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Trade Using VSA (Volume Spread Analysis)

  • #3,701
  • Oct 7, 2009 1:52am Oct 7, 2009 1:52am
Quoting TraderJoe
Hello Tfflyer,

From my point of view if you were waiting to take a long after that big selling bar then yes, it's way to late. The signal to short was just after the very top. I'm posting a couple charts to make it clear.

TJ
Hi TraderJoe. Please, Could you tell me what trading software are your pictures from?. Thanks.
You make money by waiting, not by trading.
  • #3,702
  • Oct 7, 2009 2:12am Oct 7, 2009 2:12am
Hi TraderJoe,

thank You for Your explanation.

I have question.

On Your chart You are marking downbars, which is narrow and closing high.

For me that would mean - No selling interest.

What i see is bars are making LH and also LL also volume is below average volume.

What is exactly on those narrow down bars closing high that says to You that this is selling ?

Thank You.

Best,
Tom

Quoting TraderJoe
Hello Tfflyer,

From my point of view if you were waiting to take a long after that big selling bar then yes, it's way to late. The signal to short was just after the very top. I'm posting a couple charts to make it clear.

TJ
  • #3,703
  • Oct 7, 2009 2:19am Oct 7, 2009 2:19am
Hey MIke,

Thanks for charts.

Yes, i compared Your Barcharts charts with my IBFX.

Difference is quite big.

IBFX is quite the same with esignal, this is what i have found.

Best,
Tom


Quoting MykeFX
Hi Tom,

Did you compare the charts I posted to IBFX?


Cheers, Mike.
  • #3,704
  • Oct 7, 2009 7:21am Oct 7, 2009 7:21am
Up date.....I also sold the 5925 high volume area as shown on my 15 min chart.....
Attached Image (click to enlarge)
Click to Enlarge Name: oct 7 cable 5m mkt profile at 1215 gmt.gif Size: 24 KB
Trading Levels with WRBs
  • #3,705
  • Oct 7, 2009 7:32am Oct 7, 2009 7:32am
What was reason for selling there ? Was it only that there was just higher vol area? As i see that high vol area is from today, yes ?

Edited:
What was reason for trigering order right at 25 for short ?

Thanks.

Best,
Tom
  • #3,706
  • Oct 7, 2009 7:53am Oct 7, 2009 7:53am
Quoting tfflyer
What was reason for selling there ? Was it only that there was just higher vol area? As i see that high vol area is from today, yes ?

Edited:
What was reason for trigering order right at 25 for short ?

Thanks.

Best,
Tom
The high volume area was from my 30 min chart posted earlier and started at midnight last Wednesday and so intended to catch the current trading range.

The use of this indy is new to me and so "work in progress" that I'm sharing with you guys, hoping for input / thoughts.....http://www.forexfactory.com/images/icons/icon7.gif

I had also seen the high vol 5 min doji 2 candles before the high and so was watching the action on my 1 min chart and sold it as a "Lower High" entry into a supply area...my actual entry was at 1.59267 - for me that's the 5925 area which is what I look to trade off - a psych level or a pivot level...

Cheers

Islander
Trading Levels with WRBs
  • #3,707
  • Oct 7, 2009 8:23am Oct 7, 2009 8:23am
Quoting Islander
The high volume area was from my 30 min chart posted earlier and started at midnight last Wednesday and so intended to catch the current trading range.

The use of this indy is new to me and so "work in progress" that I'm sharing with you guys, hoping for input / thoughts.....http://www.forexfactory.com/images/icons/icon7.gif

I had also seen the high vol 5 min doji 2 candles before the high and so was watching the action on my 1 min chart and sold it as a "Lower High" entry into a supply area...my actual entry was at 1.59267...
Hi Islander,

Yes, market profile is good. but I think I found a better solution if you care to try it.

Use market profile but set the histogram colors to none so you still get the level lines.
Install this market statistic indi for your histogram. it has vwap / sp lines which are really good.

so you get the important part of the market profile tool, with a better histogram, and the vwap SP levels.

In the inputs panel, you can set the days back according to important support resistance areas depending on current PA, but for a standard setting 2 days is usually very good.

here's the link for the indi, V4.1.
http://www.forex-tsd.com/indicators-...-sd-bands.html

Included in this post from this link is the TL link for the original NT version it was based off of, which has an excellent summary on how it (and market profile) works.



below is the screenshot of the MT4 version and the original NT version.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: marketstatistics.gif.gif Size: 16 KB
Click to Enlarge Name: MS2.jpg Size: 126 KB
  • #3,708
  • Oct 7, 2009 8:28am Oct 7, 2009 8:28am
Quoting Islander
The high volume area was from my 30 min chart posted earlier and started at midnight last Wednesday and so intended to catch the current trading range.

