[VSA] Volume Spread Analsysis Part III

[VolumeJedi 10]

Hi traders,

This is my first post here, though a mute spectator since a month.

 

Anyways, please see the below EOD chart and let me know how it looks to you from the VSA angle.

 

Some background info: After selling pressure of yesterday(2nd last candle), the price again sunk today in the first few hours of trade. The volume of contracts traded was not high though. Then, in the next few hours, the volume and price both started shooting up and the price recovered from its low to close on its high, with high volumes.

 

So what do you think? Is this indication of strength or weakness.

 

 

(Note: I have purposely blurred the name of the security to avoid any bias).

 

Thank you,

-Bunny.

 

The trend is up. The last candle appears to make a lower low and not a higher high. It also appears to close near its high. The wick shows support (demand) on the bar. As ther volume is increasing but does not look excessive, I think the candle is strong. It may be a from of a Shake Out.

[bbj_anchor 10]

I'm warning all to not give CC# to TradeGuider or VSA club as they will never stop charging you. And refunds dont come... lots of talk but then I dont know why that happens is retort. I had to get visa involved and 3 months charges still havent been returned. Just FYI

[Tasuki 10]

I'm warning all to not give CC# to TradeGuider or VSA club as they will never stop charging you. And refunds dont come... lots of talk but then I dont know why that happens is retort. I had to get visa involved and 3 months charges still havent been returned. Just FYI

 

Geez, bbj, sorry to hear you're having such trouble with them. Gavin must be having financial trouble, because I took their 30 day trial about 3 years ago and got my money back promptly. Hope you get things straightened out.

 

Tasuki

[ctvas 10]

Quick Quide Explanation would be helpfull explaining how to determine the following:

 

1.) No Demand Bar

2.) No Supply Bar

3.) Upthrust

4.) Test Bar

5.) Confirmation

[ctvas 10]

i should of added note, stating for you not to respond! If your not going to answer the question, then why the hell are you taking the time to make a reply?

[flimbo 10]

If you have read the book and threads, you would have known what they meant.

 

Agree, You should make effort to read stuff at first.

[ctvas 10]

If you know the answer, why not share it?

Plus, the reason for this post is b/c I notice through reading these posts, there's a lot of different opinions, its really confusing.

Edited November 8, 2009 by ctvas

[flimbo 10]

1.) No Demand Bar - Up bar on narrow spread volume less then previously two, close middle or on high, after you have Weakness behind you(background)

 

2.) No Supply Bar - Down bar preferably on narrow spread on very low volume close on middle or low.

 

3.) Upthrust - Misleading maneuver, move price up (preferably thru old top) catch some stops and then close on the low,This bar have big upper tail and close is on the low

should have increased volume.

 

4.) Test Bar - Down bar close on a narrow spread, close on the middle or high, volume less then prev two after Strength appears

 

5.) Confirmation - Dont know what you mean but all bars like : No Demand,Upthrust,Tests are confirmation of Weakness or Strength.

[sevensa 10]

i should of added note, stating for you not to respond! If your not going to answer the question, then why the hell are you taking the time to make a reply?

 

If you are not willing to put in any effort and want to spoonfed, then you will find this is not the forum for you.

[lnangia 10]

Before trying to understand the nature of no demand/no supply etc and jumping on trades it is better to understand what has happened before these bars occurred. A no demand will not materialize if the background shows strength and a no supply will add to more weakness if supply is swamping demand in the background.

 

Rather focus on charts where demand is swamping supply and vice versa to understand the flow of the market.

 

What i mean by this is look at charts where the price has been rejected at the top and accepted at the bottom. However every rejection and acceptance is not strength or weakness. This is where the law of effort vs result comes into picture.

 

Hope this helps

 

Cheers

Lalit

[ctvas 10]

In the attached chart, this is whereit can be confusing. If you look at the last bar, it closes at the high of the previous bar, and volume is less than previous bar. I cant depict this meaning. I believe it's a no demand, b/c it doesnt move past the prevoius high, spread is about the same, and volume is less. Any opinions?

[flimbo 10]

In the attached chart, this is whereit can be confusing. If you look at the last bar, it closes at the high of the previous bar, and volume is less than previous bar. I cant depict this meaning. I believe it's a no demand, b/c it doesnt move past the prevoius high, spread is about the same, and volume is less. Any opinions?

