[VSA] Volume Spread Analsysis Part III

[4rings2snails 10]

Why that? Is it more noisy? How about the state that there's more info (price, volume, moves and action) on lower TF?

 

On the ES from 8/19, if one traded from the 3 minute they would have been tossed major noise. At some points in the day the 3 min. was tell a completely different story than the 5 min. It was crazy. 3min chert = bad for me.

[flimbo 10]

Hello there,

Does anybody have Sebastian Video analysis from this tread and trade2win as well ? coz links are dead.

 

Thanks!

[habi 10]

The thing that confused me most was the first 30 minute of the regular session. If anyone would kindly chime in I'd really appreciate it as the volume divergence from the first up bar (5 min.) to the second as well as the divergence in vol. from the 4th to the 5th and sixth bars while price continued to skyrocket really perplexed me. Volume dropped off in those situations, yet we saw major jumps ups. WTH?

 

I don't see your problems with this 3 min chart, IMHO it provided even better informations at least until bar 6 than the 5 min chart. But first of all we have to consider, that both charts are created on exactly the same transactions.

 

If we look back one day, then we see a strong upmove, followed by a smaler correction. The short time trend was up. My chart starts 30 min before the regular session (15:30 = 9:30 east).

 

1 Bar 1 tested the full time session low which was rejected.

 

2 Bar 2 went through last days close with less volume but closed nearly at the high.

 

3 Bar 3 with a lower shadow confirmed strenght.

 

4 The trend followed his way and pushed through last days high, some more volume was needed to go above resistance.

 

5 After a small consolidation prices went up higher with two bars on increased volume, both closed at their high. Nearly no signs of weaknes at this point.

 

6 Some selling came in at bar 6 on high volume but it was much lower on the next downbar.

 

7 It is dibatable if this bar is a test bar or not, but it rejected at least the low from the last small up move.

[4rings2snails 10]

I don't see your problems with this 3 min chart, IMHO it provided even better informations at least until bar 6 than the 5 min chart. But first of all we have to consider, that both charts are created on exactly the same transactions.

 

If we look back one day, then we see a strong upmove, followed by a smaler correction. The short time trend was up. My chart starts 30 min before the regular session (15:30 = 9:30 east).

 

1 Bar 1 tested the full time session low which was rejected.

 

2 Bar 2 went through last days close with less volume but closed nearly at the high.

 

3 Bar 3 with a lower shadow confirmed strenght.

 

4 The trend followed his way and pushed through last days high, some more volume was needed to go above resistance.

 

5 After a small consolidation prices went up higher with two bars on increased volume, both closed at their high. Nearly no signs of weaknes at this point.

 

6 Some selling came in at bar 6 on high volume but it was much lower on the next downbar.

 

7 It is dibatable if this bar is a test bar or not, but it rejected at least the low from the last small up move.

 

 

Much thanks to you. I saw this chart quite differently with your interpretation combined with that day's pivot point and it's respective S&R's.

[2trade 10]

Welcome and thanks for the post. This is a great place to learn and share ideas.

 

#2: yes this is the place to get short. Narrow range up bar on volume less than the previous two bars. You can short on the close of this bar, or you can place you sell order at the low of the candle and wait for the next candle to trade lower and bring you into the market.

 

BTW that WRB looks like an Effort to Fall, so you not only have the obvious trend to the downside, you have an immediate sign of weakness in the "near background".

 

#4: There are two candles that jump out at me. The candle after the one you labeled NS (No Supply). This is a narrow (NR4) bar that makes a lower low closes on its highs with volume less than the previous two candles. In fact, the volume is almost non-existent. This bar close up, but it is a test. This is your signal to get long.

 

The second candle is the one I have labeled KRB (Key Reversal Bar). This is a clear sign of strength in the market. It closes higher than the previous bar, higher than its open, and makes a lower low than the previous bar. Volume is lower than the previous bar but not too low.

