PPS Trading System by Curtis Arnold

[Trembling Hand]

My current sim trading on the ES would suggest that I am likely to be wrong.

I am v interested in VSA. Are there any good readable/practical books or home study courses available that people are aware of?

cheers

I wonder about the use of VSA in index Futs? especially short intraday trades. Considering that many a big Vol trade are arbs and hedges. Then you have the casinos of Asia like the SPI & HSI where anything goes including crossing your own trade .

Not to mention the month of increasing volumes come Futs roll. Could end up jumping at the wrong shadows.

 

[mazzatelli1000]

I will have a go..... it is a low volume test of a support level (previous resistance level)...I expect it to fail ie go up. Or alternatively, it is a low volume retracement again, likely to reverse. My current sim trading on the ES would suggest that I am likely to be wrong.

I am v interested in VSA. Are there any good readable/practical books or home study courses available that people are aware of?

cheers

Hey lindsay.

Do a search of Volume Spread Analysis - tech/a has posted a pdf file from Traderguider people for you to read.
Also a poster by the name of tcoates has also posted some VSA code for Amibroker if your interested

Also I have found VSA more useful for stocks than ES

 

[tech/a]

T/H Ive watched plenty of live Vids on Futures trading using VSA by people much more advanced than I.
Watched a live trade over a couple of Hrs by Sebastian Manby trading the UK pound a few eeks ago.In that time he picked up 400 pips.
I'll se if I can get a copy if interested hes as boring as the Village People but knows how to apply his stuff.
There are quite a few on You Tube amongst the advertising hype run by Gavin Holmes also a nice guy but can become a little boring in the Advertorials!

Anyway some more on this chart.
What would we be looking for to confirm that the Breakout (Which ever way it goes) would be likely to continue rather than reverse?

 

[MRC & Co]

I would prefer to be short this set up but not from the entry on the next bar.

Agreed.

Distribution seen on the long tail previously. I would not really call it a continuation box after a tail like that. Lots of low closes within the box and the push to the higher edge was so on very light volume.

Also, looks like a bit of a wedge pattern, other than the long tail which saw the distribution. Trend strength winding to a close perhaps.

The final two bars you added are showing a push to breakout, but tight ranges and met by supply. It's in a battle now and to breakout, you would want to see a real push from the buyers.

Though this is completely irrelevent to scalping. Many times, I would just take a few ticks WITHIN the box, scalping the range, if it breaks out, then more luck to me!

 

[tech/a]

Though this is completely irrelevent to scalping. Many times, I would just take a few ticks WITHIN the box, scalping the range, if it breaks out, then more luck to me

how would you ever trade a breakout then.
To make a profit within the box youd be buying or selling the high or low not holding it for a breakout!
Sounds good in theory but in practice--it aint as it seems!

 

[MRC & Co]

how would you ever trade a breakout then.
To make a profit within the box youd be buying or selling the high or low not holding it for a breakout!
Sounds good in theory but in practice--it aint as it seems!

No, sometimes I will hold it further if it feels right. But will generally feed my lots to the breakout traders if it comes, and get back in on a pullback once again after the breakout.

It's hard to explain, completely depends on the price action within those candles. Which you cannot see from that static chart.

 

[Trembling Hand]

how would you ever trade a breakout then.
To make a profit within the box youd be buying or selling the high or low not holding it for a breakout!
Sounds good in theory but in practice--it aint as it seems!

Absolutely not the case. that's exactly why you watch the dom. Buy a hand full on lows feed them out at the other side. If the order book thins out or volume gets chewed through hold and add or if your are short flip and push. That's why Some traders trade very short time frames.

These set ups (scalps) are not an explicit set of rules but rather implicit, subconscious mode where decisions are made and made very quickly. Mostly without reference to a chart or completion of a bar. The same way you react when driving a car and something unexpected happens (a breakout of sorts) You just act. Think later.

That's why I said I would like to of got short up higher. I could take a little profit the other side and move stop to BE. If it comes back flip etc.

