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vsa with Malcolm

  • #34,001
  • Sep 13, 2021 6:33am Sep 13, 2021 6:33am
Quoting procmail
{quote} I'm still in this trade. Still feel price will go up after some struggle, but tightening my stop loss a little.
I swapped to the short side, with a small position.

It looks like price is reacting to the HVC from the london expansion bar, basically the bar with the biggest increase in volume. When price came up to 86.91 volume started dropping off.
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  • #34,002
  • Sep 13, 2021 7:00am Sep 13, 2021 7:00am
Quoting Anotan
{quote} I swapped to the short side, with a small position. It looks like price is reacting to the HVC from the london expansion bar, basically the bar with the biggest increase in volume. When price came up to 86.91 volume started dropping off. {image}
I got stopped out of my Long position at around break-even, being very careful with this trade.

Right now I'm hoping to see some heavier selling, or perhaps a lower low at H4, before I take a Short. Price doesn't seem to me to have made up its mind at the moment.
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  • #34,003
  • Sep 13, 2021 8:23am Sep 13, 2021 8:23am
Let it go to BE, I'm completely flat and calling it a day.
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  • #34,004
  • Sep 14, 2021 9:45am Sep 14, 2021 9:45am
So bad It's hard to understand this.
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Daytrader
  • #34,005
  • Sep 14, 2021 10:53am Sep 14, 2021 10:53am
Quoting trezo
So bad It's hard to understand this. {image}
I know you, like a lot of traders, do not want to hear this, but please give this post more than a passing glance.

Forget about Volume Spread Analysis (VSA).

Okay, not really. That was the "clickbait" headline. VSA or some type of volume analysis should be an integral part of your market analysis. But I do want you to leave the VSA aside for a moment and focus on the following: TREND.

You have two MAs on your chart. The dotted one I will call "fast", and the solid one I will call "slow".

When the fast is below the slow, the trend is DOWN and you should only be looking to take shorts. When the fast is above the slow, the trend is UP and you should only be looking to take longs.

That is what these duel-moving averages tell you. If you don't like that, why are they on your chart?

The first thing I noticed when I looked at this chart was that the fast MA never moved above the slow MA. Even as price moved above the fast MA, the fast MA remained below the slow MA. That tells me that strength came into the market, but not enough to change the TREND. Therefore, the path of least resistance is still down.

Okay, let's bring back the VSA while keeping the above in mind. My chart is a bit different than yours and I will jump between them, I hope it doesn't get too confusing.

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The best place to start looking for a trade with VSA is when you see ULTRA HIGH or CLIMATIC VOLUME. On your chart, this comes on a Widespread UP bar that closes off its high with the next bar DOWN. This is Supply. My chart shows the same interval, but it turns out not to be the highest as larger volume bars appear later. Nevertheless, this is Climatic Volume and represents the start of distibution.

We then see another Supply bar followed by an UpTrust (in the form of No Demand).

On my chart, price moves below the 20 period EMA and then there are three possible entries on No Demand bars.

On your chart, the fast MA is still above the slow MA when the first two No Demands appear. Thus, these would/should not be seen as possible short entries. When the third No Demand appears, the fast has crossed the slow and a short trade would be in aliment with the TREND.

You went long here. Why are you using MAs if you're going to simply trade against them? Additionally, there is obvious weakness in the background.

Trying to catch tops and bottoms is a fool's errand. Many would-be traders fail because they think they're smarter than price. They are not.

