vsa with Malcolm | Page 1197 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

VSA-divergence trading 187 replies

How to Blow $200 account using VSA--- 594 replies

VSA Journal 57 replies

VSA broker history change datas 11 replies

Attachments: vsa with Malcolm
Exit Attachments

vsa with Malcolm

  • #23,921
  • Apr 9, 2013 4:28am Apr 9, 2013 4:28am
Quoting KinsaleForex
I haven't looked at Indian stocks at all but from what i've seen from the charts posted here, i'm not a fan either. Like you say, lots of upthrust and shakeout type bars that I would expect to have high volume associated with. Each chart seems to be quite a hard read, i'm pretty lost when it comes to looking at them!

well, SD has just shown how to check the hidden volume.
The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #23,922
  • Apr 9, 2013 4:36am Apr 9, 2013 4:36am
Quoting gez40
Have you tried looking at weekly charts to get a clearer picture?
Thanks for the post.

I think the story is more or less the same, but I think SD has hit the nail on the head, PA is contained within that giant upthrust here have a look.


Attached Image (click to enlarge)
Click to Enlarge Name: Snap13.png Size: 17 KB
The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #23,923
  • Apr 9, 2013 6:57am Apr 9, 2013 6:57am
Quoting SimpleDev
Since we are all on the subject of absorption volume versus weakness volume on up bars thought it would be good to throw up a chart. US stock GE on daily. Bar 1: Gapped up on ultra high volume and we have a top to the left of it. As a generality gapped up on ultra high volume is weakness but we must sit on our hands and watch how the market responds to this bar. Bar 2: A test, let me start out by saying it would be very risky in my opinion to go long on this bar. This test could easily fail, I think it would be better to see how the market reacts...
Really nice chart mate, thanks for sharing that! It's taken me a while (and a lot of posts between here and forum) but i'm starting to get a real feel for how you look at the charts. Interesting stuff.

Also, did someone mention PnF?

Never looked at a GE PnF chart in my life but this is the first thing to jump out at me. Daily chart, $1 box size, 3 box reversal. We've hit the downside target ($13.0) from the last significant top and we still have an upside target ($27) that has yet to be hit from the last significant low. We've also broken the 45° down trend from that last significant high. Just another view, SDs analysis is still very sound in my opinion. I'm thinking minor correction on the way to hitting $27.
Attached Image (click to enlarge)
Click to Enlarge Name: 09-04-2013_GE_Stock.jpg Size: 212 KB
  • #23,924
  • Apr 9, 2013 8:46am Apr 9, 2013 8:46am
Quoting KinsaleForex
Really nice chart mate, thanks for sharing that! It's taken me a while (and a lot of posts between here and forum) but i'm starting to get a real feel for how you look at the charts. Interesting stuff. Also, did someone mention PnF? Never looked at a GE PnF chart in my life but this is the first thing to jump out at me. Daily chart, $1 box size, 3 box reversal. We've hit the downside target ($13.0) from the last significant top and we still have an upside target ($27) that has yet to be hit from the last significant low. We've also broken the...
And if you take the horizontal count, GE is projected to hit $35, what is interesting because it coincides with the last vertical projection.
Good stuff! :-)
  • #23,925
  • Apr 9, 2013 8:50am Apr 9, 2013 8:50am
Quoting HiddenGap
First, please understand that Wide Range Body (or Bar) Analysis is not a part of VSA. It's an incredible compliment to VSA, but nevertheless, it's not a part of VSA.
Thank you HD. I wasn’t aware of this fact & would love to learn more about it. Can we combine it with VSA to trade better?

Quoting HiddenGap
Now, with that said, Volume Spread Analysis does look at the spread (range) of bars as one of the three key compents. When you see a wide range interval on high to ultra high volume, the first question to ask is where is the close?
What are the other 2 key components?

