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  • #2,721
  • Aug 14, 2009 12:09pm Aug 14, 2009 12:09pm
Quoting Barry Cade
...
However, altho indicator is good & it certainly seems useful, can someone explain why none of the experienced guys screenshots seem to include it?....
I'm not that experienced in VSA trading like some here....
As i was trying to unclog my charts (used to be FULL of indicators including OBV) & learning to trade "cleaner" charts, & along the road i encountered this VSA, i have discontinued using OBV for the past 6-8months (I have it on my charts since i started around 2-3yrs ago).

OBV is quite similar with A/D (Accumulation/Distribution, another MT4 default indicator), shows trend, ranges, divergence. but it does not show spread information (which is part of & important in Volume Spread Analysis) since OBV is an oscillator (indicator that goes up & down). histogram indicators (bar chart "look"; histogram indicator example is MACD) specially the Better Volume indi. can show/facilitate VSA trading better (because u can see hi/low volume per bar, & every bar can get colored --red(climax), white, green(churn) etc.-- depending on the type/amount of volume present).

Come to think of it, OBV may compliment VSA trading. I'll test it out & use OBV &/or A/D again.. Thanks for the idea.. (Me using/revisiting OBV again might have come sooner rather than later)
  • #2,722
  • Aug 14, 2009 2:09pm Aug 14, 2009 2:09pm
recently, i asked twobuck to modify market_profile indicator based on my idea of applying the calculus on a specific period. since he was kind enough to do it for me, i thought i should share my idea with all of you.

i am a swing trader and i don't really care much about what happens during a day, unless it affects the main swing i am following. so based on my trading style, i wanted to build a market profile of the previous and current swings. therefore, the necessity of start and end dates.

now, how do i use this: very simple. if i want to look at a previous swing, i use vertical bars to identify the start and end dates - which i use for profiler. here is a h1 chart for g-j. the most intense activity happened @ 157.50, 158.18 and 159.59 areas. that's where our resistance levels are located. if these are broken, then up we go. at least, according to my understanding.
so, for now, IF I WERE TO USE h1 charts, the bias is BEARISH on g-j... BUT, for details about the bigger picture we should look at a higher timeframe to find out where supports (that is, buyers) are located. h4, for example, but i will not discuss this here.
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Nihil Sine Deo.
  • #2,723
  • Aug 14, 2009 2:22pm Aug 14, 2009 2:22pm
so far so good.
now, for the current swing, i use the same idea except that i have to constantly adjust the start date to the current bar time.

and here is an example for the last swing down, viewed on a M15 chart. you do the rest...
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Nihil Sine Deo.
  • #2,724
  • Aug 14, 2009 3:30pm Aug 14, 2009 3:30pm
The documentation that I have been able to find re the Better Volume 1.4 Indy does not cover the blue bars. They are annotated as "Neutral" yet often they are as big or bigger than the green bars (high).

Can anyone explain the meaning of the blue bars?

Thanks.
  • #2,725
  • Edited 4:41pm Aug 14, 2009 4:20pm | Edited 4:41pm
Quoting Duitman
The documentation that I have been able to find re the Better Volume 1.4 Indy does not cover the blue bars. They are annotated as "Neutral" yet often they are as big or bigger than the green bars (high).

Can anyone explain the meaning of the blue bars?

Thanks.
if you insist


http://74.125.93.132/search?q=cache:...&ct=clnk&gl=us

but honestly,its better to understand VSA patterns--sometimes i
can see the patterns(HLC-candles) before looking at the volume ---

-shouldn't be trading on friday's--but easy pips are hard to leave on the table--

okay--
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  • #2,726
  • Aug 14, 2009 10:45pm Aug 14, 2009 10:45pm
First post, I'll dive right in.
First chart:
A: Wide spread down candle on climatic volume closing off its lows with the next bar up-Demand enters here.

B: Key Reversal Bar: candle makes a lower low, opens higher than the previous close, closes higher than the previous candle and closes higher than it opens. More demand is seen here. Volume is still climatic, but it is lower than the previous bar.

C: We have just seen major signs of strength and the next bar is a down bar on volume less than the previous two bars, on a narrow (NR4) range. This is no supply.

D: Not VSA, but this candle engulfs the body of the no supply candle on increasing volume. This happens in the place we would like to see it- the supply/demand delta zone. Or put another way, within the range of previously high volume, we are now seeing little volume.
This means that the activity triggered by trading into this area (to the down side) has now dried up. The path of least resistance is up. Get long.

Second chart shows some of the key areas for Monday. If you were trading late in the day, there's a great entry/add on at the No demand within the Supply/Demand Delta Zone.

