accumulation/distribution

[roshannaidu]

Hi,

Please correct me if I am wrong!

Accumulation or distribution by Smart Money happens during periods of congestion/ranging periods.

How would one determine the predominant activity (by Smart Money) during these periods of congestion ? i.o.w. how does one determine if SM is accumulating or distributing, so that we can reasonably expect a higher probability of a breakout in a particular direction.

Thanks

Roshan

 

[new_trader]

Hi,

Please correct me if I am wrong!

Accumulation or distribution by Smart Money happens during periods of congestion/ranging periods.

How would one determine the predominant activity (by Smart Money) during these periods of congestion ? i.o.w. how does one determine if SM is accumulating or distributing, so that we can reasonably expect a higher probability of a breakout in a particular direction.

Thanks

Roshan

I will give you an answer but I know you won't like it. You want someone to tell you that all you need is this indicator or that indicator or to draw a pretty coloured line here and there....that is what you want isn't it? You want someone to tell you in the matter of a few posts how to make millions! Well, sorry to tell you, it isn't that simple.

What you need to do is spend 10-12 hrs/day 5 days/week watching the instrument you wish to trade and have your brain engaged at the same time. Observe and take notes, observe and take notes. After 6-9 months of this you might feel confident enough to put money on your figuring. Trade with a tight stop. Keep doing this until you are profitable. Trading is simple really....

 

[roshannaidu]

Chart Watching

I will give you an answer but I know you won't like it. You want someone to tell you that all you need is this indicator or that indicator or to draw a pretty coloured line here and there....that is what you want isn't it? You want someone to tell you in the matter of a few posts how to make millions! Well, sorry to tell you, it isn't that simple.

What you need to do is spend 10-12 hrs/day 5 days/week watching the instrument you wish to trade and have your brain engaged at the same time. Observe and take notes, observe and take notes. After 6-9 months of this you might feel confident enough to put money on your figuring. Trade with a tight stop. Keep doing this until you are profitable. Trading is simple really....

Hi, no that is not what I want! I have moved on and know that there is more than indicators to being a consistently profitable trader.

I am looking at the charts with an emphasis on VSA. I am having trouble though when the market gets into a ranging period. My original question still stands...what do I need to look out for that will give me a clue that SM is accumulating. i.o.w. what are the visual characteristics that dominate a trading range were the predominant SM activity is accumulation.

 

[rawrschach]

Learn to read the tape.

 

[roshannaidu]

Learn to read the Tape

Learn to read the tape.

Hi, yes learn to read the tape! some direction would be helpful. where do you suggest i start?

Regards

 

[tomorton]

Hi roshannaidu - I don't think there is a consistent way to tell, but I'll be happy if someone can tell us how its done.

My questions to you are, what do you intend to do with this skill, and do you really need this skill to allow you to do it?
I assume you mean to anticipate the direction of the break-out and enter at the furthest possible point on the opposite side of the range. Whereas the conventional teaching is that its good to be long at the bottom of the range and short at the top but do get out at the extreme: repeat as often as you can, as long as the range is deep enough, then get in with the trend after the break-out shows itself.
I am interested if you wish to do something unconventional - that could be a way towards exceptional opportunity.

 

[Joules MM1]

I am having trouble though when the market gets into a ranging period.

do you recognise the ranging period post or during? I think, maybe, you need to work on that ? first as your answer may not lay within volume analysis the way you think or have been told.....define a ranging period define what comes before the range, at exactly what point, what bar, what time frame, you see a "range"

....maybe, not intantly assigning an action to smart money, i mean, dont box where and when you think smart money is active......

 

[jiggly]

I am looking at the charts with an emphasis on VSA. I am having trouble though when the market gets into a ranging period. My original question still stands...what do I need to look out for that will give me a clue that SM is accumulating. i.o.w. what are the visual characteristics that dominate a trading range were the predominant SM activity is accumulation.

one thing you can do, is to wait for a break of the said range, and look for the pullback to test the boundary where it broke out from. if price gets rejected at this area, you could enter the market with some degree of conviction that it will continue going in that direction.

 

[disi]

Hi,

Please correct me if I am wrong!

Accumulation or distribution by Smart Money happens during periods of congestion/ranging periods.

How would one determine the predominant activity (by Smart Money) during these periods of congestion ? i.o.w. how does one determine if SM is accumulating or distributing, so that we can reasonably expect a higher probability of a breakout in a particular direction.

Thanks

Roshan

Forget about leading indicators. If you want to bet on breakout direction you either have to wait until breakout is made or use your brain. There is no other and better indicator than your brain. But it takes a long months/years before you can "synchronize" your brain with market.

 

[new_trader]

Forget about leading indicators. If you want to bet on breakout direction you either have to wait until breakout is made or use your brain. There is no other and better indicator than your brain. But it takes a long months/years before you can "synchronize" your brain with market.

Very good. Well said. Study and practice and trade with a close stop. There are no short cuts. Excellent post.

 

[HaloTrader]

New_Trader what would you call a close stop?
For instance i use a 1-1.25 stop loss on the ES, would you classify that as small or do you mean very small, as in 0.25?

 

[HaloTrader]

For breakouts, establish the range and buy the low and sell the high until one of the sides breakout.

 

[new_trader]

New_Trader what would you call a close stop?
For instance i use a 1-1.25 stop loss on the ES, would you classify that as small or do you mean very small, as in 0.25?

Wow, that is very good if you trade with stop so close already. Where you place your stop is a function of two things which are inter-related, they are skill and experience. Initially, the inexperienced trader might choose an arbitrary stop (but still close) and then find that as they become more experienced and skilled at selecting winning entries they may tighten their stop. You will find after long hours of study and practice that you are able to pick up 'the beat' of the market so to speak. You will begin to recognize where the turning points are and how the market 'acts' at these points.

Let my illustrate the idea with an analogy. Have you ever been up on a balcony and someone throws a ball (or other object) up to you and when it gets to your height it almost appears to be suspended in mid air? You can almost pick exactly where it will stop rising and start falling back down again. The way the price rallies and reacts is not very different. Think of the way the force of the thrower and gravity work against one another. Now, imagine the thrower is slowly walking up stairs. What would you see? The ball would be suspended in mid air, but slightly higher on each throw! You must be aware of each movement so that you understand where you are in relation to supply and demand! Always keep the bigger picture in mind when considering the smaller picture.

 

[VingTsunKuen]

Hi,

Please correct me if I am wrong!

Accumulation or distribution by Smart Money happens during periods of congestion/ranging periods.

You are talking about 4 stages of market.Gentleman named Stan Weinstein has wrote a book back in eighties called "Secrets for profiting in bull and bear markets"
He was quite successful trader,trading stocks from weekly charts whit help of weighted MA.Check Amazon for that book if you would like to get answer on your question.It is an interesting book.
Cheers,
VTK