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vsa with Malcolm

  • #961
  • Jul 5, 2010 8:10pm Jul 5, 2010 8:10pm
Quoting Intel
A couple of quickies, to ponder. Not meant for the gurus.

in Scoties chart below we see that after the UT which he labelled, price went up. Yet, 2 bars after the UT(in the first box) is a ND. UT followed by ND might = short entry at break of the low of the ND. Price did indeed break the low.

Q1. Why did price go UP after the ND, is this a failed VSA setup?


4 bars after the aformentioned UT is another UT. 2bars after that(the 2nd box) is yet another ND. UT followed by ND might = short entry at break of the low of the ND. Price did indeed...

Some good stuff in the answers so far and some not so good stuff. Keep them coming.
Which one of them is a failed vsa short setup?
  • #962
  • Jul 5, 2010 8:39pm Jul 5, 2010 8:39pm
Quoting Intel
Some good stuff in the answers so far and some not so good stuff. Keep them coming.
Which one of them is a failed vsa short setup?
And why did it fail?
  • #963
  • Jul 5, 2010 8:44pm Jul 5, 2010 8:44pm
Hi Malcolmb, thanks for your quick reply, i understand now. Do you trade any fixed times? i realise many talk about london n frankfurt open timings, and i will like to know more about how to marry vsa with opening timings? Not sure if i got the idea right but sometimes i tend to trade at random times and im not sure if the low volume is lack of activity or is it because at that time is off peak trading time....I've got the timings for the sessions though, just wondering how to use this knowledge.

Cheers,
Bethel

Quoting malcolmb14
lol good question .. for pro traders only.

the reason i took trade early on that one is that trens is already up in the background and we saw a down move before london being hit with stopping vol.
  • #964
  • Jul 5, 2010 8:51pm Jul 5, 2010 8:51pm
Quoting Intel
A couple of quickies, to ponder. Not meant for the gurus.

in Scoties chart below we see that after the UT which he labelled, price went up. Yet, 2 bars after the UT(in the first box) is a ND. UT followed by ND might = short entry at break of the low of the ND. Price did indeed break the low.

Q1. Why did price go UP after the ND, is this a failed VSA setup?


4 bars after the aformentioned UT is another UT. 2bars after that(the 2nd box) is yet another ND. UT followed by ND might = short entry at break of the low of the ND. Price did indeed...
The chart tells all (literally). But the main thing to think about is that there is no trend change after the Up Thrust. No trend change no reason to look for a short.

Also note that there is heavy strength in the background in the two down candles on ultra high volume. This strength does not just go away.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #965
  • Jul 5, 2010 9:05pm Jul 5, 2010 9:05pm
Quoting HiddenGap
The chart tells all (literally). But the main thing to think about is that there is no trend change after the Up Thrust. No trend change no reason to look for a short.

Also note that there is heavy strength in the background in the two down candles on ultra high volume. This strength does not just go away.
I see that the 2nd rectangle candle is no supply test.am I right?
  • #966
  • Jul 5, 2010 9:35pm Jul 5, 2010 9:35pm
Thanks f451 once again for your effort n patience to type such a gd teaching.

You mentioned that you turn down to 15 min for entry signals. Before that, on the larger TFs, you determine the background.

e.g. 4hr 1 hr, both show weakness, so on 15min look to short.

however you also mentioned : "If you see instead of a no demand bar, a wide spread up bar with above average volume (say an effort to rise), then the background has changed - and so should your bias."

1) did u mean on the 15min chart? If so, i will wait for another short signal n ignore the long, because i will want to trade with the trend. From what you said, you will scalp on the long side but kp in mind that background is weakness? Please correct me if im wrong.

2) What if larger TF shows weakness but is still in uptrend, so do we follow the trend or the background weakness? im sort of confuse over trend n weakness, or are they the same? If not, is it because strength is found in uptrends and weakness found in downtrends?

3) why will background change so fast ? since its only a bar on the 15 min?


a bit confuse over how to express my queries

Hope you understand my questions, haha sorry for the bombing of questions which may not even seem clear.

Thank you very very much f451!

Cheers,
Bethel

Quoting f451
Your understanding of background maybe right - if you're looking for climatic volume bars on (IMHO) 1HR or 4HR or higher timeframes. If you're looking at 30M or 15M you can still see climatic volume bars, but it's more likely they will be spread out over several bars. (You can even see accumulation around a price range on M5 if you look closely at the volume across a number of M5 down bars). Basically you are looking for effort to rise, effort to fall, stopping volume, end of a rising market, selling or buying climax, upthrust, squat bars - bars...
  • #967
  • Jul 5, 2010 9:49pm Jul 5, 2010 9:49pm
Quoting Bethel
Thanks f451 once again for your effort n patience to type such a gd teaching.

