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vsa with Malcolm

  • #36,201
  • May 7, 2024 12:39pm May 7, 2024 12:39pm
Quoting Macallik
{quote} IRL that one textbook setup is buried amongst 8-9 'potentially profitable but harder to analyze/time' non-textbook setups.
Heya Macallik,

You're right about 10-20% of setups are VSA textbook perfect, this is probably why a lot of people have a hard time explaining setups. In a past life I worked in telcomm, working on telephone switches and how things are suppose to work and how they actually work are usually two different things.

Quoting Macallik
{quote} 1. How did you handle the non-textbook setups initially? The "Hmmm this isn't exactly like I was taught so I have to figure out my own solution here" aspect of it all?
My favorite trading quote, which isn't a trading quote, is "if all you have is a hammer, then everything looks like a nail." You either have to be painfully patient or have multiple approaches in trading to understand what price is doing. By using multiple approaches you can usually find a setup that meets your criteria.

If you think about it, there are multiple approaches we can take with VSA. We have VZA, we have HVC, we have trading current PA into fresh new ground as well as daily/weekly charts. I.E. SoS/SoW on daily/trending HHs/HLs. Between these methods most days you can find something.

Quoting Macallik
{quote} 2. How did your confidence grow over time w/ non-textbook setups? Was it as simple as getting as many reps w/ non-textbook setups as w/ textbook setups?
I'm going to say that my confidence hasn't grown, I still get nervous and second guess myself. When I see what is potentially a setup I just take it and walk away. Let my SL/Trade manager do their job.

When I'm nervous/under pressure I'll walk away and hit my rowing machine or go find something that will distract me. 99% of trading is simply waiting, during the waiting periods is when you cause the most damage to your trading.

Quoting Macallik
{quote} Has your definition of a textbook trade expanded through experience, or would you say it's remained mostly the same and you just have a better understanding of the nuances of trades that aren't textbook/glaringly obvious for you?
My definition of textbook trade setups has expanded, I used to be hyper focused on only HVC trades, then I became hyper focused on trading current PA in fresh new ground. I can't pin point where, but somewhere along the lines of reading the old VSA thread it became apparent to me that trading is about having a toolbox.
  • #36,202
  • May 7, 2024 4:48pm May 7, 2024 4:48pm
Quoting Anotan
My favorite trading quote, which isn't a trading quote, is "if all you have is a hammer, then everything looks like a nail." You either have to be painfully patient or have multiple approaches in trading to understand what price is doing. By using multiple approaches you can usually find a setup that meets your criteria. If you think about it, there are multiple approaches we can take with VSA....
Ahhh ok that makes sense... So the additional strategies can be seen both as additional confirmation which may limit some trade setups but also alternative confirmation that might allow you to enter during a more muddled VSA narrative. I suppose I've been doing that w/ Wyckoff and little quirks that I notice over time.

Quote
I'm going to say that my confidence hasn't grown, I still get nervous and second guess myself. When I see what is potentially a setup I just take it and walk away. Let my SL/Trade manager do their job. When I'm nervous/under pressure I'll walk away and hit my rowing machine or go find something that will distract me. 99% of trading is simply waiting, during the waiting periods is when you cause the most damage to your trading.
That makes sense... VZA allows for additional confirmation via cleared heavy volume levels, so the markets are more likely to go in your favor if you can hold on. OTOH, since I've currently been backtesting taking Springs w/ less confirmation, I have been more aggressive taking risk off the table. I'm not sure it's the right call yet tho and need more reps to determine whether I should just be taking a step back after my entry.

Quote
My definition of textbook trade setups has expanded, I used to be hyper focused on only HVC trades, then I became hyper focused on trading current PA in fresh new ground. I can't pin point where, but somewhere along the lines of reading the old VSA thread it became apparent to me that trading is about having a toolbox.
Ahhh a new VSA thread to browse. There goes my wknd lol

Thanks for the response as always
  • #36,203
  • May 8, 2024 8:09am May 8, 2024 8:09am
H1 during Asia big increase in volume on a down bar and looking at daily chart the last 3 days have been trending with HHs/HLs.

Not a text book perfect trade, but a good example of having multiple tools in your toolbox. Yesterday used a lot of VZA elements today was a trend trade buying off high volume.
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  • #36,204
  • May 8, 2024 12:52pm May 8, 2024 12:52pm
Daily volume on EU seems a little weird, but there is a lack of demand as price fell.

