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  • #23,341
  • Dec 11, 2012 6:48pm Dec 11, 2012 6:48pm
Quoting Jonny 5
Intel if you're still around I have a quick question - or if anyone else knows the answer then please feel free to put me out of my misery.

I keep seeing mention of a confirming bar after an upthrust and am totally fine with this. What I'd like to know is where this idea of a confirming bar came from. I've read and seen pretty much every resource I can find on VSA over the last 6 months but can't see mention of this anywhere by Tom, Seb, Todd, Gavin or any of the other VSA experts.

Thanks in advance
Hi Jonny,

HG has hit the spot as always. The confirmation is exactly that, it confirms the strength/weakness which you have seen previously. You should think of confirmation as a concept and not a specific bar.
You have seen us talking about confirmation bars in setups. You will have to decide what you personally want to see in order to confirm the SOS/SOW your seeing. You should start by using the same as we discuss here and decide if that suits your needs. Then, as you become more experienced in VSA, you will adapt as required.
  • #23,342
  • Dec 12, 2012 1:52am Dec 12, 2012 1:52am
HG and Intel, thank you both very much for your replies. I have read MTM three times and also read Tom's first book for good measure - I can't believe how vital some of the least important looking sentences are in those books. Back to read MTM a fourth time I think : )

Intel, I've been reading through your posts recently but haven't finished them all yet - what types of set up are you trading these days? As far as I can see from my reading and looking at your youtube vids it seems to be UT - UT confirmation - ND - break of ND low (and the SO/NS for the reverse), is this correct or have you moved on with things?

Thanks again!!
  • #23,343
  • Dec 12, 2012 4:26am Dec 12, 2012 4:26am
Quoting Jonny 5
HG and Intel, thank you both very much for your replies. I have read MTM three times and also read Tom's first book for good measure - I can't believe how vital some of the least important looking sentences are in those books. Back to read MTM a fourth time I think : )

Intel, I've been reading through your posts recently but haven't finished them all yet - what types of set up are you trading these days? As far as I can see from my reading and looking at your youtube vids it seems to be UT - UT confirmation - ND - break of ND low (and the...
That about sums it up. However, you should learn VSA and NOT the setups. If you try to simply trade the setups I use, you WILL lose money.
BTW, you've missed a very important part of the setup.
  • #23,344
  • Dec 12, 2012 6:42am Dec 12, 2012 6:42am
I thought I'd post a failed trade from yesterday for people to comment on.

I'll give as little info as possible and look for people to comment. I'll follow up later on at some stage with my own thoughts in hindsight.

15min high volume zone, 5min entry on ND/UT.
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  • #23,345
  • Dec 12, 2012 7:21am Dec 12, 2012 7:21am
Quoting KinsaleForex
I thought I'd post a failed trade from yesterday for people to comment on.

I'll give as little info as possible and look for people to comment. I'll follow up later on at some stage with my own thoughts in hindsight.

15min high volume zone, 5min entry on ND/UT.
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I was watching the 1h chart at that time.

Bar 1 was an effort to rise (?) 2955 to 2994. Volume was high but not extreme.

Bar 2 to me was no selling pressure (?) because it had the lowest volume compared to the past 3 bars. To confirm, I want to see an up bar next.

Bar 3 was a reverse upthrust (?) on higher volume off the area where there was no selling pressure (bar 2). That to me was a sign of strength, along with strength in the background. I was looking for a long. Took a long at 1.2987. Can say that it was a random entry, without confirmation. Just thought, if there is no selling pressure, the only other way to go is up.

Bar 4 was kinda worrisome because it looks like an upthrust (?). It was on highest volume. I thought at that point my trade was wrong.

Bar 5 was another no selling pressure (?). Lowest volume of the past 3 and close off the low, off the low of bar 2.

I had 20 pips at the top of bar 4 but I did not take it, thinking that it will continue up. Price retraced and I was down a few pips at bar 5. I decided to take my profits the next time it went back to 3007.

This was my thought process yesterday.

*i put question marks beside the terms because I'm still not sure if I am labeling them correctly.
  • #23,346
  • Dec 12, 2012 7:40am Dec 12, 2012 7:40am
Quoting KinsaleForex
I thought I'd post a failed trade from yesterday for people to comment on.

I'll give as little info as possible and look for people to comment. I'll follow up later on at some stage with my own thoughts in hindsight.

15min high volume zone, 5min entry on ND/UT.
Hi Kinsaleforex. Thought to try to collaborate a bit.
Some points to consider here are:
1. the trend was up and therefore, ND has less significance. The high volume bar indicated some selling pressure but only one bar is not enough to consider that the trend will reverse;
2. I, particularly, don't consider that UT as an UT because UT are maneuvers to take stops out and it is not clear at that point. The best UT are seeing when the high of the bar is higher than a previous high and in a zone with strong SOW in the background
3. to take a short there was kinda of risky because it was very near a demand area so, there was not enough profit potential here

But with that said, you took the trade conforming your thoughts and that is good. After you was stopped out, the PA showed some SOS later, and you could had take a long few bars later(I don't have my charts to post but you can see a little 2 bars reversal to the upside in the 5min chart).

Hope it can help a bit.

Cheers!
  • #23,347
  • Dec 12, 2012 7:40am Dec 12, 2012 7:40am
Quoting Intel
That about sums it up. However, you should learn VSA and NOT the setups. If you try to simply trade the setups I use, you WILL lose money.
BTW, you've missed a very important part of the setup.
I'm hoping it's something obvious I've missed like "the background"?
  • #23,348
  • Dec 12, 2012 7:49am Dec 12, 2012 7:49am
Quoting KinsaleForex
I thought I'd post a failed trade from yesterday for people to comment on.

I'll give as little info as possible and look for people to comment. I'll follow up later on at some stage with my own thoughts in hindsight.

15min high volume zone, 5min entry on ND/UT.
I took a similar trade yesterday in the Euro, and the prior day, only to get out at about BE on both after sitting around for nearly two hours in both trades.

Euro has been just in a slow crawl all week. I'm trying to figure out whether that high volume we saw at the end of last week was really reaccumulation or if this lack luster rally back up this week is a lack of professional interest in long positions. I'd be interested to hear some opinions about that. The highest volume in a few weeks was down on the 6th and the 7th at the bottom here, but this volume we have had the past two days and so far today is the lowest since the end of October.
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Small disciplines repeated with consistency lead to great achievements.
  • #23,349
  • Dec 12, 2012 9:29am Dec 12, 2012 9:29am
I still really feel like there is a huge piece of the puzzle missing for me with VSA:
Does anyone else keep seeing climactic volume and then say a shake out and a no demand that then turns out to be a push through/effort to rise?
I keep getting stopped out by this scenario and would love to hear if anyone has any hard and fast rules to avoid this.
  • #23,350
  • Dec 12, 2012 9:42am Dec 12, 2012 9:42am
Quoting Jonny 5
I still really feel like there is a huge piece of the puzzle missing for me with VSA:
Does anyone else keep seeing climactic volume and then say a shake out and a no demand that then turns out to be a push through/effort to rise?
I keep getting stopped out by this scenario and would love to hear if anyone has any hard and fast rules to avoid this.
The SO is a SOS (typically) and a ND is a SOW (typically) so they are countermanding signals that should not be used together for a trade set-up. Yes we see all the time climatic action in the form of a potential buying climax or even an UT followed by a SO. This is actually a fairly common patten as is an UT right after a SO which in turn is followed by a continued upmove where the UT is taken out.

This is why I prefer to trade the lack of volume bars into supply / demand zones.

Tom W loves to trade UT's even at times without confirmation however he does so in a falling market into upper trend lines etc... as UT's are most proimenent as SOW in a weak market. The same is true for SO's. These for me anyway are SOS best playing out their purposes in a strong or rising market.

