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vsa with Malcolm

  • #22,341
  • Dec 19, 2011 9:15am Dec 19, 2011 9:15am
We are in a bit of a S/D battle zone... For shorts (if the market goes this way) I would like to see ND into either one of the two levels noted on the chart... too much volume on top of each other right now to get any real clear direction without a failure at the right spot...
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Today's zone = Tomorrow's opportunity!
  • #22,342
  • Dec 19, 2011 9:52am Dec 19, 2011 9:52am
Quoting KinsaleForex
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.
Liam, hopefully you don't mind me taking this great post a step further, to give what IMHO is an even greater insight into what happened as price approached this level, by looking at 6E futures specific buying and selling at each price. I trade both spot and futures, using the many hints and signs that are available in one instrument, to trade either both or the other but, more importantly, to define more precise entries. In this case, the spot EURUSD level where the upthrust occured was right into the DPP, at 1.3040. Here are the other nuggets visible in 6E and the volume ladder.

Note that 6E has not only the DPP at this level, but also Friday's VWAP , and the 50% point of Friday's ADR: the confluence of these levels here creates a higher likelihood turning point.

But, I really wanted to show what happens at the various 6E futures price levels, showing how many buyers and sellers are at each level. Part of that is the end of a buying climax as shown in the 5Min futures chart, with a buying climax coming to an end, as shown with the DeltaMomentum indicator. Switching to the volume ladder chart, it's interesting to note that buyers "won" that 5min upthrust bar by 614 more buyers than sellers. Problem is, the buying stopped, and price could not continue up. There are definitely trapped buyers up there, probably as a result of just having breached some of those key technical levels on the chart.

I have also included an insert into the volume ladder chart, for that key upthrust bar, to show another view that buyers seem to have won every price level, but, as mentioned, the buying of ceases and slows in the bars that follow. It's important to note that there is significant increased selling on that WRB that results - this is the smarter money getting out.

As pointed out, a trigger line is also established. One very intriguing thing to me is to see how technical the trades and moves around all the various key levels on 6E chart are. For example, note greater buying and selling directly at or above/below the Friday close price, the clear rejection of the (dashed black line) trigger, and also the increased higher buying selling at this DPP/yest-VWAP level. Quite intriguing IMHO, and a great way to learn and more deeply understand what type of buying & selling occurs where and when.
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  • #22,343
  • Dec 19, 2011 9:54am Dec 19, 2011 9:54am
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
nice analysis and educative as always, hidden gap. liam, interesting reverse of context...
  • #22,344
  • Dec 19, 2011 1:33pm Dec 19, 2011 1:33pm
Quoting Beljevina
Liam, hopefully you don't mind me taking this great post a step further, to give what IMHO is an even greater insight into what happened as price approached this level, by looking at 6E futures specific buying and selling at each price. I trade both spot and futures, using the many hints and signs that are available in one instrument, to trade either both or the other but, more importantly, to define more precise entries. In this case, the spot EURUSD level where the upthrust occured was right into the DPP, at 1.3040. Here are the other nuggets...
Many thanks for this reply! Very interesting and alternative insight. Really must start looking into those volume ladders a bit more.
  • #22,345
  • Dec 19, 2011 1:33pm Dec 19, 2011 1:33pm
Quoting s7c
nice analysis and educative as always, hidden gap. liam, interesting reverse of context...
Not sure I understand what you mean by reverse of context?
  • #22,346
  • Dec 19, 2011 1:42pm Dec 19, 2011 1:42pm
Quoting KinsaleForex
Not sure I understand what you mean by reverse of context?
I think he is calling you weird ...
Today's zone = Tomorrow's opportunity!
  • #22,347
  • Dec 19, 2011 2:07pm Dec 19, 2011 2:07pm
Quoting KinsaleForex
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...
Hey guys. Stop talking about volume in forex. There's no such thing. VSA is rubbish.

It's almost Christmas, so stop trading

  • #22,348
  • Dec 19, 2011 2:08pm Dec 19, 2011 2:08pm
Quoting pres78
I think he is calling you weird ...
Guess I got that from you?
  • #22,349
  • Dec 19, 2011 2:15pm Dec 19, 2011 2:15pm
Quoting KinsaleForex
Guess I got that from you?
Perhaps...

Follow up chart even removed the upper fib for clarity... awesome. Look at how price has remained inside that WR, UHV bar since it printed with the exception of the push out which was quickly reversed. Also look at all of the bounces off the various levels of the bar as it moved back and forth within it...

