vsa with Malcolm

fguardia, I am adding some numbers to your chart to go together through some ideas.

The main point is that the trend is up, so we do not want to sell an up trend, we want to buy.

From WW structure the PSY area has volumen, and so has BC, so they could be PSY and BC, however the AR shall be pierced and then retested to go short on an up trend...

From a more general point of view we may realize that PSY level (13519) was friday hi. So we had a closed segment on the form of a V... a good place to look for shorts, however, price never gave a signal to short and it mover up to BC... So ¿why would any one (BB) be interested in closing a segment, and then, instead of making an UT and reversing short on the trap, keep moving the price higher till the BC area?

Now lets go through some numbers.
1. We have a wide spread up bar closing the V segment from friday's hi with volume.
2. We have a narrow spread down bar with quite interesting volume, but hold on, if some one was selling up there, ¿how could the spread be so narrow? May be the amateurs were selling there and BB were buying holding the prices above the closed segment.
3. We have a doji. That bar made a new low with volume less than previous two bars but made up to close in its up third. No one (BB) was selling there or the bar would not have closed on its up third.
4. A medium range up bar going though PSY area with less volume than previous 4 bars and closing on its hi. May be a ND bar... but next bar never toke its low, on the contrary next bar toke its hi.
5. We have an up bar closing on its low, going to new territory with quite some volumen. It looks like an UT to me, but then next bar did not close below its low, and had much less volume. If there were sellers there volumen would need to increase on a down move but it did not.
6. That was an up bar that made a new low with less volumen than previous 10 bars. A NS bar to me at an interesting area. An area that was resistance (friday's hi) and that now may be support. Price toke the hi of bar number 6 confirming the NS and went up to BC with an increase of volume confirming the up trend.
7. Was an up bar closing on its hi with volumen. We suspect that BB's could be selling up there because of that volume so we look for the result of that effort to rise... and we see that the result is a lateral movement of price for more than one hour. It took 3 bars to rise the price 50 ticks, and then it took 4 bars to down it less that 30 ticks.
8. We have a narrow spread down bar with less volume than previous two bars. Next bar toke its hi confirming a possible NS bar at number 8 but with potential weakness at number 7 we need to be cautious. Two bars after bar 8 we have a inner bar indicating that the is no professional participation at that moment.
9. We have a down bar with huge volume (compared to previous bars). It could had been an attempt to take AR area (breaking the ice) but the bar after bar 9, was an up bar, a bar that make a new hi. How could bar 9 be selling going on if the bar after 9 is an up bar making a new hi?...
10. We have a wide spread up bar with volume closing the micro segment (from previous BC area). That bar was identified by you as a E2R bar. That bar could has selling on it due to the hi volume so we focus on the next bar witch is a down bar with quite volume but closing far from its low... Was some one buying there so that the close was on the up third? Next bar is a NS bar signaling that BB were not interested in lower prices. It they were not interested in lower prices they may be interested in higher prices...
11. We have a with spread up bar with volume closing above the V segment. Again someone was doing an effort to push prices up across resistance selling areas. The bar that you signal with ND has less volume than the previous two bars but it was still quite high volume... Then finally the bar that you signaled as an UT is a narrow inside bar (as previous three bars), so no an ideal UP beside the fact that you would be selling against a support (previous resistance BC was taken with price closing above it so coud be now support). Why would you sell against a support area on an up trending market that never confirmed its weakness?

I hope it makes sense.

1.

wow!

Thanks for the reply, I need some time to understand everything

Hi Lluna, I did not trade today , but I must say that if I was looking at this live I would probably thinking SHORT at that piont
I would not trade as it was monday morning but the high volume on bar 1 and no continuation the next 3 bars would make me think SO....
then bar no 5 is an UT , as you mantioned and bar no.6 is a ND and not a ns as you wrote ( please correct me if Im wrong)

It lookes in my non-pro view as a short setup that failed...

I really hope to get some other view from the experts on this one
Thanks

I think I see some weakness coming into the EU, so I'm setting up a gamble. You never know until you bet. EU bounced off resistance from prior daily highs. 15M shows UT or Squat with relatively highish volume followed by a failed test. Its not a perfect setup, but a trader has to get in there and get their hands dirty.

Hi pipon,
You would had thought on shorting it, but with confirmation of a change in the trend... that we never had.

