There is no contradiction between the two points that you made. I’ll try to answer in one post by keeping it simple here.
Although strength/demand will first appear on down moves and lower prices, it does not mean those positions are looking for an immediate markup. As a general rule, if there is still large amounts of supply during a down trend, SM buyers will continue to expect down moves, lower prices that they can buy into…accumulate.
So, as you said. If we are in a down trend and weakness appears on an up move (supply coming in), then we can expect lower prices EVEN IF we have seen demand. Once that supply is removed, the buyers switch over into markup…knowing it will be an easy ride now that the market is out of balance. (high demand, lack of supply).
I’d just like to add, and you can’t emphasise this too often, and I’m just repeating what pete says, wait until the fight is over, i.e. catch the trend continuation, it took me so long not to forget that lesson, it’s odd, you learn a bit, you realise how to get easy trades, then you think you can do a little better and start to try picking tops and bottoms, it’s not the way.
This week though has been a no brainer, I dumped volumes and just followed the trend with pure price action, all those bearish candles followed by a bearish reaction, make hay while the sun shines!
My view. But this chart is having an issue. According to Wyckoff-shematic the price should be under the supply lvl not down there. Does that mean there is still too much supply to absorb and we can expect further down moves?
The true quality of a veteran trader. When one style does not fit the picture, you have another that does. Well done PPF. Another thing for me to think about. I didn’t trade this week as the VSA style I am hoping to be fluent in did not provide me with a good enough probability trade.
Maybe a good way to go wouldhave been to look at the Madscalper through the week for entries
[I]Figuratively speaking, therefore the small trader should imagine himself as a hitch-hiker in the market. For the ordinary hitch-hiker, someone else supplies the car, chauffeur, oil and gas. When he thinks the car is about to go in his direction, he jumps aboard and rides as far as he thinks the car will go.
When he notices the machine has been stopped by a red light, or is about to turn a corner and go in some other direction, or that the car is running out of gas, or the brakes failing to work properly, he steps off and figures he has secured about as long a ride as he may expect.
All he has supplied in this transaction is a modest commission and whatever brains were necessary to observe and recognize the opportunity when to get on and off.
So it is with the market. The observer, whether a small trader or large operator, watches for his opportunity. When he sees a chance that offers reasonable odds in His favor, where the probability of profit far exceeds the risk, he buys, limits his risk and awaits developments.
So long as the stock behaves properly, in accordance with the technical action that confirms his original judgment, he maintains his position. As soon as he finds the stock has reached it’s indicated objective…
Begins to waver in it’s stride, or passes through a set of maneuvers that clearly indicate supply is increasing, and a reactionary movement seems imminent, he acts on the information thrust upon his attention and gets out…[/I]
Richard D Wyckoff
Stock Market Technique ( vol 2 I think ~ 1934 )
You are reffering to e/u, no?
In such range I really like to see some kind of upthrust, false breakout, and than clear reverse. It happened obviously. I believe this was SOW, now expecting to test and another level down. I would short after correct VSA confirmation - but it is friday, strange hour… At the end market has its last word, right?
My view is different. It’s always the case in forex. A grp of people say:it’s bullish&going to go up, and another grp say:it’s bearish& going to go down…
What I saw, price didn’t go below the previous AR top. Also there were two successful test.
My channel view is different than yours too. I connected it to previous high, the high before this friday’s one. So my up channel line(that’s the trendline too) already broken and retested. I expect an up move
I refer the big up bar as the jump from Wyckoff analysis.
My analysis might be totally wrong but in Forex there are always different opinions. But one thing is 100% true, as you said: “At the end market has its last word.”
1hr high volume points last two days (fri, mon) are wide spread up bars with bearish reaction. When you see that in a range after a markdown, it’s redistribution…sell on up moves, target bottom of range, and potentially a continuation down.
Are these the wide spread up bars from the past couple of days? I am a little confused because there also seems to be some widespread down bars. Maybe I just can not pick out the subtle differences yet.
When your looking at Wyckoff patterns, and VSA sequences etc. one might forget that the market is not always as organized as we make it sound.
There is such thing as uncertainty…times when there is more cause and effect in the here and now than anything planned. Prices have to be probed, intentions revealed. But, we know how SM operates and those principles keep order.
Follow the story line and the principles of SM activity.
Rich, not sure what broker you’re using but I use the IBFX demo for volume. There are some differences between brokers, just so you know what I’m looking at. It’s proven to be most trustworthy imo.
wow what a difference, thanks Pete. I use Go Markets and the volume bars are clearly not the same. Got IBFX downloaded now. Do you not use IBFX for your live account?
