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Trade Using VSA (Volume Spread Analysis)

  • #3,141
  • Aug 30, 2009 2:37pm Aug 30, 2009 2:37pm
Quoting chief1oar
Hope everyone is having a great weekend!

As long as everyone is posting charts, I thought I would post this one and see if my analysis is correct...

Thanks for the GREAT charts everyone, enjoy !!


Chief
  • #3,142
  • Edited 3:15pm Aug 30, 2009 3:03pm | Edited 3:15pm
Quoting malcolmb14
....40 pips versus 150 pip .... who was right ans who was wrong ? reaction to action . The weakness on this one was simple to see . I played gj off 153.50
Volume Spread Analysis is a methodology, it is not an indoctrination into some cookie cutter approach to the markets.

Individual personalities and trading styles differ with respect to how VSA is used.

Some traders are happy to hit singles and doubles, while others only want to hit homeruns.

40 pips versus 150 means nothing.
Let's assume this was the Euro/USD:
40 pips at 4 lots (mini)= (40X1.00)X4= 160.00
150 pips at 1 lot )(mini) = 150.00
The 40 pip trade makes more money.

The Point: If you want to make more money, you can increase the number of lots traded. You don't simply have to increase the number of pips per trade.

Your 150 pip trade is awesome, but it can only be viewed in a vacuum. Note every trader wants to hold positions as long as you. Not every trader is able to be in front of the screen as long as you.

Some may share your analysis methodology, but that does not mean they posses your desires and personality traits.

For you, one 150 pip trade is a success.
For others, 5 trades at 30 pips each is a success.

Keeping the baseball analogy going, teams are made up of both homerun hitters and hitters that do not hit many home runs, but constantly get on base.

What you add here is much appreciated and valued. But that does not mean everyone will be targeting the same amount of pips as you.

More traders will fail trying to copy that, than will succeed trying to copy
your analysis itself.

So yes, you are both right.

And as I said, I agree that the trade was risky at that point. It is nevertheless valid for his trading plan. Even if it was not for yours or mine.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,143
  • Aug 30, 2009 3:26pm Aug 30, 2009 3:26pm
Quoting HiddenGap
Volume Spread Analysis is a methodology, it is not an indoctrination into some cookie cutter approach to the markets.

Individual personalities and trading styles differ with respect to how VSA is used.

Some traders are happy to hit singles and doubles, while others only want to hit homeruns.

40 pips versus 150 means nothing.
Let's assume this was the Euro/USD:
40 pips at 4 lots (mini)= (40X1.00)X4= 160.00
150 pips at 1 lot )(mini) = 150.00
The 40 pip trade makes more money.

[b]The Point: If you want to make more money, you can increase the...
check the 15 min ej chart ..... was there really strength after 2 upthrusts both on highest volume of last 12 hours before the trade was taken ? that is the very simple question here ... or was ther very clear distribution thru the Asian and US session

I was in fact long gj at 152 in Asia , closed at 153 after news spike , but my posted target was 153.50 , why did I lcose , cause there was NO buying pressure in the market at all.

VSA is all baout background i have stated this time and time again .

Tom Williams himself in master the market book mentions do not go short when there is stopping volume close by on the left of the chart. The same argument goes for longs when you have seen upthrusts on highest volume in last 12 hours

btw what ever trade I do and how ever many pips I make is always done with 2.5 % risk .... so 40 pip is 40 pip x lot size and 150 pip is 150 pip x same lot size

you get me wrong I was merely pointing out what Daffy had missed...... and as a scalp it was a good trade , the test of 134.40 was a valid reason to go long , but ignoring the massive volume on the upthrust just to left of that trade on the chart could be like jumping in front of a speeding train
Blogging daily now at www.volume.zone
  • #3,144
  • Aug 30, 2009 3:27pm Aug 30, 2009 3:27pm
The best thing is to always trade with the pros...
there's nothing wrong with having a little fun (MM included)but i think what mal is getting at is at some point you will bang your
head against the rocks.....upthrust last 12 hours can't be F** with..lol
Attached Image
  • #3,145
  • Aug 30, 2009 3:31pm Aug 30, 2009 3:31pm
Quoting chief1oar
Hope everyone is having a great weekend!

As long as everyone is posting charts, I thought I would post this one and see if my analysis is correct...

Thanks for the GREAT charts everyone, enjoy !!


Chief
rofl
  • #3,146
  • Aug 30, 2009 3:31pm Aug 30, 2009 3:31pm
Quote:
Originally Posted by malcolmb14 http://www.forexfactory.com/images/buttons/viewpost.gif
the long was high risk IMHO .....

the price was showing weakness entire move thru asia and euro session

you were lucky on the upthrust before drop

I stalked this for drop in us session as weakness was simple to see .. had same pattern gj
Attachment 297836


Quoting daffy
Different trading styles

I was banking on the push through supply (the first circled candle) to hold for a move a bit further north. My actual entry, (and I apologise for not making it clear in my initial post), was after the upthrust. We saw weakness, but that weakness was immediately tested, which indicates strength. I would not have considered a short until we got closer to 135.00.
Thanks guys for posting these. Not often we get to see the same trade through two different trading styles.

