4.12 steve_philips_2

Background effect’s the right edge
• Why?
• How price action & emotion play a role.
• What action is taken to create euphoria.
• Where to look in the background.
• Use these key levels to find a VSA signal
to enter and exit the market (stops &
profit targets).
• Six specific set ups to look for.
Wyckoff, Weis & Williams – the art of ticker-tape reading for every chartist
Why?
 Blocks of orders get left on the books.
• The smart money leave their orders in the
market in particular areas.
• They trade with massive size.
• If they rush into the market the price goes
along with them. This action will make them
buy higher and sell lower. (aka bad trading)
• They resolve this issue by leaving blocks of
orders on the books
How price action and emotion play a role.
• They need to move the price fast into blocks of
orders.
• The smart money will pull orders from the middle
and let it fly up or down.
• Spiking into areas where they’ve placed blocks of
orders to mop up the uninformed retail traders.
• This creates a fear of missing out on the move or it’s
dramatically shaking people loose that are on the
wrong side.
Where to find these blocks of orders?
• Background volume and price spread.
• Look for a confluence of key levels.
• 200+ bars back multiple time frames Monthly, Weekly, Daily,
240min, 60min.
• The smaller the time frame the deeper the background. (A.k.a.
more bars)
• Track these numbers on a spread sheet and correlate the
common numbers on each time frame.
• These numbers are used for possible entry stops and exit points.
Finding blocks of orders.
Finding blocks of orders
What to look for in these areas.
 Climactic action.
 Ask yourself is it effort to rise or distribute?
 Is it an effort to accumulate or fall?
 Find where it will test or up thrust.
 Pin point an area have a pre approached plan
before it gets to these levels.
The signals to look for long
 Test- after climactic action into
support (accumulation) and an
effort to rise.
 Gap down Shakeout- Double
bottom a new low.
Signals to look for short.
 Up Thrust-After climactic action to the upside
with a double top.
 No Demand-after climactic action into
resistance with a double top.
 Up Thrust after a fall through support
 No Demand after falling through support.
Long Examples
Whole picture example
Conclusion
You will be able to
• Understand why the smart money needs to move the market
in the opposite direction before it goes back in their favored
direction.
• Find blocks of orders that will cause the market to show a VSA
signal.
• Use trigger numbers to look for specific levels for VSA signals
to show up.
• Identify six specific set ups to enter the market.
• No Demand & Up Thrust
• Tests and gap down shakeouts.
Today’s Objectives
• Trend Trade Set Up
• Specific Entry’s & Filters
• Stops
• Trailing stops using multiple time
frames to protect profits and ride the
move with an open target.
• Adding to a winner.
Set Up & Stops Criteria
• Trend cross over trade
• Time Frames-Weekly/Daily once a trend is in place the 240 minute chart can be
used to protect profits along the way.
• MA’s 20/65 simple moving average
• H stop settings (3-2.5 Longer holds more risk per trade with less trades) (1.75-
1.25 manage risk and profits)
• Entry’s H consolidation and flips or the trend changes. After a pivot high/low or
an accumulation/distribution phase.
• An accumulation or distribution needs be set up in the background or a shake/up
thrust bar needs to be no more than 45 bars in the back ground creating a new
90 bar pivot high or low)
• Stops & Trailing (H Stops) or (20 or 65 SMA trail) Tighten if you see an
accumulation or distribution phase taking place-heads up for climactic action in
favor of the position look to see if it starts a campaign to accumulate or
distribute.
• Works in all trending markets currency’s, gold, corn, wheat, soybean, stocks.
• Best stock crawler candidates are stocks acting stronger or weaker than the
index.
Weekly chart (3-2.5) settings with 65
Simple Moving Average
Weekly 3-2.5 H stop 65 Simple Moving Average Set up
Weekly chart (3-2.5) H stop settings
Weekly 3-2.5 H stop 65 simple with
20 simple moving average trail
Lock in profits and trail stop
using multiple time frames.
• When the weekly triggers lock it in with the daily chart H stops.
• When the daily triggers use the 240 minute chart H stops to lock in the
daily profit.
• Once the weekly catches up to the daily stop. Go back to the weekly
trail stop.
• Once the daily catches up to the 240 min chart go back to the daily trail
stop.
• Peeling back to the original time frame will allow you to cap it.
• Then wait for another entry using a daily or 240 minute set up.
• This will add to the winner that’s locked in already.
• If climactic action goes in favor of the position consider using a 1.75 &
1.25 H stop setting.
Top Down Scan- Filter for stocks
• If you see a principal appear on the indices.

• Accumulation or Distribution followed by a trend
change.
• Scan through the Dow 30 Stocks and find which ones
are acting stronger or weaker than the index.
• When the index sets up with the criteria in a specific
direction. Use the basket of stocks that are pushing in
that direction faster.
• Look for solid daily and weekly trade set ups. These
stocks will trend faster than the Index.
Napkin drawing of stocks vs indices
strength and weakness.
Pivot set ups enter tops and bottoms
• 90 bar high up thrust
• Up thrust needs to be an up bar regardless of volume
• It’s ok to close lower than the previous bar with average
to high volume.
• 90 bar low gap down shakeout.
• Enter on the close of the bar.
• This will help probe the market and catch the move
before the trend changes
• Look to lock in profits using the multiple time frame
technique.
Up Thrusts Criteria
Up Thrusts Criteria
Up Thrusts Criteria
Conclusion
• Find the starting of Accumulation or
Distribution.
• Find pivot highs and lows.
• Finding stocks that will trend faster than the
indices.
• Trigger swing trades based on trend and cause.
• Adding to a winner. Using Multiple time
frames.
• Letting a winner run with an open target.

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Background effect’s the right edge

• If you see a principal appear on the indices.

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