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Trade Using VSA (Volume Spread Analysis)

  • #1,741
  • Jun 9, 2009 5:14pm Jun 9, 2009 5:14pm
I am very happy to have found this thread on VSA on FF today as i am a long time fan of VSA and have been studying it since few months. Only problem I had is as I trade spot fx, i didnt know wich MT4 was a good representative of the interbank market in regard to volume and found out that IBFX is a good one and think MBT is too as it is an ECN.

Really much appreciated this thread on VSA and specially want to says a big thanks to the author of the thread and to Malcom for his absolutely wonderful analysis of VSA. Malcom, you are really a great trader as I see that the way you look at VSA setup and philosophy and incorporating, from time to time, the complimentary aspects of POC, VAH, VAL and VWAP to it through your E-Signal charts.

Will be definitely an active participant of this thread. Thanks again for starting it and great analylis of great traders.http://widget.mibbit.com/smileys/yel02.png

If anybody interested, there is also great discussion about VSA and POC and VWAP at trader laboratory. It is there that i learned much about it.
  • #1,742
  • Jun 9, 2009 5:49pm Jun 9, 2009 5:49pm
Quoting bbartha
Its almost like stealing Money
The no demand bars show as dojis on my chart. I guess ,y question is how can I tell if they are no demand or no support bars?
  • #1,743
  • Jun 9, 2009 7:23pm Jun 9, 2009 7:23pm
Quoting bbartha
Its almost like stealing Money
Very informative chart annotations. Very well done indeed. Thank you.
  • #1,744
  • Jun 9, 2009 7:33pm Jun 9, 2009 7:33pm
Also is there any reason to use Better Volume instead of the volume built into MetaTrader? I pulled them both up but the volume bars are pretty much identical (I'm using IBFX). The only difference is that the Better Volume bars have a moving average and are color coded to show different meanings.
  • #1,745
  • Jun 9, 2009 7:50pm Jun 9, 2009 7:50pm
Hello Loplpie. Good question you have on the best volume indicator compared to the default indicator. Eventhough they will usually shows the same lenths in the volume bars as it is the same data feed used, the best volume indicator is a lot better than the normal volume one as it is color coded and this color coded make all the difference when you knows how to interpret them.

In thruth, for somebody that is very much knowledgable in VSA setups and philisophies and have a good grasp of tom william or Wyckof teachings, he will not even need to use the color coded indicators as just by looking at the lenght of the volume bar compare to the spread of the price bar all in relation to the others bars in the past, he will very easily detect either an upthrust, a no demand, no selling pressure and ect.

The indicator just make it a lot a easier to learn the mecanics of the VSA concepts and the author who was made it have made a great job out of it.

Hope it helps

Shreem
  • #1,746
  • Jun 9, 2009 8:28pm Jun 9, 2009 8:28pm
Quoting shreem
Hello Loplpie. Good question you have on the best volume indicator compared to the default indicator. Eventhough they will usually shows the same lenths in the volume bars as it is the same data feed used, the best volume indicator is a lot better than the normal volume one as it is color coded and this color coded make all the difference when you knows how to interpret them.

In thruth, for somebody that is very much knowledgable in VSA setups and philisophies and have a good grasp of tom william or Wyckof teachings, he will not even need to...
Thanks for the in depth answer.

Dear lord I'm still reading the book, and even though its the condensed version which is about 31 pages, I feel like my brain's gonna explode from trying to memorize all this info . How did you guys do it?

lol
  • #1,747
  • Jun 9, 2009 8:46pm Jun 9, 2009 8:46pm
I think VSA should be called Volume RANGE Analysis. High - Low is called Range. Ask - Bid is called SPREAD. But that horse has taken off and it's too late to shut the barn door now.

How does one cram all the info? One piece at a time. The annotated chart a couple pages ago is a quick study lesson in VSA. You can start with that pattern and learn how to profit from it. Once you learn that setup, you can move on to the next.
  • #1,748
  • Jun 9, 2009 9:02pm Jun 9, 2009 9:02pm
Quoting PipForceA
I think VSA should be called Volume RANGE Analysis. High - Low is called Range. Ask - Bid is called SPREAD. But that horse has taken off and it's too late to shut the barn door now.

How does one cram all the info? One piece at a time. The annotated chart a couple pages ago is a quick study lesson in VSA. You can start with that pattern and learn how to profit from it. Once you learn that setup, you can move on to the next.
Yeah the spread thing had me confused for a while. I thought it was talking about waiting for the bid-ask spread to change which I thought would need constant staring at the chart
  • #1,749
  • Jun 9, 2009 9:06pm Jun 9, 2009 9:06pm
Quoting PipForceA
I think VSA should be called Volume RANGE Analysis. High - Low is called Range. Ask - Bid is called SPREAD. But that horse has taken off and it's too late to shut the barn door now.
PipForceA,
It's not like we invented the thing in this thread
As I'm sure you know, vsa studies exists since a long time ago, and was named liked that back then.

