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Trade Using VSA (Volume Spread Analysis)

  • #4,341
  • Dec 16, 2009 1:38pm Dec 16, 2009 1:38pm
Quoting malcolmb14
GU ..weakness is there.

It seems that even if FOMC makes usd weaker it may only be a temporary pop

volumes suggest traders may still be bear gu

Attachment

pro vsa trading dr g and I ..... look how this gu 30 min played out BEFORE new reaction was already seen

like taking candy from a baby
Blogging daily now at www.volume.zone
  • #4,342
  • Dec 16, 2009 1:44pm Dec 16, 2009 1:44pm
eur formed a channel by connecting high 1 + lower high 3 with low 2.

see 4+6, price always was able to get from the channel upper trendline (supply line) back to the lower channel support line (demand line) where we would expect buyers to step in. buying at the demand line gives us a R:R ratio of 4:1 if you draw 2 more parallel lines in the channel, dividing channel into quartiles.

so if we enter a trade on the mid channel line, our R:R would be 1:1, since our expected outcome is the upper/lower channel line, but the risk also. if we short in the upper quartile, our risk would be 3:1 or 4:1, since we know we have a reasonable chance to come down to the downchannel low.

coming back to what i wanted to say....:

point 5+7 show that the bears are in control and market is weak, since EUR was not able to come back to upper channle quartile, it in fact failed slightly above the channel mid (5) and failed the channel mid at 7, formind a consecutive lower high.

so my expectation would be, that we might go below the demand line...but, below the demand line we are vulnerable to somebody big stepping in buying and vice versa above the supply line, since market is in overbought/oversold areas outside of established channels. channels should form over a period of 3-4 days at least, preferably.
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  • #4,343
  • Dec 16, 2009 1:46pm Dec 16, 2009 1:46pm
Quoting Dr.Geppynius
see what happened---sell limit 4570. catching remaining orders and going down. level marked is one of the key numbers i like to play based on volume and bar close. it also alignes with the channel midline.
ok, it's past 3.45AM here, but i'll try to analyse this trade. let me know if my brain is still active this early morning

your entry, a sell limit, 1.4570 was chosen based on bar close of the up bar (magenta volume; bar closed 1.4570+). u knew based on this bar alone (or including subsequent bars?) that there may still be remaining orders around these area & if so u want to ride it down with them. price also exhibited weakness around that area, + price was at the channel midline. price being at the channel was just an icing on the cake or an added confirmation for the trade. the green horizontal line (POC?) is from the market profile (1.4570 too)
Thanks!
  • #4,344
  • Dec 16, 2009 1:52pm Dec 16, 2009 1:52pm
what do we know about euro ?

we know it is screwed ... think 1.2000 by june next year and maybe lower

so on a 30 min chart it is sell all high volume up bars ..this will be seller taking advantage of strength

that high volume up bar on a 30 min into 14587 knocked the market sideways and the subsequent 3x 30 min bars had large wick on the top = sellers...pretyy straight forward , with a 20 pip stop

Quoting supremeChaos
ok, it's past 3.45AM here, but i'll try to analyse this trade. let me know if my brain is still active this early morning

your entry, a sell limit, 1.4570 was chosen based on bar close of the up bar (magenta volume; bar closed 1.4570+). u knew based on this bar alone (or including subsequent bars?) that there may still be remaining orders around these area & if so u want to ride it down with them. price also exhibited weakness around that area, + price was at the channel midline. price being at the channel was just an icing on the cake or an...
Blogging daily now at www.volume.zone
  • #4,345
  • Dec 16, 2009 1:56pm Dec 16, 2009 1:56pm
another channel i drew on s&p emini after market opened. see how it is respected all day. 1111 horizontal line is based on globex premarket action which is one of my favourite indications. i emphasize it all over again- vsa is about watching markets for thousands of hours and getting a feeling for it.
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  • #4,346
  • Dec 16, 2009 2:00pm Dec 16, 2009 2:00pm
Quoting Dr.Geppynius
yes, right, market was sold off from there. but what i wanted to say is, that it hasn't to go anywhere....it is pretty stressful to predict since you are also conditioning your mind based on that.

You were right , Thank you
The Market pays you to be disciplined
  • #4,347
  • Dec 16, 2009 2:07pm Dec 16, 2009 2:07pm
Quoting Dr.Geppynius
eur formed a channel by connecting high 1 + lower high 3 with low 2.... channels should form over a period of 3-4 days at least, preferably.
why 3-4 days?
what does it imply to u when channels form in less than 3 days? if more than 4 days?
Thanks

Quoting Dr.Geppynius
another channel i drew on s&p emini after market opened. see how it is respected all day. 1111 horizontal line is based on globex premarket action which is one of my favourite indications...
price has not stayed within this channel as seen in the right hand side of the chart. still, u used that channel. is it because u feel trend is down, hence down-sloping channel still is valid?

my Inquisitive mind asks too much http://cdn.forexfactory.com/images/s...m/big_grin.gif Thanks
  • #4,348
  • Dec 16, 2009 2:07pm Dec 16, 2009 2:07pm
now below the demand line and vulnerable to someone buying. high vol occured, spread was compressed...now we have to test this to see if it was true downside momentum or somebody buying in.
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  • #4,349
  • Dec 16, 2009 2:09pm Dec 16, 2009 2:09pm
Quoting supremeChaos
why 3-4 days?
what does it imply to u when channels form in less than 3 days? if more than 4 days?
Thanks
not as reliable...it has to form over a longer periond to be of significance.

