[VSA] Volume Spread Analysis Part II

[habi 10]

I've heard that these VSA folks maintain that you can adjudge the analysis on the spot instruments (as well as futures which utilize volume) regardsless of the time of day. Well, I'll tell you now, that's horse shit. And I'll stand face to face with the best of these guys & tell em so.

 

 

Hi millard

 

It seems, that you don't read all posts in this thread. Go back to 1075 and you will see, that at least some people have an other opignion of volume outside of the main session.

 

I'm not really familiar with FX, so I'm feel not predestinated to make some comments about this chart, but since you intervend, I will try to give you an idea, what I see on it. First, I have seen a GBPUSD-chart (thanks gassa) in the Wyckoff thread, which goes back to 4/8. From there I know, that an upmove is in front of Sledges chart. I see then bars with lower shadows and volume diminishes to the end of the downmove. It looks more like a retracement and a chance for another upmove, but it's easy to say in hindsight. The next important bar was the fisrst up bar, which colsed above the night range followed by an test bar, thats all we needed for this up move.

A downtrendline was broken to the upside and (not visible on this chart), a trading range 1.965-1.985. In my opinion we have now strenght in the background. In those circumstances, I would now looking for a long trade. The upthurst has the high not in new high ground and the next bar is balancing the strenghts.

 

VSA is not a system with fix rules and as you see, there is room for different interpretations.

[milliard 10]

It seems, that you don't read all posts in this thread.

 

First, I have seen a GBPUSD-chart (thanks gassa) in the Wyckoff thread, which goes back to 4/8. I see then bars with lower shadows and volume diminishes to the end of the downmove.

 

I don't need to read all the posts in this thread son to know that you're wasting you're goddamned time trying to read something that aint there.

 

If you're referring to a SPOT FX graph & attempting to disect the guts out of it via a volume pitch, then you're pissing in the wind - period!!

 

If you want to get your scalpel & mirror out & get to work on your volume stabalizers, then you're gonna have to hitch your wagon to the CME train & punt the Pound Futures.

 

I was under the assumption that the main ingredient in this vsa pie is volume, no?

 

If that's the case, then wouldn't it make a whole lot of sense to ply your trade on an exchange which at least recognizes volume??

 

Spot doesn't register or funnel volume thru a centralized exchange. So, how you gonna fathom whether your interpretation of the graph is a genuine print or merely a ghost play??

[Art Krantz 10]

Let it go Andre, you made your point.

 

Let these fella's punch it as they see fit.

[BlowFish 10]

Milliard makes good points. It makes me smile that proponents of FX talk about the trillions of $ worth of liquidity when most retail traders have access to exactly .....none of it. Anyway I digress (well perhaps I don't) you have to wonder what these bookies show as volume? Is it the volume of there book? Not much informed trading going on there. This is one of the things that put me off looking at FX, though there are a couple of real brokers coming on line it seems.

 

Anyway seems to me that milliard is not knocking VSA but saying it is not going to make much sense when there is no volume being reported.

 

I have a more general concern with no supply/no demand and it is to do with all participants withdrawing (much as Milliard points out) rather than just one side. I suspect that many bars that might be identified as no supply or no demand are actually indeterminate. Even during regular market hours. Maybe thats something to try and articulate in another post.

 

Anyway I guess Milliard and the rest of the London FX gang will be in the pub by now being as its mid morning on a grey London Friday Unlikely to get much more sense from them this week hehe.

[milliard 10]

Hallelujah!!! here's a man who not only speaks some sense but actually has more than a handle on what's what out there...thank you for your cover Mr Blowfish, I'll scramble out of this foxhole before I get strafed with wild M16 scatter :o

 

Yep, I hear 'John Smiths' whispering his subtle sweet soul musak from the Hare & Hounds....oooooh, that sweety tweety sound of silky smooth bitter

 

(Andre licks his lips, salivates & blows bye bye kisses toward Boss Man Krantz as he grabs Anna's hand & makes a run for the exit)

 

ok, ok Mr Krantz, I'm about done on this thread now....

[Sledge 13]

Ok folks- LIVE TRADE SET-UP:

GBP/USD On the 1 hr charts you see 2 wide spread up bars today- very nice sign of weakness. Before the NY close you saw selling on the "upthrust" bar, you then saw a "test" on the next followed by the next few hours of jockeying.

