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Volume Leads Price - VSA and Wyckoff

  • #21
  • May 13, 2019 12:22pm May 13, 2019 12:22pm
Quoting DavidRP
{quote} How do you measure volume in fx?
Well, there is no actual volume in FX, so we use Tick Volume. This is activity based volume and is the closest we get to real volume. Some studies actually suggest that the relation of tick volume to actual volume is as high as 85-90%. If this is true or not however I cannot say.

I personally do not use my brokers tick volume, as I don't find it very accurate, however i have found FXCM tick volume on Tradingview.com to match my trading style very nicely.

But yet again, I am speaking only for myself. I know there are tons of people arguing against the value of volume in forex, the arguments are very good not going to argue there, however this type of trading is having very good results for me.

But the important thing here is to filter out the unreliable volume. For a pair like EURUSD that would be after NY Close until London Open. I completely ignore that volume.

As I am trading based on supply and demand, I am more interested in increased "activity" in key areas.
There is no edge in trading. Your edge is understanding risk
  • #22
  • May 13, 2019 12:24pm May 13, 2019 12:24pm
Quoting Botan626
{quote} I'll recommend you to block him right away, naviafra.
I should have listened to you from the beginning. This guy is obviously trolling the forum. I wonder why the mods don't kick the guy
There is no edge in trading. Your edge is understanding risk
  • #23
  • May 13, 2019 1:07pm May 13, 2019 1:07pm
  •  WSoar
  • | Joined Jun 2018 | Status: It's a businessNot "Get rich quick" | 56 Posts
There is no real volume in foreign exchange market.
VSA and Wyckoff are not better than fancy indicators and share the same problem- they doesn't work when you start trading using them forward(Backtesting paradox).
You are right about supply and demand(not those stupid rectangles people are drawing having no idea what they are doing) but you are wrong about commodities.
What is Forex? It is what it's called - Foreign EXCHANGE Market ....EXCHANGE... get it?
Big boys doesn't care about those stupid charts if they need to exchange money they just do it... EXCHANGE not trade... Get it?
Your first post looks like advertising...Don't be surprised if if you end up in commercial section.
==
  • #24
  • May 13, 2019 1:22pm May 13, 2019 1:22pm
Quoting WSoar
There is no real volume in foreign exchange market. VSA and Wyckoff are not better than fancy indicators and share the same problem- they doesn't work when you start trading using them forward(Backtesting paradox). You are right about supply and demand(not those stupid rectangles people are drawing having no idea what they are doing) but you are wrong about commodities. What is Forex? It is what it's called - Foreign EXCHANGE Market ....EXCHANGE... get it? Big boys doesn't care about those stupid charts if they need to exchange money they just do...
Im not advertising anything, I dont charge money for anything, I am not selling anything.

Im just here to talk about supply and demand, and how to spot imbalances in it. Wyckoff and VSA are good, but not complete. I am here to try to complete what they did miss to share with my own theory. Note, I am using the word theory here. Nothing is proven. I trade on current market situations and not based on what happened 3 months in the past.

If it is of no interest, you don't need to follow. I am sure the knowledge you have far exceeds my knowledge, I am just here to share my theory of the markets. I might be dead wrong
There is no edge in trading. Your edge is understanding risk
  • #25
  • May 13, 2019 1:33pm May 13, 2019 1:33pm
  •  WSoar
  • | Joined Jun 2018 | Status: It's a businessNot "Get rich quick" | 56 Posts
Quoting naviafra
{quote} Im not advertising anything, I dont charge money for anything, I am not selling anything. Im just here to talk about supply and demand, and how to spot imbalances in it. Wyckoff and VSA are good, but not complete. I am here to try to complete what they did miss to share with my own theory. Note, I am using the word theory here. Nothing is proven. I trade on current market situations and not based on what happened 3 months in the past. If it is of no interest, you don't need to follow. I am sure the knowledge you have far exceeds my knowledge,...
Well I said "looks like" and it really looking like that. No offense.I suggest you to post charts before local "police"(I mean FF) get in here and ruin your thread.
BTW it doesn't matter if it's a 3 months back or today - liquidity provider set his prices beforehand, so what are you see on a chart is lagging data.
Good luck.
==
  • #26
  • May 13, 2019 1:38pm May 13, 2019 1:38pm
Hi
I'm using supply&demand methodology as well and curios to see about the integration with volume and Wyckoff theories.
Thanks
  • #27
  • May 13, 2019 1:45pm May 13, 2019 1:45pm
Quoting naviafra
Homework #1 Let's start this post with a little homework. Look at the three pairs EURUSD GBPUSD USDCHF Use a 1 Hour chart. Use a bar chart with HLC bars (Not neccessary but might give you some visual advantage) Look at volume on the London Open Candle/Bar. Look at the closing price, if it's a up-bar/bull-candle does it close in the middle or low? If it's a down-bar/bear-candle does it close in the middle or high? Look at the reactions, does it lead to higher prices or lower prices? How does it react? Where is price when this happens? Is price closing...
Well to get back on track , with Homework #1,
the volumes at London opening and for the first 3 hours are high , then a period of 2-3 hours of lower volume and before closing its going up.
With NY opening , the volume is high and descending with time until closing .
For all 3 pairs for the 30 days
I am using MT4 and the volume indicator it comes with.I hope this is close to what you asked.
Thanks Naviafra
  • #28
  • Edited 2:38pm May 13, 2019 2:08pm | Edited 2:38pm
Excellent introduction and first posts.
May be with a better knowledge about how to read Volume I can keep trades a bit longer and gain more pips.
Intresting..

