# Reading 'Master The Markets' - Confused



## rcctradings (26 May 2014)

Been reading Master The Markets but got stuck making sense of the following:
Pg 32 – Testing Supply

_The danger to any professional operator who is bullish, is supply coming into his market (selling), because on any rally, selling on the opposite side of the market will act as resistance to the rally and may even swamp his buying. Bullish professionals will have to absorb this selling if they want higher prices to be maintained. If they are forced to absorb selling at higher levels (by more buying), the selling may become so great that prices are forced down. They will have been forced to buy stock at an unacceptably high level and will lose money if the market falls._

This seems to imply that a bullish operator would want to be buying at higher prices? Would it not be that one buys when the price is low (accumulation) and sell when the price is high (distribution)?
Am I missing something?
Would be great if a learned trader could share some enlightenment on the above.


----------



## nomore4s (26 May 2014)

rcctradings said:


> Been reading Master The Markets but got stuck making sense of the following:
> Pg 32 – Testing Supply
> 
> _The danger to any professional operator who is bullish, is supply coming into his market (selling), because on any rally, selling on the opposite side of the market will act as resistance to the rally and may even swamp his buying. Bullish professionals will have to absorb this selling if they want higher prices to be maintained. If they are forced to absorb selling at higher levels (by more buying), the selling may become so great that prices are forced down. They will have been forced to buy stock at an unacceptably high level and will lose money if the market falls._
> ...




It's not a very well written passage.

Essentially it is saying if supply comes onto the market and swamps demand buyers can get locked into the stock at higher prices.
It appears to be referring to buying during a rally not so much buying at the accumulation phase, but without reading the whole chapter can't be 100% sure.


----------



## cynic (26 May 2014)

"Beyond Greed" by Stephen Fay

is a book written about an ambitious attempt to corner the world's silver market. I believe it serves as an excellent real life example of the scenario that this passage cautions against.


----------



## luutzu (4 June 2014)

rcctradings said:


> Been reading Master The Markets but got stuck making sense of the following:
> Pg 32 – Testing Supply
> 
> _The danger to any professional operator who is bullish, is supply coming into his market (selling), because on any rally, selling on the opposite side of the market will act as resistance to the rally and may even swamp his buying. Bullish professionals will have to absorb this selling if they want higher prices to be maintained. If they are forced to absorb selling at higher levels (by more buying), the selling may become so great that prices are forced down. They will have been forced to buy stock at an unacceptably high level and will lose money if the market falls._
> ...




Says that when a trader who loves the stock and think it will go higher, will then find that as the stock goes up, and so he's bullish and think it will keep going up... then the market, seeing the price rising, then sell and so there are more stocks than demand for it. With more supply of stocks, for the pro to still be bullish, he must buy and keep on buying to reduce supply and so maintain the [illusion] of a higher and rising price.

But the more the pro buy, the more others will sell... and if he keeps it up, the pro will buy at higher and higher prices and might then be stuffed when he finds out he's the only one buying 

--

Makes sense, but not sensible... probably is useless.


----------



## burglar (4 June 2014)

rcctradings said:


> Been reading Master The Markets but got stuck making sense of the following:
> Pg 32 – Testing Supply ...
> 
> This seems to imply that a bullish operator would want to be buying at higher prices? Would it not be that one buys when the price is low (accumulation) and sell when the price is high (distribution)?
> ...




Been a while since I read "Master The Markets", and like you, I was left confused.


Money makers cannot control the markets, they just know which direction it is running.
I would suggest that "Pg 32 – Testing Supply" is a separate phase to accumulation or distribution.
My take would be, that they are testing that direction!


----------



## tech/a (7 June 2014)

*The Answer is Simple yet Complex---*

Volume and Bar structure or Spread are just one of many Technical tools.

 Like *ALL* analysis they *INDICATE* to those who understand the or any form of analysis Technical or Fundamental what is currently happening in the instrument being studied and at times what the potential for that instrument maybe through that analysis---going forward.

VSA is one of those analysis tools. One which I continue to use in my analysis on a daily basis.
But like *ALL* analysis they are (all analysis) dynamic. 

Its the dynamic nature of all analysis which in my view confuses many traders. They want their and any analysis of others to be set in stone. Its only when you understand how to adapt analysis (Any analysis) to the forever changing landscape of economics within your time frame and instrument that you will have any opportunity of achieving consistent profit.  

So *specifically* to the question and excerpt from "Master the Markets" 



> The danger to any professional operator who is bullish, is supply coming into his market (selling), because on any rally, selling on the opposite side of the market will act as resistance to the rally and may even swamp his buying. Bullish professionals will have to absorb this selling if they want higher prices to be maintained. If they are forced to absorb selling at higher levels (by more buying), the selling may become so great that prices are forced down. They will have been forced to buy stock at an unacceptably high level and will lose money if the market falls.
> 
> _This seems to imply that a bullish operator would want to be buying at higher prices? Would it not be that one buys when the price is low (accumulation) and sell when the price is high (distribution)?
> Am I missing something?_




There are important questions that need to be posed to the italicized question is---

Is accumulation strictly limited to lower pricing---and by that I mean after a drop or correction in price.
When then is a price "low enough for accumulation" and of course *HOW DO YOU IDENTIFY ACCUMULATION *
in isolation and for that matter* DISTRIBUTION*???

Most instruments spend a great deal of their time in various time frames consolidating---I'm a technical trader and think it important to be able to determine a likely outcome of consolidations through analysis---so to the Question related to the Question.

Lets look at some examples.








We don't want to be on the wrong side of trades so it always made sense to me that if there are signs that can be used to INDICATE a direction in price action particularly in multiple time frames and instruments---then it was worth learning.
So how then can we best take a trade given the information on the charts ---(The two above) to profit??

Some questions then before I go further to answering the question/s.

Whats happening in these consolidations?
Which bars are the most important bars.
What do they tell us?
Where are the entries--Best and not so best and why---are there any??

*Are we going to but a high which is too high ??
Are we going to buy a low which is low enough ??*


----------



## rcctradings (7 June 2014)

Hi folks,
All good points as contributed.
I can try and make sense that an increase in volume at the bottom of a downtrend might indicate that the big moneys could be busy buying at bargain price (accumulation?) and volume drying up at the top of a rising trend might indicate the end of the distribution phase.
Which bars tell me we're at the top/bottom?
How do they manage to help the price rise steadily?
How do they trigger the panic selling?
Do they buy some during the downtrend? What's an ok price?
What are the tell tale signs to help one "read between the bars"? Which bars are the significant ones in relation to what the volume is saying?
Some more pointers please!


----------



## tech/a (9 June 2014)

To help discover the answers to your questions lets have a look at the First consolidation and its top.
I have labelled the most important aspects
See if you can use them to consider the direction most likely in the Small consolidation I first posted and also in the largest one I have posted.

I will look at them both in more detail after there has been some---or any discussion.

*Click to Enlarge*


----------



## Faramir (9 June 2014)

I need help with Area 5. Low activity means that someone is waiting for news/announcements? Attention has been taken away from this stock while everyone focuses on another one? Everyone who wanted to sell has sold and buyers have dried up? The next '1' spike (after Area 5) in volume either means something was announced and/or more buyers wanted this stock? I need help.

Please correct me.


----------



## luutzu (9 June 2014)

Faramir said:


> I need help with Area 5. Low activity means that someone is waiting for news/announcements? Attention has been taken away from this stock while everyone focuses on another one? Everyone who wanted to sell has sold and buyers have dried up? The next '1' spike (after Area 5) in volume either means something was announced and/or more buyers wanted this stock? I need help.
> 
> Please correct me.




Since you asked ... 

it could be any of the above, it could be neither, who the heck knows. And if you do not know, and there is no way you could know with certainty from sales/trades volume, you're by definition speculating.

I'm pretty sure that you won't get a better teacher than Tech/A on the subject... and if technical analysis is the way for you, it's fine... but probably best to ask WHY before you ask HOW.

Once you know the Whys, the Hows are pretty easy to get to.

As Enron tells us, Enron: Ask Why


----------



## Faramir (10 June 2014)

Thank you luutzu.

I found another thread by tech/a and he posted a similar graph in Post No. 6
https://www.aussiestockforums.com/forums/showthread.php?t=23721

The main statement he wrote inside a red box which I think sums up Area 5:
"This is Volume Support Zone Resistance will be found here." We are trading inside the two zones. Does this mean share price drops, someone else buys thinking that it is a bargain but they are actually doing is supporting that support line? When share price approaches or minor breaks through resistance, someone else sells to puts resistance on the resistance line. Buying pressure and selling pressure is roughly equal in Area 5.

Each time there is a "minor Pivot done resistance" I think there has been an increase in volume of buying.

I will admit I am not a technical analysis person. After buying 3 good stocks at the wrong time, I need to learn more. I am already struggling with fundamental analysis. Some "value" investors will sometimes write off this discussion.

Tech/A, I hope you don't mind me having an attempt despite of the high risk of falling flat on my face or having egg on me. I was going to sit on the sidelines but it would better if someone exposes my lack of understanding. I don't mind putting my neck out if I can learn something.


----------



## Faramir (10 June 2014)

Area 5, there is not enough volume to break resistance nor support zone.


----------



## beachlife (10 June 2014)

Faramir said:


> Area 5, there is not enough volume to break resistance nor support zone.




