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vsa with Malcolm

  • #821
  • Edited 10:49pm Jul 1, 2010 10:34pm | Edited 10:49pm
I am quite confuse about something.. when i see a long move up, do i look out for no supply bar to get in the trade and follow its upmove.. or do i lookout for the no demand bar to trade the reversal?...

whenever i see strong upmove for a period of time, with some up bars showing weakness in that up move, and price nearing some resistance level with my oscillator in the overbought zone, i think the time for it to reverse must be coming soon.. so i lookout for the no demand bar to trade the reversal.

But i find myself 60-70% wrong most of the time and the price just turn against me...

can someone who has gone though this phase before shed some light on this? could it be soemthing to do with the accumulation and distribution?

i use ibfx and HG Volume.


f451: hi, u mentioned "I look to spot climatic bars on 1HR or 4HR..." do u sit in front of ur computer whole day to spot that climatic action bar or u use indicator to alert u? mind share the alert if there is one pls?

btw, it is not advisable to buy that no demand in purple, coz the volume is not lesser than the previous 2 bars, right?

and the part which u mentioned "i would not read this bar as a 2bar reversal(which would be an upthrust)"... can explain why? is it becoz you think that a 2bar reversal cannot be considered as valid upthrust if the volume is too high??

... and i don't see that green upbar has a narrowing spread as compared to its previous green bar.. so what makes it an upbar with narrowing spread?
  • #822
  • Jul 1, 2010 10:50pm Jul 1, 2010 10:50pm
respect! im sorta in a similar situation but i guess im lagging more behind, but i will persevere like u do, thank you for your post

Bethel

Quoting f451
I'm in too.

Three months ago I had zero forex trading experience (yep, never made a trade, never seen a chart or a technical analysis indicator), and now I'm semi regularly taking profitable trades (mostly when I get in front of the PC before the move actually happens, most I miss), in large part due to the charts and comments Malcolm has posted.

Here's a very quick summary of the steps I took to wrap my head
around VSA:
- read Master the Markets - realised volume and it's result on price were the key to understanding what was going on in...
  • #823
  • Jul 1, 2010 10:56pm Jul 1, 2010 10:56pm
Was just reading 1st few pages of this thread and felt encouraged by your post mr. f451, and the next moment i see your detailed reply, i hope i can be a better trader like u guys, will study more, n perservere, thank u!

Cheers,
Bethel

Quoting f451
Here's my two cents worth - marked up on Malcolm's chart - Malcolm and other more experienced VSA traders might disagree or correct my interpretation

Note: if you'd entered short after the possible no demand bar I marked in purple you would have been stopped out. I tend not to use 4HR charts because the sessions tend to skew the volume into regular patterns that affect my ability to read the bars. I look to spot climatic bars on 1HR or 4HR and then go down to M15 or M30 for a closer look where the bars are a little easier to read (as all the volumes...
  • #824
  • Jul 1, 2010 11:22pm Jul 1, 2010 11:22pm
Quoting keitsuke
I think the Euro retrace was long overdue, and this week's favourable ECB tender + Spanish bond auction, coupled with horror data from the US was the catalyst . As for the cable, it got dragged along for the ride.
I believe long term sentiment is still bearish though.

Aussie is heading up for now, due to our new PM settling the heat on the resource super tax.
one thing we do in vsa is ignore news ...

when everyone calling for dj 13000 I was loading sells. when others saying bear market back at es 1050 I was loading longs for ride back up ,

when news was saying bulls back on recovery blah blah i was loading sells due to no demand bar on weekly es on last move up

Ignore the news.

I saw what I missed on GU ..was as clear as day
Blogging daily now at www.volume.zone
  • #825
  • Jul 1, 2010 11:24pm Jul 1, 2010 11:24pm
Quoting malcolmb14
as we are seeing weakness in Gu for now I just went thru a 4 hour chart and picked off some potential targets ( green lines) . These are just simple s/r lines that is all.

