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Trade Guider System VSA, fact or fiction?

  • #1
  • First Post: Edited Apr 17, 2010 1:31am Apr 14, 2010 10:54pm | Edited Apr 17, 2010 1:31am
Hi all,


I ran across a video on you tube that sounds so great for forex I thought I would look into it some more.

Inserted Video


It sounded so excellent I sat and watched all the videos found in the VSA thread here.


By the time I finished I was a lot less convinced this method is a perfect fit for forex at all.

EDIT// FRIDAY 16:54 GMT

After pretty extensive chart queries via some statistical analysis I have come to the conclusion this system is not and I believe cannot be profitable for forex.

Although volume is important, the relevance of volume was applicable only to a few certain hours.

Surprisingly, when all three of the major markets were open, the results were consistent with random trading and could not be viewed with any credibility.

The larger spread or range of the HV bar after a trending market in either direction did have results indicative of weakness in the market but the timing of the change in trend was unpredictable, variable and could not be guaranteed.

The no demand bar was easily confused with the presence of many similar bars and waiting for the no demand to present clearly, missed the move on most occasions and I believe is overall non existent when applied to forex volume.

A Bearish Engulfing Pattern (two bar upthrust) is a standard forex warning at a Market high and since no volume is associated by the Trade Guider Method for this pattern, it cannot be considered to be a VSA pattern of extra merit.

An inverted hammer or a spinning top under extreme volume and at a market high (upthust) yielded the most consistent results as a turning signal. However, although the trade guider method of trading promotes relative volume of 20 bars, what appears to be extreme volume can easily be outclassed by the following volume bar of greater magnitude. This became a problem in that there was never a way to know what was extreme relative volume until after the event.

Overall I found the predictive nature of the method to be disappointing


I could write more on this but you will all be bored, if you have a question, feel free to ask.






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  • #2
  • Apr 14, 2010 11:39pm Apr 14, 2010 11:39pm
I have a theory;

when a market maker or anyone on the wholesale side of the equation receives orders, either buy or sell, all the lot sizes are different. If a large order comes in at a quoted price, for a few ticks they must fill that order with smaller orders.

I always wondered (until lately) why the volume bars on the metatrader platform were green on both a red or green candle and vise versa.

It 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.

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 the still price should mean it was a bigger order and was filled with small orders.

Bigger orders should mean professional money and they sell into a rising market and buy in a falling market.

If you knew when the professional money was selling you could do the same and vice versa. That way you should always be on the right side of the move.

appreciate some comments or suggestions on how we could validate this ?

I was thinking we could port tick results to mysql and run some queries against subsequent market action.
  • #3
  • Apr 15, 2010 12:50am Apr 15, 2010 12:50am
I also have a theory:

1.) If you take volume off the VWAP from the hidden buyers when supply is swamped by demand , you buy the dips when no demand shows a test of supply from the hidden sellers but only if the preceding action is confirmed by the RSX and the background has indicated that supply is no longer on the profile from the demand of the professional buyers.

Comments are welcome!!!
  • #4
  • Edited 1:29am Apr 15, 2010 1:06am | Edited 1:29am
I have recently delved into the more spiritual side of forex and made contact with Mr Richard Wykcoff through a slightly used ouija board and he is pissed that you think VSA is a new concept. On a seperate note, Dick (he said I could call him that) has surprisingly small hands and during the seance there was a waft of cabbage in the air.

Wayne McDonell from FX Bootcamp, who was also contacted (although admittedly not through my awesome ouija board) said he is comtemplating shoving his size 16 boot up yer stinker for illegally distributing his works through improper channels.

And why have you been banned from the original VSA thread???
  • #5
  • Apr 15, 2010 1:34am Apr 15, 2010 1:34am
Quoting wallst500
I have recently delved into the more spiritual side of forex and made contact with Mr Richard Wykcoff through a slightly used ouija board and he is pissed that you think VSA is a new concept.

Wayne McDonell from FX Bootcamp, who was also contacted (although admittedly not through my awesome ouija board) said he is comtemplating shoving his size 16 boot up yer stinker for illegally distributing his works through improper channels.

And why have you been banned from the original VSA thread???

Mate.. does it bother you I have a different point of view?

Isn't that what they teach on the CD's? Don't be part of the herd mentality!

I am banned from posting in that thread because I asked if he was making money from the free work he has asked for and been supplied with from this forum.

It is perfectly understandable and the banning is indicative confirmation

People often get upset when you appear to threaten a potential source of income but it was not my intention to upset the guy.

BTW they are links provided in Shamus's forum.. I just copied them here so they were easy to find.