Very enlightening and helpful to many.

Great thread ....
  • #3,147
  • Aug 30, 2009 3:36pm Aug 30, 2009 3:36pm
Quoting taomql4
The best thing is to always trade with the pros...
there's nothing wrong with having a little fun (MM included)but i think what mal is getting at is at some point you will bang your
head against the rocks.....upthrust last 12 hours can't be F** with..lol
in a nutshell that is what I was trying to say..lol
Blogging daily now at www.volume.zone
  • #3,148
  • Aug 30, 2009 6:56pm Aug 30, 2009 6:56pm
Quoting chief1oar
Hope everyone is having a great weekend!

As long as everyone is posting charts, I thought I would post this one and see if my analysis is correct...

Thanks for the GREAT charts everyone, enjoy !!


Chief

Friggin' Hilarious! Made me laugh big time.
  • #3,149
  • Aug 30, 2009 7:15pm Aug 30, 2009 7:15pm
Quoting malcolmb14
in a nutshell that is what I was trying to say..lol
Even better,
as you can see i have a lot of time to kill...lol
Attached Image (click to enlarge)
Click to Enlarge Name: geppy.gif Size: 44 KB
  • #3,150
  • Edited 1:33am Aug 31, 2009 1:06am | Edited 1:33am
Here is another version of Hidden Gap's indicator for those who are interested.
If some of the math wiz's would check the standard deviation calcs for errors, I would appreciate it very much. If you find an error please PM me so we don't clutter up the thread and I will get it fixed ASAP.

I tried to get it as close to HG's specs as possible, changes are noted below and on the attached pic.
__________________________________________________________
"Hi Chief;

Here's the code for my better better volume indy.

Basic outline:
1. Blue bars= volume greater than the previous bar. Royal Blue
2. Red bars= volume less than or equal to the previous bar. Red
3. Fuchia bars= volume less than the two previous bars. Pink
4. Dark Blue bars= volume is climatic (highest volume x range for the last 20 bars) and greater than the previous bar. Dark Blue
5. Dark Red bars= volume is climatic and less than or equal to the previous
6. Dark Fuchia bars= volume is climatic and less than the previous two bars. Magenta (will not show when "Display_StdDevLine = true")
7. Yellow bars= volume is extremely low (lowest volume bar in last 20 bars). Yellow

(*Standard deviation of volume for the last 30 bars, it is painted with the appropriate climax volume color. So a bar with greater volume than the previous bar and a greater than the moving average plus 2.75 the standard deviation of volume over 30, would be dark blue.)

Std_Deviation_Period is defaulted to 30, may be changed in properties window

StdDeviation_Factor is defaulted to 2.0, may be changed in properties window

_______________________________________________________________


Pretty much self explanatory..

The .mq4 file is the source code and the .ex4 file is the compiled code for those who don't want to go thru the compilation.

Hope this helps someone...
Cheers

Chief
Attached Image (click to enlarge)
Click to Enlarge Name: Hidden_Gap_Properties.png Size: 84 KB
Attached File(s)
File Type: mq4 HiddenGap Volume Indicator.mq4   19 KB | 2,978 downloads
File Type: ex4 HiddenGap Volume Indicator.ex4   17 KB | 1,910 downloads
  • #3,151
  • Aug 31, 2009 5:30am Aug 31, 2009 5:30am
Quoting HiddenGap
D-ramon;

You can send my share of the profits via paypal to......

Just kidding.

I would like to echo your sentiment. There are a lot great posters here. Thanks for all of their insights.

It's true what they say, "When you 'teach', you learn twice". My posts are as much for me as they are for everyone else. But I am truly happy that others can get something out of them.


p.s. Will you still love us if things go bad next week?

I''ll send you a couple of bucks in a mounth when I hit the million dollar mark!!!! lol

for real though....

but this week I am up already so things are still going well!!

I have been trading for 5 yrs or so, so i dont think i am going to have anymore bad weeks..


D-ramon

And I will be getting your info to send you some cash in a couple of months... lol
  • #3,152
  • Aug 31, 2009 6:22am Aug 31, 2009 6:22am
D-ramon - i am sure, losing weeks can be for everyone..


Best,
Tom
  • #3,153
  • Aug 31, 2009 7:10am Aug 31, 2009 7:10am
Quoting chief1oar
Here is another version of Hidden Gap's indicator for those who are interested.
If some of the math wiz's would check the standard deviation calcs for errors, I would appreciate it very much. If you find an error please PM me so we don't clutter up the thread and I will get it fixed ASAP.

I tried to get it as close to HG's specs as possible, changes are noted below and on the attached pic.

