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

[LoneWolf]

Banknifty Analysis : 02 Nov 2017

On intraday chart, climatic volume was seen near 25.56K to 25.58K. This marked price down and price found further support below 25.5K (Previous supply zone now acting as support ). The next rally to 25.56K was on weak volume, and again strong supply is seen near 25.56K ( up thrust with above average volume ). For any considerable upmove bulls need to absorb all the supply coming above 25.55K. 25.5K and below will act as an immediate support. Lets see how the price volume picture is emerging from this trading range. (This could be an early sign of distribution, perhaps)

 

[LoneWolf]

My 1st real trade with VSA concepts.

From yesterday's price action 25.58K was established as an supply zone and immediate support was at 25.5K. Today price opened in the middle of the trading range and tested both supply and demand zone. This is followed by a rise in price to previous day high on volume lower than average. Clearly there was no demand as price inched higher.

At A, a bullish bar closing at its top and with a volume above average is seen. An effort to rise. This is followed by an immediate upthrust bar with high volume. Bears has shown their hands here. Next 3 bars bullish bars on smaller spread and on average volume. Next 2 bars made two doji, closing higher and on volume above average., Price volume anomaly is seen. Still no signs of strength was seen.

Next bar is another bullish wide range bar closing at its top, with high volume. This is then followed by another bearish bar closing at its low on strong volume. Bulls are trapped above previous day high, A violation of Wyckoff's 3rd law, Aggressive SHORT below the previous doji bar low.

Quite a good amount of bulls were trapped above previous day high, as it was seen in the sharp decline that followed. The supply-demand equation now has shifted more to supply side. Near B, C, and D stopping volumes are seen. But for B and C, the subsequent bars did not confirm a change in hand and violated the Effor vs Result law.

Exit was after the stopping volume near D, which is followed by a bullish bar with strong close and heavy volume. This confirms the demand overpowering supply on previous bar.

 

[travi]

Welcome to the Trading System bro (Not the PA, the Vol part )
I'd read your first posts and I'm happy to see you rebuilding.

You chart reading is really good, and a few months ago I used to regular post the same on TR Bhai's Futures thread where XRay ji was pretty active.

Just my 2 cents if it helps you since I've enough screen time of BNF
I suggest you test various TF also for different symbols bcos that tends to give a bit of an edge.
5m TF is pretty high but a few like me and Subhadip Da etc find it very rewarding (I've traded 1m too, and still use it as i'm testing on StkFut these days.)
You might have to size ur stop a bit larger but something like BNF and 40pt SL isn't uncommon.

Now, for my todays, trade, if u see the snap below:

The first large Vol bar is almost the size of the OB bars accompanied by a red Gravestone which was a good hint today coupled with a few big rallies and other flat markets, Weekly BN Expiry (These are the few things I keep in mind that I'm letting you know incase you haven't followed my posts before)
This sets your mindset for direction of trade and you just have to wait for confirmation (the crack ) and any of the subsequent bars is a good entry.
See the Vol rising, and you need good Green Vol bars to think of Revs else discount as PBs.
You'll be able to trail till the bottom large Green bar with a long tail and huge Vol that implies Demand zone. (I'd exist on close of next bar as Vol was significant)

The blue line is marked earlier in the day as LoD.
Rest of the Trade Mgmt you already know well

 

[LoneWolf]

Thanks ravi for your inputs, I will surely keep this in mind. I have just learned the concept of volume analysis, and still learning it through regular application and off market testing. My goal for now is to master this technique and make it a second nature. So currently I have started testing it on BANKNIFTY only on 15 minute for swing and 3 minute for intraday trading. After I finish 6 months of testing then I will check other timeframes and stocks as well. But one difference I can tell right away from this new knowledge and between how I used to trade earlier only with price action, I feel more confident while taking trades now as the market strucutre, supply/demand zone and also how price is beahving around these key levels are more clearer with volume study.

 

[LoneWolf]

Saving one of a very good post from Xray from other thread..

Mark Douglas, author of The Disciplined Trader states there are seven characteristics of an objective person. Here they are so you can recognize it when you’ve achieved it:

1) You feel no pressure to do anything.
2) You have no feeling of fear.
3) You feel no sense of rejection.
4) There is no right or wrong.
5) You recognize that this is what the market is telling me, this is what I do.
6) You can observe the market from the perspective as if you were not in a position, even where you are.
7) You are not focused on money, but on the structure of the market.

If you can see any of the above qualities in yourself, you’re on the right road. Again, you need to release yourself from the need to be right. If you constantly need to be right, you are unfortunately in the wrong business. To be a successful trader, you don’t always need to be right, but you always need to be objective.

 

[LoneWolf]

BANKNIFTY Analysis : 03 Nov 2017

After a sharp down move from 25.6K level, price found some preliminary support near 25.5K and Selliing climax with stopping volume was seen below 25.45K level. Then it started a reaction rally as selling pressure was greatly diminished. But no buying interest was seen here as suggested by below than average volume. Around 2PM and effort to fall to previous demand zone was quickly arrested and also an attempt to go past the reaction rally top failed, and price quickly entered back in to the range. In closing hour, a 2nd phase of secondary testing of demand is seen. This has established a trading range from 25.52K to 25.42K.

Edit : Any spring or shake out below this trading range could suggest accumulation to mark price higher. Lets see how the picture emerges from mhere..

On a Side Note : The rejection of reaction rally top was a good intraday SHORT opportunity, which I had missed yesterday.

 

[LoneWolf]

A quick SHORT trade from the resistance zone to the previous day's demand area,

A : Price opened above resistance line and formed a bearish wide range bar on above average volume. A lower wick suggest some demand in the market. This is followed by another bearish bar on high volume, next is a bullish hammer closing at its top but volume is below average. Not a very strong demand. This demand need to get absorbed for price to be marked down. Next bar is a test of demand (a bullish bar closing at its top on very low volume. After an inside low volume bar, then came a doji bar showing indecision. The upper wick shows diminishing demand. SHORT below the doji low.

B to C = An effort to fall, all demands are absorbed and now price is crashing under supply pressure. High volume suggest strength in bears. This is followed by another low close high volume bearish bar. Next bar is a bearish bar, but the spread has gone smaller, volume is above average. So this represent price-volume anomaly. Bearish strength is weakening. Price is also near previous demand area. This is followed by a bullish hammer on volume above average and price closing at its top. Demand is outweighing supply. SL is tightened. Sl hit and exit from SHORT

 

[LoneWolf]

2nd Trade for the day :

C to D = From C to D price started rising on below average volume. Lack of buying interest among smart money. Price is near the supply zone. At D, a shooting start on above average volume is formed. Spread is narrow, and close is on low. Supply overcomes the demand, The effort needs to produce desired result. Next bar is a bearish bar on above average volume, But spread is narrow, and lower wick is seen. Price volume anomaly is there. Some demands are left perhaps and price not ready to be marked down. This is followed by a long congestion range.

E = An upthrust bar with above average volume. Upper wick suggests the dominance of supply over demand. This should validate the 3rd law now. This is followed by two low volume congestion and test of demand bar. No volume on upbar suggest the exhaustion of demand. SHHORT below the low of up-thrust bar.

Short triggered and an effort to mark price down. A bearish wide range bar on above average volume. But some lower wick is seen suggesting some demand left. Next three bars are inside bars on low volume. If all the demands are absorbed then price has to fall under selling pressure, but here effort was to mark the price down, and price is staying in a range. So tighten the SL. A test of demand is seen. SL hit and Exit. A small loss trade.

 

[primitivetrader]

at C there is no selling climax and at E bar is not an upthrust bar as per my reading and knowledge of vsa

 

[LoneWolf]

at C there is no selling climax and at E bar is not an upthrust bar as per my reading and knowledge of vsa

Yes, my mistake primitive trader, That is not an upthrust at E, thats a shooting star. I am often interchanging these 2 wrods, But about the selling climax please correct me if I am wrong.

TO my understanding, a selling climax is a bar which goes to make new low after a sell off on high volume, and then quickly reverses and closes at its high. And the bar at C was showing those characteristics.