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  • #5,461
  • Mar 2, 2010 7:59am Mar 2, 2010 7:59am
You've found your entry setup and are just waiting for a ND before going short.

Here it is, a nice ND bar. Do you enter when the ND closes or, do you enter when you see the next bar is down?
  • #5,462
  • Mar 2, 2010 11:10am Mar 2, 2010 11:10am
Quoting AlliumPorrum
Does anyone have any comment on these questions; how do you define "high" or "average"??
The better volume indy has an moving average on it, so above the line is above average. Like Tom Williams says alot " its not a mathematical formula... " Just have to look at the background bars and volume and compare to see wide and narrow spreads and high or low volume.

IMHO anyway...

Cheers, Mike.
  • #5,463
  • Mar 2, 2010 12:26pm Mar 2, 2010 12:26pm
also will be thanking to the SM distribution when I am capable of reading the chart

here I want to post GU 30min chart, and you know mre than 400 pip decrease occured in 2 hours, and the cable started to swing (smart money play?) ..

I have tried to the steps of SM after dramatic decrease on swings.

I would like you to correct me if I am wrong.

In the meantime, that 420 pip decrase, very big question. I am thinking of who can be responsible such a move.. Could it be a reasult of exchange of banks ?

Thanks all.
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  • #5,464
  • Mar 2, 2010 12:48pm Mar 2, 2010 12:48pm
Quoting bruceli
also will be thanking to the SM distribution when I am capable of reading the chart

here I want to post GU 30min chart, and you know mre than 400 pip decrease occured in 2 hours, and the cable started to swing (smart money play?) ..

I have tried to the steps of SM after dramatic decrease on swings.

I would like you to correct me if I am wrong.

In the meantime, that 420 pip decrase, very big question. I am thinking of who can be responsible such a move.. Could it be a reasult of exchange of banks ?

Thanks all.
On the 420 pip move down (for the day), and who was responsible, SM is considered 80% of volume generally, so them of course, but I also I think it was pretty much everyone. GU had been dropping on fundamental news for a while, but the most significant thing was when GU broke below 1.50 by a particular amount, a zillion stops were triggered that had been set in that area. If you were watching as it happened, GU went down about 200 pips in 3 minutes. So it was a cascading snowball effect as all of those stops kept getting triggered.

I presume it was all the more dramatic because 1.50 is a more significant psychological number than 1.52, 1.53, etc., and a lot more stops had been placed below it. A very similar thing happened on GY during the financial meltdown in 2008. It broke 150 also, then dropped even more sharply; I think GY went down 2000 pips that day.

Of course no one knows for sure, but that was the commentary I heard about it, and I have seen the same thing happen before (the GY example)...
  • #5,465
  • Mar 2, 2010 12:56pm Mar 2, 2010 12:56pm
Quoting MykeFX
The better volume indy has an moving average on it, so above the line is above average. Like Tom Williams says alot " its not a mathematical formula... " Just have to look at the background bars and volume and compare to see wide and narrow spreads and high or low volume.
Ok, you mean that over the moving average is high, and below it is low, that's simple. But, how about the "average" level then, which is mentioned in the VSA cheat sheet? Or is this cheat sheet for some other VSA method than the one mentioned in the MtM?

And how about "very high" level? Someone might understand it as 150% over average, and someone else could see it as 300%...
  • #5,466
  • Mar 2, 2010 1:28pm Mar 2, 2010 1:28pm
thank you for your comments, you know I am a very new trader who scratching whats happenning around and try to understand .

i think that 200 pip movement is not the effort of some lets say small prof traders, but rather biggest traders.

I hope I'll be capable of understanding the dynamics of the market one day :=)
  • #5,467
  • Mar 2, 2010 2:14pm Mar 2, 2010 2:14pm
Quoting AlliumPorrum
Ok, you mean that over the moving average is high, and below it is low, that's simple. But, how about the "average" level then, which is mentioned in the VSA cheat sheet? Or is this cheat sheet for some other VSA method than the one mentioned in the MtM?

And how about "very high" level? Someone might understand it as 150% over average, and someone else could see it as 300%...

There is no specific figure for defining the size of volume bars.

YOU DEFINE THEM YOURSELF

How you do this is, by comparing the size bar you are defining with all of those in the recent past.

Again, you decide how many bars to go back when comparing but, a starting point might be the last 30 bars.

You don't have to go as far as measuring the bars or carrying out some kind of mathmatical formula. Simply by looking at the bars you should have a reasonable idea whether your bar is smallish, averageish or ultra low etc.

Just use your eyes.




Is 'averageish' a real word
  • #5,468
  • Mar 2, 2010 6:07pm Mar 2, 2010 6:07pm
80 increase pips in nearly 30 min
  • #5,469
  • Mar 2, 2010 7:21pm Mar 2, 2010 7:21pm
Quoting Intel
There is no specific figure for defining the size of volume bars.

YOU DEFINE THEM YOURSELF

How you do this is, by comparing the size bar you are defining with all of those in the recent past.

Again, you decide how many bars to go back when comparing but, a starting point might be the last 30 bars.

