vsa with Malcolm

Thanks for the quick response

Let me say this to you and everyone else trying to learn from this thread, before I go into your questions.

If you want to find any kind of success from trading you have to make trading your own. Once you have read and understand MTM, then you can move on to reading this thread... But seriously try to limit yourself to 5 or 10 pages a day, the rest of your time is better spent looking at your own charts. Everyone sees these charts differently and will have their own twist. You can study HGs charts all day but they will not do you any good if you don't/can't see the same things he sees.

If you are first starting out and you understand VSA concepts but have no clue where to start on your own, then start by just identifying strength/weakness. Once you make some progress then move on finding LV entry bars that match the strength/weakness.

Now.. On to your questions.

From what I have gathered from Malcolm's post is that he played S/R mixed with VSA. If you look at his posts and the calls he made, when he was right he was usually dead on with his calls. He played to his strengths and he didn't have any issues just entering into the market when he saw demand/supply at area he was already looking for demand/supply. He told everyone to trade with the trend, but you will notice the majority of his trades were against hulls.

If you want tradition VSA HG is probably your best source, he doesn't fight the trend and is very adept to bar by bar analysis. Intel is very good at the 3 bar setups, but I wouldn't call him as traditional as he takes a lot of counter trend trades.

As far as hiding foot prints, I seriously doubt this thread/Tradeguider has any impact on it. Its probably done to more on the basis of institution vs institution. One of those random facts that has been thrown around on FF, which may or may not be true, is that retail traders make up about 10-15% of the cash that is traded in Forex. If I had to pick I would say that is more true than not. They don't care what we do.

They probably will get better at it, but at this time I am not sure that they will be able to find away to hide massive stopping volume.

Here is a chart, I didn't take it because I didn't see enough volume. But the PA and the small spike in volume at least should have told us longs were a bad idea.

Well written post SD. I have some thoughts on this topic also but too busy to share now, perhaps this weekend if I find the time. Nice to see some new faces and some action in the thread again. I have been trading less that my normal part time as work is still extra nuts right now but I still take a few moments each day to keep up on my reading here at Malc's...

I hope to find more time in the new year to start posting some more and maybe even get back into sharing some charts.

Many thanks SimpleDev, very clear. I'm in #30 post, but I started HGs pdf.

Like I said, volume aside ... but If you want an explanation according to VSA, maybe pres78 could bring in some thoughts as we have observed those with him in the past. Myself am observing only this pattern without volume and it most definitely always (almost) appears near some s/r area. And I'm always going long after this

Thanks 1pipperhour I will keep an eye out for this pattern and then perhaps look to the lower timeframes to see more details as to its behaviour.

Well said SimpleDev One tip I found whilst reading MTM was to make VSA flashcards and learn them everyday, this helps me to spot things on the charts easier.

Interesting Kingsford

Triple witching week. Careful on your volume reads towards the end of the week.

I'm not sure about lower tf, generally hourly is the lowest I go.

It's Halloween all over again...

Guys please can you help me with this question, I am not sure about it:

Testing as low volume down bars after a sign of weakness means a strong market = true or false

many thanks

Did you mean to say after sign of strength?

I wrote a post on tests a while ago, not sure if you will find your answer or not in it but here is the link;

http://www.forexfactory.com/showthre...25#post7091625

Great analysis of the Test Pres thank you, I was watching a great video of Sebastian Manby speak about Tests and he said 'Testing as low volume down bars after a sign of weakness equals a strong market'. I thought about it for a moment and think he actually meant to say after a sign of strength not weakness?

For example, we see a selling climax with stopping volume, a bullish reaction on high volume and as the market moves up higher we then see a test on low volume down bar, the next bar is up which confirms a No Supply/Test and up we go = strong market with strength in background.

Well I am certainly no Seb Manby but if that is what he said, it is what he most likely mean't.

Think about what he said. If you see a SOW (or what is assumed to be a SOW) but then see low volume testing you are essentially getting VSA mixed signals. Now we can and will see tests which fail in a weak market. This has been discussed both on this thread and also in MTM. Tests that do not respond postively can in a weak market be a continued SOW and in a strong market can be a leading SOW.

So again back to what Seb said...

Let's use for example a BC (buying climax). In VSA we are taught that this is a possible SOW... this is what we need to remember until we get confirmation ALL of the VSA bars are just possibly something. The confirmation is what makes or breaks a bar. This is why TG has a manual of 3 bar set-ups. They consider the completion of the 3 bar pattern to be that required confirmation where each bar helps confirm the validity of the bar before. So again we see a possible BC which is a SOW as it contains sellers. What we don't know is whether the SM are the ones selling or if they are absorbing. We can get an idea if we look left to see where we are with respect to previous PA and where we are in history.

Many, many, many times we will get a BC (or what looks like a BC) as we push up and through resistance. However this does not end up being a true SOW as the market does nothing more than a weak retrace or perhaps a sideways push. What we will see then is a return to where the SM have remaining open buy orders they want filled. Usually during this process the VSA trader will end up seeing some low volume testing which may give them a long entry despite that "buying climax" in the background.

So as we can see tests after a SOW can well mean a continued strong market depending on background, chart location and market dynamics.

This is true just the same for tests in a known weak market where we get failed tests (lows are breached)... the same can happen in a strong market. We can get tests that fail. This is why we need to consider all factors and need to see the results and the bar patterns, not just the individual bars themselves.

