vsa with Malcolm

Key Reversal Bar
Point of Control
Value Area High
Value Area Low

Can you post one without the box?

I clear them daily with exception of looking at 15min, 30min and 1hr to keep on the highest volume trigger for each time frame which I can see to the left on my screen...

Each day I generate new 5 and 15min triggers to suit while keeping an eye on the ones mentioned above.

Hi, I don´t delete them using the 5min TF but only draw the bar with the highest volume for the day. Many times I see that it comes back to test this same level the next day or two.

Here it is!!!!

When I start the day there are no high (I mean high) volume triggers yet. Asia doesn't produce them very often. Keeping last day triggers only if they have higher volume than today's triggers and if i see that it plays the roll in future move (I mean if I see that it acts on Asia like s/r and there are no triggers with higher volume). Seems working pretty good so far. Amazing.

Not keeping triggers over 2 days because they will be tested in a day most of the time.

Absolutely. That is a clear signal to get long. We would love that bar to have made a lower low and not a higher high but this is not bad. The thing to recognize is that the bar closes down (when strength appears it usually appears on down bars), but the close is above the midpoint of the bar whilst the range is narrowing and the volume increasing. The fact that it made a higher high and came off does show some supply but the close tells us it was swamp by demand.

Once again our mantra is "what we want to see, where we want to see it".

Well let's generalize a bit and not talk about the trigger level per se but the inflection point that line represents. The wide spread up bar on increasing volume is bullish and what we expect to see as resistance/support is taken out. Once it is taken out, we would expect there to be a "Test"
or No Supply. Both of these would be low volume signs of strength. This would be the basic level of entry. This is the level Gavin teaches in his webinars.

We are able to take it up a notch here, however. We realize that a high volume bar (squat) can be just as effective as an entry when seen in the right place. Why? Because we understand the underlying dynamics of the supply/demand relationship that manifests itself in the bar.

Remember, squats appear all over the charts based on the two definitions. (1) MFI decreasing and Volume increasing or (2) "short hand": narrow range on increasing volume. Bill Williams did not talk about the close of the bar (up, down or level) or the relationship of the close within their range when speaking of squats. These things, however, are important to us as Volume Spread Analysis (VSA) traders.

The squats we like to see will show us that supply is swamping demand or that demand is swamping supply. So our "Up" squats will have closes in the 50% or lower portion of the bar's range. While our "Down" Squats will have closes in the 50% or greater portion of the bar's range.

Okay, now let's take a look at the chart below.

Before we get started, please understand that these are not necessarily trade signals. The purpose here is to understand the language of the market.

Let's start at the very left hand side of the chart.

Although the first squat is equal in range to the previous bar we note that volume has increased and that the bar has closed in the lower 1/3 of its range. From the perspective of the range, we are getting the same result on increased effort. This is negative (negative does not mean bearish). The close is up but in the bottom portion of the range. Supply must have been present on the bar otherwise the close would be higher in the range. What we want to focus on here, however, is what happens on the next interval. It does close up, but it is a narrow range bar on volume less than the previous two bars. It is our old friend No Demand.

If supply just swamped demand on the previous interval, it would be natural to see the BBs withdraw if price rose again. After all, supply is resistance to any up move. The market does indeed fall.

Okay, let's move to the next squat. This type of squat has not yet been discussed fully. This squat is on an increasing range bar. The MFI on this bar (range/volume) is lower than the previous interval while the volume is increasing-the technical definition of a squat. Note that the close is down but the close is in the middle of the bar's range. As VSAers, we know what a close in the middle of the range means.

So after this bar where demand swamped supply the market does not immediately go up. What it does do is Test. Again this has to make sense to us. Demand swamped supply on one interval, but before the BBs move in to the upside, they want to "test" for sellers. The Test fails as the next bar closes level (and the bar after that closes down below the close of the Test bar). Note that the first bar was supply swamping demand as the bar closed well of its high on increasing volume.

Let's skip the next squat and move to the one after that. No here we have a squat that makes a lower low but closes up and closes on its high. Clearly, demand swamped supply as the interval started and caused the close to be on the high. Surprisingly (or maybe not), the next bar is a down bar on volume less than the previous two bars-a Test. As it turns out, this Test fails also. I hope you are starting to see why Tests happen and what they are testing for.

The next squat is another one of those increasing range technical squats. It is a Shake Out or Reverse Up Thrust type bar.

I am not going to say much about the next squat, except that it is followed by a 2 bar inversion.

The next squat is an equal range up bar that closes in the middle of its range. This bar is weakness. One the very next bar the market is tested. This test fails as the next bar is down. But that next bar has increasing volume and closes off its lows. There must be some demand (buyers) in this bar. We know there had to be some buyers because the next bar is up. And that up bar turns out to be another squat where we see supply swamping demand giving us a close in the middle of the range.

The proceeding bar is not a test for once, LOL. It is a wide spread bar that closes lower and closes on its low on volume less than the previous two bars. It is No Selling Pressure. So there was some SM traders willing to step in and push price down on the squat bar. But the move down on the next bar did not bring in any new sellers. Thus we've learned what we would have learned from a test.

