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vsa with Malcolm

  • #26,901
  • Jul 15, 2015 10:29am Jul 15, 2015 10:29am
Quoting Sonofsin5
{quote} Great Job finding something that's consistently working for you. The markets are now almost entirely controlled by machines and HFT black boxes; your system trades around high levels of activity where machine orders are most likely to generate their signals as well. Volume is activity, you've found a nice niche, keep it up.
Hey Sono... it's been awhile.

Be careful posting too much people may get excited thinking your back and they'll be lookin' for a chart or two.

It's always good to see a familiar face from the good ol' days.
Today's zone = Tomorrow's opportunity!
  • #26,902
  • Jul 15, 2015 11:00am Jul 15, 2015 11:00am
Quoting pres78
{quote} Trading does not need to be complicated.

When I watched Gavin Holmes videos I always wondered will I be able to do without TradeGuider?

BTW the GBPCAD made me a lot happier today.
The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #26,903
  • Jul 15, 2015 11:21am Jul 15, 2015 11:21am
Quoting Vcv13
{quote} BTW the GBPCAD made me a lot happier today.
Me too (well sort of... I am from Canada and my currency is taking a shit kicking)...

The concept remains the same. Regardless whether currency or CFD... trade the zones. Trade the activity.
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Today's zone = Tomorrow's opportunity!
  • #26,904
  • Jul 15, 2015 8:29pm Jul 15, 2015 8:29pm
Quoting pres78
{quote} Me too (well sort of... I am from Canada and my currency is taking a shit kicking)... The concept remains the same. Regardless whether currency or CFD... trade the zones. Trade the activity. {image}
Hi Pres,

Your entry bar was a down bar into the zone of the highest volume from yesterday. If I had been watching this pair and followed your VZA method, I would have placed a stop order above the up bar after your entry bar, where I indicated with an arrow. That up bar serves as a confirmation for rejection of the high volume zone. However, your entry was earlier and much better.

Could you please explain your entry rule here ? Why were you confident that price wouldn't go deeper into the zone ? Did you place a limit order, market order or stop order ?
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  • #26,905
  • Jul 15, 2015 8:30pm Jul 15, 2015 8:30pm
Quoting pres78
{quote} Me too (well sort of... I am from Canada and my currency is taking a shit kicking)... The concept remains the same. Regardless whether currency or CFD... trade the zones. Trade the activity. {image}
Questions:

Take a look at the chart below.

Clearly, the bar marked A has the highest volume and should therefore be a zone.

But what about B ? At the time it appears, it is clearly the highest volume bar. Should this be a Zone?

And what about C & D, do they create zones as well?

That's a lot of zones. It kind of makes me think about the old adage, "if you put enough lines on a chart, price will 'react' to one of them". Also I am not a fan of overlapping zones, is there a way around this?

And the last question, at least in this round . Bar A is a selling aggression bar. Not just a Selling Aggression bar, but a BearPower Selling Aggression bar. I know that does not mean anything to you, but if this is selling bar am I only going to be looking for shorts in this zone, or would I also look for longs? In other words, is a zone biased long or short based on the bar that creates it?
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #26,906
  • Jul 16, 2015 12:57am Jul 16, 2015 12:57am
Some valid questions raised by HG, now I'm eagerly waiting for some answers, I hope this discussion picks up steam.
The loss was not bad luck. It was bad Analysis - D.Einhorn
  • #26,907
  • Jul 16, 2015 6:39am Jul 16, 2015 6:39am
Quoting pooh123
{quote} Hi Pres, Your entry bar was a down bar into the zone of the highest volume from yesterday. If I had been watching this pair and followed your VZA method, I would have placed a stop order above the up bar after your entry bar, where I indicated with an arrow. That up bar serves as a confirmation for rejection of the high volume zone. However, your entry was earlier and much better. Could you please explain your entry rule here ? Why were you confident that price wouldn't go deeper into the zone ? Did you place a limit order, market order...
I trade these different ways depending on how much time I have. Sometimes I drill down to lower TF's to pin point entries and sometimes I stay on the higher TF and just trade off PA. For this trade I was busy at work so I set a pending at the high and a pending at the 50% (of that zone) with SL at the low as my read on LO to NYO PA was a continued base of accumulation with higher prices in order.

Plus my poor CDN dollar is weak as crap so...

Do I wait for confirmation? Sometimes yes but many times no as I am extremely confident in my reads of the market and due to my lack of time I don't always wait.