Quoting HiddenGap
Also keep in mind that there can be 25 intervals from the first sign of distribution (wide spread up bar on ultra high volume) to the conclusion of the pattern.
You mean to say there could be 25 same time frame bars?

Quoting HiddenGap
If you see a wide spread up bar on very high volume that closes off its high with the next bar down but you see a test 1-5 intervals later, the market is strong and not weak.
I honestly didn’t get this point. Could you please share a chart if possible to explain this?
  • #23,926
  • Apr 9, 2013 9:15am Apr 9, 2013 9:15am
Quoting joaoborras
And if you take the horizontal count, GE is projected to hit $35, what is interesting because it coincides with the last vertical projection. Good stuff! :-)
I always forget to look at the horizontal counts as I prefer the vertical ones, where did you take it from? I presume the 7 columns at $15 across to C? Added to the low of the column before? You can see the chart itself has the price objective marked at 35, I just wasn't sure how they got it!
  • #23,927
  • Apr 9, 2013 9:18am Apr 9, 2013 9:18am
Quoting joaoborras
HG made the point for absorption volume, that is the case when HV in up bars is bullish. Now, one thing that can serve as indication for what is coming next is to wait to see where the price move next the HV bars. For HV up bars, if the price falls into the bar's low with lowering volume, than it is testing the possible supply to the next push up. But, if the price continues to rise with lowering volume, it shows that the HV up bar was indeed weak. So, after the HV up bar, if the price consolidates low, it is bullish and if the price consolidates...
Thanks Jo - Is there a specific pattern you would look for after such WRB HV/UHV up bar before you conclude whether its going to go up or down?
  • #23,928
  • Apr 9, 2013 2:01pm Apr 9, 2013 2:01pm
Quoting abhinkoi
What are the other 2 key components?
(1) Volume
(2) Spread or range
(3) Price Analysis

It doesn't fit perfectly, but the three components VSA is looking at on any one interval are volume, spread and closing price. And just to be clear, even though VSA is looking at these components on an individual bar, trading decisions are rarely made based on a single bar. Background matters.

Quoting abhinkoi
You mean to say there could be 25 same time frame bars?
Yes. If for example you see the start of distribution in the form of an Ultra high volume wide spread up bar closing off its high with then next interval down on a weekly chart. You may well have to wait 25 weeks to see the end of the distribution phase and the signal to get short.

Having said that, there are traders/trading styles that allow one to take advantage of things on a much quicker basis. For example, take a look at the work by TraderinSD. He uses Supply/Demand Zones a la Sam Sieden. When that same Ultra High volume interval appears in a Supply Zone, the reaction would tend to be quicker. It should be by definition of a Supply Zone.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,929
  • Apr 9, 2013 2:32pm Apr 9, 2013 2:32pm
Quoting abhinkoi
..Could you please share a chart if possible to explain this?
Take a look at the GE chart posted by SimpleDiv. It is a perfect example. We see a wide range up interval on utra high volume with the next interval down. In addition, there is a gap.

We know that markets do not like ultra high volume up bars because there could be hidden selling. In this case, there must have been some selling because the next interval is down. But there are two clues that the market is actually strong.

1. Two intervals after the interval in question (marked #2 on chart) we have a test.
2. If you look to the left, you will see an old top. This top represents supply that has to be overcome. The Smart Money is willing to buy this supply as they expect higher prices to come.

If this interval was weak, you would not expect it to be tested immediately and even if it was tested, you would not expect it to be successful.

By the Way:

Take a look at the interval marked #4 . If we start our count on the next interval something interesting happens. 24 intervals later we see an Up Thrust (marked #8). 26 intervals later (2 intervals from the Up Thrust) we see a No Demand. Not only a No Demand, but a No Demand that is closing below the MA. That's the place to get short bases on just this picture here.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,930
  • Apr 9, 2013 3:55pm Apr 9, 2013 3:55pm
Thank you so much SD once again for making things look so simple via this beautiful chart.

