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vsa with Malcolm

  • #26,421
  • Mar 2, 2015 12:59pm Mar 2, 2015 12:59pm
Quoting KinsaleForex
{quote} Hi ZD, is this a hypothetical question or do you perhaps have a chart as an example? Just wondering have you had a trade where this happened?
Hi It's happened a few times, I didn't keep any charts unfortunately. It usually happens that I see weakness, then a lack of demand so I take a short position and then the market shoots up, takes out my stop and then plummets.

I think I've just been unlucky and ran into a few Upthrusts/SOs recently. I've started putting an extra few pips on my stops but on occasion it's rocketed like 20 pips past my stop. Wasn't news either.

For SL how far past the swing point should I place my stop? I add 1 - 2 pips for spread, then another 3 - 4 for safety - is that acceptable? Talking M5 M15 here.

And for entries should I be looking at a close above my SoS/SoW? Or price moving moving above/below the tip of the candle?

My demo trading has been going well though, thanks to the advice and direction of peoples on this forum. Cheers!
"Never Take a Trade You Don't Understand!" - Pres78
  • #26,422
  • Mar 2, 2015 10:21pm Mar 2, 2015 10:21pm
Quoting SimpleDev
{quote} If you arent sure you can always mark off the high/low and watch how price reacts.

The red bar comes up to the bottom of your bar with low volume, if you shorted this you would have been stopped out.

Thank you everyone for simplifying things here...

about shorting at that point, well the close of the high volume bar in question was well off the low I wouldn't want anything like this in the bg if I look for a short, also the spread of the up bar (your red bar) is too wide for me, but marking the high/low and watch how price reacts bit was fantastic.....para pa pa pa i'm loving it.
The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #26,423
  • Edited 1:52am Mar 3, 2015 12:56am | Edited 1:52am
Expecting Guidance specially from Pres78, HG and Kinsale .
2,8,9 are kicking in my head all the time.
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Think Twice Low Volume is Key to Success
  • #26,424
  • Mar 3, 2015 1:30am Mar 3, 2015 1:30am
Quoting classix
Expecting Guidance specially from Pres78, HG and Kinsale . 2,8,9 are kicking in my head all the time. {image}
Hi classix,

VSA can be a confusing concept especially when you are bar-by-bar focused. As it's been mentioned over the more recent posts, try to look at the bigger picture. Focus your analysis on a swing by swing basis and make your comparisons with volume and the spread which Wyckoff termed effort vs result. Are the demand swings decreasing? Are the supply swings increasing?

Your understanding on SOW and SOS seems to be a little muddled and from looking at this picture from judgement only from what the chart shows it seems price could be in 're-distribution'. Google that under Wyckoff terminology and you'll see a market structure that gives you a great understanding on the potential to where price may go.

There are other schematics such as accumulation, distribution and re-accumulation that should be studied too.

Hope this helps you.
  • #26,425
  • Mar 3, 2015 3:08am Mar 3, 2015 3:08am
Quoting ZeeDeveel
{quote} Hi It's happened a few times, I didn't keep any charts unfortunately. It usually happens that I see weakness, then a lack of demand so I take a short position and then the market shoots up, takes out my stop and then plummets. I think I've just been unlucky and ran into a few Upthrusts/SOs recently. I've started putting an extra few pips on my stops but on occasion it's rocketed like 20 pips past my stop. Wasn't news either. For SL how far past the swing point should I place my stop? I add 1 - 2 pips for spread, then another 3 - 4 for...
If you can keep a chart the next time you see something and post then maybe someone can have a better look and get back to you.

Stop losses are really personal preference, if you get in at the right place and right time you can get away with a tight stop, other times a wider stop is needed. As a general rule i'd say at least place it above the high or below the low of a certain bar and not just in the middle of nowhere. Make sure there's a reason for the stop, be it above a ND entry or above the last high volume bar for example.

As far as entries are concerned, let's take a ND as an example. A lot of people will place an order at the low of the ND and wait to be taken in on the next bar. If you're not taken in within two periods then cancel it. Like I said, a lot of these questions are personal preference.

