Trading W/ Smart Money

I've outlined the times of low volume which coicendently are between 20:00-04:00GMT, Which is the tail end of the US Session and the Sydney/Asian Session. So knowing this you can realize that without professional support the market can't move very far, so I'm anticipating the market to drift downwards until the 04:00GMT and all the while the down move is an accumulation period for smart money. Now, once smart money has accumulated on the downward move a little after 04:00GMT that should signal the uptrend. So I'm looking to buy in between that time frame.

I must warn you also since Wednesday US reports Retail Sells, if that is a strong number, smart money will use that news to shakeout the weakholders, so we may see a temporary reversal in our uptrend right around the time of that news, So be prepared to realize it's a trick and manipulation, the panic from the good US News will cause weak holders to sell in fear that the USD will strengthen. Once smart money drives the price down they'll test the market a couple of times looking for drying up on the selling and begin the mark up on the EUR once again.

Once a bull move is underway, the trend will not change until the professional money starts major selling (distribution). You will have reactions, tests, even shake-outs in a bull move, as different groups think
higher prices are possible. However, the major trend will not change until professional money has taken the opportunity to unload most of their holdings. This will happen on up-days, on very high volume. This
will take time because a strong bull market has 'momentum’. Look for low volume up-moves to confirm weakness, after you have seen very high volume up-days, with no results.

So, as a bull market slowly gathers pace and becomes very persistent over a long period of time, a price who are not in the market cannot stand the annoyance of missing out any longer. This rush of buying gives the traders that accumulated stocks at the lower prices, the opportunity to take profits without putting the price down against themselves. (“Thank you very much for your co-operation!”)

This stage of a bull market is known as the distribution phase. It may be accompanied by a buying climax as described above or a slower rounding over of the prices, taking on the characteristic shape of a mushroom top over a longer period of time. This slower selling has frequent up-thrusts on high volume and the price will whipsaw up and down as they support the price to create a small up-move to sell on. Volume on the up-moves can be either high or low:

• High volume shows that selling has swamped any demand and tends to appear at the beginning of any
distribution phase.
• Low volume shows that no demand is present, and tends to appear at the end of a distribution phase.

Any low volume up-move is an indication of weakness. You may also at times see what appears to be a test, which is normally a sign of strength. If the test is genuine and indicating a true turn in a bear market, you will see an immediate response from the professional money. The price will move up immediately with a slight increase in volume. However, if the response to this indication of strength (test) is sluggish, or fails to respond over several days, going sideways or even falling off slightly, this now shows further weakness to come. The test is discounted. The logical conclusion of ‘lack of demand’ after a test is that the professional money is not interested in the up-side of the market at that particular moment – they are still bearish!

Like I've been claiming, continuations on the current bullish trend on the EUR and Bearish trend on the CHF. I'm trying my best to capitalize on the two day continuation movements on the pairs. I've included a chart below of entry points.Well from the daily charts already the volume has surged and the spread on the EUR is almost about to overcome the previous day, which is a bullish sign and we just started the new trading day, we may have a 3 day rally on our hands, well see. I won't get to anxious.

I'm going to ride this one out, although, the news from the US Retail numbers quite possibly could dampen this rally but, I see that as an opportunity as smart money is going to use that to knock the pairs to more attractive prices, before the rally continues.

During a bear market, or when prices have been falling for some time, most markets will hesitate in their down-moves and go sideways, or even start going up. Any low volume up-move is an indication of weakness. You may also at times see what appears to be a test, which is normally a sign of strength. If the test is genuine and indicating a true turn in a bear market, you will see an immediate response from the professional money. The price will move up immediately with a slight increase in volume. However, if the response to this indication of strength (test) is sluggish, or fails to respond over several days, going sideways or even falling off slightly, this now shows further weakness to come. The test is discounted. The logical conclusion of ‘lack of demand’ after a test is that the professional money is not interested in the up-side of the market at that particular moment – they are still bearish!

You may not have seen weakness in the market, but the specialists and floor traders have. This weakness is shown by a decrease in trading volume, as the stock or Index attempts to go up (no demand). The traders
that matter will have seen the weakness and will not be participating in the current up-move. This action will confirm any signs of weakness in the background that you have detected.

Well depending on the volume and spread upon the closing of the daily chart, this may be the last day of this two day rally in the EUR.Based on the spread, it appears that today's daily spread will surpass yesterdays. Based on my estimates as of right now the volume was 3799 on the daily chart and it took about 5 hours so far, so I did some calculations and by the end of the daily chart the volume would come in around 18995, which is lower then the previous candle which would mean tomorrow would close down. However, I have to run another analysis around US sessions to confirm my estimation. If I'm right it would make sense to close out my trades and go short upon today's session close.

I''m going to post some analysis on a couple pairs, I'm not trading them but as some insight to new traders. Ill look at EUR/GBP, USD/JPY, GBP/JPY and USD/AUD

From looking at the daily chart, its going to be another continuation of the bearish movement. Using VSA you know that a signal of strength in the background are red candles. The spread looks like it's going to be higher on this bearish candle too. However, I'd be monitoring that volume to see where the daily volume figures comes in to determine a continuation of this trend. Based on my calculations, it looks like the volume should come in lower on this bearish candle, which in turn would mean Thursday will be a green bar. I will followup my analysis on the close of the daily candle.Only enter short trades for now.

Well from looking at the daily chart, we have a two day bearish trend however something is wrong with this chart, you have the 2nd day bearish candle with higher volume and spread however notice that the bears couldn't force the close lower. Which is a clear sign of strength meaning alot of buying occurred yesterday and I have a hunch that today's action will bring forth a green candle end of day. The spread on the previous day candle was 94 the spread on the current day candle is 58 and were not even halfway through the trading day! I'd even venture to say we have a small bull rally about to begin. I'd be looking for down bars weakness on the 5M candles to take a long position. Ill followup end of day for further analysis.

Well I'll put my money in this one, I could resist. I bought GBP/JPY@ 147.27

I hope people understand the basis of this VSA is following smart money which means that we buy into weakness, by looking at daily charts, you can get an idea of the trading day and go to lower minute charts to determine your entry points. Yes, most of my trades do start out in the negative I've even been negative at -40pips, especially from my entries on the GBP/JPY which I've posted above, but you must understand down bars represent strength, So smart money has to buy in downbars b/c they're interested in bargain merchandise and b/c they realize that strength is represented in the background.

Well finally we get that green up bar, I've explained for on the daily chart.

I couldn't resist I bought more on that down move at 146.94.

Nap time be back US Open 8AM Sharp

well i got stopped out

Hey just like I predicted smart money using Retail data to shakeout weak holders.

Well, smart money has absorbed alot of the selling and yes, I'm still in the trade b/c we already planned for the news from US Retail and smart money planned for bullish news too so they drive the price down, causing weak holders who were locked into thier trades to sell. Thus forcing the price down so smart money can buy it up again. The daily chart also proves this down move is on a weak spread. I'm not fooled still in the trade and buying more on down move.Bought at 1.3596

That the USD is weak, so they love when we have data such as retail claims, unemployment or PPI b/c its their opportunity to drive fear into the market fear in the sense that the US from each good report is getting stronger but the fact is it's not! Long term-USD smart money is betting against it, So smart money uses any opportunity they can they buy more EUR on sale.

8EUR/USD rallied off 1.3563 previous session to high of 1.3702, which took about 8hours, so if my estimates are correct sometime mid-session in Sydney open we should rally back up to that high.

The markup has begun and if you followed me you where in early.