Trading The SPI - NON-Gann Techniques

[tech/a]

T/H.

The long answer to your question is.
The rectangles and trriangles are simply alerts.
It isnt a black box as such (Not that you implied that it was).

You learn to read VSA by firstly pouring over the 2 books that Tom Williams put out (You can also do Wyckoff who was really the father of VSA and Motorways discipline--well appears to be).
Then by watching hrs of Video. Attending Hrs of Live seminars and then ofcourse experience. You know the 10,000 hr thing. I'm at about 5000 on VSA.

To be honest I'm still playing with the way I will trade the SPI with VSA.
But it will not be from alerts.It will be from reading the 5 min chart and incorporation of Common analysis S&R along with one of the Tradeguider indicators. Often an alert will fall on a signal I come across from reading the chart---simply because it will be what I'm looking for.

The short anwer is that if you wanted to and traded off the alerts (Not all alerts are 2 or in rare case 3 bar setups many are 1)
You would/could wait for confirmation of the signal.There are many things to lookfor in the confirmation.
Take the trade then wait for an exit signal with the same confirmation.

You wont get really really tight entries or exits unless you have targets for buy and sell pre set,but then there is risk there as well.

Although I wrote up 4 trades today would have been 7 under my conditions.
I havent added up pips.

Like any analysis there are many things you can do enhance the basics.
Wont be posting anything tommorow for the most part and wont be trading-I'm in the fireld for the best part of thye morning.

 

[Cartman]

Has the last 7 trading days been particularly easy or have I now paid my dues and finally learned some discipline?

eye eye Cap'n ---- post up a cuple of yr trades and let the boyz take em to bitz for ya ----- im no Index trader, but there are some here who will disect yr trades to tell ya whether u were lucky or skillful

 

[Trembling Hand]

Tech just wondering. It actually looks like the kind of stuff I trade. stopping vol and blow offs. you know all that kind a stuff.

 

[tech/a]

I guess the difference being that you are anticipating and I am waiting for confirmation--my slant on it.

VSA is falable just like all analysis---Frank would probably dis agree and I may too after 10,000 hrs of study and application of his method.

Still consistent profit with minimum stress and or time outlay,and maximum clarity and enjoyment are my aims.

I'm encouraged with these instruments.
May well ditch my stock trading!---until a clear long run appears.
Early days yet!

 

[MRC & Co]

Has the last 7 trading days been particularly easy or have I now paid my dues and finally learned some discipline?

Actually, I've found the last few days particularly hard (though the mornings were pretty easy) and the few before that particularly easy. All depends on the way your trading I guess and the timeframes.

Looks to me, like that bot is back, stacking the bids and hitting at market, chasing the price up, then thinning the bids and pulling them, only to then attack it with the ask, rinse and repeat and vice-versa. Catch all those with tight stops out. Creates a lot of noise and distorts feel a bit. Same bot was in there before the GM announcement and seemed to disappear the Monday following, think it got demolished (won't work on a running day for obvious reasons), but would be my guess as to why trends have been relatively choppy in general lately. At least this is what it appears to me and a few other of my drugo iced up friends. :batman:

 

[Trembling Hand]

I'm encouraged with these instruments.
May well ditch my stock trading!---until a clear long run appears.
Early days yet!

Tech Simply on a cost, spread and opportunity basis ASX stocks suck for intraday.

 

[tech/a]

Tech Simply on a cost, spread and opportunity basis ASX stocks suck for intraday.

Just playing around with the SPI a few days has me shaking my head!
They tell me FOREX is even better.

And when the 40-100 point volatility in the SPI flattens to 20 or so where to then?
Currencies?

 

[MRC & Co]

Good stuff tech, hope you do well in the futs!

On another note, unemployment at 11:30am, good luck with that fellas!

 

[Joolean]

I read an article today discussing how large traders will buy the price up in early trade in order to sell into it and I'd just noticed a similar thing in the day I was trading.

The pic is a tick-reversal chart of the SPI on 5/1/2007. Price went up 65 points in the first 20 minutes on ~2000 contracts and then sold all the way down again over the next 3 hours before bracketing above the lows.

Though the article was referring to stocks, does anyone know if this is likely what's happening here or can explain the rationale behind this type of a day cos I've seen a few like this.

Thanks,
Julian.

 

[Frank D]

Tech/a

I Guarantee that using VSA on 3-mins charts you’ll end up being a
short-term trader or scalper, because you’ll be concentrating on the
‘minute’ patterns in the market, whilst disregarding the bigger picture.

There is nothing wrong with that, it’s all about trying to make money
and protecting your money, whether trading 10-20 points, less or more.

I poked my nose into this thread simply to show that there are
certain statistical patterns in the market that occur and that all
traders should somehow use them to their own advantage:- an edge.

If you can combine chart reading skills & pattern recognition, the you
can begin to understand when to hold and when to fold the larger
trends within the daily timeframe and Weekly timeframe.

As per Wednesday’s report:- the SPI has played out the pattern that
I thought it would, rising up and reversing down 87 points, but sadly not
in the ‘day’ session.

But the important part in yesterday’s example was, I knew when to fold,
as the SPI was moving upwards from 3618, and the area that I wanted
to hold:- Short around channel highs and hold the move down.