Glad to hear the demo trading is going well!
  • #26,426
  • Mar 3, 2015 3:52am Mar 3, 2015 3:52am
Quoting classix
Expecting Guidance specially from Pres78, HG and Kinsale . 2,8,9 are kicking in my head all the time. {image}
I really don't like the 4h chart, but i'll give it a go. Firstly, what does ETR mean?

I don't really have a name for bars 2, 8 and 9, maybe HG can shed some light on it but as usual, we shouldn't get too bogged down in what they're called and concentrate on what the result is. My understanding is that you need to wait for a reaction. In all these cases they turn out to be weak bars with the next bar down and further downside in the following few bars.
  • #26,427
  • Mar 3, 2015 4:12am Mar 3, 2015 4:12am
Quoting olambeth
{quote} Focus your analysis on a swing by swing basis and make your comparisons with volume and the spread which Wyckoff termed effort vs result. Are the demand swings decreasing? Are the supply swings increasing?Hope this helps you.
thanks learned something new.
Think Twice Low Volume is Key to Success
  • #26,428
  • Mar 3, 2015 4:15am Mar 3, 2015 4:15am
Quoting KinsaleForex
{quote} I don't really have a name for bars 2, 8 and 9, maybe HG can shed some light on it but as usual, In all these cases they turn out to be weak bars with the next bar down and further downside in the following few bars.
yes im also not intrested in names.. but thanks you understood in all cases these are weak.. they look like test or demand coming may be i am not sure.
ETR= Effort to Rise
ETS= Effort to Sell
Think Twice Low Volume is Key to Success
  • #26,429
  • Mar 3, 2015 4:47am Mar 3, 2015 4:47am
Quoting classix
{quote} yes im also not intrested in names.. but thanks you understood in all cases these are weak.. they look like test or demand coming may be i am not sure. ETR= Effort to Rise ETS= Effort to Sell
I can see why you think they're test like. Seeing them live at the right edge i would think "perhaps this is a sign of strength coming in". But then you have to ask yourself, what is it testing? Then wait for the following bar to see if it confirms a test.

Here's a thought, they're 4 hours bars, so there's a lot going on in each of them. I could be talking out of me arse but maybe think of them like this.
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  • #26,430
  • Mar 3, 2015 9:58am Mar 3, 2015 9:58am
Quoting SimpleDev
{quote} Yup! Your VZA mixed with risk control is absolutely amazing way to trade! I did away with the 50% and I dont go back as far as you do.. Just because I would confuse myself.
Yes it works well for me. I am a bit of a nut so I like to confuse myself ...

It works just as well playing the current UHV as they print. Mark the levels and trade the upcoming reactions. There are many days where today's UHV zone offers up tommorows trades.
Today's zone = Tomorrow's opportunity!
  • #26,431
  • Mar 3, 2015 10:05am Mar 3, 2015 10:05am
Quoting classix
Expecting Guidance specially from Pres78, HG and Kinsale . 2,8,9 are kicking in my head all the time. {image}
The problem with your 4 hour chart is that there are too many UHV bars with the same (or similar) volume so without heading down a few time frames it's almost untradable.

As for some of your confusion on the bars don't forget that if they test and find supply we end up with a failed test. Bar 2 for example the high was never taken out, but the low was. A test in a weak / distrubuting market is like a ND in a strong market... Polar Bear in Hawaii they call it.

Also being a 4 hr chart your bar 2 test printed during the first 4 hour bar of your chart so I assume during a lower liquity trading period.

Just remember all bars are not created equally as there are many factors to consider...
Today's zone = Tomorrow's opportunity!
  • #26,432
  • Mar 3, 2015 1:17pm Mar 3, 2015 1:17pm
Effort vs Results - If a bar moves up a substantial amount on low volume, this implies that there is very little selling. Yet Tom Williams (iirc) talks about wide spread, low volume bars being easily reversed. Is this because although there is no selling, the buying is also disingenuous and will be easily swamped by selling coming in at the higher price?

