Day Trader’s Aftermarket Lounge 18 May 2020

Originally posted by RogerRamjet: ↑

This is terrific @Jnnl. Thanks!

I'm keen to better understand WHEN (on which candles specifically) to apply tests of No Demand (or No Supply).

If you're interested, I have been also chatting to @Cabbie on "No Demand" (post 44669336 which includes a video link) and he's kindly given his view in this thread above.

Are the following statements true of your analysis (assuming we're considering a LONG entry).
I'm basically trying to establish a rules-based recipe for both knowing WHEN to apply the test for ND and then applying the ND test itself.

1. You test for No Demand (ND) only after Distribution (or even, Markdown) has been established to be in effect?

2. Your ND test is always assessed over several candles - never just a single candle. Indeed, it sometimes may take more than two candles to confirm.

3. The trigger for applying the ND test is that price is arrived to the breakout line on somewhat increased volume ??WITH NO SIGNIFICANT SUPPLY BEING PRESENT??? (this part I'm not sure on: I think "no demand" is a concept that is to be tested in the absence of supply)

4. If the next one or two candles do not bring breakout and big volume, then your "no demand?" question kicks in

5. a red candle close below the "no demand?" candle confirms No Demand

Sorry that this is long. I'm keen to understand to get "No Demand" right. Thanks if you chose to answer

Expand

@RogerRamjet Before i answer your questions, i do apologise for using techinical terms like 'no demand' bit loosely and interchangably than what you would find in text books. I've made made various applications to my TA over the years and what works for me personally so i dont speak for any scholars out there.
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Volume Spread Analysis (VSA) is a beauty as its somewhat simple to grasp yet very effective so when I talk about demand, we got to factor in other VSA principles in terms of spread and volume and where/when we should/would expect volume to flow.

For me...
1. Yes i tend apply these tests more often after markdowns/distributions as we can assume sellers are in control for the time being so the success rate of the pattern is more likely. However, it can be applied in other stages and not necessarily in this context.

2. Yes on the intraday i often look for about 3 candles but it can vary depending on the patterns of the stock(see orange circles) . We often have the breakout/retest attempt followed by a drop in RELATIVE volume (significantly lower in volume and minimal spread to the pattern).

3. Often yes but not limited to this, in this example, we are applying it at each resistance pressure point where we would expect some movement but not supported by the follow through.

4. Ultimately it becomes a high risk point point to buy or to get your sell button ready

5. Looking for a failed breakout so we would expect that candle to close below the resistance at the point. Incredibly important to look at volume

GTR 15 mins

Then if you have a look on the daily we might see a similar pattern in play. We are at abouts ..where "1" is at the moment from the intra-day.

Based on the above, can you guess what happens next though?

GTR Daily

Hope this helps.