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Volume Spread Analysis (VSA) Discussion 2 replies

Volume Spread Analysis (VSA) and background 5 replies

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Learn to Trade using VSA (Volume Spread Analysis)

  • #741
  • Mar 7, 2009 3:22pm Mar 7, 2009 3:22pm
So.... volume (in your mind) is not lots exchanged, but tick accumulations at each price on the bar?
  • #742
  • Mar 7, 2009 3:25pm Mar 7, 2009 3:25pm
Quoting malcolmb14
I sue esignal .... GTIS feed from 300 sources .. good enough . It is tick volume but does show what is going on in the market

I was very skeptical of this when a guy introduced me to it a year ago also .. but it has changed the way I trade and think about the markets

I am going to say GU rises next week .... back into 1.4300

there was another test of the market on low volume and failed attempt to push price lower right at 1.4050 ... this smells of accumulation

lets see if VSA really does work ... last candle of 15 min chart can be ignored as a lot of brokers play odd games last hour of Frdiay afternoons
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Blogging daily now at www.volume.zone
  • #743
  • Mar 7, 2009 3:27pm Mar 7, 2009 3:27pm
Quoting tdion
So.... volume (in your mind) is not lots exchanged, but tick accumulations at each price on the bar?

yes it is the only way you can do it in forex ....

and use different time frames to see what the interest is at every prices level , and the tick volume at those levels. ...

go check out tradeguider. over and over in their free seminars I have seen them take trades in forex using tick volume.

over the course of the next week i will try to give some examples of longer term . I will follow the gu 15 min chart as i already see what is going on in the back ground and this suggest accumulation by the pros at this price level
Blogging daily now at www.volume.zone
  • #744
  • Mar 7, 2009 3:31pm Mar 7, 2009 3:31pm
A trading range shows the likely projected area of future trading. It will take professional activity, money and effort to change the trend.
Effort to penetrate trend lines is usually seen as prices approach the line, not actually on the line. You would normally observe effort to penetrate a trend line in the form of wide spreads up (or down), with increased volume.

Study old trend lines and observe when these lines were broken. Note the effort required. Gapping is one way to overcome resistance. The professional money knows exactly where the resistance is. Gapping
through these areas is always because of activity by the market-makers or specialists. This effort must always be cost effective. For example, they are unlikely to push up through resistance unless they are bullish. Any sudden activity will always have side benefits, by locking traders in or out of the market,encouraging traders not to sell, and panicking traders on the short side who then cover.

Trend channels represent resistance:
• The upper line is a resistance line to higher prices and
• The bottom line represents resistance to lower prices.
If the volume is low as the market moves up to the underside of the trend line, it is not going to go up very far. However, once the trend line is broken on the up-side to become overbought, the same line now
becomes potential resistance to lower prices. This is confirmed by the observation of low volume on any subsequent down-bar (malcolms note .. this is testing). Also note that the longer prices stay above the line, the stronger the resistance to a down-move becomes.
Once a stock or Index moves up in price and reaches the upper trend line, and high volume appears with a wide spread up-day, you would expect results from the high volume, because there is an obvious effort to
go up. That is, you would expect the price to go up and through the upper trend line. If you do not see any results on the high volume by the next day (or bar), then the opposite must be true: The high volume must
have contained more selling than buying and will show the trend is still holding at that moment. If the high volume was buying, how can prices come off the next day?
Blogging daily now at www.volume.zone
  • #745
  • Mar 7, 2009 4:22pm Mar 7, 2009 4:22pm
Quoting malcolmb14
Trend channels represent resistance:
• The upper line is a resistance line to higher prices and
• The bottom line represents resistance to lower prices.
Simply put,the upper line represent resistance while the bottom line represents support
we cannot succeed without a well defined risk management.
  • #746
  • Mar 7, 2009 4:38pm Mar 7, 2009 4:38pm
Just to help a newbie to some extent,I will say true points of support are only those which low has two candles to the left of it and two candles to the right of it which lows do not exceed the low you are using.And True points of resistance are only those which high has two candles to the left of it and two candles to the right of it which highs do not exceed the high you are using.
we cannot succeed without a well defined risk management.
  • #747
  • Edited 8:54pm Mar 7, 2009 8:39pm | Edited 8:54pm
Quoting malcolmb14
this was actually a long I played .....

