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Trade Using VSA (Volume Spread Analysis)

  • #6,661
  • Edited 6:27pm Apr 12, 2010 6:14pm | Edited 6:27pm
Quoting lascavel
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...

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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...
Your posts have been insightful. Thank you so much for all the work!

Keep them coming! They really are an art form and its great to have someone elses view that makes a lot of sense.
  • #6,662
  • Apr 12, 2010 7:42pm Apr 12, 2010 7:42pm
This post is inspired by last debate about volume between asgard2 and HG

Actually this is no matter what you doing and even HOW you doing it the point is WHO doing this. Is the person really believes and masters his way or no.

I will explain: markets is the field of human activity like car building, science, cooking, business, beer-pong etc. In any field there are NUMBER of ways you can succeed, there is no just one way to do anything right. You can see that because it's a lot of different car types, tasty food and successful businesses.
If a person have mastered his way of doing something and have a great success there is no way you can say his results better or worth than other master results.
Lets take martial arts or battle skills as example(I think it is good analogy)
You can fight with sword or bow or axe or katana or spear or even with your bare hands. If you are a Shoaling master of any kind of those weapons so you can withstand against 1-3-10 or 100 enemies and after battle drink your white tee and not think about how you won and why.
It is wrong to say that your WEAPON beat 100 enemies and it is better than any other master weapon.
I know people who trading good with simple MA crossing systems and mega-complex geometrical and fractal systems and VSA. Some probably doing well with astrological and voodoo methods. But I cannot repeat their success because there is number of IFS, BUTS and just their feeling in their methods that making impossible to copy that method or say anyones is better.
I only can achieve my OWN goal by creating my own way from melting together thousands pieces of information I have around.
Since I'm engineer and mathematician by my nature I found that VSA is logically nice and fit my style better than let's say voodoo or 123 and 321EMA crossing system. So i decide to master VSA system by learning from those who know it better and by adding my own research. Thanks everybody who making a great VSA or ASA posts here!
About volume......it doesn't really mater what was the name of the guy who made your katana(tick or transactions) if you cut the heads(pips) with it and your head still in place(account not blown)

Definitions are losers job, achievements are coming when you forgetting about definitions and start DOING SOMETHING.

No offense to asgard2, thanks to him for bringing it up! Sometimes we need to look down to see if the fundament we standind on is still solid

Good luck to fellow VSA researchers! Sit tight, reinforcement is on the way!
“buy the rumor, sell the news”
  • #6,663
  • Apr 12, 2010 8:45pm Apr 12, 2010 8:45pm
Quoting ShowT
Since I'm engineer and mathematician by my nature I found that VSA is logically nice and fit my style better than let's say voodoo or 123 and 321EMA crossing system. So i decide to master VSA system by learning from those who know it better and by adding my own research. Thanks everybody who making a great VSA or ASA posts here!
I am a data comms engineer by profession myself and at uni I did pure and applied math so we are on the same side of this equation.

Quote

About volume......it doesn't really mater what was the name of the guy who made your katana(tick or transactions) if you cut the heads(pips) with it and your head still in place(account not blown)

Yes it matters and I will try an make it clearer for everyone.

Williams says that traders don't sleep. Even if that is right, the Central Banks sleep who are providing the forex liquidity unlike a share market.

You cannot take something as just gospel because someone said it. Most Especially when their credentials are supplied via self recommendation.

Now say, I am running a Central bank and;.

I have traders who do work all night and that is for sure but they need to confer with other banks. If a little Aussie bank has a deal between BHP and Pepsi that is worth a couple of billion and my bank gets a fair stake of that.

Settlement is coming up.. that deal will go through after consultation and agreement for the exchange rate. Settlement will not take place until that exchange rate is met and it will NOT be in the news.

They will not try to move the market that far until they have given other banks a chance to get on board to help push the market in the same direction. So they are going to give fair warning to other banks that the rate is increasing or decreasing. Then you get your accumulation phase.

Settlement will always take place in major market hours and I as the CEO or whatever will make sure I am looking over everyone shoulder so no mistakes are made. Dammed if I am getting up in the middle of the night for no reason and there is not enough traders in the market to absorb the moves.

Now outside market hours the market makers know nothing will happen between the Aussie and Asian session which is 1 hour. For that hour they can move the market where ever they want.. There is your Gap, as an example.

They can create illusions that suck people in buy running the tick count up with no real orders. They can shape candles easily by moving price around.

This is not possible for them at times of high activity. I only say it matters because I have learned it and sometimes early on, I learned it the hard way. Now my brain filters out the results i see.

Question every thing.. if what you see does not make logical sense.. think harder! Why is it so?

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No offense to asgard2, thanks to him for bringing it up! Sometimes we need to look down to see if the fundament we standind on is still solid

No offense taken.. each to their own.

Just remember, if you haven't questioned something hard then you have not validated it.
  • #6,664
  • Apr 12, 2010 9:23pm Apr 12, 2010 9:23pm
continue form my previous post on GU ref: http://www.forexfactory.com/showpost...postcount=6651

GU has hit the expected projected TP measure of from point AB after some more weakness that i mentioned that can occur (after the retracement TP was hit) & is now experiencing some climatic "ACTIVITY" .
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  • #6,665
  • Apr 12, 2010 9:34pm Apr 12, 2010 9:34pm
Keep on posting your wonderful charts and analysis. I believe you have been becoming a significant contributor to this thread.

