Hi Everyone,
I am posting 2 videos showing a trade I took today on the GBP/USD Spot Forex Market, and as we are always asked how we can use volume and get signals on FX charts that have no centralized exchange, I am posting an explanation from Tom Williams. I am also posting a link to the book "Master The Markets". The book is a $99.00 value and you can download and print it with my compliments, I know that if you found this Blogg and you take the time to read the book, IT WILL CHANGE YOUR VIEW OF THE MARKETS AND MAKE YOU SUCCESSFUL.
Here is the link to todays videos, filmed the morning session on Thursday August 28th 2008 and the book, and also below is the explanattion on how we get volume in FOREX markets. Enjoy, and good trading.
Gavin
www.tradeguider.com/gavin_webinar_files/manip2.wmv
www.tradeguider.com/gavin_webinar_files/manip3.wmv
Book Download:
http://www.tradeguider.com/mtm_251058.pdf
An Explanation of How and Why TradeGuider Detects Professional Activity in the FOREX Markets!!
Although many people think that there is no Volume in FOREX, eSignal produce a volume histogram with their FOREX data. How is this done, well, you can find out a lot more by going to the following eSignal page:
http://www.esignalcentral.com/support/faq/esignal/forex/default.asp .
Q: Where does eSignal get it’s FOREX data from?
A: Forex data from GTIS -- an affiliate of FT Interactive Data and sister company to eSignal and the primary supplier, for more than 20 years, of foreign exchange information used by traders, corporations and financial institutions:
Spot rates for more than 100 currencies, as well as precious metals
Cross rates
Forward rates
Nearly 200 global bank and broker contributions (Asia / Pacific Rim, Russia, Europe and North America) -Check out the complete listing from the link below:
http://www.esignalcentral.com/support/symbol/forex2.htx?source=$(source)
Additional contributors: Garban Intercapital, the world’s leading derivatives, securities and money broking business, and Tullett & Tokyo Liberty,
one of the largest inter-dealer brokers in the world.
Forex Market Depth with the ability to view the best bid / ask by Forex contributor.
Foreign Currency Options (FCO) from the Philadelphia Stock Exchange (PHLX), the first organized stock exchange in the U.S. and one of North America's primary marketplaces.
Q: I’m seeing the volume histogram update on FOREX issues in eSignal, what does that volume represent?
A: The volume histogram for Forex issues represents the number of transactions or ticks and not true "trade size" activity. It's much like most futures contracts, where the volume histogram reflects the volume of transactions or updates during each given interval.
It is important to understand that TradeGuider does not need actual volume but relative volume compared to the previous bar to give a VSA indicator. Volume in FOREX can be seen as activity, and it is this activity that TradeGuider picks up extremely well when using the eSignal datafeed.
Here is an explanation from Tom Williams, the creator of TradeGuider.
Q: How do the VSA principles work in Spot FOREX and TradeGuider?
A: First of all you have to realize that the "Smart Money", or "Professional money" is very active in the FOREX market. "Professional Money" as we shall refer to it here, can be trading syndicates, individual traders with huge capital, large financial institutions, certain funds such as ‘The Quantum Fund’ operated by George Soros, and large institutional banks.
See further information in this letter from The Derivatives Study Center sent to The Commodity Futures Trading Commission in August 2000 by clicking the link below:
http://www.financialpolicy.org/dsccftcletter.htm
These individuals or organizations are very secret in their dealings, as they do not want others to know what they are doing. The result of this is no volume, however, tick volume works. Tick volume is added to the price movement on every price tick up or down, because one may deal in 5M while the very next trader only deals 500k, but we get one tick each dealer. Bear in mind the number one principle, that from the tick volume created, 90% will be from "Professional Money" and their dealers.
When these very large orders go through, they have a following, the same as the futures pits; this automatically creates more ticks, hence higher volume. So TradeGuider will analyze the tick volume as if it were real volume, and will clearly show this "Professional Money" either participating or just as importantly not participating in the movement of a currency. When we hear of strength and weakness in a currency, this is nothing more than professional support or lack of it, and can be clearly seen on the TradeGuider Chart.
Remember when in 1992 George Soros massively shorted the British Pound forcing the Bank Of England to eventually withdraw from the European Exchange Rate Mechanism, well, this is one very well known example of "Professional Money" having a dramatic effect on a currency. This happens every day, you just need to know what to look for.
In 1992 the British pound fell so sharply that Britain was forced to leave the Exchange Rate Mechanism (ERM). What do you think was behind this famous fall? Yes, you guessed it, professional money! The money in question was the Quantum Fund, run by the renowned speculator George Soros. He and his analysts had spotted a potential weakness in the ERM. During the weeks before the massive sell-off of the British pound, George Soros was busy exchanging seven billion US dollars for German Deutschemarks. When the time was right he moved in fast, selling the British pound. As the pound fell the Deutschemark rose, creating huge profits for Soros. As soon as news of this got out the other professionals followed suit. The onslaught was overwhelming and too much for Norman Lamont,
the then UK Chancellor of the Exchequer.