There is a reason that almost every VSA teacher out there preaches Trend trading.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #34,006
  • Sep 14, 2021 11:05am Sep 14, 2021 11:05am
Quoting trezo
So bad It's hard to understand this. {image}
Mahn, that first long entry looked like a really nice short.
  • #34,007
  • Sep 14, 2021 2:16pm Sep 14, 2021 2:16pm
Quoting HiddenGap
{quote} I know you, like a lot of traders, do not want to hear this, but please give this post more than a passing glance. Forget about Volume Spread Analysis (VSA). Okay, not really. That was the "clickbait" headline. VSA or some type of volume analysis should be an integral part of your market analysis. But I do want you to leave the VSA aside for a moment and focus on the following: TREND. You have two MAs on your chart. The dotted one I will call "fast", and the solid one I will call "slow". When the fast is below the slow, the trend is DOWN...
I'm grateful for your posts. I will pay more attention to it.

But your 2nd no demand which you marked I see it's not no demand. I have a real volume from futures. And volume on this bar its not lower than 2 previous.
Daytrader
  • #34,008
  • Sep 14, 2021 4:23pm Sep 14, 2021 4:23pm
Quoting HiddenGap
{quote} I know you, like a lot of traders, do not want to hear this, but please give this post more than a passing glance. Forget about Volume Spread Analysis (VSA). Okay, not really. That was the "clickbait" headline. VSA or some type of volume analysis should be an integral part of your market analysis. But I do want you to leave the VSA aside for a moment and focus on the following: TREND. You have two MAs on your chart. The dotted one I will call "fast", and the solid one I will call "slow". When the fast is below the slow, the trend is DOWN...
On the chart you posted, the last no demand bar is followed by a no supply bar, volume is lower than on the previous 2 bars but the spread looks bigger than on the no demand bar.

1. Do you look for exact definition of no supply no demand bars - volume lower than previous 2 bars and spread lower than previous bar or just volume below the 2 previous bar is enough for a no demand no supply

2. On the chart you would enter after the last no demand bar even tough the volume on the entry is below the previous 2 bars (the spread is higher so is not the exact definition of no demand, that is why the first question)

Thanks
Kind Regards
  • #34,009
  • Edited Sep 15, 2021 4:24am Sep 14, 2021 4:36pm | Edited Sep 15, 2021 4:24am
Edit: its kl, I found an answer in MTM pages 158-159 which confirmed Malcolms comment.

Hey guys, I came across one of Malcolms old posts where he talks through a particular trade he entered.
The entry was off a test bar that had <1 volume, but not <2.
When describing a test, he says that high or ultra high volume test bars carry more weight, which I can understand if its a squat bar.
But am I right in saying that the bar he describes would class as a failed test? As it doesnt have <2 volume, nor does it have high, or ultra high volume. So he basically entered of a pinbar/hammer that had no volume significance, purely just price action.

(2nd Pic)

https://www.forexfactory.com/thread/...5#post10158685

Cheers
  • #34,010
  • Sep 14, 2021 5:30pm Sep 14, 2021 5:30pm
Quoting trezo
{quote} I'm grateful for your posts. I will pay more attention to it. But your 2nd no demand which you marked I see it's not no demand. I have a real volume from futures. And volume on this bar its not lower than 2 previous.
Hi trezo

That is the problem, the true volumes are no where near what tick volume shows.
You need to read futures volume and it will change your world for the better.
What traders will see is market orders have no effect on direction unless they cause an imbalance.

Cheers
Trading thin liquidity at the boundary of the charts
  • #34,011
  • Edited 6:46pm Sep 14, 2021 6:13pm | Edited 6:46pm
Quoting Frag8383
{quote} On the chart you posted, the last no demand bar is followed by a no supply bar, volume is lower than on the previous 2 bars but the spread looks bigger than on the no demand bar. 1. Do you look for exact definition of no supply no demand bars - volume lower than previous 2 bars and spread lower than previous bar or just volume below the 2 previous bar is enough for a no demand no supply 2. On the chart you would enter after the last no demand bar even tough the volume on the entry is below the previous 2 bars (the spread is higher so is...
The candle after the no demand would have brought you into the trade, although it looks like a no supply, I thinks its a "Polar bear in Hawai" because its in a downtrend, and can be ignored. Plus it fails on the next candle which would confirm the weakness.