While I was typing we finally pushed out to the downside (ES sell off probably playing some factor), see if it tests and holds...
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Today's zone = Tomorrow's opportunity!
  • #22,350
  • Dec 19, 2011 2:18pm Dec 19, 2011 2:18pm
Quoting pres78
Perhaps...

Follow up chart even removed the upper fib for clarity... awesome. Look at how price has remained inside that WR, UHV bar since it printed with the exception of the push out which was quickly reversed. Also look at all of the bounces off the various levels of the bar as it moved back and forth within it...
Very interesting, I also have a follow up, but it'll have to wait til i'm home from work! Same idea with the chart adhering to fibs / highs / lows. Fascinating stuff.
  • #22,351
  • Dec 19, 2011 2:22pm Dec 19, 2011 2:22pm
Quoting KinsaleForex
Very interesting, I also have a follow up, but it'll have to wait til i'm home from work! Same idea with the chart adhering to fibs / highs / lows. Fascinating stuff.
Is it odd that we find this so interesting? :nerd:
Today's zone = Tomorrow's opportunity!
  • #22,352
  • Dec 19, 2011 2:39pm Dec 19, 2011 2:39pm
Quoting pres78
Is it odd that we find this so interesting? :nerd:
I wouldn't say so! Got to find it interesting to be willing to look at a chart and make money from it!
  • #22,353
  • Dec 19, 2011 4:59pm Dec 19, 2011 4:59pm
what software are you using for the market profile? I want to get more into it since it goes hand in hand with vsa. I like how M.P. explains how high volume bars create support and resistance.
Quoting Beljevina
Liam, hopefully you don't mind me taking this great post a step further, to give what IMHO is an even greater insight into what happened as price approached this level, by looking at 6E futures specific buying and selling at each price. I trade both spot and futures, using the many hints and signs that are available in one instrument, to trade either both or the other but, more importantly, to define more precise entries. In this case, the spot EURUSD level where the upthrust occured was right into the DPP, at 1.3040. Here are the other nuggets...
  • #22,354
  • Dec 19, 2011 5:14pm Dec 19, 2011 5:14pm
  •  s7c
  • | Joined Mar 2011 | Status: try and fail but don't fail to try | 289 Posts
Quoting pres78
I think he is calling you weird ...


i was referring at the way you chose the view from 5 min chart, to look after for trigger on 15 min chart in order fill the context. most of the people chose a time frame to get the context and go lower to find the trigger...
by the way, peter that's not MP. you find more details in liam's thread in s&p forum i think, there he explained some while ago in more detail.
  • #22,355
  • Edited 6:26pm Dec 19, 2011 5:21pm | Edited 6:26pm
what people have to realize is that VSA is a discretionary type of trading, and there are many ways to trade it. A given setup will work for one person, but not for another because we all have different capital, risk tollerence, patience, avilibility, etc... It is more important to understand the mechanics of vsa and WHY things happen, then to just simply be able to recognize a pattern.
One will not be proficient with vsa until he develops the right mindset, and starts thinking in terms of "If then" rather then "A leads to B".
for example
Test in a rising market
- IF the test fails THEN you can consider the market to be weak at that point. there no sellers on the test but sellers came in after.

Upthrust in a up trend.
- IF the next bar is strong THEN you can consider the market to be strong. Buying has overcome the selling on the previous bar.

Effort to rise in an uptrend
-IF the next bar is weak THEN you can consider the market to be weak. Lots of buying has been swamped by an even grater amount of selling.

Just because a market is showing signs of strength or weakness does not mean it will go up or down. Remember that it also takes effort to move price from one level to another. So if you observe a test in a rising market, which is a sign of strength. All that is telling you is that there is a lack of selling at that time and price level, therefore price is more likely but not certain to go up. If there is lack of selling then the effort required to push price up will be less, but that does not guarantee that the effort will be present.
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.
  • #22,356
  • Dec 19, 2011 5:36pm Dec 19, 2011 5:36pm
what is also important .. is that you have to know that one bar doesent change the market .. but that each bar adds to the whole story ..

its also important as to where the current action happens ie. location..

but furthermore its very important to know the markets background.
is it strong or weak ?

i can come up with several examples of the same bar / vol. but wich actually tells a whole different story .. depending on the background...



