vsa with Malcolm | Page 1117 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

VSA-divergence trading 187 replies

How to Blow $200 account using VSA--- 594 replies

VSA Journal 57 replies

VSA broker history change datas 11 replies

Attachments: vsa with Malcolm
Exit Attachments

vsa with Malcolm

  • #22,321
  • Dec 17, 2011 9:10am Dec 17, 2011 9:10am
Inserted Video



I'm breaking down EUR/USD chart using the TF of 1H,15M,5M.I describe the method of Volume Spread Analysis in detail.On these charts you can see how the smart money markup and markdown prices to confuse the average retail trader or investor.However, I give clarity as to how to read there footprint and trade on the right side of the market.
  • #22,322
  • Dec 17, 2011 9:46am Dec 17, 2011 9:46am
Hi,quit new to trading -so far these 2 aproaches are the best for trading i guess...

I was thinking,why not combine them for highest probability trades?

So the concept is very simple

First i find a strong supply or demand level(could be on h1 h4,m30,)and then i watch the reaction of price and volume in that aerea on lower time frames.

So supply and demand zones is the compass- "at what level should i care to look for a trade?"

vsa analysis then tells me-"is there still real supply on this level??"

i post a real example i traded on friday
its the H1 and m5 chart of eur/usd

any comments or corrections are very welcomed
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eu.gif Size: 25 KB
Click to Enlarge Name: eum5.gif Size: 30 KB
Never again will fade the trend
  • #22,323
  • Dec 17, 2011 12:04pm Dec 17, 2011 12:04pm
Quoting swingfiddle
Hi,quit new to trading -so far these 2 aproaches are the best for trading i guess...

I was thinking,why not combine them for highest probability trades?

So the concept is very simple

First i find a strong supply or demand level(could be on h1 h4,m30,)and then i watch the reaction of price and volume in that aerea on lower time frames.

So supply and demand zones is the compass- "at what level should i care to look for a trade?"

vsa analysis then tells me-"is there still real supply on this level??"

i post a real example i traded on...
Nice and welcome to the family. You beat me to it. I was going to post a pic of a nice trade from Friday from this same time period but from a 3 minute chart.

The first thing to note is the Supply/Demand Zone in green. It is in green because it is special. It is special because it was created by the first WRB Hidden Gap after the FOMC announcement at 2:13 pm eastern time. We can be certain that the Key Market Participants, or Big Boys (BBs) were active on this interval. We can also be certain that this area, or zone, will not be easily forgotten by them-now we have an understanding of the price action prior to any trade signal. Whilst many people using Supply/Demand analysis favor multiple time frames, note that this Supply/Demand Delta Zone is from the same time period.

Now that we know where we want to see something, let's take a closer look at what we see.

1. Climatic Action. This interval is actually an Effort to Rise with the next interval up showing some strength. However, we know that the market does not like Ultra High Volume up intervals. Also note that the next bar is only slightly up. If all the volume on the previous candle was buying, then the next candle should be more than just up slightly. Also note that Effort Candle closes off its high which means there had to be some selling in there as well.


2. Squat 1 and Squat 2. The first squat comes on increasing volume on a candle with a range roughly equal to the previous interval. If volume is activity, then one needs to ask why the increase in activity is not resulting in a greater range? The reason is because something (supply) is keeping the range compressed. Squat 2 is more significant. This is the classic short hand definition of a squat: narrower range than the previous interval on increasing volume. Again same idea here. With increased activity, why do we see a decrease in range? We are not getting the result (range extension) suggested by the effort (activity volume). Supply must be swamping demand.

3. 2 Interval Reversal. This SOW starts out with an Effort to Rise that gets no Result. That is , the interval after the Effort to Rise is down. In fact it is a wide spread down interval on increasing volume making the two interval pattern a 2 interval reversal.

As a personal choice, I prefer the reversal interval to be larger than the first interval in the pattern. Which brings us to.........

4. No Result from an Effort to Rise. Again we see a wide spread up candle on increasing volume representing effort. But the next interval is down. If the first interval is buying (strength), then why is the next bar down? There must be hidden selling in the first interval. And as previously stated, this is why markets do not like high to ultra high volume up candles-they can contain hidden selling.