 

You then see no demand bars to confirm downside potential (Marked with X's)

 

I'm setting up for a Short tonight on the GBP, a slug of weakness came

in today and rapidly overbought the market, should be a nice buckle under

the weight of all of that coming in:

Sell Stop at 1.9872

Target-1.9830

 

The Sell Stop is 10 pips below the low of the last "test" As well as--If it is a true breakout, the 1.9830 with the time lapse will be above the trendline off the down trend we are coming out of so that trendline can act as support now.

 

See you in the AM!

Sledge

 

[ATTACH]6085[/ATTACH]

 

To update my trade, Overnight session pumped up and stalled. I closed out the pending trade- so no trade transpired.

Sledge

[Sledge 13]

Hey Aaron,

 

I hope the folks on this here thread don't mistake my comments for bashing this method of analysis. That's not the intention at all. Just coz some choose or prefer not to recognize it doesn't render it ineffective, but I'm not sure I go with your commentary on the fade out of prices into the NY close.

 

I can understand your work/research of the flows during peak activity, especially as those highlighted bars were actioned on the punch thru layered (short covering & spec buy) stops @ 9815 thru 50.

 

You're showing a spot graph there yeah? Again, I'm not going to be drawn into the argument bout accurate volume prints on the cash. We have our own views on that debate.

 

But those itty bitty bars at the end of the run are simply profit take & book encashments. The activity dies as London closes up for the day on the spot. After aggressive shifts like today on the British currency, the foot soldiers will cash out & balance off. Not only is there no demand at that time of day, there's also no supply. Folks have done their business into the London fix & the only ones left wandering aimlessly around the park are either retailers or wounded souls sticking band aids on their bleeding accounts.

 

They'll now be sniffing next stage stops above 1.9950 with bids building back below your trigger short level.

 

That's not to say prices won't dip to check the strength of those bids, but your "no demand" bars aren;t really counting for anything. Sure, if those kinda bars are printing during London hours, then fair enough, I guess you could make a case for them.

 

I've heard that these VSA folks maintain that you can adjudge the analysis on the spot instruments (as well as futures which utilize volume) regardsless of the time of day. Well, I'll tell you now, that's horse shit. And I'll stand face to face with the best of these guys & tell em so.

 

Be very careful with this vsa stuff on the spot (with no definitive volume print outs), particularly as London shuts it's doors.

 

I can tell you now for sure, the folks who run this show are either sitting in a club eyeballin pretty girls wrapped around shiny poles or they've banked their booty & adjusted their stops for next day delivery well before NY beds down for the night.

 

Milliard-

Heh, no offense taken in the least. I'll PM you.

Sledge

[habi 10]

Anyway seems to me that milliard is not knocking VSA but saying it is not going to make much sense when there is no volume being reported.

 

o.k., millard seems to be the specialist on Forex, I'm not. I just know, that eSignal presents some kind of volume which dandxg explained in post 1016:

 

Sledge consider getting the GTIS feed from Esignal. They aggregate tick volume from a number of broker dealers and ECN's. It's $100 per month I believe but would easily pay for itself if you trade enough. I have never traded forex, but ppl. that do, that I have chatted with, said it's pretty much the gold standard if you are going to trade forex. Now with that said Esignal has had some issues recently in fast moving markets with data lag on ES and CME in general so take that for what's it worth.

 

Tradeguider used it in several charts of the week, I don't now, how reliable it really is.

 

On most points, I have no problems with your post. I would mainly point to your statement:

 

I've heard that these VSA folks maintain that you can adjudge the analysis on the spot instruments (as well as futures which utilize volume) regardsless of the time of day

 

I'm aware, and I think other people using VSA too, that there is a different in interpreting volume during the main trading session and outside of this time.

 

Second, I tried to interpret the chart with the "volume" bars underneath and that I have a different view than Sledge, but you can forget it.

 

I will avoid further posts on Forex :crap:

[jjthetrader 10]

Hi Everyone,

 

I have a beginner's question. Do you consider the following cases as a hidden potential buying bar? When Tom said strength comes from down bars, is it has to be in a down trend?

 

1. If a stock is in a trading range, one day it has a huge gap down with a very high volume.

2. if a stock is in an up trend, it also has a huge gap down with a very high volume.