You don't have to go as far as measuring the bars or carrying out some kind of mathmatical formula. Simply by looking at the bars you should have a reasonable idea whether your bar is smallish, averageish or ultra low etc.

Just use your eyes........
Whilst it is true that we are making relative comparisons between volume bars, there are some things that can be defined definitively.

1. Volume less than the previous two volume bars is ALWAYS considered low volume. Therefore, the even though the actual volume bar may be above average, if it is less than the previous two, it is considered low.

2. Volume higher than 2 stds (standard deviations) from the average over x number of bars, is high. Unless 1 is true. That's why you see so many charts with a moving average and stds of that average on them. The average used may differ, but the concepts of outliers, mean reversion, and normal distribution (bell curve) remain the same.

3. From a tradeguider perspective, most signs of strength or weakness don’t look at volume prior to more than the last five (5) and usually three(3) bars.

Many people here are using better volume which uses a look back of 20 or 30 bars. Again, however, when defining No demand only the volumes of the current bar and the last two bars are used.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #5,470
  • Mar 2, 2010 8:18pm Mar 2, 2010 8:18pm
Quoting HiddenGap
Whilst it is true that we are making relative comparisons between volume bars, there are some things that can be defined definitively.

1. Volume less than the previous two volume bars is ALWAYS considered low volume. Therefore, the even though the actual volume bar may be above average, if it is less than the previous two, it is considered low.

2. Volume higher than 2 stds (standard deviations) from the average over x number of bars, is high. Unless 1 is true. That's why you see so many charts with a moving average and stds of that average on...
Hi,

Looking at EU M15TF. Can anyone cfm if that candle down is a Stopping Volume ? And few candles later, there are 2 bearish candles with low volume, are these 2 consider as Test ?
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  • #5,471
  • Mar 2, 2010 8:21pm Mar 2, 2010 8:21pm
Quoting nico28
Hi,

Looking at EU M15TF. Can anyone cfm if that candle down is a Stopping Volume ? And few candles later, there are 2 bearish candles with low volume, are these 2 consider as Test ?
yes on both counts.

Stopping volume: ultra high volume on a down candle that closes in its upper 1/3 third of its range with the next candle up.

No Supplies/tests: narrow range down candles with volume less than the previous two candles.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #5,472
  • Mar 2, 2010 8:30pm Mar 2, 2010 8:30pm
Quoting HiddenGap
yes on both counts.

Stopping volume: ultra high volume on a down candle that closes in its upper 1/3 third of its range with the next candle up.

No Supplies/tests: narrow range down candles with volume less than the previous two candles.
hi hidden gap, is there any source to learn WRB?
  • #5,473
  • Mar 2, 2010 9:20pm Mar 2, 2010 9:20pm
Quoting HiddenGap
yes on both counts.

Stopping volume: ultra high volume on a down candle that closes in its upper 1/3 third of its range with the next candle up.

No Supplies/tests: narrow range down candles with volume less than the previous two candles.
thankyou hg for your reply.

i have another chart on GBPCHF 30min TF.
On the left, i believe its a Stopping Volume. On the right, the market went sideway, and all those marked in vertical red, i believe are the test.

Question is :

Are there any further conditions we have to look out for the valid test before go long ? It seen from the example, market actually sideway for long time before start to move up a little.
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  • #5,474
  • Mar 2, 2010 10:38pm Mar 2, 2010 10:38pm
this is what accumulation looks like

http://www.forexfactory.com/showpost...stcount=205260
Blogging daily now at www.volume.zone
  • #5,475
  • Mar 3, 2010 12:23am Mar 3, 2010 12:23am
Quoting nico28
thankyou hg for your reply.

i have another chart on GBPCHF 30min TF.
On the left, i believe its a Stopping Volume. On the right, the market went sideway, and all those marked in vertical red, i believe are the test.

Question is :

Are there any further conditions we have to look out for the valid test before go long ? It seen from the example, market actually sideway for long time before start to move up a little.
The ideal test will have the following properties:

1. Narrow (NR4 or NR7) range candle
2. The close will be down from the previous candle
3. The close will be in the middle or upper portion of the candle's range
4. The candle will make a lower low than the previous candle
5. Volume will be less than the previous two candles
6. There will be signs of strength in the background. If it is a "test in a rising market", then the fact that the market is rising is all the strength needed.
7. The test will appear within the range of a high volume candle. In other words, where there once was an abundance of selling, now there are few sellers. That's the whole purpose of a test-to find this out.
8.*A successful test must have either the next candle closing higher than the close of the test candle or the candle after that. So one of the next two candles should be up and higher than the close of the test to validate it.*

Just eyeballing your chart, it looks like the first 5 of the red lines you have there are not "ideal" tests candles. More importantly, none seem to be confirmed. This fact is a sign of weakness in itself.

Redline 6 shows a no supply/test that does confirm. However note that the volume while low (as defined by less than the previous two), is still higher than average.

7,8 & 9 are better. Now these tests are within the lower shadow portion of the range of our stopping volume candle. Plus the volume are both less than the previous two and lower than average.

