[VSA] Volume Spread Analysis Part II

[Eiger 10]

Hello guys! This is selling climax in WSA (WRB)?

 

No. Volume is not nearly high enough to qualify for a Selling Climax. Volume needs to be abnormally high. Spreads need to be ultra wide, and we need to see a close mid-range or better. A Selling Climax occurs after a significant trend down. You will also normally see an acceleration of the down trend just before the climax on a substantial decline (though not on a minor decline).

 

Eiger

[Tasuki 10]

That is because you have been too lazy or unwilling to look, though not too lazy or unwilling to post an untrue comment like this. You seem to like to challenge a method without doing your homework. TG routinely has web casts that nearly always include live VSA trading. You can judge the consistency of the method live for yourself, if that somehow satisfies you, rather than posting BS to this thread. And, here is a direct challenge to you: watch the next three webcasts of live trading and report back to people on this forum what you see. Though I doubt you will do this, one thing i can guarantee you, no VSA expert wears a beard and none have egg on their face.

 

Eiger

 

Eiger

 

Eiger, What I posted is factually correct. I have watched Todd and Tom analyze lots of charts, and they look brilliant until they get to the hard right edge, where then their abilities drop off precipitously. Are you better than Todd Krueger and Tom Williams?

 

Several people have thrown out personal attacks on me for daring to challenge VSA on a VSA forum. So, this forum is only for cheerleaders of VSA? Nobody gets to question the basic premise of a technique? Somehow, I would have thought that such a challenge would be healthy, even constructive, but some of you seem to be so afraid of anyone questioning your basic assumptions that you have to attack the questioner, or "arguing ad hominum" as they say in debating circles. There's a word for that in english: immature.

 

Speaking of addressing the issues, you did make a really good suggestion, at least I think so: "And, here is a direct challenge to you: watch the next three webcasts of live trading". Sure, great, how do I do that? (not being facetious, honest question).

 

Since you like a direct challenge, I challenge you (again) to take a market we all watch, and post your VSA analysis based on daily or weekly bars (so you wouldn't have to post something during the day, when we should all be watching the markets unfold live). I've issued this challenge twice now on Traders Lab, and nobody has had the moxie to take me up on it. I wonder why.

[tawe trader 10]

So, this forum is only for cheerleaders of VSA? Nobody gets to question the basic premise of a technique?

 

Tasuki,

 

I am not going to answer for Eiger but as mentioned previously, constructive criticism / questioning is welcome, it helps us all, especially the die-hard VSA'ers.

 

Call me a VSA cheerleader but from a personal point of view VSA (combined with S&R) works for me and has done so for over the last year.

 

How come for the first seven years of my trading when I used indicators and tried tons of other holy grail methods and techniques, I was a losing trader but now if I read the charts correctly and adhere to VSA principles, I have more profitable days than losing days ?

 

It is very rare I can attribute any of my losses to VSA, 99% of the time they are due to my impatience or greed.

 

All the best

Tawe

[jjthetrader 10]

Eiger, What I posted is factually correct. I have watched Todd and Tom analyze lots of charts, and they look brilliant until they get to the hard right edge, where then their abilities drop off precipitously. Are you better than Todd Krueger and Tom Williams?

 

Several people have thrown out personal attacks on me for daring to challenge VSA on a VSA forum. So, this forum is only for cheerleaders of VSA? Nobody gets to question the basic premise of a technique? Somehow, I would have thought that such a challenge would be healthy, even constructive, but some of you seem to be so afraid of anyone questioning your basic assumptions that you have to attack the questioner, or "arguing ad hominum" as they say in debating circles. There's a word for that in english: immature.

 

Your facts are funny. When did you ever see Todd Krueger or Tom Williams trade live? What a joke. Plus who says they're the experts on it?

 

Next, it's not that we dislike you questioning the basis of VSA, it's that this forum is to learn about VSA and the one you should post your doubts about in is "VSA Crock or Not". You just seem to be derailing the thread. Post over there with your bum buddies.

 

Eiger, ignore this dick's challenge. No real trader has to prove anything to a sim trader.

[Tasuki 10]

Tasuki,

 

I am not going to answer for Eiger but as mentioned previously, constructive criticism / questioning is welcome, it helps us all, especially the die-hard VSA'ers.

 

Call me a VSA cheerleader but from a personal point of view VSA (combined with S&R) works for me and has done so for over the last year.

 

 

All the best

Tawe

 

Tawe, thanks for the vote of confidence on the constructive criticism angle. That's been my intent all along, regardless of the mud-slinging.

 

Glad to hear that VSA is working for you, and coming from you, that's a very encouraging statement.

 

jj, I do not mean to derail the thread at all, disregarding your crude four-lettered epithets.