The use of this indy is new to me and so "work in progress" that I'm sharing with you guys, hoping for input / thoughts.....http://www.forexfactory.com/images/icons/icon7.gif

I had also seen the high vol 5 min doji 2 candles before the high and so was watching the action on my 1 min chart and sold it as a "Lower High" entry into a supply area...my actual entry was at 1.59267 -...
I've now closed part of this trade as the 5875 area is being supported....
Trading Levels with WRBs
  • #3,709
  • Oct 7, 2009 8:30am Oct 7, 2009 8:30am
Quoting Fudomyo
Hi Islander,

Yes, market profile is good. but I think I found a better solution if you care to try it.

Use market profile but set the histogram colors to none so you still get the level lines.
Install this market statistic indi for your histogram. it has vwap / sp lines which are really good.

so you get the important part of the market profile tool, with a better histogram, and the vwap SP levels.

In the inputs panel, you can set the days back according to important support resistance areas depending on current PA, but for a standard setting...
Thanks, I'll take a look....http://www.forexfactory.com/images/icons/icon14.gif
Trading Levels with WRBs
  • #3,710
  • Oct 7, 2009 11:30am Oct 7, 2009 11:30am
Quoting tfflyer
Hey MIke,

Thanks for charts.

Yes, i compared Your Barcharts charts with my IBFX.

Difference is quite big.

IBFX is quite the same with esignal, this is what i have found.

Best,
Tom
I found this announcement on the NinjaTrader support forum:

"Barchart.com currently has an issue when sending volume data to Ninja Trader. This will not be fixed until the next release version 7 of Ninja Trader.

This problem applies to all symbols and only for real time data. For real time data streams the volume data will be multiplied by a random factor and users will also randomly receive huge volume spikes that are not real. Real time daily volume is typically 10 to 20 times that of reality. This problem does not impact historical data requests.

Both NinjaTrader and Barchart.com are aware of the problem and a fix will be coming out in Ninja Trader 7"

Now I need to find out when 7 is coming out....

Cheers, Mike.
  • #3,711
  • Oct 7, 2009 11:38am Oct 7, 2009 11:38am
Yea, that realy is sh++=t.. Than no use of such data feed on NT 6..
NT 7 should be in the end of this month.

Best,
Tom
  • #3,712
  • Oct 7, 2009 12:09pm Oct 7, 2009 12:09pm
Quoting TraderJoe
Hello Tfflyer,

From my point of view if you were waiting to take a long after that big selling bar then yes, it's way to late. The signal to short was just after the very top. I'm posting a couple charts to make it clear.

TJ
TraderJoe

Thanks for the well annotated charts. They are priceless in my opinion.
Please post more if you can.

Tubguy
  • #3,713
  • Oct 7, 2009 12:26pm Oct 7, 2009 12:26pm
My analys of trade how i was thinking when folowing trade...

I would like to hear any comments from expierence traders.


Thank You.

Best,
Tom
Attached Image (click to enlarge)
Click to Enlarge Name: 2009 7th october.png Size: 142 KB
  • #3,714
  • Edited 6:24pm Oct 7, 2009 5:46pm | Edited 6:24pm
Quoting tfflyer
My analys of trade how i was thinking when folowing trade...

I would like to hear any comments from expierence traders.


Thank You.

Best,
Tom
Just a few things. You want to pay more attention to the background.

There were many signs of strength prior to your short entry. As you pointed out, #5 shows demand (buying). In fact, on the chart below it is labeled a squat and is a good place to enter long. The following candle is an engulfing candle which is a nice non-vsa confirmation sign.

Let's take a closer look at the left side.

Strength candle 1 (from the left): A narrow range down bar on increasing volume that closes off its low. This is a squat and shows some support (buying) entering.

Strength candle 2 (from the left): Up candle on increasing volume closing near its high. Note that this candle makes a lower low. The long lower shadow here is a sign of buyers entering. One might call this candle a Shake Out.

Before we get to the last marked candle, let's look at the up candles leading up to it. While they all have volume less than the previous two candles, we have to be aware of two things. First, we have seen strength in the background. Second, these candles are not being confirmed as no demand because there are no down closes after them. Note also that we are making higher lows (higher lows is bullish).

Now we get to Strength candle 3 (from the left): Here we do get a down close and lower lows, but this is another Shake Out type candle. The volume is increasing and the close is in the upper 1/3 of the range. Here again, the long lower shadow shows support (buying). The next candle is a nice engulfing candle as well.

