vsa with Malcolm

AUD/JPY I did loosen my stop loss on for the housing data that printed, but brought it back down afterwards.

Very nice no demand at the high of yesterday and bar that printed during the housing data looks to be sold into.

Don't mind me while I load up these shorts.

Same scalp as yesterday, after the swift down move sold the pull back, TP is at the lows.

Marked off the selling at the highs, pros are killing EUR/CAD.

Edit: feels like I'm just cluttering up this thread, so I felt I should move my trades over to a trading journal.

Whether this thread is active or not, posts about Volume Spread Analysis (VSA), price & volume analysis, or any other related topic are never cluttering. All are welcome. Many are missed.

Bringin' it old-school:



1: Ultra High Volume wide spread UP bar closing off its high with the next bar down. This is Supply. This interval represents the start of distribution. From a trade set up standpoint, it is always better to start with such an interval. Accordingly, we can consider this the start point of a possible trade set up.
Markets do not like Wide spread UP bars on Ultra High Volume. If all the volume represented buying, then the next interval would not be down. Therefore there must be some selling (Supply) on this interval. Although we don't predict markets, it is not surprising to see evidence of Supply coming in as price enters a Supply/Demand Delta Zone.

2: Increasing range (H-L) UP bar on volume less than the previous two bars. Volume less than the previous two bars and less than average is demonstrative of a lack of professional activity to the upside. Volume, after all, represents activity. If the range of this interval was narrow, this would be No Demand. Since the range is increasing, It is more akin to No Buying Pressure. But again, calling it No Demand isn't incorrect. What matters is the recognition that volume (activity) is drying up as price moves higher. This No Demand/No Buying Pressure interval is confirmed on the next interval when it closes DOWN.

3: This interval makes a higher high than the previous interval, in fact, it takes out all the highs that can be seen to the left. It closes DOWN and near the bottom of its range (H-L), and has increasing volume. This is a Hidden UP Thrust. We say "Hidden" because the interval closed DOWN rather than UP, but this weakness is in plain sight.

Speaking of cluttering up the thread, here's a would-be journal post. I hate the idea of starting a thread because I would feel obligated to continuously post and keep it thriving (hey....wait a minute......). Anyways, here a look at two trades from today: one taken and one not taken.

Let's start with the one not taken.



This trade was not taken because I was already in a trade (to be discussed later). Accordingly, it would have been a stop and reverse trade. I have to admit, I felt like the Market was speaking to me on this one. Lessons one and two might be : (1) Trust the Market and (2) Trust yourself.

on to the chart.

1: Ultra Wide Spread DOWN bar on Ultra High Volume (although it was lower than the previous interval) closing off its lows with the next interval UP. If all the volume (activity) was selling, how could the next interval be UP? The answer, It could only be UP if there was actually some buying in all that activity.

Note that the bard does not close the Supply/Demand Delta Zone, meaning a subsequent Long signal would likely be valid.

2: After a three interval retracement, we see an interval with an increasing range on volume less than the previous two. This is No Selling Pressure. Note, while the previous three intervals also moved on volume less than the previous two, they are immediately following a sign of strength and in the wrong place to be considered No Demand.

3: Three intervals later, we see an interval with a range narrower than the previous interval, but with increasing volume. This is a Squat. Something is compressing the range, and that something is Smart Money Demand.

4: This is a Test. Not just a Test, a beautiful Test. The volume is less than the previous two intervals and way less than average. The interval itself trades below the two previous signs of strength and down to the close of the initial SOS interval. Clearly, the Market was checking (testing) to see if all the selling had dried up. It had. Note, the arrow points to this interval as an entry. However, this is the entry signal interval, not the interval, or price level, at which you enter. In other words, you would be entering at the open of the next interval or when the high of the test bar is taken out by the next interval.

5: A narrow range DOWN interval on volume less than the previous two candles. This is No Supply. Technically, this could be second chance entry, but it's more of a confirmation of the Long entry already taken (or should have been taken).

6: This is a Test on increasing volume. This bar closes DOWN (strength when it appears, usually appears on DOWN bars), but closes well above the midpoint of its range and the next bar is UP. This interval must be strong. It's kind of a mini Shake Out or Down Thrust. Call it what you will, just make sure you see the strength within it.

Moving on to the one that was taken.

Attached Image (click to enlarge)

While the chart being used is the Emini (ES) contract, the trade was taken in the new Micro Emini (MES) contract.

I have to run. Depending on feedback, I will either finish this post later or repost it in another thread with explanations. Or I might just edit this post once I get done dropping a duce.

This is very true, I'm not sure I'm up posting every day. Maybe I will do something like once or twice a week.

I do have a question for you HiddenGap. I book marked the Action Market Theory thread, I've skimmed over the first couple of pages and saw your name a few time. My question is, in your opinion is AMT worth spending a significant amount of time studying?

Couple of after the fact trades I took. BTW I'm completely open to discussion whether its questions, observations or criticism.

The first trade is from Thursday and ended up as a loss.


A small win from Friday

I never like to discourage learning, and there are many valid lenses through which the Market can be viewed. If you want to see just how far down the ATM rabbit hole goes, it certainly will require a significant amount of time and study. With respect to its worth, your trading account will be the final arbiter on that.

Some may recall when TradeGuider used to work with Rob Hoffman. Here's a quick video of some valuable Volume/Price Analysis done by him.

Two trades were taken today.

