Merci Beaucoup Monsieur, all of your posts are admired and appreciated…
Thanks for all the replies, VERY helpful. This thread is a great resource. Hopefully, when he has time, Pete will get a chance to look over my first post in this thread and assess how I was viewing the chart. However, I am now seeing how some of my prior assumptions can be viewed differently thanks to everyone’s help here.
Multiple Time Frames?
I hold stocks for days, sometimes weeks, so I pick and choose my entries off of the daily chart. I never before considered looking at the hourly for further guidance on entries and exits. Am I correct in thinking that I should be looking at my daily chart for high volume bars, then looking at the hourly that created that bar to see how that bar was formed and get a better idea of the bigger picture?
For example, I see a high volume wide range bar with barely any upper wick on the daily, into new ground. I then view the hourly of the day and see that there was heavy selling into an up move by smart money, and a distribution phase may be starting. I choose to get out here?
Or do I need to wait for a second weak bar after that on the daily? Such as a doji on high volume/upthrust or general down move. Then look at the hourly and see the above, which confirms the move and get out.
An Example
Images below, but also extra links to larger images:
Pic 1 (daily): ht tp://oi40.tinypic.com/ogjhoh.jpg
Pic 2 (hourly): ht tp://oi41.tinypic.com/1234mza.jpg
Image 1 below shows the daily and image 2 is the hourly.
The purple arrow is showing an up move on relatively high volume (I think?) and a wide spread up bar closing at the highs. If we then look at the hourly in image 2, the purple arrow shows the top of this move. It does indeed look like huge selling volume by smart money into the up move. Do we get out on the bar that the arrow is pointing to? The down bar confirming the weakness of selling.
The green arrow on the hourly now has high volume and very wide spread bar with a bullish confirmation. Is this re-accumulation occurring? This would be a positive sign, and therefore perhaps I got out too soon? The daily for that bar appears after the purple arrow bar, and is a small upthrust on medium volume. That looks bearish on the daily.
The blue arrows on the hourly, however, appear to show more high volume selling into up moves by the smart money. I thought re-accumulation was taking place on the blue arrow bar, but now it looks like they are selling into any up move and volumes are higher at the top of this range than when it comes back down to the bottom. This would be distribution then, right? The daily also appears as though there was re-accumulation starting, but then more supply coming back in as it moved up.
How should I be viewing this, and how are my assumptions?
Many thanks.
Hi Petefader,
I have read your previous thread some time ago. I have two questions: 1. Do you use traditional patterns such as triangles, h & s etc in conjuntion with vsa with your trading and if you do, how so? 2. At one point you held some kind of webinar, is that still availlable. Thanks in advance,
Mike
First trade of the week. Volume shows weekness and as Pete said above “stopping vol is low” at the bottom.
Already locked BE as I’m writing this.
Edit: Closed half of my position at the big green area. Letting the rest run and planning on hitting the second target 
I am having problem to make a difference between accumulation/redistribution and distribution/reaccumulation. Is there any definition how to make a difference generally?
Best Regards
You will see Redistribution when there’s not enough stopping volume to turn the market around. Other way around with Reaccumulation.
Look for the tops and bottoms inbetween these phases to see where the market’s at. High volume on the tops and low volume on the buttoms? Most likely Redistribution. And again, the other way around with Reaccumulation.
Hmm… Did I forget something…? :33: Well anyway I hope you get the point
Danny, still lighting it up…nice! We’ll it’s old news now but I’ll post it anyway lol.
Great stuff Pete. I wish you had an entire library on youtube I could learn from. I’ve watched everything on your channel, and it’s really good!
Oh, forgot to mention Pete, I’d really appreciate it if you could find the time to review my 2 posts that I made that included charts, and let me know where my thinking is flawed. Many thanks in advance!
[B]My posts in this thread:[/B]
http://forums.babypips.com/newbie-island/41475-supply-demand-vsa-wyckoff-petefader.html#post292005
http://forums.babypips.com/newbie-island/41475-supply-demand-vsa-wyckoff-petefader-2.html#post292346
Where you have ND too high, I tend to read it by comparing the volume to previous volumes, if there are previous lower volumes, it doesn’t count, this is why I define an ND/NS on the 15m chart as having to have the lowest volume of the day, you cant do that on the 5m you need to take it context but sticking to only the lower volumes to be a valid setup I find is a simple way to filter out the ones you don’t want to get into.
