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Trade Using VSA (Volume Spread Analysis)

  • #6,641
  • Apr 12, 2010 9:35am Apr 12, 2010 9:35am
Continue from my previous post ref: http://www.forexfactory.com/showpost...postcount=6640

GU is seeing more supply as it nears the intermediate fibo retracement levels, a more protracted down move could be expected with renew increase in supply. (initial anticipated retracement to tp at 23.6% level is not realised yet)

for this, TP is revise slightly downwards (estimate is at ADR)

Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_13 Apr. 12 22.32.gif Size: 31 KB
  • #6,642
  • Apr 12, 2010 10:00am Apr 12, 2010 10:00am
Hi, hope you don't mind my asking.

Why can't we regard that high volume, wide down bar as effort to down but no results (because next is up bar), or failed test (combined with next up bar, because the volume is high). If we can regard it as failed test, we can expect it will test again. So let's see what will happen.

Quoting lascavel
Continue from my previous post ref: http://www.forexfactory.com/showpost...postcount=6640

GU is seeing more supply as it nears the intermediate fibo retracement levels, a more protracted down move could be expected with renew increase in supply. (initial anticipated retracement to tp at 23.6% level is not realised yet)

for this, TP is revise slightly downwards (estimate is at ADR)

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  • #6,643
  • Apr 12, 2010 10:21am Apr 12, 2010 10:21am
There have been some great posts over the last couple of days. I especially like to hear the sceptical views from Asgard2 and the rebuttals from HG.

I have been looking for a trading style/method for a long time and as such, have found a few indicator based methods that have pricked my curiousity. They appear at first to be based on a sound set of principles and should work well.

However, ALL of these different styles have one thing in common, they give no explaination as to what the market is doing. They simply give an idea as to what the squiggly lines and other icons on the chart are doing. So when the trade goes wrong, they have no idea why and therefore are doomed to make the same mistakes again and again. When questioned about this, most people shrugg it off and say 'oh well it happens'.

I dont like this approach to putting food on the table for my family. I am an engineer by trade and as such I am predisposed to wanting to know exactly how and why things work. I believe this to be the key to getting the best out of what ever your trying to use(whether it be trading or any other aspect in life).

When I first came across VSA, it was some bloke spouting off about being able to read the charts with no indicators on them, and know what would happen next. That got me interested albeit very sceptical. It led me to this thread and Shaums' first post, and that was it.......I was hooked.

What I see in VSA isn't that everyone who uses it makes loads of money. Clearly some will be better at it than others and therefore make more money. I see that those who can 'speak the VSA language' can READ the chart with unnerving accuracy. They know the 'whys' and 'wherefores' of what is happening behind the chart not just the icons on it.

This for me, was a revelation in trading. Finally I was confident that I could learn how and why the chart acted the way it does.

I have never come across anyone who can speak vsa, who has said that forex volume is true volume. They all say that it gives us a representaion of the volume and, when READING the charts, that is good enough.

If using this 'representation' of volume enables us to read the charts correctly then, I dont really care if it is ACTUALLY price changes or tick changes or trades opened/closed or just a bag of bananas!.........It works!!!!!

It is great to see the language being challenged for use in forex, and even better when it can be deffended so logically.

Please keep posting.

Just my thoughts
  • #6,644
  • Apr 12, 2010 10:41am Apr 12, 2010 10:41am
Quoting polomine
Hi, hope you don't mind my asking.

Why can't we regard that high volume, wide down bar as effort to down but no results (because next is up bar), or failed test (combined with next up bar, because the volume is high). If we can regard it as failed test, we can expect it will test again. So let's see what will happen.
Not really, infact is a form of shakeout over 2bars or the equivalent to fail upthrust-(if u were to combine the 2bars or just look at 1hr bars), The volume is supporting the supply side with resistance at around 1.54200. Selling is present there.