 

The previous candle is another Effort to Fall candle. Note, however, that it does not have anywhere near the volume as the Effort to Fall at #3 or #1. Simply, effort is decreasing. Or to put it in physics terms, effort in the opposite direction is increasing. Hence we end up with effort but no result.

 

That was nice stopping of the downmove with the wide range candel and 4 tests long move back to the point of supply FOMC beautifull one minute chart ----

[2trade 10]

Welcome and thanks for the post. This is a great place to learn and share ideas.

 

#2: yes this is the place to get short. Narrow range up bar on volume less than the previous two bars. You can short on the close of this bar, or you can place you sell order at the low of the candle and wait for the next candle to trade lower and bring you into the market.

 

BTW that WRB looks like an Effort to Fall, so you not only have the obvious trend to the downside, you have an immediate sign of weakness in the "near background".

 

#4: There are two candles that jump out at me. The candle after the one you labeled NS (No Supply). This is a narrow (NR4) bar that makes a lower low closes on its highs with volume less than the previous two candles. In fact, the volume is almost non-existent. This bar close up, but it is a test. This is your signal to get long.

 

The second candle is the one I have labeled KRB (Key Reversal Bar). This is a clear sign of strength in the market. It closes higher than the previous bar, higher than its open, and makes a lower low than the previous bar. Volume is lower than the previous bar but not too low.

 

The previous candle is another Effort to Fall candle. Note, however, that it does not have anywhere near the volume as the Effort to Fall at #3 or #1. Simply, effort is decreasing. Or to put it in physics terms, effort in the opposite direction is increasing. Hence we end up with effort but no result.

 

That was nice stopping of the downmove with the wide range candel and 4 tests long move back to the point of supply FOMC beautifull one minute chart ----

[vovakir 10]

Hello everybody! It is my first post here.

Firstly I want to say that it is the best thread I`ve ever read. Guys, thanks for your posts. Eiger also the best teacher in VSA for me – he focused mу attention on background.

It is interesting for me - does anybody trade stocks (NYSE, NASDAQ)?

I am going to try VSA in stock trading but I can`t find any good materials (examples like e-mini S&P) to start. What stocks better to trade (can you recommend a few that make good VSA signals (for the first time they will be my "e-mini`s":)), what stocks you are trading)? I know that VSA rules for stocks, futures, FX are the same, nevertheless, are there any traps in stock behaviour?

 

Best regards,

Vovakir

[cmach123 10]

I inserted Sevensa's VSA Indicator into Tradestation, it seem's the no supply, no deman bar are doing the opposite. If there's a no supply bar, the price should go up..but instead it decreases...

[cmach123 10]

I have an example I would like to share, and I would like feed back in regards to the next day's instication of a buy. If you see in the attached files, this particular stock closed at $2.43, which is the same as the bars low.

 

In order for the next bar to be an indication of a buy:

 

1.) Does the next bar have to open below the previous bar's close; the high is higher than the previous days high, and the close has to be higher than the previous bars high and the volume has to be less than the volume on 8/28?

 

or

 

2.)Does the next bar's Low, and Open both have to below the the previous day's bar, and the high has to be lower the the previous day's high, and the close has to be higher than the previous close?

 

or

3.) Simply, tell me what to look out for...

[sevensa 10]

I inserted Sevensa's VSA Indicator into Tradestation, it seem's the no supply, no deman bar are doing the opposite. If there's a no supply bar, the price should go up..but instead it decreases...

 

You should read the book again, as you do not appear to understand the basic definitions.

 

Or, if you blindly want to sell all no demand bars and buy all no supply bars, then you are just buying/selling randomly if you don't look at the background.

Edited August 29, 2009 by sevensa

[VolumeJedi 10]

I have an example I would like to share, and I would like feed back in regards to the next day's instication of a buy. If you see in the attached files, this particular stock closed at $2.43, which is the same as the bars low.

 

In order for the next bar to be an indication of a buy:

 

1.) Does the next bar have to open below the previous bar's close; the high is higher than the previous days high, and the close has to be higher than the previous bars high and the volume has to be less than the volume on 8/28?

