Learn to Trade using VSA (Volume Spread Analysis)

sorry ... but where is the volume ? that indicator with numbers in means nothing ....

please explain why you did this trade in vsa terms ? I know why I would have taken it but do you ?

in the naked chart it is not the top that was showing the sell ... but the up move into it .. most are looking at just 6 bars on a 5 min chart ... ultimately they will fail .....

Consider the dollar index chart attached below;
around point A we have volume drop and that is when dollar price hit upper bollinger band.I took a short trade and keep riding.At point B the volume increased considerably and that suggested the break of that support.I then target point C which is also fibo 161.8.

I see what you're saying Malcolmb, it makes sense but if I understand it all correctly, the fundamental difference between the way you trade VSA and the way nyse and taomql4 have shown is the time frame. They are using 15M (not 5M) charts and looking at the last 6 (recently nyse suggested a possible look at 10?) candles. So if I'm hearing you correctly, you are looking at BIIIIIGGGGG picture (wide) background but they are trading on a more microscopic level. I can't help but to think back to my early days of study about waves within waves and smaller waves combined to make up bigger waves. That was why I suggested earlier the TF drill-down method being incorporated here. Clearly the docs and articles from people like Ord and Williams speak to that as well - understanding the bigger trend and only taking signals with that trend. So what you are saying is that nyse and others trading microscopically may be having success with consistent profits but eventually they will get wiped out by not looking at the background, correct? Where would a stop loss come into play then? Doesn't the Volume Spread Analysis indi that nyse and taomql4 have in their charts show Vol (top field on each candle stats? Thanks for your insights, all good.

And bosun is in favor of using bollinger bands and fibo to confirm the trade directions as well - I see.

some say its not reliable but i use the MT4 tick volume--

am not an expert at trading VSA yet folks--just trying to follow basic NYSE1982 rules--when i fully understand it --i will give my 2 cents---am still just trying to find weakness in uptrend moves--and strenght in downtrend moves--you can say am using the KISS system

Just way too many docs and pdf files posted---with all kinds of ways to trade using VSA--

AS you can see am too much of A pu**y to stay with the system and find my exit points--so i slapped a COG indicator on it--



i know there's something to this system.--its has worked several times for me---just need to fine tune and understand it better.

Which one in particular are you using? Any repaint issues to worry about?

Oh boy, yet another indicator - LOL!

sit back and think about ... are you really trading VSA or or you trading simple candle patterns ?

VSA traders really do understand what is going on int the back ground ....

must say gbpchf treating me well this morning trading a 100 pi channel x 3 times so far

COG indicator as nothing to do with VSA--BLACKWolf----i was just trying to use price and volume analysis pdf file posted earlier on this thread--trying to measure the volume of the bar closings when they hit the most recent highs to the volume of the bar that set the high--

Normally--according to the pdf(forgot the name of the thing--see too many books--)...when price hits the recent highs with much lesser volume used to set the high--and closes below that high--there will be a reversal--and as you can see ---

i checked the volume --which came much lesser than the set volume---it came crashing down--

So much for the tick volume doesn't work theory---i think history of the bars(recent highs and Lows-volumes compare to those trying to break it) is what some traders are referring to in here...

chart

give me sometime--am gonna nail this thing down

read master the markets .... there are some misleading posting in here in regards to VSA ...

sorry to post this but I know some are seriousabout learning VSA and osme of the newer VSA traders have wires crossed a little ....

these 6 bar indicators is NOT vsa in the true meaning of the sense

this trade gave me 120 pips as i got out to early

crazy day /.. pipos left right and centre

awesome set up 5 min GJ for 40 pips in 5 min

malcolmb14-i think you have just described the "smart money play---the stoping volume to begin the whole opereation agaiin---accumulation process--markup process---small distributions on the way up---climax came--and the crazy ""cruel MARKdown process----and now forex voltures can come in to take advantage of the MARKdown(if you miss the beginning of the party---maybe after a NO-demand bar ---

--Guess am just trying to figure out the NYSE--way of doing things--maybe its the lack of patience..lol

Iam enjoying what is happening now.malcolm has posted a clear and thought-provoking charts now with good explanation.That is what I expect others to do.That is what Ican take from here to the next level.Charts have mouths.They speak better.I expect people to post charts that informed their entry and exit of a trade using vsa and perhaps with other tools or even news or timezone trading.That is the only remedy for all maladies;sharing of ideas.I wish I can grab all the details this month and march gallantly into april.Thank you all.By the way,can someone help me to convert the book` master the market` to microsoft word format.I don`t know,my laptop is rejecting the original format on 4shared.com

Hi Xin,
Many thanks for your question and also your kind comments. The subject you are interested in is generally referred to as Volume Spread Analysis, and is the study of charts and the relationship between volume, and the resulting price spread ( or price action) seen in the associated candle. Volume spread analysis has many facets, and can be interpreted in many different ways, but in my view it starts with the fundamental principle that the markets are manipulated by the market makers, every second of every day. By manipulation we mean that any event, no matter how large or small, is used by them as insiders to move prices accordingly. As a trader you will see this every day in the charts. If you have ever watched prices in the first few minutes of trading, then you will see huge price moves, with no associated volume - this is an anomoly, and in VSA we are looking for these to help us in making our trading decisions. As you say, falling volume and rising prices is bearish, as a move upwards requires effort which is volume - similarly falling prices with falling volume is also a signal, since this implies that there is little effort or volume in the move and is therefore a trap set by the market makers to frighten you into selling. They themselves are not participating in the move, as shown by the lack of volume. Whilst they can hide many of their tricks, volume is the one activity that they cannot hide and is therefore visible to us as traders. So all volume is viewed with the associated price action. A small up candle with large volume is odd - the price spread should have been wide, not narrow - so what can we deduce? We must assume that the market makers are selling hard, but that the market is not buying, as indicated by the narrow price spread. In other words the market makers are having a tough job dumping stock on the market, and as soon as they have sold out, then prices will start to fall fast.
Volume spread analysis is a huge subject and I am currently writing a book which I hope to release in the next 3 months or so, and I will be publishing details in due course. If you google VSA or volume spread analysis you should find plenty of comment ( both good and bad ) on the subject. As I’m sure you can appreciate it is more of an art than a science, but with practice it becomes almost second nature. In essence what we are doing in trading using VSA, is to use our knowledge of how the markets work(and are manipulated ) to follow the market makers and their trading - after all they are on the inside and see both sides of the market. One of the other tricks they use is a test on low volume - drop the price to see if there is any selling coming onto the market, if not, then they can safely move prices up knowing that they can sell higher and higher, until they reach the point at which everyone is buying, then when they are ready, move prices down again fast!
Hope the above helps and once again many thanks and good luck with your trading - Anna.

Thanks a bunch for posting the easy to read and understand charts. Definitely opens the eyes a bit more.

oo7_ts

Jeez--bosun2007--didn't realise you had some ideas about VSA--why didn't you speak on it---

NOw---if someone could just relate it to how NYSE is trading---i swear the US will come out of its recession--

I know am not the only one in here --trying to figure these out----

I agree. Malcolm's posted trade setups are very helpful and appreciated.

hi shamus .. good job on the chat room .. enjoyed it last night

I think a picture is worth a thousand indicators .. opps i meant words ..lol

VSA , when ones master it is very visual .. something no indicator can ever take the place of ....