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Learn to Trade using VSA (Volume Spread Analysis)

  • #341
  • Mar 1, 2009 8:00pm Mar 1, 2009 8:00pm
Quoting nyse1982
AUD/USD

Ok on the charts below you see 4 green bars and check out the volume still trending up, Your watching for a good time to go shorts, based on a decrease in the volume. Also the spread for candle 1 is extremely high, which means that weakness is waiting behind the scenes.You looking at each bar to tell you a story about the price action and you make your decision based on the previous bar.

Now on this trade if I see volume slow on candle 0, I'd look to possibly get in on a short, if not still monitor to see when you get an up candle on...
Now the volume has slowed considerably with only a few seconds left, I'd look to go short with a 15 pip stop. Your also watching this down candle to see how strong the down move is, b/c if its not stronger then the previous candle, its time to switch to the longside!
  • #342
  • Mar 1, 2009 8:05pm Mar 1, 2009 8:05pm
[quote=nyse1982;2572082]Now the volume has slowed considerably with only a few seconds left, I'd look to go short with a 15 pip stop. Your also watching this down candle to see how strong the down move is, b/c if its not stronger then the two candles before then, its time to switch to the longside!

Check out the chart
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  • #343
  • Mar 1, 2009 8:12pm Mar 1, 2009 8:12pm
[quote=nyse1982;2572088]
Quoting nyse1982
Now the volume has slowed considerably with only a few seconds left, I'd look to go short with a 15 pip stop. Your also watching this down candle to see how strong the down move is, b/c if its not stronger then the two candles before then, its time to switch to the longside!

Check out the chart
I said earlier to go short b/c this bar is going to close down and the volume is steadily increasing so I'm looking to see if the volume is going to be stronger then candle 2, to decide if your going to stay in this short or get out.
Attached Image (click to enlarge)
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  • #344
  • Mar 1, 2009 8:16pm Mar 1, 2009 8:16pm
[quote=nyse1982;2572100]
Quoting nyse1982
I said earlier to go short b/c this bar is going to close down and the volume is steadily increasing so I'm looking to see if the volume is going to be stronger then candle 2, to decide if your going to stay in this short or get out.
You still have continued weakness here and the volume is increasing, it doesn't look like the volume is stronger then candle 2
Attached Image (click to enlarge)
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  • #345
  • Mar 1, 2009 8:40pm Mar 1, 2009 8:40pm
The volume can increase or decrease since previous candle before the current candle closes - so, how do you know when to pull the trigger?

[quote=nyse1982;2572105]
Quoting nyse1982

You still have continued weakness here and the volume is increasing, it doesn't look like the volume is stronger then candle 2
  • #346
  • Mar 1, 2009 8:52pm Mar 1, 2009 8:52pm
[quote=eagle4x;2572154]The volume can increase or decrease since previous candle before the current candle closes - so, how do you know when to pull the trigger?


I'm referring to looking at the previous two candles...
  • #347
  • Mar 1, 2009 9:05pm Mar 1, 2009 9:05pm
Quoting nyse1982
AUD/USD

Ok on the charts below you see 4 green bars and check out the volume still trending up, Your watching for a good time to go shorts, based on a decrease in the volume. Also the spread for candle 1 is extremely high, which means that weakness is waiting behind the scenes.You looking at each bar to tell you a story about the price action and you make your decision based on the previous bar.

Now on this trade if I see volume slow on candle 0, I'd look to possibly get in on a short, if not still monitor to see when you get an up candle on...
Not sure if I have gotten any better over the weekend totally understanding how to read VSA but, I think I am heading in the right direction....using my TA indicators and the help with VSA I was able to take 90 pips out of the AUD/USD tonight. I have never been able to predict the absolute bottom but, with the help of VSA I NAILED IT!!!
  • #348
  • Mar 1, 2009 9:34pm Mar 1, 2009 9:34pm
Quoting Gator
Not sure if I have gotten any better over the weekend totally understanding how to read VSA but, I think I am heading in the right direction....using my TA indicators and the help with VSA I was able to take 90 pips out of the AUD/USD tonight. I have never been able to predict the absolute bottom but, with the help of VSA I NAILED IT!!!
hey great job gator!! Check out my previous trades in the thread to get more insight into VSA
  • #349
  • Mar 1, 2009 11:58pm Mar 1, 2009 11:58pm
nyse and ForexFlash,

Hi guys, I've been following this thread for some time now, silently trying to absorb it all and get my arms around the basic trading rules, etc. There is a LOT of reading material to sift through but I'm willing to do the homework. I think I'm getting there slowly but surely.

I know nyse is not a coder but understands the method well and ForexFlash is a coder and also seems to grasp it all. From both of your perspectives (and anyone else who cares to chime in), what would be the main challenges in writing a forex EA for this? Up to this point it appears that there are some very good indicators that have been produced thus far but no one has written an EA to forward test it yet (that I can tell, anyway). So, since we know that auto-trading robots require precise trading instructions, what in your mind do you see as the "gray" areas (i.e., areas of the trading method that are not in black and white and require human mental interpretation/trade experience)? Just curious because I would LOVE to test this non-manual. Your thoughts?
- Bowen (a.k.a. Wolf)
  • #350
  • Mar 2, 2009 12:17am Mar 2, 2009 12:17am
When I saw the fractal arrows, I figured that I would just use those as the signal to go long or short while I figure out all the information behind VSA (am a bit slow), then once I got things on my chart, I noticed that the arrows don't get drawn till the following bar...so much for the short-cut.