 

or

 

2.)Does the next bar's Low, and Open both have to below the the previous day's bar, and the high has to be lower the the previous day's high, and the close has to be higher than the previous close?

 

or

3.) Simply, tell me what to look out for...

 

There is no buy there. 1 bar back is a test. This test fails on the next bar as price trades lower on increasing volume. 5 bars back is a wide spread down bar on ultra high volume where some demand did enter. But that last bar made a lower low and closed lower than that bar.

 

Your best options are to do nothing and wait for a successful test. Or look for a narrow range up bar on volume less than the previous two bars to get short.

[cmach123 10]

There is no buy there. 1 bar back is a test. This test fails on the next bar as price trades lower on increasing volume. 5 bars back is a wide spread down bar on ultra high volume where some demand did enter. But that last bar made a lower low and closed lower than that bar.

 

Your best options are to do nothing and wait for a successful test. Or look for a narrow range up bar on volume less than the previous two bars to get short.

 

To go long, the next bar should be a wide spread up-bar, with volume greater than the previous two bars??

[flimbo 10]

To go long, the next bar should be a wide spread up-bar, with volume greater than the previous two bars??

 

When i first seen this Chart i noticed big Range area looks like distribution.

Whatever.

Wide bar Closing on the low with big volume pusshing thru old Support is sign of weakness I guess its SOW Principle 6.

You should wait for some kind of no demand . Also notice that on this picture, price is making Lower Lows and Lower Highs so Momentum is Down.

Edited September 1, 2009 by flimbo

[chrisp 10]

This is my first post. I hope it will contribute to this thread.

 

I am looking at the big break down on ES 01 sept from a VSA point of view. I'm concerned with the question of defining stopping volume after a big move down.

 

60 MIN CHART

01 sept breakdown from balance on hi vol

heavy vol continues till 18:30 but this is not stopping vol: mkt continues down.

 

How do we interpret the price action from 18:30 01 sept on?

We start with the background:

the hi vol down bars thru to 18:30 are potential strength but mkt remains in a downtrend.

Conclusion: mkt remains weak.

 

15 MIN CHART

 

at EOD 01 sept there are 3 white diamond bars, which on this chart indicate higher than usual vol. The question here is "is pro money accumulating anticpating a rally or distributing anticipating continuing break?" Here is my analysis:

Bar 1 down bar increased vol narrow spread close off low and making lower low:overall weak altho' narrow spread suggests buying

Bar 2 down bar increased vol wide spread close well off low making lower low and rejecting move up: overall weak altho' close is well off low. Note also this is the third lower low.

Bar 3 1 tick away from equal close bar, vol decreases relative to previous bar but is still high for this time period, narrow spread, mid low, inside bar: overall neutral

 

So EOD high vol seems to confirm the weak background mentioned above. And yet: what is the result of this high volume down bar activity? Although lower lows are made the close of all three bars is practically unchanged. To confirm weakness we want to

see a down bar, increasing but not excessive vol, wide spread and close on the low.

 

02 sept

The first white diamond is up bar, high vol, wide spread, close in the top third. It looks like an effort to break out of the balance of the previous 4 bars. Is the high vol indicative of supply swamping demand? Let's look at the next bar. I will call this bar +1.

+1 up bar lower vol wide spread rejection of move higher close near the low and only 2 ticks above close of white diamond bar: overall supply is present.

+2 bar up increased vol wide spread close in top third but only 1 tick above close of previous bar: more supply coming in

+3 a test bar on decreased vol followed by an up bar but this is overwritten by the background weakness which seems to be confirmed by increasing supply and mkt remains in a downtrend on this TF. Note also that the vol is only slightly less than the first bar in the 3 white diamonds group to the left.

+4 this looks like a stop catching manouever, but I don't know much about this sort of thing yet: any enlightenment welcome!

Finally a second white diamond: up bar hi vol for the time period BUT decreasing volume relative to previous bar coming into previous top, average spread close near the hi: overall volume is too low to breach old top and mkt remains in downtrend.