Not VSA, but note that the market is making a double top.

5. Supply coming in. This can also be seen as a subtle Up Thrust. The market attempts to trade up into the area of the double top but gets rejected and closes down near the middle of its range on increasing volume with the next interval down. This is a clear sign of weakness.

If you follow Tom Williams, and not Lauren S, then you know that Tom says that you would have to be a very poor trader to not make money trading only Up Thrusts. Therefore, if you see this as an Up Thrust with clear signs of weakness behind it, this might be your entry point.

6. Squat. This is the entry signal I like. In truth, we would rather see this narrow range up interval come on volume less than the previous two intervals. Which would make it a No Demand. Instead, the volume is increasing as the range narrows making this a Squat that closes well of its high and slightly below its midpoint.
Attached Image (click to enlarge)
Click to Enlarge Name: VSA 5.png Size: 156 KB
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #22,324
  • Dec 17, 2011 12:48pm Dec 17, 2011 12:48pm
Quoting HiddenGap
Nice and welcome to the family. You beat me to it. I was going to post a pic of a nice trade from Friday from this same time period but from a 3 minute chart.

The first thing to note is the Supply/Demand Zone in green. It is in green because it is special. It is special because it was created by the first WRB Hidden Gap after the FOMC announcement at 2:13 pm eastern time. We can be certain that the Key Market Participants, or Big Boys (BBs) were active on this interval. We can also be certain that this area, or zone, will not be easily forgotten...
you see this is why i cant ignore this easily. the mindset of great of a VSa trader is too incredible to be ignored. its not just about patterns, but ANALYSIS. from this post HG analyzes VSA well. for a dumb guy like me on the topic, i made sense of this, and the way he thinks of it to is in a great level.

great post hidden gap keep it up
i think i can learn much from such-like posts. will read ur posts that coem to my interest as well so expect some forum stalkign
Have I got something on my face, SOLDIER?
  • #22,325
  • Dec 17, 2011 2:09pm Dec 17, 2011 2:09pm
I received some questions in a pm. I hope the sender does not mind but I would like to do something different here. I would like for others to also answer the questions (either all or some). I am especially hoping for answers from Pres78, Liam, Sonofsin, Intel, Frankkn and Apple_sauce. If your name was not mentioned, please forgive me and by all means feel free to chime in.

1. which time frames do you trade for entry and for checking?
2. When do you trade? (asia, london, us?)
3. what is your favorite entry setup?
4. when should i exit my positions?
5. How/where should i put my SL in VSA?
6. Should i trade just using volume indicator or should i add any other special indicator?
7. Which volume indicator do you use?
8. which money management should i use for VSA? (e.g. Balance/25000)

thanks a lot in advance ...

Quote
1. which time frames do you trade for entry and for checking?

I like the 3 minute. It is the only timeframe I look at currently. I am, however, going to start looking at the daily to determine bigger picture volatility which will be used to determine trade size.

Quote
2. when do you trade?

I like to trade the Euro when the US stock market is open. There are good trades when the S&P mini futures are in the "pre-market" time. News events tend to come out at this time- 8:30 am est. Basically this would be during the NY session. I often see at least one good oportunity during the London session as well.

Quote
3. what is your favorite VSA setup?

I don't have a favorite setup per se. I like to start with a climatic volume bar when looking for entries but I do not have a specific setup. I think it makes more sense to understand the price action and be able to adjust to market realities rather than have set setup rules. If you only enter after a No Demand, then you will miss some high probability entries.

Quote
4. when should I exit my positions?

I use WRB analysis to exit my positions. I exit on a WRB most of the time. At times, I will use a profit target which would be a Supply/Demand Zone above or below entry.

Quote
5. where should I put my SL in VSA?

Generally speaking you want to place your stop where you know you are on the wrong side of a trade. If you enter after a No Demand that comes after an Up Thrust, the best place to put your stop would be just above the high of the Up Thrust. On the previous post, my stop was just above the Supply bar for example.

What is important to understand is that stops are personal because account sizes and risk tolerance levels are personal. To be sure, there is an ideal market-determined place to put your stop. Unfortunately, most traders do not trade the market but rather their account size............