I think I remember that, on one of the trade guider's video, it was explained that it was called "volume spread analysis" because "range" is (or was, back then) called "spread" in the UK (where I suppose the author is from).
  • #1,750
  • Jun 9, 2009 10:05pm Jun 9, 2009 10:05pm
Quoting tonirai
PipForceA,
It's not like we invented the thing in this thread
As I'm sure you know, vsa studies exists since a long time ago, and was named liked that back then.

I think I remember that, on one of the trade guider's video, it was explained that it was called "volume spread analysis" because "range" is (or was, back then) called "spread" in the UK (where I suppose the author is from).
Thank you for the background information.
  • #1,751
  • Jun 9, 2009 10:52pm Jun 9, 2009 10:52pm
Quoting lolpie
Also is there any reason to use Better Volume instead of the volume built into MetaTrader? I pulled them both up but the volume bars are pretty much identical (I'm using IBFX). The only difference is that the Better Volume bars have a moving average and are color coded to show different meanings.

Yes, even though bv is not based explicitly on VSA it does take volume information and price action to determine the colors for bars (there is a guide to the colors and what they mean in first post of this thread under resources)

The moving average helps you to see easily enough if volume is lower or higher than average (below or above the ma line)
The trend always ends.
  • #1,752
  • Jun 10, 2009 12:15am Jun 10, 2009 12:15am
Quoting Crownj
Thanks...I still don't know that I'm clear on being able to determine whether a bar is a no demand bar or no supply bar when it happens live.
If price is trending upwards and you get a bar that furfills the requirements above (Narrow Spread, Low Volume, Close above the previous Bar) then its a No Demand

If price is trending downwards then No Supply (Narrow Spread, Low Volume, Close below the previous Bar)
Boxing clever since 76.
  • #1,753
  • Jun 10, 2009 12:25am Jun 10, 2009 12:25am
Quoting copi88
If price is trending upwards and you get a bar that furfills the requirements above (Narrow Spread, Low Volume, Close above the previous Bar) then its a No Demand

If price is trending downwards then No Supply (Narrow Spread, Low Volume, Close below the previous Bar)

Hello Copi88, nice answer on the no demand requirement. i only want to add that for a "no demand" to be confirmed, in top of being a narrow spread with closing higher than the previous bar, the volume of the "no demand" bar need to be less than the 2 previous bars and not only the last bar.

Also, in a a spirit of confirmation, it would be even better that the next bar after the "no demand" bar need to close lower than the "no demand" bar itself or at the latest the bar after. That would give an extra confirmation that there is no more buyers in the current market

Hope it help

Shreem
  • #1,754
  • Jun 10, 2009 4:22am Jun 10, 2009 4:22am
Thanks Copi and Shreem
  • #1,755
  • Jun 10, 2009 5:04am Jun 10, 2009 5:04am
Quoting copi88
Yes.

For No Demand Bars they dont necessarily have to close at or near their highs but they should be closing higher than the previous bar. (The No Demand bar might even be a red bar).

Also these bars on their own dont mean much. You must always look at the background information.

Remember when reading VSA there are 4 things to look at:

1-Volume
2-Spread
3-Close
4-Backround

C

Hi all

There seems to be a lot of discussion about what bars to look fro and how to calculate them. To facilitate everyone in his own (computer)language, may I suggest to get the definitions crisp ?

Here are my 5 cents

Below a list of the defs already found: Please confirm Ok's or report errors..