Before you get side tracked into the importance of volume in todays markets check this out from 4:40 onwards

http://www.youtube.com/watch?v=dOSd2oHl4ks


----------



## tech/a (10 June 2014)

Faramir said:


> Thank you luutzu.
> 
> I found another thread by tech/a and he posted a similar graph in Post No. 6
> https://www.aussiestockforums.com/forums/showthread.php?t=23721
> ...




This is another aspect of (my own) volume analysis techniques. I haven't introduced it into this discussion.
Just leave it out at the moment. All will be come clear.



beachlife said:


> Before you get side tracked into the importance of volume in todays markets check this out from 4:40 onwards
> 
> http://www.youtube.com/watch?v=dOSd2oHl4ks




Guppy has always been an advocate that volume has little place. I don't agree and will present my case as we go.
He does bring up a point which I do agree on Volume is Speculator/Investor Participation shown as volume.

However he points out that in *HIS* view Volume comes* AFTER* the crowd.

*If that were the case Wouldn't these bars be interpreted----as shown on the chart??

This is the first chart we are looking at.*

*Click to expand*




If not *WHY NOT?*----I have my own personal view and answer.


----------



## tech/a (10 June 2014)

Firstly I think you need to identify if your instrument is being controlled by *INVESTORS* or *SPECULATORS*. To make it a little easier I believe this chart is controlled by INVESTORS.

If it were an index futures chart or a spec chart Id think differently.

Each act very differently when reading a chart.

I also believe that *ANY* analysis Technical OR Fundamental--taken in *ISOLATION* is of little to no value---there are exceptions---but in general.

Technically the ability to construct a story on a chart which leads to a possible conclusion --- sets the tradesman from the apprentice.

The chart marked up (Not with everything I see!---but enough).-------*Tells a story.*

Ask---what is each bar in isolation telling me about the participants.

*THEN* what is the story being told by the chart?* BULLISH OR BEARISH*---what do you think happens---Does the chart reverse back up OR continue down?--What does the chart tell you at the points marked.

*IS EFFORT* BULLISH or BEARISH---*is it succeeding?*

 I personally think *ALL volume* tells a story in the *CONTEXT* of the landscape of a chart.
The most powerful signals are seen in VERY HIGH volume and VERY LOW volume and normal volume----depending on their appearance in a chart.

I will *clearly* show you as we continue on.


----------



## kid hustlr (10 June 2014)

Tech,

- Looks to me as though there are some small signs of accumulation. 

- Given that we have come from the upside and there now appears to be volume supporting this market, I would be hesitant to play the short side. Although I've been wrong before!!!!

- Area 5 suggests a lack of interest to me (of both supply and demand). I see it of little use right now.

- I find the high volume bar halfway into the consolidation area @ the resistance interesting. - Supply has not yet been removed.

- I also note the tests on the downside are still on high volume which also tells me supply has not yet been removed.

@ this stage  of the lifecycle I feel it will continue to range trade. I'd be looking for a clear lack of supply near the lows or a shakeout bar as signs to get long. A big downside push on volume would negate the above analysis.

EDIT: Slow Pony


----------



## pavilion103 (10 June 2014)

Hmm...

I'm not too sure. 

Maybe a sentiment survey would help me here...


----------



## beachlife (10 June 2014)

Well that is a text book guppy trade.  Trend line break into consolidation, break of resistance out of consolidation, confirmed by the count back line, and confirmed on the next bars open.  If I knew what chart it was I could also overlay his GMMA.  A great example of trading a break out confirmation without any consideration of what volume was doing or any guesses as to who controls the market, and a great example of how volume came in after the price move.

My guess is that people looking at volume would have seen the break on low volume, ignored it because the volume was low, and missed an easy 2:1 trade.  There were probably also some bottom pickers that entered long on the large volume higher close bar that got stopped the next day.

Where to next, no idea, put it on the watch list and look for a better trade.


----------



## tech/a (10 June 2014)

Same result different analysis
The two bars highlighted show no demand after volume.
No problems with anyone who holds Guppies view.

But with no idea where this chart is going then --- for me at least ---- reading a chart puts you in front 
As it should be clear in both charts what is likely to happen ----- 

Those who don't wish to use volume in their analysis or indeed VSA will tune out.
My postings are for those who have interest in charting and VSA.

I presume there are a few more than firimar PAV and the kid.

Come on PAV what's the chart saying?


----------



## beachlife (10 June 2014)

I'm intrigued.  How about a real time example on daily oil.  Where's it going?


----------



## tech/a (10 June 2014)

beachlife said:


> I'm intrigued.  How about a real time example on daily oil.  Where's it going?
> 
> View attachment 58280




Clearly there is a waning of supply.
With the last bar being wide range on average volume.
This is in contrast to the other highs in particular when tested.

Without supply longs will hold and price will have to seek out higher prices.
Being a commodity it is highly likely that there are a number of short stops at the highs.
A volume spike is possible as these are taken out.

I expect price to continue bullish to 111 to 112 ish 
Each bar is another picture in the puzzle.

So now
Long since the latest swing low.


----------



## tech/a (10 June 2014)

tech/a said:


> Clearly there is a waning of supply.
> With the last bar being wide range on average volume.
> This is in contrast to the other highs in particular when tested.
> 
> ...





I too am intregued ----- 
What does your analysis tell you it's heading?


----------



## Faramir (10 June 2014)

Post 15 discussing Graph in Post 14.



tech/a said:


> Ask---what is each bar in isolation telling me about the participants.
> 
> *THEN* what is the story being told by the chart?* BULLISH OR BEARISH*---what do you think happens---Does the chart reverse back up OR continue down?--What does the chart tell you at the points marked.
> 
> *IS EFFORT* BULLISH or BEARISH---*is it succeeding?*




First my understanding of Area 5: volume is below the trend line. It is not influencing an bullish or bearish trend.

I am only going to try to answer the last question (and I am guessing as well - just like multiple choice . I am saying that the effort is bullish but it is not succeeding. After Area 5, I found one gap when the volume increase. Every bar, I see the closing price higher than the opening price. The graph on Post 8, you marked '1' in the volume spikes and that's where the closing price is higher. Where you didn't mark '1' and the volume was below the trend line, the closing price was lower (the line was red) OR there was very little movement in share price.

If the effort was succeeding being bullish, wouldn't we see an upward trend?

Now I need to get my head around the rest of the threads/conversation. Thank you Tech/a for being patience.


----------



## beachlife (10 June 2014)

tech/a said:


> I too am intregued -----
> What does your analysis tell you it's heading?




Oil did not appear in my scan results tonight so it's a do not trade.  But when it does come up in a scan result it will have nothing to do with volume so is irrelevant to this thread.


----------



## Lone Wolf (10 June 2014)

tech/a said:


> View attachment 58264




My view on the first one is much the same as Kid H. Area 5 shows lack of interest on both sides. Buyers aren't gaining traction on their effort to push price up, but at the same time sellers aren't seeing this pullback as an opportunity to get short.

Each side of the range saw a strong reaction. The last bar marked 1 was high volume that didn't manage to reach down as low as previous attempts, possibly showing support willing to move higher. But then we have the last bar marked 2, it was a test of resistance on low relatively low volume and followed by lower prices.

I wouldn't take a trade either way based on this. If I had to pick a direction I'd stick with the current trend which is down. But I'd rather take a long at the bottom of a range than a short.

View attachment 58254


This second one - High volume at the lows showing possible accumulation. A recent mini trend within the channel with higher lows and higher highs. The recent high volume bar wasn't actually at the high, but when it pulled back from the high. This was followed by tight consolidation rather than continued selling. If I had to pick one, I'd go long. But once again, it would've been better to go long above support than long below resistance.

I don't know if this matters, but the previous up trend didn't seem to end due to any climactic action, but rather seemed to end due to a general lack of buying interest at the highs. If so, we might have more success now that some holders were shaken out during this consolidation period.


----------



## tech/a (11 June 2014)

beachlife said:


> Oil did not appear in my scan results tonight so it's a do not trade.  But when it does come up in a scan result it will have nothing to do with volume so is irrelevant to this thread.




Well let us know if and when it does appear
Further to todays trading we have a solid test of the 
Highs.I don't have volume ---- can someone suggest a site which has it and I'm happy to follow crude as a live example.
There are other technical patterns in the crude chart----all putting the story together.


----------



## tech/a (11 June 2014)

Ah
Found a chart
Showing a pivot point reversal on volume.
This indicates a strong test of the current high.
So now not a buy and if holding a warning to be aware in the short term.

The next few bars will indicate wether there is enough supply to keep crude ranging or supply dries up and crude continues to rise. The increase in volume over the last 2 bars is showing weakness.
However the volume is lower than the most recent test.
This indicates less supply on this test.
Short term weakness but I'm still longer term bullish.---- from information gleaned from the chart.
Like all analysis the landscape continues to un fold.

Good example BL .


----------



## beachlife (11 June 2014)

tech/a said:


> Well let us know if and when it does appear
> Further to todays trading we have a solid test of the
> Highs.I don't have volume ---- can someone suggest a site which has it and I'm happy to follow crude as a live example.
> There are other technical patterns in the crude chart----all putting the story together.




It appeared today.  Stop order is in for a long trade.  Break of the high will trigger it.


----------



## tech/a (11 June 2014)

beachlife said:


> It appeared today.  Stop order is in for a long trade.  Break of the high will trigger it.




Looks a good setup
With minimal risk.
Hope it works out.

I'll comment later on the previous posts by others.


----------



## beachlife (12 June 2014)

tech/a said:


> So now not a buy and if holding a warning to be aware in the short term..






tech/a said:


> Looks a good setup With minimal risk.




