Racking My Brain with VSA, Please Help!

[herkfsu 10]

I have been reading about VSA for hours and hours over the past few days. Sometimes it appears like I got it then I get thrown something that doesn't quite gel with my thinking. Sometimes it appears the charts that get posted as examples perfect only in hindsight. Or at least from my thinking, which hopefully I get fixed. Anyways lets start from the beginning.

 

The main thing in VSA is looking for large amount of volume in a "short" period of time. It is showing the pros are active in either buying or selling. I know the first item to look for when using VSA is a wide range bar on ultra high volume. I will ask some questions, but depending on the answer I will ask more questions, so to start:

 

The questions pertain to this situation

 

In a downtrend if you see a bullish WRB on ultra high volume that closes near its top, you are assuming the smart money is buying correct? Does it matter if it is a doji or solid bar? I know VSA is only concerned with where the bar closes, so I wouldn't think it should matter. If you are assuming smart money is buying are you only looking for no supply bars and tests to the downside? Do no supply bars HAVE to be down bars(i know they have to be low volume)? Do tests HAVE to close at the middle to top of the bar? If the test bar closes at the top of the bar, but has high volume VSA would state it is a failed test, but I do not understand why. It would appear plenty of buying in coming in for the bar to finish at the top of its range. When would be the best place to go long? On the close of the no supply bar or should you always wait for a test bar?

 

Now assume in a downtrend you have a bearish WRB on ultra high volume that closes near its bottom. Does this assume smart money is selling? Say the bar closes about 1/3 off the bottom. Are we then assuming smart money is buying and now we are waiting for a no supply bar?

 

What situation would tell us to go short after a bearish WRB in a down trend? I am guessing the bar would have to finish on its lows and we would then have to see a no demand bar.

 

I am assuming the opposite is true for all cases in an uptrend.

 

AIM and yahoo messenger is fsufootball42 if anyone wants to learn with me.

 

Thank you in advance for all the help!

[Eiger 10]

Hi,

 

A few comments: The main thing about VSA is not looking for high volume in a short period of time. The main thing about VSA is developing an understanding of the charts by volume, bar spreads, and closes. Rather than read all the posts on this forum, it would be much more prudent for you to start with the book Tom Williams wrote in the mid 1990s. A free version of this is available on the tradeguider site. A link is posted on the VSA forum.

 

All of the questions you are asking and many more are addressed in this book. Once you have read that and have a better understanding of what VSA is all about, you will then find it useful to review the threads on this forum to see how traders apply the method.

 

Hope this helps,

 

Eiger

[herkfsu 10]

Well could someone push me in the right direction about the specific questions I asked? It would really shape my understanding and I would be able to follow the book much better. I have started the ebook(its long though). Thank you for your help.

[brownsfan019 17]

I have been reading about VSA for hours and hours over the past few days.

 

I know nothing about VSA but I am going to go out on a limb and say ANY method you may be looking at will take months and months and then years and years to master, esp VSA. Hours is just the tip of the iceberg.

 

Good luck!

[sevensa 10]

I know nothing about VSA but I am going to go out on a limb and say ANY method you may be looking at will take months and months and then years and years to master, esp VSA. Hours is just the tip of the iceberg.

 

Good luck!

 

And that is why most people give up. Very few is willing to put in the hours and most is looking to plug an indicator on a chart and mindlessly buy when it turns green and sell when it turn red. I'm too embarrassed to say how much time I have wasted looking for an indicator like that before I realized I am not going to find it.

[sevensa 10]

Well could someone push me in the right direction about the specific questions I asked? It would really shape my understanding and I would be able to follow the book much better. I have started the ebook(its long though). Thank you for your help.

 

I thought Eiger already pushed you in the right direction by telling you to read the book? Your questions are answered there. Do you really expect people here to give you answers because you are too lazy to read the book?

 

You said you have spent some hours over the past few days, did not finish the book and appears to think that this should be enough to be successful now. How many professions do you know where you can be successful after a few days and by asking your coworkers to help you with things covered during orientation because you walked out halfway?

[herkfsu 10]

I have read through about 100 pages of the ebook. And about 20 pages of the VSA Part I forum. Its much easier to get things cleared up as you are going. I am getting mixed ideas about, what I feel is a huge part of VSA. Getting the first part down pat makes it a lot easier to associate it with the next part.

 

I thought asking others was part of the learning process. I guess I am not "worthy" enough yet.

 

Just let the thread fall if you do not want to help me. I know it takes time to learn. If I don't put in the time I wont learn simple as that. Putting me down because I haven't spent as much time on VSA as some does nothing.

 

So if someone can help me with some of the questions I had in the first post I would be very happy to hear it. Thanks.

[brownsfan019 17]

I have read through about 100 pages of the ebook. And about 20 pages of the VSA Part I forum. Its much easier to get things cleared up as you are going. I am getting mixed ideas about, what I feel is a huge part of VSA. Getting the first part down pat makes it a lot easier to associate it with the next part.