In an attempt to halt the slide Lamont resorted to selling some of Britain's gold reserves. He put up interest rates three times during one day, but this was still no match for the professionals. Now, if a government can't beat the professionals, what hope do individual traders have?
To find out more about TradeGuider and how we can teach you to follow the activity of the "Professional Money" in FOREX, please email us at info@tradeguider.com or call us at:
United States (toll free) - 8:30am - 5pm CST
(877) 392-3895
United Kingdom - 8:30am - 5pm GMT
(+44) 208 123 8488
Hong Kong - 8:30am - 5pm Local Time
(+852) 8120-6221
Australia - 8:30am - 5pm Local Time
(+61) 404 776-687
Thursday, August 28, 2008
Wednesday, August 20, 2008
Video Explaining How to Trade Manipulation
Hi,
Here I have posted a recording of a web seminar we did live with over 250 traders in attendance that exposes the underlying chart reading skills needed to trade in harmony with "Smart Money". I hope you enjoy it, just click the link and ensure you have windows media player 9 or above and ensure your speakers are on. Enjoy, here is the link.
www.tradeguider.com/gavin_webinar_files/manip1.wmv
Here I have posted a recording of a web seminar we did live with over 250 traders in attendance that exposes the underlying chart reading skills needed to trade in harmony with "Smart Money". I hope you enjoy it, just click the link and ensure you have windows media player 9 or above and ensure your speakers are on. Enjoy, here is the link.
www.tradeguider.com/gavin_webinar_files/manip1.wmv
Tuesday, August 19, 2008
Are Markets Manipulated?
This is a very important question, and one that each and every one of you that find this Blogg will come to your own conclusions on. I will say no more other than to provide these links for you to follow up on, enjoy.
http://www.tradeguider.com/manipulation/
http://www.afajof.org/pdfs/2004program/UPDF/P306_Asset_Pricing.pdf
http://www.guardian.co.uk/business/2008/mar/19/marketturmoil.creditcrunch
http://www.hermes-press.com/neyint.htm
In my next Blogg I will post a chart of what is going on now in the Financial Stocks and Oil.
Good Trading,
Gavin
http://www.tradeguider.com/manipulation/
http://www.afajof.org/pdfs/2004program/UPDF/P306_Asset_Pricing.pdf
http://www.guardian.co.uk/business/2008/mar/19/marketturmoil.creditcrunch
http://www.hermes-press.com/neyint.htm
In my next Blogg I will post a chart of what is going on now in the Financial Stocks and Oil.
Good Trading,
Gavin
How to Trade in Harmony with "The Smart Money"
Some Background Information:
Volume Spread Analysis - The Way to Track Markets undergoing Manipulation by "The Composite Operator" or "Smart Money".
An Introduction to Volume Spread Analysis
This is a brief explanation of the underlying methodology of Volume Spread Analysis. We will be showing examples of how professional activity is clearly visible in all markets and in all timeframes, if you know what you are looking for.
Volume Spread Analysis (VSA) is a proprietary market analysis method which was conceived by Tom Williams.
VSA is used to analyze any liquid market by observing the interrelationship between volume, price and spread of the price bar(often known as the range of a price bar).
This method is particularly good at highlighting imbalances of supply and demand.
Despite the fact that few retail traders and investors are aware of this analysis method this is not a new concept, and Tom Williams, who invented VSA was once himself a professional syndicate trader who could see that the markets were being manipulated and that the key to unlocking the truth lay in the relationship between the volume, the range or spread of the bar and the closing price. Tom spent many years studying the concepts of Richard Wyckoff.
Richard Wyckoff was a trader during the 1920 and 30’s. He wrote several books on the Market, and eventually set up the "Stock Market Institute" in Pheonix. Richard D Wyckoff (born November 2, 1873; died March 19, 1934) was a stock market authority, founder and onetime editor of the Magazine of Wall Street (founding it in 1907), and editor of Stock Market Technique.
Wyckoff implemented his methods in the financial markets, and grew his account such that he eventually owned nine and a half acres and a mansion next door to the General Motors Industrialist, Alfred Sloane Estate, in Great Neck, New York (Hamptons).
As Wyckoff became wealthier, he also became altruistic about the public's Wall Street experience. He turned his attention and passion to education, teaching, and in publishing exposés such as "Bucket Shops and How to Avoid Them", which were run in New York's The Saturday Evening Post starting in 1922.