I'm a bit confused as these two comments seem to contradict.

What does volume analysis say today?  (for my trade inside day is ignored so long orders still in)


----------



## tech/a (12 June 2014)

beachlife said:


> I'm a bit confused as these two comments seem to contradict.
> 
> What does volume analysis say today?  (for my trade inside day is ignored so long orders still in)
> 
> View attachment 58314




Your set up conditions look good with minimal risk.
I'm giving a commentary on reading the chart.

To continue.
The last 2 bars are showing supply absorption.
Higher volume without pushing a great deal lower.
In fact the closes are all very close.

Id be surprised if this doesn't continue.


----------



## beachlife (12 June 2014)

Back to yesterday, your volume analysis said it looks short term bearish, but some other analysis says its a good long setup?  How do you decide which analysis to trade by when they say the opposite?


----------



## Wysiwyg (12 June 2014)

The WTI is one of those consolidation triangles. I will even call it a pennant. Two ups, two downs and now a breakout.


----------



## tech/a (12 June 2014)

beachlife said:


> Back to yesterday, your volume analysis said it looks short term bearish, but some other analysis says its a good long setup?  How do you decide which analysis to trade by when they say the opposite?




I'd have thought it would be pretty obvious that the trader would be looking for any possible long trades, after the short term weakness looked over.
You'd be looking for something like your setup ---- low risk.
If you were aggressive you could have entered on a lower timeframe as it tested the lows of the 2 bar range.
I'm sure on a shorter timeframe chart that testing would be much clearer.
You can read shorter term charts just as you can longer----provided you have enough liquidity.
I use 9 min on the DAX 

The short term bearish play would only be an option to me if there was VERY high volume
This of course indicates lots of supply.
Lower closes would also indicate possible counter trade.
The price action after the wid range bar testing the highs was strong --- hope you got on it.


----------



## beachlife (12 June 2014)

tech/a said:


> I'd have thought it would be pretty obvious that the trader would be looking for any possible long trades, after the short term weakness looked over.
> You'd be looking for something like your setup ---- low risk..




Yes it was an obvious long for me, but in the context of reading volume, no it's not obvious to me that you would be looking for a long because you said that based on volume analysis it was weak.  As I said my setup has nothing to do with volume and is not what I would call low risk - it has a 23% chance of losing money...yes my order was filled.

How can it be an obvious long when you were saying  how weak it was.  What am I missing here?



tech/a said:


> *So now not a buy *and if holding a warning to be aware in the short term.
> 
> *The increase in volume over the last 2 bars is showing weakness*.
> 
> ...


----------



## tech/a (13 June 2014)

beachlife said:


> Yes it was an obvious long for me, but in the context of reading volume, no it's not obvious to me that you would be looking for a long because you said that based on volume analysis it was weak.  As I said my setup has nothing to do with volume and is not what I would call low risk - it has a 23% chance of losing money...yes my order was filled.
> 
> How can it be an obvious long when you were saying  how weak it was.  What am I missing here?




I thought I made it clear that all charts are dynamic ---- constantly changing
The question was asked AT THE TIME what VSA said to me. And right then on the daily chart that's what it said.
I wasn't asked when I would open a trade. I clearly said that at THAT point I wouldn't by but if I was already in the trade I'd hold.
You then asked today ----- before it broke out what it said to me--- and I clearly said I'd be surprised if it didn't continue bullish---to which you asked when---my reply was at a time similar to your set up or if you'd been on a lower timeframe you could have been more aggressive .

If you look at a 1 hr chart you'll see what I mean.

What are you missing?

I'd say a very useful analytical  tool.

I sincerely hope this is beneficial to you.
I find it a powerful tool having used it for 11 years.

Perhaps the difficulty in your understanding is from being purely mechanical in your trading and not discretionary.
As you know I cut my teeth on systems trading ( maybe you don't know that ).

Discretionary trading is very difficult to master and I once questioned as you do VSA.----and ELLIOTT--- for that matter.
It's worth the effort both are very powerful in MY opinion.

I'm not here to convince you or anyone---just to present what I know.
Use it or Disregard it.


----------



## beachlife (13 June 2014)

I dont get it because your two conflicting posts #27 & #29 were made on the same day and were based on the same chart...nothing on the chart had changed.


----------



## beachlife (13 June 2014)

I'll try and explain better.

On 11th, you say VSA is bearish.
I say based on price I am going long.
You look at chart again and say nice setup, presumably based on price.

So it seems that your price analysis and VSA conflict so the question was what do you do in that case...how do you choose which one to follow when they conflict?  Or do you just stay out and wait?

The next day is inside day.  I say I'm still looking to trade long and ask what VSA now says - a seperate question based on the fact that we now have new info on the chart.  I was curious if it now agreed with price or was still saying opposite.


----------



## tech/a (13 June 2014)

beachlife said:


> I'll try and explain better.
> 
> On 11th, you say VSA is bearish.
> I say based on price I am going long.
> You look at chart again and say nice setup, presumably based on price.




Based on trigger.



> So it seems that your price analysis and VSA conflict so the question was what do you do in that case...how do you choose which one to follow when they conflict?  Or do you just stay out and wait?




I was giving commentary as to what the chart was telling me with VSA---I think you had an expectation of a trade being verbalized. Wasn't my intention 



> The next day is inside day.  I say I'm still looking to trade long and ask what VSA now says - a seperate question based on the fact that we now have new info on the chart.  I was curious if it now agreed with price or was still saying opposite.




Supply was either withdrawn or buying swamped supply so price rose confirming my initial analysis.

I'm afraid I just cant fathom where your coming from.

To put it another way in the simplest of terms.
I was always intending to cross the road when I paused at its side to observe 
Traffic conditions even stepping back a pace or so---just to be sure that's what I wanted to do.

To you it appears contradictory to me it appears very clear and anything but contradictory.
More so complimentary.
I guess that comes with experience.

Will move on from here to the initial two charts.---tomorrow.


----------



## tech/a (14 June 2014)

The *SINGLE* biggest reason people have trouble with "Getting"
VSA is that it is *COUNTER INTUITIVE*.

Guppy has demonstrated it as has Beachlife. (Their belief is that the masses
are being fooled by volume (*This I agree with in part* ) but they also believe that volume has no part to play
(*This I don't agree with not even remotely*) )

The belief of the masses is that *High Volume is Great* and very positive 
and *Minimal Volume is Weak and negative.*

I believe the *EXACT OPPOSITE* (_In context of the chart being read_ ).
This is the Hard part it seems counter intuitive.

I read *ALL* charts in the context of investigating *SUPPLY*.
Charts move up and down because of the volume of supply.

The minute supply is either
(1) Overcome
OR
(2) Withdrawn
Price will move upward---without excessive volume!

Supply is either feeding demand by being available (Often seen in high volume)
Or 
Constantly being offered in the face of demand ( Seen in price falling without volume )
Or
Being withdrawn or held ( Seen in price rising with OR without volume).

So lets look at the first chart in the context of how I look at* VOLUME* and *RANGE*-----
*WHAT IS SUPPLY DOING* relative to the chart information available---- and ultimately *WHAT IS PRICE LIKELY TO DO* in that context.

*Click to Enlarge*




Now I think it should be really really clear now as to what the chart is saying.
Those who have had a strong look at it should be more definitive in what they now see.

So the *SECOND* chart should also be very clear given the commentary on the *FIRST*.

So using your knowledge now of volume and price---what is likely in either chart??---*ANYONE*


----------



## rcctradings (14 June 2014)

Hi Tech/a
I'd say there is still supply at 6 and the test is going to fail and consolidation will continue.
The last 4 price bars have been closing lower, and the volumes are around average, would that indicate supply is overcoming demand?
Rigo


----------



## beachlife (15 June 2014)

tech/a said:


> Guppy has demonstrated it as has Beachlife. (Their belief is that the masses
> are being fooled by volume




Didnt say that.  He just said that decades ago volume was a good indicator of what the 'informed' traders were doing, but with todays access to information, that logic no longer applies.  But I think he was talking about volume levels when a break out occurs, whereas you seem to be talking about volume during consolidation as well. 

The reason I posted about the video was to make the OP consider whether or not a book written a long time ago was still relevant today.  I havent read it so cant comment.


----------



## tech/a (15 June 2014)

beachlife said:


> The reason I posted about the video was to make the OP consider whether or not a book written a long time ago was still relevant today.  *I havent read it so cant comment.*





Yet you did?
How can you consider relevancy let alone the OP?
You've not read it but seem compelled to issue a warning!

I'm sure Guppy hasn't read it either.
Let alone tried to apply it!


----------



## beachlife (15 June 2014)

No I didnt comment.  The OP asked a lot of questions in his first 2 posts and you werent answering them.  You just added to the questions and promised to reveal all and help him discover the answers but only if he did his homework.  I thought that sucked so I just pointed him in the direction of a well respected trader who happens to have a view on volume that makes perfect sense to me and a very simple approach to trading that works.

But he has now had a crack at reading your chart and has given a very clear answer so hopefully you will help him now.


----------



## tech/a (16 June 2014)

In my opinion if someon has a question particularly on which is that they

DONT UNDERSTAND

There is no point in just supplying an answer. Generally those that do understand can
See why it is that those that cant ---- can't,
Hence the questions I pose to those who need to find the answers.

Then leading people through case studies in my experience gets them
Asking the questions THEY NEED TO ASK 
To apply the analysis.

The end result often removes the mystery of APPLICATION 
The prime question asked directly or indirectly by most posters.