NAME # NAME # BAR # CLOSE # VOLUME # SPREAD # CHANGE
UP-THRUST # (SOW-58)- Trap up move # down # low # avg # vwide # wide
UP-THRUST # (SOW-2) -Basic Up-Thrust # up # low # vhigh # vwide # avg
UP-THRUST # (SOW-2)- Basic Up-Thrust # up # low # high # avg # narrow
UP-THRUST # (SOW-2)- Basic Up-Thrust # up # low # low # avg # narrow
UP-THRUST # (SOW-2)- Trap up move # down # low # vhigh # uwide # wide
UP-THRUST # (SOW-29)- Up thrust after weakness # down # low # avg # wide # narrow
REVERSE UP-THRUST # nop # up # high # high # wide # nop
Shake out # (SOS-125)-Shake out # up # high # high # wide # vwide
LIKELY MARKET TOP # nop # up # high # high # narrow # narrow
ABSORPTION VOLUME # nop # down # high # uhigh # uwide # unarrow
STOPPING VOLUME # (SOS-3)-Stopping volume # Gap down/down # high # high # narrow # narrow
FALLING PRESSURE # nop # down # low # low # wide # wide
BUYING CLIMAX # nop # up # high # vhigh # vwide # nop
EFFORT TO RISE # nop # up # high # high # wide # nop
EFFORT TO FALL # nop # down # low # high # wide # nop
SELLING PRESSURE # (SOS-131)- Selling Pressure # up # high # high # vwide # uwide
SUPPLY COMING IN # (SOW-26)- Supply coming in # down # low # high # vwide # wide
END OF A RISING MARKET # (SOW-22)- End of rising market # Gap up/up # middle/high # high # narrow # vwide
NO DEMAND # (SOW-55)- No demand # up # middle # low # narrow # vnarrow
NO DEMAND # (SOW-55)- No demand # up # high # vlow # narrow # vnarrow
NO DEMAND # (SOW-37)- No demand # up # high # low # average # average
No progress on up volume (this is not a tradeguider indicator) # nop # Gap up/up # middle # high # average/wide # vwide
INCREASE SELLING- SUPPLY PRESENT # (SOW-92) # down # low # uhigh # uwide # uwide
SELLING CLIMAX # nop # down/up?(doubts) # high # high/vhigh # wide/vwide # nop
NARROW SPREADS AND HIGH VOLUME (SQUAT BARS) # nop # up # high?(doubts) # high # narrow # nop
BAG HOLDING (not sure if this is a TG indicator. I´ve seen it in a forum) # nop # down # low # high/vhigh # narrow # nop


Cheers, Dutchy
  • #1,756
  • Edited 6:22am Jun 10, 2009 5:54am | Edited 6:22am
Quoting lolpie
Thanks for the in depth answer.

Dear lord I'm still reading the book, and even though its the condensed version which is about 31 pages, I feel like my brain's gonna explode from trying to memorize all this info . How did you guys do it?

lol

Read it... Read it agian and keep reading it until the picture becomes clearer... Then start practicing and if you still have a headache read it again

I've read the first page plus the Long 100+ page PDF twice and I think I will read it twice more - each time I picked up something new and the picture became much clearer as its too much new imformation for your brain to absorb in one sitting...

You don't have to memorize anything - once you understand the basic principles it will become second nature... Just like the way you're reading this now

I'm still learning VSA myself but from my experience so far VSA is very much like learning to read, individual letters (VSA) make up words (market conditions) - combine that with multiple timeframes and now those word are making sentences...

This is how I see it anyway

Sim
Time hides Nothing
  • #1,757
  • Jun 10, 2009 7:13am Jun 10, 2009 7:13am
Quoting CindyXXXX
I'm still learning VSA myself but from my experience so far VSA is very much like learning to read, individual letters (VSA) make up words (market conditions) - combine that with multiple timeframes and now those word are making sentences...

This is how I see it anyway

Sim
That is a great analogy. I think I'm still stuck in the single syllable words right now!
  • #1,758
  • Jun 10, 2009 8:43am Jun 10, 2009 8:43am
Quoting CindyXXXX
Read it... Read it agian and keep reading it until the picture becomes clearer... Then start practicing and if you still have a headache read it again

I've read the first page plus the Long 100+ page PDF twice and I think I will read it twice more - each time I picked up something new and the picture became much clearer as its too much new imformation for your brain to absorb in one sitting...

You don't have to memorize anything - once you understand the basic principles...
Thanks

What I'm basically doing now is reading the pdf and writing notes in Word

I can upload it here once I'm done--if that's allowed, its basically a quick reference guide to VSA (total 2-3 pages)and I think other people who are new to this like me will find it useful
  • #1,759
  • Jun 10, 2009 8:49am Jun 10, 2009 8:49am
Quoting Dutchy
Hi all

There seems to be a lot of discussion about what bars to look fro and how to calculate them. To facilitate everyone in his own (computer)language, may I suggest to get the definitions crisp ?

Here are my 5 cents

Below a list of the defs already found: Please confirm Ok's or report errors..


NAME # NAME # BAR # CLOSE # VOLUME # SPREAD # CHANGE
UP-THRUST # (SOW-58)- Trap up move # down # low # avg # vwide # wide..........
Dutchy,

Thank you very much for the list. I moded it in notepad just so it's easier to read. I'll try this and see if it helps speed up the learning curve. By the way, what does 'nop' stand for?

As Dutchy said if anyone has anything to add or you find errors, please let us know.
Attached File(s)
File Type: txt VSA Cheat Sheet.txt   2 KB | 5,038 downloads
Learning is the #2 fundamental in life, taking action is #1!
  • #1,760
  • Jun 10, 2009 9:55am Jun 10, 2009 9:55am
perfect vsa set up for 120 pip long gu earlier while i was sleeping

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