[VSA] Volume Spread Analysis Part II

[GLE% 10]

Hey VJ!

 

Thanks for posting. Absolutely - the ND's were sell signals (heads up), and the NS's were buy signals (heads up). I hope my writing didnt infer anything else.

 

You were the first one (to me) to give the idea of selling the low breach of a ND if it occured in the right place, and I have followed that idea religiously since then.

 

To clarify my chart - the programming above was precisely what it stated - all ND/NS/Squats as per definition without regard to anything else. Thats why I gave it a key The NR4 is a good idea for presentation sakes - however I find a lot of ND/NS's come in various shapes and ranges, and so I like to be alert to all of them.

 

Thanks for the NR4 idea!

[GLE% 10]

5Min ES Support line, plus weakening volume on the pullback. Bullish? 1140am

 

the 820 odd level was resistance - previous days highs.

[GLE% 10]

An update. Found weakness in the HOD, easily seen on the hourly, with weak volume.

 

Then, the 5min shows a cute upthrust, followed by increasing spreads and volume downwards. Bombs away!

 

There was a small bounce from morning support on the 5min (posted previously), which then gave the lovely UT on multiple time frames as confirmation of the overall weakness. Nice trade location.

 

All the best, GLE

[kuky969 10]

hey Kuky,

 

Thanks for sharing. I like your setup - heres why:

 

On the 15min:

 

a) you have a 2 bar Reversal - around 1330pm. - bearish sign.

b) its made more bearish by the fact that the HighOfDay (HOD), pokes above the previous globex swing high (at 2am), and then immediately closes down below that swing high.

c) market retreats.

d) the background is that the rally was done on rather poor volume on the 15min - weak.

 

5Mins:

 

a) market makes a WRB (wide range bar)14:10.

b) we get an upthrust at 14:25 into the weak area displayed on the 15min. it also closes into the WRB - poking above it, and then back down again.

c) market falls on increasing spread and volume - giving credence to the short.

d) 1445pm, you get the ND, followed by the bar you call number 2. For me, this is a 2bar reversal.

e) 1455pm, you get the WRB again, on high volume. market cannot close above that bar at all, rather, within 3 bars we get a close beneath the low of that bar, once again on higher volume.

f) 1530pm, we get a high volume test. VSA teaches us that high volume tests will usually result in higher prices momentarily, but come back down to to test that area again.

g) 1545pm, we get a WRB on high volume again closing down, next bar closes below the swing low at 1215pm - on fairly high volume for the afternoon session. Continuation sign.

 

 

Beautiful music!

 

 

Please could you please send your chart to above description. I think I have some problem with time or what ...

[GLE% 10]

I did already Kuky. Look for the charts directly after my original post.

[kuky969 10]

hey Kuky,

 

 

 

 

f) 1530pm, we get a high volume test. VSA teaches us that high volume tests will usually result in higher prices momentarily, but come back down to to test that area again.

 

 

GLE thank you .15,30 bar (in my chart have chicago time and it was 14,25 h.) you wrote that it is test .I think that it is some demand entry bar. I would like ask Eiger or VolumeJedi or anybody how interpret this situation??

[dandxg 10]

I wanted to post this in hopes that it may help, it helped me with P/V. It's not enough to simply look at P/V set ups, whether they be VSA/Wyckoff whatever. You need to look at the velocity of the market. I don't hear this mentioned often enough. It's a point that was made when I listened to Todd Kruger speak last year as well as a few of the more astute Wyckoff folks. I won't post a chart because you won't see it.

 

Look at the sell of that occurred after 2:30 ET on the ES. If you have chart replay watch it. Notice how when it took up the recent low at 2:09, closed below it, the volume increase, the range increased, and the velocity increased. It's not enough to just look P/V IMO you got to look at the speed at which it's moving. Do the pullback on low volume occur on a decline on velocity.

 

I meant to post this in response to the person, that asked, what is a good trade in an uptrend? Well make sure velocity is to the upside, the market is stair stepping higher ( HH, HL's ) the pb's are declining in velocity, price, and volume, and often you will get a pb to the zero line on $TICK.

 

Good trading to all.

[kuky969 10]

I wanted to post this in hopes that it may help, it helped me with P/V. It's not enough to simply look at P/V set ups, whether they be VSA/Wyckoff whatever. You need to look at the velocity of the market. I don't hear this mentioned often enough. It's a point that was made when I listened to Todd Kruger speak last year as well as a few of the more astute Wyckoff folks. I won't post a chart because you won't see it.

 

Look at the sell of that occurred after 2:30 ET on the ES. If you have chart replay watch it. Notice how when it took up the recent low at 2:09, closed below it, the volume increase, the range increased, and the velocity increased. It's not enough to just look P/V IMO you got to look at the speed at which it's moving. Do the pullback on low volume occur on a decline on velocity.

 

I meant to post this in response to the person, that asked, what is a good trade in an uptrend? Well make sure velocity is to the upside, the market is stair stepping higher ( HH, HL's ) the pb's are declining in velocity, price, and volume, and often you will get a pb to the zero line on $TICK.

