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vsa with Malcolm

  • #26,481
  • Edited 2:20pm Mar 17, 2015 11:51am | Edited 2:20pm
Got some pips on this GU short on a 30M display. (edit: 1410 pm - First rule of trading as Lefarve reported Livermore's pals informed him is 'Don't be a sucker.' An important principle thereof is to not chase price. Since GU has broken below major inflection prices on the monthly and quarterly charts, it seems to me like chasing to short and hold, so it treated this as a scalp. I expect GU to wash and rinse several times before it bounces or sells down towards 1.43. The major news releases affecting GBP tomorrow morning 0530 ET will afford ample opportunity for primary dealers to mark it up and down. Should be fun. Gotta get up extra early.)
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  • #26,482
  • Mar 17, 2015 3:08pm Mar 17, 2015 3:08pm
Quoting rbumbalough
Got some pips on this GU short on a 30M display. (edit: 1410 pm - First rule of trading as Lefarve reported Livermore's pals informed him is 'Don't be a sucker.' An important principle thereof is to not chase price. Since GU has broken below major inflection prices on the monthly and quarterly charts, it seems to me like chasing to short and hold, so it treated this as a scalp. I expect GU to wash and rinse several times before it bounces or sells down towards 1.43. The major news releases affecting GBP tomorrow morning 0530 ET will afford ample...
Before I get started, I want to say to the newbies, "Trade what you see".

With that said, my volume is a little different. The Up Thrust on my chart is actually an Up Thrust (in the form of No Demand). In other words, the Up Thrust is not appearing on increasing volume, but rather on volume less than the previous two intervals. As far as I am concerned, that does not change anything.

The volume on the Two Bar Reversal, however, does give me pause. On my chart, it is clearly the highest volume that can be seen. That high volume connotes a lot strength.

Since we are in a Down trend, we should only be looking for shorts. My thoughts, however, would be that we might only retest the low of the second bar of the two bar reversal. With that in mind, waiting for confirmation becomes a bit of a problem. The confirmation bar (the bar after the Up Thrust) could calapse all the way down to the price target before we have a chance to get in. I would want to get in a couple pips below the low of the Up Thrust on the confirmation bar while it is still forming. And thus is would have not yet confirmed the weakness.

Also note on my chart that this confirmation bar is itself No Supply. Now what do you do? After the Up Thrust, you would really like to see an increasing range bar on increasing volume (not too high). This bar is neither. So, while it is a confirming bar (confirmation meaning it closed lower after a Sign of Weakness), it is not the best bar to see after a Sign of Weakness.

Don't get me wrong. I love that you had a plan and you traded your plan. I'm just trying to get a little friendly discussion going here. Which is why I probably should have started off by saying, "Well done".
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #26,483
  • Edited 11:39am Mar 18, 2015 11:27am | Edited 11:39am
Has anyone found a solid solution to getting M3 on MT4? I tried the Period Converter but it doesn't seem to work that well. It won't display certain indicators and earlier I took a trade on UJ and it put my trade on EU?! Managed to get out at BE lol.

edit - The PeriodCon509 indicator in this thread seems to be working ok at the mo' .... http://www.forexfactory.com/showthread.php?t=206301
"Never Take a Trade You Don't Understand!" - Pres78
  • #26,484
  • Mar 18, 2015 2:50pm Mar 18, 2015 2:50pm
Quoting ZeeDeveel
Has anyone found a solid solution to getting M3 on MT4? I tried the Period Converter but it doesn't seem to work that well. It won't display certain indicators and earlier I took a trade on UJ and it put my trade on EU?! Managed to get out at BE lol. edit - The PeriodCon509 indicator in this thread seems to be working ok at the mo' .... http://www.forexfactory.com/showthread.php?t=206301
One valued person, Cja, some time ago gave me what you wanted.