[kuky969 10]

This is my one of first attempt read the market . I would like ask somebody write of opinion on my chart

A –buyers entry

B – some sellers

C- I could say is test but I am confused from

B bar and I am not sure about strenght in background

D – narrower spread as previously bar but volume bigger –some sellers

F – no selling pressure

G - I could say up-thrust but I am not sure about weakness in background

H- no demand

I – no demand

J – selling climax

K – no selling pressure

L – no demand

M – effort to fall ,next bar is negative action, we have spring – we have strength in background

N – test

P- test

R – sellers entry

[jjthetrader 10]

This comes back to Winnie's question a few posts ago. Where do we enter after strength comes in?

There is a nice progression of a bottom being formed that we like to see in VSA. This is a 3 min so you may want to add the bars together to see a larger timeframe.

Strength first enters and we get an automatic reaction. We see a couple of those no demands that Winnie described. We know not to be looking short here.

They retest the lows and push a bit to fool people into shorting the low. Again we're long biased already. So we get a nice little rally off that false move. There was no real testing going on at this point so I'd rather wait and buy higher if I had to.

Then we get Eigers favorite, a spring (or shake-out). On the way up out of the spring we get a test of the initial high volume bars low. I had an order sitting above the high of that first low volume downbar marked and then moved it down to just above the high of the second low volume downbar (no supply). It picked up my second order and away we went. I had a 10 tick stop to put me just under the low of the test.

 

Hope that helps.

[jjthetrader 10]

This is my one of first attempt read the market . I would like ask somebody write of opinion on my chart

A –buyers entry

B – some sellers

C- I could say is test but I am confused from

B bar and I am not sure about strenght in background

D – narrower spread as previously bar but volume bigger –some sellers

F – no selling pressure

G - I could say up-thrust but I am not sure about weakness in background

H- no demand

I – no demand

J – selling climax

K – no selling pressure

L – no demand

M – effort to fall ,next bar is negative action, we have spring – we have strength in background

N – test

P- test

R – sellers entry

 

Wow, very nice. I wouldn't argue with any of that. You were confused about C because you didn't know the background. If you look at it, it's a high volume downbar closing on it's highs. That's strength.

And "R" yes that's sellers entering and would be an upthrust.

 

"N" is a test but we'd go even further to call it a hidden test since it closed up. But drop down to a 7 min and that's a "true" test.

 

The only one I wouldn't agree with is "F". It appears to be no selling pressure and in fact there may be no real pressure there but after weakness appears this type of bar I'd label as "unable to find a bid".

 

Good work Kuky.

Edited October 21, 2008 by jjthetrader

[disperados-x 10]

Thank you for answer. Really so, indeed this was manipulation hits to activities on background of the prohibition shorts, and continuation was hereinafter fall. Well that VSA distinguishes the manipulate from truth. Enclose picture of the continuation.

[disperados-x 10]

No. Volume is not nearly high enough to qualify for a Selling Climax. Volume needs to be abnormally high. Spreads need to be ultra wide, and we need to see a close mid-range or better. A Selling Climax occurs after a significant trend down. You will also normally see an acceleration of the down trend just before the climax on a substantial decline (though not on a minor decline).

 

Eiger

 

Thank you for answer. Really so, indeed this was манипулятивный hits to activities on background of the prohibition shorts, and continuation was hereinafter fall. Well that VSA distinguishes the manipulate from truth. Enclose the picture of the continuation.

But after fall was a hammer, but then appeared WRB (manipulation). Ated the trader entered on WRB in long and left on her(its) minimum, he has lost much money.

Hammer - Long lower shadow. WRB - bullish price action and Bullish Engulfing. I am a rights?

Edited October 22, 2008 by disperados-x

[disperados-x 10]

No. Volume is not nearly high enough to qualify for a Selling Climax. Volume needs to be abnormally high. Spreads need to be ultra wide, and we need to see a close mid-range or better. A Selling Climax occurs after a significant trend down. You will also normally see an acceleration of the down trend just before the climax on a substantial decline (though not on a minor decline).

 

Eiger

 

 

Thank you for answer. Really so, indeed this was manipulation hits to activities on background of the prohibition shorts, and continuation was hereinafter fall. Well that VSA distinguishes the manipulate from truth. Enclose the picture of the continuation.

But after fall was a hammer, but then appeared WRB (manipulation). After the trader entered on WRB in long and output on her(its) minimum, he has lost much money.

Hammer - Long lower shadow. WRB - bullish price action and Bullish Engulfing. But there is else output on dark WRB with high volume.

I am a rights?