The other thing we need to consider is what's to the left? If we see climatic action we need to determine where are we on the chart with respect to supply and demand zones etc... if we look left after printing a BC we may see that we just pushed up through a supply zone or through a previous swing high. In this case we need to consider that the effort may in fact be SM absorbing to push through. Then we wait and see whether we test to prove the strength or wait for a failure of holding the push through and then ND into cliamtic action once selling has been proven.

Not sure if I answered your question or not... may have gotten off topic.
Today's zone = Tomorrow's opportunity!
  • #23,351
  • Dec 12, 2012 10:03am Dec 12, 2012 10:03am
Pres, thats a great reply - thanks. My bad, I meant upthrust not shakeout in the example I gave. It seems to me that for a while effort to rise bars looked like they should ie increased volume closing on the highs - however more recently there has been a lot of what look like really weak bars ie upthrusts at an old high then followed by a ND which looks like SM trapping the heard at a resistence level. Then price carries on up and takes out the UT.
  • #23,352
  • Dec 12, 2012 11:08am Dec 12, 2012 11:08am
Quoting Jonny 5
Pres, thats a great reply - thanks. My bad, I meant upthrust not shakeout in the example I gave. It seems to me that for a while effort to rise bars looked like they should ie increased volume closing on the highs - however more recently there has been a lot of what look like really weak bars ie upthrusts at an old high then followed by a ND which looks like SM trapping the heard at a resistence level. Then price carries on up and takes out the UT.
Hi Jonny, best thing you could do is post a chart of such an example and then hopefully someone can reply and explain why it did that at that particular time. You'll learn a lot faster if you're putting it into practice and have a clear example of it on a chart that you can save.
  • #23,353
  • Dec 12, 2012 11:09am Dec 12, 2012 11:09am
Quoting Jonny 5
Pres, thats a great reply - thanks. My bad, I meant upthrust not shakeout in the example I gave. It seems to me that for a while effort to rise bars looked like they should ie increased volume closing on the highs - however more recently there has been a lot of what look like really weak bars ie upthrusts at an old high then followed by a ND which looks like SM trapping the heard at a resistence level. Then price carries on up and takes out the UT.
Do you have a chart example that we could look at to see if we can offer some additional thoughts?
Today's zone = Tomorrow's opportunity!
  • #23,354
  • Dec 12, 2012 11:52am Dec 12, 2012 11:52am
Quoting pres78
Do you have a chart example that we could look at to see if we can offer some additional thoughts?

Here goes


http://content.screencast.com/users/...4d/example.gif
  • #23,355
  • Dec 12, 2012 12:35pm Dec 12, 2012 12:35pm
Cheers for the replies, I intended to reply whilst FOMC was kicking up a shit storm but ended up managing two PnF entries I had running.

Firstly, feel free to argue or question anything I have to say below, i'd welcome it. I'm not saying that i'm right, it's just how i'm interpreting it all since looking back and speaking with people today.

Quoting lx384
I was watching the 1h chart at that time.

Bar 1 was an effort to rise (?) 2955 to 2994. Volume was high but not extreme.

Bar 2 to me was no selling pressure (?) because it had the lowest volume compared to the past 3 bars. To confirm, I want to see an up bar next.

Bar 3 was a reverse upthrust (?) on higher volume off the area where there was no selling pressure (bar 2). That to me was a sign of strength, along with strength in the background. I was looking for a long. Took a long at 1.2987. Can say that it was a random entry, without confirmation....
This is a pretty good explanation for what is in my opinion a difficult area of the chart. Certainly read it better than I did. A lot of the volume is pretty even across this area so we've to look to bar formation to help us out. I wouldn't really call that bar a reverse upthrust though. Don't ask me what I would call it though. No idea really!

Quoting joaoborras
Hi Kinsaleforex. Thought to try to collaborate a bit.
Some points to consider here are:
1. the trend was up and therefore, ND has less significance. The high volume bar indicated some selling pressure but only one bar is not enough to consider that the trend will reverse;
2. I, particularly, don't consider that UT as an UT because UT are maneuvers to take stops out and it is not clear at that point. The best UT are seeing when the high of the bar is higher than a previous high and in a zone with strong SOW in the background
3. to take a short...
All good points and something that normally i'm well aware. Agreed it's not really an upthrust, I just called it that as it closed in the lower half of the bar. The demand area below, i'll get to in a minute on my chart.