The link is http://www.forexfactory.com/showthre...19#post8138619

Best,
D.P.
Hunting High and Low
  • #26,485
  • Mar 18, 2015 3:36pm Mar 18, 2015 3:36pm
I have one question, why do you trade (or want to trade) M3?
english isnt my mother tonque
  • #26,486
  • Edited 1:34pm Mar 19, 2015 8:40am | Edited 1:34pm
Nice simple, lower high, no demand -> price freefalls. I probably got out a bit early but in real time it looked like a big price bounce off the 3/4 number line, which was near previous support.

@Wenaaa - 3 min just seems right to me. I'm always switching between M5 and M1 otherwise.

@Dr. P Thank you for the indicator, unfortunately it doesn't aggregate the volume feed.
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"Never Take a Trade You Don't Understand!" - Pres78
  • #26,487
  • Mar 19, 2015 10:52am Mar 19, 2015 10:52am
Can anyone tell me what went wrong here?

here's my reading:
Point A: Potential selling
Point B: SoW
Point C: more selling?
Point D: confirmed no-demand

so why PA moved up instead of going down? what did i miss here? not in downtrend? or point C are up bars with increasing volume so that's a SoS?

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The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #26,488
  • Mar 19, 2015 11:38am Mar 19, 2015 11:38am
Quoting Vcv13
Can anyone tell me what went wrong here? here's my reading: Point A: Potential selling Point B: SoW Point C: more selling? Point D: confirmed no-demand so why PA moved up instead of going down? what did i miss here? not in downtrend? or point C are up bars with increasing volume so that's a SoS? {image}
You are right that there was sellers in bar A (had to be to give us that close so far off the high) however by the time bar B printed you should have seen that any sellers that were there in bar A had been absorbed.

Next point I see is that while bar D was a ND, you call it confirmed based I assume on the low being taken out. Hard to tell from your chart but despite the fact the 2 downbars after did make LL than the ND I would say we did not (or barely did) closed below the low. All of this despite the fact that we say increased activity on the bar right after D. The second downbar was a test/NS and this would have been enough to close out any shorts off that ND.

Final point is a ND that low and close to the lowest prices seen in a month would be a terrible place for the SM to sell from. They would take prices higher in a re-distribution range if lower prices were truly in the near future.
Today's zone = Tomorrow's opportunity!
  • #26,489
  • Mar 19, 2015 12:16pm Mar 19, 2015 12:16pm
Hello. A trader is only right if they are making money. I'm not making money, so I'm not right. Consequently, whatever I post should be critically examined for fitness and use. (BTW, If I've offended any readers, please accept my apology. )

Got me some pips though using a VSA and Wide Range Bar guidelines setup.

1. USDCAD rallied into upper price range of a prior wide body bar from Yellen's comments in the FOMC minutes and exhibited an up thrust or supply coming-in bar.

2. Opened a short scalp at the close of subsequent effort to rise bar as distribution (weakness) occurs on up bars.

Here's my chart.
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  • #26,490
  • Mar 19, 2015 12:30pm Mar 19, 2015 12:30pm
Quoting Vcv13
Can anyone tell me what went wrong here? here's my reading: Point A: Potential selling Point B: SoW Point C: more selling? Point D: confirmed no-demand so why PA moved up instead of going down? what did i miss here? not in downtrend? or point C are up bars with increasing volume so that's a SoS? {image}
I'll let you know how I see things.

Firs off, the trend is DOWN as we get to the first point of interest. So the fact that you are predisposed to look for shorts is correct. Correct may not be the best word. Trading in the direction of the current trend tends to offer a higher probability of success. Note that I said probability, not certainty.

On to the intervals you noted.

Point A: This is a very tricky bar. While weakness does tend to appear on UP bars, not all UP bars are weak. Note that this bar does not make a higher high, but it makes a lower low than the previous bar. Note also that it closes in the middle of it's range. The fact that the interval makes a lower low and then closes on or near it's midpoint means that there was some BUYING that came in. This of course would be confirmed as the next bar is UP.

From your chart, we must also note that the volume on this bar is the highest volume that can be seen. Therefore, if you determine that this bar is strength, you would have to also have to conclude that this the most strength that has been seen in some time.

