LionHeart: Focus & Simplicity

"Growth occurs when individuals confront problems

Struggle to master them

And through that struggle

Develop new aspects of their skills, capacities and views about life"

-Carl Rogers

The above couldn't be more true and I realize through previous journals that the best way to learn and continue to grow is to take record of one's own analysis, successes, mistakes and failures.

Everything we do and experience is an opportunity to learn and to grow and become better.

So, this will be utilized as yet another tool on that road to growth and improvement as well as serving as an aid to keep me engaged and focused.

It would seem counter-intuitive that posting on a blog would help with this.

However, we all know that trading can become very lonely, monotonous and somewhat boring at times as non-traders have little clue what we are talking about when we happen to vent or open a discussion about how price took off before we could get in or how we got stopped by a few pips just for price to go in the direction we were looking for it to go.

This will not be a means of getting into any type of trading systems or strategy discussions but rather personal reflections, revelations, ramblings and an open platform for trade discussion.

Lets get started!!!

*Random Note

It has been my observation from reading the relationship between price and volume that there is something like effort vs accomplishment that takes place often times.

During these times there are various scenarios that may occur

-Price may close beyond a support or resistance level (includes trendlines and horizontal lines) but does so on low volume indicating minimal interest in price going to far beyond that level at that time.

-Price may close with a surge of extremely high volume relative to the volume bars preceding but may achieve or accomplish absolutely nothing around a significant support or resistance level also indicating minimal interest in price going too far beyond that level at that time.

-Price may close beyond a level of support or resistance with a sudden surge of volume indicating that there is great interest in price trading beyond that price level.

These notes may be a bit off base but just an observation that may be worth taking note of.

On this day, I took two shorts in which one of those shorts was a failed position. In retrospect, I can take note of a few things that should have kept me out of this position.

a. Price closes on its lows while breaking out of the rising wedge. However, price did so on shrinking volume (volume lower than previous two bars) which is indicative that there is no support at this time for price to move lower.

b. Demand comes into the market as we see a "test bar" testing for supply and finding none as price dips below the previous low point but fails to maintain the lower price and closes on its high.

c. Here we have a bar that closes bearish but closer to the middle of the bar and on even less volume (no supply bar)

d. Price rallies to the top of the wedge pattern on ultra high volume but fails to close outside the top resistance line. This is reflective of effort with no achievement and the fact that there is probably minimal interest in price moving higher. The next bar confirms what the bar at "d" was showing as supply comes in as a sort of "hidden upthrust" closing on its lows. With the amount of volume in such a small bar, it is safe to assume that there is a lot of activity going on during this bar.

e. This area is around the area of the second short that was actually successful. So, at this bar price closes outside of the wedges support line and does so with higher volume while closing on its lows.

f. This bar is a "no demand bar" as it closes bullish but fails to close back into the wedge formation and also has lower volume than the previous two bars.

g. This bar is the same as "f" where it could not close back into the wedge, but closes on its lows. An is an "upthrust bar" on higher volume reflecting the possible end of the small amount of bullish activity that was present.

h. A reflection of supply coming into the market as the bar closes bearish and on its lows with higher volume.

The market proceeded to drop from their.

I'm still new to applying some of the principles of VSA and still learning a good bit hence the point of this all. Someone I discovered who seemed very knowledgeable on the subject matter mentioned a good bit about having the background information and paying attention to it as a reference to what is actually going on in front of us. This is what I'm trying to become familiar with doing to apply it further to my own logic.

*Random Note

What is an UPTHRUST BAR?

An Upthrust Bar is a wide range bar, with a high volume and closing down.

It indicates that the prices were marked up during the day (for simplicity we use day, it is equally applicable on all time frames), the Trading activity was High as indicated by the High volume and the prices dropped to near the low (or to the low) towards the closing hours.

Looking the SM perspective what happened was that the SM marked up the prices in early trading hours indicating strong bullishness.

Enticed by this bullish move the weak money also rushed to acquire the stock.

Shorts if any would also have rushed for cover.

Meanwhile the SM is quietly distributing their holding to the weak money.

In the later part of the day the SM drastically marks the price down trapping the weak money holding stocks at much higher prices.

In order to make this ideal, the Upthrust normally appears after a wide range upbar with high volume.

This makes it easy for the SM to markup the price and entice the weak money.