Quoting jmflukeiii
I took a similar trade yesterday in the Euro, and the prior day, only to get out at about BE on both after sitting around for nearly two hours in both trades.

Euro has been just in a slow crawl all week. I'm trying to figure out whether that high volume we saw at the end of last week was really reaccumulation or if this lack luster rally back up this week is a lack of professional interest in long positions. I'd be interested to hear some opinions about that. The highest volume in a few weeks was down on the 6th and the 7th at the bottom...
At least you got out of them at BE! I guess the volume dropping off is to do with the holiday period setting in? I'm not sure if this is a myth or not. FOMC will add some decent volume to today's totals anyway.


Ok onto the chart I have. It's not really going to show anything revelatory but adds on to some points that were already made.

A - Ultra high volume that marked the low of the down move last week. Not coincidence where it stopped, right on the high of a previous 1hr zone from the 2nd Nov that had already acted as support once

B - We gapped down into this zone and bar B starts the push out of this zone around the 50% mark.

C - Continues this push out of the high of the zone and closes the gap.

Cii (not marked) I'm looking at the highest volume bar between C and D, the one closing right on it's high, this pushes us through the last significant top, not quite the high from Friday but the reaction high to the volume at A

D - This pushes us above the high made during Asia on Thursday night / early Friday.

E - The bar that started my set up. Looking at it now, we have all this strength on the bars below us, but I took this one as weakness. At the very best it was going to get to the high of D on a retrace but it didn't even manage to do that. The low of E acted as support several times before pushing into the 1hr zone above us.

That's me done.
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  • #23,356
  • Dec 12, 2012 12:59pm Dec 12, 2012 12:59pm
1 Hour chart attached...

Back at an important supply zone. The last two times we went passed 3100 with any follow through we made it a mere 50 pips (not even 50 to accurate) before falling back below.

This time we made it back to 3100 quicker and after a much less deep sell off. What do people make of this price action? Does the quicker return represent SOS or SOW at this zone? Curious if anyone has any thoughts on this. Either way we should see some sort of set-up and reaction at this area.

Time will tell.
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Today's zone = Tomorrow's opportunity!
  • #23,357
  • Dec 12, 2012 1:26pm Dec 12, 2012 1:26pm
Quoting Jonny 5
Here goes

What's the story with the bars mate? They're neither bars or candlesticks, it looks like they're opening and closing at the same price on every bar, which they aren't or shouldn't be!
  • #23,358
  • Dec 12, 2012 1:30pm Dec 12, 2012 1:30pm
Quoting Jonny 5
Pres, thats a great reply - thanks. My bad, I meant upthrust not shakeout in the example I gave. It seems to me that for a while effort to rise bars looked like they should ie increased volume closing on the highs - however more recently there has been a lot of what look like really weak bars ie upthrusts at an old high then followed by a ND which looks like SM trapping the heard at a resistence level. Then price carries on up and takes out the UT.
Hello.

I'll start off with the answer that many VSA traders don't want to hear: While VSA is very adapt at finding tops and bottoms, VSA is best used in conjunction with the trend.

Take a look at my 5 min chart below.

From my point of view, there is absolutely no reason to even think about getting short on that No Demand. Yes we see an Up Thrust on Ultra High Volume. Even before that, we see an up bar on Ultra High Volume that closes well off its high. The next interval is up, but this interval had to have some selling in it or else the close would be higher in the range. And then we get the No Demand. Whilst this completes a sequence, the market does not change behavior. The trend remains UP.

Okay, here are the things I don't like to talk about that tell me the trend is UP:

1. Chart mode is UP (green)
2. Price is above the Trend Bias Line
3. Price is above the Balance Point Line, and for the most part, the BPL is blue.

