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Trade Using VSA (Volume Spread Analysis)

  • #3,401
  • Sep 21, 2009 9:14pm Sep 21, 2009 9:14pm
malcolmb14,
Sir if u are interested, u can check out EW threads by Blue bottle & my fellow Filipino el grande.
. perhaps, Inzider too.

i'm really happy for u that u continually learn & evolve. very commendable, Sir!
  • #3,402
  • Sep 21, 2009 11:13pm Sep 21, 2009 11:13pm
Quoting supremeChaos
tfflyer/Tom,
No, it's not.
I immediately edited the link, so it's working already

btw, here it is again
List
You need an open session to view that link, that's why it wouldn't work for Tom. Has happened to me before when referencing that page. lol

Here's a link that will work (had it bookmarked)

Esignal Symbols Guide - Forex (Format & Contributors)
  • #3,403
  • Sep 22, 2009 1:02am Sep 22, 2009 1:02am
TwoBuckChuck,
lol.... yah, i figured that out later.
great u noticed that. Thanks
  • #3,404
  • Sep 22, 2009 2:34am Sep 22, 2009 2:34am
Is this thread come to its final conclusion...Its being very quiet lately.

  • #3,405
  • Sep 22, 2009 3:34am Sep 22, 2009 3:34am
dngfx,
some traders are full-time traders. many have jobs/businesses.
there are many other things that traders do.
we are not full time FF posters.

if u feel it's quiet here, then maybe u can post some charts.
  • #3,406
  • Sep 22, 2009 6:09am Sep 22, 2009 6:09am
Quoting malcolmb14
dx .. for all my fellow vsa'ers

also on wave 5 of my new best friend elliot wave , on weekly ...

eu 1000 pips drop ?
gu 1.5500 ?
gold head fake ? or does gold and usd head up meaning market tankage

Attachment
eu when? just touched wave 5 start 1000p down?
  • #3,407
  • Sep 22, 2009 2:39pm Sep 22, 2009 2:39pm
HiddenGap,

Where do you stand in regards to high volume long wicked candles? See the attached screen shot for an example. The candle on the right that is highlighted by the ellipse is the one I am referring to. Would you consider this a Supply/Demand Delta Zone? And if so, would it be only the wick of the candle that would form the upper/lower boundaries or the entire candle itself?

Thanks,
MB

Attached Image (click to enlarge)
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  • #3,408
  • Sep 22, 2009 10:59pm Sep 22, 2009 10:59pm
Quoting MasterBlaster
HiddenGap,

Where do you stand in regards to high volume long wicked candles? See the attached screen shot for an example. The candle on the right that is highlighted by the ellipse is the one I am referring to. Would you consider this a Supply/Demand Delta Zone? And if so, would it be only the wick of the candle that would form the upper/lower boundaries or the entire candle itself?

Yes, long shadows represent changes in the supply/demand dynamic and form a Supply/Demand Delta Zone.

I once read somewhere that long shadows represent the effect of higher timeframe players on the timeframe being traded. Of course, this begs the question, "what is a long shadow?".

Long shadows are related to expansion bodies. At some point during the interval, a long shadow was an expansion body. So logically, if one is looking at EB7s (or whatever number is used) where the body is the largest body in the last 7 intervals, the long shadow should also be larger than the bodies of the last 6 and larger than the body of its interval.

But you have to compare it to the previous shadows as well. Therefore, the lower shadow of our long shadow would have to be the longest shadow in the last 7 (or whatever number is used) intervals as well.

One also has to look at the upper shadow of the candle in question. Here again, the lower shadow would need to be larger than the upper shadow.

In a nutshell, we can think of three parts to the candle:

1. The upper shadow (or wick)
2. The body (open to close)
3. The lower shadow

A long shadow (lower) would be larger than both 1&2. It would also be greater than 1+2. If we are talking about a long shadow upper the opposite would be true.

I am only interested in them when the volume is climatic and the zone is the length of the shadow only.
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,409
  • Sep 22, 2009 11:52pm Sep 22, 2009 11:52pm
This was not a trade taken but I wanted to get back to the VSA. One question first: What caused that spike?

Actually, that question of what caused an ultra wide spread candle or ultra high volume is something everyone should be asking themselves.