 

For the rest of the day the mkt drifts lower with what look like a couple of upthrusts at EOD.

 

Overall I conclude that the mkt remains weak despite the heavy selling on 01 sept and that we have yet to see volume sufficient to stop the down move. However I also note that since then we have not yet seen the kind of wide spread down bar on increasing vol with close on the low that would confirm weakness. Neither am I able to explain why the 01 sept heavy vol down bars produced little downside move.

[zaprietas 10]

Hello everybody

Can any one share Better Volume indicator ?

[VolumeJedi 10]

Do a search. I believe it is in the coding forum.

[VolumeJedi 10]

............ Neither am I able to explain why the 01 sept heavy vol down bars produced little downside move.

 

Welcome.

 

The high volume down bar marked 3 white diamonds is tested over the next 3 bars. Each bar has less volume as they close down. The third test is followed by an up bar and forms the second low of your channel.

[chrisp 10]

VJ thank you very much. I will post again soon.

[chrisp 10]

It is rare to have signals unanimously pointing in one direction, there is usually a balance of probabilities. As I understand it when in doubt refer to the background. Here is an example-from an amateur!

 

A pushes thru the old top to the left on good volume:potential strength. The volume is very high for pre-open:something is happening.

The mid close of A & hi volume show there is also a lot of supply but this is immediately tested

at B & C. B & C indicate supply drying up. The low of A is not challenged & the close of C is

above the low of B:all bullish

D is an up bar confirming the test at C. It is technically a no demand bar but we ignore this

because we have strength in the background.

G is a test in an uptrend. Volume is not less than previous 2 bars but it is low compared to

supply at D & E,which is the supply being tested. And we have strength in the background. G

is confirmed as a successful test by the next up bar.

[chrisp 10]

Sorry first post went off without attachments

 

A pushes thru the old top to the left on good volume:potential strength. The volume is very

 

high for pre-open:something is happening.

The mid close of A & hi volume show there is also a lot of supply but this is immediately tested

 

at B & C. B & C indicate supply drying up. The low of A is not challenged & the close of C is

 

above the low of B:all bullish

D is an up bar confirming the test at C. It is technically a no demand bar but we ignore this

 

because we have strength in the background.

G is a test in an uptrend. Volume is not less than previous 2 bars but it is low compared to

 

supply at D & E,which is the supply being tested. And we have strength in the background. G

 

is confirmed as a successful test by the next up bar.

[flimbo 10]

Sorry first post went off without attachments

 

A pushes thru the old top to the left on good volume:potential strength. The volume is very

 

high for pre-open:something is happening.

The mid close of A & hi volume show there is also a lot of supply but this is immediately tested

 

at B & C. B & C indicate supply drying up. The low of A is not challenged & the close of C is

 

above the low of B:all bullish

D is an up bar confirming the test at C. It is technically a no demand bar but we ignore this

 

because we have strength in the background.

G is a test in an uptrend. Volume is not less than previous 2 bars but it is low compared to

 

supply at D & E,which is the supply being tested. And we have strength in the background. G

 

is confirmed as a successful test by the next up bar.

 

thx,

nice explanation,

but you miss your Char "F" : )

[zaprietas 10]

Do a search. I believe it is in the coding forum.

 

First thing which i did was search And still nothing...yesterday I have spend all day with google search looking for this Better volume indicator and still nothing can someone help me?

[mkw111 10]

Advanced trading workshop uses VSA and was just wondering if anyone has tried there system

[flimbo 10]

First thing which i did was search And still nothing...yesterday I have spend all day with google search looking for this Better volume indicator and still nothing can someone help me?

 

here you go.

for MT4 and for NinjaTrader as well

BetterVolume 1.4.mq4

BetterVolumeBeta.zip

[Tams 20]

First thing which i did was search And still nothing...yesterday I have spend all day with google search looking for this Better volume indicator and still nothing can someone help me?

 

 

what keywords did you use ???