As for your idea, sounds great, how to you plan to test it?

cheers buddy
  • #6
  • Apr 15, 2010 2:17am Apr 15, 2010 2:17am
Quoting asgard2
Hi all,


All money in the market that moves the range of the bar must be pretty much all professional as apposed to what they are saying for stocks.

Forex is also a lot less constrained because there is no limit that you can purchase or that is still available in the market and you can sell what you don't own.

Volume is the primary factor in VSA or at least is an equal part of the equation but unlike shares, each volume bar for forex and its corresponding ticks, is not an order for a piece of the market or even a point, it is simply a quote...
If I can sell what I dont own then can I buy what I dont own? Makes volume a pretty moot point then..correct?
Continuous periods of Total Misunderstanding followed by Complete Confusion
  • #7
  • Apr 15, 2010 2:29am Apr 15, 2010 2:29am
Back on Topic

I have started testing the statistically optimal range of bars to see if there is a correlation that be suitably applied to a probability value for volume. I don't know if this is possible but I thought it might be worth playing with.

The more I think about it the more complex it becomes due to the ratio of volume size that can be attributed to slow days like Easter Friday and market size

Sometimes I think it is something worth exploring and other times I think non of it matters unless you can get inside the minds of those driving the markets, at the very time they are driving them.

I am in two minds about the value of statistics and probability so, if anyone has any comments I would be pleased to here them.
  • #8
  • Apr 15, 2010 11:25pm Apr 15, 2010 11:25pm
Well, after hearing a recent interview with Rob Booker where he disclosed his trading strategy based on statistical analysis and the favorable probability rate of success that he testifiied he was attaining, I reckon it's worth a shot. It makes sense to me that statistical analysis would take the gold over fundamental and technical analysis anyday in terms of being objective which in turn should nurture some low risk high probability trades.

BTW, I am enjoying those volume cd's you posted and I am really sinking my teeth into that order flow stuff, would like to get a hold of heaps more on that anyday.
  • #9
  • Apr 16, 2010 6:52am Apr 16, 2010 6:52am
Quoting Hal2611
Well, after hearing a recent interview with Rob Booker where he disclosed his trading strategy based on statistical analysis and the favorable probability rate of success that he testifiied he was attaining, I reckon it's worth a shot. It makes sense to me that statistical analysis would take the gold over fundamental and technical analysis anyday in terms of being objective which in turn should nurture some low risk high probability trades.

BTW, I am enjoying those volume cd's you posted and I am really sinking my teeth into that order flow stuff,...

Good stuff, mate,

I started doing this today but I am slow at coding so it might take me a few days to get any decent results.

I find candle statistical analysis pretty interesting as well.

Example, many times you will have a bear engulfing pattern or a dojie at a market high... how many times did it keep going or alternativly how many times did the market reverse? What is the probability? We can all find them at the top of the range.. look a little closer and they are all through the trend and were at the top before the market kept going.

Someone mentioned real time candle formation in another thread.. I use this to trade on a daily basis.. this is a lanugage all of its own. The very last minute of say a 30 minute candle and that candle can totally change shape from what it had shown for the preceding 29 minutes. I could be wrong but I have seen it so often I think there is more to it than just co-incidence.

Tonight I am doing up a VSA .. better called FVA (Forex volume analysis) conversion paper from the other markets.

It will be brief and to the point.. I will post it as soon as its done.
  • #10
  • Edited 9:49pm Apr 16, 2010 9:45pm | Edited 9:49pm
Hi all, I have edited the first post and removed my guarded recommendation of this trading method and stated the reasons for the change in attitude.

I am sure volume is a reasonable indicator in some circumstances but it does not stand up to statistical scrutiny in forex as it may do in other markets.

Unless someone is interested. I will let this thread die and those that may prove me wrong by profiting from forex using this as the sole trading method are welcome to post contrary comments to support their experience.

I welcome any counter ideas or supporting arguments for the method.
  • #11
  • Apr 17, 2010 1:26am Apr 17, 2010 1:26am
Quoting LasVahGoose
Here is a thread on VSA being actively traded.

http://www.forexfactory.com/showthread.php?t=157629
From what I was reading, I don't think they are really trading live are they?

I am pretty sure they are still working it out, but if anyone is making a heap of money using this method I would really like to hear about it and see the trades live.

My statistical analysis says it is improbable that success is achievable using this method for forex.

