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.
Price – 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!
Volume – 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?
S&R – 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).
PVSRA – 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.
Sincerely….PVSRA, Discipline, Patience, Profits,
Tah
In trading currencies, market makers function as intermediaries in sales and purchases between two parties and two currencies. For example a bank will function as a market maker when it collects sellers of the US Dollar to then sell to investors who have Euros in exchange. The value of each currency is based on the current market value.
To beat the MM you need to understand the basic objectives of their
activity. Overall, the MM’s are traders and their objective is to make money. This includes strategies to trade against retails traders. The major difference between them and other traders is that they have the ability, through access to massive volumes, to move price at their will. So to make money, they aim to buy at a lower price and then sell at a higher price.
They achieve this by:
1. Inducing traders to take positions.
This is achieved by using a range of price movements to ‘trick’
traders into taking a position in a given direction but then reversing
it again. This means that the MM can sell a specific currency at a
certain price and then buy it back at a lower price when the retail
trader feels too much pain from the currency value moving
backward and wanting to sell it back again (e.g. via the stop loss)
2. Create panic and fear to induce traders to become emotional and
think irrationally.
This often involves:
⋅ quick moves
⋅ spike candles
⋅ news releases
⋅ “inexplicable” price behaviour.
3. Hit the Stops and Clear the Board.
This forces traders into ‘margin trouble’ and ultimately out of the
game.
The Hybrid method was created by Tino and is a combination of PVSRA and Market Maker Method.
Vector Candles
Be aware of unrecovered vector candles in the vicinity.
Remember that we cannot determine exactly when vector candles are likely to be recovered.
The first 50% may be followed by a retrace before later full recovery.
Smaller time frames will reveal the development of the wick and whether there are smaller vector candles present which don’t show up in the higher time frames.
Exponential Moving Averages (EMAs, particularly 50 EMA)
Trade in the same direction as the larger time frame trend, but you can also take advantage of the retrace back to the EMA (see Principle of Mean Reversion).
Principle of Mean Reversion
The further the price is from a moving average, the more likely it is to revert to that moving average.
Psychological High/Low
These levels are set during the first session for the week, which in Cryptocurrency intraday trading starts at 21:00 UTC on the Saturday night, when the Sunday morning Asian session opens, and ends 8 hours later at 05:00 UTC the following morning. The highest and lowest prices of this session become important levels of support and resistance during the following week.
Range Daily High/Low, M-Pivots, Daily Open Price
RDH/RDL and M-Pivots are calculated based on the previous trading day’s price action, and along with the Daily Open price, they act as important levels of support and resistance.
Average Daily Range (ADR)
Has the ADR been reached? Has price exceeded its expected range of movement?
Trader’s Dynamic Indicator (TDI)
If the RSI line forms a sharkfin at or outside the upper or lower volatility bands, it is likely to move back towards the Market Base line, and perhaps continue to the opposite side.
Projections
Price should match your projected price line chart.
Pattern Levels
Be aware of which level in the Pattern price is currently at – is it at a peak formation, for example?
Be aware that there are patterns within patterns at different timeframes – the higher the timeframe the greater the conviction.
Retest of a Previous Area
Is price returning to a previously tested level like the RDH/L, Daily Open or the Psychological High/Low.
News Cycles
Be aware of general sentiment on sites like Cryptocraft or even Youtube. If price is in a sideways ranging movement, the markets may be waiting for important news to emerge which could determine the direction of price.
The Tactical Analysis strategy evolved from TJ’s advanced understanding of the Hybrid System, originally created by Tino from Traders Reality.
The Hybrid System combines two forex strategies: Price Volume Support Resistance Analysis (PVSRA) by Trader At Home and Market Maker Method (MMM) by Steve Mauro.
TJ added additional concepts to the Hybrid, such as Volume Profiles and Fibonacci retracements/extensions. After countless hours of analyzing the charts and applying these concepts, the immensely profitable Tactical Analysis strategy, designed primarily for Cryptocurrency trading, emerged.
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