That said however that is me and not what I recommend for most. I strongly recommend waiting for confirmation of signals so one does not get sucked in.
Today's zone = Tomorrow's opportunity!
  • #26,908
  • Jul 16, 2015 6:41am Jul 16, 2015 6:41am
Quoting HiddenGap
{quote} Questions: Take a look at the chart below. Clearly, the bar marked A has the highest volume and should therefore be a zone. But what about B ? At the time it appears, it is clearly the highest volume bar. Should this be a Zone? And what about C & D, do they create zones as well? That's a lot of zones. It kind of makes me think about the old adage, "if you put enough lines on a chart, price will 'react' to one of them". Also I am not a fan of overlapping zones, is there a way around this? And the last question, at least in this round ....
Quoting Vcv13
Some valid questions raised by HG, now I'm eagerly waiting for some answers, I hope this discussion picks up steam.
Some great questions HG (for which I have some answers)...

I will respond in detail when I have more time. Work continues to monopolize all my time!
Today's zone = Tomorrow's opportunity!
  • #26,909
  • Jul 16, 2015 8:17am Jul 16, 2015 8:17am
Quoting HiddenGap
{quote} Questions: Take a look at the chart below. Clearly, the bar marked A has the highest volume and should therefore be a zone. But what about B ? At the time it appears, it is clearly the highest volume bar. Should this be a Zone? And what about C & D, do they create zones as well? That's a lot of zones. It kind of makes me think about the old adage, "if you put enough lines on a chart, price will 'react' to one of them"{image}
If you would ask me these questions, I would either say well I follow a rule based system where the last high volume bar being the only important one. And will probly work on defining it more to lessen confusion in my trading.

But the way I see it is, BAR D&B are selling bars. Bar A is the confirmation bar "cotcha bar" "supply bar" whatever. This bar is most important to me. I use this bar to also signall trend, who is in control etc.

Bar A to me is the most important in this chart, one reason because it proves everything before that was selling.
  • #26,910
  • Edited 9:25am Jul 16, 2015 9:12am | Edited 9:25am
Quoting HiddenGap
{quote} Questions: Take a look at the chart below. Clearly, the bar marked A has the highest volume and should therefore be a zone. But what about B ? At the time it appears, it is clearly the highest volume bar. Should this be a Zone? And what about C & D, do they create zones as well? That's a lot of zones. It kind of makes me think about the old adage, "if you put enough lines on a chart, price will 'react' to one of them". Also I am not a fan of overlapping zones, is there a way around this? And the last question, at least in this round ....
OK HG here's my answers.

Yes if you put enough lines on price will react to them. While that is true it has nothing to do with VZA or how I trade.

While I may leave old zones on I only do it for huge volume bars from the past that are above or below current PA as targets for any new trades and locations where new zones will most likely form.

Due to my lack of time recently (and my old age) I have been trading very simply using one current zone. That zone is the highest volume 1 hour zone from the previous trading day as the location where I want to see trade set-ups during the current day. Some days it happens for a pair, some days it does not. Many times we see a zone happen say the high of the day followed by a sell off. Asia takes prices back up and London opens and sells it off again from the previous days zone. These cycles happen over and over again. Some days however prices just keeps going and never comes back to the zone. Those days I just don't trade that pair.

So now to look at your chart a key piece of the puzzle was missing. The 1 hour zone from July 14th was not on there and is exactly where the selling was occurring at. London opened took price up a few times into the zone filling their sell orders. New York came to the table did their own little mark up and continued the selling.

By the time bar A prints I would already want to be in the market.

I would only use the 15 minute zones as they printed during that current PA as confirmation that volume was coming in at yesterday's volume just as I would be expecting to see. Once that highest volume bar (at the time) bar B printed and closed below the low of the 1hr zone I might throw a fib on and watch PA for an entry. In fact if you apply a line to the low of bar B you can see how after NYO PA spiked up into the low right before the big sell off on bar A.

Volume at volume, day after day.
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Today's zone = Tomorrow's opportunity!
  • #26,911
  • Edited 1:31pm Jul 16, 2015 10:39am | Edited 1:31pm
Another example of simple trading.

LO we have seen an entry into yesterday's 1hr zone after seeing support earlier in the day. LO and last bar before LO both test back up into this recently broken support and we then get a push down. We put a fib on this currently highest volume 15 minute bar and wait for PA. The low is promptly taken out and then we get a NBP / 2BR right into the low of the 15 minute bar. This SOW tells me we are most likely in for a continued push down. The nice thing is there is still loads of room in the ADR.

