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vsa with Malcolm

  • #22,701
  • Feb 17, 2012 1:30pm Feb 17, 2012 1:30pm
Quoting rCrumb
Guys,

I've been studying my VSA signals and I keep coming back to testing. I just don't understand testing. Lets say we have a down move that ends with stopping volume and moves into a sideways range. Now price moves back down into the area of the original stopping volume and we have a low volume test on an up bar. How is this an indication of strength?
Its an indication of strength because it means supply has dried up. Where previously there was supply (people willing to sell) there is none - meaning smart money can mark up prices without worrying about others selling into their buying.

Remember tests need to start high, dip low and end near the high. Also remember 3 bars on a 5M may make up a test on a 15M, and so on.
Blogging daily now at www.volume.zone
  • #22,702
  • Feb 17, 2012 1:42pm Feb 17, 2012 1:42pm
Quoting Steve Gill
Its an indication of strength because it means supply has dried up. Where previously there was supply (people willing to sell) there is none - meaning smart money can mark up prices without worrying about others selling into their buying.

Remember tests need to start high, dip low and end near the high. Also remember 3 bars on a 5M may make up a test on a 15M, and so on.
Gavin is that you? Did Tom W. let you out again? You forgot to talk about how you should get a green square or triangle under the test bar and a pop up dialogue box and how you can get TG on sale right now... Operators are standing by.

Nice simple / clear reply Steve...
Today's zone = Tomorrow's opportunity!
  • #22,703
  • Feb 17, 2012 2:24pm Feb 17, 2012 2:24pm
Quoting Steve Gill
Its an indication of strength because it means supply has dried up. Where previously there was supply (people willing to sell) there is none - meaning smart money can mark up prices without worrying about others selling into their buying.

Remember tests need to start high, dip low and end near the high. Also remember 3 bars on a 5M may make up a test on a 15M, and so on.
Brilliant- do we need to add that we need confirmation? A test is not just one bar on its own? This screen shot is from Undeclared Secrets by Uncle Tom the bringer of light to traders lost to MA's, Stochs, Rsi's etc
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  • #22,704
  • Feb 17, 2012 2:52pm Feb 17, 2012 2:52pm
Quoting Steve Gill
Its an indication of strength because it means supply has dried up. Where previously there was supply (people willing to sell) there is none - meaning smart money can mark up prices without worrying about others selling into their buying.

Remember tests need to start high, dip low and end near the high. Also remember 3 bars on a 5M may make up a test on a 15M, and so on.

I appreciate you taking the time to respond but I still don't understand the logic. If I am a smart money operator and there is a successful test at our stopping volume level I agree that this indicates lack of supply at this area. But only the herd sells into falling prices. Is smart money only concerned with what the herd is doing here? Also - this doesn't indicate whether price will be able to move above the smart money sell orders which reside above current price.
  • #22,705
  • Feb 17, 2012 8:50pm Feb 17, 2012 8:50pm
Quoting rCrumb
I appreciate you taking the time to respond but I still don't understand the logic. If I am a smart money operator and there is a successful test at our stopping volume level I agree that this indicates lack of supply at this area. But only the herd sells into falling prices. Is smart money only concerned with what the herd is doing here? Also - this doesn't indicate whether price will be able to move above the smart money sell orders which reside above current price.

Pretend you are Smart Money or the Big Boys.

You bought something at $10 near the low, and you bought almost to your full capicity.

The price rally to $13, then drop down to $10.50.

As you are BB, would you sell what you bought at $10 for just $10.50 ??
No, not enough profit margin.
Your objective would be to push the price up a little bit, perhaps eventually to $20.
This "no participation from the BB in selling at $10.50" will result in less volume, and also result in price NOT going down further.

With the remaining capacity of money, you might actually buy a tiny bit at $10.50 in order to push the price up a bit.
Volume here also not much, because you spent most money on the first entry.
It is a Successful Test, IF the price goes up again.
This Testing is like a contradictory signal, indicating NO MORE Sellers at this price at this time.

Then price will have to reverse and go up.
This is evidence of a Successful Test.
Note, there are other Test that may look the same, but may result in a Failed Test, if the price falls within next few bars.

Also same idea of Successful Testing can occurred on the up side when BB sells first, and price is testing at a high price with lower volume, then price goes down.
  • #22,706
  • Feb 17, 2012 9:58pm Feb 17, 2012 9:58pm
Quoting foxybunny
Pretend you are Smart Money or the Big Boys.

