Vsa learning club - page 4
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Very nice thread John! I am anxious to get started really understanding and using VSA. From what I have read in MTM so far, it really appears to bring a new level of understanding to these markets that have captivated me for years now.
ok i was reading through gavins 2nd book and theres some really interesting info on trend channels id like to share....in both MTM and trading in the shadow of SM books trend channels are highly recommended....this is how the book says to draw your channels...in a down trend (see chart) we note UHV and start our trend channel by selecting the top of the bar at point A because we have made at least 2 lower highs previously (at points 1 and 2)...at point B, we again note the UHV since the market pulls back up and we select point B as our second low. the reason we select point B and not point D in this downtrend is because point B shows the higher volume. point C would have also worked based on this theroy i believe. the interesting thing is for the bottom line of the channel TG automatically drew from point E but at point F we had much higher volume so im not sure whats going on there ...but point F has the highest volume and would have drawn the same basic line....i need to do some more homework on the bottom line draws....now, gavin talks about after drawing your channel we want to look for our VSA signals in the over bought and over sold areas, especially at our tigger levels(which we'll get into further down the road) and that are in the direction of our trend.....best regards, john
You're making things to look so easy when you explain them!! :-)) Longing to learn a lot with you ;-)
As the trend channel is really important for Gavin and Tom, I've coded an MT4 channel having the 4 quarters like in Tradeguider.
There is the script or the indicator.
Using the script you simply draw an equidistant channel (or more), and when you double-click on the script it will draw additional quarter lines.
Using the indicator, you add the indicator to the chart and it will find and add the quarter lines.
I personnaly prefer the script.
dunkan.hey buddy glad your here..please jumpin and add any of your experience..alot of this begining stuff is pretty rudimentary for you but bare with us where getting there....
guys dunken is an old and very close friend of mine...he was a professsional trader for many years....he's won and lost more money on a single trade then most of us could ever hope to earn in a lifetime...believe me ive seen him do it with my own eyes...he'll be a great asset to the group..vsa is new to him as well but when i first started learning vsa i called him and said "hey man have i got something for you"..with his skill and experience i expect great things ....he's an extremely intelligent guy!
dvarrin..LOL..well buddy i appreciate the compliment but i must be honest ...i basically copied that last peice i posted right out og gavins book...but hey if it helped explain the point then win win for all of us ...
guys i know this going slow and im gonna have to start back working full time next week so my time is limitied but i will be vigilant in learning and posting and sharing...please i encourage you to continue following the other vsa threads to fill in your time ,,,but i will be trying to read and post every evening as we move along...onward and upward..!!!best regards, john
dvarrin..great job on the indies..keep'm coming.always good to have a coder on broard!!!
ok just another tid bit on trend ID'ing...now this is from one of malcolmbs post but i wrote it my journal as i found it interesting....he says look at your chart..find where 70% of the previous days volume was traded...now if im understanding his post correctly ,i added the market profile_prob indie to my chart..then drew 2 black horizontal lines outlining where 70% of the volume for the 3 sessions where traded...mal says if price breaks above this area its an up day...if price trades below this area its a down day ...trades inside this area is a range day....notice how price has bounced of the red center line that shows where the highest amount of volume for the day was traded...this came from mal post #85 on his thread if anyone wants to research it further....regards, john
daily range
Malcolmb talks about another subject early on in his thread..the daily range(post #83)...basically as i read it we use the following formula to judge the potential daily range of your chosen currency..to me this is something of a TP subject (ie. target) but lets go ahead and cover it here...find the 21 day average ( you can add the range trader indie to do this for you)...once you have this average multiple it by.08 then divide that by 2..with that total add and subtract that number from your open and you'll get the range for the day!
i dont know if mal still uses it but i recently read a post by pres that says he does so i thought it worth mentioning...im going to add it to my trading checklist...regards, john
ok tomarrow were gonna get into "the background"...when were doing a background check were gonna be drawing our S/R and triggers...anything anyone wants to add will be appreciated...i have some good material on background ...it isnt complicated really but what i dont like is youcan end up with alot of lines on the screen so im trying to arrive at a way to keep this very important information without cluttering the screen ...i hate a cluttered screen ...but we'll figure that out as we go...after we cover background im gonna begin covering the vsa signals(for lack of a better word)...it will be long and intense but when were done you will know your SOW and SOS like never before..theres alot good stuff coming we just have to get the basic stuff down pat first..see ya tomarrow..best regards, john
Welcome Dunkan! :-)
ok guys letss do a quick review and then break into a "background check"...
what do we know thus far..
1) we check our news and note any reports coming out that day..we avoid any trades at least a hour before and at least 15 min. after a big news report
2)we open up our charts and based your style of trading and personal pip goals , chose your chart series you'll be monitoring...in my case ill be looking at the daily first..followed by the 4H/2H/1H..in that order!ill be looking at the 10m and 15m for entries and to montior my trade once in..
3)on each TF im going to draw my trend channels as we discussed here early and ID my basic trends and direction im looking to trade.
4) per malcolmbs advice were gonna locate where 70% of the previous days trading volume was and make a note of it
5) also per mal were gonna calculate our daily range and make note of that as well
6) begin the doing a back ground check on each TF begining from the largest TF first....
Now this seems a long pre -trade check list but the more you do it the more it will become second nature.
does anyone have anything to add or subtract from the list?..have i over looked any thing? please post your comments if you have something...im creating this as we go and dont want to leave anything out so if youve got something please chime in...it'll be appreciated! best regards, john
one last thing....and this comes from TG...
VSA is all about "Effort vs. Result" and here is an example;
Volume is Activity...and what effect did that volume have on the price spread....
remember...Professional Money makes up 10 % of traders.but Professional Money makes up 90% of all volume...
in ex A we have 2 bars..the first is wide spread on average volume(activity)the 2nd bar is on much higher volume but a much smaller spread telling us SM must be selling..which is a sign of weakness...
in ex B we have the same 2 bars .the first is the same as in ex A..but on the second we have considerably lower volume (activity)...telling us the market makers are marking up the price to trap retail traders..which is also a sign of weakness...effort vs. result!!!!
sorry for the shoty art work! best regards, john