Which what Mr C is talking about here,

It's hard to explain, completely depends on the price action within those candles. Which you cannot see from that static chart.

Acting on implicit knowledge

 

[Trembling Hand]

T/H Ive watched plenty of live Vids on Futures trading using VSA by people much more advanced than I.
Watched a live trade over a couple of Hrs by Sebastian Manby trading the UK pound a few eeks ago.In that time he picked up 400 pips.

Yeah but that's not what I'm talking about. Things like the SPI are full of games. Arbs, option bots, Crosses all kind of crap that aren't directional trades. The HSI is even worst.

Anyway some more on this chart.
What would we be looking for to confirm that the Breakout (Which ever way it goes) would be likely to continue rather than reverse?

Still be getting short. But have the flip hot key armed

 

[Cartman]

MRC

That where I think VSA can help.
Regardless of timeframe (to say 3 min in VERY liquid markets). Illiquid markets cannot be read with any accuracy.{Mind you a bar which is an outlier trading Millions of stock not normally seen can be read in lower timeframes.}

I see it all the time in many many patterns and in the lower time frames you do see a great deal of Box type support/resistance type patterns.

There are very often tell tale signs which will place you on the right side of a trade.During and even after your set in a position.

The key is in.
Where the consolidation is within the timeframe traded relative to trend.
The really high volume bars
The really low volume bars
The testing of highs and lows in the range.
The range of the bars
The position of the close.

The Key to continuation is
Where the breakout is within the timeframe traded relative to trend.
The Range of the bar
The volume of the next few bars
The way price/volume reacts to highs and any lows on pull backs in the next few bars.

As an example and NOT a trick or cocky question interested in your comments and others on this chart.
Click on chart to expand.

Id use an intraday example but the R/T software is at the office ---can do so on Monday.

ok just got in from being out all arvo --- had a quick look at the chart uv posted Tech -- didnt even look at the volume and dont know whether its a stock/index/fx or whatever and to be honest that would make a difference to the way id approach it --- but based purely on the chart pattern i would be looking for a retest of the last high on waning momentum then hope for a spike high on solid volume --- then short the crap out of it !! ---

if the momentum was still rising into the retest of the last high ---all bets are off/ no trade --

definitely not a short yet unless it spikes lower on higher volume and then retests a lower high --- then id short the crap out of it again

 

[biggles]

HI Tech, I would have said a sell on your first chart, closing on the lows and volume increasing but now , with the couple of other bars added it looks like a buy , we still have narrow ranges which I don't like,( but could be someone is accumulating ) but are closing in the top half. Also the sellers didn't take it down after those 2 weak bars...so BUY ?

 

[Cartman]

ps i havent read the whole thread but is the chart a 'daily'? and knowing the instrument traded would make a big difference to the way u approach it --- the position of the shorter term cycle in relation to the major trend also cannot be assessed properly so in essence the whole exercise is a guessing game ---- toss a coin !!

my guess if it was FX would be a very short term buy followed by a spike high followed by a possible short at the top of the spike ---- if its a stock or index who knows ?? pretty pointless exercise really.

 

[tech/a]

Before I go out.

The two bars clearly are buyers absorbing supply the bars are being capped at the low end with buying.We have strong buying back in the chart (Very strong in march) very low volume early in the consolidation and the increase in volume in the last 4 bars with no movement in the pattern.

So we see buyers gap past the high of the pattern successfully stopping further supply as they will now hold.
Obviously a testing of the high would be the next stop---or is it?
What tells us this is likely/unlikely? From the last 2 bars.

So would we be looking at a test of the high OR a reversal--why?

T/H you may well be able to be correct with DOM I don't know--have never looked.Just know like you feel comfortable with DOM trading I am comfortable with VSA its now like second nature.Not 100% accurate but much better than 50/50

Cartman
No its not a pointless exercise to give you the chart would then make it pointless.
With practice you can read EVERY bar in conjunction with the last 3 bars.Sure initially more chart would be nice but clearly its not currently in a down trend!