Remember if pros want lower prices they will break these lines fast and then do no demand tests from under the lines , if they are taking profit the green lines would be the most liekly areas you would see stopping vol , shake outs etc

Attachment

1st one ultra high volume up bar sent market sideways , buying climax
Blogging daily now at www.volume.zone
  • #826
  • Jul 1, 2010 11:41pm Jul 1, 2010 11:41pm
here is what I missed on Gu

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Blogging daily now at www.volume.zone
  • #827
  • Jul 1, 2010 11:47pm Jul 1, 2010 11:47pm
Quoting malcolmb14
here is what I missed on Gu

Attachment
I would have been spooked by that high volume upbar with so much selling into it - the one you've marked supply on the chart - the volume was pretty high compared with the stopping volume before it - I guess that was buying absorbing sellers at that area (did it line up with a previous days POC?) before they could mark up the prices
  • #828
  • Edited Jul 2, 2010 1:58am Jul 1, 2010 11:58pm | Edited Jul 2, 2010 1:58am
Quoting mud3210
I am quite confuse about something.. when i see a long move up, do i look out for no supply bar to get in the trade and follow its upmove.. or do i lookout for the no demand bar to trade the reversal?...

f451: hi, u mentioned "I look to spot climatic bars on 1HR or 4HR..." do u sit in front of ur computer whole day to spot that climatic action bar or u use indicator to alert u? mind share the alert if there is one pls?

btw, it is not advisable to buy that no demand in purple, coz the volume is not lesser than the...
If you're looking to go long, identify the strength in the background, and then look for testing (down bars on low volume) - test of supply, no supply, maybe shakeout , as your confirmation to enter. This is the Smart Money testing to see if all the sellers have been exhausted so they can mark up prices without resistance. If you miss the move, you can wait for another no demand or no supply bar (again low volume) which with a big up move behind it is a little profit taking pause before continuing up

I don't sit in front of the computer all day - I have very limited time to trade so when I can I look at 1HR (or 4HR) charts on the pairs I'm watching and find the last wide spread ultra high volume bars - these will be to the left of the edge of the chart - as the starting point for my analysis. If I see any I determine if they are indicating weakness or strength, then I switch down to 15M, find those climatic bars again (they will be broken up over several bars - one 1HR bar = four 15M bars) and then I return to the right edge of the chart and look to see if there are any confirmation bars (already formed, or forming) such as no demand (for a potential short), or tests for a potential long. I also look to the Hull MA to see if it is turning as confirmation to enter. One should also be checking (at the very least) - the daily trend, (up or down, ranging) as this tells you what your trading strategy is - buying dips, selling rallies (if trending), or looking for top/bottom reversals (if ranging) and then looking for POC & S/R areas to establish where the price might bounce or what a move would have to work through to get to my target (this general context stuff is crucial but my weakness at the moment).

So if you want an alert, check the Hull MA turning to bring you to your PC, then look at the background to decide if it's worth trading

answers to the other questions
- generally not advisable to go long after no demand - no demand means no interest in higher prices (shown by the low volume on the upbar) - this is a confirmation for a short, especially if under a recently downturned hull-ma
- an ideal upthrust would have average-ish volume - ultra high volume for an upthrust is probably an end of a rising market or buying climax which are also strong signs of weakness, but may not be the ideal place for entry short


f451
  • #829
  • Edited 1:14am Jul 2, 2010 12:56am | Edited 1:14am
Quoting f451
...I have very limited time to trade so when I can I look at 1HR (or 4HR) charts on the pairs I'm watching and find the last wide spread ultra high volume bars - these will be to the left of the edge of the chart - as the starting point for my analysis. If I see any I determine if they are indicating weakness or strength, then I switch down to 15M...
do u find trading smaller timeframe tend not to work out more as compared to larger timeframes? maybe more fakeouts?

do u think that ppl with not much capital cannot afford to trade large timeframe coz of the large stops required as compared to the smaller timeframes...?

i think trading larger time frame, traders have to wait ages for that climatic action bar to showup, then the test bar... then maybe a next confirmation bar, hence, the time spent to practise the strategy and refine your methods on large TF becomes much much longer.. do u find that true?

is the hull MA is just like any moving average, which is also a lagging indicator.. except that it can do alerts.. no?

i am assuming for a candle to be red, it tells us that the bar is initially triggered by the sellers, hence it's red, is that correct..? , if no, then it leads me to think.. if we can all recognise what is upthrust,stopping volume no supply, no demand. so why would the 2 colors on our candles still be useful in any way? how is it necessary to have our candles still in 2 colors?