The first three charts are from Trade 1 and the last chart is of Trade 2. Dom on chart 3 reflects Trade 1. Dom on Trade 2 reflects BOTH Trade 1 and Trade 2.

Trade 1:







Journal entry:

After a nice early potential trade, volume explodes on a wide spread UP bar with the next interval DOWN. This is weakness and something you just have to recognize. A few intervals later, there is a Dark (C<O) WRB HiddenGAP that turns out to represent a Key Change in the Supply/Demand Dynamic in the Market. With this "weakness" in the background, I was biased to the Short side as my trading day began.

1: Wide Spread UP interval on the highest volume that can be seen on the chart, with the next interval DOWN. Again, this is a sign of weakness. Markets do not like Wide Spread UP bars on Ultra High (Climatic) volume.

I was thinking about a Short at right here but waited for more confirmation.

2: UP candle closing off its highs on increasing volume. Not just off its high, but below its mid-point. If the volume represented strength, then the close would not be so low in the range. (sound like the video we just watched that's more than four years old). Also note that the range of this candle, is less than the previous candle, but the volume is greater. This is Supply. Increasing volume on a decreasing range, that's the technical definition of a Squat. Something is compressing the range, and that something is Supply.

3: Increasing range bar that makes a higher high than the previous bar and then closes on its low. This is an Up Thrust.

That's all the confirmation I needed and went Short.

Trade 2:

Attached Image (click to enlarge)

I have watched it a number of times - What a GEM ..

Hi! I am new here but understand a little bit of the VSA system. First of all many many thanks for your great effort on this thread. As a beginner where to find this chart setup or indicators? Seems like no download link available for this particular setup in this forum.

Thank you guys for posting such valuable analysis.

Bump

Anotan, Can I please ask you a question? In you last chart, the bar you marked as absorption volume, why is not just selling as two bars after that one are bear bars.

If you decided that it was a an absorption volume after the test bar then at what point do you take trade?

I have read VSA but I'm still not very good at it. Your guidance will help.

Thanks

Yep, ask as many questions as you'd like.

Keep in mind that VSA isn't about one bar, that it's more of an unfolding story and you have to piece it together.

There is a down move behind us, which means that price is vulnerable to an up move (I'll admit that this is bad logic, but Tom Williams said it often enough and it kinda stuck with me). We also know that there is climatic volume from July 31st, which at this point we don't know if the climatic volume is position taking or only profit taking.

I've already mentioned that absorption volume pushes through old tops, but notice how the low of the absorption volume acts almost like support as price came down and tested that level. So we have climatic volume on July 31st and then on Aug 1st we have this up bar pushing through an old top then price comes down and fails to break the low of the up bar, you can piece together that this up bar must be bullish.

On the chart you can see where I marked off my entry, the reason why my entry was there was because I didn't see the setup until Monday, last week I was focused on two other pairs. I can see two entries on this chart, once you saw the absorption bar and how price was testing and rising off the low of it you could have gone long there. The 2nd entry would have been where I took my entry, if you notice the area I entered long off of was testing the highs of Friday.

My first entry yesterday, I TP'd for 60 pips in case of a correction. I'm still bullish on this pair mainly because of Weekly chart, this pair is pushing out of an accumulation area that lasted for 3 weeks. I seriously doubt the pros accumulated for 3 weeks for only 200 pips.

Hi,
my 5 cents,

Latest EurCad H1 move, i ready like bellow:

The action takes place at a previous demand zone.
A - bar makes a sort of shake out, makes a lower low, makes a higher high, big wicks at both side, closes up. very high volume. Signal that something is about happen, either breaking down or up, with strength, we still don't know.
B - this bar is an effort to fall, volume is relative high, lower than previous, still leaving some indecision.
C - this bar, and also the previous, are down bars with volume lower than the previous two, signal of no selling pressure. market might head up.
D - is again an effort to fall, the volume is higher than previous two, but we are making a lower low, and volume is relatively lower than previous low, which might signal/confirm the no selling pressure.
E - again this bar, and previous, are down bars with volume lower than previous two, signal of no selling pressure. Any entry after C or E would be somehow justified by those reasons, i rather wait to see strength to the upside.
Between E and F we have another sign of no selling pressure.
F - this bar i consider an effort rise. market makes a new high with increasing volume.
G - is a effort to fall with volume higher than previous, might have some buying hided.
H - is another no selling pressure, price makes a low with volume lower than the previous two.
I - is a effort to rise, huge volume, engulfing many previous bars, closing near top of demand area.
EP - Entry Point would either be the open of next bar or the break up of the demand zone.
TP1 - first resistance is found, price makes a uptrust, followed by an effort to rise and then a bar that makes a new high but closes as down bar, the volume being lower than previous signs small retrace. time to take partial profit (TP1) and move stop loss to BE+1.
TP2 - price makes a new high but bar closes down, volume higher than previous, time to take another partial profit and raise SL to TP1.
TP3 - price hits previous supply area, makes a higher high, bar closes down with volume higher than previous. close the trade.

cheers.

Think it was Gavin Holmes of TradeGuider who started using the term trigger number. Trigger number is the close of a high volume bar, which works well in a trending market.

Yes, it was Gavin.

Technically, the Trigger Number can be either the High, the Low, the Midpoint, and to a lesser extent, the close of the High volume bar. A very smart trader here took that concept and created the VSA subset known as VZA.

Thanks for your posts. Keep them coming.....

https://media1.tenor.com/images/8c7e...temid=12915809