Learn to Trade using VSA (Volume Spread Analysis)

That was very good PDF you shared with us. I hope all goes well for you here.

This Is The Simpliest Form Of Breakdown So You Can Learn How To Think Like The Smart Money Or Market Makers.

Ill Use Eur/usd Feb 8:15-11:15 To Prove The Point

Trading Is Like A Business Utilizied By Professionals To Trade Currencies On The Open Market And Point Being They Need To Makae A Profit. I Want You To Get In The Mindset To Be Able To Think Like The Professionals So You Can Be On The Right Side Of The Market.

Bar 1

H/l:9
H/c:5
Spread:4 <<<on Sale
Vol:111

Bar 2

H/l:10
H/c:2
Spread:8<<on Sale
Vol:119

Bar 3

H/l:29
H/c:14
Spread:15<<on Sale
Vol:252

Bar 4

H/l:20
H/c:3
Spread:17 <<on Sale
Vol:209 <<weak Buyers Dried Up

Know Think As A Professional You Marked Eur/usd Already By 13 Points Or Spread, Which Is Represented From Bar 1- Bar 4. What Do You Think Is The Logical Move. Your Buyers Or Strength Goes Down From 252 To 209, Showing That Your Buyers Are Have Dried Up 82%. Would You Sell At This Point? Or What? Your Spread Is Over 30% Already. You Next Logical Move Would Be To Sell Right??

Bar 5

H/l:15
H/c:14
Spread:1
Vol:203

Now You've Sold Some Of Your Merchandise And Took Profit Great But Your Greedy You Want More Especially Since The Spread Is So Low.lets Make Some More Money

Bar 6
H/l:13
H/c:2
Spread:11
Vol:200

Now Stop For A Minute And Look At What Just Happened You Made A Spread Of 11 A Markup Of Over 90% And 200 Suckers Bought It. Now Would You Sell At This Point. I Mean After All 90% Was Most You Made In Trade. It Took You 3 Trades To Make 30% Before.heck Yes, Your Selling.lets See What Happens

Bar 7
H/l:20
H/c:2
Spread:18
Vol:264

Focus On These Next Few Bars As The Market Makers Push The Spread Back To 1...so They Can Reaccumulate Again..learn And See How It's Done.

Bar 8
H/l:19
H/c:14
Spread:5 <<take Note How Your Spread Is Decreasing Back To 1
Vol:238<<notice How Your Volume As You Unload Starts To Decrease

Bar 9
H/l:14
H/c:13
Spread:1<<bingo Your Back To Your Starting Point Guess Whats You Unloaded To All Those Suckers..time To Start Accumulating Again...hehehehehe

Watch And Learn How Easy It's Done You Can Trade With These People It's Easy You Don't Need To Use And T/a Just Follow The Spreads And See How Eventually Market Makers Need The Spread To Get Back To 1 So They Can Accumulate Again...guess What All Those Previous Bars Were Red So Guess What The Next Bar Is Going To Be?? Hmmmm If Your Spread Is At 1 Then Your Going To Start Buying So Im Guessing Green?? Oh Shoot I'm Right

Bar 10
H/l:21
H/c:6
Spread:15
Vol:280<<oh Crap Look At That Those Market Makers Getting Greedy That Volume Is Higher Then The Last 3 Bars.hmmm

Bar 11
H/l:24
H/c:14
Spread:10<<huh How Come Spread Went Down An Anomoly?? No Silly It's A Clue Telling You That Someone's About To Unload
Vol:364<<<dang Volume Out The Roof Hmm Lets See Someone Knows Something Especially Since The Spread Decreased By 5 Just Like That..you Will See A Spike When This Happens And Thats Are Clue...lets Guess What Will Happen Next Decrease In Spread Of 5 Is No Good, Were Greedy So We Want That 5 Back..only Way To Get It Back Is Unloaded And Buy At Wholesale Again..

Bar 12
H/l:16
H/c:13
Spread:3
Vol:275<<not Enough Still Lower Then Previous Bar Need To Unload More. I Know Your Thinking Like Our Spread Is At 3..watch And Learn As A Market Maker You Want Volume Thats How You Make Money A Spread Of 3@275 Is Nothing Especially Since You Know There's More Suckers Out There...your Greedy So Act Like It..

