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vsa with Malcolm

  • #23,501
  • Dec 22, 2012 7:11am Dec 22, 2012 7:11am
Quoting gez40
Merry Christmas all.

Is it me or does this new colour scheme make it harder to read posts?...probably just me.
It might be a bit quite in her for a couple of days but i`m sure our questions will get answered.
Seek not to change the world; seek only to change your mind about the world
  • #23,502
  • Dec 22, 2012 7:12am Dec 22, 2012 7:12am
Quoting gez40
It might be a bit quite in her for a couple of days but i`m sure our questions will get answered.
Answered the wrong post doh!
Seek not to change the world; seek only to change your mind about the world
  • #23,503
  • Dec 22, 2012 6:52pm Dec 22, 2012 6:52pm
Quoting jacktrader1
.....oh well, this might sound silly but im wondering if i can post some newbie questions and hopefully without any criticize from the seniors here for not reading over 1500 pages in this thread.
Welcome to the family. You will find a lot of talented VSAers that are always willing to help.

I can promise that most of your questions will be answered. I can also promise that sometimes that answer will be read the thread.

Here's a Hint. Questions about which broker's volume is best, or indicator settings will tend to get responses to read the thread.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,504
  • Dec 22, 2012 9:10pm Dec 22, 2012 9:10pm
Ok. First question coming, i always wonder how you set your take profit, do you judge by the volume bar or any particular way of doing it?
  • #23,505
  • Dec 23, 2012 2:26am Dec 23, 2012 2:26am
Got a question concerning the buying Climax. In the book Master the Markets, it says that the SM dumps there holdings in the buying climax. So I take it the SM is selling supply and the other traders are buying supply causing the spike up. The low I guess is the SM selling.
  • #23,506
  • Dec 23, 2012 6:16am Dec 23, 2012 6:16am
I take it Gavin lost then? http://www.livetradingchallenge.com/watchlive.htm#

Markus Heitkoetter made the final, blimey, if a vsa expert like Gavin loses how are the rest of us supposed to do it then?
Seek not to change the world; seek only to change your mind about the world
  • #23,507
  • Dec 23, 2012 6:52am Dec 23, 2012 6:52am
Quoting gez40
I take it Gavin lost then? http://www.livetradingchallenge.com/watchlive.htm#

Markus Heitkoetter made the final, blimey, if a vsa expert like Gavin loses how are the rest of us supposed to do it then?
Firstly, it doesn't really matter who you can 'beat', as long as you can 'beat' the market. On another day, Gavin may have won.

Secondly, you assume Gavin is an expert VSA trader, I'm not sure this is true. However, I think he is a very good sales man. Although it was never said at the time, it was clear that Tom brought him on board to do that particular job. I am always sceptical about 'expert traders' who are trying to sell me something. There may be some out there who have a genuine desire to help people become better traders, and Gavin might be one of them. But, I'm absolutely certain that the majority of them are doing it for the money they make when you buy thier product.
  • #23,508
  • Dec 23, 2012 8:59am Dec 23, 2012 8:59am
Quoting Intel
Firstly, it doesn't really matter who you can 'beat', as long as you can 'beat' the market. On another day, Gavin may have won.

Secondly, you assume Gavin is an expert VSA trader, I'm not sure this is true. However, I think he is a very good sales man. Although it was never said at the time, it was clear that Tom brought him on board to do that particular job. I am always sceptical about 'expert traders' who are trying to sell me something. There may be some out there who have a genuine desire to help people become better traders, and Gavin...
Not to mention these competitions aren't exactly perfect. I didn't watch any of these ones but watched some in the past, as far as I know it's an hour slot. If a set up doesn't arrive it goes against the idea of volume analysis to just open any old position to try win a competition.
  • #23,509
  • Dec 23, 2012 11:07am Dec 23, 2012 11:07am
Quoting Intel
Firstly, it doesn't really matter who you can 'beat', as long as you can 'beat' the market. On another day, Gavin may have won.

