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vsa with Malcolm

  • #31,661
  • Jan 15, 2018 11:10am Jan 15, 2018 11:10am
QUESTION:

I though it might be interesting to ask a question and see what type of responses are given. Maybe it will lead to some insightful, and civil, debate.

Chart 1 is a snap shot that was taken after Friday's close. It clearly shows a great SHARP SHOOTER trade. No entry is marked, but I am sure you can easily spot one. Suppose you entered this market on Friday, and are the type of trade who does not hold trades overnight, let alone, over the weekend. Well done. You made money. But more importantly, you planned your trade and traded your plan.

Chart 2 is a snap shot that was taken Monday in real time.

The question is this: If you were going to get back into this market, which is clearly still bullish,where would you re-enter, and why?

Caveat: The "best" entry does appear to be after the opening bar on Sunday evening. But do you really trade Sunday evening? Therefore, if you opt for this bar as your answer, please explain why you trade at this volatile low volume time of day. Do you normally trade at this time, or was this opportunity too good to ignore?

Hopefully, other questions will arise as we get answers and explanations. We'll see.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #31,662
  • Jan 15, 2018 11:22am Jan 15, 2018 11:22am
Quoting Nik-Nyc
{quote} Hi Silence, As per usual HG explanation was excellent. Attached is a chart previously marked up and posted in another thread, it may offer some additional insight into the concept of absorption. Besides the bid/offer market orders represented in the OF candles, note the divergence between candle color and delta (located numerically at bottom of the chart labeled AskV-BidV). The study of bid/offer orders and general orderflow can be very worthwhile and indeed they are tools found in many professional's toolboxes, both for analysis and more...
Simply awesome . More examples and insights would be much appreciated.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #31,663
  • Jan 15, 2018 11:38am Jan 15, 2018 11:38am
Quoting HiddenGap
{quote} Simply awesome . More examples and insights would be much appreciated.
Here is an other example, about absorption. (Started studying it before a month or so and I am really happy)

Firstly the thing in the right is the delta in that price level, even if it was way negative the price reversed there so someone was filling(Absorbing the movement)
The oscillator like window is Delta for the bar. It was negative as well but way less than the previous one.
Lastly we can see 141 Sells to 35 buys around 500% difference in the low of the bars. If we combine this one with the 2 signals above we can see a clear reversal.

P.S : This chart is Eu Futures(Eur/usd), 12ticks Range bars, 12 January 2018.
Attached Image (click to enlarge)
Click to Enlarge Name: Absoprtion.jpg Size: 950 KB
Do Not Predict! React!
  • #31,664
  • Jan 15, 2018 11:45am Jan 15, 2018 11:45am
Quoting Autrader
{quote} Stuck Sellers, If market has a sell orders hitting the bid and price is not moving what does that mean? Seller selling and price not moving down? Market not reacting to sellers meaning market its absorbing orders, so the most likely right side of the market is the other.
The guy that runs the MarketDelta trading room is big on this idea.

When you sell (short), you immediately become a buyer. When you buy (long), you immediately become a seller. So an up move, for example, would be fueled as much by, if not more so, stuck shorts trying to get position neutral, as new longs. Therefore, you can create an edge if you can find where the most traders are stuck (long or short).
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #31,665
  • Jan 15, 2018 11:48am Jan 15, 2018 11:48am
Quoting HiddenGap
{quote} The guy that runs the MarketDelta trading room is big on this idea. When you sell (short), you immediately become a buyer. When you buy (long), you immediately become a seller. So an up move, for example, would be fueled as much by, if not more so, stuck shorts trying to get position neutral, as new longs. Therefore, you can create an edge if you can find where the most traders are stuck (long or short).
And the idea behind it is pure reality. If you can not spot where are people stuck you should not be taking any trade.


Kind of of poker game if you can not identify who are the sucker you are the sucker.
Know yourself before fight with the market.
  • #31,666
  • Jan 15, 2018 11:49am Jan 15, 2018 11:49am
Quoting Autrader
{quote} And the idea behind it is pure reality. If you can not spot where are people stuck you should not be taking any trade. Kind of of poker game if you can not identify who are the sucker you are the sucker.
As a professional Poker grinder, I will have to confirm that theory.
The most money in cash games are made so that you find the fish(The sucker) and you are playing the best you can against them until they are left with no money at all!
Do Not Predict! React!
  • #31,667
  • Jan 15, 2018 11:53am Jan 15, 2018 11:53am
Quoting P3rri
{quote} As a professional Poker grinder, I will have to confirm that theory. The most money in cash games are made so that you find the fish(The sucker) and you are playing the best you can against them until they are left with no money at all!
Exactly in trading is about the same easy trades with not heat is where you can see people losing money meaning stuck people.

