vsa with Malcolm

What does VWAP mean and how does it work?


VWAP = Volume-Weighted Average Price.
This allows traders to see the average price where they will receive a fill of a certain size. The feature is particularly helpful for high-volume traders who trade large deal sizes. As the liquidity tiers and pricing change very quickly on the Active Trader platform, it can be very difficult for a client to otherwise determine what their average price is.
With VWAP, a client can change the display of the price ladder to reflect the cumulative quantity available at a given average price. Thus, rather than seeing individual banks quoting in the price ladder one can see an aggregate amount of liquidity from multiple price providers.
For example: A trader wants to put through a trade of 5M, which is also the total amount of liquidity being offered at that time by three different providers. The VWAP feature will allow this trader to instantly see what the average price is for 5M. They can then make an informed decision on whether to decrease their trade size, or to place the trade based on that average price.
With VWAP, a trader can also choose to place an order for a certain amount of available liquidity by simply clicking on that price tier rather than having to specify the quantity.

Thanks Mal, that GU trade you posted earlier was spot on.

Thanks disegnosys.

Interesting, that is a new term for me.
Not a "high volume trader"!

Wonder if "VWAP" is similar to "POC" ?

Is it possible to get "VWAP" on MT4 ?

found this

As requested.

Guys,

According to VSA there is no test in a down trend. A test is a down bar making a lower low than the previous bar (at least), closing near the high on low volume. These are only found in an up move.

A test is so called because, SM want to raise prices but are unsure if there is still supply in the market. If there is still supply, SM will have to absorb this before they can raise prices further. This can be a costly excercise so instead, they will suddenly mark down the price to a level where they know there used to be supply, and see if there is any interest. If the supply has dried up (ie low volume) they can now raise prices wthout hindrance.

Having said all that, we have exactly the same in a down trend except of course they will be testing for demand at higher prices(so it will make a higher high than the previous bar at least) instead of supply at lower prices. In VSA we dont call this a test we just refer to it as a ND.

Quite why Tom wouldn't call this a test aswell I dont know. I always refer to them as tests myself but, when I'm posting, I use the correct terminology.

BTW I remember when HG said that a test doesn't neccessarily have to make a lower low. If I remember correctly he was talking about testing an up move. My views are, that if we want to call it a test it should make a lower low. If it doesn't we should call it a NS. Which ever it is, the sentiment is identical and can be used the same.

I want to make one thing clear tho, HG should not be argued with on matters of VSA theory. In the past when I have found him to be wrong, it simply meant that I had a lot more to learn than I thought

Stopped

very aggressive entry ...but only 20 pip stop

I got as little scared and closed to early as I am a muppet. also was really focused on es.


well all have a great weekend

Hi guys

ouch ...
http://www.forexfactory.com/showpost...postcount=8185

and check your pm . I wanna chat on skype to you if you have time

iiiziiiiii

First Climatic up bar.. Then folowing next is downbar.. .. Someone could think this is result from climatic upbar.. yea.. it is, but it is on too big volume. So, ignore ND

Second Climatic upbar with folowing upbar that tells me that price yet want to go up, however this up bar was on quite reduced volume - that tells me somewhere should be end of this up move.
However i don't see to met my criteria for entry.

And the third one - High vol up bar in the top.. + it cant go higher.. + next bar is down...and then folowing bar is nd - really narrow range - this is what we wait.. Unfortunately doesn't met my criteria to go short.
My criteria to go short was met on next upbar.


Not sure what else i can tell about this picture


Banzai and have a great weekend !

Best,
Tom

interesting

seems buy interest in the 1.5620 area , or the support / resistance zone we saw thru 16th .

lets see how this plays out next week.

Have a great weekend everyone.

Will think more about some live trading and webinar for a week next week. I am thinking of doing this mid october ish

Got to try and make sure i have enough time to spend 3 hours in us session with traders that want to join in

I'd have traded his number 3 and possibly his number 1!!

odd you said that I did sell the 1st cluster with some breathing room

correction ---2nd cluster

LOL i have a few weeks off and look whats happens to the damn thread, 77 pages have passed since i was last here!!!

You guys have been hard at work!
Im set for a weekend of reading it looks like.......

You've lost me?????

LOL that backfired fot you malcom.

Have I missed something here?

I feel like there's something I ought to know.......but don't!!

First of all let me say I could be wrong. I am a student of Volume Spread Analysis just like most of you here-Intel and Mal excluded.

We often refer to No Demand as our "old friend". No Demands (in the right place) are very powerful and certainly worth understanding. However, tests and testing is a much more powerful and more common occurrence. Tests happen more than you may realize. TESTS CAN OCCUR IN BOTH UP AND DOWN MARKETS.