Quoting SimpleDev
Bar 2: A test, let me start out by saying it would be very risky in my opinion to go long on this bar. This test could easily fail, I think it would be better to see how the market reacts to the test. Which the next 2 bars are up bars, so the test was successful!
So a test would only be called successful if next 2 bars are up bars?

Quoting SimpleDev
Bar 3: Another test, this time the low of the test is above the high of bar 1, which I feel is the safest entry.
This bar came after 12 bars from previous test. Were there any more successful tests in between? How to read those in between bars? Were they of any significance?


Quoting SimpleDev
Bar 5: 2 bar reversal, market showing signs of weakness.
Is this true in all such cases wherever we see such 2 bar reversals in an upmove? Or it is applicable on the effort to rise after a significant down move?

Quoting SimpleDev
Bar 6: A test, once again not a good time to go long due to this test is still with in bar 4.
Ok. So we shouldn’t take any tests which occur within the HV bar like we ignored the Bar 2 test. Correct?

Please help me understand the above mentioned doubts. Thanks a million in advance. I apologize for asking so many questions.
  • #23,931
  • Apr 9, 2013 4:08pm Apr 9, 2013 4:08pm
Quoting HiddenGap
(1) Volume (2) Spread or range (3) Price Analysis It doesn't fit perfectly, but the three components VSA is looking at on any one interval are volume, spread and closing price. And just to be clear, even though VSA is looking at these components on an individual bar, trading decisions are rarely made based on a single bar. Background matters. Yes. If for example you see the start of distribution in the form of an Ultra high volume wide spread up bar closing off its high with then next interval down on a weekly chart. You may well have to wait 25...
Thanks HG very much for helping me clear my doubts. Things look much clearer now.
  • #23,932
  • Apr 9, 2013 4:14pm Apr 9, 2013 4:14pm
Quoting HiddenGap
If this interval was weak, you would not expect it to be tested immediately and even if it was tested, you would not expect it to be successful.
This seems to be very powerful and important line. Understanding when the test would work and when it would fail is important. May I know what is the definition of a successful test?

Quoting HiddenGap
By the Way: Take a look at the interval marked #4 . If we start our count on the next interval something interesting happens. 24 intervals later we see an Up Thrust (marked #8). 26 intervals later (2 intervals from the Up Thrust) we see a No Demand. Not only a No Demand, but a No Demand that is closing below the MA. That's the place to get short bases on just this picture here.
Yes noticed it and it worked exactly the way you explained. Bingo!!
  • #23,933
  • Apr 9, 2013 8:12pm Apr 9, 2013 8:12pm
Quoting KinsaleForex
Really nice chart mate, thanks for sharing that! It's taken me a while (and a lot of posts between here and forum) but i'm starting to get a real feel for how you look at the charts. Interesting stuff. Also, did someone mention PnF? Never looked at a GE PnF chart in my life but this is the first thing to jump out at me. Daily chart, $1 box size, 3 box reversal. We've hit the downside target ($13.0) from the last significant top and we still have an upside target ($27) that has yet to be hit from the last significant low. We've also broken the...
Awesome, hopefully these charts are useful to folks. In all fairness though I have changed how I have traded a few times since joining the private forum but definitely hit my stride.

I will keep my eyes open for 27 and 35 levels, PnF is usually spot on for its projections, thanks for the heads up!

Are you having issues with sierra historical charts? Tried both using sierra's historical charts and FXCM, this bar should not be an UT.
Attached Image (click to enlarge)
Click to Enlarge Name: daily.png Size: 81 KB
  • #23,934
  • Apr 9, 2013 10:14pm Apr 9, 2013 10:14pm
Quoting abhinkoi
So a test would only be called successful if next 2 bars are up bars?
Not exactly, techincally if the next bar is up a test is considered successful. But with this chart the reason why I mentioned 2 bars, was because the 2nd bar closes above the high of bar 1.

