Wykoff/VSA theorists, what's your take on the current short term market manipulation with the USDJPY?
Chart for reference: http://i.imgur.com/qL413v3.png This week has been particularly good for market maker manipulation, with two ultimately inconsequential, but high profile speeches from Yellen and Draghi. For new players who are not familiar with this tactic, market makers will often use these speeches to drive price in a certain direction at least expense to themselves, and low volume mark-ups are typically indicative that the next "trend" play is in the other direction. This week, they used the Yellen speech to drive the USDJPY up on very little volume, thanks to the highly fortunate coincidence of thin liquidity and the speech itself. Could it be they're actually priming for a "pump and dump" (where market makers inflate the price so they can sell at a profit, and then in forex, short at much better level) and continue the down trend of the USDJPY? The obvious target for a "pump and dump" is the very well respected down trendline that has been used to contain any up move in the USDJPY. You can see how past contacts with the downtrend line result in forceful down moves with strong engulfs. So what happened with the downtrend line contact just recently? Well, for those not watching, the USDJPY was pushed up over the down trendline on the back Draghi's speech. Whilst USDJPY movements on ECB policy aren't necessarily abnormal, it's still noteworthy to see a significant trendline and level (the daily pivot point) attacked on a Draghi speech in the current risk climate. What's even more noteworthy is that they chose not to maintain price above that level, instead letting it sink back down, and thus creating the impression the trendline is holding. This leads to two possible interpretations, but I'm undecided as to which is true. 1) There will be false break of the trendline and then an aggressive mark-down, likely timed to Trump's speech. Market makers want a deeper retrace of the USDJPY, and recent manipulation was oriented at generating a consensus amongst major participants. 2) The low volume associated with the Yellen speech mark-up is simply coincidental, and it represents pre-positioning to commence marking the USDJPY up, breaking the trendline and resuming the uptrend. Either way, I'm anticipating the mark-up/mark-down will occur on the back of the inauguration speech. What's your Wykoff/VSA interpretation?
2015 is one week away from the history books. Hopefully it was a momentous year for you. How was this year to you? Kind? Brutal? What did you learn? Expectorate within; let's hear about what you made, what you learned, what you lost, what you regret and what you are looking forward to. We want to hear from n00bs and Old hats and everyone in between. For me:
Started the year off awesome with a new trading method that merges VSA, Elliott wave, Fibs, chicken sacrifice, and my experience that helped me rack up realistic gains for the first 5 months
Suffered the worst drawdown since going live several years ago all due to 3 unbelievably silly trades (-37%, I'm just barely clawing my way into negative single digit territory as of Dec18.)
Lessons learned from these three trades? 1) Do not talk to the wife while trading; 2) You are never too old for a good old fashioned revenge trade, and 3) Always check your calendar.. ALWAYS!. Basically the bull goes up the stairs, but the bear goes out the window, same with your earnings.
Learned that there is a ridiculous amount of spam on the net. Seriously, you guys have no idea how much is harvested by us and by the Automod.
Added a host of extra knowledge to my mental data banks, thanks to all of you.
Life is, otherwise, awesome
I am looking forward to 2016 where I hope to scale up my trading capital and will do my best to make consistant, realistic gains.
However, in the spot forex market, volume is a tricky concept. You will not get actual traded volume. You get tick volume which measures the times the price ticks up or down. If you intend to use VSA methods for trading spot forex, you need to decide if your source of tick volume is a reliable proxy for actual volume. (Need help deciding? VSA indicator, which measures the spread of candles. Currently, there are several similar algorithms (even a beginner in programming can create them – all it takes is to subtract the low of the candle from the high), so we won’t recommend the simplest versions now – instead, consider an interesting example called VSA WSD HISTOGRAM. The VSA indicator Forex does not give accurate signals for the opening of the position, but allows you to estimate the volatility of the asset and the relative value of the volume at each time. A sharp change in the volume dynamics will inform the trader in time that a significant amount of money is pouring into the market, then its task is to ... The market we looked at was forex, but volume spread analysis works just as well in stocks, futures and commodities. VSA is a market analysis methodology that alerts the trader to the two most important questions that they must know the answers to in order to trade successfully — why and when. VSA for Forex traders. There are huge debates among traders on whether the VSA can be used in the Forex market. The reason for it is that the Forex market is decentralized, unlike the stock one. As a result, actual volumes are not available. However, you may analyze the market by looking at the volume observed in each bar.
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