What is PVSRA?
PVSRA stands for Price Volume Support Resistance Analysis. We cannot know how the Robber Bank market makers will move price next, but by doing good and proper PVSRA we can get a "feel" for what they are up to. And with that, and with patience to await a proper "setup", we can take money from them, instead of the other way around. You will be exposed to PVSRA techniques via posted trades in the Trading Room, but here is an introduction to PVSRA, something brief about each part.
- We cannot know how the MMs (Market Makers) will move price next, period. But price tends to consolidate above key SR when MMs are filling sell orders for SM (Smart Money) and buy orders for DM (Dumb Money), and price tends to consolidate below key SR when MMs are filling buy orders for SM and sell orders for DM. The MMs are also "SM", and they tend to do the other SMs "one better"! This means that after the MMs fill the SM/DM orders, they might run a stop hunt on those SM positions....suckering in more DM also.....getting liquidity to build their own SM positions at the best prices of all!
- Increases in activity denote increase in interest. But, is it long or short interest? Where is price in the bigger picture when this is happening? Is it at relative highs, or lows in the overall price action? And if a high volume bar is for a candle which you can examine by going to lower TF charts, you might see where in the spread of that candle the most volume occurred, high or low! Using volume is about taking note of relative increases in volume and what price is doing at the same time. Are the better volumes favoring the lower or the higher prices as the MMs move price up and down? And do the volumes get particularly notable when the MMs take price above or below key SR?
- What I want you to realize here is that the whole, half and quarter numbered price levels (hereinafter referred to as "Levels") are the most important SR of all in this market! Not because price stops, pauses, proceeds or reverses there, but because it is above or below these levels that important consolidation (MMs filling SM orders) takes place. Once SM long orders are filled, they become interested in placing orders to close them at higher prices, and hence the MMs will be moving price higher, eventually. Once SM short orders are filled, they become interested in placing orders to close them at lower prices, and hence the MMs will be moving price lower, eventually. Just remember, price tends to consolidate above key levels when SM is selling (to close longs or to open shorts) and price tends to consolidate below key levels when SM is buying (to close shorts or to open longs).
- If we can spot consolidations above/below key SR, examine the overall price action on various TF charts, and take note of where the notable increases in volume have most recently occurred (did volume favor relative highs or lows), then we can build a consensus about what kind of orders the MMs have most recently been filling; buying to open longs or close shorts, or selling to open shorts or close longs. And we can get a better idea if things will next become bullish or bearish. Once PA confirms our bullish or bearish PVSRA indications, and by recognizing the importance of Levels, we can look beyond current PA in the direction it is going and examine historic consolidation around other Levels to come up with candidates for where the price might be headed. Bull or bear swings typically run in terms of 100+, 150+, 200+ pips, .....etc. And now you know why.
Okay. Now, if this is your first introduction to PVSRA, and having just read the above, you are likely scratching your head and still confused. That is normal. I will tell you a secret about the market and why you have a right to be confused. The secret is this. The market cannot be defined by mathematics nor by immutable logic. This is why the most advanced mathematicians over a century have never even come close to cracking the market. It cannot be done. Something else, other than math and immutable logic is the fundamental operand in the market. Have you ever watched a child attempt a jigsaw puzzle for the first time? And watched as that child grew and attempted more of them, and more complex ones? Trust me in this. We need to apply ourselves to learning how to do PVSRA just as a child attacks learning how to do jigsaw puzzles. And we must continue doing PVSRA, because in time our mind will "learn" when we have just picked up an important piece of the puzzle, and that we know where it goes! Developing the skill of PVSRA is an art form. We must not allow ourselves to feel badly if we miss clues. PVSRA is an art form that takes time to perfect. Over time our skill will grow and our "read" of the unpredictable market will improve. We must take to ongoing learning and application of PVSRA because at ANY time....no matter how various TF charts look....no matter what the "news" is saying....and with total disregard for supposed fundamentals....the Robber Bank MMs can, and frequently do, run price just the OPPOSITE! PVSRA can help us see places where "advanced loading" by SM might have occurred and can help us better understand direction probabilities in spite of the "noise" and "misleads" conventional chart analysis can produce.
We can never know how the Robber Bank MMs will move price next, and don't ever forget this truth! But with PVSRA we can get clues as to what is going on. With the momentum depicted by our setup and with PVSRA clues that "support" the same notion of the direction price action should take, we help ourselves to get on the right side of the odds. And in doing this, all that remains is to manage each trade appropriately, so if the MMs turn price against us, we are not "married" to a bias that keeps us in the trade, losing money.
, Discipline, Patience, Profits,