Anyway, what we see here is a few very basic VSA concepts in action:

1. When weakness appears, it appears on up candles.
2. Markets do not like wide spread up candles on ultra high volume because they could contain hidden selling.
3. The ideal place to short is a low volume signal within the range of a high volume candle.

Many people would be look at the ultra high candle as strength. VSAers know that the ultra high volume candle closing off its high with the next candle down is weakness. Supply is swamping demand on this candle. The place to get short would be on an up candle with volume less than the previous two candles-no demand.

VSA tells us we should be getting short on up candles and getting long on down candles. There are a lot of exceptions to this rule however.

There is something else I wanted to show. I do not believe that it has been mentioned here before. Tom uses a unique trade management technique. When he is short, he allows for no more than two up candles , otherwise he exits.

In the below chart, notice that after the entry we see two up candles (1&2). Since the next candle is down, all is well and the trade continues. After the down candle another up candle appears (1). The next candle is actually a level (equal close) candle. So we are still in the trade. A few candles later we see another lone up candle (1).

Assuming you miss the two candle reversal as an exit signal, after on more down candle we get three consecutive up closes. We would exit on the close of the third up close.

This technique wont get you Malcolmb type pips, but for some it may help with what to do when actually in the market.
Attached Image (click to enlarge)
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,410
  • Sep 23, 2009 2:06am Sep 23, 2009 2:06am
Quoting HiddenGap
This was not a trade taken but I wanted to get back to the VSA. One question first: What caused that spike?

Actually, that question of what caused an ultra wide spread candle or ultra high volume is something everyone should be asking themselves.

Anyway, what we see here is a few very basic VSA concepts in action:

1. When weakness appears, it appears on up candles.
2. Markets do not like wide spread up candles on ultra high volume because they could contain hidden selling.
3. The ideal place to short is a low volume signal within the range...
hi HG.
thx,but you said Tom, if short will allow only 2 up candles otherwise he will exit.
so according to this where will be the exit in your chart,is it the second candle up from the left lab.(1)with long tail ? (not the first (1) with small body)
  • #3,411
  • Sep 23, 2009 2:11am Sep 23, 2009 2:11am
Quoting rockk
hi HG.
thx,but you said Tom, if short will allow only 2 up candles otherwise he will exit.
so according to this where will be the exit in your chart,is it the second candle up from the left lab.(1)with long tail ? (not the first (1) with small body)
Hi Rockk.

Tom allows for two consecutive up closes, but no more. So the exit is where there is a third up close. On the chart its where you see numbers 1,2,and 3.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,412
  • Sep 23, 2009 2:19am Sep 23, 2009 2:19am
Quoting avi
eu when? just touched wave 5 start 1000p down?
technicaly there is nothing so called touched.
wave either started or ended ,so what did you actually mean.
  • #3,413
  • Sep 23, 2009 2:24am Sep 23, 2009 2:24am
Quoting HiddenGap

There is something else I wanted to show. I do not believe that it has been mentioned here before. Tom uses a unique trade management technique. When he is short, he allows for no more than two up candles , otherwise he exits.
this is the only techique i am using since a while (except if i see climactic action against my trade), and if applied properly, can get you the biggest amount of the move and lets you swim with the cash, since the bigmoney has to support the move and thus keeping lows of previous bars intact to stay in control of the upmove (downmove vice versa...). it should be used on the timeframe you enter on but 5m often get's you whipsawed out. that's why- even if i entered on the 5m (i trade S&P500 90%)- i try to stick to 15m for this trailing technique to catch a potential longer directional move.
  • #3,414
  • Sep 23, 2009 3:00am Sep 23, 2009 3:00am
Things changes very fast.. I think that was Malcomb that moment thinking, If You asked him after 5 hours, for example, perhaps he would think something different..

I understand very good that putting here for public some predictions, means to inform public all the time and describe that market has now changed etc.... Otherwise public will tell You that Your predictions was wrong etc...


But in meantime - everyone should understand that market is changing and thinking SHOULD change too..

Perhaps, the one who predicted 1000 pips down, have changed already his thinking, but havent just wrote it to public..

Just my toughs..