Pretty much self explanatory..

The .mq4 file is the source code and the .ex4 [color=black]file...

Sweet. I love it.
Thanks, Chief.

Also, thanks Malcolm and HiddenGap for all your posts. They have been a big time help to me and to everyone.
  • #3,154
  • Aug 31, 2009 2:29pm Aug 31, 2009 2:29pm
Todays GBP/USD chart.. Just clean chart with question here.

GBP/USD went up but i dont see any signs of strenght.. There was some volume climax, but that was on up bars..

Any comments appreciated....

Thank You.

Best,
Tom
Attached Image (click to enlarge)
Click to Enlarge Name: gu.gif Size: 24 KB
  • #3,155
  • Aug 31, 2009 2:53pm Aug 31, 2009 2:53pm
Quoting tfflyer
Todays GBP/USD chart.. Just clean chart with question here.

GBP/USD went up but i dont see any signs of strenght.. There was some volume climax, but that was on up bars..

Any comments appreciated....

Thank You.

Best,
Tom
this is an easy one Tom....get ready to sell hell out of it in London...1.6100 target. The low volume today was used as mark up . London boys not around

If someone can explain why oil dumps 4 % and usd loses ground against gbp i will be all ears ...lol
Blogging daily now at www.volume.zone
  • #3,156
  • Aug 31, 2009 2:55pm Aug 31, 2009 2:55pm
vsa
Quoting malcolmb14
been using this vsa stuff for a while now . Introduced shamus to it

Just humour me here .. yes you were lucky .... but what you did actually was against what vsa is about

correct me if i am wrong .... you went long after the high volume upthrust noted on charts, in fact the highest volume in 12 hours and a test of the same resis level seen in Tokyo session that was an UT , so the wekaness is there

after this we had a little dip down to support 134.40 , where you went long at 134.50 , max you could have got was 30 pip with 2 x areas of weakness...
Hi Mal,
first thx for your postings. its great help to traders.
as I am new to VSA , i knew some basics like that there is accumulation and ditribution, thrust, weakness ,..etc. but is there any rule in VSA to know or suspect if this smart money (in stage of accumulation) is buying or selling?
thx
  • #3,157
  • Aug 31, 2009 3:25pm Aug 31, 2009 3:25pm
Thanks Mal for reply.

Best,
Tom

Quoting malcolmb14
this is an easy one Tom....get ready to sell hell out of it in London...1.6100 target. The low volume today was used as mark up . London boys not around

If someone can explain why oil dumps 4 % and usd loses ground against gbp i will be all ears ...lol
  • #3,158
  • Edited 11:55pm Aug 31, 2009 9:08pm | Edited 11:55pm
Quoting tfflyer
d-ramon - i am sure, losing weeks can be for everyone..


best,
tom

tom,

i hear you!!! Loud and clear for the forex market has handed me my fair share of humble pie. I have eaten a lot. I don't want to get too big headed but so fare this week i am 11 for 11 this week so fare for a total of 80+ pips on my small account and 6 for 7 on my larger account for a total of 83 pips . I will admit that it should be up about 20 to 30 more chart pips but i made a mistake on a platform i do not care to trade and did not hold a break out on the eur/usd that i caught. So with proper money management i should end up positive for the week. I honestly will have to say i do not see myself having a bad week at this point in my trading career. But anything is posible........ I am sure malcome and hiddengap would have to think for awhile to remember the last bad week of trading they had..... And for me mine are behind me.... Thank god!!!

D-ramon

his grace is sufficient!!!!!!!
  • #3,159
  • Sep 1, 2009 12:32pm Sep 1, 2009 12:32pm
Rockk welcome to the wonderful world of VSA. By my post count I am no expert but I have been following since the inception of the thread and will give a try to answer.

Here goes the simple answer to your question YES and NO. Yes in that Master the Markets describes what to look for regarding accumulation / distribution, strength / weakness however it is always in context with the left side of the chart (what has taken place in the near past) and what is presently on the chart. Has there been a recent deep sell off with sidewards consolidation that may be accumulation. If there has been a steep rise with a sideways consolidation this could be distribution. You also have to factor the volumn and spread of the bars and be aware of the present price action. As Malcom has always stated we have to learn to read the market from its context and not a few bars. Master the Markets is listed in the resources on the first post of the thread it would be good to read this several times (Malcolm suggests 20x minimum).

Or maybe ask your question this way: if I accumulate / aquire something am I buying or selling?

No doubt others will pipe with better insight just hope this was helpful.

Once again welcome to the adventure.

Cheers
  • #3,160
  • Sep 1, 2009 2:13pm Sep 1, 2009 2:13pm
Hi all !

Just to ask if someone know where I could find a good data feed web based and in real time to get charts with volume indicator for free.

I want to follow the market from work but computers are very well protected, and after tried many things ( VPN, web based VPS, ... ) I failed to find a way to do so ...

Please suggest any ideas !
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