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VSA for ThinkorSwim
Started:April 8th, 2010 (04:51 PM) by cbritton Views / Replies:101,071 / 401
Last Reply:October 6th, 2013 (10:14 AM) Attachments:122

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VSA for ThinkorSwim

Old October 8th, 2010, 07:52 AM   #191 (permalink)
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snowcloud View Post
A daunting endeavor, indeed . Thanks again for all of your valuable input.


swimtrader View Post
Today's Market is different. If you had traded the algo signals on the ES, using your brain absolutely none ...playing a lot of golf instead of sweating it out at the computer ...I've attached what a $50,000 account would have gained - position sizing by the Kelly method (8 contracts) entering the only valid signal on the attached chart.

I post this only to promote an awareness of what we're up against. This is retrospective - thus of little value. Still, it raises the issue of how much faith one should put into industriously trying to program Wyckoff-oriented signals into a 2010 computer-traded Market - the bots vs Richard Wyckoff and ThinkScript. Food for thought.

My last post.

Steve

Thank you for your thoughts on this subject Steve. I hope this is not your last post as your thoughts and ideas are interesting. If I may add to this subject, agreed that there is alot of computer trading in todays market (ie BOTS), but volume is volume wheather it is generated by people like you and I hitting the the bid/ask or a computer doing so. Spread is spread and trend is trend etc. BOTS are programed by people, with their own trading thoughts, tendencies and ideas. They simply have a computer do what they themselves would do in a particular market condition or situation. Are they (BOTS) quicker than me...no doubt, but as long as i can follow their foot print, there is value in the process. My goal is to recoganize VSA signals without the progam running, ultimately making me a better trader by watching volume, spread, and price action. Again thanks to you, snowcloud, clbritton, and the others for allowing me to look in all directions to improve my trading skills.

Best to all,
Buzz

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Old October 8th, 2010, 10:51 AM   #192 (permalink)
Trading for Fun
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dqbuzz View Post
Thank you for your thoughts on this subject Steve. I hope this is not your last post as your thoughts and ideas are interesting. If I may add to this subject, agreed that there is alot of computer trading in todays market (ie BOTS), but volume is volume wheather it is generated by people like you and I hitting the the bid/ask or a computer doing so. Spread is spread and trend is trend etc. BOTS are programed by people, with their own trading thoughts, tendencies and ideas. They simply have a computer do what they themselves would do in a particular market condition or situation. Are they (BOTS) quicker than me...no doubt, but as long as i can follow their foot print, there is value in the process. My goal is to recoganize VSA signals without the progam running, ultimately making me a better trader by watching volume, spread, and price action. Again thanks to you, snowcloud, clbritton, and the others for allowing me to look in all directions to improve my trading skills.

Best to all,
Buzz

You're welcome, Buzz. I agree with you (and with Gertrude Stein) that "...spread is spread and trend is trend...". And you're right - the BOTS are quicker than any human being. I was watching the 6e on my Infinity DOM on the unemployment numbers news this AM and wow! There's no way that any human could have moved the bid/ask around as quickly as it was moving. It was literally jumping 10 pips or more at once, first in one direction and then in the other. Glad I wasn't trying to trade that machine-made insanity. Placing a winning trade in that action would have been nothing more than sheer good luck.

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Old October 8th, 2010, 10:59 AM   #193 (permalink)
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Steve,

In your participation in the Better Volume discussion on the ThinkScripter forum, do you remember why the participants decided to use the method of time averaging that in is now in the indicator? In my comparison of the three available types of VSA indicators in my previous post, I'm still trying to understand the intention of using the time averaging formulas that each author used. What results would be different from using just a simple moving average or an exponential moving average?

BetterVolume_STUDY (8/5/2010)
Time Averaging of Volume is calculated by
the Volume's Standard Deviation (STD),
the Volume's WildersAverage

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Old October 8th, 2010, 02:28 PM   #194 (permalink)
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snowcloud,

Which symbol or combination of symbols would you consider as reversal signals? Which would be bullish reversal signals and which would be bearish reversal signals?

I see in the TradeGuider's software guide for indicators that there are conditions for reversals. Download attached pdf document.

