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Trade Using VSA (Volume Spread Analysis)

  • #5,481
  • Mar 3, 2010 4:24am Mar 3, 2010 4:24am
Quoting Intel
Thanks for clarifying HG.

I wasn't aware of your number 2 many thanks for that. How many bars do you recommend for looking back when setting the MA?
In Master the Markets Tom specifically mentions 30 as a look back period.

Better volume uses a default of 20. Although I believe the H.G. version uses 30.

I have heard that the Tradeguider volume histogram uses a look back of 10 and it is shifted forward, but don't know for sure.

A case can be made for any number really. Use what you are comfortable with.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #5,482
  • Mar 3, 2010 4:48am Mar 3, 2010 4:48am
Quoting nico28
Hi HG,

thankyou. Could you correct me if i wrong with this analysis on EURGBP.

A wide bar where closed at the middle = SM is selling = Weakness
the 2 more bars on the left lock out some weak hands = Weakness
wait for no demand bar to sell .
Hopefully we can get some others to chime in here.

From my perspective, the first bar is weak. We see a ultra high volume up bar closing well of its high with the next bar down. The first bar marked weakness, however, is actually strength. The bar closes down on high volume with the next bar up. If there was selling in that bar, then the next bar should not be up. The second bar is strength as well. It has less than average volume. Moreover, it has volume less than the second bar marked weakness (incorrectly). Yet it is not trading lower than that second bar. So volume to the downside is drying up and so is the markets ability to move to new low ground. In fact the very next bar looks like a hidden test. Another sign of strength.

I think the bias is to the upside. Please post a chart to show what happened.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #5,483
  • Mar 3, 2010 5:31am Mar 3, 2010 5:31am
Quoting HiddenGap
Hopefully we can get some others to chime in here.

From my perspective, the first bar is weak. We see a ultra high volume up bar closing well of its high with the next bar down. The first bar marked weakness, however, is actually strength. The bar closes down on high volume with the next bar up. If there was selling in that bar, then the next bar should not be up. The second bar is strength as well. It has less than average volume. Moreover, it has volume less than the second bar marked weakness (incorrectly). Yet it is not trading lower than...
tks HG,

Here is the H1 TF. Seen like 9100 is a resistance. Price went there 3 times & get rejected. With the D1 chart, I fig. mkt has entered into distribution phase & background is weak. Especially after 3 attempt for 9100 & failed. I plan to short if a ND bar show up.
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  • #5,484
  • Edited 4:39pm Mar 3, 2010 5:33am | Edited 4:39pm
http://www.informedtrades.com/f302/
  • #5,485
  • Mar 3, 2010 5:45am Mar 3, 2010 5:45am
Current price at uppen trend line. Look for opp to short.

In M5 Tf, price re-visited the last high volume level. Price making higher high while volume is making lower high.

Will short if a ND bar show up.

Any comment ?
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  • #5,486
  • Mar 3, 2010 11:50am Mar 3, 2010 11:50am
Quoting HiddenGap
Hopefully we can get some others to chime in here.

From my perspective, the first bar is weak. We see a ultra high volume up bar closing well of its high with the next bar down. The first bar marked weakness, however, is actually strength. The bar closes down on high volume with the next bar up. If there was selling in that bar, then the next bar should not be up. The second bar is strength as well. It has less than average volume. Moreover, it has volume less than the second bar marked weakness (incorrectly). Yet it is not trading lower than...

Hi HG

May I conclude strength of a bar is read by what happens to the next bar, so reading is 1 bar behind ?

Cheers, Dutchy
  • #5,487
  • Mar 3, 2010 12:14pm Mar 3, 2010 12:14pm
I have attached 15-30-60-240 min charts of GU and I am not sure and dont know whether the background is weak or strong.

I think, it has been marked up, and now it is going sideaways. However, I am not sure if it is correct.

I will be so appreciated if you could share your precious comments.

Thanks
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  • #5,488
  • Mar 3, 2010 12:41pm Mar 3, 2010 12:41pm
Since using the vsa method combined with other strategies and trade management, I have started to be profitable for the first time and haven't had a down day so far.

https://www.myfxbook.com/portfolio/live/16428
  • #5,489
  • Mar 3, 2010 12:48pm Mar 3, 2010 12:48pm
Quoting nicklam66
Since using the vsa method combined with other strategies and trade management, I have started to be profitable for the first time and haven't had a down day so far.

https://www.myfxbook.com/portfolio/live/16428


Well done. I'm sure you'll be making more pips in no time.

