume count for yesterday Jan.15 on the ES daily chart.

My esignal shows 1.4 mil and tradestation shows 2.4 mil. There's got to be something wrong.

That's enough to change my view of directional orientation.

thanks

[zdo 20]

jj,

 

re: “never let these stops be hit†That is easier said than done. Several known biases are strong and operational for most of us. (and who knows about the unknown ‘biases) Takes resolve! In putting practice, Tiger Woods sinks a minimum of 100 + four foot putts in a row before calling it a day. Apply same kind of mindful resolve. Go a month without letting a single stop be hit and you’ll never go back! The tempations 'flip'! Before - it was 'decide', etc. to stay in and see if it works out. After - it is 'tendency' to get out and prepare for a 'functioning' setup... This practice saves / generates beaucoup psychological ‘capital’

 

To put into practice

It's system dependent but a general rule of thumb is if get a larger than average range bar against you = get out. And the final ‘stop’ to end all 'stops' in this practice = Always exit at market before price is close enough to stop order to risk getting a double fill.

 

After two successful months place stops (at 4.3 sigma ie in the far distance) early morning (for the whole day in case of outages/ catastrophe, etc). and use appropriate mental stops for each entry and apply the same rule –

Never let a mental stop be hit!

 

All the best.

 

zdo

[monad 10]

Does anybody have "The Undeclared Secrets That Drive The Stock Market" by Tom Williams, notice they are now selling them on the website for $199.

 

How does it compare to "Master The Markets"??? which was $99.

[jjthetrader 10]

Does anybody have "The Undeclared Secrets That Drive The Stock Market" by Tom Williams, notice they are now selling them on the website for $199.

 

How does it compare to "Master The Markets"??? which was $99.

 

They're only selling at that price because Tom signed them.

I downloaded the ebook for the undeclared secrets and it seems the same only the new one has been edited for spelling and added TradeGuider screenshots and promo.

You won't get anything new for your money. There are no 'secrets' in it that are not in MTM.

Edited January 17, 2008 by Soultrader
please no illegal filesharing here :)

[monad 10]

Very kind of you JJ, greatly appreciated.

 

I have gleaned a lot on price/vol based on Wyckoff and threads by DBphoenix on elitetrader and T2W, am trying to create my own trading style incorporating Taylor Trading Technique and some of the concepts illustrated by Soultrader on Market Profile, which BTW is excellent, check it out, he has recently posted his trades on YM.

[dandxg 10]

Could I get some people's volume count for yesterday Jan.15 on the ES daily chart.

My esignal shows 1.4 mil and tradestation shows 2.4 mil. There's got to be something wrong.

That's enough to change my view of directional orientation.

thanks

 

JJ I use Sierra Chart with EOD data and I show about 1.4. I probably has to do with the time period specified with the disparity is that great.

[dandxg 10]

Thanks to those that responded on TG's bootcamp. I guess it's just my computer? I just wanted to offer a suggestion that may help some, like it did me. Instead of judging bar by bar with price and volume, look for pullback to trend on lighter volume. I hope that makes sense. I find it so much easier when the market pulls back on trend with ever decreasing volume and then I get a key reversal of some kind it's time to sell one tick below the low and put my stop 2 ticks above the high and shoot for a re-test of the low that was just made before the pullback. This will also allow you to most often maintain good money management as you will be shooting for 2-1 or greater R to R. That's why DB's thread has been so helpful to me. It has lots of examples of pullbacks on lighter volume with different variations.

 

Does anyone here do Wyckoff P and F? I have yet to start learning it.

[jjthetrader 10]

JJ I use Sierra Chart with EOD data and I show about 1.4. I probably has to do with the time period specified with the disparity is that great.

 

I appreciate you checking these numbers for me. Tradestation is way off and I only have it on the daily session. They're pissing me off big time lately with their data.

[jjthetrader 10]

Thanks to those that responded on TG's bootcamp. I guess it's just my computer? I just wanted to offer a suggestion that may help some, like it did me. Instead of judging bar by bar with price and volume, look for pullback to trend on lighter volume. I hope that makes sense. I find it so much easier when the market pulls back on trend with ever decreasing volume and then I get a key reversal of some kind it's time to sell one tick below the low and put my stop 2 ticks above the high and shoot for a re-test of the low that was just made before the pullback. This will also allow you to most often maintain good money management as you will be shooting for 2-1 or greater R to R. That's why DB's thread has been so helpful to me. It has lots of examples of pullbacks on lighter volume with different variations.

 

 

Thanks for sharing your strategy. I totally get what you're illustrating. Nice work.

[mister ed 10]

Does anyone here do Wyckoff P and F? I have yet to start learning it.

