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Trade Using VSA (Volume Spread Analysis)

  • #3,101
  • Aug 28, 2009 1:09am Aug 28, 2009 1:09am
I made a killing shorting Solar panels using VSA:

http://graphics8.nytimes.com/images/...z-webSOLAR.jpg

(Couldn't resist some goofiness)

I am still very busy on the trainer and also dealing with our wonderful rainy season so I will remain a bit sparse here and in the chat for a short while longer... I try to find some time each day to catch up here and really enjoy the great posts from everyone.

I hope to get back to organizing the thread again soon too. I am sure I missed some stuff so if you think anything needs to be on the resources section let me know via pm.

I am going to compile all of Hidden Gap's brilliant posts into a pdf, and providing it's ok with him will put that up as well and a collection of great articles by everyones favorite vsa guy, Todd Kreuger.

Hope you are all trading well.

See you in the chat.
The trend always ends.
  • #3,102
  • Aug 28, 2009 1:15am Aug 28, 2009 1:15am
  •  Yuppie
  • Joined Jun 2007 | Status: ̿ ̿ ̿̿'̿̿\̵͇̿̿\=(•̪●)=/̵͇̿̿/'̿̿ ̿ | 2,727 Posts
Quoting HiddenGap
Don't sweat it. The market will be here tomorrow. There will always be moves that are missed.

A word of caution:

My prior post was not so much about a pattern as an understanding of supply and demand principles. We saw three consecutive down candles each with volume less than the previous two candles. In other words, as price was falling, volume was decreasing at an increasing rate. This shows not real enthusiasm by the Smart Money for lower prices.
On top of that, we were in a Supply/Demand Delta Zone. This brings together two things: 1. seeing...

I missed this also. Had called it a day by then.

However, after European/early-US sessions I stop watching currencies.

This is what happened on ES (a good proxy for EUR/USD most of the time).

Don't have time to comment on it - but a picture is better than nothing -


Magnus
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  • #3,103
  • Aug 28, 2009 2:43am Aug 28, 2009 2:43am
Hi Guys,

I am new in this VSA system what I see there are 2 grp of people buying at 1.6265 and selling at 1.6310. So if to trade is it better to trade of out of this range or looking at bigger time frame to decide?? I saw the war zone using 1 mins tf up to 15 mins tf.
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  • #3,104
  • Aug 28, 2009 2:57am Aug 28, 2009 2:57am
Yuppie; tu eres el hombre.

translation: You the man .
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,105
  • Aug 28, 2009 3:48am Aug 28, 2009 3:48am
Definitely not VSA, but here's a link to a handy firefox addon that lets me view charts and the associated analysis a little easier.

https://addons.mozilla.org/en-US/firefox/addon/4287

Before I found this, I was constantly flicking through two windows or tabs so that I read a bit of analysis, flicked to the chart, back to the analysis, back to the chart ...

And here's an image of what my browser looks like having split my browser pane to view an image in one half, and the analysis in the other half.
Attached Image (click to enlarge)
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  • #3,106
  • Aug 28, 2009 3:56am Aug 28, 2009 3:56am
Quoting daffy
Definitely not VSA, but here's a link to a handy firefox addon that lets me view charts and the associated analysis a little easier.

https://addons.mozilla.org/en-US/firefox/addon/4287

Before I found this, I was constantly flicking through two windows or tabs so that I read a bit of analysis, flicked to the chart, back to the analysis, back to the chart ...

And here's an image of what my browser looks like having split my browser pane to view an image in one half, and the analysis in the other half.
Thx for this. Very useful. Will save a lot of hassle.
  • #3,107
  • Aug 28, 2009 4:08am Aug 28, 2009 4:08am
hi i just wanted show you some one nice trade that i notice.

1. Before news, Price are mark up on next bars(news) price suddenly droped down

2. Down bar+high volume potential buying.next bar is up that confirm.
3. No Supply bar.
4. No Supply bar.
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  • #3,108
  • Aug 28, 2009 4:13am Aug 28, 2009 4:13am
  •  Yuppie
  • Joined Jun 2007 | Status: ̿ ̿ ̿̿'̿̿\̵͇̿̿\=(•̪●)=/̵͇̿̿/'̿̿ ̿ | 2,727 Posts
Quoting HiddenGap
Yuppie; tu eres el hombre.

translation: You the man .

Cheers HG.

Trying to get to grips with the whole delta-zone thing.


Magnus
  • #3,109
  • Aug 28, 2009 5:03am Aug 28, 2009 5:03am
This trade was made live in chat.

First we note the wide spread down candle. Although it closed on its lows, the next candle is up. Some demand (buying) entered on this candle. Volume is down from the previous bar, but it is still high.