Point B: Not quite a two bar reversal (TBR), but very close. Ultimately, we have an UP bar on high volume with the next bar closing DOWN. That means there had to be some SELLING on that UP bar. I would note that the second bar here has increasing volume and a decreasing range.

Point C: So many things going on here. First off, we note that this bar is making a new fresh low. It makes a new low, but closes near the high of its range. Speaking of range, it is an outside bar. That means it makes a higher high and a lower low than the previous bar. We can term this an engulfing bar. We are using the candle term, but we are not referring to the bodies rather the ranges of the bars. Many would also use the term "outside key reversal" when looking at this bar.

From your chart, it does look like the interval before Point C is No Supply. Which would be further evidence of the strength of Point C.

Since Point C makes a new low, we can also start to see volume divergence.

Many things point to C as a bar of strength.

Point D: This is No Demand. Technically, the trend is still DOWN. We've just made a lower high (B) and a lower low (C). However, we have witnessed a lot of strength coming into the market. That is to say, the immediate background is strong. We have not yet seen a change in behavior to now favor getting long, so we would still only be looking to get short (or stay out. Staying out is a trading decision too).

In the end, I do think there is enough evidence of strength entering the market to not warrant taking the short trade. Or at least enough to tell you that a short trade, while still favorable, is now lower in probability of success.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #26,491
  • Mar 19, 2015 1:48pm Mar 19, 2015 1:48pm
I'd also add that the volume at point A is considerably higher than at point B. If Smart Money was preparing to get short, I'd expect to see higher volume coming in at point B when the market has moved up in price and presents a better area for getting short than at point A. The high volume at point A which is at the bottom of a down move indicates accumulation - to me.
"Never Take a Trade You Don't Understand!" - Pres78
  • #26,492
  • Mar 19, 2015 11:07pm Mar 19, 2015 11:07pm
Quoting HiddenGap
{quote} Firs off, the trend is DOWN as we get to the first point of interest. So the fact that you are predisposed to look for shorts is correct. Correct may not be the best word. Trading in the direction of the current trend tends to offer a higher probability of success. Note that I said probability, not certainty.

Yeah I was so blinded by the no-demand (which was not a high quality one as pointed out by pres78) in the downtrend that I overlooked even the basics. There was everything I needed to short, potential selling, two bar reversal, & a ND with the trend down lol

Anyway, thank you HiddenGap, pres78 & ZeeDeveel for being so helpful, I really learned a few absolutely new stuff today.
The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #26,493
  • Mar 20, 2015 5:17am Mar 20, 2015 5:17am
Here's a lil different observation of the same chart:

We can see that price failed to sustain below the low of those two high volume bars [A & C], a support base has been formed there, so any short entry would of been only on a confirmed SoW after this support was breached.

At point D we have a two bar reversal as the up bar made a new low, I suppose we could also call it a bear trap.

Some supply at bar E, as a result PA moves sideways, finally a NS at F followed by an effort to rise, absorbing all the supply in the zone of bar E. There was a long entry here at the close of this bar with target high of bar B [green horizontal line] as it is still a downtrend.

Only if I had seen some strength in bar A like HiddenGap pointed out & bar F as a no-supply like pres78......

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The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #26,494
  • Mar 20, 2015 10:17am Mar 20, 2015 10:17am
Quoting Vcv13
Here's a lil different observation of the same chart
Just thought I would throw out my opinion..

4h is an odd timeframe and you do seem to be doing well with it. I would just say that you may want to consider adding 1h TF into your tool box.

Take a look at 1h from March 6th. Massive volume there that you don't see on the 4h chart, looking at the volume from March 11th-17th, I wouldnt entertain any ideas of being long. Nice selling into the low of that March 6th bar on March 18th.
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  • #26,495
  • Mar 20, 2015 12:48pm Mar 20, 2015 12:48pm
I agree... 4H is really weird, it's so hard to compare volumes because the volume is completely dependent on the time of day.