Quoting abhinkoi
This bar came after 12 bars from previous test. Were there any more successful tests in between? How to read those in between bars? Were they of any significance?
Yes.. In all honestly I went long on 5 bars prior the bar 3. I pointed out bar 3 because it is a perfect test.. small spread, dips below the previous bar and on very low volume.

As far as the in between bars, think of it this way. Before bar 1, we had a double bottom, around $20. Its highly doubtful that the stock would be accumulated at $20 only to see a distribution at $22. Once bar 1 was confirmed as absorption just looking for an excuse to buy.

Quoting abhinkoi
Is this true in all such cases wherever we see such 2 bar reversals in an upmove?
Or it is applicable on the effort to rise after a significant down move?
The reason why the 2 bar is significant in this case is because it appeared immediately after a potential weakness. Try not to place rules on the market, concentrate on what the market is telling you.

Quoting abhinkoi
Ok. So we shouldn’t take any tests which occur within the HV bar like we ignored the Bar 2 test. Correct? Please help me understand the above mentioned doubts.
This falls into trying place rules on VSA. Don't think about where the bar placement should be, or how exactly the bar should look. Concentrate on just reading the market.

So in reading this situation, we see bar 4. All we know at this point is that bar 4 is right at a previous top, high volume and on a gapped up, up bar. We don't know if this bar is absorption (strong) or if it the stock is being sold off. What we do know is that volume tells us that this is an important bar to watch and to watch how the market reacts to this bar. A few bars later we see a 2 bar reversal (weakness). Price comes down and then a test appears. I know that inexperienced VSA'ers will see this test and say to them selves "well we have weakness in the background, but this test means the market is strong!".. I have lost many trades with that same thought in my head!

So to answer this question, a trade shouldn't be placed here because we have a high volume up bar that is followed by a 2 bar reversal which showed that the high volume bar is likely to be weak. Now if the test was successful and priced pushed through the 2 bar, then this would still be strong and ok trade any other tests.

Please do your best not to place rules on VSA, spend the time to read and understand what the market is telling you. Trading is like trying to translate a book that is a foreign language that you can only understand every 3rd word. You have to piece the story together, sometimes a word has two meanings and you have to keep reading to find out which meaning the book meant.


Quoting abhinkoi
Thanks a million in advance. I apologize for asking so many questions.
Ask as many questions as you like, if you don't understand something ask us to explain it a different way. I am sure between HG, Kinsale and I and a few others we can get the point across.
  • #23,935
  • Apr 9, 2013 10:21pm Apr 9, 2013 10:21pm
Quoting SimpleDev
EU just seems a bit wonky and AU makes more sense to me. High volume on 2 up bars, each up bar followed by a down bar, I wouldn't say no to a ND or UT today. {image}
My daily charts were screwed up for Monday, so I avoided them again yesterday. If I had not avoided them I would have seen the SO. Got lucky there was nothing to short yesterday, but still..
Attached Image (click to enlarge)
Click to Enlarge Name: daily.png Size: 84 KB
  • #23,936
  • Apr 9, 2013 10:50pm Apr 9, 2013 10:50pm
Quoting KinsaleForex
I always forget to look at the horizontal counts as I prefer the vertical ones, where did you take it from? I presume the 7 columns at $15 across to C? Added to the low of the column before? You can see the chart itself has the price objective marked at 35, I just wasn't sure how they got it!
You are right, I used that area to make the horizontal count. Here is the chart:

Attached Image (click to enlarge)
Click to Enlarge Name: pnf on GE.jpg Size: 113 KB


As per the PO market in the chart, they use a vertical count. In that case, take the column that made the last buy signal, count how many boxes is in it and then add to its low. Will give the same price.
Here it is:

Attached Image (click to enlarge)
Click to Enlarge Name: GE vertical count.jpg Size: 116 KB