Also note that the purple and pink lines are the lower lines of a larger Supply/Demand Delta Zone created by an expansion body from yesterday's large move.

The set-up

A: Narrow (NR7) range down candle closing in the upper 1/3 of its range, but the volume is high. This is a failed test. Price can rise from a high volume test, but the rise is usually muted and likely to come back down an test again.

B: Tricky candle here. This candle makes a lower low on volume less than the previous two candles, closes down and closes in the upper 1/3 of its range. Could be another test. This makes sense as the previous candle (test) failed due to high volume. Some aggressive traders might enter on a breach of this candle's high.

C: Increasing range on a down candle with volume less than the previous two candles. This is no selling pressure. Two things of note here. First, it closes lower than the two previous tests candles. Second, it does not make a lower low. It does 1 & 2 on lower volume. This tells us that the BBs are not interested in lower prices at this time.
The market starts its charge upward (at this point without me).

D: Gaps are filled. This candle fills the gap. It is a down candle on volume less than the previous two candles and closes in the middle of its range. Both the volume and the close are bullish signs. Note that the volume on D is lower than the volume on C. Down candles are coming on decreasing volume at this point.

E: This candle breaks the down volume trend. It is a wide spread candle on increasing volume with the close in the middle of its range. VSA teaches us that high volume candles closing in the middle of their range and down are signs of strength. Notice the lower low. Support (demand) came in here and pushed price back into the middle of the range.

The herd sees the lower close on increasing volume and thinks selling. VSAers know better.

F: Back to low volume down candles. This candle does close near its lows but again the volume is low. Also note that the range narrows and it does not make a lower low than the previous candle. There is a correlation between volume and range and here both show little signs of Smart Money enthusiasm for lower prices.

Witness that price had re-entered the Supply/Demand Delta Zone and is now just barely peeking back out. Ideally, our test candle would be completely inside the zone. We don't get that.

G: What we do get is a narrow range down candle that closes equal to its open on volume less than the previous two bars that makes a lower low and not a higher high. This is a test. Note that the high of the candle is within the zone. Note also that the low, while lower than the previous candle, is no where near the low of the high volume down candle at E.
This is it: the price action we want to see, occurring pretty much where we want to see it. The first test at A failed. Price has moved up, but can only go so high without a re-test. Price did not need to fall all the way back down into the area of A to do this, however.

It "dipped" its toe just out of the support area and looked for sellers. None were found. The green light for higher prices was given.
Enter on next candle with a break of the high of our test candle.

Our target price is the Supply/Demand Delta Zone above us. Looking to our left, we can see the expansion body Effort to Fall that created this zone. We can also see how the prior down move came out of this zone.
Simply, it looks like a reasonable target area. Price shoots up and the trade is exited near the top of the Zone.
Attached Image (click to enlarge)
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,110
  • Aug 28, 2009 5:04am Aug 28, 2009 5:04am
Quoting Shamus
,,,,,,,,
I am going to compile all of Hidden Gap's brilliant posts into a pdf, and providing it's ok with him will put that up as well ....
agree.
Appreciate HiddenGap's posts/insights. Keep it up Sir




Quoting daffy
Definitely not VSA, but here's a link to a handy firefox addon that lets me view charts and the associated analysis a little easier....
FINALLY!!! woohooo......
Thanks for sharing
  • #3,111
  • Aug 28, 2009 5:17am Aug 28, 2009 5:17am
Quoting HiddenGap
This trade was made live in chat.

First we note the wide spread down candle. Although it closed on its lows, the next candle is up. Some demand (buying) entered on this candle. Volume is down from the previous bar, but it is still high.

Also note that the purple and pink lines are the lower lines of a larger Supply/Demand Delta Zone created by an expansion body from yesterday's large move.

The set-up

A: Narrow (NR7) range down candle closing in the upper 1/3 of its range, but the volume is high. This is a failed test. Price can rise...

Hi HiddenGap,

Thks for the post and explaination it make easier to understand VSA.

Cheers
  • #3,112
  • Aug 28, 2009 5:45am Aug 28, 2009 5:45am
Quoting TwoBuckChuck
IMHO, you want a feed that has the least amount of conflict of interest. Esignal is one of those feeds. They are not a broker. Their job is to report price on your screen.

An ECN feed is the only way to go. Bucket shops filter the feed from the interbank market into their own system. They can easily hide ticks and simulate ticks. The last thing you want when entering on a 5m no demand/supply bar.

FXCM has a good feed. I see minor differences to esignal.

I have also found Dukascopy to be a very good feed. It's not an mt4 broker though.

That...

