VSA Chart Analysis Discussion Thread

[Monkeyzu]

Motorway, I think I need to run your post through babelfish to have any hope of understanding most of it!

Have not read the book. But the flipper would appear be a non chronological time signal ?
Defining a trend without reference to time frame or chronological time?

It is a system based purely on price with no reference to time (also no reference to rate of change of price, moving averages etc that would tie price back to time).

consider... Price and Volume scale together in a stationary manner (intrinsic time)

Time is then always Non Stationary in relation.

Ummm.... you've lost me

Can you explain what this means?

You have made me think though; systes/signals without any reference to time... there's something in that.

 

[motorway]

Motorway, I think I need to run your post through babelfish to have any hope of understanding most of it!



It is a system based purely on price with no reference to time (also no reference to rate of change of price, moving averages etc that would tie price back to time).



Ummm.... you've lost me

Can you explain what this means?

You have made me think though; systes/signals without any reference to time... there's something in that.

On a Bar chart with time on the X axis . You have time in fixed units.

So some bars will have lots of price movement and lots of volume others will have very little etc

Ok That is only because the X axis is compressing price and volume into slices of time.

Now consider as example a P&F chart. The price will flow without reference to any time frame (slices of time ). You just significantly changed these relationships of volume, time and price.. Now price and volume will both be stationary to each other.

IE when price moves faster , volume will expand . When volume contracts price movement will slow . The exceptions will be of special causes/significance.

( Price Movement will be correlated with volume )

On the BAR chart time is stationary ( fixed units ) with the amount of price and volume changing.

On the P&F chart price and volume will be stationary to each other as time changes.


By defining price and volume with out the fixed slices of a stationary time frame.
You ,as the flipper would seem to demonstrate can develop very powerful methods that cover all aspects of trading ( eg consider the flipper as a market breath or relative strength measure % of stocks ... In fact there are many P&F methods of such bullish percents )

But most important looking at Price and Volume in this manner will also get you looking at Price and Volume very differently too. Very differently .

And Time ? You will certainly appreciate most clearly the importance of Time.

have a think ? price and volume move as a wave.. As a price/volume/time UNIT.

You always have all three at the ONE TIME..

Also consider the power for system building
The absence of stationary time. Means your system will better Time as in Timing.

looking at VSA is similar because the focus is removed form the slice of time (even though they are still on the chart) and placed on the expansion of price and volume.

Very different from using indicators using that X axis of Slices of time.

I expect the flipper to be better because the time element can expand or contract to what ever it needs to. Not restricted to 1 or 2 bars like VSA signals ( Which is different to Wyckoff method ) Just the same as a P&F chart does of course the P&F chart allows the Horizontal movement to be part of the analysis.

The Time, the flipper and a P&F ( & Renko and some others ) are triggered by is INTRINSIC (INTRINSIC TIME) not overlaid as external measure.

I would recommend study in this area.

Motorway

 

[Mistagear]

On a Bar chart with time on the X axis . You have time in fixed units.


The absence of stationary time. Means your system will better Time as in Timing.

looking at VSA is similar because the focus is removed form the slice of time (even though they are still on the chart) and placed on the expansion of price and volume.

Very different from using indicators using that X axis of Slices of time.

I expect the flipper to be better because the time element can expand or contract to what ever it needs to. Not restricted to 1 or 2 bars like VSA signals ( Which is different to Wyckoff method ) Just the same as a P&F chart does of course the P&F chart allows the Horizontal movement to be part of the analysis.

The Time, the flipper and a P&F ( & Renko and some others ) are triggered by is INTRINSIC (INTRINSIC TIME) not overlaid as external measure.

I would recommend study in this area.

Motorway

Personally I use Volume Charts, which also have no time component, but imho show the supply/demand, cause/effect equation better than P&F.
When forced to use a Time Axis (most platforms do not support Volume chart) I find having Volume Profile assists in explaining swings/waves etc.

PS. I have no experience myself with P&F, but have had discussions with Motorway on another thread since January and feel the P&F analysis keeps unseen a considerable amount of the supply/demand picture which is visible using Volume charts and/or VSA methods on a Time axis chart

 

[motorway]

Personally I use Volume Charts, which also have no time component, but imho show the supply/demand, cause/effect equation better than P&F.
When forced to use a Time Axis (most platforms do not support Volume chart) I find having Volume Profile assists in explaining swings/waves etc.