Your link doesn't work, it sends us to a password page!
  • #5,490
  • Mar 3, 2010 12:59pm Mar 3, 2010 12:59pm
Does anyone here have any experience with Dealbooks 'Autochartist'.
  • #5,491
  • Mar 3, 2010 1:02pm Mar 3, 2010 1:02pm
Quoting Intel
Well done. I'm sure you'll be making more pips in no time.

Your link doesn't work, it sends us to a password page!
http://www.myfxbook.com/members/nicklam66/live/16428

This should work.
The trend always ends.
  • #5,492
  • Mar 3, 2010 1:22pm Mar 3, 2010 1:22pm
Quoting Intel
Well done. I'm sure you'll be making more pips in no time.

Your link doesn't work, it sends us to a password page!


I tried fixing it . Does anyone else have trouble getting in the link.?
  • #5,493
  • Edited 3:25pm Mar 3, 2010 1:43pm | Edited 3:25pm
Quoting nicklam66
I tried fixing it . Does anyone else have trouble getting in the link.?
Works fine
Nice work.


By the way: a tryout. Since absolute values dont seem to matter, this indi shows effort(Red/Green: Volume) & Result (Orange: Close-Close[1]) as normalise histograms, and Range as a blue line.

Tried to explain how its supposed to work in the text. What do you think: more bananas, or does it make some sense

Dutchy
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  • #5,494
  • Mar 3, 2010 1:44pm Mar 3, 2010 1:44pm
Thanks Shamus.

Thats very impressive nicklam66.......well since discovering vsa anyway

It has made a big difference to your profitability.

Your SL may have been a bit far away on that 180 pip loss

Hope I can reproduce those % profits.
  • #5,495
  • Mar 3, 2010 2:08pm Mar 3, 2010 2:08pm
Quoting Intel
Thanks Shamus.

Thats very impressive nicklam66.......well since discovering vsa anyway

It has made a big difference to your profitability.

Your SL may have been a bit far away on that 180 pip loss

Hope I can reproduce those % profits.


Yes, Intel, I do have wide stops on only certain positions that I feel will turn my way and that is where money management and trade management come in. Even with a 180 pip adverse move, using mini lots will only equate to a 2-5% drawdown of my whole account. I will only allow huge stops when I'm using light number of lots. When using more lots, I will cut most of my position at a small loss and let the other pan out. Trade management is as important as money management and VSA (strategy).
  • #5,496
  • Mar 3, 2010 2:39pm Mar 3, 2010 2:39pm
Quoting nicklam66
Yes, Intel, I do have wide stops on only certain positions that I feel will turn my way and that is where money management and trade management come in. Even with a 180 pip adverse move, using mini lots will only equate to a 2-5% drawdown of my whole account. I will only allow huge stops when I'm using light number of lots. When using more lots, I will cut most of my position at a small loss and let the other pan out. Trade management is as important as money management and VSA (strategy).
Congrats on that performance, well done

I myself am very happy with my trading and profitability since I started to get more serious about trading... but I trade a lot less pairs than you (used to trade 3 pairs, but now more like 2 - EU & GU), and place a lot less trades than you, too (probably because I don't have much time... sometimes I have 1 or 2 full days per weeks, but most of the time, I only have 1 or 2h per day, before work or after work)...

Anyway, I'm up 18% this year, and I'm happy

But about myfxbook, I was wondering, if you or anyone else can answer:
a) Are those performance tracking sites safe to use with live accounts?
b) Can we define the date from which to show the trades and performance? (I wanted to show the performance from start of the year only, to be a 2010 tracker);
c) Any other site better than that one? Pros/cons?

Thank you (and sorry for the offtopic, Shamus).
  • #5,497
  • Mar 3, 2010 3:46pm Mar 3, 2010 3:46pm
Quoting tonirai
Congrats on that performance, well done

I myself am very happy with my trading and profitability since I started to get more serious about trading... but I trade a lot less pairs than you (used to trade 3 pairs, but now more like 2 - EU & GU), and place a lot less trades than you, too (probably because I don't have much time... sometimes I have 1 or 2 full days per weeks, but most of the time, I only have 1 or 2h per day, before work or after work)...

Anyway, I'm up 18% this year, and I'm happy

But about myfxbook, I was wondering,...

I'm not so sure it is completely off topic.

We all know that conventional MM says that we risk no more than about 5% ish of our BR.

So far as I can see, the only reason we do that is because we KNOW that we will lose some trades, and we don't want to lose too much.

However, it seems to me that some of the 'VSA Masters' can tell when entering, a particular trade will have a HUGE chance of success. If this is truly so, they might risk more than normal. So maybe, trading VSA should not just concentrate on the mechanics of the trade but also encompass a different MM strategy.