Note that if this market was going to make a "v" shape, a strong (valid) test would come closer to the stopping volume candle.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #5,476
  • Mar 3, 2010 3:21am Mar 3, 2010 3:21am
Woke up to a clean buy setup, which I took before going to work:
- First rectangle shows the buyers coming in;
- Second rectangle shows sellers were absorved by buyers, which managed to push through supply;
- Last rectangle shows a succesfull test of supply.

Entry at 1.3615, no drawdowns, SL already at BE and trailing.
Since I have pips to spare, will risk going for a TP above last highs, set at 1.3670... otherwise, I would have played safe and TP around those (1.3650).

If I'm still home when that area is reached, will watch PA around it, and decide to TP earlier or not.
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  • #5,477
  • Mar 3, 2010 3:26am Mar 3, 2010 3:26am
Quoting HiddenGap
The ideal test will have the following properties:

1. Narrow (NR4 or NR7) range candle
2. The close will be down from the previous candle
3. The close will be in the middle or upper portion of the candle's range
4. The candle will make a lower low than the previous candle
5. Volume will be less than the previous two candles
6. There will be signs of strength in the background. If it is a "test in a rising market", then the fact that the market is rising is all the strength needed.
7. The test will appear within the range of a high volume candle....
Hi HG,

thankyou. Could you correct me if i wrong with this analysis on EURGBP.

A wide bar where closed at the middle = SM is selling = Weakness
the 2 more bars on the left lock out some weak hands = Weakness
wait for no demand bar to sell .
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  • #5,478
  • Mar 3, 2010 3:29am Mar 3, 2010 3:29am
Quoting HiddenGap
Whilst it is true that we are making relative comparisons between volume bars, there are some things that can be defined definitively.

1. Volume less than the previous two volume bars is ALWAYS considered low volume. Therefore, the even though the actual volume bar may be above average, if it is less than the previous two, it is considered low.

2. Volume higher than 2 stds (standard deviations) from the average over x number of bars, is high. Unless 1 is true. That's why you see so many charts with a moving average and stds of that average on...

Thanks for clarifying HG.

I wasn't aware of your number 2 many thanks for that. How many bars do you recommend for looking back when setting the MA?
  • #5,479
  • Edited 4:27am Mar 3, 2010 3:48am | Edited 4:27am
Quoting HiddenGap
Whilst it is true that we are making relative comparisons between volume bars, there are some things that can be defined definitively.

1. Volume less than the previous two volume bars is ALWAYS considered low volume. Therefore, the even though the actual volume bar may be above average, if it is less than the previous two, it is considered low.

2. Volume higher than 2 stds (standard deviations) from the average over x number of bars, is high. Unless 1 is true. That's why you see so many charts with a moving average and stds of that average on...

Hello HG

Thanks for great posts. I am an eternal student, as you may have figured from previous posts. Some questions that may never find an answer:

1. Great instruction, did not know that: But how much lower is significant? 1% ? 10 %? 23.8%?. What if present bar is lower then previous two, but the last one is lower than the middlebar ?

So is lower defined by:
V < V[1] AND V < V[2] (in numbers e.g.: 4, 5, 3)
OR should it be more sequential like
V < V[1] AND V[1] < V[2] (in numbers e.g.: 5, 4, 3)


1a: does the same hold for higher volume ?


Chief presented an indicator based on what you described, VSA Volume Teacher, am I right?. CDRW does something like that too, is it not?.

Lately I use Fibonacci %numbers (Idea by chief) to deteremine if a Volume bar is higher or lower. If the Volume changes by say 23% form any previous bar, the Fiboline shifts to indicate that Volume. This at least eliminates the need for the X-factor in the average . Hence the question: what would be a significant change in Volume ?

2. What is the proper number of Average[x] ? I find it makes quite a difference if x=10 OR x=30. The answer will be like: it depends.. But on what ?
Subsequently, you may have answered that: what is the proper number to determine the standarddeviation, and the value for the average lookback period to deteremine standarddeviation ? While torturing the numbers any answer could turn up... It seems there is no proper value..


3. Ok, does that mean that x = 2, 3 or 5 ?

I know there are no Holy numbers, and see the point when said: an Indicator only helps to visualise the situation. So basically I ask a question that cant be answered, but its inbetween the lines that I try to figure out what VSA and WRB is all about. So answers are appreciated
  • #5,480
  • Mar 3, 2010 3:51am Mar 3, 2010 3:51am
Quoting tonirai
Woke up to a clean buy setup, which I took before going to work:
- First rectangle shows the buyers coming in;
- Second rectangle shows sellers were absorved by buyers, which managed to push through supply;
- Last rectangle shows a succesfull test of supply.

Entry at 1.3615, no drawdowns, SL already at BE and trailing.
Since I have pips to spare, will risk going for a TP above last highs, set at 1.3670... otherwise, I would have played safe and TP around those (1.3650).

If I'm still home when that area is reached, will watch PA around it, and...

Looking good mate. Hope all stays well for ya.
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