vsa with Malcolm

Most take triggers and entries from either 5min or 15min on this thread... a few trade 1hr (not sure if they use triggers)... 1min are very tricky to get a good reading as they move too fast.

I will sometimes mark 15min triggers and then go to 5min for entries.

I will let HG explain herd bars but do note that he has marked the trigger first at the close of the hred bar and then moved it to the low (he explains why). The thing to note also is for trigger bars it's not necessarily wide spread bars but more the highest volume bars we are looking for as it is the increase in volume creating the trigger bar that makes the trigger level a point of interest. SM tends to revisit and re-test points of high volume.

Note also that the herd bar is a point on interest in this case as it is ultra wide on volume that does not match...

Again HG can correct me if I am wrong and add on what I have missed.

I just got an alert that the month closed below on high volume of the month of may 2009, however closed 95% above that ns after may2009. Strength is still showing in the background, however not for long. There will be a spike up before it comes down. It could be early as next week or even tomorrow.

EDIT:
Weeky still holds the month strong. Very strong. Still a bull for now.

I'm not going to get into herd bars in this post.

As far as the trigger level goes, the original level was at the close of the bar. However, we noticed that the closing prices of the proceeding bars were actually being supported at the herd bar's low. Once price broke to the downside, we expected that support would become resistance. That is a basic idea of support and resistance and has nothing to do with trigger levels/number or VSA in general.

Now, we would have liked for price to trade up to the close of the herd bar but again we did expect the low to be important. So we "shifted" the trigger level from the close down to the low. As it turns out, the market moved above the low but closed on the low on volume less than the previous two-No Demand. In truth, the text book example would have been for the No Demand's high to not get above the new trigger level (the herd bar's low).

Up until now we have kept it pretty simple- look at the close for the trigger level. However, there are actually 4 points that are important:

1. The Close
2. The High
3. The Low
4. The Midpoint

The way to handle it is to assume the level is the close while being
cognizant of what happens at the other levels.

Thanks to you and Pres.

In summary - ultra high volume or very high volume bar - start with the close, then see how price reacts around this range - and adjust to low (high) or midpoint if that's the area that is being respected from a support/resistance perspective.

cheers
f451

I guess the cardboard lab drug growth assembly business isn't going so well, so you had to cross post this a dozen times in off hours? Say hello to Twee.

"The squat is the last battle of the bears and the bulls, with lots of buying and selling but little price movement. There is an almost equal division between the number and enthusiasm of both bears and bulls..." Bill Williams, Trading Chaos, p93.

Bill Williams has correctly identified the importance of the squat bar, but to truly understand what is going on, one needs to move into the realm of Volume Spread Analysis.

The technical definition of a squat is a bar with increasing volume and decreasing MFI (Market Facilitation Index). The "short hand" definition is a narrow range bar (narrower than the previous bar) with increasing volume over the previous bar. The second definition is an equal range bar with greater volume than the previous.

Let's focus on the second definition first. Assume we have a bar that has a spread of 10 ticks. The amount of contracts trades for the interval was 5. The next interval also has a spread of 10 ticks from high to low but the contracts traded was 10. What does this tell us? Well, in the first bar, for 1 contract of "effort" we got a result of 2 ticks. On the second interval, for every 1 contract (volume) of "effort" we are only getting 1 tick of result. Effort vs. Result is a key VSA concept.

The question becomes, why is it taking more effort on the second interval? The reason is that there is something compressing the range-either supply or demand depending on the bar. This is where VSA is more apt at describing what is going on. Every buy order, for example, is immediately being matched by a sell order. The range is being kept narrow because those that can see both sides of the market, see that there is a mass of sell orders above. This effect done countless times over the period keeps the range narrow as all Demand (buying) is swamped by Selling (supply). This is the main thing we want to keep in mind- Supply swamping Demand or conversely Demand swamping Supply. It is our understanding of this underlying dynamic that makes squats a useful component in our reading of Price.

"Virtually all moves end with a squat as the high/low bar plus or minus one bar of the same time period. Another way to stating this is that all significant trends end with a squat on one of the three top or bottom bars... While all trends end in a squat, all squats are not the end of trends". Williams, p93. Simply put, squats come in different intensities and at times are better viewed in context of background strength or weakness. At other times, they are the background strength or weakness.

Take a look at the chart below.

Not all squats are marked. You can see that most of the Up squats result in a move down on the next bar or two. And most of the Down squats result in a move up on the next bar or two. One should not just be trying to take every squat in that fashion. The Key squat comes in the form of Stopping Volume. The Ultra High Volume on an decreasing range tells us that demand must be swamping supply here. The next squat to pay attention to is the one right before the bar labeled "Demand". Much like we use Tests, a Squat in the direction of the trend offers an excellent opportunity to get into the market.

With strength in the background, we see a narrow range down bar closing in the middle of its range. We could enter long on a breach of the high of this bar. Looking closer at the bar, we can see that something is keeping the range narrow and the bar is closing in the middle of the range. That can only be demand swamping supply. The next interval is down, but this interval again shows demand swamping supply. This interval just happens to have a wider range so it is not a squat.

So in this case the Squat can be used in the same way as a No Supply or Test. The major difference is that with a No Supply the market is telling us that there are no sellers underneath. With a Squat the market is telling us that buyers are willing to step in below and support price.

HG is straight beastin it props on that sir

Just to extrapolate on what Sonofin recommendation on watching the FXE ETFs in which i have illustrated a potential Wyckoff wave built up that has filled the gap...

Here is the EU's 4hr view of Wyckoff wave of re-accumulation......Price is now on the verge of test onto AR level...

This guy is a class act with his sweet jogging suit and cool hair doo. I'm taking notes on this one.

Hey guys NFP day... do you see any hidden buying or selling? You can usually see what SM will do during NFP by looking at hidden buyers or sellers.

Those who wake up in time.
Is this a valid NS? Higher prices to see?
15 min chart

Indicator repaints.

Are you using FXCM? I know their volumes repaint, which makes it an odd choice for Tradeguider MT4 to affiliate with btw..don't you guys think?

Here's a trade I just entered..

http://i52.tinypic.com/2h30lxk.gif


..Thanks for the welcome HG.

The indicator did not repaint. The volume adjusted.

The indicator merely take in the input and spits out a color. Change the input and you change the color.

Special thanks to HG & Pres and others for all your time and help in explaining stuff ..really soaking up all that recent stuff about triggers squats tests etc. Big thanks much appreciated and hope to contribute myself as soon as I can glimpse the forest for all those trees :-)
Thanks C.

Hey Commercial, good to see you're still studying away. Any questions you have will be answered in no time, so don't hang back!

Same applies to me.....and a big thank you to Liam for the summary post ( triggers, HG and pres78 ).

It´s finally getting sorted out, I hope to be able to post some charts soon.

__________
michael

fxpro for charting other for real trades.

yesterday is interesting to me. upthrust decent volume, but back ground showing strength still I think from 3/15-3/16. this week everyday has increasing volume on up moves, as well as weekly is still showing strength from the past 2 weeks prior.

curious how this is going to play out, if yesterdays upthrust is only going to take us down to 4120 or if its going to dip us down to 3920.

anyone have thoughts or see something I dont?