Best,
Tom


Quoting rockk
technicaly there is nothing so called touched.
wave either started or ended ,so what did you actually mean.
  • #3,415
  • Sep 23, 2009 3:00am Sep 23, 2009 3:00am
Quoting Dr.Geppynius
this is the only techique i am using since a while (except if i see climactic action against my trade), and if applied properly, can get you the biggest amount of the move and lets you swim with the cash, since the bigmoney has to support the move and thus keeping lows of previous bars intact to stay in control of the upmove (downmove vice versa...). it should be used on the timeframe you enter on but 5m often get's you whipsawed out. that's why- even if i entered on the 5m (i trade S&P500 90%)- i try to stick to 15m for this trailing technique...
welcome Dr Geppynius,
I see you trade S&P .from your experience do you think using VSA in fx is appropriate ,since it is not centralised, with different charts from diff brockers with diff volumes.
  • #3,416
  • Sep 23, 2009 3:15am Sep 23, 2009 3:15am
Quoting HiddenGap
Hi Rockk.

Tom allows for two consecutive up closes, but no more. So the exit is where there is a third up close. On the chart its where you see numbers 1,2,and 3.
thx
I see many upbars after the entery before this 1,2,3 bars. these 1,2,3bars ocuured after mkt reversed. for example here if the mkt is going down and I started a short , I will wait till first sign of reversal and then exit on the third upbar?
dunno... look like bad question?
  • #3,417
  • Sep 23, 2009 3:29am Sep 23, 2009 3:29am
Quoting rockk
thx
I see many upbars after the entery before this 1,2,3 bars. these 1,2,3bars ocuured after mkt reversed. for example here if the mkt is going down and I started a short , I will wait till first sign of reversal and then exit on the third upbar?
dunno... look like bad question?
Dr. Geppynuis brings up a good point. If you were short, as in this example, you could exit on a climatic action candle instead of waiting for the three consecutive up closes. In the original post, I mentioned that there was a two candle reversal signal. You could exit on the second candle of this two candle pattern. Even though it turns out to be 1 up close followed by a down close and then 3 consecutive up closes.

The Dr. is further correct when he says that the 5 min can whipsaw you using this technique. I agree that the timeframe you enter should be the timeframe used, so if you trade off the 5 min you have to live with the whipsaws that come.

I don't use this technique myself, as I like to use expansion bodies to take partials. I am thinking about ways to incorporate it into the last partial.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,418
  • Sep 23, 2009 3:36am Sep 23, 2009 3:36am
Quoting tfflyer
Things changes very fast.. I think that was Malcomb that moment thinking, If You asked him after 5 hours, for example, perhaps he would think something different..

I understand very good that putting here for public some predictions, means to inform public all the time and describe that market has now changed etc.... Otherwise public will tell You that Your predictions was wrong etc...


But in meantime - everyone should understand that market is changing and thinking SHOULD change too..

Perhaps, the one who predicted 1000 pips down, have changed...
did not got exactly what you mean.
let me put what i understood:
1- mkt changing so thoughts and prediction change?...
agreed of course.
2- words or expressions can change?
of course not greed . there is nothing called wave touching, either we are in the beg. middle or end of wave.
3- which is the most important , we are not into spoon feeding. malc just threw a piece of chocolate to us ( or what he thought choclate at that time), so thanks to him
he is our dean anyway.
  • #3,419
  • Sep 23, 2009 3:54am Sep 23, 2009 3:54am
Quoting HiddenGap
Dr. Geppynuis brings up a good point. If you were short, as in this example, you could exit on a climatic action candle instead of waiting for the three consecutive up closes. In the original post, I mentioned that there was a two candle reversal signal. You could exit on the second candle of this two candle pattern. Even though it turns out to be 1 up close followed by a down close and then 3 consecutive up closes.

The Dr. is further correct when he says that the 5 min can whipsaw you using this technique. I agree that the timeframe you enter...
thx teacher.
so now I understand that exit should be on candle reversal signal not on the just up closing candle. right?
now as they say nothing better than live mkt disccusion. i will post EB7 just happened now on GU, may be you comment on it later when the pattern finish.
  • #3,420
  • Sep 23, 2009 3:58am Sep 23, 2009 3:58am
Quoting rockk
thx teacher.
so now I understand that exit should be on candle reversal signal not on the just up closing candle. right?
now as they say nothing better than live mkt disccusion. i will post EB7 just happened now on GU, may be you comment on it later when the pattern finish.
look at this live 15m GU EB7 bar with climatic volume.
its up bar with wide spread and climatic vol.(mkt does not like this)
any comment appreciated
Attached Image (click to enlarge)
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