Trading with FLAW system

[Sunny1]

Hi Anurag,

I am replying with context to the highlighted quote.

Agreed that VSA produced great results on some occasions for me. However, these occasions were very uncommon compared to the times when it has not worked.

I have experienced so many sudden unexpected failure of VSA events on many occasions. I do not blame VSA for this. I will blame my "lack of skill" and consider that I have missed something in the background. After so many such failures, it is difficult to believe that a upthrust bar may not be an upthrust.

Anyways, I am quite happy with the FLAW system.

READING OF BOOK (HALF READ) VSA I FELT IDENTIFYING UPTHRUST AND TEST WERE BIT DIFFICULT AND NOW YOU ARE COMFIRMING SAME. AFTER COMPLETING WE WILL DISCUSS MORE ON THIS :thumb:

 

[bunny]

READING OF BOOK (HALF READ) VSA I FELT IDENTIFYING UPTHRUST AND TEST WERE BIT DIFFICULT AND NOW YOU ARE COMFIRMING SAME. AFTER COMPLETING WE WILL DISCUSS MORE ON THIS :thumb:

Hi Sunny,

You are welcome for discussion anytime. Identifying an upthrust or a test bar is not a difficult task per se as the parameters are easy. But its is disheartening to see that the price still moves as if the upthrust or weakness never happened. One of my fellow trader who practices VSA says that if the next bar after the upthrust does not fall, the upthrust is negated. I will accept this argument of negation. However, it is difficult for me because:

1. Market makers were so wrong in seeing the supply-demand that an upthrust was so discounted.
2. On the day after the upthrust bar(upthrust bar has very high volume), the volume is low, say only 10% and still the upthrust may stand nullified. Isn't is difficult to believe that an upthrust bar was negated by a bar which has only a fractional volume as compared to it?
3. After the upthrust bar, the market falls for 2 or 3 bars, and then suddenly starts moving up across the upthurst bar as if its being propelled by rocket fuel! How does "weakness" disappear within 3 bars and turn into such a high grade strength?
4. After a successful test of supply, the market moves up swiftly for one day, and becomes sluggish for the next 2 or 3 days. Its difficult to digest all this stuff.

I have many more frustrating observations, but its no point pouring them in this post. The market moves on, so even we must move on.

On one of the last pages of that book, Tom has said that "False upthrusts can appear in a string market. As a chart reader, your skill will be important to differentiate between a strong and weak market". So if it boils down to the "skill of the chart reader", then what is the use of trying to learn VSA. Mind you, VSA needs diligent analysis bar-by-bar. Now I do not feel that it is worth so much of the effort I had invested in it.

 

[Sunny1]

Hi Sunny,

You are welcome for discussion anytime. Identifying an upthrust or a test bar is not a difficult task per se as the parameters are easy. But its is disheartening to see that the price still moves as if the upthrust or weakness never happened. One of my fellow trader who practices VSA says that if the next bar after the upthrust does not fall, the upthrust is negated. I will accept this argument of negation. However, it is difficult for me because:

1. Market makers were so wrong in seeing the supply-demand that an upthrust was so discounted.
2. On the day after the upthrust bar(upthrust bar has very high volume), the volume is low, say only 10% and still the upthrust may stand nullified. Isn't is difficult to believe that an upthrust bar was negated by a bar which has only a fractional volume as compared to it?
3. After the upthrust bar, the market falls for 2 or 3 bars, and then suddenly starts moving up across the upthurst bar as if its being propelled by rocket fuel! How does "weakness" disappear within 3 bars and turn into such a high grade strength?
4. After a successful test of supply, the market moves up swiftly for one day, and becomes sluggish for the next 2 or 3 days. Its difficult to digest all this stuff.

I have many more frustrating observations, but its no point pouring them in this post. The market moves on, so even we must move on.

On one of the last pages of that book, Tom has said that "False upthrusts can appear in a string market. As a chart reader, your skill will be important to differentiate between a strong and weak market". So if it boils down to the "skill of the chart reader", then what is the use of trying to learn VSA. Mind you, VSA needs diligent analysis bar-by-bar. Now I do not feel that it is worth so much of the effort I had invested in it.