And those trades would move faster not because there is a power in the direction of the market but those stuck into positions need to exit causing explosive moves.
Know yourself before fight with the market.
  • #31,668
  • Jan 15, 2018 11:56am Jan 15, 2018 11:56am
Quoting Autrader
{quote} Exactly in trading is about the same easy trades with not heat is where you can see people losing money meaning stuck people. And those trades would move faster not because there is a power in the direction of the market but those stuck into positions need to exit causing explosive moves.
And like always fear, mostly of losing is way stronger than greed is. An easy example is that bull markets last 10-11 years but bear markets only 3-4.
Sellouts or closing negative positions will always be a stronger emotionally than holding into profits or making a continuation.
Do Not Predict! React!
  • #31,669
  • Jan 15, 2018 11:58am Jan 15, 2018 11:58am
Other thing that helped me as a trader is thinking in the market as a game where you know he rules and you do not want lose.

Just like a multilevel game.
Know yourself before fight with the market.
  • #31,670
  • Jan 15, 2018 1:05pm Jan 15, 2018 1:05pm
Quoting HiddenGap
QUESTION: I though it might be interesting to ask a question and see what type of responses are given. Maybe it will lead to some insightful, and civil, debate. Chart 1 is a snap shot that was taken after Friday's close. It clearly shows a great SHARP SHOOTER trade. No entry is marked, but I am sure you can easily spot one. Suppose you entered this market on Friday, and are the type of trade who does not hold trades overnight, let alone, over the weekend. Well done. You made money. But more importantly, you planned your trade and traded your plan....
1. I would re-enter; on strong demand bars (green arrow below); and when the trend indicator is green

2. It's probably better to skip Sunday; liquidity is dry; players are not playing the market. Since the VSA is all about volume; we need it to trade; the more the merrier.
  • #31,671
  • Jan 15, 2018 1:15pm Jan 15, 2018 1:15pm
Quoting P3rri
{quote} Here is an other example, about absorption. (Started studying it before a month or so and I am really happy) Firstly the thing in the right is the delta in that price level, even if it was way negative the price reversed there so someone was filling(Absorbing the movement) The oscillator like window is Delta for the bar. It was negative as well but way less than the previous one. Lastly we can see 141 Sells to 35 buys around 500% difference in the low of the bars. If we combine this one with the 2 signals above we can see a clear reversal....
Nice chart! I am interested, what TF is it?
  • #31,672
  • Jan 15, 2018 1:17pm Jan 15, 2018 1:17pm
Quoting HiddenGap
{quote} The guy that runs the MarketDelta trading room is big on this idea. When you sell (short), you immediately become a buyer. When you buy (long), you immediately become a seller. So an up move, for example, would be fueled as much by, if not more so, stuck shorts trying to get position neutral, as new longs. Therefore, you can create an edge if you can find where the most traders are stuck (long or short).

Tony also pointed out that the market can not go up with too many buyers, (already long) because they will start taking profit as it goes up.

With this reality, a false breakout lower, takes out some weak longs, allowing the market to go up.
  • #31,673
  • Jan 15, 2018 3:44pm Jan 15, 2018 3:44pm
Quoting HiddenGap
{quote} Simply awesome . More examples and insights would be much appreciated.

Thanks HG. I will gladly post more examples tomorrow once the markets opens back up. The great thing about absorption is that it occurs every day and on every market, so examples are easy to find (and trade).

Also, i noticed the discussion on "trapped traders", this is another great concept that can be traded via orderflow. Another trader on FF, Rocky, has done a great job outlining this concept. He calls it a "retail flush", but in essence its the same as trapped traders. The false breakout or 2B becomes very obviously when observing market orders coming in and hitting against limit orders. For those interesting in these concepts i recommend reading all or Rocky's post, and working backwards from the posts in this thread (amazing thread, fyi):

https://www.forexfactory.com/showthr...sh#post9553937

As a quick sample of the kind of material you will find posted by Rocky, this is a sample of his analysis:

Attached Image (click to enlarge)
Click to Enlarge Name: ROCKY YM 12-16 ( OFAâ„¢ 14_3 ) 11_21_2016.jpg Size: 231 KB

(Please note the above chart belongs to ROCKY)


Best,
N
  • #31,674
  • Jan 15, 2018 4:49pm Jan 15, 2018 4:49pm
Quoting LuckyMind
{quote} Nice chart! I am interested, what TF is it?

