LoneWolf's Intraday and Swing Trade Diary with Volume Price Analysis

LoneWolf

Well-Known Member
#1
Hello Everyone,

I am starting this new thread to resume my trading journey which I consider my version 2.0. I have always been a price action trader, giving focus to candle pattern, chart pattern, market structure study. I never really got how to use any indicators with trading. For past 3 years, I was trading with candle analysis and pivot trends (using fractals) and my trading approach was to trade the trading TF's trend in the direction of higher timeframe's trend.

Then over last 6 months, many things happened in my life, and my trading took a hit, and a time came it got stopped all together. Well, whatever happens, happens for good. I was not earning for sure, but I got an opportunity to reassess my journey for last 3 years, I got a much needed break even if I did not want it.

Then I met a friend in Traderji (XRAY) and he introduced me to volume price analysis. This Sunday I finished the book on Volume Price analysis by Anna Coulling and this opened a whole new dimension for me and changed my way I used to look at charts. Now I am still watching the price actions and price patterns on chart but a validation by volume analysis. I have been practicing the concepts hard since then to learn how to apply the said knowledge in my live trading.

LoneWolf's trading diary 2.0

So here I am starting this new diary to document my learning and progress with price action and volume analysis. I will start the live action from 1st November 2017.

Objective : To catch the short term (intraday) swing and medium term (weekly) swings) with price action and volume analysis
Instruments : NIFTY and BANKNIFTY future
Timeframe : 3 minute for Intraday and 15 minute for swing trades
Strategy : Price action with volume analysis.

My core principle is based on Sir Richard Wyckoff's three fundamental laws of chart analysis. They are -

1. The law of Supply and Demand
2. The law of Cause and Effect
3. The law of Effort vs Result

 

LoneWolf

Well-Known Member
#2
BANKNIFTY intraday analysis - 30th October

Yesterday I was analyzing the BANKNIFTY intraday chart live during trading session with the new acquired knowledge. Here is the study -



A-B-C - As price was marked down from A to B, stopping volume and weakening of bearish sentiment was observed near B. with 30th October open, a secondary test was done near C near the selling climax area, and price bounced off sharply.

D-E - A hammer with large volume was seen, and the bearishness was confirmed on next candle as it closed with a lower low on high volume, but the lower wick represents somewhat weaker sentiment, not all demands are absorbed.

E-F - Again price - volume anomaly is seen as price went above previous day's high. This breakout can be a treacherous.

F-G and G-H - F to G we have a low volume correction and price started rising from G to H again on decreasing volume. This confirms the lack of buying interest among smart money and we need to see how price action behaves near F (previous supply zone). At H, a big wide range bar closing at its top with ultra high volume is seen. This is an effort to rise, but anomaly is seen on following bars, as the volume was above average but candle's range was getting smaller. A clear violation of Rule 3 (Effort vs Result). This shows all demands are being absorbed and late buyers are trapped. Time for a SHORT trade.

H to I - Price fell with a rise on volume. Cause and Effect co-relation is established and rule 2 holds. Near I, (previous supprt zone) a selling climax is seen. Need to plan the exit here. Demands coming in to the market.

After I, all the demands from lower level are resulting in lower top, and increase in volume is seen on every tops. Could be a slow selling and signs of weakness. This might make BANKNIFTY to break the support zone and mark lower on next trading session.
 
#3
BANKNIFTY intraday analysis - 30th October

Yesterday I was analyzing the BANKNIFTY intraday chart live during trading session with the new acquired knowledge. Here is the study -



A-B-C - As price was marked down from A to B, stopping volume and weakening of bearish sentiment was observed near B. with 30th October open, a secondary test was done near C near the selling climax area, and price bounced off sharply.

D-E - A hammer with large volume was seen, and the bearishness was confirmed on next candle as it closed with a lower low on high volume, but the lower wick represents somewhat weaker sentiment, not all demands are absorbed.

E-F - Again price - volume anomaly is seen as price went above previous day's high. This breakout can be a treacherous.

F-G and G-H - F to G we have a low volume correction and price started rising from G to H again on decreasing volume. This confirms the lack of buying interest among smart money and we need to see how price action behaves near F (previous supply zone). At H, a big wide range bar closing at its top with ultra high volume is seen. This is an effort to rise, but anomaly is seen on following bars, as the volume was above average but candle's range was getting smaller. A clear violation of Rule 3 (Effort vs Result). This shows all demands are being absorbed and late buyers are trapped. Time for a SHORT trade.

