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Volume Spread Analysis (VSA) Discussion 2 replies

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Learn to Trade using VSA (Volume Spread Analysis)

  • #961
  • Mar 10, 2009 10:05pm Mar 10, 2009 10:05pm
Quoting taomql4
either am dead in the water or we are in for a major raLLY--LONG eurusd

i still haven't given up on the way you trade VSA--NYSE1982---haven't seen you in the forum today


hAVE SOME QUESTIONS FOR YOU--
As far as this chart, I'll explain also

CANDLE 6
H/L64
H/C4
SPREAD 60

this is saying that the trend is moving up nicely, steady spread and good volume,not to extreme.

CANDLE 5
H/L84
H/C2
SPREAD 82

the trend is still moving up nicely and spread is good.

CANDLE 4
H/L68
H/C28

this I call the alert bar and if you look at all the other charts I post youll notice this pattern. Decrease in spread, increase dramatically in volume. Also your H/L has decreadsed meaning less buyers and H/C increased more sellers are in, which tell you of a pending change.

CANDLE 3
H/L115
H/C71

thats the trap, the smart has trapped you on an upbar, if you pay close attention notice that volume is way to extreme, and your H/L and H/C increased dramatically telling me more sellers are coming in and if you went long you need to be getting out.

CANDLE 2

H/L 164
H/C102
SPREAD 62

okay this is the strong downmove but notice that spread is extremely high for down move, its supposed to be gradual on a true follow thru down move.

CANDLE 1
H/L48
H/C1

okay this tells me that the H/L decreased over 100% which means next bar should be weak, b/c not only are most of your buyers gone, you have hardly any volume to support this upmove..

Just a cautionary note also be aware that when you trade higher timeframes your stop loss also has to be much higher, as you can see from the tails on these bars. Thats another reason I don't trade higher time frames is b/c of the issue that your exposed to alot more risk on hightime frames. If you do trade high time frame please trade using smaller lots only!
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  • #962
  • Mar 10, 2009 10:23pm Mar 10, 2009 10:23pm
Quoting nyse1982
Here's some more charts to help people understand, okay

CANDLE 5
H/L 83
H/C13

tells me more buyers in this bar b/c your H/L is higher then previous bar and also H/C is higher. Which means some sellers involved, not much but some.

CANDLE 4

H/L 68
H/C47

this bar is now telling me that buyers are slowing down and more sellers have gotten into the pair. Now the spread is 21, now pay attention to candle 3

CANDLE 3
H/L144
H/C48
SPREAD 96

this bar has just told me alot of people got in at the top on this bar thinking that the trend would...
Good.Examples and explanations like these are what really help us.Thanks alot
we cannot succeed without a well defined risk management.
  • #963
  • Mar 10, 2009 10:28pm Mar 10, 2009 10:28pm
Quoting bosun2007
Good.Examples and explanations like these are what really help us.Thanks alot
Ditto here.

Going forward, can you also add Volume figures to these candle stats as well, nyse?

Thanks!

