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Volume Spread Analysis (VSA) Discussion 2 replies

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Volume Spread Analysis (VSA) and the EURUSD 3 replies

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  • #1,481
  • Feb 14, 2011 11:18am Feb 14, 2011 11:18am
Quoting nyse1982
great chart tao..are you on stocktwits or twitter so we can keep in touch?
NO , But will look into creating one ...
  • #1,482
  • Feb 14, 2011 11:51am Feb 14, 2011 11:51am
Hey Tao
  • #1,483
  • Feb 14, 2011 11:56am Feb 14, 2011 11:56am
This phase usually occurs after we have a subsequent accumulation phase.The markup is when smart money is selling to the weak holders or retail market.By unloading there shares to the unsuspecting traders they begin to realize the profits, from the currency or stock positions they accumulated earlier.The retail traders begin to pay up for the stock or currency driving the price higher.I'm always weary of buying into a market thats moving higher because I realize that someone else is selling to me.It's not wise to pay up for your currency or stock,however when greed sets in traders have no time to waste for the stock or currency to go on sale.
Before you do intend to pay up I suggest first looking to the left of the chart to identify the previous accumulation phase and determine what percentage or premium your paying on that position. I can guarantee you that if your paying over 50% then I'd strongly suggest waiting for the price to decline before taking on a new position.You have to practice patience when trading.
  • #1,484
  • Feb 14, 2011 12:00pm Feb 14, 2011 12:00pm
You will get opportunities to pick up more currency or stock positions because smart money are professionals and are greedy,which basically means they will allow the price temporarily retrace.When you looking for your opportunity to buy make sure that your looking at the spreads of the bars and volume.One of two things will happen and you have to make a decision.Either the price will retrace on wide spread down bars and high volume which is not when you want to jump in.Simply because this confirms that supply is coming into the market and is temporarily overcoming demand. You should wait for the price to drift lower on narrow spreads and light to average volume. The narrow spreads are significant in that they are confirm the bullishness or bearishness of the smart money.
  • #1,485
  • Edited 2:22pm Feb 14, 2011 1:57pm | Edited 2:22pm
Here's a 4HR chart EUR/USD and I've indentified smart money accumulationg in the background.First you have that wide spread down bar which is heavy supply hitting the market on high volume,the next bar following again you have reverse upthrust on high volume which is a sign of strength.Buying occurred in those two bars.The next bar was an up bar on a wide spread.However, what concerns me is that the volume is quite high on the up bar which is a warning that supply still may be lurking in the background.When your looking at an upthrust bar the following up bar should have average volume compared to the following bar,because if the volume is to high that means selling was contained in that bar.Now the smart money has already accumulated on the last two bars any selling thats occuring could probably be retail traders.I would monitor the corresponding volume and spread on this next bar.This 15m chart does look promising
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  • #1,486
  • Feb 14, 2011 2:12pm Feb 14, 2011 2:12pm
Master the Markets defines a reverse upthrust as this:the action is very similar to a selling climax but less intense,this can be defined as a mini selling climax.However,please be aware like I always say prices will more then likely drift back into the previous selling area,so if you miss an opportunity to buy don't worry.Make sure if you do look to buy look for narrow spreads and a moderate to low volume to the down side.
  • #1,487
  • Feb 14, 2011 2:20pm Feb 14, 2011 2:20pm
Is described from MTM: as an imbalance of supply and demand causing a bear market to trasnform into a bull market.

This is the exact opposite of a buying climax. The volume will be extremely high on down moves accompanied by narrow spreads,with the price entering fresh low ground.The only difference is that on the lows,just before the market begins to turn,the price will be seen to close in the low or middle of the bar.Market strength appears on down bars and weakness in reality appears on up-bars.
  • #1,488
  • Feb 14, 2011 2:23pm Feb 14, 2011 2:23pm
Quoting nyse1982
Here's a 4HR chart EUR/USD and I've indentified smart money accumulationg in the background.First you have that wide spread down bar which is heavy supply hitting the market on high volume,the next bar following again you have reverse upthrust on high volume which is a sign of strength.Buying occurred in those two bars.The next bar was an up bar on a wide spread.However, what concerns me is that the volume is quite high on the up bar which is a warning that supply still may be lurking in the background.When your looking at an upthrust bar the following...
Be wary because of the volume on up bars or a series of up bars.In a healthy market you have a steady incline of volume bar after bar.This series of volume is beginning to decline on the up-move for this 15m.This something that I would keep in the back of my mind.
  • #1,489
  • Edited 2:58pm Feb 14, 2011 2:37pm | Edited 2:58pm
Quoting taomql4
Selling EURJPY ---
Looks like a Nice 30/60 minute TF Retracement coming up...

