Trading W/ Smart Money

I'm watching the daily chart on USD/CHF. What I'm noticing is as of right now it looks as though professional support may not be supporting the current moves in the pair. Check out the spread on the USD/CHF is higher then the previous 2 days, however the volume thus far is still lower then the previous 5 days. I know it's still kind of early to make this analogy but it may be something to keep an eye on. I'm probably going to be taking a position after the US close and analyse the volume from the trading day.

I've found the same issue with the GBP/JPY another fluke in this down move, the spread is very low on this down move and thus far the volume is much lower then 5 previous days. I don't see any real support in this down move, I do see this an an opportunity to accumulate GBP/JPY in anticipation of what looks like a reversal to the upside. Upon the close of the daily candle, I'll decide to take a long position depending on how the spread and volume close!

However as a side note, I did scalp 49 pips off the down move.

I've posted some charts, regarding the weakness of EUR/USD down move, which lacked true professional support, and therefore it's destined for a rebound on the next trading day. You want to look at 15M to check for an exact entry the math murray lines which I used is an excellent tool to use for entry points. You have to be patient b/c what happens is during the period where thier is no professional support the market can occassionally continue to move in the same direction, but like markets, if thier's no professional support the market can only move so far. I'm waiting until that EUR/USD hits the overshoot area, I've taken a long position earlier in the day and I'm also looking to take another long position.

The practice of professionals is to buy on down bars, you want to think like a professional and realize that you can't reveal your intentions so, professionals are bullish on the EUR simply because the down move is begining to exhaust itself. Weak holders are all the while still shorting and will be locked into thier positions, and once the rebound occurs the momentum is going to shootup like a rubberband.

caught that e/u short trade too!


http://www.forexfactory.com/attachme...8&d=1242079477
[IMG]file:///C:/DOCUME%7E1/K0MPR3%7E1/LOCALS%7E1/Temp/moz-screenshot.jpg[/IMG][IMG]file:///C:/DOCUME%7E1/K0MPR3%7E1/LOCALS%7E1/Temp/moz-screenshot-1.jpg[/IMG][IMG]file:///C:/DOCUME%7E1/K0MPR3%7E1/LOCALS%7E1/Temp/moz-screenshot-2.jpg[/IMG][IMG]file:///C:/DOCUME%7E1/K0MPR3%7E1/LOCALS%7E1/Temp/moz-screenshot-3.jpg[/IMG]

great move, hey what you can do to post your chart is to save the picture on your meta trader and then you can upload onto your response using attachment.

I'm still short this GBP/JPY the fact is that I was late into this trade, were I plotted the yellow arrow would have been an ideal spot b/c, but if you check my prior post I shorted this pair earlier for profit. The signs where I plotted the arrow show were the upmove was reaching final exhaustion and with no professional support the pair fell. For being late to the party well you can't expect to get a big piece of the cake.

I'm out at 147.33

Volume is not difficult to understand once the basic principles of supply and demand are understood. This requires you to relate the volume with price action. Volume is the powerhouse of the stock market. Start
to understand volume and you will start to trade on facts (not on ‘news’). Your trading will become exciting as you start to realize that you can read the market – a very precious skill that only a few people share.

To say that the market will go up when there is more buying (demand) than selling – and go down when there is more selling (supply) than buying may seem like an obvious statement. However, to understand
this statement you need to look at the principles involved. To understand what the volume is saying to you, you have to ask yourself again, “What has the price done on this volume”? The price spread is the difference between the highest and lowest trading points reached during the
time frame you are looking at, which may be weekly, daily, hourly, or whatever other time frame you
choose.

Volume shows the activity of trading during a specific period. If the volume is taken in isolation it means very little – volume should be looked at in relative terms. Therefore, if you compare today's volume with volume during the previous thirty days (or bars) it is easy to see if today's volume is high, low or average compared to the volume seen in the past. If you stand thirty people in a line, it is easy for you to see who the tall ones are, compared to the others. This is a skill of human observation, so you will have no problems identifying whether the volume is relatively high, low or average.

Compare this volume information with the price spread and you will then know how bullish or bearish the professional wholesalers really are. The more practice you have, by taking this professional approach, the
better you will become. To make it easier for you to understand volume, compare it to the accelerator of your automobile. Think about the results you would expect from pressing the accelerator when approaching ‘resistance’, such as a hill. Imagine you are an engineer monitoring a car's performance by remote control. Your instruments only allow you to see the power applied to the accelerator pedal (volume) and a second engineer is looking at the cars actual motion (price movement). The second engineer informs you that the car is moving forward uphill; however, this uphill movement is not in keeping with your observation of power to the
accelerator pedal, which you observe is very low. You would naturally be somewhat skeptical, as you know a car cannot go uphill without sufficient power being applied.

You may conclude that this movement uphill could not possibly be a genuine lasting movement, and that it is probably caused by some reason other than power application. You may even disbelieve what your
instruments are telling you, as it is obvious that cars cannot travel uphill unless power is applied to the accelerator pedal. Now you are thinking more like a professional trader!

Many traders are mystified if the same thing happens in the stock market. Remember, any market, just like an automobile, has ‘momentum’ that will cause movement even when the power has been turned off. This
example explains why markets can momentarily rise on a low volume up-move. However, all moves with differing types of volume activity can be explained using the “accelerator pedal” analogy.



