spike in silver and gold prices!, page-10

Just to clear up Nathans posts re VSA:

Smart Money is a bad term, it has too much negative emotional connotation attached to it. A minor failure of VSA terms.

To get to the root of what is actually meant by 'Smart Money' you need to look back to Wyckoff who coined the term, and more correctly, as The Composite Operator.

The Composite Operator is the sum total of all operations by big operational money, hedge funds, banks and all that rot. It is best viewed as a Single large person (Similar to a corporation).

Once viewed as a single trader you are then allowed to try and understand the motives and probable future direction of this 'trader'.

Smart Money implies that there are a select few traders that outperform the market always and set the prices and so on, a clandestine group of elite traders. This is NOT what Smart Money means, and imo is what turns people off from VSA as they rightfully cant believe that a handful of secretive traders determines the direction of petty stocks like SVL (petty in size compared to BHP).

When 'They' are finished accumulating actually means when the market and stock conditions are just right that the sum total off all trading actions can result in nothing but up moves. You cannot possibly accumulate more in such conditions, basically when almost all the floating supply is unavailable at that SP level.

With smaller stocks such as SVL it doesn't take much to shift the SP around, for instance it CAN be 1 person that determines the direction until they buy enough or run out of stock to sell, a person with bigger pockets then the majority of traders for that stock at least.
However, this cannot sustain any kind of up/down move for long, that requires participation from many more people like Him along with the trickle of effort provided by small retail traders.

Which leads to the next point and why the term Smart Money is used:

There are those on the wrong side of a trade and those one the 'correct' side. It is the heard that moves a stock in a direction, supported by a handful of larger players. Those who are on the right side of the trade the majority of the time are the 'Smart Money'. You can at best only estimate when they are buying or selling.

The goal of VSA is to become the Smart Money, be the part of the composite trader that is more often then not on the correct side of the trade, you do not need endless $'s to do this.

Since the activity (volume) of a stock gives an indication as to the level the composite trader is participating. When you see very large volumes you know that the majority of composite traders for that stock are participating on that bar(day,week,15 mins, whatever). In which case the 'correct traders' are most likely participating too. Which side of the trader are they on? That is your main question.


Accumulation is generally very low volume as not all members who make up the composite trader are participating, no one wants to buy a stock higher then the price the last go got it for unless they think it will go higher in the short term. So major buyers can only purchase very small amounts slowly or risk pushing the price up too high short term only to have it drop again when they are done buying.




O dear, I got a little carried away.