Quote
6. should I trade just using volume indicator or should I add any other special indicator?

For me, volume and price are the way to go. There are some other indicators that might help you if that is your thing. It's not mine. There are some great traders using VSA and Auction Market Theory (Market Profile).

Quote
7. which volume indicator do you use?

I use my version of Better volume. I believe it is the strongest version out there and can be found in the thread.

Quote
8. which money managment should I use for VSA? (e.g. Balance/25000)

You have to answer this one for yourself. Everyone talks about risking no more than 2% of your account on one trade, but I can point to a highly successful trader (non-VSA) who pays no attention to that number.

I would again go back to the idea of a market derived stop level. The market does not care about the size of your account. The best place to put your stop may be greater than 2%. That is not the market's fault nor its concern. If you can't handle that, then you need to change timeframes, entry signals, or increase the size of your account.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #22,326
  • Dec 17, 2011 8:06pm Dec 17, 2011 8:06pm
Quoting HiddenGap
Nice and welcome to the family. You beat me to it. I was going to post a pic of a nice trade from Friday from this same time period but from a 3 minute chart.

The first thing to note is the Supply/Demand Zone in green. It is in green because it is special. It is special because it was created by the first WRB Hidden Gap after the FOMC announcement at 2:13 pm eastern time. We can be certain that the Key Market Participants, or Big Boys (BBs) were active on this interval. We can also be certain that this area, or zone, will not be easily forgotten...
great analysis H.G.
  • #22,327
  • Dec 18, 2011 7:46am Dec 18, 2011 7:46am
Quoting HiddenGap
I received some questions in a pm. I hope the sender does not mind but I would like to do something different here. I would like for others to also answer the questions (either all or some). I am especially hoping for answers from Pres78, Liam, Sonofsin, Intel, Frankkn and Apple_sauce. If your name was not mentioned, please forgive me and by all means feel free to chime in.

1. which time frames do you trade for entry and for checking?
2. When do you trade? (asia, london, us?)
3. what is your favorite entry setup?
4. when should i exit my...
Very nice benefited a lot
  • #22,328
  • Dec 18, 2011 1:39pm Dec 18, 2011 1:39pm
[quote=HiddenGap;5231591]Nice and welcome to the family. You beat me to it. I was going to post a pic of a nice trade from Friday from this same time period but from a 3 minute chart.

Hi HiddenGap!enjoyed your analysis,i will stick around this thread!
Never again will fade the trend
  • #22,329
  • Dec 18, 2011 10:31pm Dec 18, 2011 10:31pm
Inserted Video


Inserted Video



I was trading GBP/JPY however, i took a loss.I jumped in kind of late,even though I had expected that s/m would mark prices back down into the previous area of supply. However, my stop was triggered. I did get back into the trade again of which I posted on my next video. I was spot on as far as price movement.At the end of the video I was able to sell into that massive wide spread up bar.S/M was selling into that massive wide spread up bar also. So, I covered my loss and some. I also go into some details about my USD/CHF trade of which I scaled in during the retracement.I speak about how on the Daily chart there is a 40% reduction in volume as the price pushed into the previous supply area on decreasing volume.
  • #22,330
  • Dec 19, 2011 7:31am Dec 19, 2011 7:31am
Quoting HiddenGap
Nice and welcome to the family. You beat me to it. I was going to post a pic of a nice trade from Friday from this same time period but from a 3 minute chart.

The first thing to note is the Supply/Demand Zone in green. It is in green because it is special. It is special because it was created by the first WRB Hidden Gap after the FOMC announcement at 2:13 pm eastern time. We can be certain that the Key Market Participants, or Big Boys (BBs) were active on this interval. We can also be certain that this area, or zone, will not be easily forgotten...
Great post as always HG. I have one little thing to add to what you said about upthrusts.

I know upthrusts are a cornerstone of VSA but personally speaking I never enter on them - at least I don't any more. I got stopped or sucked into a poor trade many many times whilst trading what I thought was an upthrust. This leads me to the point I want to make.

An upthrust has to be in the right place. I find there is absolutely no leeway when it comes to this. Trade an upthrust in the wrong place and you're fecked. An example being the bar after the one you marked climactic action. This is an upthrust, but in the wrong place.

