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Trade Using VSA (Volume Spread Analysis)

  • #7,161
  • Apr 30, 2010 4:34pm Apr 30, 2010 4:34pm
А может кто-нибудь разговаривает по русски? Было бы просто замечательно"! Shamus, вы вроде бы из Казахстана, близкая страна к России....Вы владеете русской речью?

Sorry that I'm speaking here in foreign language!
  • #7,162
  • Apr 30, 2010 5:58pm Apr 30, 2010 5:58pm
Hi Malcolm, I have been reading your comments and input for some time now and I am convinced that you are a pro when it comes to trading with VSA. Please what market session do you normally trade? Are you usually on skype?
  • #7,163
  • Apr 30, 2010 6:30pm Apr 30, 2010 6:30pm
Quoting V_2008
А может кто-нибудь разговаривает по русски? Было бы просто замечательно"! Shamus, вы вроде бы из Казахстана,...
Shamus just wrote that in his profile for fun, I guess, because he's from the USA

And no... I don't speak Russian either... just used google translator to understand what you said
But keep the thread on track... international speach only, please (a.k.a. English).
  • #7,164
  • Apr 30, 2010 7:33pm Apr 30, 2010 7:33pm
Malcolm,

Would it be possible to get the indicators in your charts?
  • #7,165
  • Apr 30, 2010 10:35pm Apr 30, 2010 10:35pm
Quoting dvarrin
Malcolm,

Would it be possible to get the indicators in your charts?
they run on esignal and you have to buy them as they are linked to your log in id
Blogging daily now at www.volume.zone
  • #7,166
  • Apr 30, 2010 11:23pm Apr 30, 2010 11:23pm
This is a long post, as I’m trying to pull together what I think I understand about Volume Spread Analysis, before giving the approach some serious practice and chart time. Can any generous experts out there please check I've got the basic VSA premises and bar definitions right, and post corrections if required?


Basic Premise:

Majority of price moves are SM (market makers or big players) who make up 80-90% of the volume of buying or selling.

SM is attempting to buy at wholesale and sell at retail. They do this by cycling through phases – accumulation, mark-up, distribution, mark down – repeat.

Accumulation - SM can move the price up if they have exhausted selling interest (at this price range) against their planned move. They attempt do this by repeated buying until they have captured the floating supply. They test to see if this has been accomplished with low volume down moves (testing for supply bars).

Mark up – once SM believes they have exhausted any potential selling interest against their move, they buy with volume, pushing the price up. (Indicated by effort to rise bars).

Distribution - SM now slowly unload their accumulated holding at the new higher price, taking profits until they have exhausted buying interest (at this price range) against a down move. They do this by attempting to capture the floating supply during the distribution phase. They test to see if this has been accomplished with low volume up moves (no demand).

Mark down – once SM believes they have exhausted buying interest against their move, they sell with volume, pushing the price down. (indicated with effort to fall), and the cycle begins again.

Bar definitions - Indications of weakness

no demand - narrow spread up bar, mid or down close, volume less than the previous 2 bars, confirmed if the next bar is a down bar

upthrust - wide spread bar, down close, volume above average, preferably making a new high, close near or at the low

effort to fall – wide spread bar down bar, down close, volume above average, preferably open near high

Bar Definitions - Indications of strength
no supply - narrow spread down bar, mid or down close, volume less than the previous 2 bars, confirmed if the next bar is an up bar

test of supply – narrow spread down bar, up close, on low volume
stopping volume – wide spread down bar, high volume (typically 1 or 2 standard deviations above average), mid close or above

shakeout – wide spread down bar, high volume (typically 1 or 2 standard deviations above average), up close

effort to rise – wide spread bar up bar, up close, volume above average, preferably close near high

Basic Entry Strategies

Move with the Smart Money.

Buying - After a stopping volume (or shakeout), look for tests of supply, and wait for a no supply bar before entering long

Selling - After an upthrust, look for no demand bars and enter short

Other observations

The more accumulation, the larger the up move

Accumulation can be identified when price is ranging, by increasing volume as price approaches the bottom of the range

Distribution can be identified when price is ranging, by increasing volume as price approaches the top of the range

Volume is a relative concept, so you need to consider which trading session you’re in. Asian session is going to have lower volume than London, or US

Questions

I am right in assuming effort to rise and effort to fall bars indicate mark up and mark down respectively?

The experts here seem to be mostly looking for 20 – 50 pip moves on the 5-30 minute timeframes, is anyone successfully using VSA on longer timeframes for bigger moves?

Are people mostly checking support and resistance levels on higher timeframes (1HR, 4HR, 1D?) and using VSA on lower timeframes (5M-15M) to see if S/R holds or breaks and time entry, or just using VSA?
  • #7,167
  • Apr 30, 2010 11:42pm Apr 30, 2010 11:42pm
Quoting f451

 ...

Basic Entry Strategies

Buying - After a stopping volume (or shakeout), look for tests of supply, and wait for a no supply bar before entering long

Selling - After an upthrust, look for no demand bars and enter short

One more question, did I miss any obvious entry strategies?

f451
  • #7,168
  • May 1, 2010 2:44am May 1, 2010 2:44am
Hi, again.

I could upload the pic finally

Any comment would be greatly welcome.

