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Trade Using VSA (Volume Spread Analysis)

  • #1,501
  • Edited 4:28am May 25, 2009 4:02am | Edited 4:28am
Quoting Islander
From memory.....like 15 years ago......Tom Williams used to call these a "Test" ( of support).....I dont know if the updated versions of his book still use this definition....
The test is usually after the climax bar or up thrust (the kama sutra of trading - lol). But you rightly pointed out on your chart in your next post which shows your entry after the test back up following the climax bar.

A high probability low risk trade (with the larger trend) is to enter at support or resistance just after the climax bar before waiting for a test back into SR. Sometimes the SR provide enough bounce that prices do not re-test.
  • #1,502
  • Edited 4:33am May 25, 2009 4:10am | Edited 4:33am
Quoting Islander
From memory.....like 15 years ago......Tom Williams used to call these a "Test" ( of support).....I dont know if the updated versions of his book still use this definition....
Hi Islander
Tests and Up Thrusts/Reverse Up Thursts are different.

Tests into support are on low volume, usually into an area of previous high volume selling area, which then close at or near their highs.

Up Thursts (UT) and Reverse Up thrusts (RUT) work in the same way just in reverse.
They are usually found when the break into new ground on high volume and then close at their lows for the UT and highs for the RUT.

See pages 79 to 82 on UT's and RUT's for this in more detail.
Boxing clever since 76.
  • #1,503
  • May 25, 2009 4:43am May 25, 2009 4:43am
  •  Yuppie
  • Joined Jun 2007 | Status: ̿ ̿ ̿̿'̿̿\̵͇̿̿\=(•̪●)=/̵͇̿̿/'̿̿ ̿ | 2,727 Posts
Quoting copi88
Hi Islander

Thanks for the analysis, your posts are always very informative. On the IBFX chart it shows a good opportunity to go short after the Wide range green candle that had no follow through that was not clear on your ODL graph.

[color=black][font=Verdana]The Wide range green candle at the green arrow is shows weakness in the market and not strength as there is no follow through as we two red candles. This is followed by two green candles with increasing...

Nice analysis copi... cheers...


Magnus
  • #1,504
  • May 25, 2009 4:53am May 25, 2009 4:53am
IMO it is equally important to look at the support and resistance areas - I usually use the relevent sweet spot levels, although here I've limited the resistance to Friday's high....and then watch the Price Action in these areas.

VSA will aslo help, but IMO the actual PA at these levels is more important...

The High Volume push down into the 825 / 850 support triggered my audio alert and I drilled down to my 1 min chart to confirm my exit and later take a small long.

My 15 min chart showed a long wicked red spinning top for the low candle, also into the fibonacci decision zone, so the bull is still alive and I'll now stand aside till the early US traders start their day....
Attached Image (click to enlarge)
Click to Enlarge Name: may 25 5m cable 0930.gif Size: 15 KB
Trading Levels with WRBs
  • #1,505
  • May 25, 2009 4:55am May 25, 2009 4:55am
Quoting copi88
Hi Islander
Tests and Up Thrusts/Reverse Up Thursts are different.

Tests into support are on low volume, usually into an area of previous high volume selling area, which then close at or near their highs.

Up Thursts (UT) and Reverse Up thrusts (RUT) work in the same way just in reverse.
They are usually found when the break into new ground on high volume and then close at their lows for the UT and highs for the RUT.

See pages 79 to 82 on UT's and RUT's for this in more detail.
NP - I stand corrected.....memo to self, must remember to take those memory pills, now where the hell are they.....http://www.forexfactory.com/images/icons/icon11.gif
Trading Levels with WRBs
  • #1,506
  • May 25, 2009 5:13am May 25, 2009 5:13am
Quoting Islander
IMO it is equally important to look at the support and resistance areas - I usually use the relevent sweet spot levels, although here I've limited the resistance to Friday's high....and then watch the Price Action in these areas.

VSA will aslo help, but IMO the actual PA at these levels is more important...

The High Volume push down into the 825 / 850 support triggered my audio alert and I drilled down to my 1 min chart to confirm my exit and later take a small long.

My 15 min chart showed a long wicked red spinning top for the low candle,...
Agreed, I think this is very important. I only take VSA signals at areas of S&R. The two inconjuction result in very high % of winners.
Boxing clever since 76.
  • #1,507
  • May 25, 2009 6:04am May 25, 2009 6:04am
Quoting copi88
The more I think about that analysis the more I think we might see a turn soonish. The Bull market has become so obvious now, everyone and their dog are long GU. Also looking at the daily S&P chart and it looks like its gone into a distribution phase, but I am not sure as I don’t know if I can trust the volume on the software I have. I have a Brocco demo account.

[color=black][font=Verdana]RSX, its attached. It doesn’t refresh and you have to do it manually, very annoying but I haven’t found a version...
Thanks. CDRW, I tried putting in the one from Forex Flash but the they were enlarged and all over the place. Anyway, doubt I need it. It amazes me that the Tradeguider software sells for 3K euros basically the same sort of thing.
  • #1,508
  • May 25, 2009 11:13am May 25, 2009 11:13am
Quoting Porkpie
Thanks. CDRW, I tried putting in the one from Forex Flash but the they were enlarged and all over the place. Anyway, doubt I need it. It amazes me that the Tradeguider software sells for 3K euros basically the same sort of thing.
Try this these two.

The Copi88 indicator ThatwasMe very kindly coded it for me to give me alerts when you get up or down arrows and it has some text boxs for a mechanical stratergy I was developing. You can turn them off in the settings.
Attached File(s)
File Type: mq4 CDRW.mq4   4 KB | 629 downloads
File Type: mq4 CDRW Copi88 v1.1.mq4   9 KB | 829 downloads
Boxing clever since 76.
  • #1,509
  • May 25, 2009 11:28am May 25, 2009 11:28am
Even though the markets where thin today (mainly because I wasnt trading ) there where some good VSA examples.