Secondly, you assume Gavin is an expert VSA trader, I'm not sure this is true. However, I think he is a very good sales man. Although it was never said at the time, it was clear that Tom brought him on board to do that particular job. I am always sceptical about 'expert traders' who are trying to sell me something. There may be some out there who have a genuine desire to help people become better traders, and Gavin...
If he is not an expert in VSA after 10 years of mentorship from Tom, does`nt say much for Tom, VSA or tradeguider.
Seek not to change the world; seek only to change your mind about the world
  • #23,510
  • Dec 23, 2012 11:40am Dec 23, 2012 11:40am
Quoting jacktrader1
Ok. First question coming, i always wonder how you set your take profit, do you judge by the volume bar or any particular way of doing it?
I use a trailing stop. Others have specific profit targets. This varies with trading style.

I have attached a picture that illustrates Tom's preferred method. Tom allows for 2 consecutive bars in the opposite direction of the trade. He would then exit on the appearance of a third one. Level bars would be ignored.

Okay, let's assume we were to get short on the red down interval marked short. We would then allow for the appearance of 2 consecutive up (blue) bars. If however, there was a third blue bar, we would exit.
So upon seeing the first blue bar after entering we would do nothing. The next time we see a blue bar it is followed by another blue bar. Now we have seen two consecutive up bars whilst in a short position. If the next interval is also blue, we exit. In this case the next interval is not blue and we are still in the trade to the downside.

In this example, you would be in the trade from where we entered to the last interval shown. As Tom says, trends tend to go on longer than you think.

Generally speaking, however, it is a good idea to look at the volume when you are in the trade. If you are short and start to see ultra high volume down bars closing well of the low with the next bar up, you should think about moving your stop down or getting out. Especially if those bars are immediately followed by a low volume Test.
Attached Image (click to enlarge)
Click to Enlarge Name: ex 4.png Size: 33 KB
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,511
  • Dec 23, 2012 11:49am Dec 23, 2012 11:49am
Quoting sweatx
Got a question concerning the buying Climax. In the book Master the Markets, it says that the SM dumps there holdings in the buying climax. So I take it the SM is selling supply and the other traders are buying supply causing the spike up. The low I guess is the SM selling.
The low is not the SM selling, although every transaction is two-sided by definition.

The area from the high to the close is the key area of SM supply. The SM sells into a raising price. So the buying enthusiasm of the herd causes the spike into which the Smart Money sells.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,512
  • Dec 24, 2012 2:53am Dec 24, 2012 2:53am
Concerning VSA and experts on it. I have watched watched some videos on the Internet with expert VSA traders trying to assume which way the next price bar is going to go ( up or down) based on volume and other VSA stuff, and most of the time there predictions are wrong. That is not to say it doesn't help, I guess it does but I haven't gotten into it enough to make a decision. Knowing how the SM works seems like it should be an advantage.
  • #23,513
  • Dec 24, 2012 4:28am Dec 24, 2012 4:28am
great stuff! Hidden gap!Thanks for the reply. Question two. Nw i know most vsa-ers and MTM book also says any volume bar lower than the previous two and a wick on top is a no demand bar. But how about a relatively low volume bar? Like the one attached. The bar is a low volume bar, acted after a red bar previously which seems to be a buying climax. http://s9.postimage.org/wzs3a112j/Un...1224182208.jpg
  • #23,514
  • Dec 24, 2012 8:01am Dec 24, 2012 8:01am
Quoting jacktrader1
great stuff! Hidden gap!Thanks for the reply. Question two. Nw i know most vsa-ers and MTM book also says any volume bar lower than the previous two and a wick on top is a no demand bar. But how about a relatively low volume bar? Like the one attached. The bar is a low volume bar, acted after a red bar previously which seems to be a buying climax. http://s9.postimage.org/wzs3a112j/Un...1224182208.jpg

You need to rethink your ND recognition. There is both the V and the S to Analyse in VSA. You're almost there tho.
  • #23,515
  • Dec 24, 2012 11:17am Dec 24, 2012 11:17am
well there are rules of ND to follow and i am quite confused to be honest. Thats why im here seeking for answers. Intel, what do you think of the analysis? The Volume is relatively low enough, and the Spread is low too. For me it seems like a ND for me.
  • #23,516
  • Dec 24, 2012 11:41am Dec 24, 2012 11:41am
Quoting jacktrader1
....i know most vsa-ers and MTM book also says any volume bar lower than the previous two and a wick on top is a no demand bar. But how about a relatively low volume bar? Like the one attached. The bar is a low volume bar, acted after a red bar previously which seems to be a buying climax. http://s9.postimage.org/wzs3a112j/Un...1224182208.jpg
Let's start with the basic definition of No Demand (ND). Our basic definition of No Demand is a narrow range UP bar that closes in the middle or low on volume less than the previous two intervals.