Im still learning aswell mate, so I could be wrong.
  • #34,012
  • Sep 14, 2021 7:20pm Sep 14, 2021 7:20pm
Quoting trezo
..... your 2nd no demand which you marked I see it's not no demand. I have a real volume from futures. And volume on this bar its not lower than 2 previous.
First of all, it doesn't matter. You have to trade what you see. It's a No Demand on my chart but not on yours. That happens.

Secondly, low volume bars are not the only possible entry signal bars. It's good to start out looking for low volume No Demands or Tests, but as you advance you will incorporate entry signals that occur on increasing volume bars.

Thirdly, and this is the most important point, that bar should not be considered a short entry bar BECAUSE THE FAST MA IS ABOVE THE SLOW MA. Simply, the issue is not the volume. The issue is the direction of the trend as defined by the MAs.

Lastly, I would point out that Tom Williams, the inventor of Volume Spread Analysis (VSA), stated that he prefered tick volume over actual volume in cases where both were available. Volume (tick or otherwise) is activity. It is the "constant" that allows us to make relative comparisons.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #34,013
  • Edited 7:54pm Sep 14, 2021 7:39pm | Edited 7:54pm
Quoting Frag8383
{quote} On the chart you posted, the last no demand bar is followed by a no supply bar, volume is lower than on the previous 2 bars but the spread looks bigger than on the no demand bar.
This is one of the reasons i have been misinterpreting VSA over time and i am not meant to say i can't misinterpret now but how i have been better at it while thinking like that.

 

  1. You don't have to take every downbar with low volume as no supply.
  2. It's no supply if there is strength in background. e.g. there is high volume zone in background and market is testing its bounds or market is in the HVZ. This is where i would be more interested in SOS in line with background instead of every up bar with low volume taken as No Demand. so with strength in background you need to look for no supply and tests.
  3. Same goes for other side when weakness appeared in background you should look for upbars with low volume as you see it as well being followed by downbar confirming the no demand. you don't have to take that confirmation bar as sign of strength (no supply).

  • #34,014
  • Sep 14, 2021 7:57pm Sep 14, 2021 7:57pm
Having ignored VSA for years I recently read Tom Williams and Gavin Holmes and others' work on VSA over the last several weeks. The impact was so profound that I suspended my own trading program until I complete a thorough study of VSA. For now I know enough to be dangerous...to myself...so I continue in suspension until I know where I'm going with this new knowledge.

I'm aware of the controversy surrounding volume and have to a limited degree compared the volume on my live Oanda with what I have on my live Think or Swim futures account (I only trade futures on T or S and forex only on Oanda) Oanda being spot Forex and T or S being futures. I can't say that I've found significant variance in volume feeds that I should dismiss the volume data on Oanda. Therefore, for now, I plan to accept Oanda Forex volume as legit and will likely eventually trade it accordingly.

Having followed the posts on this thread for many years in mostly passing interest I can vouch for some posters. Hidden Gap has been a regular and has demonstrated profound understanding of VSA concepts that I am just now grasping. Anotan has more recently, but no less knowledgeable, also demonstrated what seems to be a thorough understanding of VSA with his fairly frequent posts. There are others who no longer consistently contribute but have had equally valuable insight into VSA, so reviewing this thread would not be a waste of time.

I am looking for a longer term view with entries on the daily or perhaps H4 chart so when I get my legs underneath me I will be posting some charts to demonstrate my utter lack of understanding. I'll be looking forward to your comments. See ya'll soon.
  • #34,015
  • Edited 8:27pm Sep 14, 2021 8:17pm | Edited 8:27pm
I posted my chart which has Weis Waves on it.