 

Thanks

LLL

 

IN an uptrend the professionals still need to reload and will dip down a bit to buy lower for the next push up. So your downbars can appear anywhere really. Unfortunatly VSA is less rigid than the teachings themselves. Learning how it applies to the market and trading is a whole different story. It's the underlying principles that you're looking out for (supply & demand) not a particular set of 'rules' being met. The question you could ask yourself about these bars is 1. What's in the background and 2. is buying confirmed in them by the following bar.

[Sledge 13]

 

Second, I tried to interpret the chart with the "volume" bars underneath and that I have a different view than Sledge, but you can forget it.

 

I will avoid further posts on Forex :crap:

 

Habi-

Don't give up man. This thread is designed for discussion on this topic. You disagree with me- and that is perfectly ok (I'm not offended )

 

As it has been stated many times in numerous places- we all have our style, we all have our "way" and at the end of the day- the only thing that matters is that you "Bank $"

 

I don't see it as my place to discuss anything about Milliard and his knowledge base. I will allow him to do so if he is so inclined. But I personally take what he says and digest it. VSA has been great to me, but if their are holes in ANY analysis, I take that as a reason to say "Ok, please inform me, I want to learn" My ultimate goal is to make money, to be on the right side of the trade. I don't care if that comes from VSA, Bollinger Bands, Using a Stochastic, or what house of the sun the moon is in.

 

But that is me.

Sledge

[jjthetrader 10]

Ok folks- LIVE TRADE SET-UP:

GBP/USD On the 1 hr charts you see 2 wide spread up bars today- very nice sign of weakness. Before the NY close you saw selling on the "upthrust" bar, you then saw a "test" on the next followed by the next few hours of jockeying.

 

You then see no demand bars to confirm downside potential (Marked with X's)

 

I'm setting up for a Short tonight on the GBP, a slug of weakness came

in today and rapidly overbought the market, should be a nice buckle under

the weight of all of that coming in:

Sell Stop at 1.9872

Target-1.9830

 

The Sell Stop is 10 pips below the low of the last "test" As well as--If it is a true breakout, the 1.9830 with the time lapse will be above the trendline off the down trend we are coming out of so that trendline can act as support now.

 

See you in the AM!

Sledge

 

[ATTACH]6085[/ATTACH]

 

Sledge, wether FX volume is accurate or not lets look at your example. You saw your high volume bars as bearish. Here's why I see them as bullish (temporarily anyway). Check out the bar marked. That high volume was tested immediatly. That was not weakness. Tom Williams says high volume will be tested within the next couple bars if it's bullish. This passed!

I see what you were pointing to and it would have been a good call if you weren't looking at polar bears in Hawaii;)

Background is important bro!

[gassah 10]

You saw your high volume bars as bearish.

 

Those bars were trying to break out of a range. How about the possibility of absorption volume from "pushing up thru supply" (MTM)?

[Sledge 13]

Sledge, wether FX volume is accurate or not lets look at your example. You saw your high volume bars as bearish. Here's why I see them as bullish (temporarily anyway). Check out the bar marked. That high volume was tested immediatly. That was not weakness. Tom Williams says high volume will be tested within the next couple bars if it's bullish. This passed!

I see what you were pointing to and it would have been a good call if you weren't looking at polar bears in Hawaii;)

Background is important bro!

 

You are indeed correct. I missed that completely! Thank you for yet another lesson oh wise one!

I even called it a Test in my post- Duh!

Sledge

Edited April 18, 2008 by Sledge

[Sledge 13]

Those bars were trying to break out of a range. How about the possibility of absorption volume from "pushing up thru supply" (MTM)?

 

I considered that as well, but the volume made me scratch my head, they were fairly good volume bars, but I wasn't sure if they would hold. Basically, it could have poked through the top of the range and plunked back down- Overall, it may have been a very dangerous trade to take in either direction the more I discuss it!

[Seb Manby 11]

Test on the Dow Jones Daily, Monday 21st April 08

 

If Tuesday is an up day, then today Monday was a test and indicates a potentially strong market. Expect higher prices. If Tuesday is a down day, then the market is weak, but I think the market is strong now for this week.

 

Regards Sebastian

[Seb Manby 11]

Tuesday 22nd April 08.

