I’ve got a few requests to start a new thread to explain how I trade using VSA & Price Action. I trade a personalized version of Petefaders VSA method.
A whole new world became available to me when I first started to zoom out the charts to see the bigger picture. That’s when I started to realize how things were moving and I steadily learned how to read the market. It’s all about a clean chart with Volume, Price action, Fibs, Trendlines and your own decisions. No need for any indicators to tell you when to buy or sell. I will try to make this as simple as possible!
First, I would recommend you to read my short & simple PDF to get a basic understanding off VSA and how the market really works. If you’re unfamiliar with Supply/Demand & how to draw Fibonacci Retracements, please read a little bit about it before you start reading my PDF, just so you understand the concepts.
Just ignore the Font package message that may appear in Adobe when you open the PDF.
I’m going to post screenshots of my trades in this thread and I will try to have a detailed explaination on why and when I entered everytime. I’ll do my best to teach you this method in a simple way.
Also looking forward to this as I enjoyed reading your PDF. I especially hope you show examples of the relation between volume bars and price bars and how they show when to enter trades. This is the most complicated aspect of learning VSA for me. Most of what I have read (including other threads) has been long on theory and generalities while being short on actual examples of trading strategy (“if this does this, then trade this”).
Danny is the man. I like the “less is more” simple approach he is doing. The first fib retrace after accum/dist is a very high probability trade, and often fast moving. This thread will be nice. May the Phase be with you.
A) Price struggles to get out of the big 50-61.8 fib zone, but why? That’s simple, there’s a lot of sellers around that level (see the pins on top of the candles?) and to overwhelm this selling it requires more buying. Higher prices brings more sellers and vice versa. It’s a conflict, buyers vs sellers.
B) We’ve seen weakness so far but as you can see price pushes up and closes above the Fib zone, that made me not taking a short trade there.
C) Even more weakness appeared and you can see that price continues down through my lower trendline and at this point I was thinking “okey, we’ll probably gonna look for shorts from now on”.
D) BUT, that thought changed pretty fast as price entered the lower 50-61.8 fib zone (green area) with high volume and big pins, that was a lock 'n load and I entered this trade on the bullish candle close (the one that is marked D).
I would recommend you guys to use IBFX for your volume feed.
And also, I usually trade from London open - London close. If I’m not in a trade before London closes then I usually don’t take one.
A) Do you see that price can’t close higher than the area I’ve marked? (same area we talked about in the previous picture). It just gets rejected, see the pins?
B) I also drew a small trendline between the two highest points, just to give more confirmation.
C) You see that price doesn’t get past that green area nor the trendline. I entered this trade on the bearish candle close. This trade was taken solely off of Price Action.
D) Price entering the 50-61.8 fibs and is rejected with pins. It didn’t go as far as I hoped but that was enough to close this trade.
Yes Danny, a classic candlestick entry pattern, personally I don’t think you need the Fib, the support area matches the middle of the body of the bullish candle on the 50 Fib (Steve Nisson observation).
But then look at all that bearish action to the right of the trade, now guys remind me from last week, what was the background action again? Well, there’s no point dwelling on that is there? I think the point Danny is making here is much the same as I say, keep it simple, be patient, no point doing so much analysis in such a volatile market.
Definitely simple enough, follow the trend, just by eyeing it up and use a classic reliable candlestick entry pattern.
The hourly trend (including the price action after Danny’s trade) based on your short term view continued to retain a bullish outlook.
It was finally broken with conviction only during yesterday morning’s european trade.
No trades for me today, been a wierd day so not much to talk about really. I’ll try to post a chart later today or tomorrow to show how my entry criteria usually looks like.
I’m glad you finally agree with me, like I said last week, the bullish market will nudge up just a little bit further, before turning around, exactly like I said, it’s because there was all that weakness, and now at 1.3150, it’s quite clearly so.
But I think the point of this thread is not to bother going into all that and I have no need to discuss it further, and just trade simple setups, that work time and time again, I take 3 simple setups now, I have more time to spare, am more profitable and completely relaxed about my trading.
Nice try, but I think you’ll find that eventually, it was the other way around.
(deep sigh) Do we really have to keep going through all this silly pushing & shoving every time with you?
You obviously have this intense desire to appear credible & knowledgeable, & I’m sure you’ll get there with more study & application. But you’ll achieve a lot more, much quicker if you focus more on learning how to correctly apply what you’re studying rather than trying to score cheap shots over others & constantly derailing threads.
Pop back across to petefader’s thread again & navigate to post #'s 2634 & 2635 on page 264 when price was ticking over around the 1.32 figure.
Then revisit post #2637 from your mentor in reply to those comments.
#'s 2638 & 2640 confirm your premature stance.
I actually disagreed with your incorrect (immediate) bearish pronouncement by suggesting the background was indeed still bullish, [U]clearly explaining why[/U] (post #2656) & I concurred with Pete’s view at that point, that going long dips as opposed to shorting rallies was the higher probability play.
Apologies for this blip in your thread Danny. I hope it goes ok for you.
I read volume all the time. Its one of my biggest tools since im a breakout trader. Good breakouts happen with great volume and shows that other market participants where also looking at that breakout level so when it broke they ordered there trades and had a volume spike.
I looked at the pdf very briefly but one of the things i didn’t see is how it can be utilized in spoting great breakouts which i think is one of its greatest benefits.
I usually don’t trade breakouts, I try to buy as low as possible and sell as high as possible. I’m always cautious when it comes to high volume, especially when price enters new high or low ground.
Can you clarify exactly what three types of volume/price action setups you take? I would appreciate some guidelines to follow so I can look back over my own charts and attempt to find the setups one might take.
How do you know if its a breakout and if its a high volume since the volume is moving at the same time with the bar?. You can only know that its high volume after the bar closed right?
I was thinking I would post my trades as I take them but I haven’t seen any opportunity yet so here’s just a random trade a while ago.
A) Low volume on the top (and not a lot of pins), not suggesting much selling.
B) A high volume down bar appears in the 50-61.8 zone.
C) Price is unable to go lower. Pins…
D) This is where I would enter on the bullish close, this is not a perfect one as it has a decent pin on top. The smaller the pin is on top the better, so a solid bullish close would’ve been better.
Try to spot these setups on your own chart and you’ll see how often it does this
DannyK thats a nice one. I have a question though. When you draw your fibo, you draw it from around 1.3050 level to A right? Why you didnt draw it from the lowest point which was around 1.3000 level?
Thanks!
