vsa with Malcolm

This is more of an academic exercise, I'm thinking today should be uneventful or very choppy.



The green fib, or target zone, is from a very high volume up thrust from June 13th, we can see how how price respected the 50% of the fib on Friday where some residual buyers tried to step in (yellow circle). If I were to trade this, I would be looking for sellers at either the 0% or the 50% of the target zone. The only way I would entertain longs is if I see widespread up bars closing on the highs pushing through either the 0% or the 50%.

Interestingly enough the blue line shows the bar that contains M15 bar that HiddenGap showed us in the previous post, which shares the 50% of the target zone.

It's not just the extremes... 50% of the high volume bars also plays and important role many times in trend continuation... Quite often after taking out the H or L you will see them gather additional orders between the H (or L) and 50% (the zone hinge)...

Hence the absence of the word only.

ok

The bar marked in yellow is our absorption bar, this bar is telling us that the market is prepared to absorb any sellers. The interesting thing is the bar before the absorption bar, that bar looks like it was hit fairly hard with sellers but our absorption bar took all of their sell orders and marked up price anyways. Blue bars are 2 bar reversals which looks like they were checking the market for any additional sellers.

Friday's 50% level, support became resistance.



*EDIT*

I took profit on 1 of the positions, letting the other 2 run. I think EURUSD is in a very aggressive down trend, might as well get everything I can out of this trade.

Been waiting for you all day.



*EDIT*

Closing this out.

Ode to Malcolm

The Opening Range (London) Breakout Strategy. Also know as, the Initial Balance (London) Breakout Strategy.

Trigger levels can be powerful, using the Opening Range High and the Opening Range Low as your trigger levels can be powerful as well. Especially when combined with some good old fashion VSA/Wyckoffian chart reading.

Take a look at the chart below.



Opening Range used: 0200-0230 New York time or 0700-0730 London time. No trade until the Opening Range, or Initial Balance, is set.

Once we have our IBH and IBL, we use them like a regular trigger line. In other words, to go Short, we want to see price move and close below the IBL. Then we would want to enter on an UP bar (with some exceptions) as price attempts to retrace back to the line. Of course, we still need Chart Modes I & II to be red and for price to be below the BPL. For a little added confirmation, we might opt to also want to see the BPL sloping down.

Notice the Smart Money's immediate rejection of higher prices, as we see a No Demand and an Up Thrust at the IBH. Price trades thru the IBL (Support) on a wide spread DOWN bar with increasing volume.

A1 : This is an UP bar on volume less than the previous two as price moves back towards the IBL. This is the first possible entry signal. We can either wait for confirmation (the next bar down), or we can place an order at the low of this No Demand bar. Placing an order at the low, allows us to enter before the bar closes. Which means we could be entering on a bar that ultimately does not confirm the weakness. In this case, price does not trade down to the low.

A2: An increasing range UP bar on volume less than the previous two. No Buying Pressure. As with the previous interval, we place an order to enter Short at the low of this bar. As with the previous interval, this interval does not confirm with the next bar DOWN, nor does price trade down to the low.

The very next bar is a Squat (decreasing range bar on increasing volume, showing supply). Two intervals later we see another Sign of Weakness (SOW). However, both of these bars are closing back above the IBL, and therefore are not entry setup bars. Yet both bespeak to the Market's overall weak state.

1: A wide spread DOWN bar on increasing volume that closes below the IBL and closes lower than the Test bar. Because this bar closes lower than the Test bar, we know the Test has failed. A failed Test in a down trend is a sign of weakness. For some, this is an entry. We have trend alignment (Chart Modes I & II are red and price is below the BPL), weakness in the background, and we're back below the ORL.

2: An increasing range UP bar on volume less than the previous two that closes near its high. This is No Buying Pressure. Again, we have the option of waiting for confirmation with the next bar DOWN, or placing an order at the bar's low. Either way, we are brought into the market on the next interval.

We're trading in harmony with the market.

I called this post "Ode to Malcolm" because if you read his posts (like you should be doing always), you will see many references to the Opening Range. I'm not trying to re-invent the wheel...........

The Quintessential Guide on Understanding Volume Analysis, written by HiddenGap.

I'd buy that.

Hehe, seriously though, very well written post with content to match.

Very clear test on H4.



Long off the low of yesterday's zone.



*EDIT*

Exiting at the low of yesterday's zone.

Here is a screenshot showing my loss for today.. They can't all be winners.

I saw how far away we are today from yesterday's zone and came to the conclusion that price is oversold and to look for longs. There isn't any PA to the left of price ATM to get any high volume zones so I was left using the London Open bar.

I took a test and got stopped out by a shakeout.

Ode to Pres78

* I once read an ad for a Gann trading method. The author of the method remarked that Gann had written X number of books. And although he had read only 1 of those books, he had read it 100 times. Well, there are hundreds of poster in this thread, if you read only one, Pres78 is the one.