Boy !! Lots of Reading material, NYSE . But I like it ...
I Hate doing analysis when the market is closing (NYC) , but Am still expecting EJ to fall - Comparing the ND bars - one immediately after the Wide Spread down bar and the one after the upthrust - Looks like buyers are been absorbed ..PLus , Rising prices on decreasing volume.(hmm..Just like EU )
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  • #1,490
  • Feb 14, 2011 11:08pm Feb 14, 2011 11:08pm
Quoting nyse1982
Thank you very much you can view my videos at www.YouTube.com/nyse82
.. Got it .. Thks.. lotsa veiwing.. will get stuck in this weekend..THKS
  • #1,491
  • Feb 14, 2011 11:15pm Feb 14, 2011 11:15pm
Quoting taomql4
I Hate doing analysis when the market is closing (NYC) , but Am still expecting EJ to fall - Comparing the ND bars - one immediately after the Wide Spread down bar and the one after the upthrust - Looks like buyers are been absorbed ..PLus , Rising prices on decreasing volume.(hmm..Just like EU )
Also on EU/UD very bearish weekly makes me wary....
  • #1,492
  • Feb 15, 2011 10:42am Feb 15, 2011 10:42am
Quoting taomql4
I Hate doing analysis when the market is closing (NYC) , but Am still expecting EJ to fall - Comparing the ND bars - one immediately after the Wide Spread down bar and the one after the upthrust - Looks like buyers are been absorbed ..PLus , Rising prices on decreasing volume.(hmm..Just like EU )
good charts that massive wide spread down bar presented an excellent opportunity for smart money to accumulate.
  • #1,493
  • Feb 15, 2011 11:03am Feb 15, 2011 11:03am
Quoting taomql4
I Hate doing analysis when the market is closing (NYC) , but Am still expecting EJ to fall - Comparing the ND bars - one immediately after the Wide Spread down bar and the one after the upthrust - Looks like buyers are been absorbed ..PLus , Rising prices on decreasing volume.(hmm..Just like EU )
The thing about the EJ is that that absoption volume,was enough to change the direction of EJ.The accumulation in those last few down bars and the wide spread and high volume prove that.Strength was definetly in the background.
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  • #1,494
  • Feb 15, 2011 11:17am Feb 15, 2011 11:17am
I'm comparing the volume and spreads on the declining A/U.Notice how I've outlined in yellow the bars and volume and notice the steady decline in volume.I've plotted a red-line which shows a support line on the 0.99596.Declining volume as it hits the support line is a good sign.I'd be looking for climatic action around that line possibly a wide spread down bar on high volume or even a reverse upthrust.Now keep in mind the support line isn't set in stone you may get one of these events around this area.However,it may also break the support line which means that reversal isn't ready to occur.
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  • #1,495
  • Feb 15, 2011 11:23am Feb 15, 2011 11:23am
Remember that today significant news came out of the US, so smart money is definetly utilizing this news which is causing a sell-off in the AUD.However continue to watch the spreads and volumes especially on the 60M-4HR-15M charts and to determine the end of a bearish move in the pair.
  • #1,496
  • Feb 15, 2011 11:38am Feb 15, 2011 11:38am
Quoting nyse1982
I'm comparing the volume and spreads on the declining A/U.Notice how I've outlined in yellow the bars and volume and notice the steady decline in volume.I've plotted a red-line which shows a support line on the 0.99596.Declining volume as it hits the support line is a good sign.I'd be looking for climatic action around that line possibly a wide spread down bar on high volume or even a reverse upthrust.Now keep in mind the support line isn't set in stone you may get one of these events around this area.However,it may also break the support line which...
The amount of volume on the most recent wide spread down bars is significantly lower then the previous area that I've outline on the 5M chart.Proof that the decline in beginning to possibly slow down
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  • #1,497
  • Feb 15, 2011 11:46am Feb 15, 2011 11:46am
For a bear move to change into bull trend you need significant buying and buying occurs on down bars especially massive wide spread down bars with medium to high volume.I've counted over 8 wide spread down bars and this is significant because no where else on the 5M chart do you see such an acceleration of downward pressure.
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  • #1,498
  • Feb 15, 2011 11:48am Feb 15, 2011 11:48am
Quoting nyse1982
For a bear move to change into bull trend you need significant buying and buying occurs on down bars especially massive wide spread down bars with medium to high volume.I've counted over 8 wide spread down bars and this is significant because no where else on the 5M chart do you see such an acceleration of downward pressure.
Now for this to be a genuine reversal of trend we have to see some signs of strength or accumulation.I'd be looking for a test in a rising market which is a narrow down bar on medium to low volume.Smart money tests the market to see if any other resistance or sellers still exist in the market.If not they can begin the markup phase.
  • #1,499
  • Feb 15, 2011 11:53am Feb 15, 2011 11:53am
Also make sure to remember during the accumulation phase either on 1M-5M-15M you will see the prices dip back into previous selling area.Make sure that during this period the volume is low and spreads are narrow.
  • #1,500
  • Feb 15, 2011 12:01pm Feb 15, 2011 12:01pm
I'm still looking for that test on the 5m chart but check out the progress.For this to become a true accumulation, I need to see a test on the higher timeframes
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