H to I - Price fell with a rise on volume. Cause and Effect co-relation is established and rule 2 holds. Near I, (previous supprt zone) a selling climax is seen. Need to plan the exit here. Demands coming in to the market.

After I, all the demands from lower level are resulting in lower top, and increase in volume is seen on every tops. Could be a slow selling and signs of weakness. This might make BANKNIFTY to break the support zone and mark lower on next trading session.
Good chart reading.....

ST
 

LoneWolf

Well-Known Member
#4
Live VPA on BANKNIFTY intraday for practice : 31st OCT 2017



As it was already indicated in previous session's price action and volume validation, as sign of weakness was appearing inside previous day's afternoon range. We broke the support this morning.



Here it looks like accumulation is going on below 25K to 24.8K. Will be watching out for any shake out near that level. Lets see how it unfolds further..
 

primitivetrader

Well-Known Member
#5
are you planning to trade long from accumulation and short from dist zone? if yes thn you are making classic mistake beginner wyckoff/vsa traders make and gets frustrated. these acc/dist stuff is very complex on intraday charts
 

LoneWolf

Well-Known Member
#6
are you planning to trade long from accumulation and short from dist zone? if yes thn you are making classic mistake beginner wyckoff/vsa traders make and gets frustrated. these acc/dist stuff is very complex on intraday charts
If i was trading now, then this would have been my trade plan -

No plan of SHORT as of now. Supply is exhausting and demand is strong from 25K - 24.8K region. 25.1K has been established as a supply zone, so will see if price goes above that but fails to hold, then that could give some SHORT opportunity there.

Now for LONG - The range has been established as 25.1 - 25/24.8K, Near 25-24.8K demand is seen as strong, so if price goes there for a 3rd time and represent some shake off/spring, and then 3rd law (effort vs result) goes hand in hand, then will consider LONG there.
 

primitivetrader

Well-Known Member
#7
below is the 3M chart of BNF i dont trade it but i have put my markings and how i read it there are couple of good trade opportunities as per VSA. BTW i always try to go as per later Tom Williams
 

LoneWolf

Well-Known Member
#8
Nice one primitive trader, I see some deeper analysis there..thanks for the chart.
 

XRAY27

Well-Known Member
#9
Nice thread LoneWolf !!! you got excellent chart reading skills !!!
 

LoneWolf

Well-Known Member
#10
BANKNIFTY Intraday Analysis : 31st OCT 2017



At A, price breaks below previous day's trading range on strong volume, but the bearish sentiment dries up and demands overcame supply near B.

B to C, price shows a pullback on rising volume, this is not a sign of weakness, so no plan to trade SHORT on the breakout-pullback setup. Near C., 2nd wave of selling hit and supply again dominates over the demand, and price started falling. But volumes are not justifying the fall, as the falls are on lesser than average volume. Clearly smart money are not participating in this fall.

At D, a climatic sell off is seen (near previous demand zone). This is a time to go LONG. Next bar is bullish bar with above average volume, followed by a successful test of supply. Rule 3 satisfied. (I failed to recognize the LONG setup in real time though I sensed the accumulation).

NExt there was a minor uptrend to point E, volume was seen on every rally bar making new pivot high followed by low volume shallow correction bars.

At E, again price volume anomaly is seen near previous supply zone. The bar before E was a bullish bar closing at its top, with above average volume, but see its range, very small, Late demand is being absorbed. At E, there is a wide range bullish bar closing at its middle with again high volume. Bullish sentiment weakens. SHORT below bar E, Exit from SHORT will be planned at F on stopping volume.

Nice thread LoneWolf !!! you got excellent chart reading skills !!!
Thanks Xray, just trying to apply the learned knowledge and get familiar with the road that you showed.

So far I am getting slight mental hesitation on fitting the new knowledge with already pre-learned info. For example - Yesterday I planned a short trade on Breakout, Previously as an only price action trader, my plan would have been trading the pullback post breakout. But here with volume validation I was already alert on day before for an impending break below support, and that happened with strength, So I took SHORT. On the next pullback, there was no sign of weakness (rallied with high volume). So I avoided the SHORT on next pullback. (Plan is to SHORT on breakout and weak correction).

But as primitive trader has showed in his chart he might have planned a SHORT there at C, and a LONG at D, as he clearly pointed out the distribution and accumulation in those areas respectively. So I have a long way to go in applying this VPA concept on price action chart.. Thanks again to you and also to Primitive trader.
 

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