You mentioned that you turn down to 15 min for entry signals. Before that, on the larger TFs, you determine the background.

e.g. 4hr 1 hr, both show weakness, so on 15min look to short.

however you also mentioned : "If you see instead of a no demand bar, a wide spread up bar with above average volume (say an effort to rise), then the background has changed - and so should your bias."

1) did u mean on the 15min chart? If so, i will wait for another short signal...
Yes. 15M, or any timeframe where you are looking for your confirmation bars. If you're looking for a confirmation bar after weakness (i.e no demand), but instead you see a wide spread high volume up bar then there is still strength and it's not time to go short. Conversely if you are looking for a successful low volume test after strength in background but you see a wide spread high volume down bar, it's not yet time to go long. recheck the background. Stay out of the trade if it doesn't make sense.


Quote
2) What if larger TF shows weakness but is still in uptrend, so do we follow the trend or the background weakness? im sort of confuse over trend n weakness, or are they the same? If not, is it because strength is found in uptrends and weakness found in downtrends?
If a higher TF shows weakness in the background, it is almost certainly still in an uptrend (although could possible have been knocked sideways). Start looking for confirmation bars (possibly on a lower timeframe) but wait also until your see signs that the trend has turned on this timeframe also (e.g. hull MA). Trend and background are not the same - trend is the result of all the players in the market and their buying and selling - we are interested in what the big players (smart money) who shift the market with their buying and selling are about to do - and we see this through the footprints they leave behind in volume and spread. weakness indicates they selling their holdings to less informed buyers, because they know price will drop, strength indicates they are buying from less informed sellers because they know price will go up.

Quote
3) why will background change so fast ? since its only a bar on the 15 min?
Difficult to answer. The background depends on who is out there watching the market, and what prices they will enter to buy or sell in large volume. If price moves down to an area they have standing orders to buy at, then they will start buying. and vice versa. But they need others to be buying against in order not to move the price against their own selling, or they need to make sure all the sellers are exhausted in order not to encounter resistance when they try to push prices up with buying.

Basically if you're looking for signs of strength to confirm a long entry - but instead you see a large down move - then you need to be wary. It may be the last momentum of the down move before the Smart Money mark prices back up, or might be a further down move.

This why a number of the wise heads here are recommending you confirm that the trend has changed as well before entering.

f451
  • #968
  • Jul 5, 2010 11:38pm Jul 5, 2010 11:38pm
Quoting HiddenGap
The chart tells all (literally). But the main thing to think about is that there is no trend change after the Up Thrust. No trend change no reason to look for a short.

Also note that there is heavy strength in the background in the two down candles on ultra high volume. This strength does not just go away.
I thought I said no gurus!!!!!

Ok

Q1. this is simple......the ND is NOT a ND. The volume is too high.

Q2. this is a little trickier. The ND is not technically a ND because it closes on the high. How ever many people may have taken this trade with the 2 UTs in the background. But, there are NO signs of weakness in the background other than the UTs, and this is key.

If an UT is the only sign of weakness, it's probably going to be stalling at that price and not reversing. In this case, if we look to Scoties H1 chart from his post, we see that there is an old top right where our UTs are. Price was stalling at a resistance area.

Non of these were a 'failed' vsa setup because vsa was not telling us to enter!!!

1 point for spotting the first dodgey ND
3 points for spotting the 2nd dodgey ND
100 points for spotting the lack of weakness in the background
  • #969
  • Jul 6, 2010 12:07am Jul 6, 2010 12:07am
Quoting Intel
I thought I said no gurus!!!!!

Ok

Q1. this is simple......the ND is NOT a ND. The volume is too high.

Q2. this is a little trickier. The ND is not technically a ND because it closes on the high. How ever many people may have taken this trade with the 2 UTs in the background. But, there are NO signs of weakness in the background other than the UTs, and this is key.