 

Good trading to all.

 

Thank you for post.So if I good understand increasing volume + increasing spread = increasing of velocity .

[dandxg 10]

Thank you for post.So if I good understand increasing volume + increasing spread = increasing of velocity .

 

Yes and you want to see increase range = width of the bar/candle. As you do chart replay watch the reversal that happened at the bottom today. The speed to the upside, range of bar, volume all synched up. The pb's were on generally low volume, low speed, and low range.

 

In contrast, if you had a reversal, on increased volume, increased range of bar, increased price, but no speed on the up move where price is just drifting it's a lower probability trade.

[Eiger 10]

...You need to look at the velocity of the market. I don't hear this mentioned often enough...

 

You are absolutely right. I call this acceleration or ease of movement and it is a key aspect to consider. Others call it an impulse move. There are several things you can do with this that are not especially obvious unless you really study the price and volume action around these areas. I have posted about it before in this forum a while ago but no one ever picked up on it, and one person actually began an arguement, so I have just kept it quietly to myself and a dozen or so other traders I talk with. Good, Dan, that you picked up on this. Better that you figured it out yourself.

 

Eiger

[Eiger 10]

Yes and you want to see increase range = width of the bar/candle. As you do chart replay watch the reversal that happened at the bottom today..,

 

There was a good reason for that to happen where it did today. Part of the answer is about the Demand Line, but only a part. It has to do with what you are talking about.

Eiger

[dandxg 10]

Eiger I am the first to give credit where due. I have learned alot from your posts, Db's, Todd's teachings, Sebastian, and Tom Williams.

 

I appreciate your posts.

[Eiger 10]

How far can the current rally go? I see the press calling it a new Bull Market, so I guess by that measure it could go to the moon

 

I find a point & figure chart worthwhile when trying to estimate how far a rally could go. This comes straight from Wyckoff, though you don't see it discussed. Tom Williams refers to P&F charts in his book, but doesn't elaborate, except to say that they have many uses.

 

I keep P&Fs of the S&Ps. Here is a 10-point FC of the ES (day-session only). The attached chart show a potential cause to the 860-890 area from the 750-line. Note the previous resistance at the 870 area.

 

You can also see from this chart the resistance along the 810 area. Thus far, price has been holding gains here, so there may be more upside. Of course, no one kinows if price will make it to the 870 area.

 

Eiger

[teodosy87 10]

Hello to all i have read a lot of this thread but still do not full understand how this work or if it works.Could someone please tell me how this could be traded.I just want to see if understand something if VSA by now

[Eiger 10]

The ES put in a "stepping stone" count on the 10-point figure chart. The stepping stone count is along the 780 line and tends to confirm the projection up to 890 taken along the 750 line. There is still resistance to overcome around 820-30. If it can clear that resistance, we can anticipate it running up to the FC projection.

[Eiger 10]

P&F Update

 

ES made it to the first objective from the first phase count along the 750 line. This is the blue arrow. The projected count has been fulfilled. The stepping stone count objective (red arrow) would take it closer to the full count along the 750 line. Nothing suggests a completion of the up move at this point, so until that happens, we can continue to look to the upside (though a reaction does look likely). You can see that P&F charts can be quite useful and are very easy to keep updated.

[bbj_anchor 10]

I'm a Newbie here on thread. Are you folks using the VSA software or writing/studying your own programs? I have developed my own screener and am looking for simple method to derive directional biases. I would love to post a file of my screened picks and see if there is any addl clues you guys might ferret out as to direction. Anyone interested?

 

Thanks

 

 

Oh well, I think I've posted it anyway. Is zipped a comma delimited filr w/ date, ticker my direction choice. These are picked for large moves in next 4 months time, but I really like the ones that move immediately (obviously) but they often move against me in short term. Any thoughts using vsa would be appreciated. I think I have an old VSA program somewhere???

 

Thanks for any input you guys might have.

BBJ_list.zip

[bbj_anchor 10]

looks like a couple of people have looked at the file. Hopefully it makes some sense to someone and a pattern can be found. I'm looking for a very old version of vsa which I think I may still have somewhere! As I recall it was pretty good, but I had other things going on at the time. from the activity here it seems it has some validity and use and I think T/A stuff is crap as is all past history!

 

Thanks and hoping to hear from someone, BBJ

[bbj_anchor 10]

Also, This file contains equities, date, and direction... I see most here trading futures, I play stock options in US markets. Hope this doesnt discourage many people, but thought you should know.

 

Also need 5 posts to reply to your responses! :doh:

[sevensa 10]

I'm a Newbie here on thread. Are you folks using the VSA software or writing/studying your own programs? I have developed my own screener and am looking for simple method to derive directional biases. I would love to post a file of my screened picks and see if there is any addl clues you guys might ferret out as to direction. Anyone interested?