Most of the time the Upthrust will be moving into new higher territory.

The High of this bar will be much higher than the previous high.. High volume should be an important consideration.

What are the Things to Looks for in a Uptrust?

1. High Volume and How high?

2. Wide Spread?

3. Close, near or on the Low?

4. What was the previous bar action?

5. Did the bar into new territory?

6. Is the stock in an up trend?

High volume Upthrust are a sure indication of weakness, higher the Volume the stronger the indication.

It may be even wise to get out of the stock if the Upthrust has ultra high volume.

The wider the spread more potent the Upthrust Lower the closer the stronger the indication of weakness.

Ideally the close should be the Low or near the low.

If the close is towards the middle it would mean than the SM was not successful in marking the price down. There was too much demand. An ideal Upthrust will move into new territory.

The High will be very much higher than the high of the previous bar.

This means the SM was really successful in marking the price up and many traders get trapped into bad positions in the end of the day. Upthrusts are effective when the trend has been in force for some time.

Sometime you would find weak up thrusts in early trends.

Many times Upthrusts can be found with low volume.

Pseudo Upthrusts. These are not effective as the Upthrust. But are still signs of weakness..

*Random Note

NO DEMAND BAR

According to Tom Williams an Ideal No demand bar is a Up bar with narrow spread closing in the middle or lower and the volume is less than the volume of the previous bars.

Though this is their basic definition, there can be subtle difference in the No Demand bar throwing up different commentaries.

But in general any narrow spread low volume Up bar closing in the lower half of the bar indicated No demand.

What does this no Demand Bar indicate?

A no Demand bar indicates that there is no support from the SM.

The SM is not interested in higher prices and they are not supporting the stock.

Whatever buying or selling is from the stray weak money entering and exiting.

Consequently this indicates weakness.

The No Demand bar does not indicate any immediate reversal.

While analyzing a No demand bar we have to look at the prevailing background.

Does the background reflect weakness in terms of Upthrust or Pseudo upthrust?
If the background is weakness, the No Demand bar indicates enhanced weakness.

If the background does not show weakness the No demand bar does show weakness and does not necessarily indicate reversal.
It only shows lack of participation from SM. We may soon see the SM moving in to take the stock up further. So it would be wait and watch time.

*Random Notes

“Effort without Result”

If the “effort to move up” results in the stock moving up, the effort has yield the desired result.

Many times there may be a bar that makes and effort to move up and the next bar would be high volume bar closing near the low indicating large supply coming in swamping the demand.

So the effort to move up has not yielded the desired result.

Frequently such situations seem to be at high resistance / high supply areas.

These Efforts without result are good indications of weakness.

Most of the times you will find the stock moving down or side ways after this failure.

This is because the SM would rather wait for the supply to vanish before repeating the effort.

The SM will then test the market for supply before trying to move up further.

The repeat move could be good entry points.

*Random Notes

STOPPING Volume

In a down trend you will see a down bar with high volume bar closing on the upper side.

This is called Stopping volume.

This indicates that the SM is absorbing all the stocks.

The SM has decided to start the game all over again and have decided to stop the down tide and start accumulating.

As a result the stock will soon see side ways movement or go into a long accumulation phase.

In effect the stopping volume or absorption volume indicates that the long bearish move is likely to end soon.

An Ideal Stopping Volume bar will be down bar with high volume and closing near the top.

However most of times you would see the close on the upper half of the bar.

Stopping volume occurs after long down trend.

Stopping volumes are basically alert to the impending reversal.

“No Supply Bar"

The No Supply bar is a narrow range low volume down bar closing in the lower half.

The No Supply bars are found in the early Bottom reversals and indicate strength.

It is also common to find these bars in an up trend which are indications of continuation of the trend.

They would also be found on consolidation bases.

A No Supply indication has to be read in context with background.

At bottom reversal areas they indicate there is no supply available.

Then the SM gets ready for mark up.

Hence they indicate strength especially if they appear before/after test bars.

During up moves a No supply could indicate non participation from SM.

Like most the signs of strength/weakness, a look at the background must be heavily looked at to interpret what the bars are indicating.

Very nice information here. Going to read it all on my lunch and breaks today so I can start to soak it all up. Will post charts when I get home today.