 

Hi dandxg - yes I have a PF chart running on the ES. I use it in conjunction with bar/candle charts.

[gassah 10]

Hi dandxg - yes I have a PF chart running on the ES. I use it in conjunction with bar/candle charts.

 

Hi dandxg,

 

I also use Wyckoff PnF. I use it to find stocks that have enough potential and to estimate price targets for exits.

 

nic

[habi 10]

I appreciate you checking these numbers for me. Tradestation is way off and I only have it on the daily session. They're pissing me off big time lately with their data.

 

JJ

 

Be aware, that eSignal is reporting daly volume with one day delay. Check the eSignal knowledgebase:

 

http://kb.esignalcentral.com/display/2/index.asp?c=12&cpc=40O2r6eeyG0Jfuy2sd5gAr4LG2c3&cid=1&cat=&catURL=&r=0.7527277

 

(surch for 'futures volume' and select exact prase)

 

Advanced Chart Window

When looking at any electronic futures symbol on an intraday time frame the volume study will show you the actual contract volume being traded. If you are looking at any non-electronic futures contract in an intraday interval it will show you tick volume (tick volume is the number of times the price has changed in a given interval). If you are watching any futures symbol on a daily interval the volume shown will be yesterdays closing volume.

 

 

You can check the correct volume on the CME website in the daly bulletin. Select the corresponding day and then the PG47 file for the S&P E-mini:

 

http://www.cme.com/trading/dta/hist/dbindex.html

 

Volume reported:

 

14.1. 1'456'055

15.1. 2'438'433

 

I had a discussion recently in the eSignal forum about this issue:

 

http://forum.esignalcentral.com/showthread.php?s=&threadid=25427&perpage=15&pagenumber=1

 

This changes a lot in your analysis. Instead of a down bar on low volume, it was a no demand bar in my opinion. I attached a chart with eSignal volume and a corrected volume (volume-1) with a EFS-Formula

[Anonymous 11]

Short set up(s):

 

Interesting things prior to the trade set up.

 

A: UpThrust out of place (Polar bear in Africa). If this had been real weakness, there would be weakness in the background.

 

B: Test. Notice that the volume is low and the close is in the middle. No sellers.

 

C: Test. Note that the volume on this Test is even lower than the Test two bars ago. Even more evidence that at this time the path of least resistance is up.

 

D: Narrower to equal range bar with more volume than previous bar that closes on the low and is a buying bar. That is, it makes a higher high than previous bar but not a lower low. This is a Squat/UpThrust. This candle is designed to get people in on the long side.

 

E: Now we get what we want to see. This is a dark WRB. High volume on down bars usually means selling and this is the case here. Since this is a WRB, we know that something is changing in the supply/demand dynamics in the market. This WRB sets up our Support/Resistance zone to look for an entry point.

 

F: This is a Test. But note that the volume here is higher than the previous two test, while being lower than the previous two candles. Hence, while we have low volume we have pretty high volume for a test. In other words, this is a failed test. It shows that there are sellers (supply) below. Also note the size of the range versus the previous two Test.

 

G: BINGO. Low volume sign within the range of the body of a WRB with high volume after a Failed Test. This is an Up bar on volume less than the previous two bars, making a higher high , on a narrower range. This is No Demand. The Smart Money is not interested in higher prices.

 

H: This is No Supply and out of place. More exactly, the background is full of weakness so this No Supply should not be taken as a long signal. The Pros may not be ready to take the market down, but they are not looking to go long.

 

I: Case and point we see No Demand. Clearly the market does not want to go up.

 

J: Higher high, closing on the lows, closing up on higher volume. This is an UpThrust. We have weakness in the background. This also occurs within the body of the Dark WRB making a good place to place a short entry.

 

K: High volume closing down from previous bar but closing in the upper portion of its range- this is stopping volume.

Edited March 29, 2008 by mister ed
Add back chart

[jjthetrader 10]

JJ

 

Be aware, that eSignal is reporting daly volume with one day delay.

 

This changes a lot in your analysis. Instead of a down bar on low volume, it was a no demand bar in my opinion. I attached a chart with eSignal volume and a corrected volume (volume-1) with a EFS-Formula

 

Thank you so much Habi! This changes your analysis completely for sure.

It's great to have that link to check through the echange myself. Thank you.

 

In the last two tradeguider events Tom Williams was discussing bars on the YM and I brought them up as the same time to go over them and it turns out that they're 1 freakin' day behind which even makes the masters analysis wrong.

 

The new upgrade of Tguider is promising an integrated datafeed. I hope it's better than esignal. Knowing them though it may suck to.

[jjthetrader 10]

Short set up

 

Are you entering at market or where are you placing your orders on these bars you point to as short?

thanks