That makes perfect sense thank you Pres, so a scenario could play out like this: we are in an uptrend which is displaying weakness as we see a buying climax on high volume followed by a narrower range upbar on less volume, supply coming in and a few bars later then a low volume No Demand, the market confirms no interest in higher prices by closing lower confirming the ND bar and ranges for a while. At a range support level we then see a low volume test of supply which is confirmed with higher prices, this is the test of previous weakness seen in the background and shows us that there indeed was previous weakness but now the successful test has shown us that indeed there are buyers interested in higher prices and indeed the market is now stronger. Supply and demand is imbalanced and up we go. Or maybe I have got it a bit twisted lol?

Many thanks pres78 .

First off what moves the market? Simple enough right? It's supply (sellers) and demand (buyers).

That said we also hear these sayings;

1. For every buyer there is a seller.
2. For every winner there is a loser.
3. The market is normally in a state of balance.
4. The biggest and most powerful looking moves occur when the market finds a state of imbalance which is usually a very temporary condition.

So if there is a buy order for every sell order and a sell order for every buy order how does the market move. Honestly the simple answer is they who have the deepest pockets ultimately decide whether the bulls or bears are the side to be on. Think about this if you will;

1. SM banks A, B and C have $10,000,000 USD to invest in the EURUSD at various prices say between 1.35 and 1.335 and want higher prices
2. Joe Blow Trader and the rest of the herd only have $7,500,000 to invest in the EURUSD (thousands of amateur traders with accounts from $100 - $20,000)
3. By the time the SM are done what the VSA world calls their ACC process they have now filled their $7,500,000 worth of orders all the while the small guys who get sucked in everytime price dips to sell have been stopped out or are locked into losing positions heading towards a margin call
4. As SM has filled the last of their orders price starts to head up, more SLs are hit most of the opposing orders are now gone and price is free to rise and the SM profit off the carnage of the herd they left behind.
5. By this point some of the herd have started to also buy and their orders are filled either by other herd sellers or even by SM now starting to close some of their buys for profit and even starting to actively sell.
6. Now the entire herd had figured things out, they completed their online traders training and now know buying is the only thing to do....
7. Problem is by this point SM have started the DIST process for lower prices and the herd are once again set to fail.

Now if you trade a small enough TF you can play both sides of the fence and make money on all the market ripples but only if you are skilled enough to read the signs on exactly when to get in and when to get out. At the end of the day we are on a higher TF (say Daily and up) either in an uptrend, downtrend or ranging market. Now when we hit a ranging market on a higher TF we are usually talking about a range of a few hundred pips or more but I think you get my point.

Once you have determined who is in control of a pair it can make life easier when trying to spot trades and also when trying to determine possible risk versus reward for entries you are watching. Is it with the trend or countertrend? This is a very key item to know so you can set your risk accordingly.

When I started out with VSA I did NOT understand this very well and as I was learning I traded mainly one type of set-up;

1. Climax bar
2. Confirmation bar
3. ND or NS or test for entry

I never paid much attention to where the entry occurred on the chart or even where the most likely targets were and as such took some bad trades. Then along came some conversation about trigger numbers and how it could be the H or L or C of a UHV bar. This intriegued me greatly as now it gave more purpose to my entries. I then started to take the position which I have stated on this thread many time before;

1. For me a test bar has to be testing something. If it's testing nothing of value in my eyes then it's just any other bar.

The whole triggers number conversation lead to months of testing and discovery which ultimately lead to the creation of VZA. VZA is volume zone analysis (for those less familiar with me and my countless ramblings). Basically I focused on UHV bars to which I applied a fib that marked the H, L and 50% levels of that bar. I then decided who controlled that bars zone formed by those borders based on PA and took low volume confirmation entries into one of those 3 levels based on who I deemed to be in control. This whole method evolved over time and a few other even followed along testing it out on their own. Basically what I learned was that the SM tended to be active in the same area's over and over again which added weight to the entries I was now watching for.

Volume at volume... Over and over again. I am sure some of you here and over at the now dead VSA forum are quite sick of that saying but it was true then and is true now. Why is that? At the time I knew it worked but I didn't know why it worked. That question lead me down the path of learning supply and demand zone trading. I related to it as it felt similar to my VZA but it helped me immensly in pin pointing tighter more precise entry zones. From this part of my journy I started to merge and grow my plan into what it is today which is basically using a combination of VZA and S/D for trade locations and VSA bars for entries.

It was not until I learned supply and demand trading that I truly understood why VSA and VZA worked. Volume at the end of the day = activity which is caused by selling and buying going on. Once you determine which side the SM are most in then you can use VZA and S/D zones to see where they most likely want to take price to fill more of their waiting orders. It is at these locations where we see the low volume ND or NS or test type bars which we can use for confirmation that the SM are in fact doing what we think. Now don't get me wrong there are times the moves are so quick and so powerful that we just don't get that pretty low volume entry and that's OK because tommorow there will be more entries.

In a bull market a test into a proven demand zone is just as good for me as a test of a proven supply zone. Actually a low volume test into a zone from which I saw SM actively buying is much safer. There was buying, we see no sellers in the test bar and boom back up we go. Demand tends to remain at demand zones until either all orders are filled or until all orders are absorbed so we are safer playing with the odds until the odds have shifted.

My biggest suggestion to anyone that wants to truly learn VSA and be successful with it short of forking out money to TG to buy software that basically tells you when to trade even though you haven't got a clue why you just went long is to spend some time learning to understand market dynamics, price structure, supply and demand patterns and how the market really moves. Then you can take the VSA bars and know whether what you are seeing truly makes sense and when an entry is truly safe and a nice high R:R.

I had a point when I started. I no longer really remember what that was so I am sorry for being long winded. I hope you find something of use.