DislikedExcellent analysis! I am very interested in the use of vsa concepts with amt. I found looking at vsa 3 bar combs(too many variables) all day long distract my attention from other important reference "levels". I would like to hear how others are fine tuning these concepts at these important levels. I will be looking forward to reading your posts. I really feel you cant beat vsa when your fine tuning an exit or entry. I also overlap volume indicators (All found on vsa thread) to see where I am at in relation to higher timeframe vol. The vsa thread...Ignored
Here's my take of VSA in a nutshell.
I consider myself a VSA trader first and foremost. When I trade large size it's with VSA not AMT. My limited knowledge of AMT only allows me to use it for confluence of entry and trade management once I'm in a trade.
I'm gonna keep this pretty basic, as I'm leaving for campus in about 10 minutes.
1) Institutions trade in such large size, that they have to take positions while price is dropping. When you see a wide spread up or wide spread down bar (WSU or WSD) that closes off of its lows, and on ultra high volume (UHV) you can be sure of one thing: the professional side of the market is active during this bar. This is your first sign of strength/weakness (SOS/SOW). If you see this at the end of a rally, it is called a buying climax (BC), and at the end of a sell off it is stopping volume.
2) Following this you will see an up thrust (UT) following a buying climax, or a shake out (SO) following stopping volume. UTs look like pin bars, and should be on volume greater than the previous two bars and into fresh high ground (or low ground). This is the next SOS/SOW
3) Only after the first two have taken place, you can look for entries. The entries I prefer:
- No supply/No demand - narrow range down (NS)/narrow range up (ND) bar with volume less than the previous two bars
- Test - bar with volume less than the previous two, that breaks the low of the previous two bars, and closes on its highs
- Squat (not necessarily VSA but it takes volume and spread into account so you could consider it VSA. This bar isn't covered by Tom Williams, creater of VSA, it is talked about by Bill Williams, and he includes other things in the definition) for our purposes, it is a narrow range bar (narrower than previous bar, but I like it to be narrow than previous 2 bars) with increasing volume
The only other thing I add to this anlysis is the hull moving average. I personally like my entry to be across the 15m (21 period) hull and I like the 5m hull color to have already changed in my direction prior to entry.