Understanding VSA(Tom Williams)

Well I've added to the chart, the start of the London session when the smart money comes in, coincidentally the volume on the Asian is beginning to die down. We know that a market can only advance so far with out professional support, therefore their is a possibility the market can either move sideways or decline until the London Session, comes in for support. Now based on the Daily chart, we know that today is going to be a bullish day, so I'm looking to enter on down moves, which I'm anticipating to occur during the Sydney/Tokyo session. I'm anticipating smart money to come in and cause a reversal to the anticipated down move, I'm looking for soon.

If you observe high volume on a down-day (or bar), as it nears or touches the lower trend line, then this is selling pressure, but if the next day is up, it must show that the high volume down-bar contained buying (absorption of the selling) for the market to have gone up the next day. This is a now a sign of strength. However, you will still need a phase of accumulation to occur before a proper rally can take place, which takes time. Any move in the market is strictly controlled by the amount of accumulation or distribution that has taken place.

A weak market has a wide spread down-bar, on increased volume, as it approaches a lower trend line. Note the words 'approaches' and 'increased' volume, both vital indications. If you are approaching a gap which you intend to cross over, you will run for it as you are approaching, resulting in an increased effort to cross over, as opposed to going right up to the edge before attempting your jump. The market acts in a similar manner. Indications of strength or weakness will appear in varying degrees of intensity. It will be the more obvious indications you will be looking for at first, but as you gain experience, you will soon be seeing much more than the obvious signs of strength and weakness

Well sadly, I missed my opportunity to get in the pair on my mini account, looks like this is defying gravity, well that happens. Well see if we get a pullback during the US session, which I'm expecting which would give me another potential opportunity.

I'm also monitoring the volume on this one, based on my figures I'm looking to see if EUR/USD can reach 8867 tick volume on the daily chart before 720M. This gives me an indication as to if we'll get a continuation of this trend.

Weakness was apparent in the background, as you know upbars represent weakness and an upthrust is the beginning manifestation of the weakness on the chart.

Up-thrusts can be recognized as a wide spread up during the day (or during any time frame), accompanied by high volume, to then close on the low. Up-thrusts are usually seen after a rise in the market, where the
market has now become overbought and there is weakness in the background. Up-thrusts are frequently seen after a period of selling, just before a down-move. Note the day must close on or very near the lows;
the volume can be either low (no demand) or high (supply overcoming the demand).

Market-makers are quite capable of generating an up-thrust, which is a moneymaking maneuver. The dynamics of an up-thrust are interesting and quite brutal – the rapid up-move brings in buyers and catches
stops. The traders who are already selling (shorting) the market, become alarmed and cover their positions. It is a common strategy to suddenly mark-up prices to catch the unwary. This action is seen after signs of
weakness and frequently indicates the start of a falling market. Once the market is known to have become weak, market-makers or specialists can mark the prices up quickly, perhaps on good news, to trap you.
The higher price is maintained for as long as possible. The price then falls back, closing on the lows. As the early price is marked up, premature short traders are liable to panic and cover with buy orders.
However, those traders looking for breakouts will buy, but their stop-loss orders are usually triggered as the price plummets back down. All those traders who are not in the market may feel they are missing out and
will feel pressured to start buying. This action is also designed to entice large pension funds, fund managers, banks and so on into the market. You do not have to be a small trader to be forced into a poor
trading position!

Overall, these up-thrusts are very profitable for the market-makers or specialists. An upthrust is usually seen after a period of weakness and usually indicates lower prices

Feel sorry for those that got locked in on that upthrust!

Very Very usefull information .. keep nice posting my brother.

On my standard account, I captured a few pips, trading the pairs I'm waiting for a reversal again to get back in on the pairs,but then again, well see b/c I still have a strong feeling a reversal could be happen during US session.I'm going to monitor the situation.Right at this moment an entry wouldn't be advised by I would be chasing the pair! I also basket trade EUR/USD and USD/CHF. The overall trend for both pairs is EUR/USD closes up and USD/CHF closes down. If you've been following my previous post, you'll notice, I correctly indetified the outcome of the bars based on volume and spread.

Will return in 3 hours.

You lost your margin, right?

no,i was tired ive been up since yesterday!

I've been watching the action on the EUR/USD daily chart and thus far it has surpassed the halfway point in terms of volume then the previous day also the spread on the daily chart is also higher. If I could make a guess I'd say we should have a continuation of this uptrend. If you do want to get in wait until you get pullbacks. I'm thinking we will have a greater chance for a pullback near the end of the US session as volume begins to drop off, so around 22:00 - 01:00GMT. So if you missed the current uptrend don't worry you still will have an opportunity later.

Well like I mentioned earlier, I'm predicting a continuation of this bullish trend, based on the closing volume on the daily chart it's higher then the 30 day average and we have an increasing spread on an upbar. I'm waiting for the volume to dry up on this current up-trend so I can make another entry on my mini account.

This action is very similar to a selling climax but is less intense – the reverse up-thrust can be thought of as a mini 'Selling Climax’. There will still be a wide spread down-day, often driving down into recent or new
low ground, and then closing at or near the highs, on high volume. Note, this indicator is more reliable when the day is gapped down and the following day is gapped up – add more bullishness if the news is bad. Any down-day on low volume (no selling) after this event, especially if it closes on the high of the day, is a strong indication of market strength.

This professional buying (absorption of the supply) will usually stop the down-move. The more liquid the market, the more buying will be required to stop the down-move. The four major currencies are good examples of liquid markets. Here substantial volume is usually required over several days to stop a down move. Without accumulation, every rally is doomed to failure. Without distribution, every down-move is also doomed to failure. Every move is directly linked to the amount of shares that have changed hands, which creates an imbalance of supply and demand, tipping the move one way or the other.