 

P.S. : Delete my messages 1634 and 1635 - they duplicate my text

Edited October 22, 2008 by disperados-x

[CandleWhisperer 10]

Thank you for answer. Really so, indeed this was manipulation hits to activities on background of the prohibition shorts, and continuation was hereinafter fall. Well that VSA distinguishes the manipulate from truth. Enclose the picture of the continuation.

But after fall was a hammer, but then appeared WRB (manipulation). After the trader entered on WRB in long and output on her(its) minimum, he has lost much money.

Hammer - Long lower shadow. WRB - bullish price action and Bullish Engulfing. But there is else output on dark WRB with high volume.

I am a rights?

 

 

Looks to me like the "hammer" is an example of No Supply. It closes down from the previous candle, closes near the middle of its range and has volume less than the previous two candles. (BTW this is not a "hammer")

 

The WRB you identified is an Effort To Rise candle. Note that the volume is not that high. Markets do not like very high volume on up candles, but here the volume is relatively low. What we see after this Effort To Rise, is NO RESULT from an Effort To Rise. This shows the general weakness in the market.

 

Moreover, two candles later we have a Test. This is a good test as the volume is less than the previous two candles and the close is in the middle. The market does close up the next candle. But then price moves down. This is weakness: no result from a Test. If you count 4 candles forward, you see a dark WRB closing lower than the Test bar. Again this shows weakness.

 

Simply, the market is weak. Some buying entered on the candle before the No Supply "Hammer" which was followed up by an effort to move higher. That effort, however, is soon negated as price moves down.

 

There has not yet been enough CAUSE for higher prices.

[kuky969 10]

JJtheTrader

Thank you for your opinion

Is possible say that C it's a high volume downbar closing on it's highs. That's strength and simultaneous a test of supply ( volume is high but smaller than two previous) ????

 

Thank for your willingness to answer . I am pleased

[tawe trader 10]

WOULD YOU SHORT THIS NO DEMAND ?

 

Here is a 5 min pre-mkt ES chart from this morning around the time the UK mkt opened. Ignore the low number of traded contracts, VSA volume is relative and from what I've seen, VSA setups work just as well, if not better pre-mkt than during actual mkt hours.

 

Chart #1

 

At 8am we have a very high low upbar followed by a no demand (higher high and higher close) two bars later. We have potential weakness in the background, followed by a no demand - anyone for a short trade ?

 

The next bar breaks the low of the no demand.

 

Chart #2

 

If we add a basic resistance line we can now see the reason for the 8am very high volume upbar, it is as Tom W says 'pushing up thro' resistance'. It is a sign of strength, a high volume upbar through a resistance level.

 

We still have the no demand, sitting there but it can be ignored and it is followed by a bullish 'test' - a downbar on volume less than previous two bars which also doesn't go lower than the resistance level. Resistance has now become support ...... the mkt is in an uptrend and the big players are still long and bullish.

 

The mkt went on another up-leg before weakness did appear at 8.55am.

 

As you can see by adding the resistance line it made me stop and think and question the reason for the high volume upbar. Thankfully it prevented me from entering into a losing short this morning.

 

Tawe

[jjthetrader 10]

JJtheTrader

Thank you for your opinion

Is possible say that C it's a high volume downbar closing on it's highs. That's strength and simultaneous a test of supply ( volume is high but smaller than two previous) ????

 

Thank for your willingness to answer . I am pleased

 

Kuky, volume less than the previous two makes it low volume from a relative standpoint and that's what we're looking at so it was a test.

Either way, futures can have high volume on a test because it's the large players hopping in. It's the cash market where you don't want to see it.

 

 

Tawe, excellent example. When I first learned VSA that same pattern always tripped me up. It looks like weakness has come in but it's not. It's effort. Great job.

[disperados-x 10]

Looks to me like the "hammer" is an example of No Supply. It closes down from the previous candle, closes near the middle of its range and has volume less than the previous two candles. (BTW this is not a "hammer")

 

The WRB you identified is an Effort To Rise candle. Note that the volume is not that high. Markets do not like very high volume on up candles, but here the volume is relatively low. What we see after this Effort To Rise, is NO RESULT from an Effort To Rise. This shows the general weakness in the market.

 

Moreover, two candles later we have a Test. This is a good test as the volume is less than the previous two candles and the close is in the middle. The market does close up the next candle. But then price moves down. This is weakness: no result from a Test. If you count 4 candles forward, you see a dark WRB closing lower than the Test bar. Again this shows weakness.

 

Simply, the market is weak. Some buying entered on the candle before the No Supply "Hammer" which was followed up by an effort to move higher. That effort, however, is soon negated as price moves down.

 

There has not yet been enough CAUSE for higher prices.

