VZA - Basic Rules and Chart Set-up for Intraday Trading - **START WITH THIS FOR TESING VZA BEFORE ATTEMPTING ANYTHING MORE ADVANCED
- At the start of the new trading day (using NY close as a reference) place a fib on the highest volume 1hr bar from the day before (regardless of spread).
- Take the fib's hinge (50%) and place a line at the daily ADR above and below the hinge.
- Zoom out and find a zone at those lines to use as a target if we get an entry from our previous days zone. Again this target zone could be at, or slightly closer than or slightly further away than the days ADR line. This is simply a targeted point of interest where we expect some sort of countermanding reaction to what the trade direction would be.
- Always place the most weight on the most current zones (yesterday's and today's as they form - both for new possible trade set-ups and also for signs that PA may be reversing on current positions etc...).
- When starting out ONLY take longs from the H and shorts from the L, leave the 50% alone until you are comfortable trading the edges.
- The entry signal (whatever that may be for you) MUST touch the fib level, we don't want floating signals as they are too unreliable and can often fail.
ABBREVIATIONS USED
I am tired of typing everything out so see the list of abbreviations I will be using in my posts. At times I may even combine these into a longer abbreviations (example - YVZH = yesterday volume zone high).
- VZA = volume zone analysis
- WRB = wide range bar
- UHV = ultra high volume
- VZ = volume zone
- YVZ = yesterday's volume zone
- TVZ = today's volume zone
- Y = yesterday
- T = today
- H = high
- L = low
- M = mid or 50% level of a zone
- ND = no demand
- NS = no supply
- NBP = no buying pressure
- NSP = no selling pressure
- 2BR = 2 bar reversal
- R = Resistance
- S = Support
- ACC = Accumulation
- DIST = Distribution
- LO = London Open
- LC = London Close
- NYO = New York Open
- NYC =
New York City(kidding) New York Close
FAQ
Q1. Why do you no longer trade pure VSA?
R1. See post 19. The long and short I needed more than what VSA alone gave me. I owe where I am today to having learnt VSA and still use some of what they teach (certain bar patterns) but mostly I am grateful for having learned to read and understand volume and spread and the clues these two factors when they happen at the right location. This is what was missing for me from VSA and what I gain from VZA.
Q2. What is a pres78 2BR?
R2. A pres78 2BR is a 2 bar pattern that I love to trade. It is by far my favorite entry pattern. I had never seen or read anything on the web or in any books that had this very specific set of rules so I named it a pres78 2BR in my trading plan. For the sake of this response I will describe a buyers pattern.
- Bar 1 is a down bar into either a zone 50% (if this level has become active) or the zone H. I like to see an increase in volume on this bar as compare to the last couple of bar THIS IS A MUST AS IT INCREASES THE PATTERNS SUCESS.
- Bar 2 is an up bar which MUST, make a LL, be on lower volume than bar 1, close at or near it's high, close at or over 50% of bar 1 (bonus points if it closes over the open of bar 1) and close over the zone level being tested.
See the lovely example posted by VSAgav in this POST. Thanks gav! This will save people some time searching though my hundreds of charts and thousands of posts to find them.
Q3. What TF zones do you use?
- R3.#1 For scalping and intraday trading (what I mainly show here) I use 1hr zones as my main zones (at times you will see me dissect the zone into sections using the 15min chart but I won't cover that here). If we have crazy spread or volume bars on 4hr and Daily chart (as we saw on EURUSD for example on Dec 3rd) I will also put them on as background zones so I am aware when we approach their levels.
- R3.#2 For swing trading I use 4hr, Daily, Weekly and even Monthly zones. Obviously the higher the TF the less set-ups you get each year.
Q4. What TF's do you use for entries?
- R4.#1 For intraday trading (what I mainly show here) I use 5min, 15min, 30min and 1hr.
- R4.#2 For scalping I use 1min and 5min.
- R4.#3 For swing trading I use 4hr, Daily, Weekly and even Monthly entries. Obviously the higher the TF the less set-ups you get each year.
Q5. What items do you trade?
R5. I intraday and swing trade items with an ADR of at least 100 pips and average spreads of 5 or less. When scalping I like to focus on pairs with sub 2 spreads (this can make a huge difference in a successful scalp). Right now on my platform I am watching the following. EURAUD, EURCAD, EURGBP, EURJPY, EURNZD, EURUSD, GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPNZD, GBPUSD, USDCAD, WTI (light crude), Mini S&P, Mini Dow and Gold.