PS. I have no experience myself with P&F, but have had discussions with Motorway on another thread since January and feel the P&F analysis keeps unseen a considerable amount of the supply/demand picture which is visible using Volume charts and/or VSA methods on a Time axis chart

CVB will move much like P&F boxes

Almost exactly the same

But the P&F has enormous flexibility.

CVB and P&F Both are two dimension charts

HERE IS a Golden Pearl

On these charts a movement in the vertical has exactly the same meaning as the movement horizontal. Hence Cause is directly correlated with Effect
the P&F chart can use just X as a symbol because every X is the same price/volume unit and means the same across or up/down.

imo CVB are a way of drawing a P&F chart when the software can not draw them.

Again the time element becomes clear as the variable ( and key to many considerations )

It is easy to make up P&F charts and overlay them with CVB and CTB ( T=Time )

You will find how alike volume and Price move.

P&F chart because of its construction and special way it handles the signed order flow ( CVB handle the same way I think ). But esp construction allows everything to be zoomed into or out. In modifying BOX or changing reversal. What is very far apart can be brought together and connection become visible ( remove the empty spaces )

Or you can zoom right into the bursts of activity ( in a special way ) at the bid ask and all directly correlated though the time that is intrinsic.

Imagine you following a portfolio of stocks
you can have the one scale on a P&F and screen and manage the entire universe. ( the scale will be a type of logarithmic scale )

You can not to this with CVB so easily

You only need to define YOUR signal
The Intrinsic time will do the timing

eg ~ 4% Box size X 1 ( primary trend )
on say large cap on the US market would have multiple entries and holds on AAPL
while other charts crawl in comparison to NO WHERE.

The P&F used in this way can truly seem to ignore time and volume ( because it really isn't as explained above )

The only way to find out is to DO

Make up some charts
overlay time and Volume

You will see the relationships of time volume and price
VERY QUICKLY..

connection to the thread
VSA is connecting the user to a degree to this Intrinsic Time.


A guy who grasped this was the creator of MP
Only imo there is little to be gained collapsing the fluctuations into a BELL CURVE
or as was used ( and still ) 30 min slices of time.

The X on a P&F chart.. was called a Price/volume/Time UNIT

There is one important difference to a MP TPO... But
They are same species. That difference is Important

When looking at a 4% APPL chart ( go to Stockcharts )

Think about the Flipper

How it can Time ( without using time )

Of course Wyckoff grasped this as did some earlier and later.

Then until recently lost and on the sidelines, Now the Physicists are rediscovering it.

I would say to any beginner
start with P&F
then you will know what you are looking at when looking at any other method
( you will be looking with intrinsic time eyes )

Many will finish back with P&F and won't bother going anywhere again.

The thing is to make the charts up study and learn.
You really for a beginner do not need any software
a simple spreadsheet with manual entry can be a great leaning adventure
and extremely simple and very little time to maintain.

With AAPL Start from 31 dec 2006
4% select log select daily select High Low

Move the date gradually forward.
consider what I have said
every X and O has same meaning

consider how other stocks would have been behaving
From 2003 till the present ( some stocks entire history would be on the one screen shot = Intrinsic Time )
Motorway

 

[Gringotts Bank]

motorway, what is intrinsic time?

 

[Monkeyzu]

motorway, what is intrinsic time?

Time measured in events, rather than seconds. An "event" may be a % change in price (or volume). The best description I could find:

http://www.economics-ejournal.org/economics/discussionpapers/2011-28/count&sa=U&ei=TAyRT8HLA_TG6AHOlNCRBA&ved=0CC0QFjAJ&usg=AFQjCNEZcPgnoHv8gNpBGtiu105jxY7nBg

So if the "event" is price of a stock doubles, it does not matter whether it takes 30min or 3 days, in the specified scale (of 100% increase), one unit of time has passed. We could select smaller events (eg 5% change) to extract more data-points. If you use very small events you begin to closely map the normal price/time chart (a bit pointless), if you use very big events you probably won't extract much meaning. Somewhere in between you may find a "delta" that when plotted shows meaningful events.

I may have got some of this wrong, sure Motorway can clarify. But the paper is interesting.

I have no idea about P&F, never seen it before. But I can see how for example time may not be relavent to support and resistance. In VSA they suggest plotting support lines from the past out into the future. These could be from way back, off the edge of your chart. VSA even talks about support line from years ago having an impact on some stocks. If your time scale is not linear the support line would be compressed on your page and more visible, as to whether it has an impact.