the congestion area was very easy to see which way the price was going to go .... as yes guess what ... I knew what had happened in the background several hours before the breakout of the VWAP happened. This is what I have been going on about ... knowing what is going on in the background when it comes to VSA is a sure way to make sure you are consistently hitting those 100 - 400 pip trades

The test was in Asia and I felt very happy going long and and leaving my position on for a few...
Hi Malcomb,

"Background" - This is exactly what I have been struggling with trying to fully understand. It's been keeping me up at night too. Several folks here have been saying the same thing like a broken record; "you have to understand what is going on in the background" to trade VSA effectively" but... I haven't seen specifics or precise suggestions yet on HOW you go about getting a clear picture of it. Perhaps I overlooked some important prior posts regarding the answer (for which I apologize if I did) but this is a subject matter that I personally want to fully understand and get my arms around. Why? Because I too think it is very important - especially if you are a longer term trader than nyse is. You seem to really have a handle on it.

If you look back at some of my prior posts (#687 in particular), I questioned why no one had brought it up yet. I even suggested that we look at the higher time frames to compare Volume and drill down throught the Daily-4H-1H-30M to confirm that the trade signal we are getting on the 15M is in sync (similar to trading with the trend but using Volume for consistency). Maybe even a perfect volume direction alignment of all the time frames has significance? You seemed to have just echoed what I suggested earlier but I would really appreciate it if you could speak to precisely WHAT you do to evaluate the background. Forgive me if you already have and I missed it.

When the student is ready the master will appear. I'm an open mind, teach away, please! And thank you for your contributions of enlightenment.

- Bowen (a.k.a. Wolf)
  • #748
  • Mar 7, 2009 9:20pm Mar 7, 2009 9:20pm
Quoting BlackWolf
Hi Malcomb,

"Background" - This is exactly what I have been struggling with trying to fully understand. It's been keeping me up at night too. Several folks here have been saying the same thing like a broken record; "you have to understand what is going on in the background" to trade VSA effectively" but... I haven't seen specifics or precise suggestions yet on HOW you go about getting a clear picture of it. Perhaps I overlooked some important prior posts regarding the answer (for which I apologize if I did) but...

refer to post 742 ... my 15 min on GU .... the background was there for the break to the upside of the congestion zone .. I have made the notes on the charts .

You may see several sets ups or things happening 50 or even 100 candles back from the one you get a valid VSA set up on , if the back ground supports the vsa set up on the candleo n the right side of the chart , then these are the trades that I can take more risk on (5% versus 1.5)
Blogging daily now at www.volume.zone
  • #749
  • Mar 7, 2009 10:00pm Mar 7, 2009 10:00pm
This pair looks to open with weakness based on the 1HR chart,it closed on narrow spread and decrease volume on an up bar Good time to go short on the open!
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  • #750
  • Mar 7, 2009 10:52pm Mar 7, 2009 10:52pm
Quoting nyse1982
This pair looks to open with weakness based on the 1HR chart,it closed on narrow spread and decrease volume on an up bar Good time to go short on the open!

To help our members realize when a bullish rally has reached exhaustion, I've included an example on EUR/JPY. If you look at the 6 candle move it clearly shows how the process takes places. As the rally begins you get a normal rise in volume then suddenly a huge spike in volume well over 50%. Which shows that the herd is starting to pile in on the pair. After the two strong bars the next green bar has medium strength. Then the following two bars are in red, which shows that the volume is begun to slow and on the last bar is yellow bar which is lower then the green bar, when the rally begun. At this point you should realize that this pair is weak. If your smart you recognize that weakness and short at the last green candle. Notice how after the brief sell off you get a congestion period, which is recognized with low volume moving in a range.This results in an accumulation by the smart money.
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  • #751
  • Mar 7, 2009 10:53pm Mar 7, 2009 10:53pm
Quoting malcolmb14
refer to post 742 ... my 15 min on GU .... the background was there for the break to the upside of the congestion zone .. I have made the notes on the charts .