You bought something at $10 near the low, and you bought almost to your full capicity.

The price rally to $13, then drop down to $10.50.

As you are BB, would you sell what you bought at $10 for just $10.50 ??
No, not enough profit margin.
Your objective would be to push the price up a little bit, perhaps eventually to $20.
This "no participation from the BB in selling at $10.50" will result in less volume, and also result in price NOT going down further.

With the remaining capacity of money,...
Please look at my diagram. I understand testing in a supply area - I just don't understand it in a demand area. Smart money is never selling here so volume should always be low unless they are buying more which wouldn't be low volume. Sorry if I'm being thick.
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  • #22,707
  • Feb 17, 2012 10:23pm Feb 17, 2012 10:23pm
Quoting rCrumb
Please look at my diagram. I understand testing in a supply area - I just don't understand it in a demand area. Smart money is never selling here so volume should always be low unless they are buying more which wouldn't be low volume. Sorry if I'm being thick.

We all need to think "opposite" a bit in order to "imitate" Smart Money.

This is your statement:
"Smart money is never selling here so volume should always be low"

This statement is correct here, and it is like the definition of what is Testing.

The picture you show that you understand is the Testing of a Higher Low, that you label as Sellers (Supply). That could be like a Testing of a 2nd area.

But before Testing of a Higher Low, they need to do same sort of Testing of the swing Low, this is the part that you are unclear.
So it is necessary to Test the swing Low first that label as Buyers(Demand), testing the 1st area.

You may also think of it another way, in that if price does NOT test the Buyers(Demand) area that you labelled, how would you know that is the Buyers(Demand) area?

This lower volume during this testing of the swing Low first is the hint we get that price may go higher from here.
If Volume was high during this testing area, this may mean actually there are still more sellers.

Ask yourself if there are "more sellers" at that 1st testing area, what should the volume look like? Will the price go up or go down ?

Ask yourself if there is a "lack of sellers" at that 1st testing area, what should the volume look like? Will the price go up or go down?

Testing can occur in more than one area, there may be multiple testing as the price move up and move down.

Also do re-read again a many more times on the PDF of what is their meaning of Testing.
I have re-read many times, and I still don't understand it all.
  • #22,708
  • Edited 2:15pm Feb 19, 2012 8:08am | Edited 2:15pm
any thoughts here from the vsa pros...
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  • #22,709
  • Feb 19, 2012 8:13am Feb 19, 2012 8:13am
Quoting rCrumb
Guys,

I've been studying my VSA signals and I keep coming back to testing. I just don't understand testing. Lets say we have a down move that ends with stopping volume and moves into a sideways range. Now price moves back down into the area of the original stopping volume and we have a low volume test on an up bar. How is this an indication of strength?

In my mind it seems like we would want medium or high volume. Lower prices attracts buyerss and we want to know that the buyers are present. Smart money doesn't have sell orders down there,...
My understanding of tests is the low volume in the direction of the down trend is the sellers are not interested anymore, hence no continuation but look for a reversal of trend. The test in a down trend would not be an upbar but a down bar.
  • #22,710
  • Feb 19, 2012 9:19am Feb 19, 2012 9:19am
Quoting rCrumb
Please look at my diagram. I understand testing in a supply area - I just don't understand it in a demand area. Smart money is never selling here so volume should always be low unless they are buying more which wouldn't be low volume. Sorry if I'm being thick.
it's because there's no such thing as the so-called clever monkey testing this, testing that. what's the probability of having lower volume than 2 bars behind in a day, in 15/30/60 timeframe, out of randomness? it's huge! Do you know that it's just some guy seeing something common and put logic in it, hoping other will think the same, thus selling product in the end?

market comprises of full range of interest: dealer, exporter, importer, trader, you name it. Complexity: market time, fundamental, orders, etc.
Yet you naked-trading volume? be anyone guest.
  • #22,711
  • Feb 19, 2012 9:44am Feb 19, 2012 9:44am
volume is probably one of the most under-used indicators but is probably the most informative...I'd say of those people you named each volume bar, staying in the htfs, is 70 to 80% of that bar at least if not more. The market makers are the ones moving the market not us...those volume bars are "his" footprint. When the volume shuts off the market stops moving because the big boys aren't moving it...no activity. Your critisicm comes from your ignorance...and why do people criticize other people's methods in here FF anyway. It's like trying to tell you might religion is right and yours is wrong. It's stupid. Maybe post a chart that we can talk about instead of ridiculing something you obviously know nothing about...

my remarks not meant to be negative and not really directed at you, just amazed at the things said within these walls. Everyone has something to offer, would like to see yours.

