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Trade Using VSA (Volume Spread Analysis)

  • #6,781
  • Apr 14, 2010 8:43pm Apr 14, 2010 8:43pm
Quoting Shamus
I mentioned this in the chat already but this is for those that hang out here...

I have some excellent news to report to all of you. I received an email from Chuck (TwoBuckChuck) and... HE'S ALIVE!

He's had a really horrible time since the accident but the good news is he is ok and recovering.

I hope to find out more later tonight. I will post an update later if I hear back from him or perhaps he will come on to say Hi.

Great news !!!
The Market pays you to be disciplined
  • #6,782
  • Apr 14, 2010 9:07pm Apr 14, 2010 9:07pm
Quoting Shamus
There is no "System" in this thread...
Again... there is no "System" in this thread...
1.–noun
an assemblage or combination of things or parts forming a complex or unitary whole.

Quote
I have spoken many times in the chat about the differences between stock and forex vsa trading and my disdain for certain things such as accumulation and distribution which in the true sense (vsa wise) is not possible to identify in forex. It's simply a ranging market. I ignore these topics (as should you) when they come up.
Thats great, me too but what about other the other stuff?

Quote
PS VSA is not a system nor is it new. VSA is a method of trading that was originally developed using ticker tape in the early 1900's (Yes the early1900's) and modernized somewhat in the 70's.
I don't think we are in any disagreement what VSA is, simply how forex did not exist at the time and possibly things from the 70's could be changed to make it a better fit for forex in 2010.

Quote
Furthermore The resources in this thread are free and apart from meeting a lot of great people both here and in the chat I have not benefited from this thread....
Damm-- I should have said "intend to benefit" from this thread or "are you affiliated with?".

I am pleased you will not be profiting from the software that the people on this forum are helping you develop and test for free.

Not that I really mind if you do but I can't stand the wrapping of one size fits all because it ethically unattractive.

Quote
One more outburst like that and I swing the hammer... LOL
I have a couple questions!

 

  1. Why do you care if people want to use and expect others to use the accepted forex terminology for this stuff? Do you think possibly that it may save some confusion or is that part of the on size fits all markets sales solution?
  2. If a spread means the same in any market including forex, how is it interchangeable with bar size, range or width? Why are our resident sheep using it in the wrong context?
  3. Oh and how long is the hammer handle?

  • #6,783
  • Apr 14, 2010 9:14pm Apr 14, 2010 9:14pm
Quoting V_2008
http://www.forexfactory.com/attachme...8&d=1271177054

Hello, lascavel!

Would you explain me please, how did you recognize accumulation? As I know, accumulation phase consist of some points: 1. Spreads must be narrow 2. Volume should shrink near support line and increase near resistance line. 3. And market should go sideways.

Please, help me and correct if I'm wrong!

P.S.: Sorry for my English!
Sorry i miss your post..

You are mostly correct. I will not explain to death about all this rules but let's just keep it simple. Keep an eye on those dropbars with increase volume follow by retraction, subtle or not. (tip, best way to train your eyes to spot accumulation is to study equities stocks chart.)

cheers!
  • #6,784
  • Apr 14, 2010 9:25pm Apr 14, 2010 9:25pm
OH OH , i sense alittle friction on the thread.....

its Time for
The Chipmunks


Inserted Video
  • #6,785
  • Apr 14, 2010 9:44pm Apr 14, 2010 9:44pm
Quoting asgard2
1.–noun
an assemblage or combination of things or parts forming a complex or unitary whole.
HAHA There you go with semantics again LOL (refer to my previous comment regarding this). I trust you know what I meant by "it's not a system"? so let's move on.

Quoting asgard2
Thats great, me too but what about other the other stuff?
Which other stuff? This what I meant when I said you should articulate your thoughts a bit better than you have.

Quoting asgard2
I don't think we are in any disagreement what VSA is, simply how forex did not exist at the time and possibly things from the 70's could be changed to make it a better fit for forex in 2010.
A better fit for whom? You? Surely you are intelligent enough to understand what someone means in *this* thread when they refer to the spread... right?

Quoting asgard2
Damm-- I should have said "intend to benefit" from this thread or "are you affiliated with?".
Benefit from what? Affiliated with what? Assume for a second that I am not a mind reader. Again... This what I meant when I said you should be clear in your posts.

Quoting asgard2
I am pleased you will not be profiting from the software that the people on this forum are helping you develop and test for free.
Not that I really mind if you do but I can't stand the wrapping of one size fits all because it ethically unattractive.
First off who said anyone is testing for free? You assume much for someone that has no idea what you're on about.
PS.
I'm glad *you* don't mind LOL.