As long as tomorrow stays above the daily open, we have a bullish background.
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  • #36,205
  • May 9, 2024 8:12am May 9, 2024 8:12am
Quoting Anotan
Daily volume on EU seems a little weird, but there is a lack of demand as price fell. As long as tomorrow stays above the daily open, we have a bullish background. {image}

EU turned out to be messy I guess because of the GBP Interest rates.. But easy trade on AU, same concept low volume as price tried to fall on the Daily chart and during Asia on H1 price rejected the lows as it tried to fall below yesterdays highest volume.
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  • #36,206
  • May 17, 2024 2:36pm May 17, 2024 2:36pm
Hi guys,

I hope everything is going well,

I will like your opinion in big spread bars with high volume Vs small spread bars with high volume

Big volume can be higher than the average, the highest of the last X numbers of bars etc etc

In my never ending study of VSA, I have found that for reversals or end of pullbacks are more reliable when on the last bar or few bars prior to the high/low you find a candle that has big spread with high volume but I have found a mix reaction on what people look for

1-For example many people like to see the volume on the bar that makes the high or the low and they don't care about the size of the bar as long as the volume that makes the high/low is big
2-Others don't care if the volume is at the exact top/bottom but they do care if they see big spread bars with high volume before the top/bottom.

I trade like on the first case with the volume on top/bottom. I find a lot more traded than in the second case but I'm finding that is not so reliable as the second case

Basically before I considered volume and where it was to be more important than the size of candles and so on but I'm starting to think otherwise, I guess that I wanted to find as many trades as possible and now I'm more inclined to find the best trades. This is because I have less time to trade and look at the markets I guess

Please let me know what you guys think
Kind regards
  • #36,207
  • May 19, 2024 8:51pm May 19, 2024 8:51pm
Care to share some visual examples?
  • #36,208
  • Edited 8:32am May 20, 2024 7:02am | Edited 8:32am
Sorry, I put your message into ChatGPT in order to help me understand it better.

Quoting Frag8383
I hope you're all doing well.

I'd like to get your opinions on big spread bars with high volume versus small spread bars with high volume.
When studying Volume Spread Analysis (VSA), I've noticed that reversals or the end of pullbacks are more reliable when you see a big spread bar with high volume near the high/low. However, opinions on this seem to vary:

  1. Some traders focus on the volume at the high/low, regardless of the bar's size, as long as the volume is significant.
  2. Others prefer to see big spread bars with high volume before the high/low, rather than the volume being exactly at the top/bottom.

Personally, I trade based on the first approach, looking for volume at the top/bottom. I find more trades this way, but it's not always reliable. I'm starting to think the second approach might be better.
I've always considered the volume location more important than the bar size, but now I'm rethinking this. I want to find the best trades, not just as many trades as possible, especially since I have less time to watch the markets.
I'd love to hear your thoughts.

I put my reply through ChatGPT to hopefully also make it easier to understand:

I guess we all have our own spin on this particular setup.

For me, the bars leading up to the high/low are important, but not as much as the bars at the high/low.
Using a low as an example, here’s what matters most to me:

  1. There’s a sign of strength in the down bar into the low.
  2. This is followed by a high-volume up bar confirming that strength, which must close convincingly.
  3. The price should then ideally move above the bar in step 2 and come back to retest with low selling volume. If there's still lots of selling then I won't be buying.

  1. The most important point to me is #2, followed by #3. Point #1 often comes with #2 (thought not always) and is the least important of the three for me.
  2. Now that #2 is present, we have Strength in the background. If I’m now convinced that selling has dropped off, I’ll try to go long by placing an order above the local high created before the retest, or above an up bar.
  3. Foremost in my thoughts is always, how did price react to the show of strength? Is the strength sustained? Is the opposite side (sellers here) waning?
  4. I’m still deciding whether to take the trade if the price doesn’t go above the up bar in #2 but moves sideways with low selling volume (See one of the screenshots). Waiting for price to go above the up bar can reduce wrong trades but also miss out on some good trades. Maybe a smaller position?

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  • #36,209
  • Edited 3:59pm May 20, 2024 12:24pm | Edited 3:59pm
Quoting Macallik
Care to share some visual examples?
Sorry that I cannot post my own charts. I'm currently traveling, got new job.

In procmail post, the first chart is a clear example of what I mean, volume not being at the high or in this case bottom, highest volume is not at the bottom price keeps drifting down losing steam. There are big volumes high spread candles before the bottom.