Continuing as a trader and educator in the stock, commodity and bond markets throughout the early 1900s, Wyckoff was curious about the logic behind market action. Through conversations, interviews and research of the successful traders of his time, Wyckoff augmented and documented the methodology he traded and taught. Wyckoff worked with and studied them all, himself, Jesse Livermore, E. H. Harriman, James R.Keene, Otto Kahn, J.P. Morgan, and many other large operators of the day.
Wyckoff's research claimed many common characteristics among the greatest winning stocks and market campaigners of the time. He analyzed these market operators and their operations, and determined where risk and reward were optimal for trading. He emphasized the placement of stop-losses at all times, the importance of controlling the risk of any particular trade, and he demonstrated techniques used to campaign within the large trend (bullish and bearish). The Wyckoff technique may provide some insight as to how and why professional interests buy and sell securities, while evolving and scaling their market campaigns with concepts such as the "Composite Operator".
Wyckoff was thorough in his analysis of the trading range. One tool that Wyckoff provides is the concept of the "Composite Operator." Simply, Wyckoff felt that an experienced judge of the market should regard the whole story that appears on the tape as though it were the expression of a single mind. He felt that it was an important psychological and tactical advantage to stay in harmony with this omnipotent player. By striving to follow his foot prints, Wyckoff felt we are better prepared to grow our portfolios and net-worth.
"At its core, Wyckoff's work is based on the analysis of trading ranges, and determining when stocks are in "basing," "markdown," "distribution," or "markup" phases. Incorporated into these phases are the ongoing shifts between "weak hands" (public ownership) and "composite operators", now commonly known as "Smart Money".
For more about Richard Wyckoff, see these books:
How I Trade and Invest in Stocks and Bonds by Richard D Wyckoff
Stock Market Technique, No. 2 by Richard D Wyckoff
Tom came back from Beverley hills in the early 1980’s and began to investigate if it was possible to computerize the system he had learnt as a syndicate trader, and so began the evolution of Volume Spread Analysis. Together with an experienced computer programmer Tom carefully studied many thousands of charts to recognize the obvious patterns that were left when professional or smart money was active. This methodology although simple in concept took many years to write and is now taught as a methodology combined with the software called TradeGuider. (www.tradeguider.com)
Volume Spread Analysis seeks to establish the cause of price movements. The ‘cause’ is quite simply the imbalance between Supply and Demand or strength and weakness in any liquid market, which is created by the activity of professional operators or "Smart Money".
The significance and importance of volume appears little understood by most non-professional traders. Perhaps this is because there is very little information and limited teaching available on this vital part of technical analysis. To use a chart without volume is similar to buying an automobile without a gasoline tank.
For the correct analysis of volume, one needs to realize that the recorded volume information contains only half of the meaning required to arrive at a correct analysis. The other half of the meaning is found in the price spread. Volume always indicates the amount of activity going on, the corresponding price spread shows the price movement on that volume. Many traders believe you cannot analyze volume is the FOREX markets because it is unavailable, but this is a misconception.
Some technical indicators attempt to combine volume and price movements together. Rest assured that this approach has limitations, because at times the market will go up on high volume, but can do exactly the same thing on low volume. Prices can suddenly go sideways, or even fall off, on exactly the same volume! So, there are obviously other factors at work.
In this Blogg I am going to show YOU exactly what is going on, and to start with, I am uploading a video that was made available on You Tube 5 weeks ago (This Blogg started August 19th 2008). In June and July we were hearing about $200 a barrel of Oil and a weakening Dollar, but as I post Oil has dropped from $148.00 to $114.00 today and You can now get 1.86 Dollars to the Pound, a very different picture painted by the NEWS MEDIA and ANALYSTS who are apprantely "In the know"
I hope I can help you and if you found this blogg your journey to profits begins here.
Good Trading,
Gavin
Volume Spread Analysis - The Way to Track Markets undergoing Manipulation by "The Composite Operator" or "Smart Money".
An Introduction to Volume Spread Analysis
This is a brief explanation of the underlying methodology of Volume Spread Analysis. We will be showing examples of how professional activity is clearly visible in all markets and in all timeframes, if you know what you are looking for.
Volume Spread Analysis (VSA) is a proprietary market analysis method which was conceived by Tom Williams.
VSA is used to analyze any liquid market by observing the interrelationship between volume, price and spread of the price bar(often known as the range of a price bar).
This method is particularly good at highlighting imbalances of supply and demand.
Despite the fact that few retail traders and investors are aware of this analysis method this is not a new concept, and Tom Williams, who invented VSA was once himself a professional syndicate trader who could see that the markets were being manipulated and that the key to unlocking the truth lay in the relationship between the volume, the range or spread of the bar and the closing price. Tom spent many years studying the concepts of Richard Wyckoff.