Quoting asgard2
I have a couple questions!
Quoting asgard2
[*] Why do you care if people want to use and expect others to use the accepted forex terminology for this stuff? Do you think possibly that it may save some confusion or is that part of the on size fits all markets sales solution?
Why do you think I shouldn't care? Keeping this thread on topic is hard enough without throwing different terms into the mix. Again... surely you are intelligent enough to understand what someone means in *this* thread when they refer to the spread... right?


Quoting asgard2
[*] If a spread means the same in any market including forex, how is it interchangeable with bar size, range or width? Why are our resident sheep using it in the wrong context?
Since this is a vsa thread (Not a commission thread for instance) they are *not* using the term spread in the wrong context. Get it? Understand?... Good. Now read what I said again. Let it sink in. Now move on.


Quoting asgard2
[*] Oh and how long is the hammer handle?
Since you are offering little to further people's knowledge of VSA and have steered off topic a number of times you should now know the answer to your last question. PM me if you wish to continue this discussion.
The trend always ends.
  • #6,786
  • Edited 11:00pm Apr 14, 2010 10:38pm | Edited 11:00pm
Quoting HiddenGap

I say that if you must use multiple timeframes after decrying that a chart never lies and a chart is a chart, then you don't believe your tenets and the whole thing falls apart.
Sure we don't want to let down our believes in charts and VSA...but different time frames are essential for the essence of VSA wich is look to the LEFT of the chart.
I think different TF help a lot with understanding the conditions of particular trade. You can take 20 of 5min bars in isolation and conclude strength/weakness.... but if you look on 20 1H bars same time your 5min analysis can stay the same but your FORECAST of future movement will have more probability to be right(ie 60% if isolated and 80% if not).
That's my point and I think you get it
And I think there is the reason for this phenomena. Every day we see how.... eg. during some period strength is coming to the market but then we see weakness signs because for some reason supply happen to come back and price fall then strength again..etc. Those period can be as short as 5-15 of 5min bars.
We can read the chart but we cannot predict when one VSA signs will be changed to opposite ones using VSA(thats why we add s/r, fibs. ATR etc.) BUT with bigger picture in the head probability of good prediction thru better understanding of current conditions is bigger.
That's my thought's about subject, will be good to hear HG opinion because I think a lot of folks here curious about how that TF question answered in WRB analysis. What is your preffered TF?
“buy the rumor, sell the newsâ€
  • #6,787
  • Apr 14, 2010 10:42pm Apr 14, 2010 10:42pm
Quoting ShowT
Sure...
Doing a bit of celebrating tonight after hearing the news regarding Chuck. I just had to stop everything to say Your sig rules!
The trend always ends.
  • #6,788
  • Apr 14, 2010 10:47pm Apr 14, 2010 10:47pm
Thanks

I glad for Chuck too! I know what is accident...been in bad one.
“buy the rumor, sell the newsâ€
  • #6,789
  • Edited 11:15pm Apr 14, 2010 10:56pm | Edited 11:15pm
I also been following EG (when i do GU) but i did not share the chart previously but for those who are interested or may find it useful.

EDIT: chart updated sorry.

Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_81 Apr. 15 12.04.gif Size: 36 KB


EDIT: Here are the TPs, estimates within ADR

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  • #6,790
  • Apr 14, 2010 11:07pm Apr 14, 2010 11:07pm
You talk in circles ...lol

ALL time frames are applicable to VSA . Depends on what you want to do.

If , like me , you would like to trade on the lower times in the direction of the strength of the charts ( ie those selling eu this week are likely having a hard time and getting hit with loads of stop outs but the 60 min have clearly shown the buyers on every dip . They are not even hiding as they know everyone is super bear EU) then I look to 60 min for strength or weakness and then trade in direction of that on 15 min charts down .

If you trade a 2 min chart only and do not care about trading with trend and keep very tight stops with a 50/50 win loss ratios then sure look at just one time frame.

Quoting HiddenGap
Just my 2 pips.........

This is my biggest problem with VSA.

If you believe that a chart never lies (Gavin believes this as I do). And if you believe that a chart is a chart is a chart (again Gavin believes this as I do). Then why do you have to look at another timeframe?

The weakness you see on the 15 minute MUST exist because a chart never lies. Due to the fractal nature of markets, you can take two charts without the scale and you cannot determine timeframes based on price movement itself. Taking it one step further, you could...
Blogging daily now at www.volume.zone
  • #6,791
  • Apr 14, 2010 11:49pm Apr 14, 2010 11:49pm
Quoting ShowT
............. will be good to hear HG opinion because I think a lot of folks here curious about how that TF question answered in WRB analysis.
WRB analysis and VSA are independent of one another. Although I think they can be melded into a cohesive and synergistic understanding of the supply/demand dynamics in the market.