Cheers!
  • #6,645
  • Apr 12, 2010 11:14am Apr 12, 2010 11:14am
Quoting Intel
There have been some great posts over the last couple of days. I especially like to hear the sceptical views from Asgard2 and the rebuttals from HG.

I have been looking for a trading style/method for a long time and as such, have found a few indicator based methods that have pricked my curiousity. They appear at first to be based on a sound set of principles and should work well.

However, ALL of these different styles have one thing in common, they give no explaination as to what the market is doing. They simply give an idea as to what the...
i think we should start saying "Activity" instead of volume, i think people
might feel better...My Guess.
  • #6,646
  • Apr 12, 2010 11:21am Apr 12, 2010 11:21am
Quoting taomql4
i think we should start saying "Activity" instead of volume, i think people
might feel better...My Guess.


Activity Spread Analysis.....mmmmmmm I mighta make an ASA outa myself!!!!
  • #6,647
  • Apr 12, 2010 11:42am Apr 12, 2010 11:42am
@Intel... great post. Dead on with Forex volume. In fact the best price action scalpers I know of are using tick volume without realizing it. When watching them trade I notice that they pay special attention to how the bar moves up or down. Does it go way up smoothly or does it jiggle a lot on the way up? Did a bar open low and close high or did it go up, back down and then close on the high? The difference between the scenarios above? Tick volume! even if they don't plot it, they are reading tick volume in the price action. It works for them and it works for VSA, er ahem... ASA.


@asgard: FYI, By the time Galileo was born, it had been common knowledge for hundreds of years that the Earth was spherical. Galileo was called a heretic because he claimed in his book, "Dialogue Concerning the Two Chief World Systems"that man could know truth as God knows it. This was a rather arrogant assertion considering that the main dispute of natural philosophy at the time was the very nature of truth itself. Galileo's statement was a poke in the eye of not just the church, but also many of his peers. The whole affair was a huge clash of egos between the church and Galileo. Pardon me going off topic, but I can't stand revisionist history or when people get the facts wrong.
"You can't have everything... where would you put it?"
  • #6,648
  • Apr 12, 2010 12:00pm Apr 12, 2010 12:00pm
Quoting Intel
If using this 'representation' of volume enables us to read the charts correctly then, I dont really care if it is ACTUALLY price changes or tick changes or trades opened/closed or just a bag of bananas!.........It works!!!!!

Just my thoughts
Nice post.. it didnt work as far as I can see though. By time the update came in the move was made and entry was too late and it hasn't recoverd, so it was not an intra day retracement.

I believe also, that the skill was evident in his reading of the chart and it was impressive. To me, like I hinted in my post, the volumes were not strong enough to push through.

Although volumes are relative.. if it had higher volume last time and it did not break resistance it was a clue that the same result might occur.


Luckily I shorted twice, once at the gap and exited on the 15minute hammer and once at R2 pivot when germany opened, so I am pleased.


Something interesting/different.

I always wondered (until today) why the volume bars in metatrader were green on both a red or green bar and vise versa.

I dawned on me, (sometimes I am slow)... that when the ask or bid changes price in isolation from its counter part it is counted as volume in that direction.

So based on the theory below a green volume bar on a red candle would mean a bigger sell order came in that was filled with smaller buy orders.

For example, if bid is stationary but ask is ticking around .. it means, they are finding a match or matches for orders at a solid price doesn't it?

So if nothing else that should mean a bigger sell order came in and they are filling it with multiple buy orders and the sell price cannot be moved until the bigger order is filled or they should move together. I closed a trade on this theory today and the trade did move in the opposite direction but it may have been just dumb luck.

I am not sure this is so but I will investigate to see if it has some merit.
  • #6,649
  • Apr 12, 2010 12:24pm Apr 12, 2010 12:24pm
Quoting asgard2
Nice post.. it didnt work as far as I can see though. By time the update came in the move was made and entry was too late and it hasn't recoverd, so it was not an intra day retracement.