I am going to reveal something that has never been revealed: If you place a Fib retracement tool on the low and use the No demand on the upper left as the top, the 50% line is on that Effort to Fall candle. Put simply, it acts like a "measuring" gap. Some would be afraid to enter hear, but those in the know have reason to believe that the move is only half over.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #2,727
  • Aug 14, 2009 11:06pm Aug 14, 2009 11:06pm
My version of the better volume indicator:

Blue: Volume bar is greater than the previous volume bar.

Red: Volume bar is less than or equal to the previous volume bar.

Fuchsia: Volume bar is less than the two previous volume bars. This is key for No demands and tests type bars.

Dark Blue: Climatic action (range*V) highest high value 20 and volume increasing from previous bar.

Dark Red: Climatic action and volume less than or equal to previous bar.

Dark Fuchsia: Climatic action and volume less than the previous two bars.

Yellow: Lowest volume bar in the last 20 bars.

Volume bars will also show the "climatic volume" colors if the volume is greater than or equal to 3 standard deviations of the average volume for the last 30 bars.

Hope this helps.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #2,728
  • Aug 15, 2009 1:10am Aug 15, 2009 1:10am
Quoting Duitman
The documentation that I have been able to find re the Better Volume 1.4 Indy does not cover the blue bars. They are annotated as "Neutral" yet often they are as big or bigger than the green bars (high).

Can anyone explain the meaning of the blue bars?

Thanks.
The BV indicator only compares the current bar to the last "n" number of bars, which is determined by the "LookBack" setting, usually 20 or 30.

For the sake of simplicity, an example would be a climax bar: if there is no bar out of the last 20 which is higher than the current one, then it is labeled a climax bar. Consequently, if another bar comes along that is not greater than that one, even though it may qualify as a climax bar, BV will not show it unless it is beyond the "lookback" setting. (This is actually determined by comparing both the volume and the bar size.)

This same type of comparison is what is used in all the bar types in BV, although the actual logic behind each bar type is slightly different, they all follow the same basic idea. When no comparison qualifies, a blue bar is generated as the default or "neutral" bar.

This logic was used to attempt "relative" comparisons of bar types, this is why there are so many false signals generated in BV. A more accurate comparison can be achieved by increasing the lookback period, but it will reduce the number of signals. Just remember that any bar which does not exceed the threshold for that bar will not be displayed, no matter what the lookback setting is.

This is not intended as a detailed explanation of BV, but a generalized explanation to help answer your question.

As someone has already said, better to learn the different bar types and volume formations by sight and not rely on BV for signals.

Hope this helps clear up any confusion ...

Sincerely,

Chief
  • #2,729
  • Aug 15, 2009 2:31am Aug 15, 2009 2:31am
Here's a look at a really nice set up.
First we get a wide spread up candle on very high volume. Markets do not like up candles on high volume because they could contain hidden selling. We note that the next candle is down. If all the volume on the up candle was buying, how could the next candle be down? Supply (weakness) must have entered here.

Momentum takes us higher, then we see a second wide spread up candle on very high volume with the next bar down. More supply entering the market. Note that the next bar in addition to being down, it is a narrow range bar on increased volume: a squat.
We don't enter here. What we want to see is a narrow range up bar on volume less than the previous two bars: no demand. Two bars later we do get an up candle with volume less than the previous two candles, but the range is not really narrow.

The better entry comes 7 candles later. A narrow (NR4) candle on volume less than the previous two bars closing in the lower portion of its range. This candle also makes a higher high and not a lower low. This is the ideal type of no demand bar.

Note that we are now seeing a low volume candle in the range of a previously high volume candle. To the extent that there was buying on that second wide spread candle, we see no return of the buyers as price trades in this area again. The Smart Money is not interested in higher prices at this time. Two candles later, we see a dark candle that is an effort to fall confirming there has been a change in the supply/demand dynamic.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #2,730
  • Aug 15, 2009 6:22am Aug 15, 2009 6:22am
An excellent first post. Welcome aboard.


Quoting HiddenGap
First post, I'll dive right in.
First chart:
A: Wide spread down candle on climatic volume closing off its lows with the next bar up-Demand enters here.

B: Key Reversal Bar: candle makes a lower low, opens higher than the previous close, closes higher than the previous candle and closes higher than it opens. More demand is seen here. Volume is still climatic, but it is lower than the previous bar.

C: We have just seen major signs of strength and the next bar is a down bar on volume less than the previous two bars, on a narrow (NR4) range....
The trend always ends.
  • #2,731
  • Aug 15, 2009 9:01am Aug 15, 2009 9:01am
Quoting HiddenGap
First post, I'll dive right in.
First chart:
A: Wide spread down candle on climatic volume closing off its lows with the next bar up-Demand enters here.