Our last squat is a shows more supply swamping demand. Why doesn't the market fall? Because they market is tested on the very next bar. Sound familiar?

If you're still reading this, thank you. I hope you have a better understanding of the notes that make up the music of the market.

I thought so... you had a few things hidden and this is a much better view.

Hope you don't mind me marking up your chart...

That wide range highest volume bar is important to take note of. We see stopping volume of sorts over two bars and we can see some demand has entered as after the two high volume bars we move sideways for awhile. We actually get a quick short entry for 15-25 pips demending on when you got out... either way 1:1 for sure... but now let's move onto how we got into the box you drew and how the box was actually relevant.

So I have drawn on the trigger level in orange of that highest volume bar and in purple for the second highest one. So after price has ranged sideways and we get in short off the ND with it's high right off the first orange trigger we get a move down (trap) we see stopping volume with upbar confirmation. Then we get a NS with the same close as our third trigger level which you have in as a dotted line at the bottom. This is not the highest volume but it is in the current price area.

We could have an agrressive long entry off that NS which was taken out by the very next bar... we can also feel good about the entry as that second bar formed a beautiful 2 bar reversal... that second bar was also key as it takes us back above the purple trigger level.

From there the bar you had hidden by your box is a real nice low volume test of the close of that key bar which you have marked as the higher second dotted line. Another nice long entry.

Now I mentioned that black box as having some relevance...

3 bars after the test we get another key bar which takes us on increasing volume back above the orange trigger line... the thing to note here is that we are now inside the wide range bars body and price can become trapped inside for a while and one needs to take note of volume as we approach it's borders the same as you would with S/R or trend lines, channels etc..

If you got in long off the NS / 2 bar reversal or the test that high of the WRB is a possible exit point depending on volume.

After that bar which takes us into the body of the WRB we immediately see a squat bar which is a SOS as demand has swamped the supply... confirmation of this on the bext bar... the high of this squat is another possible long entry as the background strength has more than proven itself at this point.

We move up and then come down on no selling pressure have a ND that does not matter based on where it prints and then another key bar which surges out through the WRB's high... so we are now out of that possible range.

At this point one might expect a move away and a weak retrace to test that bars high but it does not occur as strength is too much and SM are done with this area.

Further up we get another possible trigger marked in green and we see a probe pin bar on high volume closing on the trigger bar's close, an upbar on good volume, a NS and a hidden test with it's low right on the trigger... another long entry.

Now I haven't taken ADR or time of day into account which one should as we can get what appears to be a set-up that quickly dies as ADR or London close etc... come into play.

You should write a book, or a weekly newsletter.

Many thanks HG!

Also thanks to everyone else who replied to my previous post about leaving triggers in etc.

Great post... many thanks as usual.

Pres so many thanks!!!! Your analysis is as clear as water!!!
I never took squats into consideration, but I'll spend this week end for it.

Thanks again!


fulvio

I received a PM about some of my MT4 indicators... I have already shared my better volume window range and volume indi (PREZ R&V) and Bandung offered up a mod of it...

Attached here is my ADR, AWR, AMR indicator, my hull, my increased price size (for older people like me ) and I am also uploading the daily profile indicator that I got from the AMT thread with full credit going to Bandung for his amazing work on it. It generates my daily profiles including POC's, VAH, VAL etc... I keep 6 days on at a time so I can see current plus previous weeks worth.

I also use a daily pivots indicator to plot DPP and daily S/R levels. Found it in another thread on FF.

The other thing I use is a PAL (price action line) which is just a moving average set to smoothed, shifted 4, HLC/3, period 7... Use this as a trend filter.

I would like to trade naked charts like Intel but not quite there yet (still need to do a few sit-ups to feel comfortable trading naked )...

Another question for Pres. I've noticed that two bars reversal can give nice trigger points even when they are on low volume. Can you confirm?

thanx


fulvio

pres analysis was good but overly done...

keep it simple .. vsa does not have to be complicated. the more you complicate it the more you think you see things that do not exist. the 5 min chart is not the best to trade off imho even though some do well off it ... 10 and 15 min are my favs for intraday and 30 min / 2 hour and 8 hr for longer term

10 min gu very easy

vertical blue lines
1) stopping
2) testing of stopping volume level with uh volume
3) test on a rising market with strength in background .. and safe entry

Just wanna compare the volume with malcolm's esignal chart.

Sorry didn't mean to over complicate things.

Many times I pull triggers off the 15min but enter off the 5min as it gets me in sooner.

Again my appologies if I have made things too complicated in my analysis.

For a 2 bar reversal I want the second bar to be on increased volume and therefore yes at times this second bar can produce a possible trigger.

Almost the same ! What is your Vol feed ??

no it is good and works for you ... but do not forget some just getting into this need to have things as simple as possible. even to the point of do not worry if the bar is a test or no supply , but understand what it means in the context of the price action

looking forward to learning ,I am new in the forex market