Pure WRB analysis does not need volume. Pure WRB analysis doesn't need multiple timeframes. While some more advanced users might try to use the WRB zones of one timeframe to trade another, it is not necessary and is actually a bit difficult to do.

My personal take on WRB analysis adds a volume component as you know. Take a look at the chart below. The thing about this chart is that there is a cause and an effect. The stopping volume candle represents the cause and the WRB that comes later is the effect. What this means is that the area of the Key Change in the supply/demand dynamic that is marked on the chart becomes the very best place to look for signals.

So if this was a key change in supply/demand on this timeframe, you don't need another timeframe if you are taking your trade within this zone. The traders responsible for the change, know this area. How they feel about this area, will be reflected in how price acts within it. With that said, WRB analysis is not a trade signal. One still needs a method, VSA or otherwise, to get into a trade.

Ultimately WRB analysis gives an understanding of the price action prior to any trade signal. Going back to the chart. One would have a better understanding of the price action and therefore be more able to take a trade if it appeared within this zone. Think of it as the "second" wave of BB demand and the stopping volume as the first. From this chart you have an idea of what price area matters to the BBs on this timeframe and why a trade signal in this area carries more weight.

In conclusion, if one wanted to take a trade signal on the 5 min. within a WRB zone created on the 15 min., it could be done. However, it is a bit difficult. Using multiple timeframes to say, look for a trade entry within the zone of a 5 minute chart and then confirming it with a signal(s) within a zone on another timeframe(s) is not the proper use of WRB analysis.
Attached Image (click to enlarge)
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Without VSA, you're playing checkers while the Smart Money plays chess.
  • #6,792
  • Apr 14, 2010 11:57pm Apr 14, 2010 11:57pm
Quoting malcolmb14
....ALL time frames are applicable to VSA . .
Quoting malcolmb14
....If you trade a 2 min chart only and do not care about trading with trend and keep very tight stops with a 50/50 win loss ratios then sure look at just one time frame.
ALL time frames have trends. Otherwise a chart is not a chart. Take a 2 min GBP and a 4 hour GBP chart. Take off the scale and then tell which is which? If VSA can detect weakness and a chart never lies then you shouldn't need to look at more than one timeframe. Otherwise you are admitting that SOME charts lie.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #6,793
  • Apr 15, 2010 1:30am Apr 15, 2010 1:30am
Quoting Shamus
Doing a bit of celebrating tonight after hearing the news regarding Chuck. I just had to stop everything to say Your sig rules!
Man you've been busy whilst I've been getting my 8 hours ....great news about Chuck - please pass on my best regards.....
Trading Levels with WRBs
  • #6,794
  • Edited 1:50am Apr 15, 2010 1:39am | Edited 1:50am
Quoting HiddenGap
Using multiple timeframes to say, look for a trade entry within the zone of a 5 minute chart and then confirming it with a signal(s) within a zone on another timeframe(s) is not the proper use of WRB analysis.
Thank you for reply!

Quoting HiddenGap
ALL time frames have trends. Otherwise a chart is not a chart. Take a 2 min GBP and a 4 hour GBP chart. Take off the scale and then tell which is which? If VSA can detect weakness and a chart never lies then you shouldn't need to look at more than one time frame. Otherwise you are admitting that SOME charts lie.
I got your point but can not say I totally agree
because...you always have a utility barrier that prevent you from trading any/every time frame alone, I explain: 1month is too big for one life(in VSA terms) and 1min too small because of spread, trends on 1-2-5min can be 5-25 pip wide and spread will just eat all your profits.
This is just extremes but still...for VSA you can chose to use 1 from 5min-4h TF on standalone basis and better just from 5m-30m because bigger TF are distorted by sessions. But if you combine 2-3 TF together you can use almost any from 1min to 1Year.
That's why I insist to look on 2-3 TF, but sure you can still pick signals from just one
And you are right about FEAR, when using 1 TF it's always fear that you don't see something...but may be it's just me and you used to do other way.

P.S is it possible to find any info about WRB basic principles anywhere or only at thestrategylab.com for $$$?