B: Key Reversal Bar: candle makes a lower low, opens higher than the previous close, closes higher than the previous candle and closes higher than it opens. More demand is seen here. Volume is still climatic, but it is lower than the previous bar.

C: We have just seen major signs of strength and the next bar is a down bar on volume less than the previous two bars, on a narrow (NR4) range. This...
Great posts there, HiddenGap, some stuff to learn there for everyone. Could you elaborate a bit more on the demand/supply delta regions? Is that based on wide range bar open and closes acting as support and resistance? WRBs are on my reading list, but as yet, I haven't checked them off the list.
  • #2,732
  • Aug 15, 2009 11:33am Aug 15, 2009 11:33am
Quoting chief1oar
The BV indicator only compares the current bar to the last "n" number of bars, which is determined by the "LookBack" setting, usually 20 or 30.

For the sake of simplicity, an example would be a climax bar: if there is no bar out of the last 20 which is higher than the current one, then it is labeled a climax bar. Consequently, if another bar comes along that is not greater than that one, even though it may qualify as a climax bar, BV will not show it unless it is beyond the "lookback" setting. (This is actually determined by comparing both...
Thanks Chief. Your explanation is cogent and I appreciate it.

Good Trading.

Lew
  • #2,733
  • Aug 15, 2009 12:14pm Aug 15, 2009 12:14pm
Hello Sir.,
is it possible to get this volume indicator with Your configuration ? Or someone other have Better volume indi with those configuration?

Thank You.

B,
Tom


Quoting HiddenGap
My version of the better volume indicator:

Blue: Volume bar is greater than the previous volume bar.

Red: Volume bar is less than or equal to the previous volume bar.

Fuchsia: Volume bar is less than the two previous volume bars. This is key for No demands and tests type bars.

Dark Blue: Climatic action (range*V) highest high value 20 and volume increasing from previous bar.

Dark Red: Climatic action and volume less than or equal to previous bar.

Dark Fuchsia:...
  • #2,734
  • Aug 15, 2009 10:27pm Aug 15, 2009 10:27pm
Quoting HiddenGap
First post, I'll dive right in.
First chart:
A: Wide spread down candle on climatic volume closing off its lows with the next bar up-Demand enters here.

B: Key Reversal Bar: candle makes a lower low, opens higher than the previous close, closes higher than the previous candle and closes higher than it opens. More demand is seen here. Volume is still climatic, but it is lower than the previous bar.

C: We have just seen major signs of strength and the next bar is a down bar on volume less than the previous two bars, on a narrow (NR4) range. This...
Hello HiddenGap, I wish you my sincere welcome on this great VSA thread. You will certainely like it here a lot as people, who are truly interested to use VSA in their trading, are very much helpful and will certainely appreciate your great VSA skills.

So, in a nutchell, warm welcome to FF and this board

Shreem
  • #2,735
  • Aug 15, 2009 11:31pm Aug 15, 2009 11:31pm
Quoting HiddenGap
Here's a look at a really nice set up.
First we get a wide spread up candle on very high volume. Markets do not like up candles on high volume because they could contain hidden selling. We note that the next candle is down. If all the volume on the up candle was buying, how could the next candle be down? Supply (weakness) must have entered here.

Momentum takes us higher, then we see a second wide spread up candle on very high volume with the next bar down. More supply entering the market. Note that the next bar in addition to being down, it is...

Hello HiddenGap,

Thanks for that excellent post. Your analysis is really spot on and very much instructive. Very clear and well detailled.

Thanks again. That really great that this thread is attracting lots of great VSA traders as yourself or Malcomb14. Those posts are so much useful for others to learn from.

Sincerely

Shreem
  • #2,736
  • Aug 16, 2009 1:10am Aug 16, 2009 1:10am
What do you think about using envelopes around moving averages(like a bollinger) to help determining entry & exit points for scalping? I found it pretty useful - 14 wma, 0.15% derivation - on 5 min chart, only using along VSA principles. I don't want to trick myself to use something that won't be useful in the future.
  • #2,737
  • Aug 16, 2009 2:16am Aug 16, 2009 2:16am
Hi HiddenGap,

very nice posts.

I appreciate Your teaching posts and be ready for questions ;]

Thank You.

Best,
Tom


Quoting HiddenGap
Here's a look at a really nice set up.
First we get a wide spread up candle on very high volume. Markets do not like up candles on high volume because they could contain hidden selling. We note that the next candle is down. If all the volume on the up candle was buying, how could the next candle be down? Supply (weakness) must have entered here.