You may see several sets ups or things happening 50 or even 100 candles back from the one you get a valid VSA set up on , if the back ground supports the vsa set up on the candleo n the right side of the chart , then these are the trades that I can take more risk on (5% versus 1.5)
Ok, I see that now. By "Background" you are referring to recent past price/volume activity and events (50-100 bars back on same time frame, 15M in the case of post #742) as opposed to my eluding to what price/volume looks like on the higher time frames. Thanks!
- Bowen (a.k.a. Wolf)
  • #752
  • Mar 7, 2009 10:54pm Mar 7, 2009 10:54pm
Lets see some of our new members making some positive gains and post some charts, so we can see your success and comment...to make an improvements...
  • #753
  • Mar 7, 2009 11:10pm Mar 7, 2009 11:10pm
I realised that all things that happen in forex trading is all about harmonic motion.Though the moves are considerably distorted to the point that haphazardness tends to to overwhelm the harmonic format.Nevertheless,the steady application of synchronicity,harmonization to trading is of an importance that cannot be over-emphasized.What does that mean?it means there is a continuity of beats in successive timeframes.So,how do we apply that? I think we need to choose our one favourite timeframe like 5min,15min,1hour,4hour,daily,e.t.c. As for me i prefer 15 minute.Now if iam considering 15minutes chart,i will check if price is going up on 5min and hourly.then i wait for signal to buy on 15min.Likewise if iam considering 1hour chart,i will check if price is going up on 15min and 4hour.then i wait for signal to buy on 1hour.also,if iam considering 4hour chart,i will check if price is going up on 1hour and daily.then i will wait for signal to buy on 4hour chart.The rhytm continues to monthly chart
we cannot succeed without a well defined risk management.
  • #754
  • Mar 8, 2009 12:08am Mar 8, 2009 12:08am
Quoting bosun2007
I realised that all things that happen in forex trading is all about harmonic motion.Though the moves are considerably distorted to the point that haphazardness tends to to overwhelm the harmonic format.Nevertheless,the steady application of synchronicity,harmonization to trading is of an importance that cannot be over-emphasized.What does that mean?it means there is a continuity of beats in successive timeframes.So,how do we apply that? I think we need to choose our one favourite timeframe like 5min,15min,1hour,4hour,daily,e.t.c. As for me i prefer...
See, I think that was where I was trying to go with it as well, Bosun. Great minds think alike! Yet, nyse has shown consistency with most of the VSA triggers despite this. If I were trading similarly to nyse, I would examine those trades that failed and then look to see if I was out of sync with the other time frames. If proven true, then you're on to something, eh?
- Bowen (a.k.a. Wolf)
  • #755
  • Mar 8, 2009 4:22am Mar 8, 2009 4:22am
This is some basics indicator signals from TradeGuider RT.....
Shamous is you are realy into coding with your guys, reconsider
about coding something like this, I will try but this is over my head!
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forexflash
  • #756
  • Mar 8, 2009 4:24am Mar 8, 2009 4:24am
and ...............
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forexflash
  • #757
  • Mar 8, 2009 5:05am Mar 8, 2009 5:05am
The book on secret science of price and volume
is very interesting it was to large to attached , but I attached the cover
and you can down load it from xxx4sharedxxx
you can also get the program traderguide just search for them both


In the secret science book he adds up total volume for Zigzag lag,
volume for each leg is higher or lower

Attached is a zigzag indicator that count the pips between each lag
maybe someone could add volume to it
Attached File(s)
File Type: pdf The Secret Science of Price and Volume.pdf   207 KB | 2,226 downloads
File Type: mq4 ZZCount ZZ LabTrendZigZag_v1.2.mq4   14 KB | 622 downloads
  • #758
  • Mar 8, 2009 5:11am Mar 8, 2009 5:11am
Thank you for those FF they should help.

FF I still think an average volume calculated over multiple bars is a good idea for your indi as you would have a normalized baseline of volume to see wether it is going down on average or up for a particular bar in realtime. rather than waiting for the close.

Up you can see fairly easily (once it rises above the previous) but not down as each bar volume resets to 0

I also think some rate of change would be nice so you could see if volume was rising or falling faster or slower in realtime as well.

If this is not really possible or I'm not understanding it correctly let me know.
The trend always ends.
  • #759
  • Mar 8, 2009 7:14am Mar 8, 2009 7:14am
Hi all,

Just having a look at setting charts up having read the whole thread in the last 2 days.

How do I get the CDRW Spread and Volume in the same window rather than separate ones as in my screenshot ?

Thanks

WG
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  • #760
  • Mar 8, 2009 7:41am Mar 8, 2009 7:41am
Quoting Willowgal
Hi all,

Just having a look at setting charts up having read the whole thread in the last 2 days.

How do I get the CDRW Spread and Volume in the same window rather than separate ones as in my screenshot ?

Thanks

WG
Setup the one, then drag the other into the same window.
The trend always ends.
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