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vsa with Malcolm

  • #16,921
  • Mar 21, 2011 3:52pm Mar 21, 2011 3:52pm
Quoting sony
This was easy today and somehow as predicted

But i might got stoped out on that SO

SL should be bellow lower red line

Those trigger bars you draw seem to work rather well, alot of the time this area tends to be the point of control aswell when one uses market profiles. I really like using this idea as it helps me know the best place to enter a trade and also guage whether the trend is continuing or changing, i.e. if price breaks through a trigger area then my short to medium term bias may go from long to short, and vice versa.

I also took this trade today but was stopped out. Unfortuantely I wasnt around to look for a re entry as I had to work but its great being able to come back to the screen and understand why price hit that area and moved back up.

Thanks for sharing.
  • #16,922
  • Mar 21, 2011 3:56pm Mar 21, 2011 3:56pm
Quoting Intel
Is anyone watching EU M15?
Do you mean ND's? Even if not, I don't usually enter trades minutes before the NY close. Too often what makes sense pre-5pm, changes after 5pm, since, close/PA manipulation can occur. (ie., the multi-year crashing of the yen - now there was a ND, lol!)
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  • #16,923
  • Mar 21, 2011 4:07pm Mar 21, 2011 4:07pm
Is anybody here trading futures cause i need guidance,like what are the trading hours and is it the same as forex NY open and London and Tokyo like we have on FF
  • #16,924
  • Mar 21, 2011 4:08pm Mar 21, 2011 4:08pm
Quoting Beljevina
Do you mean ND's? Even if not, I don't usually enter trades minutes before the NY close. Too often what makes sense pre-5pm, changes after 5pm, since, close/PA manipulation can occur. (ie., the multi-year crashing of the yen - now there was a ND, lol!)
Bout the only thing I am seeing is that up until NY session, the line in the sand was daily roll...or weekly roll for that matter...would see that as possibly a trace for Asian session if we see some selling...support on deck at about 4193...Yellow box...
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Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #16,925
  • Mar 21, 2011 4:29pm Mar 21, 2011 4:29pm
Quoting Beljevina
Do you mean ND's? Even if not, I don't usually enter trades minutes before the NY close. Too often what makes sense pre-5pm, changes after 5pm, since, close/PA manipulation can occur. (ie., the multi-year crashing of the yen - now there was a ND, lol!)
Sorry, at work at the mo.

It looks a little weak to me. The M30 not quite so. Maybe thats all the weakness there is?
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  • #16,926
  • Mar 21, 2011 4:54pm Mar 21, 2011 4:54pm
Quoting Magix
Bout the only thing I am seeing is that up until NY session, the line in the sand was daily roll...or weekly roll for that matter...would see that as possibly a trace for Asian session if we see some selling...support on deck at about 4193...Yellow box...
I would like to see a test into the 4160 zone to test today's SO trigger level. The 1hr, 30min and 15min triggers are all within a few pips and would be a nice test area to load up some longs to take on that 4280-4300 zone from.
Today's zone = Tomorrow's opportunity!
  • #16,927
  • Mar 21, 2011 5:04pm Mar 21, 2011 5:04pm
Quoting pres78
I would like to see a test into the 4160 zone to test today's SO trigger level. The 1hr, 30min and 15min triggers are all within a few pips and would be a nice test area to load up some longs to take on that 4280-4300 zone from.
**Nods head in agreement**

I concur...

Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #16,928
  • Mar 21, 2011 5:17pm Mar 21, 2011 5:17pm
Quoting pres78
I would like to see a test into the 4160 zone to test today's SO trigger level. The 1hr, 30min and 15min triggers are all within a few pips and would be a nice test area to load up some longs to take on that 4280-4300 zone from.
And for GU I would like a test into 6260 or even as deep as 6220..
Today's zone = Tomorrow's opportunity!
  • #16,929
  • Mar 21, 2011 6:28pm Mar 21, 2011 6:28pm
Quoting Intel
Sorry, at work at the mo.

It looks a little weak to me. The M30 not quite so. Maybe thats all the weakness there is?
Usual TP hit.
  • #16,930
  • Mar 21, 2011 7:01pm Mar 21, 2011 7:01pm
This is part 2 or the second post dealing with this chart (I'm actually doing this one first though). I wanted to begin by discussing stops, as I believe this is an area where most traders go wrong.