Some notes taken from material by Wyckoff:

Accumulation Terminology

PS- Preliminary Support
Where substantial buying begins to provide pronounced support after a prolonged down move.
Volume increases and price spread widens, signaling the down move may be approaching its end.

SC-Selling Climax
The point at which widening spread and selling pressure usually climaxes and heavy or panicking selling by the public is being absorbed by larger professional interests at or near a bottom.
Often price will close well off the low in a SC, reflecting the buying by these large interests.

AR-Automatic Rally
Intense selling pressure has greatly diminished.
A wave of buying easily pushes prices up, further fueled by short covering.
The high of this rally will help define the upper boundary of accumulation TR.

ST-Secondary Test
Price revisits the area of the SC to test the supply/demand balance at these levels.
If a bottom is to be confirmed, volume and price spread should be significantly diminished as the market approaches support in the area of the SC.
Common to have multiple ST's after a SC.

Spring or Shakeout (not required elements of an accumulation phase)
Usually occur late within a TR and allow the dominant players to make a definitive test of available supply before a markup campaign unfolds.

-A spring takes price below the low of the TR and then reverses to close within the TR.
Allows large interest to mislead the public about future trend direction and acquire additional shares at bargain prices.

-A shakeout is a more extreme version of a spring.
May occur once a price advance has started with rapid downward movement intended to induce retail traders and investors in long positions to sell
their shares to large operators.

Test-Large operators always test the market for supply throughout a TR and at key points during a price advance.
If considerable supply emerges on a test, the market is often not ready to be marked up.
A spring is often followed by one or more tests
A successful test (indicating that further price increases will follow) typically makes a higher low on lesser volume

SOS-Sign Of Strength
A price advance on increasing spread and relatively higher volume.
Often takes place after a spring, validating the prior action.

LPS-Last Point of Support
The low point of a reaction or pullback after a SOS.
Backing up to an LPS means a pullback to support that was formerly resistance, on diminished spread and volume.
Can be more than one LPS.

BU-Back-Up
Test for additional supply around the area of resistance.
Common structural element preceding a more substantial price mark-up and can take on a variety of forms
(Including a simple pullback or a new TR at higher level.)

Some notes taken from material by Wyckoff:

Distribution Terminology

PSY-Preliminary Supply
Where large interests begin to unload shares in quantity after a pronounced up-move.
Volume expands and price spread widens, signaling that a change in trend may be approaching.

BC-Buying Climax
The force of buying reaches a climax and heavy or urgent buying by the public is being filled by professional interests at prices near the top.
Often marked increases in volume and price spread.
A BC often occurs coincident with a great earnings report or other good news, since the large operators require huge demand from the public to sell shares without depressing stock price.

AR-Automatic Reaction
Takes place after intense buying substantially diminishes after the BC and heavy supply continues.
The low of this sell-off helps define the lower boundary of the distribution TR.

ST-Secondary Test
Price revisits the area of the BC to test the demand/supply balance at these price levels.
If a top is to be confirmed, supply will outweigh demand, volume and spread should decrease as price approaches the resistance area of the BC.
An ST may take the form of an upthrust (UT) in which price moves above the resistance represented by the BC and possibly other STs then quickly reverses to close below resistance.
After a UT, price often tests the lower boundary of the TR.

SOW-Sign Of Weakness
Observable as a down move to (or slightly past) the lower boundary of the TR, usually occurring on increased spread and volume.

The AR and the initial SOW(s) indicate a change of character in the price action of the stock.
At this moment, supply is now dominant.

LPSY-Last Point Of Supply
After testing support on SOW, a feeble rally on narrow spread shows that the market is having considerable difficulty advancing.
This inability to rally may be due to weak demand, substantial supply or both.
LPSYs represent exhaustion of demand and the last waves of large operators' distribution before markdown begins.

UTAD-Upthrust After Distribution-(not required element of distribution phases)
Distributional counterpart to the spring and shakeout in accumulation TR.
Occurs in later stages of the TR and provides a definitive test of new demand after a breakout above TR resistance.

I've attached a screenshot of the EURUSD trade from last night. The trade was triggered at 9:09pm PST if my calculations are correct. It would have had a stop loss of between 35-40 pips and at it's peak it was +75 pips profit. Depending on whatever stop loss that was used this trade would have been either a 1:1 trade or a break even stop out.