Bar 13
H/l:30
H/c:23
Spread:7
Vol:244<<this Isnt Good Either You Made More Spread But Less Volume..keep Selling, Besides You Need To Get Ready To Re-up Soon At Wholesale Prices..keep Watching

Bar 14
H/l:14
H/c:11
Spread:3
Vol:251<<<oh Crap This Won't Do Especially Since This Volume Isn't Even More Then Bar 12...guess What More Selling..

Bar 15
H/l:26
H/c:26
Spread:0<<huh Oh Am I Drunk Zero, This Is Your Doji With A Small Body...as A Market Maker A Spread Of 0 Isn't Good For You..so Keep Selling

Bar 16
H/l:16
H/c:13
Spread:3
Vol:342<<nice Time To Accumulate If Your A Market Makers Then You Can Mark The Price Up..thats Where You See The Heavy Volume Smart Money Is Accumulating Now...

Bar 17
H/l:22
H/c:10
Spread:12
Vol:306<<nice Volume So Here We Go Again...


Hopefully You Have A Better Understanding And Can Learn How You Can Trade And Junction With The Market Makers Or Smart Money, Occassionally You Might Get Tripped Up It Happens But You Can Occassionaly Figure Out Short Term Trends Which I Think Is Amazing...from Reading This Article You See That The Top Spread Used In These 17 Bars Maxed Out Around 17 So Possibly If You Reach Or Come Near 17 It Would Be A Good Time To Start Selling Until You Get 1.

I must be confused because I still don't understand where the volume statistics come from.
Could someone explain?

READ MY POST 42, I BREAK IT ALL DOWN TO EVERYONE....THE VOLUME IS TICK VOLUME WHICH IS SHOWN WHEN YOU HIGHLIGHT THE BAR IN WHATEVER TRADING PLATFORM YOUR USING...IF YOU LEARN TO UNDERSTAND THE MECHANICS OF HOW THE MARKET WORKS, WHICH I BREAK IT DOWN, THEN YOU CAN LEARN TO TRADE IN HARMONY WITH THE SPECIALISTS IN ANY MARKET...

Here's an article I found on VSA:

http://vpanalysis.blogspot.com/

Also, I searched the net for a VSA indicator for metatrader, but no luck. However, here is a link for the Amibroker code for it. Not sure how well a VSA indicator would work with a .mql version, but if someone can recommend a coder who will do it for a reasonable price, it's worth a try:

http://www.bullcharts.com.au/forum/f...p?TID=501&PN=1

(see 5th post on the 1st page)

GREAT GOOD REASEARCH....LETS SPREAD THE WORD, GET PEOPLE ON THE RIGHT SIDE OF THE MARKET AND GET TRADERS TO THINK LIKE MARKET MAKERS...THE SPREAD IS KEY...

nyse.. don't get me wrong, your post at eur/usd thread brought me here just to clarify the basics. Some questions:

- For how long have you tested this? The claims you make over the Eur/Usd thread will need proven record to get credibility, beliefs don't work here.

What's the entry rules? What is the stop loss, take profit?
Are you aware of the difference in volumes reporting from broker to broker? Are you aware of the colective unpredicatable behaviour of the markets? - Where, whatever our method, we can never be sure of where it's going?

You point out a few examples, without any stress test, this is bound to fail, no one will seriously trade like this in the long run. You are free to do it and prove me wrong though, and i'll happilly greet you and give you congrats, and even join the club.

Don't get me wrong, I think there is potential in this idea(although volume data is from your broker), but I suggest you test it for longer, and I mean at least 3 months, and even more.

My friend I see where your coming from with all understanding, however Ive traded this method using equities for past couple of years. VSA isn't a new method of trading it was revised by T.Williams and confirmed in research reports in SFO. If you do your research you would find out that information. Secondly, the method isn't random trading, if you understand how markets work you would understand market makers trade using vsa. Which they monitor price analysis and volume analysis.I used to work for E-TRADE before we were bought out so I'm quite familiar with the functions of a trading desk operations. Market makers make profit from spreads they trade between high/low on price fluctuations..So please my friend before you tell me, I'm coming up with an unproven method do your research.

Volume in forex is the bid change, it does not equate to how many and how large the number of lots traded. In other words it is of very little use.