Momentum takes us higher, then we see a second wide spread up candle on very high volume with the next bar down. More supply entering the market. Note that the next bar in addition to being down, it is...
  • #2,738
  • Aug 16, 2009 3:22am Aug 16, 2009 3:22am
Quoting tfflyer
Hello Sir.,
is it possible to get this volume indicator with Your configuration ? Or someone other have Better volume indi with those configuration?

Thank You.

B,
Tom
I don't have it for Metatrader, but if I could get it for Metatrader that would move me closer to switching over to it. Seems like there are some good programmers here that could easily do it.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #2,739
  • Aug 16, 2009 4:29am Aug 16, 2009 4:29am
Quoting daffy
Great posts there, HiddenGap, some stuff to learn there for everyone. Could you elaborate a bit more on the demand/supply delta regions? Is that based on wide range bar open and closes acting as support and resistance? WRBs are on my reading list, but as yet, I haven't checked them off the list.
Thank you for the kind words.

There is so much that can be said here, I may have to use more than one post. First, I do not use the term WRBs. I use Expansion Body 4s (EB4) and Expansion Body 7 (EB7).

Which brings me to the first idea to cover: Volatility.

Many have heard or seen the terms Narrow Range 4 (NR4), Narrow Range 7 (NR7), Wide Range 4 (WR4) and Wide Range (WR7). These terms are ways of talking about price volatility. To these I add EB4 and EB7. EB7 refers to the width (range) of the open to close rather than the entire width or range (high to low) of the price candle/bar.

The basic idea is that volatility ebbs and flows. Periods of high volatility follow periods of low volatility and vice versa. That is why some traders look for NR4 or NR7 bars and will trade the breakout of that bar expecting to profit from the volatility increase. Conversely, some traders would look to exit on WR7s expecting the volatility (price movement) to lessen.

What does this have to do with VSA?

Well, the ideal no demand or test bars will be NR4s or NR7s with volume less than the previous two candles. Yes, there is a correlation between volatility and volume.

Let's move back to the EB7. Many contend that the distance between the open and the close most accurately displays the actions of the Smart Money. Hence, leaving volume aside for a moment, the wider the range between open and close (the body) the more active are the players that matter most: the Smart Money. Well another way to see this activity is to see it as volatility (price movement).

An EB7 creates a "pocket" of high volatility, measured from the open to the close. We would expect that as price returns to this pocket of high volatility, volatility would decrease. This is a refinement of the low volume signal within the range of a high volume bar. The range has been refined from high to low to mean only the open to close. And volume (for now) has been replaced with volatility. Ultimately we combine both volume and volatility of course. So, we are looking to trade the breakout of low volatility that occurs within a once high volatility area. This is seen on the chart were we have a EB7 whitch is an Effort to Fall followed by sideways movement in price. Price then moves back into the range of the body of our EB7 candle and we see a NR4 bar closing off its highs on volume less than the previous two candles: No Demand. This is our "high probability" trade set up area.

Let's bring some more VSA into the equation. Notice that this EB7 (yellow rectangle) has increasing volume, but the volume is not that high. We know in general that bearish volume is increasing volume on down candles and decreasing volume on up candles. We also note that the close to open range almost encompass the entire candle's range. Plus we note that the midpoint of the candle is lower than the low of the previous candle. All this tells us that this is a bearish bar. Supply enters here. However there was some buying as the next bar is up and prices start to drift sideways.

Now skip ahead to the no demand bar at the top of our zone. As price has moved into an area where there was increasing activity, we now see activity decreasing. If there were a lot of buyers on that Effort to Fall bar, a return into this area of the price chart has not brought them back or brought new ones in. Therefore there has been a change in the Supply/Demand dynamic in the market as evidenced by the candles within this range. The Smart money that were actually selling on the Effort to Fall are still bearish and therefore are not interested in higher prices, so we see little activity on an up bar. Which we call no demand.

We can look for high probability set ups within this area until it is closed. A close both above and below with price action thru it would close the zone. Some zones are special and do not close, for example the zone with the black and green lines is not closed even though price has closed on both sides of it. This zone was created on Tuesday at 14:15 hrs EST.............
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #2,740
  • Aug 16, 2009 4:43am Aug 16, 2009 4:43am
Quoting HiddenGap
First post, I'll dive right in.
First chart:

Second chart shows some of the key areas for Monday. If you were trading late in the day, there's a great entry/add on at the No demand within the Supply/Demand Delta Zone.
What's a "supply demand delta zone"?
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