PS> This really is a great thread. Thank you again for starting it!!!
- Bowen (a.k.a. Wolf)
  • #964
  • Mar 10, 2009 10:38pm Mar 10, 2009 10:38pm
@ nyse1982. i respect you greatly even though i express my view more plainly.Yet i respect you greatly considering the truth that you opened my eye to this technique.Now Iam going to be posting clear charts to explain myself.Please do me a favour,ensure that you correct me wherever iam wrong in my analysis.Though I know of a strong fund manager that gives me signal and i come to realise that he uses vsa because he gives me the signals even before the momentum indicators confirm it.I have been pondering on tis before until i saw your thread.That is why Iam curious to know the principles.
we cannot succeed without a well defined risk management.
  • #965
  • Mar 10, 2009 11:01pm Mar 10, 2009 11:01pm
Quoting malcolmb14
I will post a ninja script for EVERYTHING you guys need for VSA signals when I get home later ( on my main trading computer) . It is as good as tradeguider and maybe even a little better . I think there are some free forex feeds for ninja trader . is a hungry beasty though and you need some good ram to drive it.
Thanks malcolmb14! You are right NT is a resource hog, but a pretty nice platform.
  • #966
  • Mar 10, 2009 11:22pm Mar 10, 2009 11:22pm
I can easily understand that the downward mobility is more likely to continue since the lower bollinger band was broken with great efforts/volume on that red candle
Attached Image
we cannot succeed without a well defined risk management.
  • #967
  • Mar 10, 2009 11:32pm Mar 10, 2009 11:32pm
As we can see,the red candle eventually broke down the support at fibo retracement 100 with great effort/high volume.That immediately suggest a reliable dive to fibo extension161.8/1.3571 or even lower
we cannot succeed without a well defined risk management.
  • #968
  • Mar 10, 2009 11:37pm Mar 10, 2009 11:37pm
As we can see,the red candle eventually broke down the support at fibo retracement 100 with great effort/high volume.That immediately suggest a reliable dive to fibo extension161.8/1.3571 or even lower .Iam deep in the trade now with 100 pips plus.And Iam trailing my stop
Attached Image
we cannot succeed without a well defined risk management.
  • #969
  • Mar 10, 2009 11:46pm Mar 10, 2009 11:46pm
Quoting bosun2007
As we can see,the red candle eventually broke down the support at fibo retracement 100 with great effort/high volume.That immediately suggest a reliable dive to fibo extension161.8/1.3571 or even lower .Iam deep in the trade now with 100 pips plus.And Iam trailing my stop
What settings are you using on the Bollinger bands? Period, Deviation, Close (?) ?
- Bowen (a.k.a. Wolf)
  • #970
  • Mar 10, 2009 11:56pm Mar 10, 2009 11:56pm
Quoting BlackWolf
What settings are you using on the Bollinger bands? Period, Deviation, Close (?) ?
i use the default setting.That is 20period and 2 deviation.
we cannot succeed without a well defined risk management.
  • #971
  • Mar 11, 2009 1:19am Mar 11, 2009 1:19am
Quoting bosun2007
@ nyse1982. i respect you greatly even though i express my view more plainly.Yet i respect you greatly considering the truth that you opened my eye to this technique.Now Iam going to be posting clear charts to explain myself.Please do me a favour,ensure that you correct me wherever iam wrong in my analysis.Though I know of a strong fund manager that gives me signal and i come to realise that he uses vsa because he gives me the signals even before the momentum indicators confirm it.I have been pondering on tis before until i saw your thread.That...
Hi Bosun

Thanks for your recent charts, much appreciated.

Could you please include a volume histogram on the charts, this would help even further to explain the timing and reasoning for the moves?

Thanks

Madog
  • #972
  • Mar 11, 2009 1:35am Mar 11, 2009 1:35am
Quoting bosun2007
@ nyse1982. i respect you greatly even though i express my view more plainly.Yet i respect you greatly considering the truth that you opened my eye to this technique.Now Iam going to be posting clear charts to explain myself.Please do me a favour,ensure that you correct me wherever iam wrong in my analysis.Though I know of a strong fund manager that gives me signal and i come to realise that he uses vsa because he gives me the signals even before the momentum indicators confirm it.I have been pondering on tis before until i saw your thread.That...
Guys look out for this pattern in one trading day it occurs atleast once or twice and you easily spot it..A good thing to do is copy the charts I posted and look for signals and bars that line up, just like that chart pattern I described. What I'll do is isolate it on a chart, so you can look specifically for that pattern...
  • #973
  • Mar 11, 2009 1:44am Mar 11, 2009 1:44am
@madog.Thanks for yuour recommendation.I will try and get one volume indicator and check it as you suggested.Although I don`t have one yet.It will be very nice if you can send one to me.As you can see,i use tools alot,especially;fibo,trendline,50ema and bollinger band.Now vsa is helping me to understand the potential of candlesticks around major support or resistance.Please when i say support or resistance i mean upper/lower bollinger band or tredline or 5o ema.That yellow spot on the chart was my decision zone.You can see that robust red candle in the yellow circle that dived through all supports.It broke the lower bollinger band,broke the inclined support(rising trendline),broke the white 50 ema.And much more,the volume was high enough to guarantee continuity.So I entered the trade immediately at the close of that candle.
Attached Image
we cannot succeed without a well defined risk management.
  • #974
  • Mar 11, 2009 1:54am Mar 11, 2009 1:54am
1.I observe that vsa does not suggest how long a move will go so one really needs other tools to set a potential take profit level before one leaves his computer with a tight stop loss as well.