Take a look at the chart below.

#1 is No Demand by our base case definition. It is a narrow range up bar closing in the lower portion of its range on volume less than the previous two. Now, I have left off something that you will hear a lot when people define No Demand. That being, "in the right place". Being in the right place actually has nothing to do with whether the interval is No Demand or not. It does however, have everything to do with said No Demand being a viable trade entry or not.

In this case, you can see that this No Demand is in the right place. There is weakness behind us. Both in the form of specific VSA indications like an Up Thrust and a Squat, and in the form of an overall down trend.

I don't want to confuse the issue by talking about "being in the right place", but we need to think about that in order to clearly understand #2.

#2 is also No Demand. We can see that the interval is up and the range is narrow. These are two parts of our base definition. The close here is in the upper portion of the range. This is okay. In fact, a close in the upper portion of the range should "fool" more of the herd than a close in the middle or low. That is, an interval closing up and closing on its high should be seen as strength by most (uniformed) people. Add to that the fact that it is making a higher high and not a lower low. Which makes this what the herd incorrectly term a "Buying bar". And you can see how this would appear as strength to the uniformed.

Now let's take a look at the volume. It is decreasing but not less than the previous two. But look at how close it is to being less than the previous two. And note that this volume is actually less then the volume on #1, our base definition of No Demand.

Again, when we place this interval into context, it must be seen as No Demand.

Another thing to remember: Unlike Tests, No Demands will never come on increasing volume.
Attached Image (click to enlarge)
Click to Enlarge Name: ex 3.png Size: 101 KB
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,517
  • Dec 24, 2012 11:46am Dec 24, 2012 11:46am
I thought the ND or NS would be the 2nd low volume bar after the high volume bar, in the diagram it looks like yours is the 3rd bar. I may be wrong, if so I had an incorrect assumption myself.
  • #23,518
  • Dec 24, 2012 12:03pm Dec 24, 2012 12:03pm
Quoting sweatx
Concerning VSA and experts on it. I have watched watched some videos on the Internet with expert VSA traders trying to assume which way the next price bar is going to go ( up or down) based on volume and other VSA stuff, and most of the time there predictions are wrong. That is not to say it doesn't help, I guess it does but I haven't gotten into it enough to make a decision. Knowing how the SM works seems like it should be an advantage.
If you are talking about Seb's videos on Trader's Lab, these are a must watch. He certainly does a better job than a coin toss (50/50). If you really want to learn VSA, I recommend you do the exercise yourself. Replay your data one interval at a time and try to determine the direction of the next interval. You will quickly find out a few things:

1. You can determine the next interval with some degree of accuracy as you improve.

2. Even though you can look at the current interval and with some degree of accuracy determine the result of the next interval, the more you know about the background, the higher your degree of accuracy becomes. Simply put, background matters. And background is more than just one bar.

3. Being able to determine the direction of the very next interval is actually not sufficient alone to make entry decisions. There are a couple things called trend and momentum that matter as well.

4. Background matters.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,519
  • Dec 24, 2012 12:10pm Dec 24, 2012 12:10pm
Right. Now i see where my problem is. The shape and everything is ok, except it appears on a increasing volume even though it is still low. Great help! HiddenGap and intel! Thanks
  • #23,520
  • Dec 24, 2012 12:16pm Dec 24, 2012 12:16pm
Quoting jacktrader1
Right. Now i see where my problem is. The shape and everything is ok, except it appears on a increasing volume even though it is still low. Great help! HiddenGap and intel! Thanks
These seb vidoes you are talking about, there are only 5 of them by Seb from traders lab right? Just want to make sure i get the right materials.
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