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VSA Trading: Reading the Tape & Learning to Wait

  • #21
  • Quote
  • Dec 1, 2025 4:41am Dec 1, 2025 4:41am
Symbol: TLT
Fundamentals

  1. Recession -> lower rates -> TLT price increases
  2. May 2026 -> Powell retires -> Trump installs a crony who cuts rates because Trump wants it -> TLT price increases

Monthly Chart

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  1. EvR as a potential sign of strength.
  2. Test w/ supply present, but more importantly, it selloffs beyond the prior bar and rejects the lows. In unison w/ the prior bar, the background is bullish for the foreseeable future
  3. Ambiguous bar. Half the bar is a test, and the other half is an attempted rally. Volume is below average either way
  4. Shakes out below the lows of the prior bar and closes well off the lows. Subtle, but bulls win yet again.
  5. Ambiguous bar. Price rallies above the prior bar's high and fails, but closes off the lows on reduced volume
  6. Shakeouts out beyond the prior bar's low as a sign of strength. Increase in volume and spread are a sign of intent (altho the close off the lows suggest bears are still present)
  7. Rallies above the prior bar's high and it is rejected. The bars that sold into the prior bar are still present. With that said, bars 1 & 2 are still suggesting bullish background
  8. Test bar w/ the lowest volume since July 2023. There's little supply drawn out

Weekly Chart

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  1. Major Sign of Strength w/ this shakeout/reversal bar. Colors the background for the foreseeable future
  2. Price runs out of momentum w/ reduced supply. No weakness in background as much as a lack of momentum for higher prices at the moment
  3. Spread increases on the selloff but the volume remains average. The selloff is unlikely to be sustained for an extended period of time
  4. The volume as the same as the prior bar even tho the spread has narrowed considerably. Price also closes off its high. Someone is buying...
  5. Gap higher shows intent and jumps over a short-term resistance level. The close off the high suggests supply is potentially still present

Gameplan
The less likely scenario is that price sells off for 2-3 more weeks and then rallies heavily at the end of the month.
The more likely scenario is that price tests earlier in the week and the resistance turns support.
I will be looking for testing on the Daily chart to get involved

  • #22
  • Quote
  • Dec 5, 2025 2:51am Dec 5, 2025 2:51am
Finished a (free) course/quiz on Bayesian/Probabilistic thinking that is useful for thinking about risk when trading : https://programs.clearerthinking.org..._evidence.html
  • #23
  • Quote
  • Dec 16, 2025 8:13am Dec 16, 2025 8:13am
Potentially mushrooming on the S&P again:
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Here's a breakdown on the Daily:
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  1. Strength in background so bulls are in control but demand is slowing up. No buying pressure
  2. Lowest volume in weeks. Not great but still the bulls to lose
  3. Below avg volume bar that is still more than the prior bar and a close off the lows. Solid
  4. Errr. Another weak up bar... No interest in higher prices at the moment but it can be tested away
  5. Tests below the prior bar's close and closes above the prior bar's high. Solid response
  6. Another test... But the prior bar tested as well. It needs to get a move on soon ideally
  7. Up-bar and the highest volume in ~2 weeks, but that closes is not great. There's supply overhead that needs to be absorbed
  8. Close off the lows on low volume. No interest in lower prices which is a good sign
  9. Another secondary test bar. Bulls aren't in a rush to take advantage of their opportunities yet.
  10. Finally the bulls take advantage of a test. Hidden test in this bar that engulfed the prior bar and closed well above it. Strong bar for sure
  11. Hmmm. I would've expected bulls to run up the score here after the last bar showed conviction. Their inability to do so is concerning, but the close is great, so they might let 'er rip on the next bar
  12. In addition to basically being a two-bar reversal price has away from the breakout zone which is bearish.
  13. Price rallied at the open, only to again close closer to support than the breakout level.


TBH, I don't envision a huge market selloff during Christmas week, so that limits the potential for an outsized breakdown this week that immediately continues. For this week, my ideal scenario is a selloff that is faded next week but leads to a no demand or a test that potentially fails to start the new year.

