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HiddenGap May 26, 2019 2:03pm | Post# 32001

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Wanted to see if I could use Paint instead of Snagit. I can't. At least not well.

Such a great chart.

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There's no text on the chart, but you almost don't really need any to follow.

Background

The first thing we see on the left side of the chart is a beautiful Two Bar Reversal (TBR). We see a Wide Range (WR7) UP bar on increasing volume that closes on its high. Which is immediately followed by a Wide Range (WR7) DOWN bar on increasing volume. Although this interval closes off its lows, the next bar closes DOWN confirming the weakness.

We don't get short here, as price is not below the TBL and the BPL and Chart Modes I & II are not both red.

Foreground

Obviously, this is a hindsight chart, but we want to distinguish the first sign of weakness that puts us on alert (the Background) from subsequent signs of weakness that may act as points of entry.

After price closes below both the TBL and the BPL and Chart Modes I & II turn red, we see another Wide Range (WR7) UP bar on high volume that closes on its high. In general, markets do not like widespread UP bars on high volume. The next interval is DOWN, which tells us that there must have been "hidden" selling on the previous bar. If all that volume represented strength, how could the next bar close DOWN?

We also note that this WR7 UP bar is attempting to move into the range of the Previous WR7 DOWN bar of the TBR.

Five intervals later, Yahtzee!

After moving DOWN, we see price move UP on an increasing range bar with volume less than the previous two bars that closes in the middle of its range. This interval is either No Demand or No Buying Pressure. Most will think No Demand, but since the range is increasing rather than decreasing, No Buying Pressure is technically more correct. Either way, this is a weak bar in a Down Trend with weakness in the Background. We can also note that the WR7 UP bar's midpoint (50% Fib level) is acting as a resistance level here.

We can wait for the next bar to close DOWN to confirm the No Buying Pressure sign of Weakness and then enter, or we can place an entry order at the low of the No Buying Pressure interval as a more aggressive entry.

Another nice entry occurs when we see a narrow range UP bar on increasing volume. This is a Squat. Volume is increasing but the range is compressed. What could be the reason for this? VSA tells us (as does Bill Williams) that the range is compressed because all the buy orders are being immediately filled from a large pool of sell orders positioned at the level. Not so coincidently, this Squat is appearing at the midpoint of the most recent WR7 DOWN bar, which represents a key change in the Supply/Demand dynamic in the market.

HiddenGap Jun 3, 2019 5:01pm | Post# 32002

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Chart dump, thread bump.........

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HiddenGap Jun 5, 2019 1:04pm | Post# 32003

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LEST WE FORGET:

Weakness, when it appears, usually appears on UP bars.

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HiddenGap Jun 8, 2019 3:32pm | Post# 32004

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DISCLAIMER: I believe that every retail trader should exit all positions at least 15 minutes before a news event like NFP. Moreover, I don't think a retail trader should initiate a new position 30 minutes or less before a news event like NFP. Therefore, while what follows may appear to be hindsight of an ideal entry, no representation is being made of a trade that was or should have been taken by the author or the readers of this post.


WHAT DID THEY KNOW, AND WHEN DID THEY KNOW IT?

One of the issues many traders have with Volume Spread Analysis (VSA) is the notion of Smart Money coordinated market manipulation. Critics are in disbelief that certain well-heeled parties call each other on their bat phones from secret locations and say, "Let's move prices up today gents." I would concur that such a notion is absurd. However, a chart never lies. And sometimes, nay, many times the story the chart tells begs the question, "What did they know (the Smart Money), and when did they know it?".

Chart I

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Early action on Friday we see a wide spread (WR7) DOWN bar on ultra high volume that closes well off its lows with the next bar UP. This is a ShakeOut and the start of accumulation. Accumulation by definition means the Smart Money is buying.

Price meanders around for a couple of hours. Then we see another even larger wide spread (WR7) DOWN bar on the highest volume that can be seen on the chart, that closes off its lows with the next bar UP. This is Climatic Action. If all that volume represented selling, how could the next bar be UP? This is the second major sign of accumulation. The Smart Money is buying. Why are they positioning themselves to the long side with the mother of all news events just around the corner? Could it be that they don't care, or worse, already know what the report is going to say? Again, it's doubtful that a series of smoke signals or coded messages were sent to various Smart Money players. But they all do seem to be buyers.

Two subsequent "Tests" confirm to the Smart Money that the prevailing wisdom is to be Long. The first test comes after price moves above the Bull/Bear Mason-Dixon Line (MDL). The second Test is the more interesting one, however. There has been a change in behavior. Chart Modes I & II are Green and price is above (or on) the Balance Point Line (BPL), the Trend Bias Line (TBL) and the Bull/Bear Mason-Dixon Line (MDL). In short, this is a Test in a rising market that is occurring roughly an hour before the news release. If you're a member of the Smart Money, this is your cue to get Long is you're not already. For those that follow the Smart Money, this is what to look for to get Long as well (see disclaimer).

Also note that the Test is appearing at the High of the Climatic Action interval, or where the Trigger Number line would be drawn for a Shart Shooter entry.

Chart II

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NFP is released and price rockets UP on a wide spread (WR 7) bar on ultra high volume.