If an UT is the only sign of weakness, it's probably going to be stalling at that price and not reversing. In this case, if we look to Scoties H1 chart from his post, we see...
not enough weakness - I agree - the three up bars before the 1st upthrust aren't really wide enough spread or high enough volume to count as climatic volume up bars - and the upthrust isn't into a new high, so we have not quite enough evidence of effort to rise, and no real signs of hidden selling - if you went up to 1HR chart those 3 up bars would be 1 up bar sandwiched between a couple of down bars - not enough of an effort to rise

good test Intel - keep 'em coming!
  • #970
  • Jul 6, 2010 2:46am Jul 6, 2010 2:46am
been reading through this thread. fantastic stuffs you guys have posted thus far. i am still trying to absorb and understand your explanations. i thnk i am a bit slow through. But keep them coming!
someday i wil catch up with you.
  • #971
  • Jul 6, 2010 3:19am Jul 6, 2010 3:19am
Quoting f451
Your understanding of background maybe right - if you're looking for climatic volume bars on (IMHO) 1HR or 4HR or higher timeframes. If you're looking at 30M or 15M you can still see climatic volume bars, but it's more likely they will be spread out over several bars. (You can even see accumulation around a price range on M5 if you look closely at the volume across a number of M5 down bars). Basically you are looking for effort to rise, effort to fall, stopping volume, end of a rising market, selling or buying climax, upthrust, squat bars - bars...

Hi f451,

This is a really helpful post. Thanks for it.
@mel
  • #972
  • Jul 6, 2010 3:40am Jul 6, 2010 3:40am
Good Morning Malc,

Would you share some thoughts on what might be developing on Cable and AJ early this week and if you plan to trade either? Volumes appear to be fairly thin with both pairs having retraced back to near Friday's highs.

Regards,

Mo.
  • #973
  • Jul 6, 2010 3:47am Jul 6, 2010 3:47am
Hello to all!!!

Am I right in my analysis?
1) We have selling here on this bar. Some supply came in. But then we have up bar, which means that not all demand has gone.
2) One more supply bar, very high volume.
And then we have 3 bars with lower volume in the area of bar 2 where we saw big volume.
So after the last point we can say that SM don't interesting in lower prices.

Thank you!!!
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  • #974
  • Jul 6, 2010 4:27am Jul 6, 2010 4:27am
Anyone had any experience with using the period converter to ceate different time frame charts for MT4? Are they VSA worthy? The volume data which is produced is it accurate? Just curious to know if anyone has ever tried that.

I'd like to get 10 min charts or 3 min charts, without having to get esignal! ... have my cake and eat it too I guess... hehe...

Thanks,

-SilverKnight-
  • #975
  • Edited 5:40am Jul 6, 2010 4:49am | Edited 5:40am
Bar 1 is an upthrust which shows evidence of weakness but the background is a strong uptrend and the next bar is also up. Bar 2 is an up bar closing off the high on climactic volume which might be a danger sign for going long because it could contain hidden selling. The next bar though again is up which shows at least some demand is still there.

The three down bars as you quite rightly point out are on diminishing volume so there's no evidence in them that professional money is looking seriously to mark down prices yet. The bar after is again up.

It's possible we're starting to see a turn. There's a line of tweezer tops now on the 15 minute at the 1.26 psych level which look distinctly bearish. We've seen a strong up move though and it may just be consolidating and pausing for breath. Hard to be sure quite yet.

(Post refers to V 2008's EURUSD chart on previous page).
  • #976
  • Jul 6, 2010 7:37am Jul 6, 2010 7:37am
Malc Good place to short aj I guess?? Price also at weekly pivot and daily r2.
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  • #977
  • Jul 6, 2010 8:06am Jul 6, 2010 8:06am
Quoting honeybhi
Malc Good place to short aj I guess?? Price also at weekly pivot and daily r2.
It may come down a little cos there are some signs of weakness but, in general it looks to me like it will continue up once it has passed this resistance area.

Keep a close eye on any reversal/retrace setups and continuation setups. Take which ever when it shows it hand.

EDIT :- the next few bars might tell. I think it will either push up through 75 or retrace to 50/60 area before trying again.
  • #978
  • Jul 6, 2010 8:37am Jul 6, 2010 8:37am
If watching EU(potential SHort ) is not interesting , i don't know
what is...
  • #979
  • Jul 6, 2010 8:54am Jul 6, 2010 8:54am
Quoting taomql4
If watching EU(potential SHort ) is not interesting , i don't know
what is...
Where are you seeing that Tao?
  • #980
  • Jul 6, 2010 8:57am Jul 6, 2010 8:57am
weakness already in the background

I will look for an up move with no demand or ut inside WRB S/D Delta Zone to confirm then wait till the trend diamond turn red
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