This entry has it all. Volume at volume, confirmation of the weakness and room to drop.

Now someone may ask "but what about that zone low?"

While it provided brief support the lack of buying pressure followed by ease of move back down to the low would tell me the low was going to give way. If serious buyers were present at that level we would be seeing increased volume on the down bars as they move into that level as buy orders are being filled.

Again this is all my take, my 2 cents and how I trade VZA-VSA... one size does not fit all.
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Today's zone = Tomorrow's opportunity!
  • #26,912
  • Jul 16, 2015 4:02pm Jul 16, 2015 4:02pm
Quoting pres78
{quote} OK HG here's my answers. Yes if you put enough lines on price will react to them. While that is true it has nothing to do with VZA or how I trade. While I may leave old zones on I only do it for huge volume bars from the past that are above or below current PA as targets for any new trades and locations where new zones will most likely form. Due to my lack of time recently (and my old age) I have been trading very simply using one current zone. That zone is the highest volume 1 hour zone from the previous trading day as the location where...
Awesome! Thanks. I really like this.

You mentioned the previous trading day. When do you start and end the day? Have you looked at basing the high volume zone on each separate session?

Also, while there are lines placed at the high, low and midpoint of the zone, are trades taken anywhere within the zone? In other words, if you see a test that is in the zone but nowhere near the midpoint, would it still be valid?

Are you only looking to take low volume signals in high volume, or is more high volume where high volume already showed itself?

How long are zones valid for? Do zones act as both "entry signal areas" and "profit targets"?

Sorry, if I am asking you to give away the keys to the kingdom.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #26,913
  • Jul 17, 2015 9:26am Jul 17, 2015 9:26am
1Hr zone from yesterday N.Y. (7/16)
It really just happens to line up with the lines that are always on my chart anyway, xx00,xx25,xx50,xx75 etc.
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  • #26,914
  • Jul 17, 2015 10:11am Jul 17, 2015 10:11am
Quoting pete148
{quote} If you would ask me these questions, I would either say well I follow a rule based system where the last high volume bar being the only important one. And will probly work on defining it more to lessen confusion in my trading.
Well, I'm glad I didn't ask you. JK. This is actually a great answer. What I feared was something like this:

After bar D, one would say, "This is the highest volume bar, let me draw my fib volume zone (FVZ) now". Three (3) intervals later, C shows up. Now the question becomes, "Do I change the FVZ to the new high volume bar, or do I expand the zone to include C's range, or do I draw another zone which overlaps?" Again, the same situation happens at B. Is one going to draw a new zone, expand an existing zone, or draw a zone overlapping another one.

Your answer is well defined and leads to consistency. While choosing a zone matters, always choosing a zone for the same reasons matters more.

Quoting pete148
..But the way I see it is, BAR D&B are selling bars. Bar A is the confirmation bar "cotcha bar" "supply bar" whatever. This bar is most important to me. I use this bar to also signal trend, who is in control etc. Bar A to me is the most important in this chart, one reason because it proves everything before that was selling.
Actually, they are BUYING Aggression bars with obvious signs of absorption. For every buyer there is a seller. So aggression is what moves the market. But in this case, one has to ask, " who's on the other side of the aggressive buyers ?". In other words, who are the passive sellers at the highs? Almost by definition, it's the professional or SM.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #26,915
  • Edited 12:07pm Jul 17, 2015 11:27am | Edited 12:07pm
Just to show this isn't about throwing on random lines until price reacts to it. Look at my EURUSD 4 hour chart.

Days separated by the green lines (at 00:00 of the new day).

Very simply I applied a fib on the highest volume 1 hour bar of each day this week and then for clarity and removal of noise I switched to a 4 hour chart (my chart is a New York close chart in case anyone is wondering)...

  1. Monday close below the zone, Tuesday return to the zone with sellers found
  2. Tuesday close below the zone, Wednesday return to the zone with sellers found
  3. Wednesday close in the zone, Thursday push below with a return to the zone with sellers found
  4. Thursday close in the zone, Friday push up to high with sellers found

Everyday the 1 hour zone from the day before played a role in the current days trading. This is what I exploit using VZA. I know everyday where the best place to watch for entries is. Will there be entries everyday... nope. But then again who cares because there are many pairs with great ADR's to watch.