Richard Wyckoff was a trader during the 1920 and 30’s. He wrote several books on the Market, and eventually set up the "Stock Market Institute" in Pheonix. Richard D Wyckoff (born November 2, 1873; died March 19, 1934) was a stock market authority, founder and onetime editor of the Magazine of Wall Street (founding it in 1907), and editor of Stock Market Technique.
Wyckoff implemented his methods in the financial markets, and grew his account such that he eventually owned nine and a half acres and a mansion next door to the General Motors Industrialist, Alfred Sloane Estate, in Great Neck, New York (Hamptons).
As Wyckoff became wealthier, he also became altruistic about the public's Wall Street experience. He turned his attention and passion to education, teaching, and in publishing exposés such as "Bucket Shops and How to Avoid Them", which were run in New York's The Saturday Evening Post starting in 1922.
Continuing as a trader and educator in the stock, commodity and bond markets throughout the early 1900s, Wyckoff was curious about the logic behind market action. Through conversations, interviews and research of the successful traders of his time, Wyckoff augmented and documented the methodology he traded and taught. Wyckoff worked with and studied them all, himself, Jesse Livermore, E. H. Harriman, James R.Keene, Otto Kahn, J.P. Morgan, and many other large operators of the day.
Wyckoff's research claimed many common characteristics among the greatest winning stocks and market campaigners of the time. He analyzed these market operators and their operations, and determined where risk and reward were optimal for trading. He emphasized the placement of stop-losses at all times, the importance of controlling the risk of any particular trade, and he demonstrated techniques used to campaign within the large trend (bullish and bearish). The Wyckoff technique may provide some insight as to how and why professional interests buy and sell securities, while evolving and scaling their market campaigns with concepts such as the "Composite Operator".
Wyckoff was thorough in his analysis of the trading range. One tool that Wyckoff provides is the concept of the "Composite Operator." Simply, Wyckoff felt that an experienced judge of the market should regard the whole story that appears on the tape as though it were the expression of a single mind. He felt that it was an important psychological and tactical advantage to stay in harmony with this omnipotent player. By striving to follow his foot prints, Wyckoff felt we are better prepared to grow our portfolios and net-worth.
"At its core, Wyckoff's work is based on the analysis of trading ranges, and determining when stocks are in "basing," "markdown," "distribution," or "markup" phases. Incorporated into these phases are the ongoing shifts between "weak hands" (public ownership) and "composite operators", now commonly known as "Smart Money".
For more about Richard Wyckoff, see these books:
How I Trade and Invest in Stocks and Bonds by Richard D Wyckoff
Stock Market Technique, No. 2 by Richard D Wyckoff
Tom came back from Beverley hills in the early 1980’s and began to investigate if it was possible to computerize the system he had learnt as a syndicate trader, and so began the evolution of Volume Spread Analysis. Together with an experienced computer programmer Tom carefully studied many thousands of charts to recognize the obvious patterns that were left when professional or smart money was active. This methodology although simple in concept took many years to write and is now taught as a methodology combined with the software called TradeGuider. (www.tradeguider.com)
Volume Spread Analysis seeks to establish the cause of price movements. The ‘cause’ is quite simply the imbalance between Supply and Demand or strength and weakness in any liquid market, which is created by the activity of professional operators or "Smart Money".
The significance and importance of volume appears little understood by most non-professional traders. Perhaps this is because there is very little information and limited teaching available on this vital part of technical analysis. To use a chart without volume is similar to buying an automobile without a gasoline tank.
For the correct analysis of volume, one needs to realize that the recorded volume information contains only half of the meaning required to arrive at a correct analysis. The other half of the meaning is found in the price spread. Volume always indicates the amount of activity going on, the corresponding price spread shows the price movement on that volume. Many traders believe you cannot analyze volume is the FOREX markets because it is unavailable, but this is a misconception.
Some technical indicators attempt to combine volume and price movements together. Rest assured that this approach has limitations, because at times the market will go up on high volume, but can do exactly the same thing on low volume. Prices can suddenly go sideways, or even fall off, on exactly the same volume! So, there are obviously other factors at work.
In this Blogg I am going to show YOU exactly what is going on, and to start with, I am uploading a video that was made available on You Tube 5 weeks ago (This Blogg started August 19th 2008). In June and July we were hearing about $200 a barrel of Oil and a weakening Dollar, but as I post Oil has dropped from $148.00 to $114.00 today and You can now get 1.86 Dollars to the Pound, a very different picture painted by the NEWS MEDIA and ANALYSTS who are apprantely "In the know"
I hope I can help you and if you found this blogg your journey to profits begins here.
Good Trading,
Gavin
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