Quoting 
Reversals:
1. Reversal(99) p22
2. Bottom reversal(57,78) p22
3. Bottom reversal(79) p23
4. Reversal after Effort to Rise(-97) p23
5. Top Reversal(-126) p24
6. Top Reversal(-94) p24

If reversal symbols are not already in the VPA indicator, I wonder if they can be coded into it?

Attached Thumbnails
VSA for ThinkorSwim-tradeguider-indicators-manual.pdf  

Last edited by StockJock; October 8th, 2010 at 04:10 PM.
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Old October 8th, 2010, 03:07 PM   #195 (permalink)
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snowcloud,

It was a nice idea to use the ROYGBIV color spectrum to display colors of the rainbow on the price bars; however, I would suggest to consider complementary colors from the color wheel to provide more contrast for clear identification of the meaning of the colors on the bars. Complementary colors stand out when they are next to each other. I wonder if we could get feedback from others reading this discussion about color identification. As for the color scheme for the symbols, that could stay as ROYGBIV.

Complementary colors are two colors which are directly opposite each other on the wheel.

Please register to view the post attachment(s), image(s), or screenshot(s) - it's simple and free.


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Old October 8th, 2010, 08:33 PM   #196 (permalink)
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StockJock View Post
snowcloud,

Which symbol or combination of symbols would you consider as reversal signals? Which would be bullish reversal signals and which would be bearish reversal signals?

I see in the TradeGuider's software guide for indicators that there are conditions for reversals. Download attached pdf document.



If reversal symbols are not already in the VPA indicator, I wonder if they can be coded into it?

The attached cheat sheet contains the descriptions for the symbols. I only use the word "reversal" once because I would rather that the study leave some of the interpretative work to the user. Have you read Williams? If so, you'll know which symbols might lead to a reversal. If not, you should read it.

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Old October 8th, 2010, 08:36 PM   #197 (permalink)
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snowcloud View Post
The attached cheat sheet contains the descriptions for the symbols. I only use the word "reversal" once because I would rather that the study leave some of the interpretative work to the user. Have you read Williams? If so, you'll know which symbols might lead to a reversal. If not, you should read it.

oops, forgot the cheat sheet. here it is...

Attached Files
Register to download File Type: xlsx VSA_Cheat_Sheet_03c.xlsx (15.2 KB, 140 views)
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Old October 8th, 2010, 08:37 PM   #198 (permalink)
Trading for Fun
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Trading Experience: Advanced
Platform: Infinity, IB, TOS
Favorite Instrument: currency futures
 
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StockJock View Post
snowcloud,

It was a nice idea to use the ROYGBIV color spectrum to display colors of the rainbow on the price bars; however, I would suggest to consider complementary colors from the color wheel to provide more contrast for clear identification of the meaning of the colors on the bars. Complementary colors stand out when they are next to each other. I wonder if we could get feedback from others reading this discussion about color identification. As for the color scheme for the symbols, that could stay as ROYGBIV.

Complementary colors are two colors which are directly opposite each other on the wheel.






Please make specific suggestions and provide the rationale behind the suggestions and I'll consider them.

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Old October 8th, 2010, 10:26 PM   #199 (permalink)
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Quoting 
Have you read Williams?

If you download the attachment in my post, you'll see its from TradeGuider. Check me if I'm incorrect, but wasn't TradeGuider developed by Williams? I've read through his reference for the TradeGuider software "Master The Markets" and I'm not sure what the difference would be. Possibly I missed what your talking about. Do you have some quote from it that I might look for to explain you point? The TradeGuider pdf that I attached as a reference was meant to show you what I was talking about. Did you open it? Below I've copied and pasted the section on reversals.