"I have also found Dukascopy to be a very good feed. It's not an mt4 broker though."

I think you can have Dukascopy on MT4 via www.sparenfx.com

e.g. Symbol "EURUSDk"
/ ... clarifying decisions ... /
  • #3,113
  • Aug 28, 2009 7:57am Aug 28, 2009 7:57am
Quoting daffy
Definitely not VSA, but here's a link to a handy firefox addon that lets me view charts and the associated analysis a little easier.

https://addons.mozilla.org/en-US/firefox/addon/4287

Before I found this, I was constantly flicking through two windows or tabs so that I read a bit of analysis, flicked to the chart, back to the analysis, back to the chart ...

And here's an image of what my browser looks like having split my browser pane to view an image in one half, and the analysis in the other half.
Cool! Thanks
  • #3,114
  • Aug 28, 2009 10:26am Aug 28, 2009 10:26am
  •  Yuppie
  • Joined Jun 2007 | Status: ̿ ̿ ̿̿'̿̿\̵͇̿̿\=(•̪●)=/̵͇̿̿/'̿̿ ̿ | 2,727 Posts
Short trade on ES.

5-min.


I refrained from annotating this too much. So far today on S&P there has been great VSA action - I don't mean in terms of profitability, but learning opportunities.


Magnus
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  • #3,115
  • Aug 28, 2009 10:38am Aug 28, 2009 10:38am
Here is one of my favorite things to look for VSA wise. Decreasing volume of a downmove is a sign of strength. An aggressive entry (which I do) is to put your order in on the line of Support. Otherwise you can wait for further confirmation

C
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Boxing clever since 76.
  • #3,116
  • Aug 28, 2009 2:34pm Aug 28, 2009 2:34pm
Quoting daffy
Definitely not VSA, but here's a link to a handy firefox addon that lets me view charts and the associated analysis a little easier.

https://addons.mozilla.org/en-US/firefox/addon/4287

Before I found this, I was constantly flicking through two windows or tabs so that I read a bit of analysis, flicked to the chart, back to the analysis, back to the chart ...

And here's an image of what my browser looks like having split my browser pane to view an image in one half, and the analysis in the other half.

Here is another addon that I find very useful It allows you to essentially compile your own library of research material from the vast amount of info available online. In particular you can string together related but not neccessarily contiguous posts from any forum thread, rename the collection then store it for easy reference later.

https://addons.mozilla.org/en-US/firefox/addon/8186
  • #3,117
  • Aug 28, 2009 2:49pm Aug 28, 2009 2:49pm
Quoting theorem
Here is another addon that I find very useful It allows you to essentially compile your own library of research material from the vast amount of info available online. In particular you can string together related but not neccessarily contiguous posts from any forum thread, rename the collection then store it for easy reference later.

https://addons.mozilla.org/en-US/firefox/addon/8186
This may be more suitable for larger collections

https://addons.mozilla.org/en-US/firefox/addon/3504
  • #3,118
  • Aug 28, 2009 4:46pm Aug 28, 2009 4:46pm
Hi,
Has anyone got or could someone please program an indicator for MT4 that has horizontal line marking the high and another line for the low for a particular look back period, and vertical lines marking the look back period of between 5pm - 3am EST. Even better if the look back periods lines could be variable.

Thanks for any help offered.
Denis
  • #3,119
  • Edited 10:38pm Aug 28, 2009 7:07pm | Edited 10:38pm
I just want to say thanks to all of you who post here about vsa entries......... You know who you are but here are a few names.... Malcome, shramus, hiddengap, twobuckchuck, yuppie, supremechaos, copi88, adriann, and a hole lot a folks i cant even recall... I have read every post on this thread. I am now spoting trades and have the confidence to take the trades that i have been letting pass by. I am more profitable than i have ever been in trading. I would say it is easy but the truth is that you have to put your time in... Once you do you will begin to notice the setups over and over.. Not all of them work out but the percentage is way higher than any other method i ever looked at. You name it i have tried it... Vsa compliments and is the back bone for anyone looking to in prove their trading. It works in all types of markets and keeps you out of trouble areas that can blow out your account because you are unable to see back ground which allows you to find high probably trades....... But enough....

i just want to simply say!!!!

thank you!!!!

d-ramon
  • #3,120
  • Aug 28, 2009 7:10pm Aug 28, 2009 7:10pm
Quoting denis1
Hi,
Has anyone got or could someone please program an indicator for MT4 that has horizontal line marking the high and another line for the low for a particular look back period, and vertical lines marking the look back period of between 5pm - 3am EST. Even better if the look back periods lines could be variable.

Thanks for any help offered.
Denis
TRY THIS ONE
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