 

I thought asking others was part of the learning process. I guess I am not "worthy" enough yet.

 

Just let the thread fall if you do not want to help me. I know it takes time to learn. If I don't put in the time I wont learn simple as that. Putting me down because I haven't spent as much time on VSA as some does nothing.

 

So if someone can help me with some of the questions I had in the first post I would be very happy to hear it. Thanks.

 

I was not putting you down if that was directed to me. I was however just alerting you to the fact that this business takes years to conquer and your post mentioned working 'hours' at it. I was simply giving you some advice from someone that has been there that it takes more time than most anticipate, myself included.

[herkfsu 10]

I understand it takes years to master, but you got to start somewhere, right?

[brownsfan019 17]

I understand it takes years to master, but you got to start somewhere, right?

 

No doubt. You'd be surprised how many come here or to ET expecting to become millionaires overnight. If that was the case here, I was providing a little dose of reality but it appears you get it. And that's good b/c some never will! Keep it up and good luck!

[herkfsu 10]

I agree. Nothing is an ATM on its own. And if it were it soon wouldn't be. I really like the concepts to VSA and would like to use it to help me grasp the overall market conditions. Use it to help me find patters that I think are tradable. Just some things in VSA are not clicking and I do not know why it describes things the way it does.

 

 

Again, if someone can help me with some of the questions in the first post I would really appreciate it.

[DbPhoenix 42]

Regardless of what approach you choose to follow, rely on your native intelligence, common sense, logic, which seem in your case to be in working order. If something you read makes no sense to you, then it's probably BS, most likely of the sort that's going to end up costing you money.

 

Volume is trading activity, period. It has no meaning in and of itself.

 

If price rises, demand/buying power/buying pressure is greater than supply/selling power/selling pressure.

 

If price falls, supply/selling power/selling pressure is greater than demand/buying power/buying pressure.

 

If price doesn't move, then demand/buying power/buying pressure and supply/selling power/selling pressure are more or less equivalent.

 

That's it. You can keep it simple, or you can make it extraordinarily complex. That's entirely up to you.

[herkfsu 10]

But what about manipulation. Things like tests and upthust. Do you agree that they give an idea as to what the BBs are doing?

[Bearbull 10]

But what about manipulation. Things like tests and upthust. Do you agree that they give an idea as to what the BBs are doing?

 

Think there are enough posts advising against getting involved with this smart/dumb money crap and studying pure price action regardless of who is doing what. Once again go to the Wyckoff forum threads, read Dbphoenix's blog, study the posts there, enough material in there to get you on the right track as all the info. presented originates from the original source ie. Wyckoff not from any jargon riddled derivative.

 

However if you are determined to get into the quagmire of jargon and professional/dumb money, that so be it.

The choice is entirely yours;)

[herkfsu 10]

Well the more i hear talk about smart money ad trying to follow it the more I feel like people are trying to make something out of nothing.

 

The only real thing that makes sense to me is that volume shows force required to move price. So logically, the more force, the more movement. When this is out of balance you can see something is not right(maybe smart money?? Who knows). In VSA they are SQUAT bars, narrow bars on high volume, usually in unseen high or low territory. VSA does not address(so far from what I have read) wide range bars on little volume. If a price move is extreme under low volume, its telling me no one is wanting to be on the other side, thus I can get an idea as to how the market is feeling.

 

VSA talks about high volume/wide range bars as often being turning points. They could be yes, but I think it is better too look(under smaller time frame) at how the price is moving compared to the volume in real time. If for instance during a high volume/wide spread up bar, the price begins to rise slower and slower and the volume is relatively constant, it is telling me someone is stepping in front if this move to get out or go short. If I just saw the price rises and the volume rises I wouldn't have a clue as for what to look for. In my example I would be looking to go short as soon as I saw weakness.

 

Upthrusts or tests can be useful, but to put them in a box per say like VSA is tough. I think big money can push a price over a SR line to hit some stops if they feel like the price is soon to reverse. I think that is something that has to be seen in real time though because you will usually see a large volume spike followed by a quick retrace. I believe in these situations the RR would seem favorable.

 

Things like NO DEMAND bars or NO SUPPLY bars can be one in the same. If there is a NO DEMAND bar, it is an up bar that has less volume that the two previous bars. Well the fact that its an up bar tells me there is MORE DEMAND than supply for that time frame. That is a big thing I try to understand about VSA. Seems fishy to me, but I am trying to learn all I can about it because maybe I am not seeing or thinking about it the right way.

 

I will check out Wyckoff. Thanks.

[Sledge 13]

I understand it takes years to master, but you got to start somewhere, right?

 

herkfsu-

VSA is a vast and in-depth topic/course of study. I read "Master the Markets" 5 times. It is a very worthwhile course of study if you want to learn it- but it does take time- & a lot of it.

 

Best advice I can give- is read a section or portion of a section, then look at a real chart to see if you can find real-trade bars and examples to reinforce your learning. It will take time, and it will take dedication- but if you do this- you will see your trading take off in ways you have not seen up until now.

 

Aaron