Entered this USD/CHF trade Short, but had to exit to do some other things. I ended up taking a small loss. But there's so much to learn from this chart.
Without VSA, you're playing checkers while the Smart Money plays chess.
- #33,601
- Nov 18, 2020 9:33am Nov 18, 2020 9:33am
- Joined Aug 2009 | Status: Reading the TAPE | 2,389 Posts
- #33,604
- Edited 11:46pm Nov 18, 2020 9:18pm | Edited 11:46pm
- Joined Jan 2015 | Status: Trader | 1,460 Posts
- #33,607
- Nov 19, 2020 9:06am Nov 19, 2020 9:06am
- Joined Aug 2009 | Status: Reading the TAPE | 2,389 Posts
I think failed tests are my favorite signals to sell on, see them a lot.
Another really good signal is No Result From a Test. It's a bit more advanced but not that hard to see. In this case, the Test is successful (the next interval is UP). However, if you see a dark (O>C) WRB in the next 1-5 intervals that closes below the low of the Test bar (preferably) or at least near the Test's bar low, this shows Supply is still present and thus you get no real result from the successful Test.
The USD/JPY has a good example of both.
Without VSA, you're playing checkers while the Smart Money plays chess.
- #33,609
- Nov 19, 2020 9:54am Nov 19, 2020 9:54am
- Joined Aug 2009 | Status: Reading the TAPE | 2,389 Posts
[W]ould you consider entering short trade on 1st ND because also touching the DeltaZone? if yes how and where you put the stop ? or you only trade when price enter the zone. thanks in advance
On Zones:
For a trade signal to be valid, it needs to share at least one tic/pip with the Supply/Demand Delta Zone.
On Entry:
I find myself struggling with this one, but in general, most traders should start with a High, Ultra-High, or Climatic volume bar as part of their entry signal sequence.
Take a look at the picture below.
I've updated it. Price moved from the Supply/Demand Delta Zone back into the Supply/Demand Delta Zone and then price fell through the Demand Zone rendering it closed. Which is why it is no longer shown on the chart.
But I've also updated the Relative volume indicator. Note that the volume bar (C) is a darker shade of blue. This alerts me that the volume is high. Which is defined as the largest amount of volume in the last 5 intervals. The reason to look for High, Ultra-High, or Climatic volume is that they represent intervals where the Smart Money is most active. They leave their footprints in the volume.
So I would argue that C is the place to start to look for a trade. Check out what happens on the very next interval (D). The volume is yellow alerting me that the volume is less than the previous 10 intervals. So the Smart Money became active and then their interest drop off precipitously.
Backing up for a second, It's a good idea, when looking to go short, to look for evidence of selling (Supply), followed by evidence of a lack of buying (Demand). Intervals C&D meet that notion.
Some might say, "HiddenGAP, the Zone was created on Climatic Volume (the volume bar is the darkest blue). Therefore the No Demand should be an entry based on what you've said."
My response is, you're technically correct and I probably would have entered there if I had not moved on to another chart when it occurred. I would have likely been stopped out and had to get back in. Therefore A could be an entry, but B can't because neither it nor its confirmation interval is not sharing a tick with the Supply Zone
But it is generally better to see a High, Ultra-High, or Climatic volume bar leading into the established Zone rather than using the High, Ultra-High, or Climatic volume of the WRB interval that creates the Zone.
Without VSA, you're playing checkers while the Smart Money plays chess.