Flat out this morning so in the absence of any more direct comment on the two charts
Will sum up tonight.


----------



## Wysiwyg (16 June 2014)

tech/a said:


> So using your knowledge now of volume and price---what is likely in either chart??---*ANYONE*



Am reading Anna Coulling's guide to VPA at present. So my interpretation of bar (6) is that buyers have had enough of the supply coming in at resistance. With the bar before bar (6), Anna says that there is an anomaly if the bar range doesn't match the higher volume (Wyckoff - cause/effect) so it means that bar before (6) on above average volume and narrower range was more supply pushing the price lower. Then bar (6) shows lower volume and a lower close validating the observation. The price will now move lower and possibly shake out all the remaining supply.

Now I am a novice with this stuff so that is my saving grace and zero embarrassment if I am completely wrong.


----------



## Lone Wolf (16 June 2014)

tech/a said:


> View attachment 58350
> 
> 
> So using your knowledge now of volume and price---what is likely in either chart??---*ANYONE*




I don’t have much time right now but I don’t want you to think nobody is interested.

I find consolidations confusing. When you come out of a trend you can clearly see who has control. You’re waiting for those in control to lose interest or for the other side to take control. In a consolidation neither side is in control, so I find it hard to tell if low volume is due to lack of supply or lack of demand. In truth it’s actually both.

You could look at the high volume at the lows and say that supply is failing to overcome demand and that it is being accumulated. But the very low volume at the high (5) says that that it takes no effort to push price down. At (6), price has drifted back to the lows, the closes of the recent 4 bars have been near the lows. It looks weak. The effort to hold price up isn’t resulting in movement.

However, the low at (6) Is relatively low volume compared to the other lows. Is this a low volume test of the lows that often results in a bullish movement. Has demand been exhausted? or has supply withdrawn? As I said – Confused.


----------



## tech/a (16 June 2014)

*OK and WOW*

Well done everyone for having a go.
To summarize everyone.

*RCC*
Test to fail Supply over coming demand

*WYSI*
Push lower shaking out supply.

*Lone W* and *The Kid*
Holds the argument for weakness but not the confidence in what he sees.

*Farmir*
Just having a little trouble getting his head around it all.

I must disagree that volume is needed in EVERY case for a break out of consolidation
Often the best breakouts don't have volume!
On the Short Side Supply just keeps looking for buyers at lower and lower prices buyers are swamped by supply.
and on the Long Side buyers keeps looking for sellers at higher and higher prices as Sellers withdraw.

*After this little exercise* Id say that the majority of people can "see" what a chart can tell once they actually know what to look for.

WELL DONE seems I haven't wasted my time!

*CLICK TO EXPAND*




*So Finally what is the SECOND CHART SAYING?*


----------



## rcctradings (16 June 2014)

tech/a said:


> Flat out this morning so in the absence of any more direct comment on the two charts
> Will sum up tonight.




Well. I've given my take above. So did a couple of other posters.
 We are still interested in the topic and I believe that exercises are indeed more instructive than simply straight answers. I'm here to learn, not to be fed.

 Thank you for all your guidance so far.
Sorry, just saw your last post.
 Rigo


----------



## Wysiwyg (16 June 2014)

Wysiwyg said:


> With the bar before bar (6), Anna says that there is an anomaly if the bar range doesn't match the higher volume (*Wyckoff - cause/effect*)



I got my law mixed up there because I was referring to the single bar and not the overall pattern. It should have been *(Wyckoff - Effort vs. Result)*.


----------



## Lone Wolf (16 June 2014)

tech/a said:


> *So Finally what is the SECOND CHART SAYING?*






Lone Wolf said:


> This second one - High volume at the lows showing possible accumulation. A recent mini trend within the channel with higher lows and higher highs. The recent high volume bar wasn't actually at the high, but when it pulled back from the high. This was followed by tight consolidation rather than continued selling. If I had to pick one, I'd go long. But once again, it would've been better to go long above support than long below resistance.
> 
> I don't know if this matters, but the previous up trend didn't seem to end due to any climactic action, but rather seemed to end due to a general lack of buying interest at the highs. If so, we might have more success now that some holders were shaken out during this consolidation period.




Quoted my earlier post for honestly. But I don't know anymore.

Looking at the last few bars. Two bars reaching up to the highs and closing on their lows on average volume. Then a bar that gaps down, closing on its lows on very high volume. Looks like sellers stepped in. However, that's where it ended. The next few bars have failed to push lower. The second last bar was a very low volume up bar.

I believe it comes down to what you think the last very high volume bar means, as that changes the context for the very low volume up bar.

If the high vol bar was demand absorbing the supply that came in, the low vol up bar indicates no supply. Up move expected.

If the high vol bar was supply holding down demand, then the low vol bar indicates a lack of effort to overcome supply. Down we go.

I feel the overall pattern has accumulation, the recent move was up, the recent pullback is shallow and hasn't dragged on for too long yet. So unless the recent low is taken out I'll stay on the long side.


----------



## Faramir (16 June 2014)

My answer was wrong in Post 23. I honestly did not expect a big drop in price after '6' as shown in Post 48. I originally thought good volumes represent good buyers. Post 40 changed but made me wondering which way the next bar will go. This quote challenged my thinking.



tech/a said:


> The belief of the masses is that *High Volume is Great* and very positive
> and *Minimal Volume is Weak and negative.*
> 
> I believe the *EXACT OPPOSITE* (_In context of the chart being read_ ).
> This is the Hard part it seems counter intuitive.




Thank you tech/a. I tried my best to answer your question. I keep re-reading this post again and again. Forgive me but I am only new at this. One day I too will join the majority who can see what the chart is telling.


----------



## luutzu (16 June 2014)

Right after the battle of Waterloo, 1815 [?], Nathan [?] Rothschild got the news from his agent near the battlefield that Napoleon had lost the war. No one else in England had heard of the news yet.

So Rothschild began selling everything on the market... soon, words got around that he's selling and the people there knew that if Rothschild is selling, it must mean that he knew Napoleon had won and soon England will be a French colony so they all sell too and within a couple of hours, everything was crashing.

Now, imagine if these prices and these volumes are on a chart, you too will sell... and imagine if you are that Rothschild who started the panic BUT then forget that you started it and follow the charts, you too will sell.

Rothschild knew the source and start to buy and thereby pretty permanently established the Rothschilds empire.


I think you guys might have missed the fact that maybe what you're doing is also reflected on the price chart. So to then make decision based on previous decisions that were based previous decisions that were made in the same way - chart reading... doesn't make sense.

You are reinforcing your own thinking - until a few experienced among you jump a step or two ahead; or until other events, like actual profit reports showing great losses or profits than expected pushed the reset button...

But i suppose you guys are thinking most of the transactions were made by fundamentalists, fund managers and tea leaf readers so your transactions are negligible. 

That too is speculation.


----------



## payday (17 June 2014)

luutzu said:


> Right after the battle of Waterloo, 1815 [?], Nathan [?] Rothschild got the news from his agent near the battlefield that Napoleon had lost the war. No one else in England had heard of the news yet.
> 
> So Rothschild began selling everything on the market... soon, words got around that he's selling and the people there knew that if Rothschild is selling, it must mean that he knew Napoleon had won and soon England will be a French colony so they all sell too and within a couple of hours, everything was crashing.




This is an entirely incorrect urban myth that has been used (and obviously) continues to be used to this day to discredit the Rothschilds. This myth was especially perpetuated by the Nazis - Joseph Goebbels in 1940 approved the publication of the book Die Rothschilds which reports on this legend. The truth is that, according to Niall Ferguson in his book  "The Ascent of Money", the Rothschilds were nearly ruined by Wellington's victory, and I quote from page 82 "Their fortune was made not because of Waterloo,  but despite it.


----------



## beachlife (17 June 2014)

Did anyone say go short at the close of bar 6?
Did anyone say go short at the next day open?
When exactly is the decision to actually place the trade made?
Where is the entry, where is the stop, where is the exit?
What happend next 10 days?
How much money was made?


----------



## tech/a (17 June 2014)

*Some terrific responses.* 



> I think you guys might have missed the fact that maybe what you're doing is also reflected on the price chart. So to then make decision based on previous decisions that were based previous decisions that were made in the same way - chart reading... doesn't make sense.




Yes you are absolutely correct---All charts have a left of page and that supplies a history of participant behavior.
The right of page is what is happening BAR by BAR----*every* bars volume and range is important in the context of reading a chart. It may not make sense to you but to some of us it makes perfect sense.



> You are reinforcing your own thinking - until a few experienced among you jump a step or two ahead; or until other events, like actual profit reports showing great losses or profits than expected pushed the reset button..



.

The Participants on a bar to bar basis *REINFORCE MY* thinking or *ALTER IT.* How the participant come to their trading decisions doesn't concern me.



> But i suppose you guys are thinking most of the transactions were made by fundamentalists, fund managers and tea leaf readers so your transactions are negligible.
> 
> That too is speculation.




I can only speak for myself---I have no idea who the participants are (But do from time to time have my suspicions) it doesn't matter----speculation---from your seat that's the way you see it---from mine its a part of my discretionary trading method. The rest is minimization of risk and maximization of Profit---another topic.

*B/L* your questions I'm sure are on the tips of many tongues---thanks.

*Did anyone say go short at the close of bar 6?*

It was a resounding 90% 4 of 5 who at the last bar read weakness. I'm sure the break below would have seen the confirmation they needed. But again this was and still is an exercise in chart reading----*I'm even more certain the would not have gone LONG!*



> Did anyone say go short at the next day open?