By the way, are you going to wait for signals for long at this phase?

Quoting lascavel
continue form my previous post on GU ref: http://www.forexfactory.com/showpost...postcount=6651

GU has hit the expected projected TP measure of from point AB after some more weakness that i mentioned that can occur (after the retracement TP was hit) & is now experiencing some climatic "ACTIVITY" .
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  • #6,666
  • Edited 10:44pm Apr 12, 2010 10:06pm | Edited 10:44pm
Quoting polomine
Keep on posting your wonderful charts and analysis. I believe you have been becoming a significant contributor to this thread.

By the way, are you going to wait for signals for long at this phase?
You are welcome, I m here to learn also, swap ideas etc...

Yes since we'v met with some kind of strengths, in this case it would be wise to wait for some kind of test of weak supply, consolidation in which price will drift up & down (creating more minor swings) before heading up.

Do keep an eye for those "pickup activities" where there is an increase of vol on down bars or over 2 bars or even a possible strong shakeout.

edit: Volumes can be very subtle depending on which session you are looking at, u might not want to compare relative vol from that of NY & Asian but rather they are relative to it's own session. (notice my vol chart have levels indicating limit point e.g in in 30mins chart asia session can drop to below 500 & above 1500 but < 2500. NY tends to pick up > 2500, this is for 30m chart.

(hope my explanation makes sense)


cheers!
  • #6,667
  • Apr 12, 2010 10:53pm Apr 12, 2010 10:53pm
Quoting asgard2
Now outside market hours the market makers know nothing will happen between the Aussie and Asian session which is 1 hour. For that hour they can move the market where ever they want.. There is your Gap, as an example.

They can create illusions that suck people in buy running the tick count up with no real orders. They can shape candles easily by moving price around.

This is not possible for them at times of high activity. I only say it matters because I have learned it and sometimes early on, I learned it the hard way. Now my brain filters out...
I totally agree.....but we are talking about different parts of the picture)

I'm assuming that somebody who good with VSA have noticed all nuances(especially about market hours) and in this situation nature of volume is ALREADY doesn't matter....I mean if someone will say that this nature is different from what everybody else thinking this wouldn't change anything. But for people who just began volume nature make sense YET and help understand what they see, that's why I thank you for bring this topic up.

This reminds me one funny episode: we been watching transformers in cinema and after one of action scenes my friend said "That's not right, transformers seems to be very heavy so they cannot move so fast!"
I thought "Hmm...alien robots came to find some kind of cube that can create cyborg from a cell phone and it will jumps and shoot rpg.......can they move fast having huge weight? WTF! sure they can!))))"
I mean in some conditions some things doesn't matter....

To make it clear are you saying that forex volume represents just number of ticks, and tick can be generated without actual buy/sell episode just by changing quote price back and forth by market makers?
I know that volume is not a volume of contract sizes or whatever but ticks, but i'm not sure how ticks are generated.
“buy the rumor, sell the news”
  • #6,668
  • Apr 12, 2010 11:39pm Apr 12, 2010 11:39pm
Thanks for explaination!

I am curious about what volume indicator you are using. the volume of my gbp/usd m30 chart never exceeds 1000.

Regards,
polomine

Quoting lascavel
You are welcome, I m here to learn also, swap ideas etc...
notice my vol chart have levels indicating limit point e.g in in 30mins chart asia session can drop to below 500 & above 1500 but < 2500. NY tends to pick up > 2500, this is for 30m chart.

(hope my explanation makes sense)


cheers!
  • #6,669
  • Edited Apr 13, 2010 12:00am Apr 12, 2010 11:45pm | Edited Apr 13, 2010 12:00am
Quoting ShowT
I totally agree.....but we are talking about different parts of the picture)
I know that volume is not a volume of contract sizes or whatever but ticks, but i'm not sure how ticks are generated.
Well a market maker is basically an Auctioneer. He sets a price and checks the interest.. if the interest is not forthcoming, he lowers the price to try and create an interest. Still no interest, if he thinks there are potential sellers, he raises the price.

After he figures out and gauges what he can make the most profit from, he will move the market in that direction to create order flow. When he has enough orderflow in one direction, the move will be the opposite. That is why and how he makes the market.

All the while he is generating false volume (or activity if you prefer).

If you make a trade based on those volumr figures at that time, you are not making a trade based on the reality of the market or orderflow.

Glad someone finally gets it..

Oh.. I used to work for the financial times.. (years ago) and a tick was generated by sparc boxes with specialised software that was measuring trade orders as they arrived. This was about the time the EUR was floated so.. it is years ago. I imagine the software is simply more user friendly now. Wish I still worked there, I could hook up to the feed.
  • #6,670
  • Apr 12, 2010 11:50pm Apr 12, 2010 11:50pm
Are there any ATR indies that just show the number? without the mA?
  • #6,671
  • Apr 13, 2010 12:07am Apr 13, 2010 12:07am
Quoting asgard2
All the while he is generating false volume (or activity if you prefer).