I personally don’t use the daily chart for much besides s/r. There is so much info packed into those candles that you really dont know what went on at the various prices.
A high volume down candle during a healthy up move is not supply coming in. It will show up at the higher prices (on up moves) if it’s a real threat. Technically it’s not something to worry about. But again, trying to read the market just by seeing the daily open, spread and close and ending Volume amount is not enough to read the market imo.
This chart is not showing the usual activity at all…it’s showing alot of weakness on that up move…so I have to ask, did it tank soon after? LOL.
Your 1hr chart shows stopping volume at the green arrow, but rather than accumulation, the up moves hit high volume. A “failed markup” as I call it…turned into re-distribution. Anyone to buy that breakout before the last down move would be a fool. Ends up being a fake breakout, right back into range. So often that marks the tops/bottoms, and off it goes trending…mark down after redistribution.
Stick to the 1hr and below and apply the principles I’m showing, rather than trying to figure out what happened here or there. Then we can be on the same page.
Thanks Pete, much appreciated.
My reason for using the daily is that because the moves can last for a week/few weeks, I’m worried that if I trade off the hourly, then I’d often be getting out prematurely? Or can I really use the hourly for days on end and be confident with it? Should I be looking for some sort of confluence between that and a daily?
Here is the continuation of the chart you asked if it tanked soon after on both a daily and an hourly.
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This was a pullback to the top of the trading range after a breakout (normally a good point to get in a trade for a continuation up, but given the heavy selling on the first rally, I’d assume you would want some sort of stopping volume on the hourly and a no supply bar to confirm what I’m seeing here is in fact a correct bounce/move up. On the daily it is confusing as it looks like a low volume down move with no stopping volume, hence using the hourly more?
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On the daily this is again fooling as it looks like it might just be a standard retrace for a few days before continuing the up move as it is low volume down bars, but I guess we need to consult the hourly for answers. Hence I have posted below that the hourly. Look at number 3 there and tell me what you think. My thoughts are below.
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It appears that we had stopping volume at 3 and more supply still when it retested that high. BUT, on each bar labelled 4, it looks as though accumulation is taking place. Would you agree? The down moves are accumulating and the up moves following it are finding few sellers by comparison. Is this re-accumulation taking place, and therefore this may in fact be just a short lived down move before reattempting the highs of 3.00p again? I’m not sure how to view the angle of descent or when it might end.
Thanks again.
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I wouldn’t be looking to buy for a continuation since there is weakness in the background. You might need to reset your brain and put aside any preconceived ideas to clearly see what I’m showing.
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Let’s get off the Daily and stick to what I’m teaching.
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The points labeled 4 on your chart do show some demand, but it also shows the importance of looking left. The background is weakness and it’s playing out.
Thanks again. Apologies for the annoyance with the dailies. It’s what I’ve learned to trade off for a few years now, and because I trade shares rather than forex, I’ve been trying to put what I see here into practice with what I do. I assume that can work just as well with stocks as the principle of supply and demand is the same. I just need to drill down into the hourly for it.
1). Can someone explain what they think is going on here on the bars highlighted with arrows. It is into new high ground, and we have highest volume yet on an upbar, and the next bar is down. I would be thinking this shows stopping volume. However, the volume on the down bar exceeds/matches the upbar. How would we interpret that. Distribution then accumulation, therefore indecision and watch for more bars to give us a better indication of which way things may head?
2). Normally you are looking for wide range bars and high volume for selling or buying. Does it need to be a wide range bar, or can we infer the same thing from a short range bar with high volume also for top/bottoms?
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Just because a trending move hits high volume doesn’t mean it will reverse, it’s just increases the probability at that point. For a reversal of an up move, not only do we want to see supply come in, but a lack of demand. That creates an imbalance in supply/demand and price will move lower in search of balance.
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There has to be a wide bar somewhere in there when I’m looking for reversals, yes.
Take a step back. You’re asking “what happened here…what happened there” when it should be identifying the phase on the 1hr, then finding entry point on the five min. Don’t be so reactive to every candle. I wait patiently for setups to form, if it doesn’t I don’t obsess over what went on there. We don’t have to understand every move the market makes, just the overall way SM operates, phases and entry.
If you have this many questions, your time might be better spent re-watching all the videos, and reading the second half of the first thread.