who cares about 5m intraday channels aka flags?
the ranges are too tight so price will most likely rapidly break out of it.
  • #4,350
  • Dec 16, 2009 2:13pm Dec 16, 2009 2:13pm
Heres a longer TF channel on GU... Just bounced off the upper line.
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  • #4,351
  • Dec 16, 2009 2:20pm Dec 16, 2009 2:20pm
Quoting malcolmb14
what do we know about euro ?
we know it is screwed ... think 1.2000 by june next year and maybe lower
...
wow, interesting.
based on what? pure VSA?
if u have extra time, i'd love to see a chart on how this conclusion came about
Thanks!
  • #4,352
  • Dec 16, 2009 2:23pm Dec 16, 2009 2:23pm
Quoting Dr.Geppynius
not as reliable...it has to form over a longer period to be of significance.
who cares about 5m intraday channels aka flags? ...
there goes my brain.
i didnt realize u were particularly referring to a 'duration' (3-4days) based on M5. correct?
so i presume on M15 & up, this 'duration' shortens accordingly.
  • #4,353
  • Dec 16, 2009 3:03pm Dec 16, 2009 3:03pm
Quoting mima
You were right , Thank you
Dr G is always right .. well 90% of the time. He mentored me in VSA and now we are the dynamic duo slaying pros that get in our paths. They try to hide form us , but we know where they are and what they are up to ... it is all in the charts.
Blogging daily now at www.volume.zone
  • #4,354
  • Dec 16, 2009 3:18pm Dec 16, 2009 3:18pm
Quoting supremeChaos
wow, interesting.
based on what? pure VSA?
if u have extra time, i'd love to see a chart on how this conclusion came about
Thanks!

go look at the weekly dollar index...place volumeo n the chart and tell me what you see.

If you have a handle on vsa your eyes will pop out of your head.

Someone Pmed me today about vsa on longer time frames. Look at weekly DX and tell me what you see.....

I give you one clue .. here is monthly chart .. now you do homework and go find the weekly

dx is 57% weighted euro

Attached Image
Blogging daily now at www.volume.zone
  • #4,355
  • Dec 16, 2009 3:46pm Dec 16, 2009 3:46pm
vsa can be used any time frame very effectively ...

would any one like to be going long gu here and thinking here comes 1.7500 based on weekly futures and vsa....if you think that you had better go check yourself into the local nut house and be putn in a staight jacket immediately for your own safety ..lol

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  • #4,356
  • Dec 16, 2009 4:07pm Dec 16, 2009 4:07pm
Quoting malcolmb14
go look at the weekly dollar index...place volumeo n the chart and tell me what you see.

If you have a handle on vsa your eyes will pop out of your head.

Someone Pmed me today about vsa on longer time frames. Look at weekly DX and tell me what you see.....

I give you one clue .. here is monthly chart .. now you do homework and go find the weekly

dx is 57% weighted euro

Attachment
Same conclusion with difference ways
  • #4,357
  • Dec 16, 2009 4:31pm Dec 16, 2009 4:31pm
Quoting malcolmb14
go look at the weekly dollar index...place volumeo n the chart and tell me what you see.

If you have a handle on vsa your eyes will pop out of your head.

Someone Pmed me today about vsa on longer time frames. Look at weekly DX and tell me what you see.....

I give you one clue .. here is monthly chart .. now you do homework and go find the weekly

dx is 57% weighted euro

Attachment
Let me take a stab at it:

the DX shows very High Volume on a fairly low spread up bar. The weekly EUR/USD chart shows very high volume on a sizable down bar ( last weeks )

The pros must be selling the Euro and buying the USD, slowly accumulating maybe because we don't see a lot of upward movement on the DX but alot of volume. Does this sound right?

Lots of activity, things should get interesting!!
  • #4,358
  • Dec 16, 2009 4:33pm Dec 16, 2009 4:33pm
Quoting MykeFX
Let me take a stab at it:

the DX shows very High Volume on a fairly low spread up bar. The weekly EUR/USD chart shows very high volume on a sizable down bar ( last weeks )

The pros must be selling the Euro and buying the USD, slowly accumulating maybe because we don't see a lot of upward movement on the DX but alot of volume.

Lots of activity, things should get interesting!!

bingo

Nice work M.

That is massive accumualtion fopr 8 weeks now .. think euro stays at 1.4500 for long ? 1st target 1.1500 and then we take it form there.
Blogging daily now at www.volume.zone
  • #4,359
  • Dec 16, 2009 4:38pm Dec 16, 2009 4:38pm
Mal, You mean mark down before Upmoove ?

Thanks.

Best,
Tom


Quoting malcolmb14
bingo

Nice work M.

That is massive accumualtion fopr 8 weeks now .. think euro stays at 1.4500 for long ? 1st target 1.1500 and then we take it form there.
  • #4,360
  • Dec 16, 2009 4:50pm Dec 16, 2009 4:50pm
Quoting malcolmb14
Dr G is always right .. well 90% of the time. He mentored me in VSA and now we are the dynamic duo slaying pros that get in our paths. They try to hide form us , but we know where they are and what they are up to ... it is all in the charts.
No wonder why you are so good...It is privilege to learn from both of you...
Thank you.
The Market pays you to be disciplined
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