I believe also, that the skill was evident in his reading of the chart and it was impressive. To me, like I hinted in my post, the volumes were not strong enough to push through.

Although volumes are relative.. if it had higher volume last time and it did not break resistance it was a clue that the same result might occur.


Luckily I shorted twice, once at...

Nice posts, certainly something to think about
  • #6,650
  • Apr 12, 2010 12:42pm Apr 12, 2010 12:42pm
last update of the day for GU continue from prev post ref:http://www.forexfactory.com/showpost...postcount=6642

GU has make it to the retracement level of 23.6% (initial TP retracement level) & is now seeing some weak supply & tapering vol but any pickup on upbars could still move price downwards more or less...

Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_14 Apr. 13 01.33.gif Size: 28 KB


Overall, the expectation of the price move up to TP in todays early session have been cut short with sudden reversal & price retracement instead.

I hope these post have been useful for you as much it is for me.
Any advise & comments is most appreciated.
Thanks
  • #6,651
  • Apr 12, 2010 1:08pm Apr 12, 2010 1:08pm
where is the bootcamp cd that is posted, i didnt see it under the attachment? If its a link to another site then if someone can direct me to the pg with the post or repost the link, thatll be helpful.. Thanks
  • #6,652
  • Apr 12, 2010 1:13pm Apr 12, 2010 1:13pm
Quoting megamo
where is the bootcamp cd that is posted, i didnt see it under the attachment? If its a link to another site then if someone can direct me to the pg with the post or repost the link, thatll be helpful.. Thanks
here you go
http://www.tradeguider.com/customer/...s/VSA%5Fintro/
“buy the rumor, sell the news”
  • #6,653
  • Apr 12, 2010 1:28pm Apr 12, 2010 1:28pm
Quoting ShowT
here you go
http://www.tradeguider.com/customer/...s/VSA%5Fintro/
Nice link to some good stuff. However, this is not the boot camp.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #6,654
  • Apr 12, 2010 1:59pm Apr 12, 2010 1:59pm
Quoting HiddenGap
Nice link to some good stuff. However, this is not the boot camp.
I watched the original bootcamp with Todd & Tom where Todd uses "hand drawn" charts.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #6,655
  • Apr 12, 2010 2:14pm Apr 12, 2010 2:14pm
Quoting megamo
where is the bootcamp cd that is posted, i didnt see it under the attachment? If its a link to another site then if someone can direct me to the pg with the post or repost the link, thatll be helpful.. Thanks
Try here
  • #6,656
  • Apr 12, 2010 2:18pm Apr 12, 2010 2:18pm
YES. That's it.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #6,657
  • Apr 12, 2010 2:32pm Apr 12, 2010 2:32pm
Quoting taomql4
i think we should start saying "Activity" instead of volume, i think people
might feel better...My Guess.
ASA. Done.

PS Hi guys.
The trend always ends.
  • #6,658
  • Apr 12, 2010 2:43pm Apr 12, 2010 2:43pm
Quoting Shamus
ASA. Done.

PS Hi guys.
Does this mean we got to start a new thread:-

Trade Using ASA (Activity Spread Analysis)

I mean, we wouldn't want to go off topic
  • #6,659
  • Apr 12, 2010 2:52pm Apr 12, 2010 2:52pm
Quoting Intel
Does this mean we got to start a new thread:-

Trade Using ASA (Activity Spread Analysis)

I mean, we wouldn't want to go off topic
Think about poor old HG and the like who use Wide Range Body analysis, they use volatility.

Mmmmmmm..........

WRB
EB
VSA
ASA
AVA

......they wont know whether they're coming or going
  • #6,660
  • Apr 12, 2010 3:13pm Apr 12, 2010 3:13pm
Well, i see professional activity on around EU, ATR is pretty much
oversold--we need another session--asia/london might take her up..
@TP .3700
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