See above.



> When exactly is the decision to actually place the trade made?




*This Chart* is how I would have traded the consolidation and breakout---how anyone else would have traded it I don't know.



> Where is the entry, where is the stop, where is the exit?



All here

*Click to expand*.






> What happend next 10 days?




This did

*Click to expand*






> How much money was made?




Depends on where the last trade is closed.
Do you think I would have closed it yet?
Do you think Id have a trailing stop?
Do you think Id have closed some of the position or all?

There are many many options---how much is made is really trader based---point is though* its a PROFIT!*

*Any more ideas on Chart 2?*


----------



## kid hustlr (17 June 2014)

Ripper analysis tech/a.

Perhaps more impressive that your analysis is your patience.

A couple of quick things, recognising everything is easier in hindsight:

1. The more I look @ the chart the high supply bar (@ the bar you mark 1) to me seems very important. Initially as you said it retraces off the lows on low volume - there's nothing doing. Then it comes up for another look. THIS TIME THERE IS VOLUME AND THE NEXT DAY IT GETS TURNED AROUND FAST. To me that's the sign we should be looking for shorts (SUPPLY IS STILL PRESENT) and until that bar is breached the short side is the strong side. Any upthrust/weak test/etc are chances to get short.

2. After the breakdown, the overall bounce/consolidation period is weak. If this had retraced back a long way then my view would change but as played it simply looks like a pause in the momentum to the downside, rather than a strong accumulation and possible turning point.

3. Other factors such as long term support/resistance/context and the parent index are also important.

4. From a trading perspective, I think compounding/pyramiding and trusting your analysis is huge as when you are right you NEED TO BE AGGRESIVE

I know for me personally sometimes I look @ the volume @ the low and think 'OK ITS TURNING' when quite often its just a pause before continuing. This is where things like the level of the retracement, the volume at the extremes, the parent index, longer term context all play such an important role.


----------



## beachlife (17 June 2014)

tech/a said:


> *Some terrific responses.*
> 
> 
> 
> ...





Reading weakness is one thing but at the end of the analysis a decision to trade or not has to be made, and if you miss the move then all that lead up work was a waste of time.  If you wait for the price to break the consolidaion, then that seems to be a price based entry.  I assume the point of VSA is to get an edge over price only methods, ie an earlier entry, so what in VSA said take the earlier long and short entries in consolidation?

The longs in consolidation were wrong, no problem with that, every system has losses, but what is the win/loss ratio of VSA?

Trailing stops are usually price based.  Where does VSA signal the exit?

What is the chart?  I want to see what my criteria would have said.


----------



## tech/a (17 June 2014)

beachlife said:


> Reading weakness is one thing but at the end of the analysis a decision to trade or not has to be made, and if you miss the move then all that lead up work was a waste of time.  If you wait for the price to break the consolidaion, then that seems to be a price based entry.  I assume the point of VSA is to get an edge over price only methods, ie an earlier entry, so what in VSA said take the earlier long and short entries in consolidation?
> 
> The longs in consolidation were wrong, no problem with that, every system has losses, but what is the win/loss ratio of VSA?
> 
> ...




B/L 

I may have this wrong but

I was under the impression you are a reasonably experienced proponent of T/A.
The questions that keep coming up are either ones of a novice or your taking the Micky for the sake of argument.

If you really are totally clueless than I'm happy to spell it out.
Let me know which it is.


----------



## beachlife (17 June 2014)

tech/a said:


> B/L
> 
> I may have this wrong but
> 
> ...




When it comes to VSA, clueless and curious.


----------



## tech/a (17 June 2014)

beachlife said:


> When it comes to VSA, clueless and curious.




Ok In the middle of tenders so later tonight.
In my other life!


----------



## tech/a (17 June 2014)

> Reading weakness is one thing but at the end of the analysis a decision to trade or not has to be made, and if you miss the move then all that lead up work was a waste of time. If you wait for the price to break the consolidaion, then that seems to be a price based entry. I assume the point of VSA is to get an edge over price only methods, ie an earlier entry, so what in VSA said take the earlier long and short entries in consolidation?




VSA is simply another technical analysis method. Like all methods the better you become at applying it the better the results. Its a trading method I use daily in my own trading and have done so for around 12 yrs. Your making assumptions without remotely trying to understand how you'd apply it to trading---everything you need to know has already been shown in my examples---simply *LOOK*



> The longs in consolidation were wrong, no problem with that, every system has losses, but what is the win/loss ratio of VSA?




The long signals are correct as are the short signals. They were traded with my experience in the use of VSA. (in the exercise)  VSA can be used as a stand alone trading method or can be used as an adjunct to.



> Trailing stops are usually price based. Where does VSA signal the exit?




Yes and the problem is?



> What is the chart? I want to see what my criteria would have said.




All in good time still some more to be completed.

*B/L* take some time to either understand and become involved in at least attempting to grasp the concept or go off and do your own thing. I'm happy to help anyone but loose interest really quickly when all people want to do is discredit without a Modicum of interest or effort. I'm here for this thread ONLY and will be off again once its over.


----------



## rcctradings (17 June 2014)

For chart 2:
The last six bars have all been in a downtrend. The previous 4 bars before the last one were all closing low, some real selling was happening at normal volume. Then that last bar, wide range-high volume, looks like a selling climax. The weak holders have panicked and dumped it to get out of there. Probably not much stops taken out because the recent history did not give any hope of going up for anyone to think about being bullish prior to this last bar. But from here the strong holders would have scooped the last bits and probably will throw a test, then start marking up the stock. So let's watch the next couple of bars to confirm before going long.



tech/a said:


> *Some terrific responses.*
> 
> 
> 
> ...


----------



## beachlife (17 June 2014)

tech/a said:


> The long signals are correct as are the short signals. They were traded with my experience in the use of VSA. (in the exercise)  VSA can be used as a stand alone trading method or can be used as an adjunct to.




This is exactly what has sparked my curiosity.

The longs may have been correct in terms of the method, but they were not profitable and tied up capital that could have been used elsewhere.

If it can be used alone, the question any trader considering it should be how good is it, but that cant be answered without considering the exit criteria.

And if it is used in conjunction with other methods the question any trader should ask is how much does it improve the existing system by re-evaluating last years trades and see how much more money would have been made, but again the exit criteria is needed. With every trade I take I review later with 4 different trailing stop methods to make sure what I use is still the best option.  I also record the best possible target to make sure my targets are reliable.  So traders considering adding VSA to their existing system should test it and compare it with past results. 

Hence my question (not problem) of where does VSA signal the exit.  The entry is only half of the story


----------



## tech/a (18 June 2014)

The answers require more time than I have now.

But regardless of method no one or method cand tell you in advance wether it will be successful or not over a myriad of time frames. Even criteria plugged into a system ---- at the time of an entry signal cannot give an advanced point of exit.----- it will have conditions if met will trigger an exit.

So to with the discretionary use of VSA.

B/L you mentioned you use a system to trade.
Why do you review every trade with extensive
Notes as described. Systems results present a
Blueprint---further tinkering is not in the interests
Of any system?

More when I can devote the time.

By the way I'm not am ambassador for VSA.
Wether people use it or not is of no interest to me.
I'm simply answering questions presented---in my own
Circumstance.


----------



## beachlife (18 June 2014)

tech/a said:


> The answers require more time than I have now.
> 
> But regardless of method no one or method cand tell you in advance wether it will be successful or not over a myriad of time frames. Even criteria plugged into a system ---- at the time of an entry signal cannot give an advanced point of exit.----- it will have conditions if met will trigger an exit.
> 
> ...




I wasnt expecting VSA to predict a target.  I was asking about as the trade progressed in those next 10 bars that you showed, how does VSA help choose a time to exit.  Was there an exit in those 10 bars or sometime later?

My system is not mechanical, more of a systematic approach that has both mechanical and discretionary aspects, so sensible to monitor and review.


----------



## tech/a (18 June 2014)

beachlife said:


> I wasnt expecting VSA to predict a target.  I was asking about as the trade progressed in those next 10 bars that you showed, how does VSA help choose a time to exit.  Was there an exit in those 10 bars or sometime later?
> 
> My system is not mechanical, more of a systematic approach that has both mechanical and discretionary aspects, so sensible to monitor and review.




VSA showed both the time to exit and the time to go short (as an example ) in the consolidation in the chart.
Same is in the rest of the chart after bar 10.(Some hints before) But importantly there are discretionary considerations that need to be evaluated with each signal. As such an experienced practitioner is likely to trade VSA differently to a novice---purely from experience in trading 1000s of charts.

To your method---how then can you evaluate your method if you have a discretionary component to it?
(Other than Forward trading?).
How can you evaluate a discretionary method in any other way?

More later---I digress.


----------



## beachlife (18 June 2014)

tech/a said:


> VSA showed both the time to exit and the time to go short (as an example ) in the consolidation in the chart.
> Same is in the rest of the chart after bar 10.(Some hints before) But importantly there are discretionary considerations that need to be evaluated with each signal. As such an experienced practitioner is likely to trade VSA differently to a novice---purely from experience in trading 1000s of charts.
> 
> To your method---how then can you evaluate your method if you have a discretionary component to it?
> ...




Easy.  I backtest manually using the walk through mode in my software and monitor the live trades to make sure the live trading agrees.


----------



## tech/a (18 June 2014)

beachlife said:


> Easy.  I backtest manually using the walk through mode in my software and monitor the live trades to make sure the live trading agrees.