Of course I'm only learning the basics at the moment so I'm not really qualified to say that this would work. Perhaps the more experienced guys can help.

Or........if it is completely off topic......I'm very sorry Shamus.
  • #5,498
  • Mar 3, 2010 4:05pm Mar 3, 2010 4:05pm
Quoting Intel
I'm not so sure it is completely off topic.

We all know that conventional MM says that we risk no more than about 5% ish of our BR.

So far as I can see, the only reason we do that is because we KNOW that we will lose some trades, and we don't want to lose too much.

However, it seems to me that some of the 'VSA Masters' can tell when entering, a particular trade will have a HUGE chance of success. If this is truly so, they might risk more than normal. So maybe, trading VSA should not just concentrate on the mechanics of the trade but also...
Yes, of course... when I said off topic, I meant the questions about myfxbook and others alike.

I do so myself:
- In the "regular" trades, I leverage around 10x, and risk 1 to 2% of capital (to a minimum 20 pips target);
- In some high probability trades (but in which I almost only enter to scalp), I leverage between 30x to 50x, and risk up to 10% of capital (to an up to 15 pips scalp).
  • #5,499
  • Mar 3, 2010 4:17pm Mar 3, 2010 4:17pm
Quoting tonirai
Yes, of course... when I said off topic, I meant the questions about myfxbook and others alike.

I do so myself:
- In the "regular" trades, I leverage around 10x, and risk 1 to 2% of capital (to a minimum 20 pips target);
- In some high probability trades (but in which I almost only enter to scalp), I leverage between 30x to 50x, and risk up to 10% of capital (to a up to 15 pips scalp).

Hey thanks tonirai

Its not often traders will tell you that they break this notional 5% rule (frightened of the backlash).

It would be interesting to see whether any of the full time vsa traders do this.

18% in 2 months - part time.................. very nice
About 170% over the year.
  • #5,500
  • Mar 3, 2010 10:32pm Mar 3, 2010 10:32pm
Quoting Dutchy
Hi HG

May I conclude strength of a bar is read by what happens to the next bar, so reading is 1 bar behind ?

Cheers, Dutchy
This is the eternal question. It stymies newbies and fuels the fire of detractors.

There are two sides of this question to look at. The first has to do with the interpretation of the bar/bars, and the other has to do with how to trade them.

Let's look at defining or interpretting the candle/candles. In the picture below I have marked up some recent price action in the Euro 5 min. As the market moves into a Supply/Demand Delta Zone, we begin to see some signs of the market's intent. The Candle marked UpThrust only needs one interval to be defined. That is, once this candle closes we know we have an UpThurst. That's because all we need to know is the close in relation to the range, the volume, and sometimes the close in relation to the previous close-ideal UpThrusts actually close up.

Skip three candles ahead to the NoDemand. To define a NoDemand, we need actually only need one candle. However, we also need the next candle to CONFIRM it. So as we are looking at this chart, as soon as we see the narrow range (NR4) on volume less than the previous two (and as it happens the lowest volume candle in the last twenty (yellow)) that is closing up from the previous bar and making a higher high, we can define this candle as No demand. In addition, this is appearing where we would want to see it. We have an UpThrust in the background followed by an dark engulfing candle. Yet, if this is truely a NoDemand, the next bar would be down. No Demand implies that the BBs are not interested in higher prices. If the BBs are not supporting higher prices, price must fall. Therefore, the next candle confirms the NoDemand only when it closes lower than the NoDemand candle.

The older versions of Tradeguider would not even put an triangle on a NoDemand unless it was confirmed. That is, one bar after. This has lead many to think Tradeguider/VSA lags but it does not. In many ways it is like some Japanese candle patters. There are some hammer patterns that can only be confirmed on the candle after the actual hammer. There is only a hammer line (interval) until the next candle completes the pattern. Only then can the hammer transverse from a line into a pattern.

But what about real-time trading?

Looking at our chart example again, once we see the narrow range (NR4) up candle on volume less than the previous two candles and in the correct place with volume in the background, we can look to enter on the next candle. We can place an order to enter if the low of this candle is breached on the next interval. Therefore we will be entering PRIOR to the confirmation. Because the confirmation is dependant on a down close. Therefore, one of the first things we want to see after we enter is the candle close down and confirm the previous bar as NoDemand. If we enter the trade and the candle ultimately closes up, we are a bit uncomfortable about our position from the get go.

Hope this helps.
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Without VSA, you're playing checkers while the Smart Money plays chess.
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