But I wonder what the arrows are telling me, and since I can visualy see the arrows call the direction (maybe not the right term), what should I be looking for so I can understand VSA better. It just might mean me printing the pdfs out and reading them until they finally make sense...but I figure the arrows are giving a hint to somthing that nyse1982 sees in the numbers.

Just me being a bit slow...thank you for your time.
  • #351
  • Mar 2, 2009 1:34am Mar 2, 2009 1:34am
Quoting Narrew
When I saw the fractal arrows, I figured that I would just use those as the signal to go long or short while I figure out all the information behind VSA (am a bit slow), then once I got things on my chart, I noticed that the arrows don't get drawn till the following bar...so much for the short-cut.

But I wonder what the arrows are telling me, and since I can visualy see the arrows call the direction (maybe not the right term), what should I be looking for so I can understand VSA better. It just might mean me printing the pdfs out and reading them...
You know I just read Tow Williams, however let me give you another ebook from an author who also trades using Tom Williams method.His name is Karthik Marmar
Attached File(s)
File Type: pdf VSA BASICS[1].pdf   665 KB | 1,097 downloads
  • #352
  • Mar 2, 2009 1:36am Mar 2, 2009 1:36am
Quoting nyse1982
You know I just read Tow Williams, however let me give you another ebook from an author who also trades using Tom Williams method.His name is Karthik Marmar
The way he explains it is much easier to understand!! The fact is I know once you guys read over the material and practice your going to understand this method also..Once you get this, I know that we all are going to be successful traders!! I also am very interested in someone who can help code this into an EA that would be amazing!!
  • #353
  • Mar 2, 2009 1:45am Mar 2, 2009 1:45am
Quoting BlackWolf
nyse and ForexFlash,

Hi guys, I've been following this thread for some time now, silently trying to absorb it all and get my arms around the basic trading rules, etc. There is a LOT of reading material to sift through but I'm willing to do the homework. I think I'm getting there slowly but surely.

I know nyse is not a coder but understands the method well and ForexFlash is a coder and also seems to grasp it all. From both of your perspectives (and anyone else who cares to chime in), what would be the main challenges in writing a forex EA for...
I agree, this would be amazing to help our members especially as a handsoff approach. I think it would be good for you to skim through these e-books and we can interact to try to come up with any remaining information. I look foward to working together to get an EA put together..
Attached File(s)
File Type: pdf VSA BASICS[1].pdf   665 KB | 455 downloads
  • #354
  • Mar 2, 2009 1:58am Mar 2, 2009 1:58am
candle 1 spread is way too high for one candle!
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  • #355
  • Mar 2, 2009 2:01am Mar 2, 2009 2:01am
Quoting nyse1982
candle 1 spread is way too high for one candle!
update on trade closed out with 33 pips,great trade!
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  • #356
  • Mar 2, 2009 2:09am Mar 2, 2009 2:09am
Quoting nyse1982
update on trade closed out with 33 pips,great trade!
IM MONITORING GBP/USD CURRENTLY HAS 4 RED BARS, LOOKING FOR AN ENTRY TO GO LONG TO MAKE SOME PIPS...FOCUS ON VOLUME AND SPREAD RANGE....
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  • #357
  • Mar 2, 2009 2:12am Mar 2, 2009 2:12am
Quoting nyse1982
IM MONITORING GBP/USD CURRENTLY HAS 4 RED BARS, LOOKING FOR AN ENTRY TO GO LONG TO MAKE SOME PIPS...FOCUS ON VOLUME AND SPREAD RANGE....
WATCHING THE VOLUME STRENGTH AND THE SPREAD TO FIND A GOOD ENTRY TO GO LONG!
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  • #358
  • Mar 2, 2009 2:15am Mar 2, 2009 2:15am
Quoting nyse1982
Lubo that second indicator works great, thanks...can you let members know where you can find info on that, it's called market profile method?
Yes, the main name is Market Profile, but according to the formula is also called the Price Histogram, Volume Profile or Volume Histogram.
Price formula is based on time, ie plots a histogram overlay the main chart with more or less lenght according to where the price spent more or less time in a certain period of time.
Volume formula is based on volume, ie plots a histogram overlay the main chart with more or less lenght according to where the price has more or less volume in a certain period of time.
The main usage is to see where are the areas with more length, ie where the price may be more likely to react.
Another is to look at the value area, ie where the price range where 70% of yesterdays price / volume traded.
However the usage can be several, a good sources are there http://www.secretsoftraders.com/ValueAreaHelpGuide.htm
http://www.enthios.com/universal.htm.

Personally I use the formula of the volume, because it indicates where are prices with more volume to pay more attenion, ie: max volume of Contract, max volume of last week and current week, max volume previus days, and max of current day.

Lubo.

P.s. All the indicators, I found, for MT4 use the price formula.
If I know how, I tell You!! Few but Good!!
  • #359
  • Mar 2, 2009 2:39am Mar 2, 2009 2:39am
See where the price reacts today.

Lubo.
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If I know how, I tell You!! Few but Good!!
  • #360
  • Mar 2, 2009 3:03am Mar 2, 2009 3:03am
Quoting nyse1982
WATCHING THE VOLUME STRENGTH AND THE SPREAD TO FIND A GOOD ENTRY TO GO LONG!
GOING LONG!
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