 

Hmm when you look at Th11/5 you see that huge volumes on two bars. Close is little bit bellow middle. and further reaction is not much weak. This can be strength comming.

So therfore you should not look right now for No Demand.

also No demand should have volume less then previously TWO and you have just less then previously one. and also for me it looks like high is higer then previous bar so this is not nodemand. and look for short right now is too risky my opinion.

[ctvas 10]

short is correct b/c this stock went down 10%

[sevensa 10]

short is correct b/c this stock went down 10%

 

That doesn't mean it was correct. A trade is only correct if you place it according to your trading plan. If you didn't, then it is just a random entry you got lucky on.

[ctvas 10]

That doesn't mean it was correct. A trade is only correct if you place it according to your trading plan. If you didn't, then it is just a random entry you got lucky on.

 

Are you saying Flimbo was lucky in guessing to short this stock?

[sevensa 10]

Are you saying Flimbo was lucky in guessing to short this stock?

 

I don't see anywhere where he said to short. Either way, that is not what I said. Please read my post again.

[ctvas 10]

Please take your argumentive approach to another forum. No one else in this forum speaks they way you do.

[sevensa 10]

Please take your argumentive approach to another forum. No one else in this forum speaks they way you do.

 

I am not sure what you see as arguementative, but I was thinking you were the one being rude and trying to start an arguement by pretending that flimbo said something he didn't, and trying to twist my words about executing orders based on a trading plan.

 

If you don't like my posts, feel free to use the ignore function.

[ctvas 10]

Part of the confusing part of VSA is the color of the bars, and volume bars. Does anyone utilize the colors? Or simply ignore them, and concentrate if the bar is up or down, spread...?

[VolumeJedi 10]

Part of the confusing part of VSA is the color of the bars, and volume bars. Does anyone utilize the colors? Or simply ignore them, and concentrate if the bar is up or down, spread...?

 

There's really not enough information to answer you question.

 

There are a myriad of ways to paint the volume bars. One can paint the volume bars blue if the close is greater than the previous close and red if the close is lesser. One can paint the volume bars blue if the volume is greater than the previous volume bar and red if the volume bar is less than the previous volume bar.

 

Some people use the better volume indicator which has various colors for the volume bar based on things like range of price bar X volume.

 

One can use different colors to indicate many things and basically take the place of "squiggly" lines on the chart. Its just a question of how much information you want to be.able to gleam when you look at a volume histogram. I would also add that VSA looks at relative volume, and there are times when using colors helps accentuate the relative difference is size of the volume bars

[Tasuki 10]

 

There are a myriad of ways to paint the volume bars.

 

Speaking just for myself, I find that the best volume bar painting scheme is green for higher close, red for lower close, magenta for unchanged close and, most importantly, blue for a close lower than the previous two bars. When you get a series of blue bars, take notice!

 

Tasuki

[ctvas 10]

When you get a series of blue bars, take notice!

 

Tasuki

 

Sorry for the inexperience.. ur saying to take notice b/c of accumulation thats taking place?

[bisecom 10]

Good day.

 

In the attached I send a picture of E6Z9for period of 13.11, 3 min chart.

We can see how the price moved in a channel and in some moment broke the channel.

In the thread significantly were indicated examples how VSA works, but it could be interesting to get some feedbacks how its possible to use VSA in a channel perhaps with using Footprint or Market Delata indicators.

So, the channel was formed by appearing of a hammer 1 with rather big volume and we could get a trade from a test No 2 which has volume less then 2 previous bars. The channel could help us to install TP at level of candle No3 but price did not stop and gone higher to candle No4. The candle was formed as Hanging Man with big volume so it can be considered as reversing sign. Then price dropped to resistance and formed a candle – hammer with rather big volume which can be considered as reverse sign but without big efforts of volume the price broke the support and dropped…

VSA works pretty good with background as big volume. But it could be very interesting to understand how its possible to manage trades in a channel. How its possible to understand with volume help there are signs of reversal or continuation of a move nearby channels support and resistance. Perhaps for this its necessary to use Footprint or Market Delata indicators?:bang head:

All comments are welcomed.

Regards and good trading.

[Tasuki 10]

Sorry for the inexperience.. ur saying to take notice b/c of accumulation thats taking place?

 

No, the opposite, the lack of accumulation.

[ctvas 10]

Are there any stockscreeners available which would allow us to input criteria related to VSA? Thousanads of stocks to choose fom, how can you isolate stocks?