Good luck with your thread.

Subscribed.
Risiko birgt immer auch die Chance.
  • #29
  • May 13, 2019 2:24pm May 13, 2019 2:24pm
So for Homework #1

There are a few things I look at when looking at volume and the price bar/candle it represents.

 

  1. If we are in an uptrend, does volume really spike up on the highs of this trend? Why is the activity rising after price has risen so much? The reverse goes when looking at a beartrend.
  2. The volume spikes of London and NY open, are they attached to candles/bars with closes that represent buying or selling? For example, coming down to a new low and suddenly London opens with a bearish candle/bar that closes off its highs. Buying?
  3. The previous sessions high volume, was the volume consistent when reaching this price or was it showing lack of interest? (decreasing volume)
  4. Is the volume spike in an area where there previously was selling/buying?

Picture example attached



Now to continue with this homework, ask yourself. Why did volume spike up everytime on the higher end of price? The same area it previously spiked? Why was the result always bearish? Why was the closes of the resulting candles very low? The same way we saw that selling was heavy (high vol area on the top), can we find the reverse? Can we see where buying was present? Where are the buyers? If you find the buyers, are you seeing how they behave when price revisits previous buy zone/zones?

Maybe the clues given here can help you finish the homework.

Attached Image (click to enlarge)
Click to Enlarge Name: chart.png Size: 75 KB
There is no edge in trading. Your edge is understanding risk
  • #30
  • May 13, 2019 3:45pm May 13, 2019 3:45pm
Why did volume spike up every time on the higher end of price? Because it needs more money to break higher top or lower bottom
The same area it previously spiked? YES
Why was the result always bearish? supply >demand
Why was the closes of the resulting candles very low? buyers gone .only sellers stay to party.
The same way we saw that selling was heavy (high vol area on the top), can we find the reverse?Can not tell
Can we see where buying was present? YES , at least at some point
Where are the buyers?Can not tell
If you find the buyers, are you seeing how they behave when price revisits previous buy zone/zones?Sometimes the retest zones of interest , or they keep going north/south.How do we know if this time is the big move time ?
thanks for your time
  • #31
  • May 13, 2019 3:49pm May 13, 2019 3:49pm
Quoting naviafra
Homework #1 Let's start this post with a little homework. Look at the three pairs EURUSD GBPUSD USDCHF Use a 1 Hour chart. Use a bar chart with HLC bars (Not neccessary but might give you some visual advantage) Look at volume on the London Open Candle/Bar. Look at the closing price, if it's a up-bar/bull-candle does it close in the middle or low? If it's a down-bar/bear-candle does it close in the middle or high? Look at the reactions, does it lead to higher prices or lower prices? How does it react? Where is price when this happens? Is price closing...
my homework: for the moment I have only taken EURUSD in H1, with standard MT4 volume and 30 history sessions, according to my interpretation of some of your questions. some quick conclusions, without a deeper analysis are:
1. Except for a few exceptions, the volume always increases at the beginning of LO open and NY open.
2. It seems to establish a pattern if the closing price of the candle that opens the corresponding session is high (for bull candles) or low (for bear candles) AND relate to the previous bottom (for bull candles) or top (for bear candles) which lead the price up in the first case or down in the second.
3. If that close of the candle that open session is in the MID, could lead range price or poor volatility.
Attached File(s)
File Type: xlsx homework.xlsx   11 KB | 565 downloads
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  • #32
  • May 13, 2019 3:56pm May 13, 2019 3:56pm
Quoting zarkon
Sometimes the retest zones of interest
Awesome. Your really on to something here. Great work. Keep at it!
There is no edge in trading. Your edge is understanding risk
  • #33
  • May 13, 2019 3:59pm May 13, 2019 3:59pm
Quoting jusiur
{quote} my homework: for the moment I have only taken EURUSD in H1, with standard MT4 volume and 30 history sessions, according to my interpretation of some of your questions. some quick conclusions, without a deeper analysis are: 1. Except for a few exceptions, the volume always increases at the beginning of LO open and NY open. 2. It seems to establish a pattern if the closing price of the candle that opens the corresponding session is high (for bull candles) or low (for bear candles) AND relate to the previous bottom (for bull candles) or top...
The picture example was in a ranging condition. Can you see the reasoning when applying the same principle during trending movements?

Price will always take the path of least resistance. That is up if there are no sellers present and down if there are no buyers present.
There is no edge in trading. Your edge is understanding risk
  • #34
  • May 13, 2019 4:03pm May 13, 2019 4:03pm
This picture example is actually a trade I took today.

I took this example because it is an easy one, spotting the imbalance. Remember, we are trading on imbalance, not when we see balance!
There is no edge in trading. Your edge is understanding risk
  • #35
  • May 13, 2019 4:16pm May 13, 2019 4:16pm
Naviafra

What is that script/indicator called volume analysis? Is it freely available on TradingView? Thanks
  • #36
  • May 13, 2019 4:23pm May 13, 2019 4:23pm
Quoting pakeha
Naviafra What is that script/indicator called volume analysis? Is it freely available on TradingView? Thanks
Search for "vsa" in the search box. It is the one called

Volume Spread for VSA by Hariprasath_
There is no edge in trading. Your edge is understanding risk
  • #37
  • May 13, 2019 4:48pm May 13, 2019 4:48pm
Quoting naviafra
{quote} The picture example was in a ranging condition. Can you see the reasoning when applying the same principle during trending movements? Price will always take the path of least resistance. That is up if there are no sellers present and down if there are no buyers present.
I can understand this .Like electricity.It always looking for the least resistance to go through .
but with electricity , we know the signs.(we can see the materials , the power electrical resistance or the conductors etc) and electricity does not retest a port unless we drive it to it again and again until we 'burn' that port.
What are the signs that tell us the next resistance is easy or hard?
Is it the times it retest?
is it the growing volume bar by bar?
What is the sign of growing demand around a zone of interest or the opposite on south direction?
And how do we identify the zones? only from highest tops/lowest bottoms?
And how do we measure the lack of buyers/sellers before price take the correct path ?

thanks for the 'forexfood'
  • #38
  • May 13, 2019 4:49pm May 13, 2019 4:49pm
Quoting naviafra
This picture example is actually a trade I took today. I took this example because it is an easy one, spotting the imbalance. Remember, we are trading on imbalance, not when we see balance!
And what is imbalance for you?
thanks
  • #39
  • May 13, 2019 4:50pm May 13, 2019 4:50pm
Quoting zarkon
{quote} I can understand this .Like electricity.It always looking for the least resistance to go through . but with electricity , we know the signs.(we can see the materials , the power electrical resistance or the conductors etc) and electricity does not retest a port unless we drive it to it again and again until we 'burn' that port. What are the signs that tell us the next resistance is easy or hard? Is it the times it retest? is it the growing volume bar by bar? What is the sign of growing demand around a zone of interest or the opposite on...
Your questions basically covers everything. I cannot answer it all right away because it will influence the learning curve. I will answer all in time and step by step making sure everything is understood correctly
There is no edge in trading. Your edge is understanding risk
  • #40
  • May 13, 2019 4:52pm May 13, 2019 4:52pm
Quoting naviafra
Look at major news events for a currency pair and ask yourself “The USD had VERY good news during this past week, but how did the market turn bearish as a result of this?”.Well the answer is easy, the big boys (Smart Money) had bought A LOT at the bottom, and now needed to sell off their holdings. When will they find buyers to dump their holdings on, without marking down the price against their own interest? Well, during positive news!
The data last week was bad, not good and if you are referring to NFP then your analysis has left a pretty significant detail out. The fed are not worried about employment, and even though the job number was good, a best on expectations, what isn't good was wage growth which affects consumer spending. This ties into inflation which is a major discussion point at the fed and this is the reason the dollar sold off, not because of an imbalance. A lowering of wages followed by lower cpi numbers doesn''t play ball with their mandate and will extend the horizon of rate hikes, and potentially, bring forward a rate cut which is their preferred tool for adjusting the economy.
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