 

I expected today to be an up day, but the market decided otherwise, there was no distribution at the end of the market, so it was not so easy to know that Tuesday would be down. Today on the Sp Emini there was distribution at the end of today, and so I expect Wednesday to open down on the open.

 

Yesterday on the Dow cash market, we had a test, this failed today, meaning the market is weak, there was a test Thursday and Friday was up, so there was strength last week, but the market has turned bearish today so I now wait for a low volume up day or 'No Demand' to confirm that the market is weak.

 

There is an image of me with some clerks outside the Chicago Mercantile Exchange in Chicago for you to view.

 

Regards Sebastian

[Sledge 13]

LIVE TRADE SET-UP:

GBP/USD

4/23/08

 

Attaching two charts (1 hr and 4 hr.) We see our friendly consolidation zones tonight showing a very nice accumulation phase --Buying on the lows at the bottom of the "zone" and testing of supply.

 

Current trade: Long at 1.9786

Target: Conservative at 1.9927 --below the bottom of the last supply area.

 

 

[Sledge 13]

UPDATE from My Prior Post (#1117) on:

GBP/USD Long

Long 4/23/08

 

Went long in the last "Hot Zone" (Blue bar on left of chart)on 4/23/08

Wednesday night market needed to further test for supply as well as throughout the NY session. It appeared as if upon entry that testing was done- apparently it was not

 

No worries because in Thursday London and NY session you saw even stronger signs of testing than in the "Hot Zone." To make allowance for the "dip" and test of supply, My S/L was moved down to accomidate for the "dip" and further testing. This is why I advocate that you "take what the market gives you." My target was much higher and right now it is in a resting state and may be achieved ultimately, but by taking what the market gives instead of demanding it from the market, I woke up to a wonderfully executed trade.

 

Result:

Long @ 1.9790 on 4/23/08

Target (T/P) Moved from 1.9927 to 1.9860

Results: Friday AM London Session- Target Achieved

 

Notice on this 4 hr chart that the 4 hr bar that on the secondary test is a HUGE volume bar, if you watched it form in real time (or drilled down) you would have seen that it was of very low volume (relatively) as it touched bottom and worked its way up to open before shooting off the launchpad.

 

Chart with Results:

[Bearbull 10]

Anybody attend the VSA weekend symposiums or the webcast, Sebastian stated here that they would be talking about exact strategies/tactics i.e trade entry, management etc using VSA principles rather than the eternal hindsight bar by bar analysis which was being read with uncanny accuracy

[NAVEEVIa 10]

Anybody have the KPCurrency moneytec thread on VSA.

i am unable to find it.

thanks in advance

Naveen

[Guest forsearch]

Anybody have the KPCurrency moneytec thread on VSA.

i am unable to find it.

thanks in advance

Naveen

 

Try searching or asking someone over there for it. It's not rocket science, you know.

 

http://www.moneytec.com/forums/f14/volume-21484/#post214920

[NAVEEVIa 10]

Thanks for the tip

I would appreciate if somebody here could help me out.

If anybody saved that thread & can send it to me or post a public link here, that would be great help for those learning VSA( including me).

That guy did lot of incrdedible work

Cheers

Naveen

[Sledge 13]

Thanks for the tip

I would appreciate if somebody here could help me out.

If anybody saved that thread & can send it to me or post a public link here, that would be great help for those learning VSA( including me).

That guy did lot of incrdedible work

Cheers

Naveen

 

Naveen-

KPcurrency is the same guy as PivotProfiler who posted here. He tore down all of his work in the VSA thread, but one of the super talented Moderators took a lot of time to restore the work by matching charts up with the text.

 

You can see the restored thread of VSA I here:

http://www.traderslaboratory.com/forums/f34/vsa-volume-spread-analysis-1369.html

 

Hopefully this helps you!

Sledge

[Seb Manby 11]

wednesday 30th April

 

Fed lowered interest rates today, so what? well there was a selling climax at the end of the session today, and so thursday will open higher at the bell, this could even extend through Friday. SP Emini contract.

 

FOMC always a good shakeout opportunity for the professionals to rid the market of the herd.

 

Regards Sebastian

[Gary 10]

Great Symposium, Sebastian. I was going through the principles sessions today during the lackluster trading, and getting even more out of the rich content. What an incredible event. I saw the climatic action at the end of the day and wondered "could this really indicate a higher level tomorrow?" Now I know I am seeing it!