Simply, a look at the background should prompt you to be looking for longs and not shorts in the first place. If you were going to look for a counter trend short, you should be looking for a high to ultra high climatic action volume type candle to start off with.
Attached Image (click to enlarge)
Click to Enlarge Name: Current3.png Size: 96 KB
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,715
  • Oct 8, 2009 1:41am Oct 8, 2009 1:41am
Here's my 5 min chart of the action since the NY close and this weeks action to date, now on a 30 min chart.

The 5 min IMO shows buying early in the session, followed by profit taking around the 6000 level
Attached Image(s) (click to enlarge)
Click to Enlarge Name: oct 8 cable 30m mkt profile at 0715 gmt.gif Size: 26 KB
Click to Enlarge Name: oct 8 cable 5m mkt profile at 0715 gmt.gif Size: 21 KB
Trading Levels with WRBs
  • #3,716
  • Oct 8, 2009 1:48am Oct 8, 2009 1:48am
HiddenGap, thank You for Your comments.

Best,
Tom


Quoting HiddenGap
Just a few things. You want to pay more attention to the background.

There were many signs of strength prior to your short entry. As you pointed out, #5 shows demand (buying). In fact, on the chart below it is labeled a squat and is a good place to enter long. The following candle is an engulfing candle which is a nice non-vsa confirmation sign.

Let's take a closer look at the left side.

Strength candle 1 (from the left): A narrow range down bar on increasing volume that closes off its low. This is a squat and shows some support (buying) entering....
  • #3,717
  • Oct 8, 2009 2:12am Oct 8, 2009 2:12am
HiddenGap,

here is my question on Your chart.

Thanks.

Best,
Tom,

Quoting HiddenGap
Just a few things. You want to pay more attention to the background.

There were many signs of strength prior to your short entry. As you pointed out, #5 shows demand (buying). In fact, on the chart below it is labeled a squat and is a good place to enter long. The following candle is an engulfing candle which is a nice non-vsa confirmation sign.

Let's take a closer look at the left side.

Strength candle 1 (from the left): A narrow range down bar on increasing volume that closes off its low. This is a squat and shows some support (buying) entering....
Attached Image (click to enlarge)
Click to Enlarge Name: Current3.png Size: 121 KB
  • #3,718
  • Oct 8, 2009 3:34am Oct 8, 2009 3:34am
Thanks HiddenGap, You answered my question mainly.

As i understand from Your explanation - any new climatic action brings "fresh air" on charts and the old ones is not for use.

Because i tough from Sebastians ( TG ) video that he was mentioning quite the same situation and what he said was - Look what caused this up move and compare volumes at bottom and at this markup - volume is still more climatic at the bottom. ( The same situation what we discuss - at least i see it the same, but its ok - i am mainly all time wrong

About hidden test - yes, You are right, now i realize that i didn't knew what it was testing
But now i know

Thank You.

Best,
Tom
  • #3,719
  • Oct 8, 2009 4:04am Oct 8, 2009 4:04am
Quoting tfflyer

As i understand from Your explanation - any new climatic action brings "fresh air" on charts and the old ones is not for use.
From a VSA point of view this is incorrect. The actions on the left don't disappear just because a new climatic action candle appears. If that was the case, then we would of expected prices to fall after the third climatic action candle on the chart. Price falls slightly but eventually moves up. That is because the volume associated with the cause (on the left side) is still there.

These things happen in different intensites.

Quoting tfflyer
Because i tough from Sebastians ( TG ) video that he was mentioning quite the same situation and what he said was - Look what caused this up move and compare volumes at bottom and at this markup - volume is still more climatic at the bottom. ( The same situation what we discuss - at least i see it the same, but its ok - i am mainly all time wrong
Seb is the man and you should listen to him.

My point is this: If you look at the left side of the chart, only one volume bar is dark blue-the Effort to Rise after the Shake Out type candle. This is because the ranges and volumes are greater during this time of day.

After a period of extended low volume , we begin to see dark blue volume bars. Again, better volume is only looking 20 bars back. The look back can be changed, however, if you prefer a larger amount of intervals. But with a lookback of 20 we start to see "climatic action" volume bars even though the volume is less than the volume bars on the left in absolute terms.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #3,720
  • Oct 8, 2009 5:33am Oct 8, 2009 5:33am
Thank You HiddenGap for Your comments !

Best,
Tom

Quoting HiddenGap
From a VSA point of view this is incorrect. The actions on the left don't disappear just because a new climatic action candle appears. If that was the case, then we would of expected prices to fall after the third climatic action candle on the chart. Price falls slightly but eventually moves up. That is because the volume associated with the cause (on the left side) is still there.

These things happen in different intensites.



Seb is the man and you should listen to him.

My point is this: If you look at the left side of the chart,...
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