 

[motorway]

Gringotts Bank & Monkeyzu .. look at the APPL chart at 4% ( also select wide chart and Giga size + trend lines daily H/L )

consider that there is significant larger time horizon trend momentum.
You will see this by looking at at 8% chart and even a 16%.
That large Time Horizon is sweeping along every other active time Horizon right down to the day traders. So larger time horizon activity is visible on the smallest resolution charts right down to the bid ask spread ( though here we approach a important change in behavior) and here is important point.. We look at the smallest scale charts to see what EVERYBODY is doing.

Olsen's description of Direction change ( BOX SIZE ) and Overshoot ( The number of boxes after the reversal in the same direction ) is a definition of a P&F chart.

Hence the usefulness of his work.

For an intrinsic time point to occur, there must be enough movement against the previous prevailing trend to trigger a Directional Change Threshold (DC), where the DC is defined by a fixed percentage of the previous move. From this point onwards, the Price Overshoot (OS) starts to be counted until another Directional Change is triggered.

In the same way as we have different Timeframes and Tick Charts on conventional charting, we can have different Intrinsic Time charts by using different percentages as the Directional Change Threshold.

The Olsen Scale of Market Quakes takes the calculation of the Intrinsic Time one step further and, for each price movement in the market, the SMQ will measure how many DC thresholds, from 0.05% to 500%, would be be triggered, normalizing then the values into a scale from 0 to 6.

calculation is based on the price evolution of a currency through time, any event causing a raise in the markets volatility can be indentified and set apart for further analysis. This makes it a valuable Fundamental and Technical Analysis tool capable of quantifying the impacts caused by news events, the placement of large orders, cascades of liquidations, and ubiquitous unbalances between buyers and sellers,

All true , but also the important aspect of a P&F chart though , is the fact of the same meaning on both axis.

So a movement five boxes up or down has same relevance as a movement 5 Boxes across ( which is achieved by changes in direction Olsen's DC )

This is untrue of a Bar chart. The two axis are not the same. five units up is price
five units across JUST HAPPENS it is just the Earth revolving.

Now time is still important and on Both charts all activity moves through time.

There is direct connection to VSA

But maybe getting too Off Topic.

Motorway

 

[Gringotts Bank]

Thanks motorway and monkey,

This is actually quite hard for me to follow. I'd need to read some basics on it first.

Just one quick question: are renko and 3-line-break charts based on intrinsic time? Do they have any of the same benefits of P&F charting?

 

[motorway]

Thanks motorway and monkey,

This is actually quite hard for me to follow. I'd need to read some basics on it first.

Just one quick question: are renko and 3-line-break charts based on intrinsic time? Do they have any of the same benefits of P&F charting?

Yes ,, Renko is the same as a P&F chart except it is exploded ( every brick moves sideways ) But you can not change the reversal it is always one.

Renko is OK when looking at a small section of activity
But imagine that APPLE chart as a Renko chart.. Renko charts can get that extensive that you soon lose sight of the background context. Renko chart is full of meaningless empty spaces.. The charts just get too large to handle.

P&F can modify the box size as well as change the reversal so
the price series can be condensed ( removing empty spaces or adding meaningful ones ) In a number of ways

Three-line-break are related
But Renko and Both TLB . both tend to focus on trend momentum to the relative exclusion of trading range analysis

P&F can do either , It can focus very specially on the areas of congestion because they appear with so much clarity. Hence movement from such zones has high clarity also..

Also because of that that clarity, the relationships of such zones to each other ( rising, falling accelerating , decelerating etc ) is Higher too.

Motorway

 

[joea]

Tradeguider Roadshow in Sydney 29th - 30th in September I think.
joea

 

[derteye]

Re: VSA Chart Analysis Discussion Thread CBA 1/3

Gday All

New to VSA learning and thought I would post some charts and see if any followers wish to provide some commentary on the price action with respects to VSA.

 

[derteye]

Re: VSA Chart Analysis Discussion Thread NBA 2/3

NBA 2/3

 

[derteye]

Finally UNG 3/3

 

[tech/a]

Well
Your the one learning
So what's your take on each?