Volume in currency futures is much more representative of what is actually happening.

There's some huge threads in the traderslaboratory web-site regarding VSA:

http://www.traderslaboratory.com/

Free registration. Do search on VSA, titles only.

My cross-face (sorry Sun ) Suntrader said it all, volumes in Forex don't work like in equities, you don't have a centralized "center" where to draw volumes from.

The best you can do is try futures volumes and watch the volume to correlate with the pair on forex, I may even help saying that the usual deviation as been of about 7 pips.

I agree with this man.

No centralised Market in forex.

As for looking at CME volume, no big funds will ever trade in the Futures market when the liquidity it can get there is so poor in comparison to what they can get in the Spot Market.

Even still there are loads of traps placed by the big players on the volume side of things also.

This is the thing that I do not understand, if you are proficient in this method, then I do not understand why you have to trade forex, why not just trade equities etc ?

I am personally looking into using this for equities (lol) and I have read a lot about the VSA over at Traders Laboratory. But I personally do not see its use in Forex. Not saying that you cannot make money from it etc etc and I wish you all the green pips in the world .

EDIT: Actually I am saying just that, I don't know why I want to be nice to every body on a god forsaken forex forum. You will not make win with this because the information you are basing your decisions on is flawed. Anyone thinking that this is a viable system for forex is mistaken.

In my opinion . . .

Regards
Jig

MT4 volumes has helped my FX trading..that is a fact for me.

I tried a few different broker demos, and there is a difference of course. I found one that seems to be the most "accurate" and gives a good indication of activity.

"Tick volume may be used where no transaction volume is available"
-T. Williams, page 27 of MTM.

Thanks for the thread, I'll be checking in.

to the owner of the thread :

i dont know your experience in trading and i dont even care, but volume should not be overlooked, it is just another indicator you can use on your trading.

the volume is essential in stock trading but not in forex since you never know the real volume in forex, now, futures may provide some more approx idea of the overall volume but that too is not at all very indicative at times (since most of the exghange is not done thru futures), this is from my personal experience in futures, as for MT4 volume form anomymous brokers, you can very well disregard it completly.

i am out of this disscussion

Here's page 27, so everyone can see that quote used in context. I just noticed that the PDF download from this thread skips about 100 pages after page 25, and then continues with 16 pages of info telling us how great TradeGuider software is.

Another opinion about forex tick volume:

http://www.forexspirit.com/2008/03/07/when-volume-lies/

This doesn't mean that forex volume can't be used successfully in some ways. Just be aware of what you're really using . . .

I agree however tick volume is still volume...just how price action from the forex is translated to candlestick formations on the chart so it's relevant information..So you can use it,point is you should be focused on price action thats key to letting you know the spread of each trade. Thats how you follow what the market makers are accumulating or selling..You can't really make an arguement that tick volume isn't relevant b/c every indicator that most of these traders use is based on the tick volume..Your adx,bollinger and rsi are moving in line with tick volume

NO they don't.

Volume indicators such as the one you are raving about - VSA - use volume.

Most others use price.

Don't you even know the basics?

I recommend you spend some time at www.babypips.com .

Huh how is VSA flawed? “Technical analysis of both market averages and stocks must include volume studies in order to give the technician a true picture of the internal dynamics of a given market. Volume analysis helps in identifying internal strengths and weaknesses that exist under the cover of price action.” What you should realize is just like those indicators you follow where do you think that information is comprised from volume/strength of the traded currency. When EUR/USD moves up your RSI moves or supposed to move in tandum correct? Well the RSI which is a relative strength indicator is based on tick volume..So for you to say that tick volume is irrelevant is saying that every indicator you trade with is worthless..this method works on forex because forex is no different than any other market. Its a central market place for currency to be traded. The currency traded elicits price actions from highs and lows which can be translated on the candlestick bars that form on your chart. So therefore I can tell that if EUR/USD has high and low then you can determine the spread between each candle. People who trade realize that market makers and huge institutions which trade equities or currency make money on the spread. If you can find out the spread between each bar and depending on the volume you can tell where smart money is moving to next.

thank you..I guess these people really have no clue that forex,commodities, and stocks are all market that trade. Price action and the momentum of the price action ie volume, is a strong indication of what the next direction of where the instrument will move.