Whilst the chart is of the ES, for this post we will be using a fictional market as I hope that will make the subject more relatable. In this market, the minimum tick size is 1 and that's $1/tick.

Okay, again I am saving the price action/vsa analysis for the next post, but we need to look at our entry signal bar-the squat.

We see a narrow range up bar on increasing volume. Note that the close is well off the high and in the lower 1/3 of the range. We have to be able to see that supply swamped demand on this bar. If this bar had been strength, then the close would be high in the range. The other thing we need note is that the close is below the trigger level.

We place our entry 1 tick below the low of the entry signal bar (squat). Being the disciplined traders that we are, we want to place a stop. The question is, where do we want to place it?

As I have said before, the market does not care about the size of our account. The best place to put our stop is based on market generated information. In this case, a tick or two above the squat. We will pretend that that level is 20 ticks above our entry, or $20.

Why here? There are two things that we know about this level:

(1) Supply swamped this level before and therefore the BBs are likely to defend this level again. If they don't, then we don't want to be short.

(2) The move up on the squat bar was artificial and designed to suck in the retail trader. If it was marked up artificially, we would have to assume any move back into this level and above is NOT.

So we place our stop just above the high of the squat bar. The next bar brings us in and into the black. The next interval does not disappoint as price continues down. We want to reduce our exposure by moving our stop again. But where? Break Even (BE)? No. This is where most traders go wrong. Moving our stop to BE and then subsequently being stopped out, tells us nothing about the condition of the market. With our initial stop level, we knew something. If our stop was hit, we did not necessarily want to be long, but we did not want to be short.

At BE what do we know? Nothing. We don't even know if we are wrong on timing, because BE is not a time based stop. It's just a level where we can say we are in "free" trade. Yet the market is all about information and sometimes information comes with a cost.

Still, we want to reduce the cost of that information. Suppose we move our stop to just above the trigger level. In our hypothetical example, this level is 10 ticks above our entry. So what do we have here? We have reduced our risk from $20 to $10 but here's the rub. We are able to get roughly 2/3 the amount of information at the trigger level as we were able to get a the high of the squat. In other words, we can risk 1/2 as much and only get 1/3 less the information. Unlike a BE stop, we know what it means for the market to trade back above the trigger level.

Our next goal is to let the market tells us where the next stop level should be. In the case of this example, we have to recognize the wide spread down bar that closes near its middle on Ultra High Volume. This is the highest volume bar for some time. A clear exit signal.

In this example, it is true that a BE stop would have been hit while the trigger level stop was not. That, however, is of no importance. The concept is what matters here. BE almost never gives you any information about the condition of the market, so why place a stop there? The ideal stop level will minimize risk while maximizing market information.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #16,931
  • Mar 21, 2011 7:07pm Mar 21, 2011 7:07pm
Great thoughts as always...

Quoting HiddenGap
This is part 2 or the second post dealing with this chart (I'm actually doing this one first though). I wanted to begin by discussing stops, as I believe this is an area where most traders go wrong.

Whilst the chart is of the ES, for this post we will be using a fictional market as I hope that will make the subject more relatable. In this market, the minimum tick size is 1 and that's $1/tick.

Okay, again I am saving the price action/vsa analysis for the next post, but we need to look at our entry signal bar-the squat.

We see a narrow range...
Today's zone = Tomorrow's opportunity!
  • #16,932
  • Mar 21, 2011 7:18pm Mar 21, 2011 7:18pm
I know I said I would post the first part of the two parter next, but I decided to post this chart. No analysis. I just think this is the most beautiful chart I have ever seen. I spent all weekend just looking at it.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #16,933
  • Mar 21, 2011 8:17pm Mar 21, 2011 8:17pm
Quoting HiddenGap
This is part 2 or the second post dealing with this chart (I'm actually doing this one first though). I wanted to begin by discussing stops, as I believe this is an area where most traders go wrong.

Whilst the chart is of the ES, for this post we will be using a fictional market as I hope that will make the subject more relatable. In this market, the minimum tick size is 1 and that's $1/tick.

Okay, again I am saving the price action/vsa analysis for the next post, but we need to look at our entry signal bar-the squat.

