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vsa with Malcolm

  • #33,761
  • Apr 21, 2021 6:36am Apr 21, 2021 6:36am
Quoting Anotan
Its confuses me that the test bar isn't a test bar.. When that bar printed professionals saw there were no serious sellers around so they took price up 70 pips. The expansion volume is where the professionals entered the market, its also during the CAD market open, which paying attention to and putting alot of weight on what a currency does during its home session makes a lot of sense to me. Granted, the last two bars (Bars A and B) of the up move look like supply, but it make sense this is profit taking and retail traders trying to sell because...
hello, seems like our understanding to a test bar is different from each other
-the function of a test bar is to confirm the background, e.g. "Yes, the low volume narrow spread bar is contextually correct because supply has exhausted in the background". i.e. it is the background that gives meaning to a bar.

however, the test bar in question is contextually incorrect because directly behind it
1) price broke down more than 50% of previous swing
2) Bar A - breakdown bar with surge in volume
both indicates there's supply in the market

if i was looking at this chart in real time, at that point in time i would be looking for a weak rally to short, but market had other idea and printed a change of behavior up wave.
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  • #33,762
  • Apr 21, 2021 6:53am Apr 21, 2021 6:53am
Quoting iddqd87
{quote} hello, seems like our understanding to a test bar is different from each other -the function of a test bar is to confirm the background
I understand what you mean now. Thanks.

Also something that I didn't consider is Bar A. In VSA it could've been seen as an absoprtion volume since it broke through the support that you drew. I guess I was blinded by the 2 bar reversal, I saw the pair being bought. That's a mistake on my part for missing that.
  • #33,763
  • Apr 21, 2021 7:43am Apr 21, 2021 7:43am
Quoting Anotan
{quote} I understand what you mean now. Thanks. Also something that I didn't consider is Bar A. In VSA it could've been seen as an absoprtion volume since it broke through the support that you drew. I guess I was blinded by the 2 bar reversal, I saw the pair being bought. That's a mistake on my part for missing that.
hello, im not familar with VSA downside absorption but to my understanding, an absorption should occur AFTER demand has proven itself, because without demand in the market, who is absorbing?

if we have a look at the background, and compare wave 1 and 2, we will find that in fact wave 2 has even less demand than wave 1
-wave 1 price was able to rally a little, whereas wave 2 price went sideway, unable to rally. The lack of demand was also reflected in their volume

therefore due to the context, absorption is contextually incorrect

but again im not familiar with VSA downside absorption so i could be wrong regarding this.
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  • #33,764
  • Apr 21, 2021 7:58am Apr 21, 2021 7:58am
Bit of volume coming in, good opportunity to get some profits locked in. Rate coming out in an hour so don't want to expose yourself more than you have to.
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  • #33,765
  • Apr 21, 2021 8:14am Apr 21, 2021 8:14am
Quoting iddqd87
{quote} hello, im not familar with VSA downside absorption but to my understanding, an absorption should occur AFTER demand has proven itself, because without demand in the market, who is absorbing? if we have a look at the background, and compare wave 1 and 2, we will find that in fact wave 2 has even less demand than wave 1 -wave 1 price was able to rally a little, whereas wave 2 price went sideway, unable to rally. The lack of demand was also reflected in their volume therefore due to the context, absorption is contextually incorrect but again...
Seems like you are following Wyckoff? I don't know much about Wyckoff, I've heard people say that VSA is a bastardized version of Wyckoff because it doesn't address market structure. VSA only looks at price bars and volume.

I tend to use trigger numbers.. Which is support/resistance based on the close of high volume bars. Another trader named Pres78 used his VZA zones, which use the H/L and 50% of high volume bars as a way to see market structure.

Now about absorption volume, in VSA a core principle is that "When strength appears, it appears on a down bar" This refers to see down bars with high volume. There is an exception to this principle which is absorption volume. Absorption volume is a high volume down bar pushing through a previous low.

So if you look at bar A as absorption volume pushing through the support that you drew, you could've started looking for shorts. But looking at the chart there is nothing worth shorting, the up bars after the absorption volume are increasing in volume and in range.
  • #33,766
  • Apr 21, 2021 8:27am Apr 21, 2021 8:27am
Quoting Anotan
{quote} Seems like you are following Wyckoff? I don't know much about Wyckoff, I've heard people say that VSA is a bastardized version of Wyckoff because it doesn't address market structure. VSA only looks at price bars and volume. I tend to use trigger numbers.. Which is support/resistance based on the close of high volume bars. Another trader named Pres78 used his VZA zones, which use the H/L and 50% of high volume bars as a way to see market structure. Now about absorption volume, in VSA a core principle is that "When strength appears, it appears...
if VSA absorption is the same as demand overcome supply, we dont want to see price breaks below support for more than 50% of the previous range, otherwise it penetrated too much. We should be looking for a weak rally to trade the breakout

