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Trade Using VSA (Volume Spread Analysis)

  • #1,081
  • Apr 29, 2009 12:28pm Apr 29, 2009 12:28pm
Quoting R Richards
I am looking for some videos showing the usage of VSA on Forex. Any ideas? Having a hard time grasping this concept.
Thanks

lets start with something simple ......

think of this ...price is declining on a 5 min chart , with reducing volume. That means there is no selling pressure. / interest .

Then you get a doji on an area of previous support on high volume.

With the lack of selling interest on the way into support , that high volumeo n a doji ( low spread candle) on support is buyers . (1 in attached chart)

You can either go long there OR wait for price to move up a bit , then come back to test support on LOW volume.(2 and 3 in attached chart) This is a double bottom. BUt the low volume on the test of support tells you that there is no selling interest . This is the entry for the long.

This set up was AN EASY TRADE this morning .....

Attached Image (click to enlarge)
Click to Enlarge Name: chf.gif Size: 20 KB
Blogging daily now at www.volume.zone
  • #1,082
  • Apr 29, 2009 12:32pm Apr 29, 2009 12:32pm
Quoting malcolmb14
lets start with something simple ......

think of this ...price is declining on a 5 min chart , with reducing volume. That means there is no selling pressure. / interest .

Then you get a doji on an area of previous support on high volume.

With the lack of selling interest on the way into support , that high volumeo n a doji ( low spread candle) on support is buyers . (1 in attached chart)

You can either go long there OR wait for price to move up a bit , then come back to test support on LOW volume.(2 and 3 in attached chart) This is a double...

An excellent post as always and one of my favorite setups.
The trend always ends.
  • #1,083
  • Apr 29, 2009 12:55pm Apr 29, 2009 12:55pm
Quoting malcolmb14
lets start with something simple ......

You can either go long there OR wait for price to move up a bit , then come back to test support on LOW volume.(2 and 3 in attached chart) This is a double bottom. BUt the low volume on the test of support tells you that there is no selling interest . This is the entry for the long.

This set up was AN EASY TRADE this morning .....

Attachment
Nice trade Malcolmb. I look out for this too. I have seen this pattern many times especially on GBPUSD and is most often a sign of reversal
Attached Image (click to enlarge)
Click to Enlarge Name: gbp.gif Size: 42 KB
Boxing clever since 76.
  • #1,084
  • Apr 29, 2009 2:14pm Apr 29, 2009 2:14pm
Quoting smittens4212
I think it's accurate enough. Many if not most of us are using MT4, and depending on the broker, it compares decently to eSignal et al. It's at least accurate enough to give you a good background on what is going, which is most important.
Thanks, Smittens & Malcolm
The purpose of knowledge is action, not knowledge
  • #1,085
  • Apr 29, 2009 2:25pm Apr 29, 2009 2:25pm
Quoting mima
Thank you for new indy ForexFlash. Here is MACDdiv. Similar should be on VSAdiv...To me Buyers_Sellers is clearer on TickSeparateVolume.
Hi,

Can you please upload Tick Separate Volume Indi for MT4.

Thanks,

Alifari
The purpose of knowledge is action, not knowledge
  • #1,086
  • Apr 29, 2009 2:38pm Apr 29, 2009 2:38pm
Quoting alifari
Hi,

Can you please upload Tick Separate Volume Indi for MT4.

Thanks,

Alifari

here...
Attached File(s)
File Type: mq4 TicksSeparateVolume.mq4   3 KB | 1,205 downloads
The Market pays you to be disciplined
  • #1,087
  • Apr 29, 2009 2:52pm Apr 29, 2009 2:52pm
Quoting mima
here...
Thanks
The purpose of knowledge is action, not knowledge
  • #1,088
  • Apr 29, 2009 3:06pm Apr 29, 2009 3:06pm
Hi forex flash your indi looks great, can you confirm the diff between the sold lines and dotted and how to read them
probably simple to most - sorry if it is obvious
  • #1,089
  • Apr 29, 2009 3:11pm Apr 29, 2009 3:11pm
Quoting tonirai
I think Mal uses the same feed as you.
The point is not the quantity of volume - the numbers don't matter;
What matters is the size relation between bars, and it's in that sense that Ibfx is considered to be good.

Haha Toni. Love the avatar!
The trend always ends.
  • #1,090
  • Apr 29, 2009 5:00pm Apr 29, 2009 5:00pm
You can look the Klinger oscillator for directional divergences on price/volume, i don't have the source code to offer it to you thou.
I use this oscillator on oil trading never used it in currencies, you boys can experiment if you have time.
Hope this helps the volume traders here.

regards
Arthur
  • #1,091
  • Apr 29, 2009 9:13pm Apr 29, 2009 9:13pm
Just stopping by to say thanks for starting this thread Shamus, I'll be adding VSA to my trading tool box (I'm still learning it though)...
  • #1,092
  • Apr 29, 2009 11:27pm Apr 29, 2009 11:27pm
Quoting Aad
Just stopping by to say thanks for starting this thread Shamus, I'll be adding VSA to my trading tool box (I'm still learning it though)...