I would be very pleased to be proved wrong in this instance. Should that happen, I would no doubt use the method myself.
  • #12
  • Apr 17, 2010 5:34am Apr 17, 2010 5:34am
what excactly are you doubting? volume feeds? SM? VSA is not easy and takes time but i have no doubt it works in forex.
  • #13
  • Apr 17, 2010 5:45am Apr 17, 2010 5:45am
Quoting asgard2
but if anyone is making a heap of money using this method I would really like to hear about it and see the trades live.
If anyone is making a heap of money using that method I'm not sure they'll be interested in telling you about it or sharing their live trades.
  • #14
  • Apr 17, 2010 5:55am Apr 17, 2010 5:55am
Quoting eurotrash
If anyone is making a heap of money using tha method I'm not sure they'll be interested in telling you about it or sharing their live trades.
yup
  • #15
  • Apr 17, 2010 9:26am Apr 17, 2010 9:26am
Quoting asgard2
From what I was reading, I don't think they are really trading live are they?

I am pretty sure they are still working it out, but if anyone is making a heap of money using this method I would really like to hear about it and see the trades live.

My statistical analysis says it is improbable that success is achievable using this method for forex.

I would be very pleased to be proved wrong in this instance. Should that happen, I would no doubt use the method myself.

ALL I CAN SAY IS OPERATOR ERROR.

vsa is a very valid way of trading in the markets. I use it every day. I can asure you I am profitable in this market. I do not take hundreds of pips a week as most claim to. I make a modest200 to 250 pip a weekas i am picky about my trades , but constantly.

1) go back to my postings of June last year where I called the top ( to the pip as i said liekly it will get an upthrust after initial weakness to 1.7000 ) of GU and called 1.5300 and was laughed at due to pricing rising still.

2) here is a skype extract from Friday when talking to my client
[4/16/2010 7:37:14 AM] malcolm britton: gu is sell here
[4/16/2010 7:37:17 AM] malcolm britton: 1.5440

Just because you do not understand something does not mean it does not work. It takes time to learn these things.

Good luck in your moving forward and learning how to trade.

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Blogging daily now at www.volume.zone
  • #16
  • Apr 17, 2010 9:34am Apr 17, 2010 9:34am
Quoting sharpster
what excactly are you doubting? volume feeds? SM? VSA is not easy and takes time but i have no doubt it works in forex.
Well, I am not about to argue with you.

Each to their own but I think I will be swapping volume indicators for an order flow indicator for my own trading.

I think to viably refute any argument, some evidentiary support needs to be forthcoming. I am not sure what conclusion can reasonably be achieved without it.
  • #17
  • Apr 17, 2010 9:43am Apr 17, 2010 9:43am
Here is 6b and why i called a top at 1,6500 to 1.7000 area.

This week we have seen a sign of weakness in a doji on an up move on high volume. I will be looking for a break down of 1.5380 Monday to confirm this . Looking for test only of 1.4800 if we get backinto that channel as that ultra high vol candle at start of this range is pretty powerful .

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Blogging daily now at www.volume.zone
  • #18
  • Apr 17, 2010 9:56am Apr 17, 2010 9:56am
Quoting malcolmb14
Just because you do not understand something does not mean it does not work. It takes time to learn these things.

Good luck in your moving forward and learning how to trade.

Attachment
Congrats on your successful trade.

I have been a full time trader for quite some time and the market teaches me almost on a daily basis that I am not perfect and there is always scope for improvement. When I am over confident it swiftly reminds me how humble and insignificant I am.

If it hasn't yet reminded you, then I would suggest its coming

I might also remind you, picking the top of a trending market is one of the easiest things to do, picking the ceiling and floor of a sideways market is an enviable skill.

While I am happy to wear the inference you imply, I am not that pleased to wear if from one that offers no evidence or credible theory to support his/her case.

I suspect given my statistical analysis, your handling of the truth is somewhat reckless. Although I did not state it strongly, I will now state, it is impossible outside a certain 3 hours that volume in the form of tick value will have any effect on your trades and any successes are a random coincidence.
  • #19
  • Apr 17, 2010 9:59am Apr 17, 2010 9:59am
Quoting asgard2
Well, I am not about to argue with you.

Each to their own but I think I will be swapping volume indicators for an order flow indicator for my own trading.

I think to viably refute any argument, some evidentiary support needs to be forthcoming. I am not sure what conclusion can reasonably be achieved without it.

Maybe you can share your trading plan with us here
  • #20
  • Apr 17, 2010 10:03am Apr 17, 2010 10:03am
Quoting asgard2
Congrats on your successful trade.

I have been a full time trader for quite some time and the market teaches me almost on a daily basis that I am not perfect and there is always scope for improvement. When I am over confident it swiftly reminds me how humble and insignificant I am.

If it hasn't yet reminded you, then I would suggest its coming

I might also remind you, picking the top of a trending market is one of the easiest things to do, picking the ceiling and floor of a sideways market is an enviable skill.

While I am happy to wear...

If you have been a full time trader for "quite some time"...feel free to post your charts and trades with full explanations, i look forward to you sharing your information as malcolmb has on many occasions.
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