if the 2 bar bottom reversal were genuine demand, price would have rallied more than that, but instead it went sideway with declining upside volume. Its even more obvious if we compare it to wave 1

we are always trading with the flow - demand went sideway with declining volume (struggling to move up) > breakdown with expanding spread and volume (easy to move down), on the contrary i just dont see any strength / demand on this chart as bar A prints.
  • #33,767
  • Apr 21, 2021 8:48am Apr 21, 2021 8:48am
Quoting iddqd87
{quote} if VSA absorption is the same as demand overcome supply, we dont want to see price breaks below support for more than 50% of the previous range, otherwise it penetrated too much. We should be looking for a weak rally to trade the breakout if the 2 bar bottom reversal were genuine demand, price would have rallied more than that, but instead it went sideway with declining upside volume. Its even more obvious if we compare it to wave 1 we are always trading with the flow - demand went sideway with declining volume (struggling to move up) >...
Yes its the same as demand overcoming supply, and in a sense VSA would be looking for a weak rally by looking for no demand bars. No demand bars are low volume and narrow ranged bars. Since the up bars are increasing in range and volume, VSA wouldn't allow for shorts to be taken. The absorption bar only would tell you that you should be looking for shorts.

In trading, outside of VSA there is a concept known is preliminary demand. What happens is a professional hits the market with a batch of orders to see how the market reacts. Based on that reaction they would continue or pull out of their orders. The 2 bar, was preliminary demand, someone hit the pair with buy orders, its evident in the wide range and the time of day that it occurred. But the market wasn't ready for this demand and price fell. I wouldn't act on this bc its the Asian session and this is a CAD pair. But add the 2 bar revesal, plus the test, plus the expansion volume and its clear that someone bought the shit out of this.

I understand that at Bar A you don't see the demand. I wouldn't have traded this pair on the day that all of this occurred, I didn't start trading this till the day after.

Another thing that concerns me is that you keep mentioning about price breaking below the 50% of the range or swing. The market isn't perfect, I'd bet money that things don't always go as planned for the professionals. So how is placing rules like price must do this at the 50% on an instrument that isn't perfect beneficial? For me putting hard rules only limits me and makes me a worse trader. I personally look at volume and ask how does price react to this volume?
  • #33,768
  • Apr 21, 2021 9:10am Apr 21, 2021 9:10am
Quoting Anotan
Bit of volume coming in, good opportunity to get some profits locked in. Rate coming out in an hour so don't want to expose yourself more than you have to. {image}
Didn't expect them to hit it this hard but for the past year or so rate decisions have been the biggest currency mover, but they did give us a great opportunity to get out with the 70 pip rally. I took off 1/4 of my trade.. ehh well I'm probably done for the week.
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  • #33,769
  • Apr 21, 2021 9:01pm Apr 21, 2021 9:01pm
a lot of great discussion about USDCAD ... i almost forget when i traded USDCAD last time ... lets try this one .. my buy entry from almost bottom and hope to get the top again .... i may be wrong .. my entry almost in real time delay because of this post-writing ....

happy trading ...
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  • #33,770
  • Apr 22, 2021 1:10am Apr 22, 2021 1:10am
Quoting Cyberforex
a lot of great discussion about USDCAD ... i almost forget when i traded USDCAD last time ... lets try this one .. my buy entry from almost bottom and hope to get the top again .... i may be wrong .. my entry almost in real time delay because of this post-writing .... happy trading ... {image}
I really like commodity pairs, especially CAD and AUD. they seem like they trend more aggressively than euro or jpy.

Thanks for posting your trade.
  • #33,771
  • Apr 22, 2021 3:51am Apr 22, 2021 3:51am
yes its more volatile than GBPUSD right now, but the pip value is only around 80% than GBPUSD and if you trade from US i think it is a good pair to trade because most of the time the big movement occurs in US time ...
  • #33,772
  • Apr 23, 2021 2:03am Apr 23, 2021 2:03am
USDCAD is getting interesting.

As price came down to yesterday's low, volume and spread started shrinking. No serious sellers to be found, I wouldn't want to be holding any shorts after seeing that.
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  • #33,773
  • Apr 28, 2021 3:06am Apr 28, 2021 3:06am
I covered some shorts on AC today.

I was looking to sell it again on a rally, but there is straight up bag holding! You don't see that very often in Forex, at least I don't. So yeah, when I see bag holding I don't ask questions, I just buy.
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  • #33,774
  • Apr 28, 2021 3:56am Apr 28, 2021 3:56am
Im not holding my breath on this trade.