Glad to have you and your bold grey text.
The trend always ends.
  • #1,093
  • Apr 29, 2009 11:47pm Apr 29, 2009 11:47pm
I see what you are describing in the candles, but in no way see the volume you are speaking of. The higher volume appears to be only on that climax bar. I printed the pic out to study it. Thanks for the help. I might tell you also that i try never to go below the M15 time frame.
  • #1,094
  • Apr 30, 2009 1:17am Apr 30, 2009 1:17am
Quoting crabbydog
Tradeguider people who originated VSA (based on Wyckoff's beliefs) say it works as well on Forex and Stocks, or any liquid traded market.
Crabbydog - I see that you are very interested in mentioning the "TG" people......FYI it was Tom Williams a British ex Chicago pit trader who popularised VSA in the early 90s. I went to his house in Brighton - south coast UK - and actually purchased one of the very early versions of his VSA software.

Some of Tom's work was based on the earlier work by Wyckoff.

I also met him at the Chicago Expo ~2005 when he had just sold his software to the TG people - Tom was then in his 80s and rapidly loosing his sight. Despite a very intersting offer to update to the TG modified software, I wasnt that impressed and declined. I dont know how much they've improved since then.

Regards

Islander
Trading Levels with WRBs
  • #1,095
  • Apr 30, 2009 1:48am Apr 30, 2009 1:48am
Quoting Islander
Crabbydog - I see that you are very interested in mentioning the "TG" people......FYI it was Tom Williams a British ex Chicago pit trader who popularised VSA in the early 90s. I went to his house in Brighton - south coast UK - and actually purchased one of the very early versions of his VSA software.

Some of Tom's work was based on the earlier work by Wyckoff.

I also met him at the Chicago Expo ~2005 when he had just sold his software to the TG people - Tom was then in his 80s and rapidly loosing his sight. Despite a very intersting offer...

Hi there good sir.
The trend always ends.
  • #1,096
  • Apr 30, 2009 7:42am Apr 30, 2009 7:42am
Quoting ShamusFamous
Hi there good sir.
G'Day Shamus......I'm now getting to busy to get into the chat and so my posting will now be sporadic - I've also dropped the MM lines and gone back to sweet spots combined with daily pivots - IMO more traders use these than rely on a slightly esoteric indy.....


This chart should be clear to all VSA followers - some great longs, two VSA warnings and then some great shorts.....http://www.forexfactory.com/images/icons/icon6.gif
Attached Image (click to enlarge)
Click to Enlarge Name: apr 30 gu 5m 1240.gif Size: 21 KB
Trading Levels with WRBs
  • #1,097
  • Apr 30, 2009 10:50am Apr 30, 2009 10:50am
Quoting ShamusFamous
Volume on stocks is closer to what you need for VSA but Mr. Williams says in the absence of real volume data, tick data can be used and from my experience it does work indeed.

Sorry I missed your post.
Actually it wasn't the tick volume differences that I was thinking of. On page 40 of Master the Markets you have the following:

Bull moves run longer than bear moves because traders like to take profits. This creates a resistance to upmoves. However, you cannot have a bear market develop from a bull market until the stock bought on the lows has been sold (distributed). Resistance in a bull move represents selling. The professional does not like to have to keep buying into resistance, even if he is bullish. He also wants to take the path of least resistance. To create the path of least resistance he may have to gap-up, shake-out, test, and so on, or he may do nothing at that moment, allowing the market to just drift.

Bear markets run faster than bull markets because a bear market has no support from the major players. Most traders do not like losses and refuse to sell, hoping for a recovery. They may not sell until forced out on the lows. Refusing to sell and accepting small losses, the trader becomes locked-in and then becomes a weak holder, waiting to be shaken out on the lows.

I would have thought that this does not apply in Forex as I cannot see why there should be a a difference between going long or short Is not one just the mirror of the other? So I was wondering if the VSA principles are not quite the same in Forex and where they might differ It is confusing to think that some things said might not apply

Thanks
  • #1,098
  • Apr 30, 2009 7:03pm Apr 30, 2009 7:03pm
Set the wheels in motion
turn up all the machines
activate the programs
and run behind the scenes...

Asia is open.
The trend always ends.
  • #1,099
  • Apr 30, 2009 7:56pm Apr 30, 2009 7:56pm
[quote=Islander;2705517]... I've also dropped the MM lines and gone back to sweet spots combined with daily pivots - IMO more traders use these than rely on a slightly esoteric indy.....[quote]


I think so too...SM has main targets PP either daily or weekly or monthly. Between them could be Fib or significant SR of all kinds.
The Market pays you to be disciplined
  • #1,100
  • Apr 30, 2009 9:29pm Apr 30, 2009 9:29pm
Quoting Islander
G'Day Shamus......I'm now getting to busy to get into the chat and so my posting will now be sporadic - I've also dropped the MM lines and gone back to sweet spots combined with daily pivots - IMO more traders use these than rely on a slightly esoteric indy.....


This chart should be clear to all VSA followers - some great longs, two VSA warnings and then some great shorts.....http://www.forexfactory.com/images/icons/icon6.gif

Nice trades Islander. I have to say you are one of the best traders I've had the pleasure of following but I'm a bit confused on the MML comment.

I have found the pa is nearly to the pip on both major and minor lines throughout the day on every pair I watch. Of course whatever works best for you is best.

I have found the MML to be an excellent tool for entries and exits off of clear vsa (and sometimes not so clear) signals.

Hope work is treating you well and hope to see you in the chat soon.

Cheers.

PS. I would like to take a closer look at the sweet spot stuff, if you use them I am more than interested. Can you recommend any threads or indi's? Feel free to post them here and I thank you in advance.
The trend always ends.
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