The question is how is it going to react out of the congestion zone surely we don't need 6 months of price action to answer that question?
I'm happy to continue further with comments if thought practical.

Remember WEAKNESS is found in VERY HIGH VOLUME up bars and STRENGTH in VERY HIGH VOLUME down bars
More tomorrow.
If you want to read more bars.

 

[Cartman]

Cartman
No its not a pointless exercise to give you the chart would then make it pointless.
With practice you can read EVERY bar in conjunction with the last 3 bars.Sure initially more chart would be nice but clearly its not currently in a down trend!

Techno, its NOT a pointless exercise IF we know the instrument we are trading AND if we know whether its a daily chart or a 1 second chart for eg ---- otherwise it IS a pointless exercise !! cause we are all guessing within UNDEFINED parameters

but i like the yr idea though

ps we'll talk more when u get home !!

 

[tech/a]

Cartman.
I have seen VSA used on many instruments and its principals hold true to every one of them.
As different as they appear to be.
I do note however that the pros tend to trade Currencies and Indexes.
Certainly FX and E minis.
But more when I get back gotta go---coming she who must be obeyed!!

 

[MRC & Co]

HI Tech, I would have said a sell on your first chart, closing on the lows and volume increasing but now , with the couple of other bars added it looks like a buy

Exactly.

And this is my problem with daily charts, now your stop is even wider, as you would have paid that gap to get in AFTER the breakout.

My guess now would be a close of that gap before a continuation higher.

 

[Trembling Hand]

Well I'm stopped out with a 3 R loss after thinking I was trading intraday

Time to take my bat and little swing ball and go back to the beach for some twilight cricket and a lot more :drink:

 

[lindsayf]

"Remember WEAKNESS is found in VERY HIGH VOLUME up bars and STRENGTH in VERY HIGH VOLUME down bars
More tomorrow.
If you want to read more bars."

weakness/strength..what kind? do you mean buyer/demand strength? This is an idea I struggle with...will read that book...cheers

 

[sails]

"Remember WEAKNESS is found in VERY HIGH VOLUME up bars and STRENGTH in VERY HIGH VOLUME down bars
More tomorrow.
If you want to read more bars."

weakness/strength..what kind? do you mean buyer/demand strength? This is an idea I struggle with...will read that book...cheers

"Weakness" in this context can usually be substituted with "sellers"
- and substitute "buyers" for the word "strength".

 

[It's Snake Pliskin]

What would we be looking for to confirm that the Breakout (Which ever way it goes) would be likely to continue rather than reverse?

...the character of the stock, currency, whatever, before anything else.

 

[It's Snake Pliskin]

Before I go out.

The two bars clearly are buyers absorbing supply the bars are being capped at the low end with buying.We have strong buying back in the chart (Very strong in march) very low volume early in the consolidation and the increase in volume in the last 4 bars with no movement in the pattern.

So we see buyers gap past the high of the pattern successfully stopping further supply as they will now hold.
Obviously a testing of the high would be the next stop---or is it?
What tells us this is likely/unlikely? From the last 2 bars.

So would we be looking at a test of the high OR a reversal--why?

T/H you may well be able to be correct with DOM I don't know--have never looked.Just know like you feel comfortable with DOM trading I am comfortable with VSA its now like second nature.Not 100% accurate but much better than 50/50

Cartman
No its not a pointless exercise to give you the chart would then make it pointless.
With practice you can read EVERY bar in conjunction with the last 3 bars.Sure initially more chart would be nice but clearly its not currently in a down trend!

The question is how is it going to react out of the congestion zone surely we don't need 6 months of price action to answer that question?
I'm happy to continue further with comments if thought practical.

Remember WEAKNESS is found in VERY HIGH VOLUME up bars and STRENGTH in VERY HIGH VOLUME down bars
More tomorrow.
If you want to read more bars.

Tech/A,
Any reason why you don't use the open on your bars?