Supply on bars 1&2, there was a test on bar 3, but it found supply on bar 2. The current bar looks like a lot of supply as well, but keep in mind it isn't finished.. For all we know it could close 30 pips in either direction.
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  • #33,775
  • Apr 28, 2021 8:16am Apr 28, 2021 8:16am
Quoting Anotan
Im not holding my breath on this trade. Supply on bars 1&2, there was a test on bar 3, but it found supply on bar 2. The current bar looks like a lot of supply as well, but keep in mind it isn't finished.. For all we know it could close 30 pips in either direction. {image}
to me that massive down bar looks more like supply than potential shakeout. we also have a weak background. you know i like your trading style, but i think this time you are trying to catch the bottom. also we have not broken the middle part of that down bar, so i think you are very, very early for the buys.

p.s.
good job on those previous sells
The more you learn the more you earn
  • #33,776
  • May 6, 2021 3:57am May 6, 2021 3:57am
I've been watching AJ, but this chart is AU just because its a little more straight forward.

A lot of volume on May 4th, and the highest volume is on the low of the day which made me really bullish.

Then today we had the announcement about China suspending trades with AUD and created Bar A. Normally that is a bearish bar because of the rally on May5th. Technically you want to see strength on a down bar in fresh new low ground. Bar A is anything but, fresh new low ground.

We starting to see some more weakness at Point B, but personally I couldn't pull the trigger for a short with the PA on May 4th, go up to a daily chart and you can see the 4th is climatic, I have it as the highest volume since late March.

The only thing I can see is to wait till next week and see if price takes out the high of Bar A and holds, anyone see anything else here?
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  • #33,777
  • May 6, 2021 11:33am May 6, 2021 11:33am
Quoting Anotan
I've been watching AJ, but this chart is AU just because its a little more straight forward. A lot of volume on May 4th, and the highest volume is on the low of the day which made me really bullish. Then today we had the announcement about China suspending trades with AUD and created Bar A. Normally that is a bearish bar because of the rally on May5th. Technically you want to see strength on a down bar in fresh new low ground. Bar A is anything but, fresh new low ground. We starting to see some more weakness at Point B, but personally I couldn't...
I dont trade AUD, but looking at the chart i would say above UHVC and a test its a clear buy. Up bars have bigger spreads than down bars. to sell on B i would want to see a break of A highs and then closing on that bar to close on the lows.
The more you learn the more you earn
  • #33,778
  • Edited 2:30am May 7, 2021 12:22am | Edited 2:30am
Quoting freemind
{quote} I dont trade AUD, but looking at the chart i would say above UHVC and a test its a clear buy. Up bars have bigger spreads than down bars. to sell on B i would want to see a break of A highs and then closing on that bar to close on the lows.
Kinda what I was thinking today when I woke up, if today's NFP holds above the high of Bar A then Ill be looking for buys Monday or Tuesday.

I wasn't entertaining shorts, just saying that weakness was on Bar B. Perhaps though I am a little too rigid with trading, I kinda have an idea what I'm looking for and if that idea doesn't play out I just sit out all together.

Yesterday I was reading some of Pres's posts, here he mentions this exact setup basically. On Mar 4th you have the highest volume bar on the low of the day and price rallies above the high of it. He basically would have been long on March 5th at the high of the Mar 4th bar I have cross hairs on.
  • #33,779
  • May 7, 2021 2:33am May 7, 2021 2:33am
Quoting Anotan
{quote} Kinda what I was thinking today when I woke up, if today's NFP holds above the high of Bar A then Ill be looking for buys Monday or Tuesday. I wasn't entertaining shorts, just saying that weakness was on Bar B. Perhaps though I am a little too rigid with trading, I kinda have an idea what I'm looking for and if that idea doesn't play out I just sit out all together. Yesterday I was reading some of Pres's posts, here he mentions this exact setup basically. On Mar 4th...
I have printed many folders of charts and one of them is with pres charts, they are good. his thread i have read like 5 times, but for me to put the puzzle together helped to study Wyckoff materials (the best one is Gary Dayton and David Weiss).
actually, there was an entry even before the one you are thinking. -see asia, the small down bar closing in the middle, one could argue thats the test and at the perfect place - at the highs of UHVC (personally i look at NS/ND only if they are inside bars, as then they work better). BUT the 2BR is way more beautiful - it goes lower than that days asia session and closes on the highs and higher than the previous bar close AND with higher vol the previous bar AND before we made HH. Also, that up wave was the biggest in the down move, so thats a potential change of behaviour (COB) so several confirmations to buy it.
The more you learn the more you earn
  • #33,780
  • May 7, 2021 6:51am May 7, 2021 6:51am
Nice to see some traders keeping the old thread alive. Great work guys.
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