Personally, i wouldn't even enter on the bar you point out to be an upthrust, the sqt or no demand (close enough!) that you entered on is the best place for me.

Now, i'll get to answering that other post as well
  • #22,331
  • Dec 19, 2011 7:45am Dec 19, 2011 7:45am
Hi all!i suppose this is the active thread about vsa right?

i am watching this interesting supply zone in m5 chart,looks like a short of bying climax is happening,but its not clear...so i will not enter any trade yet..suspicius moves lol...
Attached Image (click to enlarge)
Click to Enlarge Name: au.gif Size: 26 KB
Never again will fade the trend
  • #22,332
  • Dec 19, 2011 7:51am Dec 19, 2011 7:51am
i was a little late here was watching loonie drop RIGHT after i closed my shorts but i think it was a squat. or a hidden demand bar... i entered nevertheless on the crack of the hgih.

cant say how much vsa really helped me so far

nice GU long
Attached Image (click to enlarge)
Click to Enlarge Name: just my thoughts.gif Size: 30 KB
Have I got something on my face, SOLDIER?
  • #22,333
  • Dec 19, 2011 8:07am Dec 19, 2011 8:07am
Quoting HiddenGap
I received some questions in a pm. I hope the sender does not mind but I would like to do something different here. I would like for others to also answer the questions (either all or some). I am especially hoping for answers from Pres78, Liam, Sonofsin, Intel, Frankkn and Apple_sauce. If your name was not mentioned, please forgive me and by all means feel free to chime in.

1. which time frames do you trade for entry and for checking?
2. When do you trade? (asia, london, us?)
3. what is your favorite entry setup?
4. when should i exit my positions?
5....

  1. which time frames do you trade for entry and for checking?

This has changed quite a bit for me over time. It used to be 4h and entry on 1h. Then I changed to 1hr charts with entry on a 20min. Now I'm almost solely using 5min and 15min charts. To be honest I rarely even look at higher time frames any more.

 

  1. When do you trade? (asia, london, us?)

I'm in Ireland so I have the benefit of being able to get up at a reasonable hour to catch London open and trade through until about 4 / 5pm London time, I don't usually take any trades after that. I'm also not a fan of leaving trades run over night. I firmly believe living in the EU is the best area to be for trading, you don't have to get up at silly o'clock to catch the London session and then the US session kicks in around lunch time.

 

  1. what is your favorite entry setup?

Similar answer to HG for this, almost all my setups start with some sort of high volume climactic bar. I don't really have a favourite as every set up will have a slight nuance from the last time. For shorts I like to enter on an ND. For longs it's either a test or a NS. I feel these will always be the best entries, again, in the right place.

 

  1. when should i exit my positions?

Completely down to you. What do you want from the trade? There are all the old nuggets like letting the market take you out, set and forget etc etc. I used to get my entry point, set my stop and then aim for 1:1, risking 3% of my account. For example if my stop was 30 pips, my target was 30 pips.

 

  1. How/where should i put my SL in VSA?

Same as HGs response.

 

  1. Should i trade just using volume indicator or should i add any other special indicator?

For ages I believed in purist VSA, chart, HLC bars and volume bars. That was it. Over time I've added other bits and pieces whilst still mainly concentrating on VSA. I've started fibbing high volume bars like Pres, trendlines sometimes appear and I use a bit of Point and Figure in the background as well.

 

  1. Which volume indicator do you use?

For ages I used TradeGuider with eSignal volume feed - the so called best volume feed. To be perfectly honest, I was getting ripped off for the best part of a year paying for the feed. Plus the Tradeguider software isn't exactly the best in the business. I now use Sierra charts who I believe get their feed via FXCM institutional. Excellent software, excellent suppport (for the most part) I spent the best part of a month comparing the two feeds and they are very, very similar, hardly any differences at all. At 1/6th of the price it was a win win for me.

 

  1. which money management should i use for VSA? (e.g. Balance/25000)

Like HG says, this is completely down to you. Firstly you should decide what % risk you want per trade. Some people say risk no more than 2%, some say 2.5%, personally I go with 3%. (I may reduce this in the new year though as i'm trying to get confidence and emotional responses in check. But that's a whole other area you haven't asked about!) Moving on, like I said previously I used to get my entry, place my stop and aim for 1:1, all with one trade. I have now adopted a different method, again inspired by (copied from!) Pres78.