 

Thanks

 

 

Oh well, I think I've posted it anyway. Is zipped a comma delimited filr w/ date, ticker my direction choice. These are picked for large moves in next 4 months time, but I really like the ones that move immediately (obviously) but they often move against me in short term. Any thoughts using vsa would be appreciated. I think I have an old VSA program somewhere???

 

Thanks for any input you guys might have.

 

How about posting your VSA analysis for the stocks you listed to get the ball rolling?

[bbj_anchor 10]

I don't have a VSA analysis. I think somewhere I may have an old version as seemed interesting back in the day but I was working on a different hypothesis and methodology. I was hoping is someone has the software and some time they could have a look (I'm assuming that you can set time window and get historic EOD data in easily as well?). My methodology uses options data and doesnt look at any T/A indicators etc as they seem in my tests to seriously lag in time regardless of time periods set. Mine seems a precursor, but I get opposite direction sometimes which I'm thinking VSA usage may reduce or eliminate. VSA ,as I have read, is atleast quite timely as is in virtual real time. I suspect that since my indicators are with EOD data the previous day's VSA will show some pretty cool indications as "big boys' and MMakers will have been doing their thing.

 

Thanks for the interest and hope this perks your interest. OH, does the VSA likely work in daily time frames or primarily in sub daily time frames as I dont know if previous days data is available historically. Actually, I have no idea what I might expect to be seen as not familiar with VSA other than I believe I had the origional program from 8yrs or so ago and may still have it, I'm looking for it but know it doesnt have all the neat notes I've seen in the current versions.

 

Thanks, all of you who have looked,

 

BBJ

[sevensa 10]

I don't have a VSA analysis. I think somewhere I may have an old version as seemed interesting back in the day but I was working on a different hypothesis and methodology. I was hoping is someone has the software and some time they could have a look (I'm assuming that you can set time window and get historic EOD data in easily as well?). My methodology uses options data and doesnt look at any T/A indicators etc as they seem in my tests to seriously lag in time regardless of time periods set. Mine seems a precursor, but I get opposite direction sometimes which I'm thinking VSA usage may reduce or eliminate. VSA ,as I have read, is atleast quite timely as is in virtual real time. I suspect that since my indicators are with EOD data the previous day's VSA will show some pretty cool indications as "big boys' and MMakers will have been doing their thing.

 

Thanks for the interest and hope this perks your interest. OH, does the VSA likely work in daily time frames or primarily in sub daily time frames as I dont know if previous days data is available historically. Actually, I have no idea what I might expect to be seen as not familiar with VSA other than I believe I had the origional program from 8yrs or so ago and may still have it, I'm looking for it but know it doesnt have all the neat notes I've seen in the current versions.

 

Thanks, all of you who have looked,

 

BBJ

 

 

If you read through this thread, you will see that you don't need to use the TradeGuider software to understand and use VSA. The point I have tried to make was that I doubt you will get many people willing to analyze your stocks for you, when it appears that you don't know VSA and don't appear to be willing to read through the thread to understand the concepts and do some effort from your side first.

 

Once you put in a little effort, you will see that people here are very helpful, but if you just post a list of stocks and expect someone to analyze it for you, I don't think you should expect too much help.

[bbj_anchor 10]

You are likely right but if someone looked and found some profound relevance... a pattern etc... I will be posting my picks on a free automated website and whomever can have and use them. Here is URL explaining what I am doing. Thanks to anyone who has an interest as there is huge up/down moves being made in almost all of the stocks listed. Most moves in first week or two. I think the prior days activity will show what the absolute end direction will be as options volume is unusual on all of the tickers listed. MMakers would be doing something to cover their backside.

 

Thanks if you take the time and if you dont thanks for reading this.

 

BBJ

[bbj_anchor 10]

I have now read the book and have gone back through the thread. Pretty awesome. Now I will have a look at the stocks on my list.

 

First a question... I will be trading US equity options as they offer huge reward and I think I have them figured out pretty well (as far as I have gone!)... if the time frame/window of the trade is 1 wk to 3 months... what time frame would be recommended for watching VSA set ups? I would use daily/intraday for entry points, I think. Would watching weekly have any validity?

 

Thanks for the help.

 

BillyBob

[bbj_anchor 10]

Wow, this is cool! Started looking at my list and with info I have learned in two days I have 4big wins 2 solid wins and one loss. This is my next one and I dont see (with my new eyes!) much until the last bar which is a downthrust for sure and starts move in my dirrection.

 

Would someone have a look and let me know if much else between the 22nd and the 8th sept, please.

 

This is pretty amazing stuff, and with my data derived by a totally different hypothesis and data set it's pretty strong stuff!

 

Thanks to all, I'll be going thru my list to see what I see, and thanks sevensa for getting me off my a$$ to learn a thing or two!

 

BillyBob Joe

 

 

PS I added another file w/edit... this is my loser... on 20060831 was my indicator to go down. I should have waited/passed... I dont see much to say down in this time frame... but I'm totally new... I want to set my direction in <1 week after signal... any signal down in this 2nd chart? Thanks again

Edited April 20, 2009 by bbj_anchor