 

[derteye]

Ok here is what I have to offer:

CBA- Has been in a strong uptrend now for most of the year since January and it seems to me that the distribution of CBA has commenced at the Volume spike at the very end of June. It has chopped along for most of July and I think that the last bar is a form of shake out and that CBA could find support levels at around either firstly $79 or $77.50 which was resistance Dec/Jan and the start of April. I would be looking for support on one of these levels and then look extremely low Volume on a down day for a SOS.

UNG- Was forming a breakout pattern and came to my attention via Nick Radge on FB. He was looking at a breakout late June. Looking back to the huge Volume spike and up bar on June 12 you would possibly have thought that a breakout was on the cusp but I believe that SOW is shown the very next day as the spread is thin upwards and volume is extremely low. I believe that price action is still coiling within the triangle pattern.
However you might argue that a break to the downside is in play as the last 3 bars are with little spread on Up days and volume disappearing. Almost like a divergence.

NAB- For mind it is rather choppy and I am less clearer on my thoughts of this than the previous two. Is the recent trading in the channel b/w $32.75 - $33.75 Accumulation and the last day a possible shakeout before a possible surge.

 

[Cam019]

Thought I might resurrect this thread as I feel it will help me talk through my analysis with other traders interested in VSA and hopefully help me learn a few things in the process.

COE



So the way I am reading this is lots of effort on Jan 30 with a high volume up bar closing on the days high. Then we have a month long period of consolidation with no sell signals as most of the down bars are accompanied with either narrow range, low volume or a combination of both. On Monday, there is a successful test for floating supply which could have also been a shake out (especially for holders who had just used an ATR based stop without considering previous levels of support). The test bar closed half through the range which indicates some buying pressure stopping the prices from falling further (buyers must be entering the market). Yesterday we saw a large increase in volume with wide range closing near the days high and through a previous level of resistance.

Please feel free to dissect and comment as it can only help with my VSA education.

 

[tech/a]

Thought I might resurrect this thread as I feel it will help me talk through my analysis with other traders interested in VSA and hopefully help me learn a few things in the process.

COE

View attachment 70133

So the way I am reading this is lots of effort on Jan 30 with a high volume up bar closing on the days high. Then we have a month long period of consolidation with no sell signals as most of the down bars are accompanied with either narrow range, low volume or a combination of both. On Monday, there is a successful test for floating supply which could have also been a shake out (especially for holders who had just used an ATR based stop without considering previous levels of support). The test bar closed half through the range which indicates some buying pressure stopping the prices from falling further (buyers must be entering the market). Yesterday we saw a large increase in volume with wide range closing near the days high and through a previous level of resistance.

Please feel free to dissect and comment as it can only help with my VSA education.

Just saw this.
Its a good example as it didn't go on with things as anticipated.

Ill comment later.(No time now)

 

[Cam019]

Just saw this.
Its a good example as it didn't go on with things as anticipated.

Ill comment later.(No time now)

Anything @tech/a?

 

[tech/a]

Sorry Cam I decided to wait and see if there was interest, seems only you!
But hey if one is listening Ill ramble on.

Firstly these are my observations.
In General terms VSA single /multiple bar or chart patterns have a life
Single bars only the next day
Multiple bars until the pattern or bar pattern breaks down.
COA is a great example because it triggers then breaks down then gives more signals.

So here is a marked chart which we can follow with comments on how I would have traded it
just as I trade others like it. For me the initial pattern was weak which wasn't certain until
the very next bar. (5/10) .
I know its easy in hindsight but this chart has panned out like many others with similar setups.
Many I have posted in charts of interest. I get caught in trades I should not be taking like many others do.
Ruthless exits have proven more than their worth.----for me.

 

[Boggo]

I don't want to derail this excellent VSA thread but I did have COE in a watch list for a few days and this is about another way of looking at this type of stock behaviour.
I run my weekly scan of the All Ords stocks (~500) during the week sometimes just for a heads up and sometimes an opportunity to enter a weekly buy on a Friday when it is obvious that the signal will still be valid at the end of the day (and week).

In the case of COE, it came up in both the weekly and daily scans on Tue 28th Feb but because I now lean towards weekly only I held off to see how it would hold up for the rest of the week and the weekly OHLC bar in the pic below says it all (to me anyway).

While I occasionally miss out on some short term fast runners I am finding that this approach reduces the number of failed trades and gives me a better win/loss ratio.

Sorry for the thread disruption, just thought that the bigger picture was worthwhile mentioning and I was familiar with this stock for about a week