HI BUNNY , GREAT OBSERVATION AND THANKS FOR THESE.

AS YOU HAVE ASKED then what is the use of trying to learn VSA.

MY ANS IS THAT HE HAS GIVEN THE DIFFERENT WAY OF OBSERVING THE MARKET AND ALSO GIVEN FEW THINGS TO START OFF WITH LIKE UPTHRUST , TEST, ABSORPTION ETC.. , NOT NECESSARY THAT ALL THESE ARE CORRECT BUT WE HAVE TO FIND HOW THESE WORKS IN OUR MARKET AND NOTE OBSERVATION ACCORDINGLY. I THINK WE SHOULD MODIFY RULES ACCORDINGLY . FOR ALL THESE WE NEED SKILLS.

 

[bunny]

HI BUNNY , GREAT OBSERVATION AND THANKS FOR THESE.

AS YOU HAVE ASKED then what is the use of trying to learn VSA.

MY ANS IS THAT HE HAS GIVEN THE DIFFERENT WAY OF OBSERVING THE MARKET AND ALSO GIVEN FEW THINGS TO START OFF WITH LIKE UPTHRUST , TEST, ABSORPTION ETC.. , NOT NECESSARY THAT ALL THESE ARE CORRECT BUT WE HAVE TO FIND HOW THESE WORKS IN OUR MARKET AND NOTE OBSERVATION ACCORDINGLY. I THINK WE SHOULD MODIFY RULES ACCORDINGLY . FOR ALL THESE WE NEED SKILLS.

Hi Sunny,

I agree that we have to take "everything" with a pinch of salt, but, it is very difficult to image that the market becomes "very weak" on one bar, and then "strong" after just two bars.

VSA may be a different way of observing the markets, but it should help in trading too because it claims that it gives insights into supply and demand. If it is so, the how come supply and demand equations change completely and drastically in two days.

There is a reasonable limit and threshold for everything. I cannot stretch myself beyond those because making money comes first. Whether we will trade with VSA, MP, Candle is secondary. VSA is merely a tool, not a do-or-die thing.

On one of the forums, I read that "Learning VSA will be a real test of patience". For me, it also turned out to be a real test of how much money I am ready to "sacrifice" to the market in the name of VSA.

 

[Sunny1]

hi sunny,

i agree that we have to take "everything" with a pinch of salt, but, it is very difficult to image that the market becomes "very weak" on one bar, and then "strong" after just two bars.

Vsa may be a different way of observing the markets, but it should help in trading too because it claims that it gives insights into supply and demand. If it is so, the how come supply and demand equations change completely and drastically in two days.

There is a reasonable limit and threshold for everything. I cannot stretch myself beyond those because making money comes first. Whether we will trade with vsa, mp, candle is secondary. Vsa is merely a tool, not a do-or-die thing.

i think we should not see market or stock as bar by bar but rather first we have to check accumulation/distribution process clearly and then look for bar by bar strengths/weakness..

Like from last year (oct 08 to apr 09) the accumulation was going on and look at the volume in broader picture ( in many stocks), its very intersting . Volume is so huge compare to 2006 and 2007.
Than effort to push prices up in apr 09 and than gap up in may.
See it all shows what they want to do. But sadly at that time i did not know vsa. I could have made millions. Than you can see absorption of supply on 4 nov , it means they are not interested in low prices.

Now the ? Is distribution, is it over or yet to be done. Or they will again accumulate more stock for next bull run?

And according to this we have to see weakness and strengths...
And i know you are too good at that.

I Still need to explore more of vsa..

 

[GREENCANDLE]

Hi Greencandle,

I re-read #2 of your comment, and I think that you have slightly misunderstood the system. The flow chart of the system is:

1. Go through all the constituent stocks on CNX 100.
2. Label the last bar as strong or weak, ofcourse with dure consideration to background.
3. Go long on the weak stock and short on the strong stock.

The mind does not know in advance which stock should be shorted or longed.