sorry if it sounds too basic..
  • #830
  • Edited 1:46am Jul 2, 2010 1:13am | Edited 1:46am
Quoting mud3210
do u find trading smaller timeframe tend not to work out more as compared to larger timeframes? maybe more fakeouts?

do u think that ppl with not much capital cannot afford to trade large timeframe coz of the large stops required as compared to the smaller timeframes...?

i think trading larger time frame, traders have to wait ages for that climatic action bar to showup, then the test bar... then maybe a next confirmation bar, hence, the time spent to practise the strategy and refine your methods on large TF becomes much much longer.. do u find...
setups on higher timeframes tend to be more reliable because they are less likely to be trumped by a larger timeframe player stepping in to change the market dynamics, so yes more whipsaws and fakeouts on lower timeframes but you can learn to read (and avoid) these

it's definitely easier to trade higher timeframes if you have deeper pockets - but that's why you drop down to lower TFs to time your entries

I like D1 for the overall view, to decide if the market is trending or ranging, so I know what strategy to apply when VSA tells me it's time to enter.

I like 1HR for analysing strength or weakness in the background because it just seems easiest to spot wide spread ultra high volume bars in this timeframe - D1 rarely has really clear VSA setups - (when it does tho, you should trade them - the trend will be changing)

I like 15M (or 30M) for watching potential confirmations and timing entries because you can clearly see testing bars, no supply, no demand, upthrusts, plus you get better entries with better placed stops, improving your risk to reward ratio

I don't need more than 15 minutes to decide if a setup is valid, so longer timeframes don't really help me there - because I can't be at the screen for hours, I can't wait for the setup to be confirmed on D1

Hull is a pretty fast, fairly non lagging version of an MA - so if a Hull MA 21 alerts you to a trend change on M15 then you have time to look at the background and see if it's a valid VSA setup and decide to enter - alternatively you can use stop orders and wait for price to come to you

the candle colors are for closing up or closing down - you need to see this to read the VSA bars
  • #831
  • Edited 1:44am Jul 2, 2010 1:20am | Edited 1:44am
Quoting f451
I like D1 for the overall view, to decide if the market is trending or ranging, so I know what strategy to apply when VSA tells me it's time to enter.
Thanks for the detailed explanation! tho i still havnt quite figured out how would the close up and down be useful for the VSA... and what do u mean by D1?

am i right to assume the following? :
a test bar would have the following properties:
it would be a downbar
low spread with short wick at top and bottom, closing in the middle to upper
lower volume as compared to the previous 2 bars and significant lower volume than the last stopping volume

no demand bar:
would be a upbar
low spread with short wick at top and bottom, closing in the middle to lower
lower volume as compared to the previous 2 bars and significant lower volume than the last upthrust
***********************
Thanks again!.. im am still halfway thru the MTM

BTW, i just googled and found this for Hull for NT:
http://www.ninjatrader.com/support/f...d.php?p=176129

In Post #2, their customer service said that : "...it's available per default in NinjaTrader and called the HMA indicator"
  • #832
  • Edited 2:05am Jul 2, 2010 1:31am | Edited 2:05am
Quoting mud3210
Thanks for the detailed explanation! tho i still havnt quite figured out how would the close up and down be useful for the VSA... and what do u mean by D1?
D1 = 1 day timeframe

red candle = close lower than open of the candle
white candle = close higher than open of the candle

candles do not line up precisely with VSA bars (which were defined for bar charts) - in VSA you only care if the close of this candle (bar) is higher or lower than the last candle (bar) - red and white shows you where the close of the candle is, but not if it's higher or lower than the last candle - you need to do that by eye (visual comparison)

you need to know if a bar closed up or down from the last bar (as well as spread and volume) to determine what kind of VSA bar it is - no demand is an up bar (i.e closed higher than previous bar) test of supply is (generally) a down bar (i.e. closed lower than the previous bar), stopping volume is a down bar, upthrust is an up bar - all the vsa bars (candles) have definitions - you also need to see where in the bar's range is closes (upclose = top third of the bar's spread, downclose = bottom third) - read master the markets
  • #833
  • Edited 1:45am Jul 2, 2010 1:32am | Edited 1:45am
does anyone have a Hull MA indicator for Ninja Trader?

been posting a lot today so the last request is going to get lost...