Have the same.
Next to useless.
For a meaningful sample size.
But hey if your turning a profit
Or convinced your results are
Enough for you---

Forgot the State Match is on.

So won't be posting tonight.
Gotta get my priorities right.


----------



## tech/a (19 June 2014)

Firstly there are *No Secrets* in any trading method.

Technical 
Fundamental
Systematic 
Discretionary
Mechanical.

In my own experience*ANY* Indicator or analytic tool in isolation will at very best return a less than consistent favorable outcome when tested.

The whole Idea of Mechanical or Systems trading is to devise a set of trading rules and variables which can be coded into a computer and run them against various data sets with the view of returning a positive expectancy.

Trouble is like *ALL* methods is that at the time of a trade being triggered we have no idea whether it will a winning or losing trade.

All we do know is that if we continue to apply the same entry and exit criteria to a data set which has in the past shown a positive expectancy ---- and the data set at some future point doesn't experience new data outside of the parameter of the old data tested---we can expect results within a deviation of the mean of the tested results.

Its simply repetitive mechanical ---mindless---following of a positive expectancy tested method.
*AND I'M ALL FOR IT*
Best I've seen in a mechanical system is a return of 43% consistently.
I've seen many blow up but the majority return a healthy 10-25%

But what if you can see and understand intuitively whats going to happen and what is happening and you sit there screaming at the screen as your mechanical trade goes from profit to loss---worse opens then loses---worse opens then flounders between the open and your stop for weeks.

You've become discretionary if in nothing else but opinion.
After looking at 10's of 1000s of charts.

*T/H* said it best a while ago.

*If your in a crowd you'll recognize your mother immediately yet those around you wont have a clue.*

That's the best description I've seen when it comes to a chartist---a reader of crowd behavior in charted instruments.

VSA is a tool --- in my view a valuable tool for serious chartists---those discretionary traders who like myself can out perform mechanical trading by adding discretionary observations which are (in many cases) not code able.
And used in isolation are often meaningless.

Its what we do.
Is it better than what others do---who cares--its what *WE DO*.
Oh and yes I do trade Systematically---I don't have the time to trade in a discretionary manner day in day out--Don't have to--Don't want to.

So To the question



> how does VSA help choose a time to exit. Was there an exit in those 10 bars or sometime later?




For price to fall there must be supply.
For price to rise supply must either be overcome so there is not enough to satisfy demand 
OR Sellers with draw and simply hold.

*Hint* (Useful hints for application of analysis)

Every low is tested
Every high is tested
LOW volume speaks as loud as high volume in the correct context.
Look at range of low volume bars are they rising easily??

What we need to be able to recognize is a test which is likely to hold or likely to be broken 
we can only do this by looking at price action before and *AT* the test.

So lets do that.

*CLICK TO EXPAND*


----------



## Caveroute (19 June 2014)

Or to look at it another way – without the volume angle.

We have a bear break out of an established  TR, 3 push’s  down, a wedge, [ expect 2 legs up if it triggers, it does], then 3 bull bars to higher high and then a failed second entry short [fl2] on the last bar drawn, which is also a strong bull bar. 

There is also an inverted h&s – fwiw.

So sure it’s a scalp long, whether it gets much further time will tell. An abc target would be about the bottom of the trading range, where other patterns will likely form.


----------



## beachlife (20 June 2014)

Interesting.  I cant say if I would have taken a trade or not without more info on the chart, but if I had a scan signal and my criteria was met my entry would have been a stop entry below the low - blue line.

My stop would have been red or orange line, without ATR info I couldnt say.  Targets would have been as shown.  Hard to say exactly where the orange target would be by scaling off the screen so it may or may not have been filled near that close.  If it wasnt filled the trailing stop would have got me out where shown in orange.

So depending on where the initial stop was placed I would have been slightly better or slightly worse using price only.  Over say 100 trades I wonder which would be better and by how much.  Good food for thought though.


----------



## tech/a (20 June 2014)

OK so we have 1 not sure
and 1 NO.

*Next 10 bars*

Click to expand


----------



## kid hustlr (20 June 2014)

my 2c - worth far less!


----------



## pavilion103 (20 June 2014)

I haven't been following this thread and don't know how much background info was given. This might be handy. 

My thoughts are below based on very limited info (I've only checked the last few posts)

Other things I'd need to consider include previous support/resistance, context of overall market etc.

But based on this chart alone, here are my thoughts.

Of course this analysis would be accompanied with strong risk management including my original stop well and truly at BE by now.


----------



## beachlife (20 June 2014)

tech/a said:


> OK so we have 1 not sure
> and 1 NO.
> 
> *Next 10 bars*
> ...




Liquidate and sell at break of low because is looks like a counter trend that has failed at resistance.


----------



## pavilion103 (20 June 2014)

beachlife said:


> Liquidate and sell at break of low because is looks like a counter trend that has failed at resistance.




OK this made me go back and look at the previous charts posted in this thread. 

I didn't realise there was such strong resistance "ragne" in the background before it broke down sharply. 

Context is king. 

Seeing this in the background would make me think that I now need to see where previous support levels are before even considering taking a long. I'd need to see the much bigger picture. 

Based on the volume on the fail and the failed test that I mentioned the ORIGINAL long position was an area where price was likely to at least pause and push up a little. This happened. 

If we were at a medium term support level I'd go with my analysis above. 
If we were not at a support level then I wouldn't take the long. 

My trading is so strongly based on S/R levels that I cannot reach a decisive conclusion without that piece of information and would thus sit on the sidelines. 


The key for me, even moreso than analysing where it will go from here is the fact that the stop on my original long would be at least at BE (well moved to below this current base now). And if I did decide to take the additional long that it would trigger at a level where the analysis for a short trade makes less sense (and initial risk isn't excessive). 


In terms of taking a short trade here, I would not.
1) Price has pushed up from a base, rather than consolidating on the way down. 
2) Most of the bars in the triangle/range are not closing on the lows (which I would require).

3) Id consider a short if price now broke lower and then pushed up again to re-test this range with bearish price action (and then failed)


----------



## IFocus (20 June 2014)

No idea what Techs thinking here but surprised no one is talking about the last bar probe down on higher volume looking like a hold and or adding to position next bar if you are keen to me.


----------



## Caveroute (20 June 2014)

Well its not xstal to me. 

For the bulls:
We have the hallmarks of a trend reversal.

If it breaks above the last bar it's a fl2, if it can get above the resistance from the earlier TR, it's good for a swing, otherwise just a scalp - but it's a dodgy area so caution is needed.

For the bears:
Wait, given the TR further price action is needed.

May just go sideways for a while.


----------



## beachlife (20 June 2014)

This one's volume pattern has sparked my interest so thought I would see what Tech (and anyone else) thinks.  No in depth analysis required, just a choice.

1. already in...if so what bar and what direction.
2. go long... if so at close or next day open
3. go short.. if so at close or next day open
4. wait.

It's a daily chart.


----------



## tech/a (21 June 2014)

beachlife said:


> This one's volume pattern has sparked my interest so thought I would see what Tech (and anyone else) thinks.  No in depth analysis required, just a choice.
> 
> 1. already in...if so what bar and what direction.
> 2. go long... if so at close or next day open
> ...




BL

have a look at the 2 original charts I posted.
That's what I need to be able to make an opinion of this consolidation.

But without that from what I can currently see.

There is nothing which perks my interest in taking any trade in this consolidation.
Looks flat ----- ranging.

So 4.

How's your crude oil trade going.
Still in 
Adding
Exited?

Back later


----------



## tech/a (21 June 2014)

*Back to our first chart.*

*PAVs* 

1 st post was pretty spot with his analysis.
Bit of self doubt crept in!

BUT 

*I focus* 
Picked the critical bar and message in context with the landscape of the chart.
Experience shows.

*CLICK TO EXPAND*


----------



## beachlife (21 June 2014)

tech/a said:


> BL
> 
> have a look at the 2 original charts I posted.
> That's what I need to be able to make an opinion of this consolidation.
> ...




How about like this.

Still in with oil, no plans to add, using count back line trail, may extend target based on last swing range, but only if I get a close just shy of the current target.


----------



## pavilion103 (21 June 2014)

tech/a said:


> *Back to our first chart.*
> 
> *PAVs*
> 
> ...





I would now say that we are in an uptrend.

Price moving up on low volume. No supply. 

Now we are at a resistance zone. 
Time to watch price and volume closely.
So far there are no signs of supply as price pushes up on low volume. 

I would simply be sitting back (still in the trade) and watching to see how it reacts around this area.
Until heavier volume begins to appear, price is free to continue to move up.

IF heavy volume appears THEN I will watch to see how price reacts following this. 

But for now, I'm sitting back and doing nothing.


----------



## Caveroute (21 June 2014)

I would take profits and watch what happens next.

Your at the top of a potential TR, so it's an easy decision.


----------



## tech/a (22 June 2014)

pavilion103 said:


> I would now say that we are in an uptrend.
> 
> Price moving up on low volume. No supply.
> 
> ...




This is most important.



Caveroute said:


> I would take profits and watch what happens next.
> 
> Your at the top of a potential TR, so it's an easy decision.




Yes you are correct also but if you added PAVs observation then your analysis would be on going rather than terminating.




*To B/Ls Chart*





*Found this on another thread and believe it to be a very very important post which if read in conjunction with the ablility and skill of chart reading of which a proficiency in VSA would be a great avantage may well be a turning point for many!*

CLICK TO ENLARGE


----------



## pavilion103 (22 June 2014)

One of the things that confused me early on was that I equated low volume in an uptrend like this one with low demand.

