I personally think, other kind of volume indicators made by market makers&brokers in order to mislead the people.
Hello,
I try to understand better the background information. Here is my analysis.
I marked the incoming strength(demand) with an up arrow, weakness(supply) with a down arrow. I also drawn trend lines.
First I drawn trendline 1. Price formed a lower high, then I drawn trend line 2. Then price broke trend line 1 but the volume was low and price returned above the trend line 1 later. It went sideways after that, made a higher low and broke trendline 2 upwards. It was a succesful effort to push the price above the resistance. I drawn trend line 3 using the higher low made before.After this, price went sideways. Then it pushed up again with high volume. As time past, an ascending triangle formed. The price broke upwards from this triangle and headed to the old trendline 1. It had broken it but returned below later.
If we see the volume on the previous down move it is higher than the overall up move volume. Does it suggest anything? Also on 4 hourly chart price made a lower high so the direction is down on that chart. Well, we still do not know that high is completed or not but the second 4 hourly candle has a long pin up.
The black lines mark levels where I consider go long or short later. Also for short I would like to see more volume than now.
Could you please review my analysis? I would appreciate that.
Best Regards
Pandras
Wow, Talk about being paranoid 
⌠I doubt this is true. Also, note that brokers donât profit from your loses.
Thank you for your very helpful replies. I have added a trendline and fibs (Should have done it in the first chart already, I apologize.) I see the significance of the trendline. Price bounced from it four times, so I suppose we should wait for it to be broken before we can categorize a downbar on low volume as a valid NS bar.
@Purplepatchforex: Yes, I can see how the first NS that I marked not only conflicts with the candlestick pattern but is also dubious (if taken in isolation, without considering background and context) because it was so narrow and could too easily have been a UpBar. But the main reason which invalidates a NS (any NS for that matter) in that particular situation is that a strong trendline needs to be broken first. Do I understand correctly?
@Pandras: I didnât notice the third test. Thanks. Without giving the trendline enough significance I think itâs too easy to fall for the NS after âTest 2â.
I can rephrase my initial question into âHow do I know how many tests we need?â It seems like I canât really know exactly. Sometimes price shoots up even if the test was on relatively high volume, sometimes price comes back for a re-test even after a low vol test.
What matters is that we should identify a resistance area and wait for it to be broken AND we wait for price to show a confirmed NS after broken resistance. Is this correct? But then again, I have seen many entries in the old thread where it goes âclimaxâ>testâ>ND/NSâ>entryâ, without price having to break s/r. It seems that one could always imagine a s/r trendline, so the question is when do we use a trendline and when donât we? I guess we just have to use common sense?
Hummels, I fully understand your question and itâs a good one. Different VSA traders will give you slightly different answers on how they chose entry.
In short it comes down to how aggressive you are. If the background clearly supports the reversal, I tend to be more aggressive then a sudden stopping volume with a less clear background. Waiting for a resistance (auto rally after stopping volume) to be broken, then a low volume test is not aggressive. Going off of a simple trendline break/NS is a bit more aggressive, and waiting for the actual trend to start and find a NS would be least aggressive of all, but can be quite a late entry. This is something I should discuss more in future posts. Thanks for bringing it up.
Basically saying the same thing but in the example on left, price was able to MAKE PROGRESS up on itâs close from the open, and since the first bar closed near the highâŚitâs not looking as bearish and example 2 where NO PROGRESS up was made on the close relative to itâs open. Of course itâs out of context, so thatâs all I can sayâŚdepends where this shows up.
Hello Pete,
Please review my analysis Pete, I use volume and the bar spread, to identify weakness and strength, and the stochastic just for confirmation.
I think âthe big boysâ tried to get the higher place to jump @ 10.11.2011, coz the up bar @ 11.11.2011 volume is lower than 10.11.2011.
And this is âthe EURUSD down trend Part 2â from 8.11.2011 (weakness from H4 Chart). The weekly chart is in down trend, and the stochactic already crossingâŚ
My strategy for Monday areâŚI short the EUR @ 1,38000 , SL @ 1,39000. coz I think there are too much barrier (resistance area) from previous historical price. Strong resistance area between 1,39780 - 1,41180. So even if my position is closed at SL, I will short again @ 1,39000. And if price is start moving down I will double or triple my position after 500 pips (MT 5digits)
with lower volume @ 11.11.2011 than 2 previous bar there is no way for the EUR to get the fresh new higher groundâŚsince the stochastic is already crossing @weekly chart.
Thanks a lot for your review, Pete.