Edit: ignore this - apparently it's in the default NT indicators as HMA
  • #834
  • Jul 2, 2010 1:44am Jul 2, 2010 1:44am
these might help those still working out the VSA bar definitions
Attached File(s)
File Type: xls VSABarDefinitionsv2.xls   37 KB | 994 downloads
File Type: txt VSA Cheat Sheet.txt   2 KB | 901 downloads
File Type: pdf VSA BASICS.pdf   665 KB | 1,671 downloads
  • #835
  • Jul 2, 2010 2:10am Jul 2, 2010 2:10am
gu seem still pushing up even i c this but still no signal for short yet
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  • #836
  • Jul 2, 2010 2:24am Jul 2, 2010 2:24am
please comment 15chart right now
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  • #837
  • Edited 8:37am Jul 2, 2010 3:46am | Edited 8:37am
Quoting f451
Intel, I'm impressed that you read that up move. It was clear as mud to me...
Can you post a chart with your thinking?

Ok, it all started the day before during the down move.

On the chart below at 10 am we get our first sign, a stopping volume = STRENGTH.
Following that, all of the very high volume bars during UK and US are all down bars. Some of which are showing POSSIBLE STRENGTH
Ohers are showing BUYERS COMING IN.
All of this volume without price moving very far down = POSSIBLE STRENGTH
But, price isn't ready to rise yet so, we get more sideways action on small spreads.

Then during Asia we get more of the same = POSSIBLE STRENGTH

At FO, we get a down bar (not strictly vsa), frankie fake out = PROBABLE STRENGTH.

Then right on que, we get a stopping volume in the form of an Shake out style bar = STRENGTH

We are now at a previously respected area of support = POSSIBLE STRENGTH

The next bar is up, confirming the stopping volume.

I was unsure at this point whether we had a reversal or a retrace. So, I entered at the start of this bar(in case it was a retrace). The price went up but started to come back down so I bottled it and took 20 pips. See here http://www.forexfactory.com/showpost...&postcount=786 and http://www.forexfactory.com/showpost...postcount=7865


However, the next bar is a NS(not the ND which is written on the chart!) with a spread which may be a little on the wide side but with all the background, it was good enough = STRENGTH.

I entered at the break of the high of the NS(not the ND which is written on the chart!).

I saw no reason to exit until the UT style bar which was preceeded by a stopping volume. I saw the close of the UT style bar as a good exit and took what I had.

Hope it helps

Edit :- The UT marked at the start of the up move should read Shake out instead. Also, the ND marked at the start of the up move should read NS. These are terminology mistakes only. All descriptions are valid.
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  • #838
  • Jul 2, 2010 4:11am Jul 2, 2010 4:11am
Quoting Intel
Ok, it all started the day before during the down move.

On the chart below at 10 am we get our first sign, a stopping volume = STRENGTH.
Following that, all of the very high volume bars during UK and US are all down bars....
Intel,

Thank you for posting this step by step methodology you use. It really helped me clear up the mistakes I have been making. Congrats on catching this big move so precisely too!

Do you prefer to make these VSA observations on hourly charts only?

Regards,

Mo.
  • #839
  • Jul 2, 2010 4:22am Jul 2, 2010 4:22am
Shouldn't the bar marked ND for No Demand be NS for No Supply? Or have I misunderstood?

Very helpful analysis in any event. Thanks for that.
  • #840
  • Jul 2, 2010 5:11am Jul 2, 2010 5:11am
Quoting Intel
.....I entered at the break of the high of the ND.

I saw no reason to exit until the UT style bar which was preceeded by a stopping volume. I saw the close of the UT style bar as a good exit and took what I had.

Hope it helps
I think you ment to say, "I entered at the break of the high of the TEST/NS. A successful and ideal test/ns is going to close down with the next bar up and signal strength. A ND is going to close up with the next bar down and signal weakness.

When we talk about an "Up Thrust" where the price closes down and it is a sign of strength,not weakness, it is usually termd Reverse Up thrust. The real key is that it isn't really going up-it's doing the reverse and doing down.

I think you may have just gotten this wrong in your haste. Very nice trade anyway.
Without VSA, you're playing checkers while the Smart Money plays chess.
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