P.s. Go take a look at COT data it might help U understand volume a bit more.
  • #22,712
  • Feb 19, 2012 11:47am Feb 19, 2012 11:47am
Quoting bayfisherman
My understanding of tests is the low volume in the direction of the down trend is the sellers are not interested anymore, hence no continuation but look for a reversal of trend. The test in a down trend would not be an upbar but a down bar.
I don't think this is true. I believe it could be on either an up or down bar as long as it dips into the stopping volume area and closes on its highs but I would appreciate some input from the VSA pros.
  • #22,713
  • Feb 19, 2012 11:51am Feb 19, 2012 11:51am
Quoting Probo
it's because there's no such thing as the so-called clever monkey testing this, testing that. what's the probability of having lower volume than 2 bars behind in a day, in 15/30/60 timeframe, out of randomness? it's huge! Do you know that it's just some guy seeing something common and put logic in it, hoping other will think the same, thus selling product in the end?

market comprises of full range of interest: dealer, exporter, importer, trader, you name it. Complexity: market time, fundamental, orders, etc.
Yet you naked-trading volume? be anyone...
Its not just lower volume than the previous two - its also a narrow range and the area where it occurs along with what is happening in the background. If you are visiting a VSA just to say it doesn't work while there are plenty of highly successful traders using this methodology the only person you are hurting is yourself. VSA has been working since at least the late 1800s. Its still working today.
  • #22,714
  • Feb 19, 2012 11:52am Feb 19, 2012 11:52am
Quoting rCrumb
I don't think this is true. I believe it could be on either an up or down bar as long as it dips into the stopping volume area and closes on its highs but I would appreciate some input from the VSA pros.
Downbar = test
Upbar = hidden test
Today's zone = Tomorrow's opportunity!
  • #22,715
  • Feb 19, 2012 12:57pm Feb 19, 2012 12:57pm
Quoting pres78
Downbar = test
Upbar = hidden test
So the hidden test is actually the opposite of a hidden up thrust.
Old Habits Die Hard.
  • #22,716
  • Feb 19, 2012 2:16pm Feb 19, 2012 2:16pm
Quoting bayfisherman
any thoughts here from the vsa pros...
while a couple of you guys are in here how are you interpreting this weekly and daily volume...looks significant to me.
  • #22,717
  • Feb 19, 2012 3:21pm Feb 19, 2012 3:21pm
Quoting Shaggy_rock
So the hidden test is actually the opposite of a hidden up thrust.
UT = upbar
Hidden UT = downbar
Today's zone = Tomorrow's opportunity!
  • #22,718
  • Feb 19, 2012 6:21pm Feb 19, 2012 6:21pm
Quoting Sonofsin5
Coming out of semi retirement since my last post which could have put some into semi retirement as well.

Something is cooking in the Eur.usd.

I am expecting to see a large high volume drop on "Bad news" testing the .3000 level within the month. If this occurs and there is no follow through I will be taking a massive long with a price target of at least 3500.

Remember, we need to buy when the news is bad and sell when it is great.
Chew on this for a while, good luck everyone. This is a tough market.
The trade is on. Many piled back into shorts late last week, they are all dead.
  • #22,719
  • Feb 19, 2012 6:22pm Feb 19, 2012 6:22pm
Quoting Probo
it's because there's no such thing as the so-called clever monkey testing this, testing that. what's the probability of having lower volume than 2 bars behind in a day, in 15/30/60 timeframe, out of randomness? it's huge! Do you know that it's just some guy seeing something common and put logic in it, hoping other will think the same, thus selling product in the end?

market comprises of full range of interest: dealer, exporter, importer, trader, you name it. Complexity: market time, fundamental, orders, etc.
Yet you naked-trading volume? be anyone...
I suggest you study a bit of VSA. You really know only a bit or nothing about what you're criticizing.
Be aware that the "some guy" never tells us to look at only one bar. We are always trying to read the market as a whole. It needs practice, willing to learn and humility.

As one of our friends said, what do you have to contribute here? If you answer "nothing", so it is better for you to expend you time learning something or in other threads where you can contribute with something.
  • #22,720
  • Feb 19, 2012 6:23pm Feb 19, 2012 6:23pm
Quoting pres78
Downbar = test
Upbar = hidden test
Hi pres!
It is a good, clear and concise remembering. Thanks! :-)
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