for example.. a low vol small spread upbar... may be a no demand bar
or it can even mean that no supply is left at prev, supply level.. but its the background that makes the difference

or a small spread up bar on high vol. could mean that its stuffing.. ie. supply swamping demand heavily

or it can mean that ... we are holding gains at previous level of supply
ie.. absorbing...


so its important to read the whole market and how it unfolds...

ie background, location ,recent action , current price action..
  • #22,357
  • Dec 19, 2011 6:13pm Dec 19, 2011 6:13pm
Quoting s7c


i was referring at the way you chose the view from 5 min chart, to look after for trigger on 15 min chart in order fill the context. most of the people chose a time frame to get the context and go lower to find the trigger...
by the way, peter that's not MP. you find more details in liam's thread in s&p forum i think, there he explained some while ago in more detail.
Ah I get what you mean, yeah I've noticed this on a couple of occasions recently and it seems to hold as much merit as trading from 15 down to 5 or whatever the desired time frames are.
  • #22,358
  • Dec 19, 2011 6:43pm Dec 19, 2011 6:43pm
Quoting KinsaleForex
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.
Just a follow up to this from earlier. Not the best set up and not the easiest chart in the world either but i'll finish what I started. Just to be clear, I didn't actually take this trade..

A - Climactic bar, pink fib is from the 5min chart of a bar that made up this 15min spike. I showed this in the earlier chart. My stop was above this bar @ 1.3046

B - No demand, entry just below the low - 1.3029 (17 pips from stop) Giving a target of 1.3012 to achieve 1:1 on first half.

C - a revisit to the low / 0% of the earlier 5min fib, increase in volume, next bar barely closes up and the next one confirms some weakness. I put another fib on this bar.

D - hidden upthrust back towards the low / 0%

E - another climactic bar, this one hits 1.3012 so the first trade would've been closed for 1:1 and the second trade moved to BE. I've also put a fib on this bar. Interesting as the bar after was down, no buying immediately apparent. Next bar is up but on a decrease in volume.

F - hidden upthrust / trap upmove of sorts, this probably would've tripped me at BE on the second trade, if not then you would've gained another few pips on the next leg down.

Any other opinions or insights into this?
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  • #22,359
  • Dec 19, 2011 7:10pm Dec 19, 2011 7:10pm
I suggest everyone watch this whole series. Some really great info on trading psychology. You should spend some time dwelling on that statement "how much am I willing to risk before the market proves me wrong". you have to understand that like any other method vsa just puts the odds in your favor. It does not predict a certain outcome, only a more likely one.
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  • #22,360
  • Dec 19, 2011 7:36pm Dec 19, 2011 7:36pm
Quoting apple_sauce
what software are you using for the market profile? I want to get more into it since it goes hand in hand with vsa. I like how M.P. explains how high volume bars create support and resistance.
I use Ninjatrader with the freely available Gom Ladder indicators (at least I think they're free) - I get them from http://www.bigmiketrading.com/ and although they're behind the paid section there, I have seen them at the Ninjatrader support forums as well.

They can be a bit tricky to get running and set up. I use them with a CQG datafeed as provided by my broker, so there are no extra charges. The only caveat is that for storing the bid/ask data (since NT does not store them and all except 1 datafeed stream historical ladder data), your PC needs to be running to capture the live stream, which, gets written out to files, one per day for each instrument you are building a volume ladder for. This is where all datafeeds are not necessarily all the same, ie., filtered and unfiltered, compression, etc. But, once you have them, the versatility of building charts of any timeframe is amazing, and, unlike a datastream where this data has to be pulled in for every chart, this is conceivably faster.

There are other solutions out there, that are not expensive; I believe Sierra Charts has them as well - check their pricing level + datafeed needs though. http://fin-alg.com/index.php/products also offers it.

Apparently another decent package is the ability as given in Investor/RT paired with a DTN/IQ datafeed, which AFAIK is the only datafeed that gives up to 30 days worth of historical feed datam when you request it via chart.

There's a fair amount of resources on the web that talk about Order Flow and give analysis; be careful though of the youtube stuff and other cherry-picked things, since, IMO it's never this simple in real-life trading. Just found this example a couple of days ago too. The key to OFA is to really get to know it, plus the instrument that it is on. (ie., I find oil much easier to read than say 6E; ES is somewhere in the middle, plus I have found some unique ways of identifying buying and selling climaxes via the DeltaMomentum indicators, which, surprisingly, I have not found written about elsewhere.)
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