Trading with FLAW system

[bunny]

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

Hi Sunny,

Well, I have become too lazy to now go back and study all those charts. I do not find all that hard work fruitful. So there is no point in repeating that. Moreover, I have always been able to do VSA on historical charts, but not so well on current dated charts.

As regards to whether we are in accumulation or distribution phase, practically we should not bother because we are short term traders. Accumulation or distribution are not completed under 1 or 2 days. So even if you find that this is accumulation and you go long, you can still lose money.

 

[Sunny1]

Hi Sunny,

Well, I have become too lazy to now go back and study all those charts. I do not find all that hard work fruitful. So there is no point in repeating that. Moreover, I have always been able to do VSA on historical charts, but not so well on current dated charts.

As regards to whether we are in accumulation or distribution phase, practically we should not bother because we are short term traders. Accumulation or distribution are not completed under 1 or 2 days. So even if you find that this is accumulation and you go long, you can still lose money.

After accumulation/distribution market moves very quickly thereby not giving chance to take position. therefore its still necessary for us short term trader to know acc/dist. after all that is the only time we make killing:thumb:
also we would be mentally prepared on what is going come and how to tackle it.

Anyways , everybody has different opinions....

 

[bunny]

After accumulation/distribution market moves very quickly thereby not giving chance to take position. therefore its still necessary for us short term trader to know acc/dist. after all that is the only time we make killing:thumb:
also we would be mentally prepared on what is going come and how to tackle it.

Anyways , everybody has different opinions....

Hi Sunny,

Tom Williams has written in his book that after accumulation there is a possibility for a shakeout. There is also one illustrative chart on the same page. This adds to more confusion when the stock is breaking downwards from a congestion area. Is that a downwards breakout or a shakeout? Tom Willams says that if the market holds itself after such high volume has been seen, then it must have contained hidden buying.

It quite confusing to recognize what the large volume is. The usual rule that "If the market has held after it..." has failed miserably for me. The market does "hold itself", but only for a short period after which it resumes its down leg. So if we are seeing low volume up bar between these two markdowns(i.e, the secondary congestion where the market was holding itself) how do we ascertain which scenario it is representing?

• That the high volume on down bar was selling climax which has resulted in supply-demand imbalance and hence the price is moving up on low volume and sluggish up bars.
• OR, it is a case of genuine no-demand?

It looks easy in the book, but I have never been able to do it on current dated charts. On historical charts, the future course of price action is visible, so we can we confidently distinguish each and every important bar.

 

[trader.trends]

Bunny

Is it possible for you to test VSA here?

http://www.chartgame.com

 

[Sunny1]

Hi Sunny,

Tom Williams has written in his book that after accumulation there is a possibility for a shakeout. There is also one illustrative chart on the same page. This adds to more confusion when the stock is breaking downwards from a congestion area. Is that a downwards breakout or a shakeout? Tom Willams says that if the market holds itself after such high volume has been seen, then it must have contained hidden buying.

It quite confusing to recognize what the large volume is. The usual rule that "If the market has held after it..." has failed miserably for me. The market does "hold itself", but only for a short period after which it resumes its down leg. So if we are seeing low volume up bar between these two markdowns(i.e, the secondary congestion where the market was holding itself) how do we ascertain which scenario it is representing?

• That the high volume on down bar was selling climax which has resulted in supply-demand imbalance and hence the price is moving up on low volume and sluggish up bars.
• OR, it is a case of genuine no-demand?

It looks easy in the book, but I have never been able to do it on current dated charts. On historical charts, the future course of price action is visible, so we can we confidently distinguish each and every important bar.

well , we have to discuss these observation with the charts so we can arrive at reasonable conclusion.

i think we have to see how much volume is coming during shakeout , if it is high then
probably there would one more shake out ..

 

[bunny]

Bunny

Is it possible for you to test VSA here?

http://www.chartgame.com

Hi TT,

Yes, but was not satisfied by my performance. Earlier, there was one more similar website by the name www.inspectd.com but this one is not functioning now.

 

[Capricorn]

Hi Guys,

We all have been wrong with our analysis at some point of time, and correct at other times. It is difficult to be always right. And I am finding it difficult to to be correct even upto a moderate proportion.

More often than not, I have been grossly incorrect in taking my positions, often buying the top and selling the bottom. I have blown up my "experimental" account(which was small in size) in the past, and it is obvious that if it continues the same way, the replenished account, which is of bigger size, will also meet the same fate.

My trading view journal(VSA) is already running in this forum, and my experience so far has been 10 correct to 90 wrong. I don't know how much time and effort I will need to spend in order to reverse that ratio. However, if I had bought when I was bearish and sold when bullish, I would have made good money. Keeping this in mind, I will posting my ideas to see if it works atleast this way.