With an hour chart you have like between 8am GMT and 4pm GMT of good volume candles to compare. With 4H you have like 2 high volume candles and the rest are Asia / Australian session etc
"Never Take a Trade You Don't Understand!" - Pres78
  • #26,496
  • Mar 20, 2015 8:26pm Mar 20, 2015 8:26pm
GU
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Trading 24/h
  • #26,497
  • Mar 20, 2015 11:45pm Mar 20, 2015 11:45pm
Thanks Simpledev for those encouraging words.

Yes I did check 30mins charts before but that last post from Hiddengap has made me love 4H even more now.

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The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #26,498
  • Mar 21, 2015 3:01am Mar 21, 2015 3:01am
from previous discussion :
1. What is the best Time Frame to trade for VSA?
2. Is it possible to trade only one time frame or do we need another TF for confirmation?

Maybe we should make a polling just to know which TFs are using among traders here :

Me : M30
Malcolm : Which TF uses Malcolm for his trading? (is he doing well now?)
Hidden Gap : M3 + ...
  • #26,499
  • Mar 21, 2015 1:48pm Mar 21, 2015 1:48pm
Quoting dogol
from previous discussion : 1. What is the best Time Frame to trade for VSA? 2. Is it possible to trade only one time frame or do we need another TF for confirmation? Maybe we should make a polling just to know which TFs are using among traders here : Me : M30 Malcolm : Which TF uses Malcolm for his trading? (is he doing well now?) Hidden Gap : M3 + ...
Don't take this the wrong way, but you are asking the wrong question. The question is not, "What is the best time frame for VSA?". The question you should be asking is, "What is the best time frame for ME?".

The principles of VSA work in all markets and on all time frames. Therefore, one just needs to determine what time frame suites his or her own "trading makeup". A you a swing trader? Does the prospect of holding a trade for 5 minutes make you pull out your hair? Is your account large enough to handle the necessary stop (risk) levels needed to trade for the points a market typically makes in weeks, rather than in minutes?

As far as trading only one time frame goes, my opinion is well known.

When I first started to learn about WRB Analysis, I noticed two things. The first was that most of Mark's charts were 3 minutes. And the second was that only one time frame chart was needed for analysis and entry. Other time frames can be used for entry, but are not necessary. When other time frames are used, it is mainly for advanced price action trading. For example, a doji on one time frame will be a hammer on a lower time frame. So if you only trade hammers, when you see the doji on one time frame, you can do down a time frame or two to find a hammer. When you have a multi-interval entry signal pattern and one of the intervals you are looking at invalidates the pattern, often times move up (or down) a time frame will reveal that multi-interval signal pattern as valid. But that is advanced price action theory and beyond the scope of what we are discussing here.

Another method that resonates with me, uses a 1 minute chart only. Market profile charts are used for bigger picture analysis. But real time trading decisions are based on the 1 minute chart (for the ES. For the YM and TF it is 2 minutes). I do believe they use a 3 minute for the Euro. Technically the method is applicable in all time frames. If a method only works in a certain time frame, it is suspect at best. That usually means a large degree of curve-fitting and optimization has taken place.

I then make the logical assumption, if VSA is closer to the "truth" then it should preform at least equally as well using a single time frame. Of course, my assumption may not be as logical as I believe it to be. But at the end of the day, we're really just back to the question, "What time frame (and how many) are best for Me?". Bill Williams once said, " Spending more than 5 minutes analyzing a chart is nothing more than mental masturbation". I would not agree with that. But in my opinion, looking at 4 or more time frames comes close to an exercise in Intellectual self gratification.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #26,500
  • Mar 22, 2015 7:12am Mar 22, 2015 7:12am
Quoting HiddenGap
{quote} Don't take this the wrong way, but you are asking the wrong question. The question is not, "What is the best time frame for VSA?". The question you should be asking is, "What is the best time frame for ME?". The principles of VSA work in all markets and on all time frames. Therefore, one just needs to determine what time frame suites his or her own "trading makeup". A you a swing trader? Does the prospect of holding a trade for 5 minutes make you pull out your hair? Is your account large enough to handle the necessary stop (risk) levels...

Thanks a lot Hidden Gap for nice explanation .... thump up
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