KAMISE

Quoting kamise
I have been traded with this method and have very good results so far.

Thanks for all those who enlighten me each day on this thread and forum.

Entry : high churn up bar at 29 Apr 18:00. high volume but low range

Tick histogram showed selling swamps buying = weakness. then short.

Exit was 94.06 at 29 Apr 21:00 a point of TP as Market Profile showed heaviest volume

Regards,
Attached Image (click to enlarge)
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  • #7,169
  • May 1, 2010 9:39am May 1, 2010 9:39am
Hello Friends: While looking at the 15M EU chart from 4/1/10 , I thought this might be of interest to the thread. Best.
********************
http://www.forexfactory.com/attachme...3&d=1272724569
Attached Image (click to enlarge)
Click to Enlarge Name: $eurusd 15m 4-1-10.gif Size: 23 KB
  • #7,170
  • May 1, 2010 11:49am May 1, 2010 11:49am
you missed the most important bar on that chart ..did not even mentioned it . Can you guess which one it was ?

Quoting rbumbalough
Hello Friends: While looking at the 15M EU chart from 4/1/10 , I thought this might be of interest to the thread. Best.
********************
http://www.forexfactory.com/attachme...3&d=1272724569
Blogging daily now at www.volume.zone
  • #7,171
  • May 1, 2010 12:16pm May 1, 2010 12:16pm
Quoting malcolmb14
you missed the most important bar on that chart ..did not even mentioned it . Can you guess which one it was ?

let me guess let me guess..hmmm...could it beeee the ultra mega wtf vol candle to the far left closing well off highs ?
Thank you Malcolm, Belekas, Jim, raczekfx and Ryanmcd !
  • #7,172
  • May 1, 2010 12:22pm May 1, 2010 12:22pm
Quoting malcolmb14
you missed the most important bar on that chart ..did not even mentioned it . Can you guess which one it was ?
I can almost hear you screaming "look to the left damn it"..lol
  • #7,173
  • May 1, 2010 1:58pm May 1, 2010 1:58pm
Quoting sharpster
I can almost hear you screaming "look to the left damn it"..lol

that was the one I was looking at everything else after that meant little
Blogging daily now at www.volume.zone
  • #7,174
  • May 1, 2010 2:12pm May 1, 2010 2:12pm
Quoting malcolmb14
you missed the most important bar on that chart ..did not even mentioned it . Can you guess which one it was ?
Thank you malcolmb. Of Course, how silly of me to miss the main point in the chart. The very high red volume bar on the left signals a buying climax and the doom of that rally. I really should not look at charts when I first wake up.


Best Wishes and Regards.
  • #7,175
  • May 2, 2010 8:11am May 2, 2010 8:11am
Tick volume by Todd Krueger:
http://lib.store.yahoo.net/lib/yhst-...CVN050110.html
The Market pays you to be disciplined
  • #7,176
  • May 2, 2010 8:22am May 2, 2010 8:22am
Quoting mima
Tick volume by Todd Krueger:
http://lib.store.yahoo.net/lib/yhst-...CVN050110.html
Like I said, this is awesome. You're awesome. Thanks.

http://2.bp.blogspot.com/_ZXEjh7r5S9...wesome_Dog.jpg

http://1.bp.blogspot.com/_01nIg59Y3T.../golf+clap.jpg
HELL IS EMPTY, ALL THE DEVILS ARE HERE. -- Shakespeare
  • #7,177
  • May 2, 2010 1:06pm May 2, 2010 1:06pm
Quoting pete148
Hey mal i have a question if you could pls answer.

On average how many trades do you take in a day, or does this vary if you could pls explain. Do you have planned trades for the day. And also would you enter if you saw weakness and thought it would turn in a certain area, would you take the short before you see like a nd or clear entry.

Reason why i ask this is ive had trade where the bar runs up i short and it shoots down for some pips and there was a vsa setup just not vsa entry, but when i try to repeat this i loose pips again

thnks
One trade

I typically take one trade a day. My goal is 50 to 100 pips a day and then get out

Each day pairs have a range , so 90% of the time this range will complete between the aisa and us session , we as traders just have to determine which direction days session will be moving in and with vsa and background we can determine this with a fairly high degree of accuracy.

I will typically plan my trades based on event of US and asia session and place trades in late asia / ff for daily range set ups in London .

Attached Image (click to enlarge)
Click to Enlarge Name: chart2161.png Size: 264 KB
Blogging daily now at www.volume.zone
  • #7,178
  • May 2, 2010 1:16pm May 2, 2010 1:16pm
hi malcomb are the eurusd long trade until 3450 still good ???
getting nervous..can we expect it tommorow or when do you think ?
StopLoss is for none belivers... Trust the Gurus..
  • #7,179
  • May 2, 2010 1:27pm May 2, 2010 1:27pm
Quoting lillelise
hi malcomb are the eurusd long trade until 3450 still good ???
getting nervous..can we expect it tommorow or when do you think ?
nothing has changed on 4 hr charts form a vsa perspective
Blogging daily now at www.volume.zone
  • #7,180
  • May 2, 2010 1:35pm May 2, 2010 1:35pm
Quoting malcolmb14
nothing has changed on 4 hr charts form a vsa perspective

TH
StopLoss is for none belivers... Trust the Gurus..
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