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Trade Using VSA (Volume Spread Analysis)

  • #2,861
  • Aug 18, 2009 9:13pm Aug 18, 2009 9:13pm
Quoting HiddenGap
Here's a chart of the Euro (5 min).

Just wanted to compare and contrast two candles.

A: Narrow range up bar on volume less than the previous two candles. The close is off of the high, which shows weakness. But notice the low. It is lower than the previous candle and the close is up from there. Support enters the market here causing the candle to move off its lows.
The next bar is an Up Thrust, which goes to confirm the overall weakness in the market.

B: In my opinion, this is the best place to take a short. We see a narrow (NR7) candle closing...

Awesome. Learning every time.
"If it bleeds ... we can kill it"
  • #2,862
  • Aug 18, 2009 9:16pm Aug 18, 2009 9:16pm
Quoting chalk54
First of all, thanks for being gutsy enough to allow criticism and inputs, not to mention the fact that you are posting situations at the right edge of the charts. I think that VSA, as tom puts it is most predictive on higher time frames eg weekly. Earlier on I mention the selling climax on the cable chart but got no response from anyone.

I am most comfortable with the 4hr tf as I have found it to be more predictive. There is always a destination of a given currency and on the euro right now, I see it heading higher to approx 1.426/90. I have...

Cheers dude, appreciate that. View duly noted. Ive been watching it on the 4hr chart as well... right now im seeing an effort to rise on low volume (no demand) which comes off the daily rising trendl,ine that has just been nroken down.

Next bar (most recent down bar) is a reversal with a sharp rise in volume... i was thinking this says that theres a good bit of supply coming in... would be keen to hear where im going wrong with that line of reasoning...

Cheers mate.
MM
"If it bleeds ... we can kill it"
  • #2,863
  • Aug 18, 2009 9:21pm Aug 18, 2009 9:21pm
Quoting HiddenGap
I was going to do a "bar by bar" analysis on the first chart and then show the result on the second. I' m feeling a little tired and don't know if it is even wanted. Well, here's the pics anyway.

The more the better mate.
"If it bleeds ... we can kill it"
  • #2,864
  • Edited 9:54pm Aug 18, 2009 9:42pm | Edited 9:54pm
Quoting Ari Gold
Cheers dude, appreciate that. View duly noted. Ive been watching it on the 4hr chart as well... right now im seeing an effort to rise on low volume (no demand) which comes off the daily rising trendl,ine that has just been nroken down.

Next bar (most recent down bar) is a reversal with a sharp rise in volume... i was thinking this says that theres a good bit of supply coming in... would be keen to hear where im going wrong with that line of reasoning...

Cheers mate.
MM
Yes, if you notice, the previous bar had low volume followed by a down bar with low volume. But before that, there is a high volume bar that broke the July high. If that much effort was needed to break through, shouldn't there be the same to revers it? I think it is a trap to make us believe it is going back down.
They say the larger TFs contain more information, therefore the more info, the better the decision based on it. Here is another chart that might say more than words. U can see the battle-grounds painted in Aquamarine. Imagine trading these in smaller TFs. At the end it will make an up and down-thrusts to shake-out before it continues south.
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  • #2,865
  • Aug 18, 2009 10:05pm Aug 18, 2009 10:05pm
Quoting chalk54
They say the larger TFs contain more information, therefore the more info, the better the decision based on it. Here is another chart that might say more than words. U can see the battle-grounds painted in Aquamarine. Imagine trading these in smaller TFs. At the end it will make an up and down-thrusts to shake-out before it continues south.

Thanks bro appreciate the chart. So what i am getting from that is that you are expecting a squeeze on the upside before breaking down... in a similar fashion to the way previous trading ranges have been busted?

UPDATE:

Sorry just saw the extra text you added. Cheers.... I see what you're saying.
"If it bleeds ... we can kill it"
  • #2,866
  • Aug 18, 2009 10:07pm Aug 18, 2009 10:07pm
Quoting malcolmb14
fed up with all the bullshiters on forex factory .. been posting less this week
Hey guys I have been learning about forex for 5 yrs now. I have a pasion to learn and understand market movement so one day i can go from part time trader to a full time trader. I have spent lots of money on education. Most of which was crap!!! I have read every post in this tread and I am dedicating my time to learning VAS!!! All charts that are posted are helpful and i wish to learn from you guys who know what you are doing............ I have read Master the Markets and now am working on chart time to put all of what I have learned to work. If there is a chat room or privit room that proper education on VSA is being taught I would love to join and then one day contribute to teaching others. If one is started please extend an invite I would love to attend. Also outside of the book Master the Markets are there any other materials that outline true VSA setups that I can study?

Thanks to all of you that contribute........YOU KNOW WHO U ARE!!!!!

SHAMUS, MALCOLB14, TAOMQ14, HIDDENGAP and all those who are no longer here............ THANKS

D-ramon
  • #2,867
  • Aug 18, 2009 10:30pm Aug 18, 2009 10:30pm
"(chalk54)I have enclsed a chart and the blue lines are areas of high volume of the weeks in respect. I combine these with vsa 'climaxes' to find reversal points.

I may be wrong, but what is trading without being wrong... and open to suggestions.

Cheers and hunt 'em pips down.[/quote]"


chalk54

?...... I also trade higher time frames.. how are you coming up with your high volume areas on your charts?