We see a narrow range...
Great info HG, thanks.

If your squat was of much narrower spread, would you still use its high as a basis for the initial stop?
  • #16,934
  • Mar 21, 2011 9:10pm Mar 21, 2011 9:10pm
Is there a website with any decent reading material on WRB Analysis?
  • #16,935
  • Mar 21, 2011 9:27pm Mar 21, 2011 9:27pm
Quoting HiddenGap
I know I said I would post the first part of the two parter next, but I decided to post this chart. No analysis. I just think this is the most beautiful chart I have ever seen. I spent all weekend just looking at it.
One of those telegram charts!! Aka free money.
  • #16,936
  • Mar 21, 2011 9:47pm Mar 21, 2011 9:47pm
Quoting Intel
..If your squat was of much narrower spread, would you still use its high as a basis for the initial stop?
Leave it to Intel to ask the right questions.

A narrower squat tells us that something is keeping the range small. In this case it would be supply. Remember on a squat every buy order is being matched to a sell order instantly thus keeping the spread (range) narrow. So on the one hand, an narrower range is more telling.

On the other hand, we might want to move the stop a few ticks further as we don't want to get caught in a fake "probe" which would likely come on the next bar. So if we would normally use 2 ticks above the high, we might want to go with 5.

If the squat if very narrow, you could think about using the high of the 2 bar reversal. But look what we have there. You are risking more to gain the same information you could learn by risking less.

I don't play poker, but this would be like going all in on the river when all you really need to do is make a pot sized bet.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #16,937
  • Mar 21, 2011 10:58pm Mar 21, 2011 10:58pm
Okay in this post I am really only going to talk about 1 bar. Specifically, the second bar of the Two Bar Reversal.

This bar is so telling. We should note that it closes on its low on increasing but not excessive volume. But the real info comes from a more pure price action stand point.

To understand that this bar is weak, take a look at the close. Notice that the close is lower than the close of the last 6 up bars. And the close is lower than the lows of the two immediate prior bars. I don't know for sure, but this bar in candle terms most likely is engulfing those two prior candle bodies. Leaving candles aside, we have to note that we are seeing a down bar closing lower than the last 6 up bars. A bar like that can not be strong. The next bar is up (our squat) but the fact that supply is swamping demand on the squat actually confirms the weakness of the prior bar.

The key here is that even though the volume is low, the clue to the bar can be seen in the price action itself. Actually, the entire set-up starts with low volume.

Gavin doesn't mention this type of price action often, but he does mention it.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #16,938
  • Mar 21, 2011 11:18pm Mar 21, 2011 11:18pm
Quoting HiddenGap
Okay in this post I am really only going to talk about 1 bar. Specifically, the second bar of the Two Bar Reversal.

This bar is so telling. We should note that it closes on its low on increasing but not excessive volume. But the real info comes from a more pure price action stand point.

To understand that this bar is weak, take a look at the close. Notice that the close is lower than the close of the last 6 up bars. And the close is lower than the lows of the two immediate prior bars. I don't know for sure, but this bar in...
Hi HG,
i thought the squat is suppose to be a narrow range bar on high/ultra high volume?

but the squats which u have indicated on your chart , their vol is not so significant... pls advise, thanks!
  • #16,939
  • Mar 21, 2011 11:32pm Mar 21, 2011 11:32pm
Quoting Yaad
Is there a website with any decent reading material on WRB Analysis?
Mark Perry invented WRB. You can see his stuff over at www.thestrategylab.com

Be warned tho, he charges for most of it. There is some good free stuff tho.
  • #16,940
  • Mar 21, 2011 11:34pm Mar 21, 2011 11:34pm
Quoting HiddenGap
Leave it to Intel to ask the right questions.

A narrower squat tells us that something is keeping the range small. In this case it would be supply. Remember on a squat every buy order is being matched to a sell order instantly thus keeping the spread (range) narrow. So on the one hand, an narrower range is more telling.

On the other hand, we might want to move the stop a few ticks further as we don't want to get caught in a fake "probe" which would likely come on the next bar. So if we would normally use 2 ticks above the high, we might want...
Thanks for that.

FYI pot sized bets are becoming more the norm than a probe these days.......poxy internet poker!!!!
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