Entering on the low of a ND, open two trades/orders/whatever with half your risk for each one, so each trade carries 1.5% risk in my case. Place your stop in the usual manner and for one of the trades set a target of 1:1. All going well and this is hit then half your trade is closed, then move the second half to break even and let it run. For me there is a lot less emotion involved with using this method.


Hope this helps!

  • #22,334
  • Dec 19, 2011 8:12am Dec 19, 2011 8:12am
in the au short i had posted before few minutes
why i entered?

becasue
usd index at demand

and the in the 4 arrows i have on chart,from left to right,effort to rise in supply aerea,upthrust in supply aerea,and 2 upbars with low volume...probably no demand..
Attached Image (click to enlarge)
Click to Enlarge Name: aum5.gif Size: 22 KB
Never again will fade the trend
  • #22,335
  • Dec 19, 2011 8:23am Dec 19, 2011 8:23am
As i was writing my previous response, this set up happened. Shows perfectly what I was talking about.

15min ND into the 50% of the 5min Fib. We'll see how it goes from here.

Edit - 15min Red line would have been stop, Green line the entry.
Attached Image (click to enlarge)
Click to Enlarge Name: 19-12-2011_EUSetup.jpg Size: 145 KB
  • #22,336
  • Dec 19, 2011 8:34am Dec 19, 2011 8:34am
Thanks Kinsaleforex for answering. It's good to get a different point of view on things. In fact, my reason for doing it this way is to show that VSA need not produce "robots" all trading the same way.

I'm curious why you have gone down time frames? Also do you feel smaller time frames take a different understanding of VSA? For example, are failed tests more important the lower the time frame gets?
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #22,337
  • Dec 19, 2011 8:42am Dec 19, 2011 8:42am
Quoting HiddenGap
Thanks Kinsaleforex for answering. It's good to get a different point of view on things. In fact, my reason for doing it this way is to show that VSA need not produce "robots" all trading the same way.

I'm curious why you have gone down time frames? Also do you feel smaller time frames take a different understanding of VSA? For example, are failed tests more important the lower the time frame gets?
I'd say the main reason for going down the time frames was from reading this thread, it got to the stage where I was thinking "if it's working for them, then why not me?"

At first It was a little confusing, too many little things going on in the chart, so yes I'd say it does take a different understanding, probably a better understanding. In analysing the lower time frames I feel i became better at reading a chart. I also found that with say an hourly chart, you could tell every day at what time you'd get the volume spike, this was down to a combination of London and NY running at the same time, using the lower time frames allowed me to see the volume spikes at more specific times and seeing what made up the overall volume on the hourly chart.

Re: failed tests, i'm not sure if they're more important on a lower time frame, but we'll certainly see more of them.

Of course I still get things wrong. With what is happening on EU now, i'm very interested to see how the chart above plays out. If it doesn't work i'll put it down to being Xmas week

Liam
  • #22,338
  • Dec 19, 2011 8:44am Dec 19, 2011 8:44am
What's wrong
Why not fall
Attached Image (click to enlarge)
Click to Enlarge Name: ???.jpg Size: 102 KB
  • #22,339
  • Dec 19, 2011 8:58am Dec 19, 2011 8:58am
Quoting swingfiddle
in the au short i had posted before few minutes
why i entered?

becasue
usd index at demand

and the in the 4 arrows i have on chart,from left to right,effort to rise in supply aerea,upthrust in supply aerea,and 2 upbars with low volume...probably no demand..
out for only 9 pips,cad and gbp are very strong pulling dollar down probably..
Never again will fade the trend
  • #22,340
  • Dec 19, 2011 9:05am Dec 19, 2011 9:05am
Quoting boyce
What's wrong
Why not fall
The reason is in this high vol bar. For me, if I want to take more safety trade, I want to see a good reaction/respond from high vol bars (It must penetrate the low of HVB within 1-3 bars) Now it is still in an up trend, but from my point of view it shows more weakness then strength.
15 traders viewing now