Here a good example of an up thrust which we where discussing earlier.

On the chart you can see leading up to the point at the green arrow, price is going up but on low volume indicating that there is not much interest in the pair at this price.
A high volume chum bar appears (Green Volume bar) before the upthurst.
This often signals the Bottom or Top of a trend. The market is already indicating that the move up is weak and the Churn bar adds more weight to this indication.

Once you see the Up Thrust (A high volume bar that closes at or near is lows at the top of a trend and is usually into new ground ie there is a significant space to the left of it with no price action) accompanied by Volume Climax Down bar (White Volume Bar) you can be pretty confident that its going to go down.

The only thing is that it was not off an area of Resistance otherwise this would have been an A+ trade.

C
Attached Image (click to enlarge)
Click to Enlarge Name: GU.jpg Size: 118 KB
Boxing clever since 76.
  • #1,510
  • May 25, 2009 11:53am May 25, 2009 11:53am
Thanks for the replys Copi and islander - Reverse Up thrust - duh !!

cheers
Time hides Nothing
  • #1,511
  • May 25, 2009 11:58am May 25, 2009 11:58am
  •  Yuppie
  • Joined Jun 2007 | Status: ̿ ̿ ̿̿'̿̿\̵͇̿̿\=(•̪●)=/̵͇̿̿/'̿̿ ̿ | 2,727 Posts
Quoting copi88
Even though the markets where thin today (mainly because I wasnt trading ) there where some good VSA examples.

Here a good example of an up thrust which we where discussing earlier.

On the chart you can see leading up to the point at the green arrow, price is going up but on low volume indicating that there is not much interest in the pair at this price.
A high volume chum bar appears (Green Volume bar) before the upthurst.
[color=black][font=Verdana]This...

Perhaps the TL could have been regarded as potential resistance?...


Magnus
Attached Image (click to enlarge)
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  • #1,512
  • May 25, 2009 6:52pm May 25, 2009 6:52pm
... You can surrender
Without a prayer...
But never really pray...
Pray without surrender.

You can fight...
Fight without ever winning...
But never ever win...
Win without a fight.

I hope you all had an excellent weekend. See you in the chat.
The trend always ends.
  • #1,513
  • May 25, 2009 7:26pm May 25, 2009 7:26pm
Hi all,

I don't know why but I have really different volume data on my Interbankfx demo account than those I see on the thread. Mine are a real mess in particular the one of the demo account server. I have 3 server to choose from, one demo, one mini account and one metal account. I can't connect to the mini account server and the nearest from your data seems to be data from métal server. Also I see some of you with account with 4 digits on ibfx, and I am only able to found 5 digits ones...

What am I missing ? which server do I have to choose ?
  • #1,514
  • May 25, 2009 7:35pm May 25, 2009 7:35pm
Quoting MonkeydLuffy
Hi all,

I don't know why but I have really different volume data on my Interbankfx demo account than those I see on the thread. Mine are a real mess in particular the one of the demo account server. I have 3 server to choose from, one demo, one mini account and one metal account. I can't connect to the mini account server and the nearest from your data seems to be data from métal server. Also I see some of you with account with 4 digits on ibfx, and I am only able to found 5 digits ones...

What am I missing ? which server do I have to choose...

IBFX volume has been a bit whacky since they started the switchover to 5 digits. I'm not sure if it's related but it seems to have happened about the same time. You might want to try another ECN broker such as fxcm etc.
The trend always ends.
  • #1,515
  • May 25, 2009 8:16pm May 25, 2009 8:16pm
Quoting ShamusFamous
IBFX volume has been a bit whacky since they started the switchover to 5 digits. I'm not sure if it's related but it seems to have happened about the same time. You might want to try another ECN broker such as fxcm etc.
which broker you use trading volume with?
  • #1,516
  • May 25, 2009 8:37pm May 25, 2009 8:37pm
Quoting teodosy87
which broker you use trading volume with?
For live? I use fxcm and fxpro mainly.
The trend always ends.
  • #1,517
  • May 25, 2009 8:39pm May 25, 2009 8:39pm
Quoting ShamusFamous
For live? I use fxcm and fxpro mainly.
are you fine with them i think best way to determine if thir volume is good or not is to ask malcolm to show his screen and compare his volume with fxcm let say ... : }
  • #1,518
  • May 25, 2009 8:41pm May 25, 2009 8:41pm
Quoting teodosy87
are you fine with them i think best way to determine if thir volume is good or not is to ask malcolm to show his screen and compare his volume with fxcm let say ... : }

As I've said a few times before the signals are relative, ie a no demand bar on one broker tends to be a no demand bar on others as well. The actual numbers may vary but the signals are fairly close at least with the brokers I use.
The trend always ends.
  • #1,519
  • May 26, 2009 1:31am May 26, 2009 1:31am
WWSMD?

http://vsa.pipbuilders.com/wwsmd.jpg


Credit to the mighty WallSt.
The trend always ends.
  • #1,520
  • May 26, 2009 2:14am May 26, 2009 2:14am
Guys,

Attached is a 10 min eurjpy and I'm having trouble understanding the VSA on this one.

If you look at 750 bar, its black (this black symbolizes low churn bar) but it looks out of place there because I can see quite high volume. Is this bar ok?

Ok, lets say it is correct, I see the low churn bar head towards pp and also MM 4/8, would this be a high prob trade to the short side? Not sure

Maybe its the indicators as I'm trying out different 'better volume' indicators for NT. Can anyone tell here?
Attached Image (click to enlarge)
Click to Enlarge Name: 26-MAY-09 09.03.23.GIF Size: 31 KB
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