vsa with Malcolm

Brilliant!!

If he posts, they will come!

Stopping volume marked in yellow.
In red we saw some supply. (I personally did not expect there to be enough to break the low of the channel.)
Orange more stopping volume.
Green Test
Blue supply from last Friday.

We have seen some supply on this move, but nothing in compared to the stopping volume we saw across Red and Orange. Hoping to see some testing around 2920-ish.

We will see.

Hi Scipio

I agree that it did 'look' like that but it was not a true market top; LOOK LEFT.
Price moves in waves although I'm still unsure about elliott wave stuff, that's too much after the event and make it up as they go along.
What you saw is minor detail in a much bigger picture.

Hi Greg- Just adding some waves to your chart. Im not sure about Elliot waves (I have not looked into elliot) But just wanted to post a few notes. As Hidden Gap eluded to in an earlier post, it comes down to seeing what you expect to see in the places you would expect to see them. Wyckoff was a huge fan of the 50% normal retracement in a trending market. Commercials position themselves and this drives the market, on this large downwave that only makes it to the 50% retracement of the first big upwave, and first HH, we can see there is higher volume in this wave. We don't go down so this is clearly buying.

The safest entry is the next downwave that does not retrace much at all as this shows strength in the upwave, again proven with a sharp increase in prices at around 12:30 on your chart.

Just my 2 pips on wave structure

I don't like to toot my own horn. Especially when this is not a game of being right, but rather a game of making money.....

The first chart was the chart posted over the weekend.

The second chart is from today (Tuesday).

Notice that the intial interval after the No Demand was a wide range down bar on volume less than the previous two intervals. This is No Selling Pressure.

The next interval is a narrow range up bar that makes a lower low than the previous interval,closes above its midpoint, and has increasing volume. First off, this interval is a Squat. It has a decreasing range whilst the volume is increasing. This is an alert that something is capping the interval-Demand. The fact that the interval is making a lower low, further speaks of strength.

Whilst most tests come on low volume, there are tests on high (or increasing) volume as well. This bar is one of those cases (see next post).

I just wanted to say a few words on Tests.

As always, my word is not gospel. I can be wrong. If you disagree, please say "why" as I am always trying to get better. I am a student just like the rest of you.

Tests are very important in the market. The idea behind a test comes from the fact that the Smart Money knows that Selling is resistance to any Buying. This selling may in fact even swamp his buying causing price to fall. Therefore the Smart Money wants find out if there is any supply (selling) still out there before actively trading up his holdings. "The best way to find out is to rapidly mark prices down. This challenges any bears (sellers) around to come out into the open and show their hand". Tom Williams, MTM, pg. 34.

Thus the most often talked about tests, will come on low volume. Low volume being volume less than the previous two intervals. This is because the amount of volume on the mark down will tell the Smart Money how much selling there is.
Another good feature of a test would be a narrow range. This too, however, is not always the case.

Take a look at the chart below.

This is a 3 min chart of the ES.

I wanted to compare the Tests marked 1,2, and 4 from a entry signal point of view.

#1. We see an increasing range interval that closes down from the previous interval, closes in the middle of its range and has volume less than the previous two intervals. This interval has the mark down seen in a test. And it has the close in the middle of the range. For me, a Test will close in the middle or higher of the range and a No Supply (#3) will close below the middle of the range.

It also has volume less than the previous two intervals. But here's the key. The volume is still high. It is greater than average. In this case, volume greater than average on a test is not good. This would not make a good entry.

#2. This is almost our text book test. If the close was on the high, it would be text book. In this case the close is in the middle on a narrow range with volume less than the previous two intervals. This is in fact a Test after a Shake Out.

Note that the volume is less than the previous two intervals. Moreover, it is grey. This means it is the lowest volume in the last 20 intervals. Clearly, this is low volume. The market was marked down to bring out any sellers and none were found. This is a bullish sign and a good entry point.

#4. This is an interesting one. Take a close look at the interval. It looks exactly the same as interval #2. It has a narrow range and closes in the middle of its range. Unlike, #2, this interval does make a lower low than the previous interval. Not all tests make lower lows than the previous interval, but I personally like the ones that do. The other difference is that the volume is increasing.

If we have increasing volume on a decreasing range, we know we have a Squat. Moreover, we know that the range is being capped by demand (buyers). So the increase in volume does not actually tell us that there are sellers present. But rather that there are buyers present. Thus we can have a test that comes on increasing volume. And in this case volume that is greater than average.

In the case of #1, volume greater than average was not a good sign. In this case volume greater than average is a good sign.

To be honest, there is some other stuff going on here. For example, the Shake Out. But the idea I wanted to discuss was some of the different forms of a test.

What are your thoughts?

Nice post, you are good at getting people to think.

This goes hand and hand with your test question. You do well with your bar by bar analysis. I however get confused, so I try to do my best at keeping it simple as possible (maybe I even make it too simple). When I look at your chart what sticks out to me is that I see stopping volume, you marked effort to fall. Next I see the high volume shake out and finally I see the entry another HV SO, labeled sqt for bar#4.

Lets go back to the first test labelled #2, I see this as failed and not a true test, the next bar dips below this bar and fails to close higher than this bar.
The NS #3, I see as failed as well, same reasons as #2.