Thanks in advance

D-ramon
  • #2,868
  • Aug 18, 2009 10:39pm Aug 18, 2009 10:39pm
Here she goes...

Hitting that lower trendline at pace... strong vol backing it up so i would be very surprised if we dont get a textbook break lower with a retest and then on again.

Next logical level is 1.4060. See how she behaves around there...

UPDATE:

1.4090 is another pivot zone that could hold things up a little... but should be too much trouble if it can punch through the figure.
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"If it bleeds ... we can kill it"
  • #2,869
  • Aug 19, 2009 2:11am Aug 19, 2009 2:11am
I would like also join the room of Mal, but i think, there is no need to make another 24/7 chat room - we have one already as we know.

Mal could open some room for 1 h for a day or 30 min.. or something like that. Just my opinion..

Thanks

Waiting

Best,
Tom



Quoting Ari Gold
Definately keen for something serious.

I cant say I have the trading experience that you guys do but I do trade for a living. Need to put up P/L month in month out to keep my job so i dont take it lightly.

Only thing is I couldnt honelstly say that io would add any value to a room in the presence of more experienced and sharper traders like yourselves. I would be in the background observing and coming out with the occasional question. Again, i make money, just want to make more.

MM
  • #2,870
  • Aug 19, 2009 2:16am Aug 19, 2009 2:16am
Sold the no demand candle post news, exited a little early perhaps on bounce from DS1 +30.
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  • #2,871
  • Aug 19, 2009 2:17am Aug 19, 2009 2:17am
Quoting tfflyer
I would like also join the room of Mal, but i think, there is no need to make another 24/7 chat room - we have one already as we know.

Mal could open some room for 1 h for a day or 30 min.. or something like that. Just my opinion..

Thanks

Waiting

Best,
Tom
No, there really isnt a NEED... its definately more of a WANT.

"If it bleeds ... we can kill it"
  • #2,872
  • Aug 19, 2009 2:19am Aug 19, 2009 2:19am
Quoting malcolmb14
doomed on long .. do not get married to it ..lol

today was up due to us markets up ...Home depot saved the day

high volume on the 3 hour candles at 157 loads sellers and very fast drop in asia ... much faster than up move. They are more willing to sell than buy.
Another classic read.
  • #2,873
  • Aug 19, 2009 2:58am Aug 19, 2009 2:58am
This is being discussed currently in chat:

Test: an ideal test will be a narrow range candle that closes lower and in its middle or high on volume less than the previous two candles. It is confirmed with a higher close in one of the next two candles. Ideally, a test will make a lower low than the previous candle. As the BBs are probing lower to find supply (Sellers). They can however, be inside candles: not making either a higher high or lower low.

A: This is a test. It is a narrow range bar (NR7). It does not close near the high of its range, however. It also does not make a lower low.

B: Up bar on increased volume closing off the highs and in the lower portion of its range. The up close confirms the previous bar as a test. The increased volume with a close in the lower portion, however, shows weakness.

C: Wide spread candle that closes below the low of the test bar. This is NO RESULT FROM A TEST. There are two way a test can fail:

1. no up close in the next one or two bars
2. Volume can be too high.

What we see here is a positive test, but no result. Once we see the up candle we know the test was good. Once we see the effort to fall close lower than the low of the test, we know we are not getting the results we should from a successful test.

We bring a little Japanese Candlestick analysis in and note that the VSA effort to fall candle is also engulfing the test candle and the up candle. Serious weakness.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #2,874
  • Aug 19, 2009 3:08am Aug 19, 2009 3:08am
Solid post. Thanks mate.
"If it bleeds ... we can kill it"
  • #2,875
  • Aug 19, 2009 3:50am Aug 19, 2009 3:50am
Can some programmers make it for MT4 ?



b,
Tom

Quoting HiddenGap
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.
  • #2,876
  • Aug 19, 2009 5:30am Aug 19, 2009 5:30am
Quoting tfflyer
Can some programmers make it for MT4 ?



b,
Tom
what do u need to code?
  • #2,877
  • Aug 19, 2009 5:32am Aug 19, 2009 5:32am
Based on huge vol 15 min very close to support 153.45 I took a small buy here at 75.
Price does what price wants , I just need to be prepared.
  • #2,878
  • Aug 19, 2009 5:43am Aug 19, 2009 5:43am
Quoting PJkiller
Based on huge vol 15 min very close to support 153.45 I took a small buy here at 75.
Out of 3/4 with 26 pips 1/4 left at + 5sl
Price does what price wants , I just need to be prepared.
  • #2,879
  • Aug 19, 2009 5:53am Aug 19, 2009 5:53am
Quoting Vantage
Another classic read.

it seems they are marking the market up under any news now. Was fairly easy to see on GJ for a 400 pip drop there overnight

symmetry says 151.70 is target , but seems to be some buying going on in 153.50 zone.

If ES break 975 today then gj may well see that 151.70 , after all that is only 230 pips away now . 600 pip move less than 24 hrs
Blogging daily now at www.volume.zone
  • #2,880
  • Aug 19, 2009 5:56am Aug 19, 2009 5:56am
i see where you getting here.

but i'm confused. maybe someone can decode this? is this a reversal point?
cos i see a test. but the next bar is an upthrust.
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