As I written in the post it is not timeframe. It is range bars, 12tick range bars.
Do Not Predict! React!
  • #31,675
  • Jan 15, 2018 9:28pm Jan 15, 2018 9:28pm
Quoting Nik-Nyc
{quote} Hi Silence, As per usual HG explanation was excellent. Attached is a chart previously marked up and posted in another thread, it may offer some additional insight into the concept of absorption. Besides the bid/offer market orders represented in the OF candles, note the divergence between candle color and delta (located numerically at bottom of the chart labeled AskV-BidV). The study of bid/offer orders and general orderflow can be very worthwhile and indeed they are tools found in many professional's toolboxes, both for analysis and more...
Hi Nik,

You mention these trading tools are free except for MT4. Can you guide me in the right direction to obtaining some of these free tools as most I see on the internet are paid versions.

Thank you
  • #31,676
  • Jan 16, 2018 2:08am Jan 16, 2018 2:08am
Quoting shrips
{quote} Hi Nik, You mention these trading tools are free except for MT4. Can you guide me in the right direction to obtaining some of these free tools as most I see on the internet are paid versions. Thank you
I know that the question is not for me but, if it is not a problem I will go on and answer.
Sadly you have no free platform for Bid/Ask. And the cheapest you will find is around 30-40$/month + Data Provider.
And it is no surprise because that kind of platforms have a lot of costs and are also used by a lot of institutional traders. But you can find a lot of trial's no longer than 14days, maximum 1 month.

Perri.
Do Not Predict! React!
  • #31,677
  • Jan 16, 2018 7:29am Jan 16, 2018 7:29am
Quoting shrips
{quote} Hi Nik, You mention these trading tools are free except for MT4. Can you guide me in the right direction to obtaining some of these free tools as most I see on the internet are paid versions. Thank you
Shrips,

Let me explain in a little more detail. Unlike the retail forex world, futures data does have a small monthly cost, $5-$50 per month, depending on which instruments you are interested in, and what kind of deal your brokerage is offering. During the study phase, the best "trick" to avoiding this cost is to bounce between brokers and use up their free trials. Also note, while most brokers have a 30 day demo limit, they will all extend this limit to 45-60 days if you email asking for an extension.

The second cost is the platform cost. My recommendation to all traders looking to switch to futures is to check out Sierra Charts. Apart from being an extremely robust and powerful trading platform with great features & tech support, they also have some of the lowest cost price schemes in the business. For example, a few brokers offer Sierra Charts completely free if you complete 10 live trades in a month. If you compare this cost to other trading platforms in the futures world, it is quite reasonable. All this said, during the demo phase, Sierra Charts will be free.

Therefore, while it is true that to use these tools you need to have a data feed and a proper trading platform, the cost are ultimately very minor. Furthermore, and this is the key point, there is no need for 3rd party add-on software from vendors charging $xxx per month, or $xxxx for a lifetime license.

My recommendation regarding which platform is simple, Sierra Chart SP5. Regarding the broker/data, most a pretty good, remember this is a highly regulated market unlike forex.

Intro To Sierra Chart
Inserted Video



Intro to Numbers Bar (Orderflow bars
Inserted Video

Inserted Video
  • #31,678
  • Jan 16, 2018 5:51pm Jan 16, 2018 5:51pm
Quoting Nik-Nyc
{quote} Shrips, Let me explain in a little more detail. Unlike the retail forex world, futures data does have a small monthly cost, $5-$50 per month, depending on which instruments you are interested in, and what kind of deal your brokerage is offering. During the study phase, the best "trick" to avoiding this cost is to bounce between brokers and use up their free trials. Also note, while most brokers have a 30 day demo limit, they will all extend this limit to 45-60 days if you email asking for an extension. The second cost is the platform cost....
Thanks Nik,
You mention 3rd party plug ins. I was looking at jigsaw trading because of their features but I am put off by the price tags. You honestly believe its not worth it?

Cheers
  • #31,679
  • Jan 16, 2018 6:46pm Jan 16, 2018 6:46pm
Quoting shrips
{quote} Thanks Nik, You mention 3rd party plug ins. I was looking at jigsaw trading because of their features but I am put off by the price tags. You honestly believe its not worth it? Cheers
Shrips,

I had an in-depth look into the jigsaw suite about 1.5yrs ago and came to the conclusion it was not worth it. The Orderflow concepts of Imbalance and Absorption can be seen with Sierra Charts, and other platforms, alone. Furthermore, after some tinkering, SC has some very advanced functionality that allow you to customize the bid/offer data and display it in easier to to interpret ways. I would skip Jigsaw, and the other 3rd party apps/add-ons and focus on learning the concepts.

Best
N

(PS the above view of Jigsaw doesn't pertain to their DOM which was never of interest, but in fairness, has many happy users)
  • #31,680
  • Jan 16, 2018 7:20pm Jan 16, 2018 7:20pm
thanks Nik !
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