Cheers to many pips this week. Secure the bag!

I've attached a screenshot of the GBPUSD trade that I took last night that ended in a loss.
I did receive a short signal per my method (plotted by the red vertical line) a little after midnight my time but was sleep and didn't get to close out the trade. Had I been up for this signal, I would have closed out my long and entered short, saving myself about 20 pips. My long would have still been a negative trade but only for about -13 pips instead of -37 pips.

For testing purposes, all these trade I will post are taken on a demo account and with no stop loss. If I decide to go live with this way of trading, I will be using a stop loss. So far, my GBPUSD trade from last night is the only trade that I have taken that has been closed out.

I have also attached a screenshot of my trades that are still open.

All trades, to keep things as simple as possible are taken with 0.01 lots per trade. I currently have a floating profit of +255 pips on the 4 open trades that I currently have.

My GBPUSD trade was entered at 7:03pm PST on 8/13/17 @ 1.3016 and I manually closed the trade at 9:29am PST on 8/14/17 @ 1.2978 for a loss of -38 pips (I round up). The red vertical line was at 12:34am PST on 8/14/17 @ 1.2999. That trade would still be open with a floating profit of about +49 pips right now.

As my trades get closed out, I will post a chart showing where my entry and exit were at. Full transparency.

Lesson learned from last night...stop loss is needed. Gave back way too many pips. This is all for testing purposes so I'm not mad one bit. Going forward, I will have a stop loss on each trade that I will try to trail. Trailing a stop loss manually is just way too hard (can't be at the charts all day long) so I will give it my best shot. Below is a screenshot of each trade with the trade details also. I think I'm doing my time conversion wrong so for now, I will not display the entry time or exit time until I'm confident that I'm doing it correctly.


Long @ 1.2532 out @ 1.2517 for -15 pips
Long @ 1.2613 out @ 1.2517 for -96 pips


Long @ 86.34 out @ 86.72 for +38 pips


Long @ 109.42 out @ 110.62 for +120 pips

Spreads have not been taken into consideration.

Sometimes, the best lessons are learned from our own experiences. good work!!!

Thanks. I appreciate that. We in this for the long run. Like we said before, we family...so that means you stuck with me. My GBPUSD trade that I missed from post #14 hit a peak of +152 pips. It would currently still be open with a floating profit of +137 pips. Shoulda, woulda, coulda...

Looking forward to the next trade opportunities that I get and staying connected in the thread.

Here are the screenshots from the trades that I took last night. I have closed them all out as I need to update my laptop and it will take a nice chunk of time. What I will do going forward to make it easier on me when it comes to the transparency I will show my trade history for each trade I take. I will show the chart with my trade plotted on it and I will have that trade highlighted in blue in the trade history so all the detail are there.

And the post with what I look for will come today for sure.

An example of a short that should not have been taken but even further, an example of a short that was taken and should have been closed out around break even point. That is where attention to detail comes into play. The same attention to detail that should have been taken before the entry. This entry was taken on m5 but H4 and daily can still give some idea of an overall view point of what may be likely to occur (big picture)

H4


H1


H1 shows exactly what H4 was depicting but just in better perspective.

So basically, all signs point to the fact that I probably shouldnt have had an interest in shorting since smart money is clearly pulling out from bring prices lower and will start to mark the prices up. In which then I would have to begin to watch closely to see when the imbalance happens and demand has taken over the supply.

The screenshot below depicts the point where I should have closed the trade out to become a nearly break even position.



Price testing the supply in the area where we could see stopping volume with the wide range bars. Ive always read and have seen for myself that the market does not like ultra high volume very much and it is usually an indicator of a final effort or a lot of selling in up bars or a good amount of buying in a down bar. So this would have been a good point to exit this short.

Taking a look at EUR USD from the evening of 08/22/2017 and why I would not have shorted this pair at that time.



Point 1 shows stopping volume indicating that there is no further interest in moving the market down much further.

Point 3 shows a retest of supply at point 1 which again comes to a point of effort with no result on the highest volume for about 14 bars followed by a bar with increased volume testing the lows even further.

Point 5 and 7 depicting the same thing again as point 3 continually testing the supply to see if there is any before marking prices up which we can see happens later on.

So, at any rate, thats my perspective on why I wouldnt have shorted this pair.