Let's back up for a moment. There are two catagories of tests: Successful and Failed. A subset of Successful tests is No Result from a test. No Result from a test can only happen when you have seen a successful test. How do we define a successful test? It will usually be a narrow range down bar closing near its high on low volume with the next interval up. Or at least the interval after that up (2 intervals later). We really like to see the test candle/bar making a lower low than the previous candle/bar if not the previous two.

Unfortunately, the real world is not so neat. Some test will come on wider ranges. Some tests will close up and not down. We call these hidden tests. And some will come on higher volume.

Testing is very important and as I have said before, it is not merely the opposite of No Demand. No Demands are about a lack of participation by the Smart Money. Tests are more about the Smart Money DOING something-looking for sellers. Selling is resistance to buying. When the Smart Money wants to take prices up therefore, they test for sellers. They do not want to have supply hit the market against their buying. The way they check, or test, is to mark prices down. The move down brings out seller if they are there.

Again, TESTING OCCURS IN ALL MARKET CONDITIONS. In fact, tests (that fail) are an important catalyst and an intergral part of down moves.

Which brings us to the chart.

A. We have a narrow range candle that closes in the middle of its range on volume less than the previous candle. While the volume is not less than the previous two, it is lower than average. The close is up rather than down but notice how this candle makes a lower low than the previous candle. It is marked down and the marked back up to end in the middle. This is a successful test because the next interval is up.

B. Okay, a bit of non-VSA, but this is a WRB (2-5 intervals after a successful test) that closes lower than the low of the test candle. This is no result from a test. One of the laws in markets is EFFORT VS RESULT. The Test is the effort. The expected result is higher prices. If we are not getting the result we expect from the effort then something must be wrong. Simply, the market must be weak. Note the volume on this WRB. It is very important that it is not all that high.....

C. Let's look at it from the Smart Money's point of view. We have just seen a wide spread down candle telling us that we are getting no result from a test, but the volume was not very high. Bearish volume is Increasing volume on down candles/bars. Whilst it is increasing we would expect it to be higher. So as Smart Money, what do we do? We Test. Are there truely sellers (Supply) around?

This Key Reversal Bar (KRB) makes a lower low but closes near the high of its range and closes up from the previous candle on high volume. At first glance it looks like strength. But the next interval is down. The if the volume was Demand (Buyers) then the next interval could not be down. There must be sellers in that volume. Which is what the Smart Money would be searching (testing) for.

This is a failed test on two levels: 1. The next candle is down and not up. 2. The volume is too high.

D. Again, because this candle is down, we know the test has failed. Curiousley, the volume here is low. Why would a test fail and be followed by a low volume down candle? This is the question the BBs are asking themselves. So what do they do? They test again.

E. This is a very tricky candle. Many would see an up candle closing in the middle of its range on volume less than the previous two candles and think "No Demand". It is in fact a hidden test. It makes a lower low and immediately follows a low volume down candle (No Selling Pressure). If the previous candle was indeed No Selling Pressure, then the BBs need to test for sellers before the start buying. Remember selling is resistance to buying. Note that the next candle is up. This would mean that if E was No Demand it did not comfirm. Here it means that E was a successful test.

Since it is a successful test is it time to get long? Only if you don't like money. The background is weak. We have no result from a test and a failed test just to the left of us.

I did not place a letter on the candle that closes lower than our test at E. Even though it is not a WRB it nevertheless tells us that we have No Result from a test. How can a successful test be followed by lower prices? Again Effort and Result do not fit here. The market must be weak. The hallmark of a successful test is higher prices. Since we are not getting higher prices the path of least resistance must be down. And the market always moves in the path of least resistance.

F. Down candle closing near its lows on volume less than the previous two candles. This is No Supply. The candle prior to this one was a squat. A narrow range down candle on increasing volume. That shows some strength. It is then followed by this No Supply. Could something be changing in the market? One way to find out-test.

G. Take another look at C. Okay this candle closes in the upper portion of its range, makes a lower low and not a higher high, and had increasing volume. At first glance, it appears to have some strength. But as is the case with real estate; location, location, location. The previous two to three candles have been hinting at some demand coming into the market. To know for sure a test is needed. If this candle had been strength then the next candle should not be down. Since the next candle is down, this is a failed test. We are in a down trend and have now seen a test. But not just a test. A test that has failed. This fuels further downside action.

Actually the market gets hit with demand and moves sideways for a bit. There is a better example of a failed test yet to come.

H. Two intervals following a nice No Demand in a down trend we see a narrow range down candle on increasing volume closing off its lows. This is a squat and suggest demand may be swamping supply. How do you know all the supply has been soaked up? You test....

I. This is a narrow range down candle that makes a lower low than the previous two candles, closes near its high on volume less than the previous two candles. THIS IS A TEST. But the next candle is down. That means the test has failed. The downtrend is not done yet.

Nice post. Someone stick it in the HG.doc.

oh and BTW, I am definately still a student