2. Just like the set up above,the red candle that became the set-up candle does not necessarily need to close before one enters the market.One can use nyse`s candle`s half-life hypothesis.The hypothesis suggests that if the current 15 minutes candle reaches or surpases half the volume of the previous candle at 7.5mins,then the continuity is likely to hold.

3.I observe that there is high volatility around london 9am and newyork 9am.That means we can take reliable signals on gbpusd around those time and target 100 pips with 50 pips stop loss.Thanks
we cannot succeed without a well defined risk management.
  • #975
  • Mar 11, 2009 2:00am Mar 11, 2009 2:00am
There's been some pretty nice movement on the majors. It all started about 3 hours ago with volume spikes and large candles. Big initial moves, followed by retraces, then continuations. U/J is a little out of sync with the others, but still similar.
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  • #976
  • Mar 11, 2009 2:14am Mar 11, 2009 2:14am
As we can see from the second lower yellow circle at 8:30 on the time axis which is actually 6:30 gmt.We can see that the white candle(high volume) truncated the new red trendline.That is a signal to exit short trades or trail your stops.But I will stay in until the middle bollinger band is broken or the old trendline is broken.
we cannot succeed without a well defined risk management.
  • #977
  • Edited 2:43am Mar 11, 2009 2:33am | Edited 2:43am
okay i've been speaking with members and i quite honestly this thread really has gotten out of hand and just is utterly unorganized, I'll remind people one more time to not bash people the fact is VSA can be traded in various time frames period. If your not exclusively in here to learn or trade VSA, I'm going to ignore you and if your in here advertising another trading style i'm ignoring you. Please go start your own thread! Last time, I'm going to mention this..
  • #978
  • Mar 11, 2009 2:52am Mar 11, 2009 2:52am
Quoting nyse1982
okay i've been speaking with members and i quite honestly this thread really has gotten out of hand and just is utterly unorganized, I'll remind people one more time to not bash people the fact is VSA can be traded in various time frames period. If your not exclusively in here to learn or trade VSA, I'm going to ignore you and if your in here advertising another trading style i'm ignoring you. Please go start your own thread! Last time, I'm going to mention this..

nyse why don't you start a new thread. Compile all the basics, indicators, and pdfs on the first post (so you can add to it) and just police the thread a bit.

A fresh start would be make it work I think. There is a lot of useful information here but it's impossible to find so a new thread with a main post that included everything and could be added to as needed would be awesome.

Also why don't you come in the chat. A lot of people are finding it useful and it would help if you were there too. (Link is in my sig)

PS who's bashing or advertising here? I think I missed that.
The trend always ends.
  • #979
  • Mar 11, 2009 3:06am Mar 11, 2009 3:06am
A few days ago I posted that I'd found a couple of other volume indys. I also said that I would try them before posting. As I personally find them easy to use, here's a chart with both.

The upper one's bars are coloured as per candles and will change colur on higher vols - settings are adjustable. The gold line is a 14 period RSI of the volume.

My charts aslo always have the 50 and 100 sweet spots and often the Daily Pivots - here the red line at 1.3656 is the S1 level......notice how the confluence of this and the 650 sweet spot just happened to hold that move down....

NYSE - please let ne know if this post is too out of line for what you want here in your thread and I'll look for somewhere else to post.....
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Trading Levels with WRBs
  • #980
  • Mar 11, 2009 3:12am Mar 11, 2009 3:12am
Quoting ShamusFamous
nyse why don't you start a new thread. Compile all the basics, indicators, and pdfs on the first post (so you can add to it) and just police the thread a bit.

A fresh start would be make it work I think. There is a lot of useful information here but it's impossible to find so a new thread with a main post that included everything and could be added to as needed would be awesome.

Also why don't you come in the chat. A lot of people are finding it useful and it would help if you were there too. (Link is in my sig)

PS who's bashing or...
This is what I've been thinking for the past couple days. Maybe it's about time to start a new thread in "Interactive Trading". The new one could have a similar title, but maybe minus the "Learn to". As many basics as possible on the first post. We could still refer people here now and then to read up on the origins. But the new action would take place in the new thread.

Just a thought . . .

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