It is not necessary to know when the Smart Money knew what they knew or how they knew it. Do Smart Money players all belong to a club at an undisclosed location with a secret handshake needed for entry? Maybe or maybe not. But however they know what they know or whenever they know it, they leave footprints on the chart for each other, and for the astute retail trader to follow.

pooh123 Jun 8, 2019 9:31pm | Post# 32005

Critics are in disbelief that certain well-heeled parties call each other on their bat phones from secret locations and say, "Let's move prices up today gents."
They don't use bat phones. They use chat rooms of social media. https://www.reuters.com/article/us-e...-idUSKCN1SM0XS

Alf Ralf Jun 28, 2019 3:54am | Post# 32006

Hi HiddenGap, I'm back from a long hiatus.
Awesome to see you still teaching. Thanks

Alf Ralf Jun 28, 2019 4:09am | Post# 32007

EU M30 Minor weakness @ 9am

Alf Ralf Jun 28, 2019 4:35am | Post# 32008

EU M30 Minor weakness @ 9am
Stopped out at BE
Not ideal as counter trend.

Alf Ralf Jun 28, 2019 7:31am | Post# 32009

Turned out to be the right call.

Hoaibaochieu Jun 29, 2019 10:50am | Post# 32010

Hi, i go to forums I don't understant can used methor With MT4 then see indicator for good trader. Thanks

ditlegend Jun 29, 2019 11:21pm | Post# 32011

Hi @HiddenGap, would u like to share ur's indicator and template?
I looking for workable but not lucky.. i still studying this vsa concept.. find hard to learning it

Alf Ralf Jun 30, 2019 5:45am | Post# 32012

Hi @HiddenGap, would u like to share ur's indicator and template? I looking for workable but not lucky.. i still studying this vsa concept.. find hard to learning it
That looks like Tradeguider to me, but you don't need it. Learn supply/demand, effort/result and cause/effect.

Alf Ralf Jun 30, 2019 9:45am | Post# 32013

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Image 1 - EU M30 Effort v Result
Image 2 - EU M1 - Entry, after sign of strength and what I like to look for, which is a bar were traders are getting the best value.

HiddenGap Jun 30, 2019 10:43pm | Post# 32014

Hi @HiddenGap, would u like to share ur's indicator and template? I looking for workable but not lucky.. i still studying this vsa concept.. find hard to learning it
I use Sierra Charts. All the indicators are there, none are custom made by me. Although, I may have tweaked the appearance to emulate TradeGuider.

Balance Point Line (BPL) = 12 period moving average (smoothed) of the midpoint ((H+L)/2), shifted 7 periods forward.

Trend Bias Line (TBL) = 64 period moving average (simple) of the midpoint ((H+L)/2).

Chart Mode I = Bill Williams' Awesome Oscillator. I use 34, 5 (volume weighted) MAs of the midpoint.

Chart Mode II = Accumulation Distribution 38.

Wide Range Bar (WRB) or Wide Range 7 (WR7) = largest range (High - Low) in the last 7 intervals.

Anotan Jul 1, 2019 4:11am | Post# 32015

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Could it be? Are people still interested in volume?

Judging by last weeks action the commodity pairs and the yen seem to be starting a strong trending period, granted that is my bias talking. Here is a chart of EUR/CAD which IMO volume looks weak.

Looking at what happened on a H1 chart from Friday, on Friday we can see the little rally which was hit with supply (a). The weird part is this two bar reversal (b) which formed before price could really drop, the location of this two bar reversal seems off. A two bar reversal really is just a shake out across two bars right? For this to be legitimate two bar I would expected this to form below the previous low and try to shakeout any weak bulls. Also look at the reaction (c) to the two bar reversal (b), price did try to rally off of it, but for only one bar (c), then price drops hard on a wide spread down bar on high volume (d). How can this high volume down bar (d) be strong when it just collapsed on a major sign of strength (b)? It's not.

Today I was watching the Asian session and saw a bit of buying come in, in the form of a squat bar (e). I have no idea who was buying there, the bar itself doesn't look like profit taking, IMO at least it looks like legitimate buying but who would be buying with Friday's selling? The reaction to the buying was a no demand up thrust (f) which I was nervous about shorting because of the squat bar behind it so I stayed out. The next bar (g) was the nail in the coffin so to speak, an up bar that failed to take out the high of the no demand up thrust (f). I saw that and the next bar was headed down so I sold it.

I know today there are some OPEC meetings which could have a major impact on CAD, but honestly the risk is so minimal with this trade I'll let the stop ride and see where we are Thursday or Friday.
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Alf Ralf Jul 1, 2019 5:29am | Post# 32016

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EU M30 potential accumulation, long now is risky.
Wait for cross above 1.3303 and test to long.

Alf Ralf Jul 1, 2019 7:56am | Post# 32017

Played out well

Anotan Jul 1, 2019 10:57am | Post# 32018

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Stop was a little too tight on the first trade, round 2.
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Anotan Jul 1, 2019 11:21pm | Post# 32019

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Went ahead and set my stop to break even. Hoping to see another down day today as well, early during the Asian session price dropped off a failed test.
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Anotan Jul 1, 2019 11:57pm | Post# 32020

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Have my eyes on AUD/JPY this week.

On the weekly chart we can see back in December of 2018 a massive shakeout and few weeks ago we saw our first signs of strength in a small two bar reversal which price soon after ran the stops on any weak buyers. Two weeks ago we had a perfect test which price responded very well.

There is an RBA rate announcement coming up, hoping that drops price a bit and can start looking for some discounted longs, conservatively I think price can hit 78.00, but realistically I think we will see 84.00 or higher.
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