I would be wary of going Long at this point (right-side data censored to semi-pretend we're real-time) because:
1) Lower Low created
2) Weis Wave suggests general weakness due to the increased selling and decreased buying
3) The Weis Waves on the tests of the Trading Range area have lower (up wave) volume than the down waves (Rally Back to the Ice).
4) Below the Moving Averages.
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  • #34,016
  • Sep 14, 2021 10:26pm Sep 14, 2021 10:26pm
Quoting trezo
So bad It's hard to understand this. {image}
It takes time, doctors don't become doctors overnight. I've been studying VSA for almost 7 years, HiddenGap has been at this at least 11 years.
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  • #34,017
  • Sep 14, 2021 10:59pm Sep 14, 2021 10:59pm
HiddenGap is trying to move this thread to a more trend oriented style of trading. After reading his posts and the responses, I honestly believe its for the best.

I tend to look at HVC's which is more of a support/resistance trading and I don't want to make things more confusing so I'm going to take a back seat to posting. Besides I this thread is littered with my screenshots anyways, you don't need more of them .

One for the road.
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  • #34,018
  • Sep 15, 2021 12:55am Sep 15, 2021 12:55am
Quoting RickM
{quote} Hi trezo That is the problem, the true volumes are no where near what tick volume shows. You need to read futures volume and it will change your world for the better. What traders will see is market orders have no effect on direction unless they cause an imbalance. Cheers
Hi RickM,
With all due respect to your style of finding good trades on volume from futures markets. What I heard from traders is that in CFD's most of the case the futures index'es more volume is traded and liquidity is higher than in the real futures as the broker is a market maker and has to respect the client on order fill, not so mutch on futures contracts where liquidity provided by non clearing members - traders.
Regarding forex liquidity its same; as main currency trading banks provide the liquidity and make the market to customers, in futures true liquidity can be taken away and no one has to take orders, hence the gaps are bigger.
  • #34,019
  • Edited 1:41am Sep 15, 2021 1:03am | Edited 1:41am
Quoting Anotan
HiddenGap is trying to move this thread to a more trend oriented style of trading. After reading his posts and the responses, I honestly believe its for the best. I tend to look at HVC's which is more of a support/resistance trading and I don't want to make things more confusing so I'm going to take a back seat to posting. Besides I this thread is littered with my screenshots anyways, you don't need more of them . One for the road. {image}
You dont have to quit posting your style of trading mate, myself and others have learned alot from your posts.

I think its good to see all angles of VSA and restricting it to "trend" trades only serves to dilute the understanding.

After going through 1000s of posts on this thread, and then conparing it with Trezo's post, isnt it just simply a lack of consideration of the background?, which has came up time and time again, Thats up to us as individuals to work around these issues and just shows that much more trial, error and hard graft is needed on our part.

Also im pretty sure that by the time Trezo gets to post 34,000, and compares the screenshots of all the hundreds of trades posted with the descriptions and sequences shown in MTM, and Gavin Holmes book, then reasonings for failed trades will become more understood.
  • #34,020
  • Sep 15, 2021 1:53am Sep 15, 2021 1:53am
Quoting Anotan
HiddenGap is trying to move this thread to a more trend oriented style of trading. After reading his posts and the responses, I honestly believe its for the best.
While I do believe trend trading is the way to go for most traders, that belief shouldn't stand in the way of your brilliant posts. One of the great aspects of this thread has always been the multitude of ways traders have shared for trading Volume Spread Analysis (VSA).

Quoting Anotan
I tend to look at HVC's which is more of a support/resistance trading.....
I would argue that HVZ/Trigger numbers are indeed exactly that: support/resistance areas. In fact, when after one FIBs a high volume candle he has a set of "launch points" (that's why they're called "trigger numbers"). Which is nothing more than a way to take a long at support and short at resistance. It's just my contention that said trades should be taken in conjunction with the trend.

In short, (1) our differences make the thread stronger; (2) although there are differences, we share more in common than not; and (3) the thread needs your knowledge, energy, and skill. If you stop posting, we all lose.
Without VSA, you're playing checkers while the Smart Money plays chess.
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