Now this changes how the chart should be viewed.

Take a look at the purple line drawn at the low of the Climatic Action interval. This was the first interval in the sequence. A close below this interval should be bearish. Notice that we never get a close below that low. In fact there is an equal close on the interval marked strong. But that interval is a narrow range down bar that closes in the middle on decreasing volume. And it's finding support at the TBL. This is more of an advanced entry, but it is aided by an understanding of the trend.

Let's skip to the interval marked Test. This test appears after an interval where we see more supply come into the market. We know supply came in because the range is narrow whilst the volume is increasing and the close is in the lower portion of the range. Simply, this is a squat. So the supply that just entered the market is being tested, but notice that the test is also in the range of our Up Thrust. Only after this test, do we see a close above the high of the Up Thrust. If you were a trend trader, then you should be able to take advantage of this test as an entry. Giving this test even more weight, is the 2 bar reversal behind it.

But the real point of this post is not where and how to get long, but rather when not to get short. Don't get short when the trend is Up.

As I said, this is the post many VSAers do not want to see.

One of the beauties of VSA is that it encompasses many different trading styles. You don't have to be a trend trader. Many here are not and I look forward to seeing their thoughts.

P.S. FF moderators, I would like to be able to PREVIEW my posts.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,359
  • Dec 12, 2012 1:51pm Dec 12, 2012 1:51pm
Quoting KinsaleForex
What's the story with the bars mate? They're neither bars or candlesticks, it looks like they're opening and closing at the same price on every bar, which they aren't or shouldn't be!
They're HLC bars but in MT4's ususal shonky style! They only display the close but for some due to some MT4 shonkiness they have to display like that ie right across the bar.
I love HLC bars - its just a shame that not many platforms support them. I also use trade interceptor which looks much neater for HLC but I find MT4 easier as it's what I'm used to.
  • #23,360
  • Dec 12, 2012 1:53pm Dec 12, 2012 1:53pm
Quoting HiddenGap
Hello.

I'll start off with the answer that many VSA traders don't want to hear: While VSA is very adapt at finding tops and bottoms, VSA is best used in conjunction with the trend.

Take a look at my 5 min chart below.

From my point of view, there is absolutely no reason to even think about getting short on that No Demand. Yes we see an Up Thrust on Ultra High Volume. Even before that, we see an up bar on Ultra High Volume that closes well off its high. The next interval is up, but this interval had to have some selling in it or else the close...
Nice reply as always HG. Something one should take away from this IMHO is to watch your volume spikes and then the reactions to said spikes. What you do with those reactions is up to you and should be based on your trading plan.

My personal trade plan is based 100% around this premise. I find UHV zones into which I trade VSA reactions.

Looking at HG's chart he calls note to the fact that we find support at the UHV bar low (black volume bar 2 bars before the UT). The fact that we see support at this bars low and then print that UT at the high shows that the market is in fact ranging within the first UHV bar. The safest thing to do is wait for a break and a test of this volume. To short a ND within this bar after seeing support and since we are and have been trending upward is very risky as there is no confirmed room to move down and sellers have proven no strength.

Personally I no longer use any indicators to identify trend or pivots or value areas but these are all great tools that traders can use to keep their VSA entries on the right side of the bigger picture. So many times I see people posting charts where they shorted a ND that was above a MA or colored hull that was still pointing upward and was blue. If you have the indicators to identify trend then use them as HG notes. Wait for all your tools to align and then take the set-ups that match with what your chart is saying.

Your right HG that the test is not a bad entry. We had the 2BR with the second bar closing above the first climax bar's high. However we are still below the UT high so we still need to be ready for it to possibly hold as resistance. Even safer for me looking just at your chart was after we broke the high of the UT and glided along sideways (never closing back below the UT high) we print around 07:00 on your chart a nice 2BR into the UT high closing back above with the upbar making a LL, a HH and a nice high close on increasing volume.

All of this is of couse just my 2 cents and there are many ways to skin this VSA cat...
Today's zone = Tomorrow's opportunity!
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