On the second of his charts you can see that the big volume is at the top, in this case a very big volume and big spread candle and price never close above it.

On my previous post, what I mentioned is that in the second chart, imagine the top was not on big spread but was on big volume I would consider good to trade.

And I'm debating with myself if just with big volume at the tops and bottoms is good enough or the tops and bottoms has to be on high volume high spread

Thanks for the chats procmail very well explained

Kind regards
  • #36,210
  • May 20, 2024 12:37pm May 20, 2024 12:37pm
Quoting Frag8383
I will like your opinion in big spread bars with high volume Vs small spread bars with high volume Big volume can be higher than the average...
I know that Tom/Gavin always said they prefer narrow spread on high volume. Forex seems to respond better to big spreads, maybe it has something to do with tick volume? Tom didn't really trade Forex and I'm not sure if Gavin trades Forex or Futures more.

The only thing with widespread bars is they're often used to mark through previous S/R, so they can't be mechanically used as reversal points.
  • #36,211
  • May 20, 2024 8:21pm May 20, 2024 8:21pm
Hey yall, I've got a question as well. I'm backtesting futures contracts and had a solid trade using the background and I realize that this time, the background accumulation led to a rally -> pullback -> rally, but many times, I jump in after seeing background strength and get stopped out. Does anyone have any suggestions on additional filters I can use to increase my odds of trades like this while avoiding the headfakes? Also, given that most of you trade Forex, what (if any) analysis do you do for the off-peak periods? Here's what I saw:

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  1. The prior day has a strong selloff after the open but as the spreads start to decline, the volume remains high, suggesting accumulation. Similar potential for accumulation @ the close.
  2. I completely ignored the overnight session outside of the fact that the market lightly trended higher.
  3. The volume on the following day shows much lower volume on the selloff and a subtle increase on the 4th last bar, suggesting some potential accumulation
  4. The third last bar looks like a test for supply. It tests the lows of the new session and closes w/i the range of the last bar
  5. Marginal up-bar.
  6. I placed a buy-stop entry order here and it is filled. Weak close, but bullish in that it tests the lows of the prior bar before it rallied, suggesting supply might be exhausted

Here is how the trade ended:

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Successful trade, but in review, I realized I'm pretty clueless in determining when a market is ready to run, versus when it's biding time and needs to test for additional supply. That means it's not as repeatable of a setup as I'd like, so I'm looking to bounce some ideas around to make it more recognizable in the future.

(Oh and the trade was the S&P 500 contract on May 3rd 2023 if anyone wants to take a deeper dive outside of my screenshots)
  • #36,212
  • May 21, 2024 8:47am May 21, 2024 8:47am
Quoting Macallik
Does anyone have any suggestions on additional filters I can use to increase my odds of trades like this while avoiding the headfakes?
The best advice I can give you is don't fall down the rabbit hole of filters and trying to turn trading into a mechanical formula. Keep it as basic as possible.. I.E. SoS/SoW --> trend change --> price reaction to SoS/SoW.

Market conditions and participates change which means when market behavior changes your filters will become useless.

The other thing is that you won't always have perfect timing.. Sometimes your trade is perfect other times you sit on your trade waiting for price to pop. If you enter early and get stopped out then you can re enter the trade, assuming you're running an RR greater than 1:1. Re entry does skew your RR though, for example, if you run a 2:1RR per trade and get stopped only to re enter then in reality you're really only running a RR of 1:1.
  • #36,213
  • May 21, 2024 2:06pm May 21, 2024 2:06pm
Thanks Anotan. Is there anything you look for outside of lengthening of thrust as a trend change?
  • #36,214
  • May 21, 2024 8:17pm May 21, 2024 8:17pm
Quoting Macallik
Thanks Anotan. Is there anything you look for outside of lengthening of thrust as a trend change?
I don't watch for LoT/SoT..

Keep it simple, after a SoS (Initial SoS into fresh new ground) looking for 2 consecutive up bars with the 2nd bar making a HH/HL. After that trend change, is price responding positively to strength or did price completely ignore a SoW? If so then find your entry. The only thing about this though is there will be times where your entry will be higher than you'd like.

I don't have much experience trading S&P/Nasdaq, but I suspect you might want to drop down to either a M3 or M5.
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  • #36,215
  • May 21, 2024 8:37pm May 21, 2024 8:37pm
I could call this a low hanging fruit trade, but it was more like just bending down to pick it up.