• My trades will be against my own opinion. I hope you understand what its about. So whenever I say long, I am bearish, and when I am short, I am bullish. So we will be skating on very thin ice!
• Remember that I can be correct(in my analysis) 10-15% of the times too.

1. Failure is the first step to success.
2. Put your mouth where lies money.
3. It is better to be an trader and make money, than be an analyst and not make one.

If my skill does not let me capitalize adequately , lets try the same with my flaws!

Sorry I am so late in on this but this is what Alan farley has to say about volume...

http://www.thestreet.com/story/10556761/1/volume-the-great-deceiver.html

Hope u find it helpful..

 

[SwingKing]

Well, no analysis no indicator and no system works all the time.

I remember Bunny and I had this discussion somewhere earlier where Bunny was sure about VSA working and Technicals failing often. I had simply stated there that neither VSA nor Technicals work all the time. This is true as Market's sometimes follow (follow means being predictable with some system) some analysis/system on random basis. See guys, there are a lot of supporters of Random walk theory for market's whereas there are a lot of traders who think market's are beatable. My personal take on this lies somewhere in between. There are windows of opportunities where the Efficient market Hypothesis/Random walk nature fails. It is during these phases that traders make a living. Thus, we cannot reject a system or form of analysis based on its failing in a given span of time. Most of the experienced traders realise this. Hence they come up with a technique to judge when their system work's and when it doesn't. This is what separates good traders from less good one's. Hence, whichever system one picks, he needs to virtually live with that system to understand nuances associated with it. The more time we spend with a system, the more we get to learn about it's functioning. The more we know about it's functioning, the better we can refine it going forward.

This post is not about VSA in particular nor it is about bunny. It is about all the systems/techniques and other form of analysis which trader's here follow. If one understand's the system well, then surely one can continue refining it. Trading is entirely a 'feedback' driven business. And the feedback here is given by the ultimate tutor i.e. The Market's.

Lastly, Bunny kudos for starting the VSA thread and the Flaw system thread.

Tc.

 

[bunny]

Well, no analysis no indicator and no system works all the time.

I remember Bunny and I had this discussion somewhere earlier where Bunny was sure about VSA working and Technicals failing often. I had simply stated there that neither VSA nor Technicals work all the time. This is true as Market's sometimes follow (follow means being predictable with some system) some analysis/system on random basis. See guys, there are a lot of supporters of Random walk theory for market's whereas there are a lot of traders who think market's are beatable. My personal take on this lies somewhere in between. There are windows of opportunities where the Efficient market Hypothesis/Random walk nature fails. It is during these phases that traders make a living. Thus, we cannot reject a system or form of analysis based on its failing in a given span of time. Most of the experienced traders realise this. Hence they come up with a technique to judge when their system work's and when it doesn't. This is what separates good traders from less good one's. Hence, whichever system one picks, he needs to virtually live with that system to understand nuances associated with it. The more time we spend with a system, the more we get to learn about it's functioning. The more we know about it's functioning, the better we can refine it going forward.

This post is not about VSA in particular nor it is about bunny. It is about all the systems/techniques and other form of analysis which trader's here follow. If one understand's the system well, then surely one can continue refining it. Trading is entirely a 'feedback' driven business. And the feedback here is given by the ultimate tutor i.e. The Market's.

Lastly, Bunny kudos for starting the VSA thread and the Flaw system thread.

Tc.

Hi Raunak,

I remember that post where I had asked the person to use VSA instead of technical indicator.

Now, the purpose of this thread is not VSA or not. Its just about discovering a system that works with whatever knowledge I have till date - be it VSA or other basics of TA.

The FLAW experimental system has given good results in its first 4 days, however, since the market trend does not swing in just 4 days, it is yet to be seen if this system can provide consistent results in all market conditions, and on swing pivots.

Right now, the FLAW system is "human dependent" meaning I do not have scanning AFLs. This is one powerful source of error. Not that AFL writing is difficult for me, but that I am just being lazy with this.

 

[bunny]

Sorry I am so late in on this but this is what Alan farley has to say about volume...

http://www.thestreet.com/story/10556761/1/volume-the-great-deceiver.html

Hope u find it helpful..

Hi Capricorn,

Consider the three volume sources that are corrupting your nightly investigation of the stock market:

1. Pension and mutual funds, moving slowly and covering their tracks within the broad noise of daily market movement.
   
2. High-frequency trading algorithms, generating profits through minor fluctuations in the bid-ask spread.
   
3. Massive trading in index derivatives and exchange-traded funds that generate lockstep adjustments throughout the component shares.

That is why I have started reading few books on MP concept.