The very last bar you marked as strength in the accumulation period I see as a 2nd entry if you missed the #4 entry.

Thanks for the post. I was originally going to post about this. In my opinion, we do not want to get bogged down in nomiclature. Is a bar a Shake out or Stopping Volume? Is that Supply coming in or No proggress on high volume?

What matters is the supply/demand implications of the interval and not the name. So where you see stopping volume. You see a high volume bar where demand swamps supply, putting an "end" to the down move. I can see an effort to fall (increasing high volume on a wide spread that closes on or near the low) with no result.


#2 does make a lower low, but it actually closes higher. Since the close is higher, I would consider it a confirmed Test. In truth, however, I don't like the fact that the next interval trades lower as you mentioned.

The NS #3 closes equal which I would consider confirmation. Again, I aggree in terms of the next interval making a lower low. Not really what I like to see.

After my previous post, that last interval should now be seen as a Test on increasing volume. It is marked down only to close on or near the high. It makes a lower low and closes down from the previous bar. The range is increasing and the volume is increasing and less than average.

is #3 really a no supply since the next bar did not close higher therefore the no supply bar wasn't confirmed...i just read your followup post...ignore this...

Hey All just a reminder that if you want to learn some new tricks the boys and girls at VSAWIKI have a pretty good site for VSA and Wyckoff users. Wealth of knowledge and loads of charts.

Worth a look especially if you have read MTM and want to go a little deeper.

Once your in- read the rules of the site so you can get the most from all the contributors. Also In this game the the more you contribute to the site the more you will learn as the more perspectives you will gain... live like you want to learn from every moment!

http://forum.vsawiki.com/index.php

WOW.. TradeGuider has a mini mentorship today and GOOGLE has an early and poor earnings release incident. (Which may well turn out to be a Shake Out)

Too bad the mentorship was over by the time the release came out. But I'm sure Gavin will be doing a video for youtube in the next couple of days.

Yep that Google sell off today was pretty fast and impressive... quite the drop. Anyone who hasn't should pull up a chart.

That's why earnings don't get released during market hours... to avoid what we saw today on the Google stock.

I totally missed this trade.

If you made a short or would have made a short here, I would like to hear your reasoning.

The reason(s) I missed the trade are pretty simple. I saw the Ultra High Volume wide spread down bar that closed well off its lows on the Fed news release as strength. I saw it as a Shake Out.

Although price was bumping its head against a Supply Zone, I was looking for the strength of the Shake Out to carry prices higher and thru the zone.

I saw the nice No Buying Pressure interval and was not surprised that the next interval would be a test. This interval (A) is almost as good as it gets in terms of tests. Notice how the volume drops off a cliff. The prior intervals have volume less than the previous two, but it is on this interval that volume is less than average. The spread of the bar is narrow. In fact it is a NR4 interval-narrowest range in the last four intervals. But most importanly, it makes sense. If the prior interval had no real buying going on, then the BBs would want to know why.

So they would test to see if the lack of buyers was due to predomince of sellers (supply).

The test fails as the next interval is down. That next interval was an Outside Key Reversal (OKR) and or a Trap Up move. Then we see a decreasing range up bar that closes in the middle on decreasing volume. Not a true No Demand, but a clear sign of weakness.

Again, I missed this. If you would have taken a trade here, please explain your thought process. Are you comfortable taking shorts after such a clear sign of strength enters? Is that such a clear sign of strength?

I need help on settings of my Better Volume indi

What is the best settings.I mostly trade based on 1hr chart and go smaller to 15m but not lower then that.
I am confused MA function.What period is most suited and how to understand MA function.
I tried reading about online but can't find good information.
Thank you

That shakeout bar seems a suspect-shouldnt it be after a clear downtrend behind it? it appears after some consolidation.

Did not expect frogs croaking in 23k post thread...

Yes its a 23k post thread, but look at the dates of the posts.. You may notice that it is not really that active.

The better volume "indi" you are only using it for volume, since volume does not change, there are no settings to change.

Better volume was not created for VSA, the MA does not apply here.
This entire thread has TONS of good information, seriously its a gold mine, this is why folks like HG, Ady and the others who just recently started posting are trying to keep this thread alive. Start from the beginning and read up, you will not be wasting your time by starting on page 1.

Posted this chart in the Euro thread.

Posting it here to spark some action (will I ever learn?).

Volume and rejection at just the right place. All of the PA progression down from and back up into that buying climax was perfect, well orchastrated and makes complete sense. I can thrown my VZA levels on your chart and every turn in price happens at a level and for a reason both the up waves and down waves. Until that BC high is taken out and tested successfully from above we have a top in place. There is also some good support below us both at current price action and as we look further south. The close of today's bar should be quite telling...

Also I am not a WRB analysis guy but looks to me HG that you may have a roughly 100 pip hidden gap sitting down there that is looking to be filled!

When the market made a new lower high marked supply the volume is less compared with the volume of the climatic action --> No D/S. During the rally 1.2821 new low to 1.31063 lower high the volume decreased it is not baking the up move in to weakness. There is another ND bar after the key reversal or 2 bars UT marked supply