The mistakes, and the checklist that catches them

Buying the climax bar

The expensive one. The bar prints, the volume is enormous, the close is off the low, and the trader buys it. Sometimes it works. Often it does this.

Bar 4 has every mark of a selling climax except one: it is not yet the end of the selling. Bars 5 and 6 make lower lows on heavy volume before the real stop prints at bar 7. Volume alone does not mark the low; the sequence of closes after it does. The test in part 5 exists precisely so that you never have to decide whether the huge bar was the bottom. You let the market tell you.

Reading a bar without its background

Part 3 in one line: the no supply bar and the no demand bar are the same bar. If you cannot say which phase you are in, you cannot read it. Every VSA event has an evil twin at the other end of the cycle, and the only thing that separates them is where they sit.

Comparing volume across sessions

The largest bar of the Asian session is not a climax. It is Asia. Part 9 drew it. If you read Asian bars against a London or New York average you will find three climaxes a night, and none of them will be real.

Treating a news bar as an event

Scheduled releases print climax shapes by construction. They are information, not absorption. Skip the release bar and the one after it, and read from the third.

Trading events in the middle of nowhere

A perfect stopping volume bar in the middle of a range, with no zone, no swept low, no structure point beneath it, is a good drawing and a poor trade. The method works at levels because that is where the participants who create the events are working. Part 10 put location as step three for a reason.

Skipping the confirmation

The test bar is a hypothesis. The bar that closes beyond it is the evidence. Entering on the hypothesis saves a little price and gives up the one thing that separates a VSA trade from a hunch. On gold, where a test can be retested twice in a session, the confirmation is not optional.

Expecting volume to predict direction

It does not, on its own, and we measured it. Volume predicts volatility. The directional content of VSA comes entirely from the conditional readings, event plus test plus confirmation at a level. If you ever find yourself buying because volume is high, stop and go back to part 1.

The checklist

Run it before every trade the method suggests. A single no is a pass.

1. Have I named the H1 background, and was the last major event strength or weakness?
2. Has price contradicted that event since? A lower low on rising volume after strength, a higher high on rising volume after weakness?
3. Is the M15 event a real one: widest spread of the move, largest volume, close off the extreme?
4. Is it at a level: a zone, a swept high or low, a structure point?
5. Was it a news bar, or within two bars of one?
6. Has the test printed: narrow spread, volume below the previous two bars and below the event, close off the extreme?
7. Has the confirmation closed beyond the test bar on rising volume?
8. Do I know the entry, the stop beyond the event bar, and the target at the last opposing zone, and is the reward at least one and a half times the risk?
9. Did I compare volume only within the session?

That is the course. Open the live chart, turn the volume pane on, and find one example of one event. Then another tomorrow. The vocabulary took an evening; the recognition takes the weeks, and there is no way to shorten them.

Course navigation. Previous: Part 10, The trade plan. Course index: VSA course for gold.