Stockcharts.com has some nice tutorials on P&F counting. Worth to have a look on it.
Cheers!
  • #23,937
  • Apr 9, 2013 11:07pm Apr 9, 2013 11:07pm
Quoting abhinkoi
Thanks Jo - Is there a specific pattern you would look for after such WRB HV/UHV up bar before you conclude whether its going to go up or down?
Well, not a specific pattern but I continue looking for VSA principles when prices fall.
Here is an example of what happened with euro yesterday. I think I wrote a post on it, showing the UHV up bar, showing weakness and was willing to short on a pull back. But, along the day, it showed signs that there was buying pressure there indeed, as the low of the bar(well, not exactly the low) was defended.
Remember to mark the low of any up bar with UHV or HV as the line in the sand to decide long or short. If the price breaks and stay below the low, it is a high probability short.
But it was a good short early in the session as the price stayed below its high and close. There are the 3 "trigger number" you must be aware in an up bar with UHV or HV: the high, close and low(the last line in the sand).
Well, here is the chart:

Attached Image (click to enlarge)
Click to Enlarge Name: euro example 1.jpg Size: 183 KB


And here is an example of the opposite, what I look for to see if the up bar is weak or strong. In this case, the price stayed more or less in the higher range after the HV bar finished, indicating that the SM was holding the price up to distribute all their inventory on better prices(in this case, higher prices).

Attached Image (click to enlarge)
Click to Enlarge Name: euro example 2.jpg Size: 147 KB


I know that these are poor examples but I think you get the idea. :-)

Cheers!
  • #23,938
  • Apr 9, 2013 11:18pm Apr 9, 2013 11:18pm
Quoting SimpleDev
My daily charts were screwed up for Monday, so I avoided them again yesterday. If I had not avoided them I would have seen the SO. Got lucky there was nothing to short yesterday, but still.. {image}
Nothing to add. You've been all over this one. Here's my chart.

That KRB is a low volume Shake Out or Basic Test.
Attached Image (click to enlarge)
Click to Enlarge Name: ex 12.png Size: 158 KB
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #23,939
  • Apr 9, 2013 11:36pm Apr 9, 2013 11:36pm
I am not good in multi time frame analysis but will try one with the euro, as it is an area that I have to improve a lot. So, please help me with this one!

Here is a daily chart. I see no signs of weakness and the only immediate threat is the resistance level indicated.

Attached Image (click to enlarge)
Click to Enlarge Name: euro daily.jpg Size: 151 KB


Here is the 4hr chart. It is a bit more concerning related to an extended up move because the falling volume with higher prices. And we can see better the supply zone above us:

Attached Image (click to enlarge)
Click to Enlarge Name: euro 4hr.jpg Size: 173 KB


The 1hr chart shows we are in an up trend on this time frame(that I think is good to plan intraday trades):

Attached Image (click to enlarge)
Click to Enlarge Name: euro 1hr.jpg Size: 183 KB


Conclusion: I am a bit lost on what to do with euro now. I can see some small space for aggressive shorts with small take profits. And if we get a retrace to around 1.3060 or even 1.3030, we can engage longs to bigger profits(at least a test of the last highs).

What do you guys think?
  • #23,940
  • Apr 9, 2013 11:38pm Apr 9, 2013 11:38pm
Quoting HiddenGap
Nothing to add. You've been all over this one. Here's my chart. That KRB is a low volume Shake Out or Basic Test. {image}
I am going to have to start learning this, this weekend. HG you make the supply/demand zones look easy and useful! Thanks buddy.

Kinsale/Jo you want to show some of your PnF goodness on this stock?

CLF Daily..

From a VSA stand point, we have bag holding, then a 2 bar and followed by a test. This setup is still a bit early to start trading, has been in a wicked down trend since mid 2010, so we will want to see some positive results and testing on the lows.
Attached Image (click to enlarge)
Click to Enlarge Name: 2013-04-09-TOS_CHARTS.png Size: 107 KB
106 traders viewing now