Take a VSA entry of choice (low volume, high volume, pick your poison) if they present as price is reacting to the previous days volume zone. Rinse, repeat.

Nothing random or unplanned about it.

Very strategic, easily repeatable, as rule based as you can get .

Edit - Added chart that I forgot to attach... makes the market look a little less random now doesn't it?

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Today's zone = Tomorrow's opportunity!
  • #26,916
  • Jul 17, 2015 11:40am Jul 17, 2015 11:40am
Quoting HiddenGap
{quote} Awesome! Thanks. I really like this. You mentioned the previous trading day. When do you start and end the day? Have you looked at basing the high volume zone on each separate session? Also, while there are lines placed at the high, low and midpoint of the zone, are trades taken anywhere within the zone? In other words, if you see a test that is in the zone but nowhere near the midpoint, would it still be valid? Are you only looking to take low volume signals in high volume, or is more high volume where high volume already showed itself?...
HG I will do my best to explain but much of how I trade would easier be shown in a video or on a webinar or something because showing and talking is always easier than trying to describe details in writing on printed charts... something always gets lost, missed or confused.

 

  1. I use New York close charts so my day starts and ends at 5PM EST.
  2. No I have not (other than for scalping 1 min zones but that's a whole different topic)... Simple at this point in my life. 1 zone per day - use for the next trading day.
  3. Entries can be taken inside the zone however the preferred entries are into the low from below and into the high fom above. I consider the 50% as a hinge point where I would be more looking for shorts when price is below and longs above but that is NOT a fixed rule. Take today on EURUSD... The high was the location for the short today. There is still the need for being able to read and understand PA and what the bar prints and volume are showing us. As for the test in the zone but not at a level... as with any test for me it HAS TO BE TESTING SOMETHING. A test floating in space is like a ND in a raging uptrend... useless (to me anyway).
  4. I take low volume and high volume entries, again based on my read of current PA.
  5. For the most part they remain valid for that current trading day then at the end of day I remove the yesterday zone and apply the today zone for use in my tomorrow trading. I will look at levels 50% and 100% ADR above and below daily open for any Yeo Ming type volume or really key looking turning points for targets of where price may stay or turn for use in profit taking etc...

As I said I have some nuances (based on years of screen time) that I can't describe in writing on how I trade, place and plan these zones but that's the short and sweet of it.

Today's zone = Tomorrow's opportunity!
  • #26,917
  • Edited 12:22pm Jul 17, 2015 11:45am | Edited 12:22pm
Quoting pres78
{quote} HG I will do my best to explain but much of how I trade would easier be shown in a video or on a webinar or something because showing and talking is always easier than trying to describe details in writing on printed charts... something always gets lost, missed or confused... .
Invitation accepted .
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #26,918
  • Jul 17, 2015 2:20pm Jul 17, 2015 2:20pm
Quoting pres78
Now someone may ask "but what about that zone low?" While it provided brief support the lack of buying pressure followed by ease of move back down to the low would tell me the low was going to give way. If serious buyers were present at that level we would be seeing increased volume on the down bars as they move into that level as buy orders are being filled.{image}
Thank you so much another question answered .. Your are really a hunter and understand herds like us.. BTW sir when your going to plan and upload recorded video..
Think Twice Low Volume is Key to Success
  • #26,919
  • Jul 17, 2015 5:11pm Jul 17, 2015 5:11pm
Hello guys

Following the method explained by pres78 , how would trade the 15 of july on AUDCAD ??
I have mentionned the HV zone of the 14 july by a rectangle

Let's see ur point of views !
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  • #26,920
  • Jul 17, 2015 6:58pm Jul 17, 2015 6:58pm
Quoting baidovich
Hello guys Following the method explained by pres78 , how would trade the 15 of july on AUDCAD ?? I have mentionned the HV zone of the 14 july by a rectangle Let's see ur point of views ! {image}
That is one ugly moving pair. For me if it doesn't have EUR, GBP or USD in the pairing I stay away as I want pairs that are most active during London and NY sessions plus that is two of the weakest currencies paired up thus the horrible less than 400 pip range the pair has been stuck in since April yikes!

The only reason the pair moved at all on the 15th was CAD dropping their rate by 0.25%.

Mind you the whole move up on news came from the previous day zone low so...

Looking even at lower TF I have no idea how I would have traded that pair on the 15th which for me means no trade.
Today's zone = Tomorrow's opportunity!
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