Bar n.6 is a Test lookalike... an up bar making a new low but closing far below the low... For me it is saying that there is no supply in the market at that level or its hight would not had been taken by the next bar... For it to be a ND bar I would expect it to make a new high with less volume than previous two bars no a new low...

I do understand the idea of looking for shorts, but where? Two bars after the UT (n.5)? That bar closes below the UT bar, but above the low of the previous bar... May be on bar number 6... but it never closed below previous bars and close above UT close... I do not see a way to go short...

I see your point , and yes, there is no valid short entery , I just wanted fguardia to understand that it is also not a classic long vsa ( again ,im no expert) but bar no.5 -UT with high vol on yesterdays high sould make you think twice...
it can save us all some money ...lol

simple setup
1.stopping vol 1.3575
2.shake out.
buy 1.3588 sl 30pips tp 1.3655

Good post. Thanks.

Very nice.

Just a follow-up on this trade ..... it did worked out. Here is the chart.

Quiz: Where is your entry (short). If there is not an entry that fits your requirements, where would you expect others might enter?

I have marked the interval where supply entered on a wide spread up bar closing well off its high on Ultra High Volume. This bar is weak and is the start of the distribution phase. This is the interval that is telling us to look for shorts-not the resulting price action that can be seen.

Extra Credit: What is the signifigance of the number 26?

The thing is that I fully agree.
The Euro should go south unless some big demand is coming in.

See chart for my 2 entries... 2BR and a ND... also bar 26 is the first bar to close below the climax bar.

Edit - Oh yes and bar 1 of the 2BR was a squat bar with the result of sellers on that perfect second bar... higher high, lowe close and lower low all on reduced volume. Also it was into both the low of the climax bar and the high of the bar 26...

Pres, i remember you when seeing price pause/bounce/break at hvz
vsa

Hello Friends. Thanks once again for posting the very informative charts and analyses. I too shorted EU after it topped at 18:00 GMT. I opened a short position at 18:09 @ 1.3817 with a 25 pip take profit and a 25 pip stop loss after quickly reviewing the hourly chart for a minute or so. I was in a hurry and had to go. (One thing I like about VSA is that after I learned it somewhat, it is supportive of quick decisions.)

As EU has been on a upward tear, I reasoned a short was counter trend and for a small gain. My hourly chart is below.

I reasoned the High Volume Test was not a Shake Out because the follow on bar had selling pressure. The squat up, following on a ND, was into fresh high ground, at least since 9/16, was thus not absorption volume. These six signs of weakness made a case for a short position.

Although I'm hopeful for the Euro if they can fix the debt/bank crisis without monetizing, so I'm not a perma-bear or a perma-bull either. I'm much more interested in making money than in being right.

Many Thanks and Best Wishes for Big Profits

Edit: 10-13-11 11:27 GMT What happened was that rate tested during Asian session and was then bid back up to 1.3825 where selling pressure from those trapped yesterday came in as they sought to escape and get out flat. It seems that Big Money is not interested in higher prices just yet.

Thank you HiddenGap for posting this interesting Quiz.

Very interesting ideas Pres78!

Well, I can't say I’m totally disappointed once more or disillusioned encore. PRES wrote an incredibly informative response that may in fact have intimidated a few who would have otherwise responded.

I called it a quiz, but there was no correct answer. I really just wanted to see how others viewed the price action that was shown. What PRES said about the up bar was truly gold. I saw it a little differently. For me it was just an inside up bar on decreasing volume closing in the middle of its range.

Nice post PRES and thanks for playing .

P.S. There were two acceptable answers for #26.

1. The interval that closes lower than the start point (climax volume bar) signifying the end of the distribution phase.

2. What some call a "push through".

i like your post.lol.clear.and easy.
i want to konw why do you use 3min chart ?For me, too fast and not easy to get profit

I could make something up and say that because the free charting packages don't offer a 3 minute, I am able to see the market in a way that the brokers do not want the retail traders to see.

But the truth is, I use it because I have seen a lot of charts from Mark (WRBtrader) that were either 3 or 2 minute charts. 2 minutes seems way to fast for me, so I went with 3. WRB Analysis does work on all time frames and he does show many other time frames but most of his charts tend to be 2 or 3 minutes.

As for Profit:

Just because the time frame is small that does not mean you can't look to get larger moves. That is to say, small time frame does not only equate to scalping.

P.S. This is also why my charts are LOG charts.