If you make a trade based on those volumr figures at that time, you are not making a trade based on the reality of the market or orderflow.
So, do you agree that we can trust the tick volume as market activity indicator during normal trading hours, say 7-22 GMT ?
“buy the rumor, sell the news”
  • #6,672
  • Apr 13, 2010 12:44am Apr 13, 2010 12:44am
Quoting ShowT
So, do you agree that we can trust the tick volume as market activity indicator during normal trading hours, say 7-22 GMT ?
Absolutely ... when the banks are in the market, the market makers have no say. They cannot shift the market when order flow increases.

In fact I agree with most of the system. But those people teaching do not know forex and I believe they assume it is the same.

Major differences. (Given I know nothing of their markets!)

 

  1. Forex is faster, the leverage is greater and Banks do sleep.
  2. Forex can not run out of supply, only demand and if that sounds like a pedantic argument.. then some more thought is needed.
  3. You can always sell what you don't own so there will always be greater potential for the move against you regardless of which side you took or how shaken out you think the market is.
  4. An exhaustive up/down candle is very often accompanied by another of equal magnitude.
  5. The retail market cannot alter prices.. only the professionals can do that.
  6. retail activity can double volume but it will have no effect on the range of the candle.


Similarities;

 

  1. Everyone is trying to get a piece of you and most times they will succeed.
  2. News is rumors and lies and markets react.
  3. The indicative charting patterns apply to both type of markets apparently.. see I learned some stuff from those guys.
  4. When the news comes out.. technical analysis goes out the window.
  5. You can never know enough.
  6. Be careful who you listen to and always verify everything.

My Take on this whole system has not changed.. the fundamentals are good but the differences, if addressed would make it a better fit for forex.

My Complaints;

I wish those guys would do away with the antique charts and speak English.. This is me telling an Englishman to speak English

Each of those chart patterns have a corresponding and accepted forex name.. so why don't they use them. Why are we adopting them so readily?

Aside from the obvious confusion with spead and his diamond MA that I will guess is the 200 X 5minute period.

  • #6,673
  • Apr 13, 2010 1:17am Apr 13, 2010 1:17am
Quoting polomine
Thanks for explaination!

I am curious about what volume indicator you are using. the volume of my gbp/usd m30 chart never exceeds 1000.

Regards,
polomine
My broker is GO mkts. Different broker may have slight variation of the volume count. I was testing the dukascopy mt4 beta 2 weeks ago, i have to chg my levels in the vol indi more or less.

I even spoted a trap downmove (shakeout) in all the other brokers datafeed except Dukascopy.

Anyway just simply define your "peak level" in all TF then draw the levels accordingly. I do not like avg of vol line as it does not makes sense to me.

cheers!
  • #6,674
  • Edited 1:44am Apr 13, 2010 1:28am | Edited 1:44am
continue from my previous post on GU's ACTIVITY!!!

ref: http://www.forexfactory.com/showpost...postcount=6665
ref: http://www.forexfactory.com/showpost...postcount=6667

GU have seen support & now have broken the trendline of the down move yesterday. Price have move up slightly.

Expect possible retracement of price from the swing of AB (B is yet to be establishdd) & watch for possible vol pickup at ard 38.2 or 23.6 % retracement level.

edit: please ignore the AB on the left edge of the chart. the AB i am refering to is on the right (logically)
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  • #6,675
  • Apr 13, 2010 2:54am Apr 13, 2010 2:54am
Quoting Rangerdoc
@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?...
I have always thought that if a trader could learn to understand the creation of a candle/bar, he or she would truly be in tune with the market. I think its the pinnacle of understanding price action. I would love to hear from some traders that have a handle on this. Add a layer of volume analysis (relative volume analysis) and that would seem to be as close to market understanding as anyone could hope to achieve.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #6,676
  • Apr 13, 2010 3:21am Apr 13, 2010 3:21am
Short trade?
  • #6,677
  • Apr 13, 2010 3:24am Apr 13, 2010 3:24am
Quoting Intel
Short trade?
Please ingore above post
  • #6,678
  • Apr 13, 2010 3:27am Apr 13, 2010 3:27am
Short trade?
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  • #6,679
  • Apr 13, 2010 3:29am Apr 13, 2010 3:29am
Quoting HiddenGap
I have always thought that if a trader could learn to understand the creation of a candle/bar, he or she would truly be in tune with the market. I think its the pinnacle of understanding price action. I would love to hear from some traders that have a handle on this. Add a layer of volume analysis (relative volume analysis) and that would seem to be as close to market understanding as anyone could hope to achieve.
Now would you be thinking about the real time development of an actual candle.....if so, then we may be on the same wave length.....

The green / red arrows were trade signals from my thread and the yellow arrows are from a nice little Candle Size Alert that I've found......as usual, this is "work in progress".....
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Trading Levels with WRBs
  • #6,680
  • Apr 13, 2010 3:30am Apr 13, 2010 3:30am
Quoting Intel
Short trade?
ND failed so no trade
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