When I began to recognize low volume to mean little supply it opened my eyes. 

When in a stock I look at two things in my trade management plan.
1. S/R levels
2. Volume
(More specifically, volume AT these levels).

When big volume appears at these levels I will do one of two things depending on a couple of factors.
1. Take profits
2. Wait and see how price reacts following the large volume (next few bars) and move stop tight.


----------



## ThingyMajiggy (22 June 2014)

pavilion103 said:


> One of the things that confused me early on was that I equated low volume in an uptrend like this one with low demand.
> 
> When I began to recognize low volume to mean little supply it opened my eyes.
> 
> ...




Interesting, so: 

uptrend + sudden high volume into resistance zone = supply entering?
uptrend + low volume into resistance zone = no supply and demand winning?

I would have thought strong volume in an uptrend going into a resistance zone would be a sign its going to smash through it, especially if it's tested it before? I've been looking at it similar to you used to, low volume in uptrend = low demand. 

I guess you can argue a case for anything that supports your bias, that's the part I find tricky.


----------



## beachlife (22 June 2014)

That would have been a nice entry Tech, its ncm on Thurs.


----------



## Caveroute (22 June 2014)

Yes you are correct also but if you added PAVs observation then your analysis would be on going rather than terminating.

Well as an observation you get a breakout pullback long on the next 2 bars, so you can have your cake and eat it too.


----------



## pavilion103 (22 June 2014)

ThingyMajiggy said:


> Interesting, so:
> 
> uptrend + sudden high volume into resistance zone = supply entering?
> uptrend + low volume into resistance zone = no supply and demand winning?
> ...





I'm not suggesting that price will always just smash through resistance zones with no volume and continue up.

Certainly at strong resistance areas there will be a lot of potential sellers (often who look to get out at break-even). Under these circumstances if price is to continue higher, buyers need to be prepared to absorb the selling. A price range will form. It will be very important to watch these areas to determine whether buyers are prepared to absorb the selling. If buyers are, then price will be able to continue upwards. If not then the bears will win.


----------



## Wysiwyg (22 June 2014)

tech/a said:


> OK so we have 1 not sure
> and 1 NO.
> 
> *Next 10 bars*
> ...




Price can also range and fall from here on too. The formation of accumulation where the lowest support is bounced off a number of times can and does happen. It is only 3 & 4 bars later in the following chart, when 1) resistance is hit with higher volume 2) bars close high and 3) new highs are made, that a confirmation of less supply is evident. That indicated to me that a 'possible' new trend is unfolding and further downside for the moment is less probable. Supply can enter at any moment and turn this chart's scenario the other way. 

Live and present, one can only trade it as one sees it.


----------



## rcctradings (22 June 2014)

Wysiwyg said:


> Am reading *Anna Coulling's guide to VPA *at present. So my interpretation of bar (6) is that buyers have had enough of the supply coming in at resistance. With the bar before bar (6), Anna says that there is an anomaly if the bar range doesn't match the higher volume (Wyckoff - cause/effect) so it means that bar before (6) on above average volume and narrower range was more supply pushing the price lower. Then bar (6) shows lower volume and a lower close validating the observation. The price will now move lower and possibly shake out all the remaining supply.
> 
> Now I am a novice with this stuff so that is my saving grace and zero embarrassment if I am completely wrong.




Thank you for mentioning Anna's book!
I found it, I'm reading it and she's so much clearer than Master the Markets, I can now see how trading is so much more relatable to normal capitalistic money making system. If indeed things happen as described, randomness and chaos are removed, and all our focus should be in learning, understanding and identifying the rules of the game(s) and we too can play with the professionals with some chances of winning some thing!


----------



## Wysiwyg (22 June 2014)

rcctradings said:


> Thank you for mentioning Anna's book!
> *If indeed things happen as described*, randomness and chaos are removed, and all our focus should be in learning, understanding and identifying the rules of the game(s) and we too can play with the professionals with some chances of winning some thing!



Yes, I have an Ipad now so e-books are the go. With regard to the highlighted part, I very much doubt that insiders would be on every security traded. The read is also not gospel in my opinion. As I mentioned in the previous post, chart analysis can change in just one bar.


----------



## tech/a (22 June 2014)

Wysiwyg said:


> Yes, I have an Ipad now so e-books are the go. With regard to the highlighted part, I very much doubt that insiders would be on every security traded. The read is also not gospel in my opinion. As I mentioned in the previous post, chart analysis can change in just one bar.




I think also there is a lot to be said for the Marketing Aspect.
"Learn how to beat those nasty market manipulators".

Who cares who does what.
Can your analysis turn a consistent profit---all that matters.


Its pretty clear by now most here can read a chart with a few hints along the way.


The final chart was that the consensus is Bullish
So time to reveal all. 

I hope these posts have helped.

*Click to expand*


----------



## pavilion103 (22 June 2014)

My exit likely around 50-55 on that chart. I wouldn't have held for that next consolidation.  

But 100% is nothing to complain about.   With one like this the overall market context would have been important. 

Post GFC no doubt many charts setting up some sort of base after a severe fall.


----------



## kid hustlr (30 June 2014)

Anyone able to assist in providing ideas as to why this chart appears to have broken to the upside? Any clues in the consolidation area which would have provided us with a set up?


----------



## pavilion103 (30 June 2014)

kid hustlr said:


> Anyone able to assist in providing ideas as to why this chart appears to have broken to the upside? Any clues in the consolidation area which would have provided us with a set up?
> 
> View attachment 58499




This was the chart that I said previously "definitely doesn't look short". 

It found support at a previous S/R level (not significant one). 

It touched this low and then successfully re-tested this low. 

Another clue is most of the bars in this "range" are bullish, or at least certainly not bearish. 


One way to think about it is to look at it from a short perspective. 
Would you have liked the look of it if you were looking for a short?
I'd say absolutely not. 

That can also help in the analysis.


----------



## pavilion103 (30 June 2014)

The biggest clue for me is the "test". 

It is moreso a two bar reversal. 

The next bar then pushes higher and this is a sure clue as to the rejection of the downside. 



Note: the bar that shows there is still supply, as you market, is bearish. 
However, even the bar before found some support close to a previous level.  So at that stage it was "wait and see"
From here there was a lack of follow through to the downside. 
Some support was found. 
This was tested on a two bar reversal and then price pushed higher, a strong rejection of the low.


----------



## tech/a (30 June 2014)

In reply and to ADD to Pavs observations.




Would really like to see a chart with the bars going into the high 
So I can analyse whats likely to happen then you post what DID happen!


----------



## Caveroute (30 June 2014)

kid hustlr said:


> Anyone able to assist in providing ideas as to why this chart appears to have broken to the upside? Any clues in the consolidation area which would have provided us with a set up?
> 
> View attachment 58499




Looks like you have had a TL break 2 legs down, a double bottom and then a weak resumption of the trend with some sort of retest of the high.

Vanilla price action.

What happens next – who knows, you need more bars.


----------



## beachlife (30 June 2014)

So is the consensus that volume provided clues that its not bearish but didnt say pull the trigger long so everyone would just sit on the side lines and miss the move?

There are price based clues that scream go long, and give entry triggers, so does including VSA just cause analysis paralysis?


----------



## kid hustlr (1 July 2014)

Appreciate the thoughts all.

tech - I'll post up this chart in a couple more days time. I should note that we have the USA unemployment number on Thursday night and although I'm a big believer that the market makes of it what it wants, it does have the possiblity to really skew the chart in one way or the other.


----------



## minwa (1 July 2014)

beachlife said:


> So is the consensus that volume provided clues that its not bearish but didnt say pull the trigger long so everyone would just sit on the side lines and miss the move?
> 
> There are price based clues that scream go long, and give entry triggers, so does including VSA just cause analysis paralysis?




Price or volume - which is more important to you ? If you were given a choice to only see one of them, which would you see ? 

To me price is the ultimate decider, Wyckoff traded in the early 1900's when institutional activity was much more dominant which made volume more important. Today the markets are different..

I've personally spent a great deal of time studying and meeting traders - I've never met someone who primarily uses volume and turns profits. Elliot Wave also goes into that category. Not trying to attack this thread - I may change my mind if I see consistent profits turned with the analysis.

People use all sorts of voodoo magic to turn profits so I guess anything can be said about any method.


----------



## tech/a (1 July 2014)

beachlife said:


> So is the consensus that volume provided clues that its not bearish but didnt say pull the trigger long so everyone would just sit on the side lines and miss the move?




B/L
Sometimes I don't think you read peoples replies. The test of the bottom is the obvious place to go long---I and PAV pointed that out.
The next clue for me that my long was a fair trade was the 3 bars on lower volume which I circled---staying long is dependent on future bars and what they say.



> There are price based clues that scream go long, and give entry triggers, so does including VSA just cause analysis paralysis?




At the first bar which pulls up as a bottom there are 2 things that can happen. Price can continue down OR it can reverse up. If a trader doesn't apply his analysis into a trade then his analysis---any form of analysis---is not acted upon and he waits until he does apply it.

I think the longer you've been trading the more you'll understand that being wrong is par for the course as is being right. Its what you do in both cases which will determine profit or loss. I don't mind being wrong---it brings me closer to being right---I wont stay wrong for long---but when I'm right Ill be slow in getting off the right train---I will at the next logical technical point place my trade at B/E---then I'm free!



kid hustlr said:


> Appreciate the thoughts all.
> 
> tech - I'll post up this chart in a couple more days time. I should note that we have the USA unemployment number on Thursday night and although I'm a big believer that the market makes of it what it wants, it does have the possibility to really skew the chart in one way or the other.