Yes I do agree VSA is fallible, like most analysis, simply because you
haven’t demonstrated to others where support and resistance is, along
with certain daily set-ups, and how best to use VSA.

You might prove me wrong and I hope you do, but if you just persist
using VSA as a standalone tool, you will be chewed and spewed and
another statistic in this game.

SPI Daily and 5-day pattern charts

 

[tech/a]

Frank.
Although Ive just read the beginning of your book and from the comments you have been kind enough to post up here,I see where your coming from and it fits with my own bias.

I'm investigating day trading holding nothing overnight.
With current volatility and the very short time Ive looked at the SPI and it seems that with even small parcels 1-5 contracts you can turn a $.

There is more to VSA than simply reading the next bar/s and my posting here has been just an exercise. Certainly not a demonstration of VSA in its entirety on the SPI. For me its a work in progress that has shown enough potential for me to be seriously considering ditching stocks in the forseeable future. I'm well on the way in developement of a trading method given the tools I have.


Your road map forward was and is extremely helpful and with your experience would be all you need. I dont have your experience in your field but will study up.

Thanks again.

 

[acouch]

today's road map for those interested..
have a great day, and good trades..
ac
yesterdays road map was so close to perfect it doesnt matter..
2 tics of hod and 2 tics of sycom low..

 

[Bronte]

yesterdays road map was so close to perfect it doesnt matter..
2 tics of hod and 2 tics of sycom low..

Yes acouch, we noticed this also, very well done

I'm investigating day trading holding nothing overnight.
With current volatility and the very short time Ive looked at the SPI and it seems that with even small parcels 1-5 contracts you can turn a $.

There is more to VSA than simply reading the next bar/s and my posting here has been just an exercise. Certainly not a demonstration of VSA in its entirety on the SPI. For me its a work in progress that has shown enough potential for me to be seriously considering ditching stocks in the forseeable future. I'm well on the way in developement of a trading method given the tools I have.

Nice one tech/a
It is so pleasing to follow your development.
If possible please reread our 2003 'Trading the SPI' thread on RC and our recent one on Shares.
Should make more sense to you now.

 

[Frank D]

Today's Premium Report....

"Yesterday's view of price moving up into the channel highs and
reversing down 87 points played out, but sadly not in the day session.

Along with this week's view for price to continue down into the Weekly
lows @ 3481.

Therefore there are 2-days to go in this Weekly timeframe, but that
move down won't occur unless there is a breakout of the 5-day lows
on Thursday @ 3560.

Below 3560 and normal price action would see a move down 44 points
and then consolidate for most of the trading day:- choppy"

Today's price action is a perfect example of Weekly trends and using 5-day breakout patterns.

Once price opened below 3560 today the continuation down towards 3481
was confirmed with a test and reject pattern and a 5-day breakout.

Validation intra-day also confirmed with a rise upwards of 27 points and the rejection down below 3560 to complete the move towards 3519


And even though I have a view of price heading lower this week, which
could end up easily below 3481 by Friday's close, on most occassions 5-day breakouts often complete the range and then consolidate for the rest of today.

This could see price during the day swing upwards and retest the
5-day break once again or later today.

But Personally I don't want to trade longs below a 5-day break.

If I have a view of lower prices on Friday, then the same 5-day break
on Friday is viewed as resistance (depending where market the opens), then look for the next move down on Friday:- lower Weekly close.

 

[Trembling Hand]

But Personally I don't want to trade longs below a 5-day break.

I got a low + 1 entry. might as well let some of it ride.

 

[tech/a]

Yes acouch, we noticed this also, very well done


Nice one tech/a
It is so pleasing to follow your development.
If possible please reread our 2003 'Trading the SPI' thread on RC and our recent one on Shares.
Should make more sense to you now.

Dont know about developement.

All I'm doing as looking at another chart.
People keep telling me they (The other charts) react vastly differently to Stocks.
I havent seen that yet and from what I see on a Daytrading level they are a damned site easier to trade.

 

[Trembling Hand]

I got a low + 1 entry. might as well let some of it ride.

Try again hey?

 

[Frank D]

SPI Weekly and 5-day pattern

That's why I didn't want to trade the R44 low @ 3519, because it resulted
in a breakout of a secondary channel, resulting in a retest @ 3536 and
continuation down into my Weekly lows :- which may or may no hold this afternoon.

Reminder:- markets are being puhed down from the monthly 50% levels, and if markets are going to continue down, as per primary cycles
in 2009, eventually these levels will have to break.... 3481.

I'm not expecting a major reversal upwards, if lucky 44 points, but i've
taken my partial exit out

long 3484 partial exit 3493 + 9

and run breakeven stops from entry.

Either it continues up or breaks lower..

Let's see how she goes

 

[MS+Tradesim]

Didn't take any of the shorts on the far right. Too near to close. Which is probably where TH is making the big bucks. When this has proven itself, I'll go live on it and start working on a reversal system, which I imagine will provide more points?! We'll see, I guess.

 

[Cartman]

Dont know about developement.

All I'm doing as looking at another chart.
from what I see on a Daytrading level they are a damned site easier to trade.

smugness is not a very redeeming quality Techno :

People keep telling me they (The other charts) react vastly differently to Stocks.

i think we were mainly talking about currency trading re the argument over chart differences weren't we Tech --- u musta forgot that bit