Quoting 
Reversals:
1. Reversal
These are really shake-outs over two bars. The first down bar puts fear in those traders on the wrong side of the market, catches stops, and encourages traders to short the market. The following up bar tends to lock traders into a poor trade if they shorted. The rapid up bar also cuts many traders out of taking a long position as they now feel the market has gone up to far to get a safe position.
Add more strength if the news is 'bad'
Add more strength if the spreads are wide to ultra-wide.
If the market is still a weak one then although this looks like strength the market can die on you over the next few bars.
2. Bottom reversal
As a market falls, at some point the 'herd' will panic and sell. If professional money decides to buy into this selling because the price levels now look attractive to them, this action will create high volume on a down bar. The news will be 'bad'.
If the next bar is up on a wide spread closing on the highs this has the hall mark of a bottom reversal and a sign of strength.
Supplementary Comments:
If the program fails to pick up this subtle indicator it is unlikely you will see this because the news will have bad and lower prices predicted. It is not easy to be a good trader!
3. Bottom reversal
A Bottom Reversal or a 'Test over two bars', is designed to shake you out of the market, catch your stops or to mislead you as much as possible. They mostly happen on the market lows. If the next bar is wide and up with volume average to high (as interpreted by the program) you would expect higher prices.
If the next bar is reluctant to go up on low volume and perhaps a narrow spread then this is 'NO DEMAND'. You may have strength but the market is not ready to go up yet.
What are the following bars telling you?
Testing into the same area: Strength.
Low volume up-bar: No Demand.
Up-thrusts: additional weakness.
4. Reversal After Effort to Rise, Followed by Drive Down
High volume up-bars closing off the highs indicates that supply is present.
Things to Look Out For:
The situation can suddenly change if the market is still strong.
Any immediate down-bar with reduced volume would indicate that, yes, there was supply present, but the supply must have been quickly absorbed by the marketmakers. This is now a sign of strength. A down-bar on low volume shows that there is little or no more selling from the market makers. If there is no selling then the market is very likely to go up.
However, an immediate down-bar on high volume would indicate further weakness.
5. Top Reversal
Markets often have a turning point on a sharp up bar, closing on the high, into recent new high ground. This is then followed by a sharp down bar, closing on the lows. We call this a Top Reversal. This action tends to encourage traders to go long in a weak market, or frighten those traders that have a short position into covering it. This is liable to happen on the first up bar. The second down bar, closing on the lows, then locks the traders into a poor position.
For this signal to be a legitimate one, there should be some sort of weakness in the near background, like:
high volume up bars
narrow spreads
a marked decrease in volume
Things to Look Out For:
Look to the following few bars for clues as to the sentiment of the market makers. For example, if the very next bar is down on a narrow spread, and the volume is less than the two previous bars (which is considered "low" volume in TradeGuider), then you would see that professional money has little or no interest in lower prices, despite the weakness.
Tip: Remember, it is the activity of professional traders that we are interested in. Are they showing interest in this sign of weakness?
6. Top Reversal
Top Reversals are often seen after there has been a rally. They appear as a wide spread up-bar which closes on the highs, sometimes even gapping up. The news will be 'good', which prevents you from seeing that this is a top. This type of price-action is designed to catch stops, panic premature shorts, and encourage traders to go long.
Things to Look Out For:
This is an especially strong indication if the first leg up was on low volume, showing 'no demand'

Here are the chapters from Master The Markets regarding reversals.

Quoting 
How to Recognise the Likely Market Top ……………………………………………………page. 75
How to Recognise a Market Bottom ……………………………………………………………page. 92

Let me know if you think these reversals can be programmed into the VPA indicator. I think this would help other users.


Last edited by StockJock; October 8th, 2010 at 11:16 PM.
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Old October 8th, 2010, 11:32 PM   #200 (permalink)
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StockJock View Post
If you download the attachment in my post, you'll see its from TradeGuider. Check me if I'm incorrect, but wasn't TradeGuider developed by Williams? I've read through his reference for the TradeGuider software "Master The Markets" and I'm not sure what the difference would be. Possibly I missed what your talking about. Do you have some quote from it that I might look for to explain you point? The TradeGuider pdf that I attached as a reference was meant to show you what I was talking about. Did you open it? Below I've copied and pasted the section on reversals.


Here are the chapters from Master The Markets regarding reversals.

Yes, I looked at your attachment and have seen it before. And yes, TG was developed by Williams but I'm sure others are involved with its current development. If you've studied MTM you should have enough info to put 2 and 2 together and interpret upThrusts, Stopping Volume, and the various Strength and Weakness signals into your own opinion on whether a reversal is likely or not. This study is a study, it's not meant to be a trading signal generator or BOT-like system. In fact Karthik, the study's original author, wrote that he never intended the study to be a replacement for TG.

I am very interested in hearing specifically about what works and what doesn't work in the study as it is so that I can tweak the code to improve it. I definitely don't have time to add a multitude of bells and whistles or to do a major re-write. If you do, by all means, go for it.

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