VZA trades, the biggest thing is to check daily chart and make sure the trade isn't fighting the daily trend. The last few days haven't been making LH/LLs so the long trade is good to go.
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  • #36,216
  • May 24, 2024 11:20am May 24, 2024 11:20am
I'm not sure how I'll ever financially recover from this loss on Thursday.

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Oh never mind, its fine. The May 22nd bar that I fibbed, the volume wasn't very high, but hopefully you can see how it allowed price to rally on the next day. When I opened this trade, I originally planned to close the position above May 23rd high, but since today is Friday I just closed early.

There are advantages to being a professional trader, there are also advantages to being a retail trader. Such as it extremely easy for us to get in and out of trades, it doesn't make sense to me when I see threads that tell retail to trade like a bank and average their losers. Just take the loss and wait for a better opportunity.

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  • #36,217
  • May 30, 2024 2:46pm May 30, 2024 2:46pm
Chart below is the DOW cash, with NYSE session candles imposed on M30 TF
The top indicator box is accumulated session volume
Second box is the session range, white is the current session range, shaded is the average number of sessions, set to 5
Bottom is the volume of a given bar (in this chart is M30) set against the shadow, which is the average of individual bars set for the selected number of last sessions, set to 5
Attached Image (click to enlarge)
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It looks that selling climax is a real possibility, last session candle is doji, with session range well below the last 5 sessions, Accumulated session volume very reasonable, the M30 individual bars volume much higher set against the average of each M30 bars set for the last 5 sessions. shaded bars.
Lots of effort with small result, VSA traders are prepared to act decisively when things ( a confluence of tested parts of a given trading strategy) align to establish a position.
Tomorrow is also the last day of May.
VSA principles are applying to many TFs, and NYSE DOW session bars are also a type of TF, though in the case of the chart above, NYSE session candles are applied to DOW cash on M30 TF.
Trade well.
2be
Make sure losses are small and profits are bigger!
  • #36,218
  • May 31, 2024 6:38am May 31, 2024 6:38am
Quoting 2be
Chart below is the DOW cash, with NYSE session candles imposed on M30 TF The top indicator box is accumulated session volume Second box is the session range, white is the current session range, shaded is the average number of sessions, set to 5 Bottom is the volume of a given bar (in this chart is M30) set against the shadow, which is the average of individual bars set for the selected number of last sessions, set to 5 {image} It looks that selling climax is a real possibility, last session candle is doji, with session range well below the last...
Gone long on DOW 38120, during the fist minutes on NYSE session, in addition to other positions established earlier
Make sure losses are small and profits are bigger!
  • #36,219
  • Edited 6:53am May 31, 2024 6:41am | Edited 6:53am
Quoting 2be
{quote} Gone long on DOW 38120, during the fist minutes on NYSE session, in addition to other positions established earlier
Will take profit now 38260
I am done for a while
good positive points, taken were they were there, just in case
More explanation in my journal
Good trades to all
2be
Make sure losses are small and profits are bigger!
  • #36,220
  • Edited Jun 1, 2024 3:51am May 31, 2024 1:17pm | Edited Jun 1, 2024 3:51am
Quoting 2be
Chart below is the DOW cash, with NYSE session candles imposed on M30 TF The top indicator box is accumulated session volume Second box is the session range, white is the current session range, shaded is the average number of sessions, set to 5 Bottom is the volume of a given bar (in this chart is M30) set against the shadow, which is the average of individual bars set for the selected number of last sessions, set to 5 {image} It looks that selling climax is a real possibility, last session candle is doji, with session range well below the last...
Please read the late edit, as the chart below is incorrect, due to a computer/program. glitch.
I have left that chart so it is easier to compare. Sorry for the glitch which I have discovered well after posting that chart.
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VSA way of interpreting PA in relation to volume, a good result, chart worth studying.
Do not want to repeat the obvious, and while things align, the good results follow!
I find Session candles very useful for trading DOW, or other indices, I trade mainly DOW and occasionally DAX and NASDAQ

Later edit:
Studying the last week DOW PA, I have noticed that I have experienced a glitch resulting in the NYSE session candles of the last Tuesday, 28th May 2024 and the last Wednesday, 29th May 2024 printing a much longer lower wicks. The current chart has been corrected. Sorry for that glitch glitch came to my attention just now. All the remining data including volume and the range is correct, as it is calculated and printed according to a given TF, M30 in this case.
I do profoundly apologise for that.
The blue rectangles indicate closed intersession gaps
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Make sure losses are small and profits are bigger!
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