vsa with Malcolm

what do you guys think about this fundamental quotation from a wells fargo fx strategist, "the ECB possible rise in interest rate is ALREADY priced in for the next 12 months, HOWEVER, the market has not reflected on the debt that the Euro is in right now."

What do you guys think?

I could care less, these same strategist were calling sell euro to parity at 1.2 and don't worry about Fanny may and Freddie mac.



Charts don't lie, humans do.

So it turns out I had multiple Trojan's...

here it is. sorry for the sloppy screen shot

OK folks pull up a chair I am going to bore you again... So I have still been getting lots of questions and PM's about how I trade triggers.

Disclaimer - This is how I trade triggers and very well may not be at all the way they are intended to be traded.

So let's look at EU from today... this is how I would have traded it if I was able to watch from my charts fulltime from 4AM (1hr before LO) until 2PM which is London Close.

So I try and get up at 4AM because I like to see what has happened thus far leading into LO... LO many times give a SO or false break out before choosing it's true path but many times we get a prevue and quite often an entry or at least a trigger in that hour before LO.

The first thing I do is look for any high volume trigger and mark them, then I mark swing highs and or swing lows as applicable.

Now today I set two swing highs, one at the daily high and one at a lower swing high (see swing high 1 and 2). Now what is PA doing 1hr before LO. Well first thing is I had two high volume bars both giving a trigger around the 4080 level. Since this level printed as a trigger we moved below it then back up to create a lower swing high and the back down again but it is the move leading into LO that I am most interested in.

So now the second 5 min bar after I got up gave a nice high volume downbar. Now this closes on it's low so no buying? Looking for a short off the trigger... OK let's see. So now I have two triggers... 4063 and 4080. The biggest thing I notice here is man we didn't go anywhere off that increase in volume over those two bars. Next bar is a NS and then an upbar on increased volume... perhaps we did find buyers. Another NS then an increased volume downbar closing well off it's low. The next 2 bars for a hidden test 2 bar reversal but the little upbar closed in the middle... nest bar was a NS... this for me was a SOW after a hidden test 2 bar reversal. This is Key Bar 1 and I am now thinking I might be looking for a long.

I have actually started to do some studying / backtesting on 2 bar reversals as a possibly entry option but I will leave that for another time...

OK back to the chart.

LO prints as a NS right into the 4063 trigger and the next bar would get you in long. Entry 1. So we move up away from the NS 15 or so pips and then OMG a SO off "bad" (well mixed) EUR data... big shock.

Key bar 2 was the start of the SO on increased volume but we are still above the trigger. Now look at the very next bar... increased volume upbar with a lower low completing yet another hidden test 2 bar reversal (SO over 2 bars). Entry 2 would be an agressive entry at the break of the high of this upbar. Just for a coincedence fact look at this high of this bar... 4080 which was our first trigger.

Key bar 3 gets us into a long trade and takes out the 4080 trigger. So now we have a new highest volume trigger at 4060 but these was never tested so I left it off. Look at the close of this bar 4089... that's our swing high 2 right to the pip... Don't tell me SM doesn't manipulate prices and moves it around the charts like a chess piece.

Ok so here we are 1 hr after LO and we have had 2 entry options.

Key bar 4 is a squat bar ending a half assed move back towards that old swing high... Entry 3 at the break of the high of this squat bar. We now have a new swing high called swing high 3. I didn't lable the swing before the SO as the SO negated this swing for me as it was news driven.

Key bar 5 is important to staying in long as it takes out Swing High 1 and 3 on increased volume and closed right on it's high. Between Key Bar 5 and Key Bar 6 there were a couple of NS's which did give entries within 2 bars.

I don't have NY open marked but Key Bar 6 happens 35 mins after it. Nice squat bar closing right on Swing High 1... Entry 4 off next bar when it breaks the high. Look at that bar right after Key Bar 6... well well... another hidden test (of Swing High 1 and 3) 2 bar reversal. During this retrace I have marked what is now Swing High 4.

Key Bar 7 is a nice NS and gives us Entry 5 within 2 bars... guess what we have another 2 bar reversal as well...

I didn't mark it but the wide spread increased volume (now highest of the day) which took out Swing High 4 is also key to staying in your longs until we read the ADR as we are still not seeing any SOW.

5 entries marked plus a couple I didn't...

Well that's enough... sorry for being so long winded.

I know, I know 4hr charts can't be traded well because of GMT offset variables... Just look at the first red line... this is my second 4 hr candle for Thursday after a drop off Wednesday on an obvious drop off in volume culminating in the NS. Trading the break of the high would have made for a real nice long today. Now look at the second red line. That is the last 4hr Thursday bar... another real nice NS this time after 2 good upbars and on even less volume than the first red line NS.

HMM... if we break the high 4186 of this bar within the completion of the current and following 4hr bar (which closes 1hr before before LO) we might have another nice upday to end the week.

Goodnight see you at LO (hopefully)...

Funny how things happen sometime. I was just about to make this post and low and behold Pres makes his post.

I missed this trade because I was waiting for something to happen after the 2 Bar Reversal. Some information on then would be much appreciated. Seems like a hard thing to do since there are so many types of 2 Bar Reversals.

For me, the ideal type would be like the one in the chart:

1. Wide spread down bar on increasing volume that closes on or near its low.
2. Wide spread up bar that does not make a lower low than the first bar, closes higher than the close and the high of the first bar and closes on or near its high.

I have a question relating to stopping volume. The bar you labeled, you can't really tell its stopping volume until a couple bars later on right? Or can you tell right away when the bar ends? Other than that pres and HG great explanations.

At the time the bar is being created, you can see that price has been falling. You also see that the bar closes well off its low on very high volume. But you need to wait for the next bar to confirm it is stopping volume. So as the bar forms you can immediately see potential stopping volume, but you have to wait for the next bar to actually know if it is stopping volume.

Many bars in VSA need confirmation.

anyone looking at 30" usdchf?
fill see if it'll test the trigger area with NS.

nice test on usd/chf

Holy crap, your posts look more and more like HG's. Great, now we have two HG's, superb.

In your post, shouldn't it be SOS?

Nice analysis. You using tradeguider?

Did usdchf went higher? That looks like absorption.

oh huge LO shakeout, huge stopping vol, perfect formula for a good run at 4250 barriers and 4280 high. i think today IF this continues up will see a quick touch of 4300 before end of day (but il be very surprised it if closes above it).

took a long on that huge pin bar stopping vol at 4160, ultimate TP 4300 (but I may hop out before than if i see something bad). time to pray

EU 5 min. Entered short on the final 2 bar reversal and closed below the support line because they usually come back to that line before doing anything else. Took 25 pips off that one.

The double top was a niz set up - pardon for bringing in patterns to VSA, just an extra observation

i'll prefer for the SO candle to finish and confirmed by up bar, and a test if you're more cautious, rather than risky entry and pray

i am more aggressive was worried it might double bottom/test it again on lower vol so already had stop in place. ill get in again if 50 holds (because if it does i think THIS time it should take out 4200), if not will watch 4100 instead. imo its being bought off 4150, might get absorbed though.

yes it's going pretty high now.
we've seen a very nice R:R setup there.

Yes sorry...