Trade Using VSA (Volume Spread Analysis)

closin out EU..end of session(up against M/W pivot)..5025
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Remember to always trade a** backwards....

I'd like to ask for some guidance re. background. I understand that we need to look at the background when evaluating setups, but how far back should we be looking?

To look at it in terms of trends for example, if the H1 trend is up, but the M15 and M5 trends are down, do we consider the background to be strength or weakness? Or do we look a certain number of bars back regardless of TF?

Any help/clarification on this is appreciated...

Thanks

Climax volume at double bottom area. Retest of that level and then up up up ...

Hello ,

i would like to hear comments from expierence traders for my picture, if possible.

Some small comments from others also are welcome, offcourse

I am attaching picture with - How i tough on this trade live.



Thank You.


Best,
Tom

Looks like you shorted just as price was bottoming out on the uptrend line drawn from the bottom left of your chart. After price went up against you notice the decreasing volume on the retracement, uptrend is still alive.

I'm a novice with this, and have plenty of questions myself so take with a big grain of salt. BUT, the "background" at least seemed to be bullish, with the prior upmove making higher highs on increasing volume.

Also, your entry bar didn't take out the low of the bar prior, so possibly a safer entry would have been to enter on a break of the low of prior bar by 2-3 pips maybe. Also, the bar marked 2 could maybe be seen as a "squat", signaling the end of that move down.

Not sure if that's helpful and it's all so easy in hindsight, but I'm looking at similar stuff myself, and those are just some observations from a VSA newb

TC,
thanks for comments.

I aggree with 2-3 pips, but bar nr.2 tooked KRB by 3 pips.

I am now interested to know - what shows bar nr 1. and bar nr 2.

Will wait for comments.

Best,
Tom

TC - also i am not sure i aggree with You about strenght.
I see "public comes in trend" and that says to me - trend is going to change.

But You know - my mind is changing as fast as money flow ( as much as i understand lol )

So, we are different.. different views... So, we can believe only to ourself in our thinking.

Best,
Tom

Greeting, this is my reading:
Bar 1: up Bar, Avg vol, close low (weakness, which buyer try to push up the price, but facing a sell down)
Barr 2: Down Bar, Avg Vol, Close middle (buying, there is some buying in the market to stop the down move)

At this point, it is not a entry point for short as have not confirmation trend direction yet. the batter/safety entry level for short would be the pull back area at 1.6800-1.6780 level as it giving out a no demand bar.

hope this might help...Happy trading.

if FOMC Member Lacker can keep quiet for a minute or 2..lol

bearish GU TP@ .66249-65769----bullish UJ TP@ 89.977-90.246

perfect entry forming right now.....Nd--NShigher TF(looking for a sit)

Talk about a countertrend trade..lol

Up thrust and SL ?


Some comments.

As always - expierence trader comments are welcome.

Best,
Tom

Yah I hear you about not being sure about the background strength. I had upward channels on H4, H1, and M15, and it had been surging higher so I figured, ok, must be strength. Of course it's busted lower since then

I'm still trying to figure out how to best read the background as it relates to the trade I'm about to take. Long term, GU is clearly trending up, but does that matter if I take a trade this session and plan to exit after a 15-20 pip gain? Probably not. I'm thinking of that Malcolmb term, "trend of the session", and thinking it makes a lot of sense, especially if more in scalping mode (which is often how I trade).

I'm getting the hang of this thing slowly but surely, but still quite a ways to go of course...

TC,
this was and is also for me problem, i have a lot of problems, but for all them i see solution - PRACTICE.

About term - trend of session - i think there is a lot of times 2-3 trends of all day sessions.

And what i have learned is - ONLY Your view of market is only way to see and learn for the future market.
Whenever You saw the strenght and market went down - This is Your view and from it You learn.


Not sure You understand what i meant with my story here LOL, but that my story

Best,
Tom

almost end of session--countertrend trade--
Gotta take what the markets give me!!

stepping ouit

First off let me thank Shamus for this thread and 25 pips yesterday on the GB/US instead of shorting the E/J I grabbed it on the way back up for 25 and also the E/U long for 25 down around the daily 50 fib next let me thank Malcolmb 14 Hidden Gap DR G and ThatWasMe you each have a separate folder in my documents and the charts and explanations you took the time to post are much appreciated and studied must of done some good I managed to bag a few pips yesterday Ive read the entire thread and wish to learn this method with only the BV bars and CDRW volume oscillator because 85% of the read out is SM as my indicator I would like for someone to explain how to properly interpret the oscilator as it changes from on top green to on bottom red thanks for any help you can offer thanks Fried

Could you post a chart and annotate it so we can understand what you are talking about?

Good thoughts on tick volume by Simon Hart:

Tick volume was something that I always thought was utterly useless in forex trading because you don't know the size, but I'm starting to learn that it is not useless at all. The importance of volume in stock trading is well known, but in forex we do not have access to this data except in the form of the weekly commitment of traders reports. That tells you something in a bigger picture way.

Tick on the other hand merely shows us the up/down price swaps without the volume size, so whats the use? Actually there is plenty of use, if you are intraday trading which I have started to do more of due to trading news releases. I think that volume size is of less importance in forex. Even if you had an ECN broker platform and could see the level II data, knowing the transaction sizes that went through is of little use as you do not know WHY people are moving the currency.

Stocks on the other hand are bought for only one reason, to invest, so large size indicates that people importance and wealth believe the stock is worthy. But currencies move around for a multitude of other reasons making volume size kind of irrelevant. If Honda decide to hedge 500 million before shipping cars overseas of what relevance is that to you? If you saw the level II data you would see swaps going on in chunks like 5 million, 15 million, 50 million, 5 million, 5 million, 100 million, 20 million.... etc etc. What does this tell you? Nothing... You do not know who is moving this money or why.

But what tick volume does tell you is the amount of activity going through the market. The forex market has a normal daily pattern of activity which I wish to see - it is the breathing of the market. That generally amounts to low volume in asia, large volume in london, lulls before news releases, and medium volume in the US. Thats a normal day. Any deviation to this is something to take note of.

Tick also shows you certain things for instance a sudden bust in the tick rate at a key level can indicate that price has run into an area thick with take profit orders or stops, and this can move the market directionally temporarily until all these orders have gone through. Forex does that a lot; it has to sometimes chew through a ton of orders that were piled up at certain levels before the prevailing sentiment can take hold again.

Also you can see when a move is dying as all the volume begins to slow down, and it also gives clues when the market is just in a directionless drift. This is becoming an increasingly useful tool in my day to day activities.

went back and reviewed my notes lime to maroon is strength coming in dark green to red is strength leaving thanks anyway fried

THanks for this post shamus!

i took this trade below after read this post from Hidden gap.

like in his example, the candle is a down bar on great volume but not so great. It has less volume than bar 1 for example. Then i saw a ND whitin the range of the big bar and took a short after the down close in the bar after the ND.

before read this post i would wait a test to go long.

bar 4 is a squat, right? Should i close the short there? And after bar 5, wich is a test? Or in the bar after that, wich confirms the test? Or sould i stay in the trade until the high of the bar 2 is violated?


any comments would be appreciated