Or is there another explanation? It just seems that sometimes Effort vs Results doesn't hold true. I guess this is because of intermittent participation of the smart money and/or price manipulation counter to the path of least resistance - possibly to induce buyers who can then be sold into?
"Never Take a Trade You Don't Understand!" - Pres78
  • #26,433
  • Mar 3, 2015 7:56pm Mar 3, 2015 7:56pm
Quoting ZeeDeveel
Effort vs Results - If a bar moves up a substantial amount on low volume, this implies that there is very little selling.
I think you are thinking about Effort to Rise and Effort to fall. Effort to Fall is a wide spread down bar on low volume and is considered a sign of strength.

Effort vs Results is on page 38 in MTM, here is what is says:


If the market is already in a rally and high volume suddenly appears
during an up-day (or bar) and immediately the market starts to move sideways or even falls next day, then
this is a key indicator of a potential end to the rally. If the higher volume shows an increased effort to go
up, we would expect the extra effort to result in higher prices. If it does not, then there must have been
something wrong. This principle is known as effort versus results and we will cover this in more detail
later.

Basically what that is saying is if you see a lot of effort (volume) come in during an up move then the market starts to go sideways, that the sideways movement is the result of the effort.
  • #26,434
  • Mar 3, 2015 8:04pm Mar 3, 2015 8:04pm
Effort vs Result in action.

NFP is Friday, hoping to see a massive shakeout down into 1.1060.
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  • #26,435
  • Mar 3, 2015 9:51pm Mar 3, 2015 9:51pm
4h charts are difficult to interpret for me due to the lower volume trading time prior to the Tokyo open.
#8 on your chart was most likely a pre-news bar.
  • #26,436
  • Mar 4, 2015 1:27am Mar 4, 2015 1:27am
ok I would like to show you my "2 cents"....I like more h12 chart

I think or it looks like situation from Nov-Dec 2014...we made first part in Feb 2015 and if we make second part same as before in March 2015 for example I am opening long term positions for short
time will tell....
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do whatever the fuck you want to do !
  • #26,437
  • Mar 4, 2015 7:45am Mar 4, 2015 7:45am
Quoting icantmilk
ok I would like to show you my "2 cents"....I like more h12 chart I think or it looks like situation from Nov-Dec 2014...we made first part in Feb 2015 and if we make second part same as before in March 2015 for example I am opening long term positions for short time will tell.... {image} {image}
I can see where you are coming from, the volume on 2/3 and also looks like supply on 2/20.

Great chart.
  • #26,438
  • Mar 4, 2015 9:02am Mar 4, 2015 9:02am
So why is an Effort to Fall considered a sign of strength? I think this is what I am referring to. You've got a widespread downbar on low volume, this seems to imply that if it the bar managed to make a widespread down on low volume, then there must have been very little resistance to it's move downward i.e. a lack of buying. So why does that show strength?
"Never Take a Trade You Don't Understand!" - Pres78
  • #26,439
  • Mar 4, 2015 9:12am Mar 4, 2015 9:12am
Annoying.
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  • #26,440
  • Mar 4, 2015 9:37am Mar 4, 2015 9:37am
Quoting ZeeDeveel
So why is an Effort to Fall considered a sign of strength? I think this is what I am referring to. You've got a widespread downbar on low volume, this seems to imply that if it the bar managed to make a widespread down on low volume, then there must have been very little resistance to it's move downward i.e. a lack of buying. So why does that show strength?
The idea behind Effort to Fall is there is a lack of sellers. In MTM Tom talks about you want to see expanding volume for a move to sustain itself, I don't use Effort to Fall in my trading.

My advice is to learn to identify stopping volume and testing, once you get those down then work on S/R.

Work on finding Major S/R then minor S/R. Look to open positions at major S/R and add to your position at minor S/R, using VSA setups.

Yellow and Red lines are Major support and resistance, whites are minor.
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