P.P.S If you give anybody who have at least little VSA skills any chart(say at least 20 bars) without a scale but with Volume bars he will tell you pretty accurate what TF is there. Thats because TF making more sense in VSA then in.....whatever)
“buy the rumor, sell the newsâ€
  • #6,795
  • Apr 15, 2010 3:03am Apr 15, 2010 3:03am
Whilst its great news about chuck, I have to confess.....I didnt know he was sick

Get well soon Chuck
  • #6,796
  • Edited 4:10am Apr 15, 2010 3:16am | Edited 4:10am
http://i865.photobucket.com/albums/a.../GJ30min-1.jpg

Its important to see what gj does at this 43.75 level. But thats is my take on the action so far, alot in there dont get lost pls. There was a couple of good nd on 5 min in that down move. Volume was a bit high but relatively they were quiet good.

peace

update:
http://i865.photobucket.com/albums/a...46/gj30m-3.jpg climactic action easier to see on lower tf, looking fo a long
  • #6,797
  • Edited 4:12am Apr 15, 2010 4:04am | Edited 4:12am
Quoting lascavel
Simply put the answers is yes to the 3 question. Do also take note of pickup of strengths after test, lower timeframe (15 or 5) may give you an earlier signs of these because sometimes they are hidden.

EDIT: Just to add to the point on the use of lower timeframe & what i mean hidden. To me lower timeframe does not mean more or less noise(yes noise could be prevalent in most cases). I see it as a way to break down a bar into smaller pieces depending on period of volatility e.g. A 1hr shakeout bar may consist of a test follow by a shake-out & rush...
Many thanks.

Also to HG


I would like to add my view to the ever more debateable subject of TFs.

........Use whatever helps you become more profitable!

Having said that, I have to agree wholeheartedly with HG. If I thought for one minute that VSA would 'Lie' to me on a M15 chart when it said 'long trade' because on H4 VSA said 'short trade', I would be following some other thread right now.

Further more, I am willing to bet that almost all of you here, agree with me. You just dont realise it.

The reason we trade off the H1 and D1 charts is so we can trade with the trend. We all know that Malcolmb makes trades where he regularly nets 100+ pips. This is a big trade for most of us here and we are all quite jealous of his prowess. So let me ask you this. If we want to trade SAFELY with the trend and make more pips.....why dont we all trade the yearly charts and make thousands of pips?

The answer as most of us know is that there is more profit to be made using the smaller TF(D1 and H1) by trading REGULARLY in the OPPOSITE direction to the larger trend. We ALL do it!!!

VSA WORKS.

I'm sure a position trader might look at us trading against the trend on H1 and say

'The trade can't last long'

And he would be right on 'his' terms but, we are not wrong for taking the trade. We just have to accept that the H1 trade will only last so long before we get stopped out.

The crux of the matter is this:-

If VSA says that price should move in a certain direction.....it almost certainly will its the SIZE OF THE MOVE that differs with the TF providing the clues.

Of course, the move could last much much longer than normal and you'll make a fortune but generally speaking, there is an average move size for each different TF.

eg

M1 - 10 pips
M5 - 20 pips
M15 - 30 pips
M30 - 60 pips
H1 - 100 pips

These are for example only. I have made up the figures.

If you are reading from the H1 chart you should be expecting no more than a 100 pip move. If you are reading from the M5 chart you should be expecting no more than a 20 pip move. The M5 chart will get you in more trades but will net you less per trade. YOU SHOULD ALWAYS READ THE CHART TO FIND OUT WHEN YOU SHOULD EXIT.

VSA wont lie to you.
  • #6,798
  • Apr 15, 2010 4:38am Apr 15, 2010 4:38am
I use higher time frames to find out what is intention of BBs...
The Market pays you to be disciplined
  • #6,799
  • Edited 5:09am Apr 15, 2010 4:58am | Edited 5:09am
continue from my previous post ref:http://www.forexfactory.com/showpost...postcount=6780

GU did not hit the todays projected target but rather the TP projected for previous day post where price reach just above 1.5500 & reverse with a massive supply release.

Some hint of supply was present at the top before a sudden 2fold increase in volume driving down the price below the previous bar after the hidden selling .

Price could be retracing to the 76.2% level making it close to ADR of the day.

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retracement is base on the swing of AB

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  • #6,800
  • Edited 5:24am Apr 15, 2010 5:10am | Edited 5:24am
Quoting mima
I use higher time frames to find out what is intention of BBs...
Makes sense.

Accept that another VSA tenet states that the BBs are active on all timeframes and in all markets. Simply, the intentions of some BBs can be seen on the timeframe you are trading. Otherwise there would be no such thing as a no demand bar/candle on your timeframe. By your admission this sign of BB disinterest would have to come on a timeframe higher than the one you are looking at.

EDIT: just to be clear. If you are trading the 3 min for example, yet you have to go to higher timeframes to see the intentions of the BBs, you are essentially saying the BBs don't trade the 3 min. That means any VSA sign of strength or weakness is a fallacy because the signs are based on the intentions of the BBs. If they don't trade the 3 min, then you can take off your volume histogram and add RSI. Or you can move up a timeframe where they do trade. Which still begs the question: once you are on a timeframe they trade, why do you need multiple ones?
Without VSA, you're playing checkers while the Smart Money plays chess.
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