The explanation is not to prove that somebody is wrong but to clarify my stand and view.REVERSIBLE SYSTEM-If a process is done in backward direction all the parameter remain same at every stages as it was in forward process.Say U go for office at 10 nd come back at 5, it will be reversible if u can do exactly same thing in back journey as in forward journey .IRREVERSABLE SYSTEM-If reverse journey produces different parameter then forward process though the destination is same it will called as irreversible. Ur FLAW will work if the system is revesable.As I told ,no real system is reversible.U cant couple an electric motor nd generator of same rating to run automatically. Trading world is more irreversible then other world.As u said ur VSA system produce 90% wrong signal hence u decided to go opposite to ur system so that the 90% which was in losser side come in winner side.U R thinking so considering pseudo reversibility.Without considering inbetween u have considered about initial nd final point of ur journey.So I m sorry 2 say that I cant keep faith 2 ur FLAW .I M More sorry to
padysrini to say him that market even doesnt care of our wives also.
:lol:NB-I have attach 2 charts after my joining .Now traderji doesnt allowing me 2 attach more charts.Can u say why this discrimination and how can I solve the pblm.

 

[bunny]

The explanation is not to prove that somebody is wrong but to clarify my stand and view.REVERSIBLE SYSTEM-If a process is done in backward direction all the parameter remain same at every stages as it was in forward process.Say U go for office at 10 nd come back at 5, it will be reversible if u can do exactly same thing in back journey as in forward journey .IRREVERSABLE SYSTEM-If reverse journey produces different parameter then forward process though the destination is same it will called as irreversible. Ur FLAW will work if the system is revesable.As I told ,no real system is reversible.U cant couple an electric motor nd fan of same rating to run automatically. Trading world is more irreversible then other world.As u said ur VSA system produce 90% wrong signal hence u decided to go opposite to ur system so that the 90% which was in losser side come in winner side.U R thinking so considering pseudo reversibility.Without considering inbetween u have considered about initial nd final point of ur journey.So I m sorry 2 say that I cant keep faith 2 ur FLAW .I M More sorry to
padysrini to say him that market even doesnt care of our wives also.
:lol:NB-I have attach 2 charts after my joining .Now traderji doesnt allowing me 2 attach more charts.Can u say why this discrimination and how can I solve the pblm.

Hi Green Candle,

Most of your theory went over my head. May be because this is night time and I am not in a very serious mind.

Anyways, you can attach as many pics you want. However, you will have to use an image sharing site and link the image through your post. Please see this thread: http://www.traderji.com/announcements/22138-how-post-chart-image-traderji-com.html

 

[bunny]

Hi guys,

I have closed all the positions taken according to the F L A W system.

Here is the updated excel sheet. Updated excel sheet: http://www.editgrid.com/user/bunnyflaw/Bunny_Flaw

Will be busy else where during the day, off market.

 

[bunny]

Long positions in following stock futures look good according to FLAW system.

No.	Scrip	Direction	Entry date	Entry price
8	BAJAJ-AUTO March	Long	5-Mar-2010	1909.15
9	RNRL March	Long	5-Mar-2010	65.85
10	BHARATFORG March	Long	5-Mar-2010	266
11	MPHASIS March	Long	5-Mar-2010	673.9

Full excel sheet: Bunny Flaw - Online Spreadsheets - EditGrid

I am sorry for not posting these during the market hours. I do not have a RT feed. I will soon make one that fetches delayed quotes of CNX 100 stocks from NSE's server soon.

 

[Sunny1]

i think we should not see market or stock as bar by bar but rather first we have to check accumulation/distribution process clearly and then look for bar by bar strengths/weakness..

Like from last year (oct 08 to apr 09) the accumulation was going on and look at the volume in broader picture ( in many stocks), its very intersting . Volume is so huge compare to 2006 and 2007.
Than effort to push prices up in apr 09 and than gap up in may.
See it all shows what they want to do. But sadly at that time i did not know vsa. I could have made millions. Than you can see absorption of supply on 4 nov , it means they are not interested in low prices.

Now the ? Is distribution, is it over or yet to be done. Or they will again accumulate more stock for next bull run?

And according to this we have to see weakness and strengths...
And i know you are too good at that.

I Still need to explore more of vsa..

no comments .. i thought you would be having answers for my question