 

Allow to be created in strategies to trade VSA, I see since participant of the forum processed vastly material, but strategies to trade hitherto do not concern carefully. It Is Got VSA required for description already happened motion, rather then for real trade. Why not to adapt the strategies from trade message to value VSA, with some change bound entering the volume?

In them certainly much subjectivity, and sample for trading does not happen often and not always they correct. But why not probe change their having reduced their subjectivity?

Edited October 22, 2008 by disperados-x

[disperados-x 10]

The Example:

the signals of the entry in long

- effort (wrb on high volume)

- Pushing Up Through Supply

- Shakeоut

 

signals of the entry in short:

-uphtrust

- selling pressure

- effort (wrb on high volume)

 

 

And signals of the acknowledgement of the trend after main signal

Possible, together beside us to be reduce subjectivity of the method VSA

[disperados-x 10]

Good signal is seen On my drawing for entering in short, but after we see that to remain in short I was able only having installed foots above maximum dark. But after all I entered nearly on minimum dark WRB.

1) Under possible following motion upwards after my short position I lose 300 point if stop is installed on maximum WRB.

2) Under possible following motion not above maximum WRB (as it was got on my picture) I lose short to position if stop I had is installed to example on half dark WRB

[jjthetrader 10]

And signals of the acknowledgement of the trend after main signal

Possible, together beside us to be reduce subjectivity of the method VSA

 

Hey man, I totally get where you're coming from. You're right that VSA is a methodology and that rules for trading it need to be layed out. My trade example on the last page is an example. If I get that shake-out or spring then I'm looking for my test to enter in on. I'll put my order at the high of the test bar so the next bar picks me up as it moves up. This is just one way I've adapted an entry using VSA. They like the close of the confirmation bar. This is too late for my personal risk tolerance.

 

In this market, with the stops that are needed you can't just jump in anywhere just because you saw a VSA signal.

 

Unfortunatly VSA can't be broken down from it's subjectivity. It can't be put into a system because it's dynamic and you have to be flexible even if the close of your bar is off a bit. A system with hard rules can't be flexible.

 

My advice is to find one VSA setup. Learn it, know when it's valid and when it's not, find out how to enter on such a setup and once it's made you rich you can add a second setup. Master just one. That's all you need to make money. They happen all day everday on different timeframes.

[sw9 10]

"Either way, futures can have high volume on a test because it's the large players hopping in. It's the cash market where you don't want to see it."

 

 

ummm.....Ive never heard this before...... so I can treat high and low volume the same on a test in futures?

 

 

Thanks, Steve

 

 

 

 

 

 

'

[tawe trader 10]

Yes Steve, it is something you need to look out for and be aware of.

 

Whilst low volumes are essential for test bars in the underlying cash index (showing a lack of supply), futures markets can create similar test bars on higher volume (because traders pile into the future on sight of the cash index test bar), so this is not necessarily a negative indicator. - THE WELSH WIZARD (Aug 2007).

 

 

Tawe

Edited October 23, 2008 by tawe trader
.

[Eiger 10]

...

 

Whilst ...

 

Tawe

 

Tawe,

 

Do y'all really say things like "whilst?"

 

 

Eiger

[tawe trader 10]

Do y'all really say things like "whilst?"

 

Eiger,

 

I'm not sure, it's not something I've thought about. My grammar isn't as good as it should be but my background is Mechanical Engineering and Design and not English literature.

 

The Welsh Wizard (http://www.thewelshwizard.com) as well as being a top-class trader is quite artistic and a fine writer.

 

Regards

Tawe

[BlowFish 10]

I have to say I disagree about the Welsh Wizard. An out and out scam artist with a similar modus operandi as the "Chief Wizard" (which has been well documented in various places).

 

I see he has further simplified VSA to 1000 indicators (per instrument type!) With 100 lines of algebra for each. That certainly trumps tradeguider. Of course there is no evidence that his software or book for that matter exist.

 

Do you know the guy? I see you are from Wales too. God forbid, you arent the WW are you? Kind of worried that you have started promoting this con man.

Edited October 24, 2008 by BlowFish

[winnie 10]

Dear all,

I still have problem in identify the strength and weakness background. I have attached a chart for all your attention. I really do not know that if I see an ultra high volume bar follow by a low demand bar, in a downtrend, should I take the sell signal in the no demand bar. I feel confused is that :

1) Ultra high volume bar with wide spread , follow by an up bar should indicates there is professional demand in the ultra high volume bar , am I right ?

2) an no demand bar in a downtrend , show it is a bearish signal

 

When (1) and (2) combine, it become very confused. Hope you can help me crap:

I have find that in VSA club, there is a lot video which are very useful. I am not a member but just want to share with all you .

Thanks

Winnie: