vsa with Malcolm

One of the best posts I've ever read.
Thank you

Gilts gaped up on open, tried going higher but volume dropped off each bar until it came back down to fill the gap.
Once the gap was filled we got a nice high volume bar back up to developing PoC.

Nice chart. Thanks for posting.

No worries, I check this thread from time to time in hopes you have posed something because you are the adept VSA trader.
I don't mind giving this thread a bump/chart dump because this is my favourite thread on Forex Factory (largely due to your contributions HiddenGap).

VolumeSpreadAnalysis(VSA) 501

On Tests (No Result from):

While there are always things to learn, and subtleties and nuances to master, we have come to the last (graduate level) class on Tests.

* We've learned that Tests that pass (confirm) and are "in the right place" are bullish.
* We've learned that while "in the right place" can pertain to a certain price level/area, the base definition of "in the right place" in VSA actually refers to in the direction of the trend. Accordingly, we want to look to take Tests (confirmed) Long in Up Trends.
* We've learned that if Tests that pass (confirm) are bullish, Tests that fail (do no confirm) are bearish. If the Test (failed) is in a Down Trend, we could look to get short. In this situation, theTestwould not be "in the right place", but it's failure would. The Market is always Testing. Hence we will see Tests in both Up Trending and Down Trending conditions.

We now move our understanding of Tests to the next level. In order to begin, we need to start with a basic understanding of Market dynamics: When the Market is not doing what it is "supposed to be doing", what it is doing is what matters most.

No Result from a Test.

1. No Result from a Test is a multi-interval signal.
2. It begins with a Test that passes (confirms with the next interval UP).
3. If after a successful Test, we see a WRB (Wide Range Body or Bar) that closes lower than the low of the Test interval within the next 5 intervals, we have No Result from a Test.
a. This interval MUST be a WRB, an interval closing lower is not enough.

Our expectation from a successful Test is higher prices. If the Market is immediately (1-5 intervals after the confirmation interval) trading lower, we must give more what to what is happening than to what we expect to happen.

Take a look at the chart:



#1: This is our Test.
a.: This interval is UP and confirms that the Test is successful (passes).

Let's pause for a moment here and reflect. We know that a successful Test (net interval UP) is bullish. Accordingly, we would expect to see price move higher. But in this case, as evidenced by prices being below the volume cluster moving average, we are in a Down Trend. Hence, we would not want to take a Long here and we expect any up movement to be somewhat muted ( we're not concerned with catching tops and bottoms).

b.: The very next interval is a WRB that closes lower than the low of the Test interval. This is No Result From a Test. The Market had given us some information about its true state of weakness.

Once again, let's pause for a moment and reflect. We know that a Test is a means of looking for sellers. Accordingly, a successful Test indicates the absence of sellers at the time of the Test. Hence the bullishness. With No Result From a Test, the sellers show themselves immediately after the Test and drive prices down below the area the Market initially probed to find them.

If this occurs in a Down Trend, we would want to get Short after the close of the WRB interval. If this occurs in an Up Trend, we would want to move our stops or exit. What we don't do is go Short against the trend.

https://www.forexfactory.com/news/97...sk-off-markets

I hate that this is happening, but its a joke that people believe the markets turn on a dime based on news..

Trying to see the bigger picture, on Dec 13th professionals entered the market which we can see by the sizeable volume.

There is always the question when we see massive volume whether its an actual position being taken or positions being exited. Right now I see the very orderly and controlled rally after Dec 13th which I think is a rising distribution period. It makes sense to me that if professionals are exiting a position and no longer interested in a pair then price action would be messy and all over the place.

Last Wednesday price tried to rally above the close of of the HV bar from Dec 13th, but failed to stay above it for more than a few hours, the Pros are ready to take it down. Hopefully no one here is trying to buy AU right now because its at the previous low from Nov 29th.

I closed all my trades down prior to FOMC, I was expecting a spike up and re enter my shorts. But there was no reaction to FOMC.

AU had the previous low from Nov. 29th, it was expected that AU would find buyers at this level but looking at H1/H4 there wasn't really any stopping volume. It took two days for buyers to exhaust themselves and once they exhausted themselves, price quietly pushed lower.





Also wanted to add the H1 chart, there was a down bar that had a little volume on it. If you had gone long in this area and marked off the close of this bar, you can see how late yesterday price completely rejected the trigger number. Something like this is a dead give away to get out of any longs.

I'm here posting charts to myself like a lunatic, so with that my time here at FF is done.

Doubt anyone even trades volume anymore, but if anyone does I'd like to think my contribution to this awesome thread is this.. Markets don't change directions on a turn of the dime. These things take time as we all learned about accumulation and distribution in MTM book. The market don't suddenly become bearish because of some news report, tweet or outbreak.

Just because you see a high volume down bar and a test doesn't mean the market is now bullish, give it time. Look for signs that price is being supported and moving in an orderly fashion. Because sometimes High volume is profit taking and the pros are exiting positions and no longer interested in the instrument.

HI guys
Is there a PDF about the VSA collect all what explain in this theater
Sorry for my English

I received a PM from a person saying they've read my posts across 3 threads and couldn't get a handle on how I trade. I can kind of understand this because my approach to trading volume has changed. I'm posting this on the forum because I don't think I can post screen shots in a PM and I think screen shots will help me explain what I do. I read some of your post history I'm not sure that you've read the book Master the Markets, if you haven't please do because a lot of what I'll say won't make sense.


I'm going to lay everything out as best as I can, what I do isn't a secret and I can understand a lot of reasons why people want to keep their plans secret, but like everyone else on this forum I struggled for years to be successful and I hope that I can be at least be some help to someone. Besides I believe the market doesn't care about my position or why I took it.

I start out by looking for high volume bars and patiently wait to see how the market reacts to their close. Sometimes I will see, for example, a weak bar and price doesn't react to the close, but instead reacts to the low of the bar. I take note of it, but I don't place trades unless I see rejections off the high volume bar's close.



Bar A) High volume up bar, when I see a potential high volume bar I don't know whether the market will react to it or ignore it, so all I do is mark off the close and wait. I have to remind myself that the high volume bar is the start of a long process and not a signal to jump into a trade.. Besides who wants to sit on a position that isn't moving when they don't have to?


Bar B) The rejection to the close of Bar A, this up thrust is rejecting the close of the high volume bar showing me that there is weakness around. But..... sometimes there will be a rejection bar that looks like its rejecting the close of the high volume bar, but in reality its rejecting the close of a different high volume bar because of this it is very important to check the background. If I see a rejection bar, but I can also see that it could be rejecting the close of a different high volume bar then I walk away. There will always be another trade.


Bar C) Price being supported, at Bar C price is pushing through a low and making a lower low. Seeing supply come in on a high volume bar and price rejecting the close of the supply bar isn't enough. I need to see sellers, in this case, proving to me that they are in control and supporting price. I tend to look for lower lows, I also look for successful NDs / UTs with the next bar closing below the ND / UT as signs of sellers are in control.

Bar D) The entry bar, at this point I was satisfied that price was weak. I had my high volume bar, my rejection to the close and saw sellers supporting price. Bar D is a test, with all of the weakness behind me I was confident that this test would fail so I placed a sell order underneath this bar and let price fall to take me into a position.


Bar E) Bar E is purely an educational bar that I want to talk about. In the past I would have seen this bar that looks like strength and would have found some excuse to long and would have been stopped out. But one bar doesn't make price strong or weak, its a process. It took a while to get myself to a point where I'm no longer afraid to walk away from a setup, it was really hard especially when I would see something and price did what I thought it would do. I eventually trained myself to the point that if I don't see what I need to see or completely understand what I'm looking at (Pres78 quote ) I walk away.


Bar F) A ND UT, rejects any strength on Bar E, with the next bar pushing down hard. This was a great sign showing us the buyers were in trouble.


Through VSA I've also learned that markets are fractal, meaning that this process will work on any time frame. I tend to focus on H1 though, it's just a time frame I'm comfortable with and I'm not going to change something that isn't broken. One other thing is that before I take I trade I do look at higher time frames just scanning for any obvious countermanding signals. I check H4 / Daily / Weekly / Monthly.

AUD/USD Monthly, there was a nice sign of strength from Jan 2015. Price has tried to break above the close and has failed multiple times. Stuff like this can tip me off as to whether I should hold on to some of my trades for long term.

An after the fact trade, I probably should have posted this before price took off.

High volume bar which came in on Feb 7th.

Bar B) Is the rejection bar, price rejecting the close of the high volume bar.

Bar C) Price being supported, Bar C is a hidden test with price responding very well proving that buyers are supporting price.

Bar D) Test, I marked this bar because technically this could have been a test in a rising market. The thing is, the stop would have been too wide for me to take, almost 25 pips. I generally shy away from trades with the stop being that wide.

Bar E) Test, this test would have been ideal to go long off because it would've allowed for a tight stop loss. This bar was at the very end of the day during a time I don't watch the market.

Bar F) Hidden test, this is the bar I essentially entered if off of, I entered in two bars later but still got a decent price with a 13 pip stop loss.

I'd like to point out that that the high volume bar was happened on Feb 7th, and we really didn't get a proper entry till late in the day on Feb 11th. This setup took 2 1/2 days to mature, before an entry could be made. Patience.

I have been following this thread and learnt a lot about VSA. I am not looking for indicators anymore. all those who have contributed to make it easy for common man like me to understand VSA, i am truly grateful to you.

Looking at anotan's recent post, i just scanned the pairs yesterday as he mentioned his way on H1 and this is what i ended up with. I thought i am going in earlier but i had reasons to get in. Any comments are welcomed.

It was a good read and a good trade, the only thing in my opinion was that your TP was too close. I would be aiming for something like 73.55 which is the low of that shakeout at the very bottom of your H1 screen shot.

It was a little early on the H1 time frame, if you went down to a M30 I can see an opportunity to short AUDJPY that would have met my personal criteria. I'm not saying my way is the only way to trade VSA, I'm only pointing out what I would've liked to seen.

thank you very much for your feedback. though i don't use volume profile but interestingly i noticed that very widespread downbar exactly touched POC of previous day.

will you please elaborate why would you focus a shakeout low? i was actually satisfied with my RRR of 1:2. But i am all ears to learn about your perspective.

I tend to stalk potential trades for day(s) so I'd like to maximize my gains when I do take trades, there is nothing wrong with your 2:1 RR, its just when I first see that trade without knowing what today's PA would look like, I would have been aiming for price to come down further. Now taking into account of the ultra wide spread down bar I would have closed the trade on the close of that bar.

When I look for potential targets to the down side I tend to look for previous strength and aim to exit around there. Today's ultra wide spread down bar touched the close of the shakeout and price has yet to come back down to that level. When you see something like that, its another indication that AUDJPY is becoming bullish and that you want to exit any shorts.

**EDIT** You asked why I was focusing on the low, the low is just something I'm aiming for, I would be watching the HLC of the shakeout of indications that I should get out.

thanks a lot anotan. i'll keep learning and sharing.

with stop below the widespread downbar closing in middle and tp around yesterday's POC, i am long in eu.
Any comments/review on my chart reading attempt is welcomed, please.