A Noob from New Bie Island
This is a clean version of my chartâŚsince too many horizontal line identifying resistance/support from previous historical price based on volume ⌠
This is where things start to get a little tricky for me. This image was just after a re-accumulation phase that broke out to the upside through resistance. The 3.6p level is another area of resistance historically. The bar I have highlighted is obviously showing supply coming in as it touches that area above, however, it is also a down-bar, with next bar up, so could this be viewed as a lot of strength with buyers absorbing supply?
I also get confused by definitions of a down bar as compared to a down day (in relative terms here as this is a 15 minute chart - a down day here would obviously be a down compared to the previous bar). Is one more important than another when looking for stopping volumes i.e. can we have stopping volume in an uptrend where the very high volume comes in on a down day (compared to the previous bar close), but is also an up bar going by the current day/bar open? Is it purely the close relative to the open we should be focussing on primarily?
how are you choosing the best time frame to trading the eurusd?
I think its an individual preference and depends on the personality and trading method some like scalping and taking small moves over the market others like the long trends.
would love to hear what you think about it?
Another Daily chart?? The Daily is good for s/r, trend lines and Fib but as I [I]already[/I] explained, I donât do VSA analysis on the Daily.
Youâve managed to mention every time frame besides the ones Iâm talking about here.
Letâs try to follow what Iâm showing. Iâm offering golden info on the techniques I use to trade profitably. I would like posters to be more focused on learning that, than trying to have me answer questions about things I donât even do.
Yes, that high volume pin is supply coming in as higher prices got tested, but as I often talk about, look at the REACTION. There was buying as well.
The second question is about the DailyâŚsomeone shoot me now.
Pete, Iâm not talking about the daily in the above question, hence my posting of the 15 minute chart. I was simply trying to understand if there is a difference in how I assess bars in terms of itâs close relative to itâs own bars open or low, and itâs close relative to the previous bars close. I simply stated previous day (meaning previous bar) because i didnât know how to phrase the question.
Basically, if we have a stopping volume bar, then the next bar closes DOWN compared to the stopping volume barâs close, but the bar closes at itâs high relative to itâs spread/low, does that change anything in terms of stopping volume confirmation?
Thanks. I hope you see what I was meaning.
So the second bar closes below the close of the first bar, but itâs closing at itâs high? Is this a trick question? Obviously there would have been a gap down! The second bar would be all pin on the bottom so itâs a sign of strength that should be confirmed on the next bar.
Wow you guysâŚseriously. I might have to ask the mods to do a cleanup here.
Oh, yes it is a gap down, which is why slight gaps up/down in illiquid shares after stopping volume can cause me trouble. Iâm guessing gaps donât appear in forex? I had no idea, and didnât realise the question would be another annoyance for you. I apologise. Iâve learnt so much from applying all your techniques to trading shares. Iâd read MTM several times, but only by finding this thread did I really manage to grasp things that were eluding me and making things more difficult. Iâm also now only trying to post things/charts in this thread that can be answered and make sense to people who trade forex. Like I said, I had no idea my last question would cause such a stir.
P.S. Iâm also 50 pages through your previous thread. Gold in there also.
Ok, no problem. I gave the answer, hopefully that is helpful. I think it would be better for you to finish reading the other thread before posting more. Iâm sure most or all of your questions will be answered there already. And please, no more hypothetical brain twisting questionsâŚand stop focusing on 2 candles like they are the mystery of the universe. There is always the big picture. Thanks.
Hey All,
My first post on this thread. Please, more reading and less yakking! I just ignore most of the unnecessary posts. [U][B]But, Pete feels committed to read and respond to all of them. Give him a BREAK!![/B][/U]
Itâs like asking a Doctor to take care of your blister. What a waste of talent.
Feel free to delete this post :15:.
@Pete
I wanted to ask how come you can draw those boxes to show res/sup in your MT4 trader in IBFX. I have demo account with them and donât have that functionality.
@ALL
Also, has anyone had issues with their brokers feed. Where you get a dead flat candle and astronomical Volume. It happens reasonably regularly on GoMarkets and VantageFX. The signal is obviously wrong and is frustrating because it screws up the rest of your volume reading until the super high vol bars go off the edge of the chart.
Another thing I have difficulty with is my demo broker VantageFX seems to be lagging on order open and close up to 5 seconds. A few times it fails entirely saying no connection. It only happens occasionally but enough to be an issue. I have tested other brokers at the same time and no issues so it is not my internet throughput.
To be honest, these issues seem to be on-going, I have persevered this long because their spreads are great and their customer support is good, but am not really happy with this issue and probably would not trade live with them.
Anyone have these sorts of issues.
I use IBFX and I have that function. I think MT4âs default is to not show the rectangle function. Right-click on where you select lines, fibs etc and then youâll see the option to customize. Then just insert the rectangle and youâll be able to draw the boxes.
Hey thanks mateâŚall those extra functions been hiding out on me all this time.