Its been said that all news is generally shown in the chart before it comes out.
Id like to see preceding bars to see if we can spot this.



> I've never met someone who primarily uses volume and turns profits. Elliot Wave also goes into that category.




*Minwa*
Agree but I have seen many who are better traders because of their "Practical Application" of either and or BOTH.

If you don't apply it to a trading setup for ENTRY or EXIT then its simply an exercise in analysis---and there are plenty analysts here and out there who do just THAT!

There is no voodoo or magic in doing nothing!


----------



## tech/a (1 July 2014)

beachlife said:


> So is the consensus that volume provided clues that its not bearish but didnt say pull the trigger long so everyone would just sit on the side lines and miss the move?
> 
> There are price based clues that scream go long, and give entry triggers, so does including VSA just cause analysis paralysis?




B/L this was the question



> Anyone able to assist in providing ideas as to why this chart appears to have broken to the upside? Any clues in the consolidation area which would have provided us with a set up?




Think the question was answered in that light.

More than happy to do real time right of page setups with entry-stops-exits.
Already done it a few times in this thread Oil was one but that went dead (No further comment from you or I).

NCM another.


----------



## beachlife (1 July 2014)

tech/a said:


> B/L
> Sometimes I don't think you read peoples replies. The test of the bottom is the obvious place to go long---I and PAV pointed that out!




Ah I have mixed up the charts.  When asked in another thread in real time about the aussie 10 year Pav said not too sure so stay out, kid said he was confused.  Based on Kids question here it looks like he also let this one go.  I cant help but wonder if VSA kept him out of an obvious break of counter trend on both charts.

You have said VSA is not stand alone and that's sensible.  

What I am trying to figure out by asking the questions I am asking is does including VSA with other analysis improve results or over complicate things.  From your CBA study I see no advantage.  For Kids two recent examples I see both trades let go.  

I am not trying to convert those who choose to use it, just checking it out for myself and asking questions that hopefully will help others decide.  So far I'm not inspired to study 185 pages in that ebook or pay for the course offers that hit my inbox every couple of days.

I havent commented on how I am trading oil and ncm because I am not using VSA to manage them.  (BTW saying you would have entered 2 or 3 bars earlier is not live but my fault for giving that option in the question).


----------



## tech/a (1 July 2014)

beachlife said:


> Ah I have mixed up the charts.  When asked in another thread in real time about the aussie 10 year Pav said not too sure so stay out, kid said he was confused.  Based on Kids question here it looks like he also let this one go.  I cant help but wonder if VSA kept him out of an obvious break of counter trend on both charts.
> 
> You have said VSA is not stand alone and that's sensible.
> 
> ...




Like you I'm not here advocating a way to trade.
Simply making known what I know.

I can say that my Index Futs trading in all time frames is far more profitable than it would be without.
In fact I don't know how Vanilla technical traders "could" turn a profit in time frames less than daily---if at all.

Best of trading


----------



## kid hustlr (2 July 2014)

tech - see below







beachlife said:


> Ah I have mixed up the charts.  When asked in another thread in real time about the aussie 10 year Pav said not too sure so stay out, kid said he was confused.  *Based on Kids question here it looks like he also let this one go. * *I cant help but wonder if VSA kept him out of an obvious break of counter trend on both charts.*
> You have said VSA is not stand alone and that's sensible.
> 
> What I am trying to figure out by asking the questions I am asking is does including VSA with other analysis improve results or over complicate things.  From your CBA study I see no advantage. * For Kids two recent examples I see both trades let go.  *
> ...




B/L, please don't make assumptions about how I trade, you really have no idea how I trade.


----------



## kid hustlr (2 July 2014)

Another question duckman if you have the time/inclination.

See chart below, its the aussie 10 years although truth be told the chart is irrelevant. Looking to get an understanding of how to play it when the longer term context might be pointing in one way but the shorter time frame is pointing the other.


----------



## tech/a (2 July 2014)

Kid

I don't trade these charts *so interested in how the analysis pans out.
*
Here are the 3 charts and how Id play them from here.

*CLICK TO EXPAND*


----------



## kid hustlr (2 July 2014)

you're a legend, will study tomoro


----------



## kid hustlr (3 July 2014)

Tech,

The reason I like you commenting on these charts is because you have no idea how these markets trades. As such I get a purely unbiased view of the charts and it allows me to step and think with a clean slate to speak. Big data effectively book ends a lot of my longer term trades because put simply I need to be square going into these things because the movements can be super volatile.

I know you are of the view that all information is priced in, and to an extent I agree with that but the reality in these markets - probably moreso than any other market - news events can really shake up the market and instantly change the bias of the particapnts. Quite often highs and lows are made on big announcements (RBA/GDP/black swan event etc) and it interests me as to whether VSA can account for this type of stuff with some degree of accuracy.

Most wide range high volume bars are surrounded by a news event and whilst I hate the term 'fundamental' I think it has more use in bond markets and analysiing the macro environment then when compared with stay stocks.

Finally, I'm confident very few people use VSA in the markets I trade. That in itself gives me in the inclination to atleast consider whether it is useful in my market because put simply, I want to be do doing something that few others are doing. Instinctively I dont think it works AS WELL in these markets when compared to a stock indice but that doesnt mean it can't provide clues.

Appreciate your time looking at the charts, this thread + talking with Pav has assisted a great deal in my knowledge/understanding of VSA.

--

Updated charts of the two markets:

Aussie 10 years - 300 min: I note the huge volume on the bullish bar that came in yesterday afternoon and the fact we are now right back where we started. I tend to agree with you that it has 'run its course' but for now I am sitting out.




USA 10 years - daily:




I should note that there is plethora of market moving data out tonight which will most likely have a bearing on where this market is headed, atleast in the short term.


----------



## pavilion103 (3 July 2014)

Well there you go.
On the first chart we spoke of poor context to consider a long.

The initial trade with the stop above that wide range down bar is still valid.

Not sure what impact news has but if this chart was FTSE for example you'd be sitting pretty right now to the short side had that initial short been taken.


----------



## pavilion103 (3 July 2014)

Following that big volume bar we spoke about, notice the decreasing volume and bearishness in the 2 bars that follow. The first closes off the highs. The second rejects the top of the bar where we would have had out stop, on much lower volume.


----------



## tech/a (3 July 2014)

*The US chart* is showing Supply has returned. Wide range with higher volume. The short term analysis is that for this to pull up Range will need to contract as volume is met or Bars will need to show reversal within their length.
The longer term analysis is a lower high----that will if the current low is taken out herald a lower high.
A bearish longer term pattern.So my current long is under threat.

If I were aggressive---and for the exercise---Close the long and go short---stop at 10 ticks above the current high.
Will follow if you post me a daily chart.

Perhaps some of the "Vanilla" traders may post their trade----?


----------



## pavilion103 (3 July 2014)

Come on now Tech.... Why should people post their own trades when they can simply just sit back and criticize yours?


----------



## tech/a (3 July 2014)

pavilion103 said:


> Come on now Tech.... Why should people post their own trades when they can simply just sit back and criticize yours?




That Oil Trades a cracker!


----------



## kid hustlr (3 July 2014)

tech/a said:


> Will follow if you post me a daily chart.




I'll post the US daily chart every couple of days or when I remember so you can track you hypothetical trade.

In the mean time, Updated Aussie 10 years chart. Good example of data or people talking can mess this market around. RBA Stevens opened his Gob today fyi.




I wont post anymore charts apart from the US daily from now on.


----------



## beachlife (3 July 2014)

pavilion103 said:


> Come on now Tech.... Why should people post their own trades when they can simply just sit back and criticize yours?






tech/a said:


> That Oil Trades a cracker!




Funny story about that. Because of position sizing I used cfds, and expected they would roll me over at expiry, but they didnt, they closed me at $107.32.

NCM going nicely too but no VSA to share.

Went long WES today, no VSA to share on that one either.

Any live trades that you would care to share?  I find woulda coulda shoulda but didnt a bit boring. 

Seeing as though my assumptions about Kids trading were wrong perhaps he could post what he actually did do and how he applied VSA.


----------



## fiftyeight (3 July 2014)

Care to explain why you took those trades BL?


----------



## kid hustlr (3 July 2014)

beachlife said:


> Funny story about that. Because of position sizing I used cfds, and expected they would roll me over at expiry, but they didnt, they closed me at $107.32.
> 
> NCM going nicely too but no VSA to share.
> 
> ...




Re the bolded, I don't use VSA to trade the bonds. almost 100% depth and simply trying to take money off other locals. Almost solely intraday. I'm attempting to learn VSA as I wonder if it might help me on a longer term scale.


----------



## tech/a (3 July 2014)

Aussie still testing that high.
Not over yet. Would have been stopped
But it's still resisting at the high.


----------



## beachlife (4 July 2014)

fiftyeight said:


> Care to explain why you took those trades BL?




All explained in NCM thread.


----------



## tech/a (4 July 2014)

tech/a said:


> Aussie still testing that high.
> Not over yet. Would have been stopped
> But it's still resisting at the high.




Interesting chart Still think a short re entry is OK here.
Stop at the highest high (5 ticks above)
Will watch.




Whats increments is this traded and what is it/contract/tick?


----------



## kid hustlr (8 July 2014)

US 10 years:


----------



## pavilion103 (8 July 2014)

That last push up was on low volume and didn't look at all convincing.


----------