  • #24
  • Quote
  • Dec 16, 2025 10:37pm Dec 16, 2025 10:37pm
I don't understand why the VIX spiked 10% leading up to the somewhat predictable FOMC event but was flat going into the jobs report when expectations are poor and there's increased chance that it leads to selling
  • #25
  • Quote
  • Dec 18, 2025 9:01am Dec 18, 2025 9:01am
Quoting Macallik
TLT Fundamentals Recession -> lower rates -> TLT price increases May 2026 -> Powell retires -> Trump installs a crony who cuts rates because Trump wants it -> TLT price increases Monthly Chart {image} EvR as a potential sign of strength. Test w/ supply present, but more importantly, it selloffs beyond the prior bar and rejects the lows. In unison w/ the prior bar, the background is bullish for the foreseeable future Ambiguous bar. Half the bar is a test, and the other half is an attempted rally. Volume is below average either way Shakes out below...
Ideal scenario mentioned earlier vs current scenario
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Better to be lucky than good

Game plan
TBH this is more aggressive than I prefer as it hasn't accumulated on the weekly as much as I'd like, but with the stock market teetering on the edge, I know bonds have an inverse relationship, so I want to make sure I have some exposure in case there's an onslaught of buyers in a rush-to-safety trade.

The Daily chart is deceptively strong so I am not exactly winging it, but like I said, it's very aggressive:
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  • #26
  • Quote
  • Jan 27, 2026 8:06am Jan 27, 2026 8:06am
Reinventing the Wheel Anotan's Structure
I've come up w/ a lot of theories about price over time. The other day I glanced at Anotan's semi-retired journal and realized that his framework, shared years ago, reached conclusions I'm only recently appreciating/understanding.

There are three reasons why I never got Anotan's setup. Two are personal quirks and the latter is a VSA principle that I think most people struggle with. First the personal quirks:

  1. Anotan uses candlesticks and I use HLC bars: I can translate between the two, but the extra brainpower required means I usually just skipped over a lot of his charts. That little bit of extra friction potentially stopped me from seeing the forest for the trees
  2. I'm hard-headed/opinionated and want to do things the hard way

Now, for the bigger VSA principle. Initially, Anotan's strategy seemed as simple as "draw a line -> wait for price to test/ND the line -> enter a position". That failed for me because, perhaps a bit counter-intuitively, the line is the least important aspect...

...What matters are the VSA principles that show up as price moves away from/towards the line. That is the part that you have to target and grow with experience/repetition.

Surprisingly, JMP trading, another trader I respect and listen to, reached the same conclusions as Anotan.

In the video below, the first 2-3 minutes explains where/why to draw the line, and the rest of the video explains the VSA principles happening around the line:

Inserted Video


In conclusion, mastery let's people make the complex look simple. Anotan's strategy seems easy to replicate, but it is really the VSA happening between the drawing of the line and the retest(s) of the line that makes or breaks the strategy. Make sure to focus on the right parts to flatten your learning curve
  • #27
  • Quote
  • Last Post: Feb 26, 2026 6:39am Feb 26, 2026 6:39am
Quoting Macallik
Appreciate the feedback HG. Will carve out some time down the road to backtest the 50% line and see how I feel about it. On an unrelated note, I think there might be a chance for me to add to my position on the Daily at some time this week potentially (thanks largely to 9 and 13). Gonna do a bar-by-bar of the leadup for my own sanity/context. (I find it's much easier to create a VSA narrative retrospectively than in real time) {image} Reduced volume shakeout beyond the prior bar (which was also reduced volume) EvR as a sign of accumulation Strong...
Made this comment in the main VSA thread. TL;DR: I have a small position in TLT and was contemplating adding to it. Figured it makes sense to update it here instead of treating the Malcolm thread like my personal journal
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I was nervous overnight because unlike TLT, the 10y bond futures (ZB1! on TradingView) showed heavy volume entering (2x the avg), which meant supply was present. I am trading TLT, but I'm assuming the two are related so heavy volume seems ominous regardless.

My first instance was to take it as a clear sign of distribution and to get out at the open of TLT, but thanks to experience, I paused a beat and decided to wait for confirmation. It's early but it appears to be the right move based on subsequent price action:
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I decided to add to my TLT position @ the close. We shall see how things play out.
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