* As far as I am concerned, what follows is both the SHARP SHOOTER strategy and Volume Spread Analysis (VSA). Pres78 calls it Volume Zone Analysis (VZA), but it is really nothing more than his brilliant take on what would eventually become the core of all current TradeGuider strategies.

I recently remarked that high probability trades occur at the extremes. The extremes referring to the High and Low of a particular volume bar. When you reach a semblance of Pres78's level, you know how bring in the midpoint, or 50%, of the range as well. As I am nowhere near that level, I will be focusing on the extreme of the range.

The first thing we want to do is find our high volume bar. This is where his first bit of brilliance shows up. "Today's zone=Tomorrow's opportunity". We want to start of by looking at a 1 hour chart. We will use the standard Forex definition of a day-Sydney open to New York close (1800-1700).

Once we find the highest volume bar, regardless of spread, we can mark the HVZ (High Volume Zone) with a line at the High and a line at the Low. Now we have our key zone for the next day. More exactly, we have our Trigger line (Long) and our Trigger Line (Short) for tomorrow. We are then going to do something Gavin has echoed, but Pres78 said first, and look to take Shorts after price trades below the Trigger Line and then attempts to retrace upwards as a SOW appears. And vice versa for Longs.

Take a look at the chart below.



At the beginning of the London Session, our Zone is already set. We quickly trade above the Trigger Line (Long). Supply enters but price remains above the line and above the BPL. We then see a narrow range DOWN bar on volume less than the previous two bars. No Supply. But we do not have trend alignment, so no trade is taken. The interval also fails to confirm with the next bar UP.

Things get interesting as price moved back into the Zone and down to the Trigger Line (Short). We see a Test. This Test does confirm with the next bar UP. But the confirming interval is a Test in its own right. And this new Test does not confirm as the next bar closes DOWN.

1: Bingo. We've just closed below the Trigger Line (Short) as a Pres78 2 Bar Reversal has formed. The second bar of this Pres78 2BR happens to also be a Trap Up Move. Knowing the power of the Pres78 2BR, this is an aggressive, but understandable, place to get Short.

2: Another Trap Up Move that can be used to enter the market.

A1 & A2: A1 and A2 are the "retracement" type entries on low volume. If you placed an order at the low (one tick below), you might not have been brought in on the next interval. If you placed an order at the low of this second interval, you definitely would not have been brought in, as the next bar does not make an equal or lower low.

Again, here we are trading in harmony with the Smart Money.

Read all posts by Pres78, and then read them again. I can't promise you'll be a millionaire by Tuesday, but your account will thank you for it.

Just wanted to Thank malcolmb14 for starting this GEM Thread .. also BIG Thank You to pres78, HiddenGap and albern.

Combined with Weekly, Daily & 12-hr TF S/R Zones that i draw, this tread has provided me with the missing link. Thanks All.

Thank you for this explantations. I coded, but comparing charts - I dont have same results as yours.
My main code is here :
iAD - standart function, that calculate Accumulation/Disribution

It doesn't look like anybody that knows how to code is going to offer you assistance. I can't code for MT4, so there's not much more help I can offer.

The Yen looks strong, but this is not a prediction.

What we would want to see for a SHARP SHOOTER, or VZA TRADE. Again, I maintain they're exactly the same thing. Pres78 was just ahead of his time.



Volume Zone Analysis (VZA): Always FIBbing, but never lying.

Entry was a bit late, noticed the H4 up thrust and shorted.

Calling it a day, should see 1580 on Monday.

WHEN IT ALL COMES TOGETHER

The Market has a way of keeping you humble. If one can learn to put aside ego and surrender to it, it will provide. Be present.

That was for me, the rest is for you, the reader.

The two post is my "ode" series were not only attempts to extol praise on two of the thread's best, but also to show that this thread teaches everything TradeGuider gives you, but at a better price point.

Take a look at the chart below. This was a beautiful "location trade". I say "Location trade", because you only had to be there to take it. Which may be the only value offered by Tradeguider's scanning software. But let's assume you know the EUR/USD pair is the most liquid Spot currency pair and therefore should always be on your radar.

If you like the idea of trading the London Opening Range Breakout (LOR), as popularized by the great Malcolm himself, there was a beautiful opportunity. If you are a Volume Zone Analysis (VSA) enthusiast, as popularized by the incomparable Pres78, there was a beautiful opportunity. If you follow TradeGuider's lead, which is actually behind the two aforementioned methods, there was a beautiful opportunity. In short, the methods don't just overlap, they're pretty much the same in the first place. This is especially true of VSA Triggers and VZA Triggers as both are based on high VOLUME. Sometimes the LOR interval isn't the highest volume bar. The LOR is important because SO many Smart Money Professionals pay attention to it. The Highest Volume interval is important because SO many Smart Money Professionals are active during it. A substantial amount of the time, they're one in the same.