THIS THREAD HAS BEEN CONTINUED HERE:
Some live trades with explanation of the setup: YouTube - petefaders Channel
All you need is a naked chart and Volume to realize..
The market moves through particular cycles. It's a system rigged to take your money. That's how it works. That's why it's there.
How you trade actually helps determine the very cycles that are causing you to lose. If you happened to be on the right side of the market, know that most are not..and next time you may not be so lucky. Indicators pick up on symptoms of a trade setup, but not the cause of the price movement.
Jesse Livermore discovered how the markets are manipulated, and developed methods to profit from these manipulations.
Richard Wyckoff codified Livermore's discoveries and methods and applied them to chart reading.
Tom Williams added VSA to Wyckoff's work to reveal the specific tactics used to manipulate crowd behavior and expose the footprints of the Smart Money manipulators.
Petefader started a thread.
You won't get much out if it if you just read a few pages. My method becomes more refined as my understanding of the market increased. The thread is 3 years old as I write this update.
During a distribution phase, smart money has built up short positions, but the "herd" is positioned long. A markdown phase (aka down trend) runs through their stop losses.
As the markdown continues, eventually it attracts much of the herd to now sell. Smart money is taking the other side of that trade. They're already in profit on the short, but thin out their position and they take the other side of your shorts. Once they are switched over to a position biased long and gone through accumulation, they begin the mark up phase, again catching stop losses.
When and where the cycles take place is largely based on how many people they can get on the wrong side.
Trend retraces often go to 50-61.8% not only to test the validity of the markup/down, but that's also where many stop losses are (re accumulation, redistribution)
When the herd is most aggressively selling, it is in turn when smart money is most aggressively buying. This causes the high Volume, large candles, pins, dojis we are so used to seeing (absorbtion volume). It's systematic carnage.
Sorry for the cheesy thread title. When I first started it, I figured I need something eye catching to not be overlooked.
PS, I am fully aware that we are not talking about actual Volume traded, but Volume of ticks..and I prefer it that way. No debates please..we are waaaaaay past that.