Helpful Ideas for Newcomers to VSA

[Eiger 10]

At the suggestion of one of the contributors to the VSA threads, we thought it would be a good idea to have a thread for some basic info on VSA to help those just getting started in VSA. I'll start it with a couple of suggestions. Others should chime in as well. Just as important, newcomers are encouraged to post what they are finding helpful in learning and understanding VSA.

 

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Here are a couple of ideas to get started:

 

1. Read Tom Williams's Undeclared Secrets That Drive The Stock Market. This is the basic text and has a true wealth of information, both about how the markets work as well as how to read the charts. This is fundemental to understanding VSA.

 

2. Understand the background conditions of the market you are trading before putting on a trade. Although VSA is about reading the current bars on your charts, a fundemental error I see traders new to VSA commit time and again is to look at a few bars on the right edge of the chart and trade off that. You will definately lose money trading this way. VSA is more about understanding the background and using the individual bar indications to trigger entry/exit. Always look first to the background conditions that exist on your chart. If you don't understand what the background is telling you, just be patient and don't trade until you do see something that makes it clear.

 

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This is a start. Again, others - including the new folks -- are encouraged to add to this. If the thread turns into a useful list helpful for the newcomer, I'll stick it to the top of the forum.

 

Eiger

Edited May 11, 2009 by Eiger

[teodosy87 10]

Thanks for this thread i think is needed.

[teodosy87 10]

Question about the background.Could background be in an up move we see no demand bars after that we see uptrust ... so is this a background and what we have to wait to see before we enter the market.Test maybe?

[Eiger 10]

  teodosy87 said:

Question about the background.Could background be in an up move we see no demand bars after that we see uptrust ... so is this a background and what we have to wait to see before we enter the market.Test maybe?

 

Think of the background as a combination of market actions that all point in one direction. In the UT example, I drew a basic graphic to illustrate how to look at background.

 

Starting from the left-hand side of the chart, we have a rally that leaves a print of an "Old Top" or resistance level. Although volume is not shown, were the volume high at the old top, we would note that as well as a potential Buying Climax.

 

We then look at how the market reacts. In this graphic, Lower Lows are put in - weakness. Again, volume is not shown, but if the volume increased on the reaction, that would add to the developing background of weakness.

 

Now we see the market rally. As depicted here, it is rather "lackluster," meaning that volume is relatively low and the spreads are narrow - the market is struggling to advance higher -- more weakness.

 

When we get back to the level of the Old Top, price is unable to sustain a close above the resistance of the old high. This represents an UT and is even more weakness. Aggressive short trades might be taken on the UT, or more conservative short entries would occur on a No Demand following the UT, indicating a lack of interest in higher prices by larger traders, which again, is more weakness.

 

The idea is to read the background as a continuing story with the triggers being the UT and the ND. In this example, the background is the combination of:

 

• An old top that forms resistance
  
• High volume at that old top indicating a climax
  
• Lower low on the reaction
  
• Increased volume to the downside
  
• lackluster rally - low volume, poor spreads
  
• UT and rejection of higher prices
  

 

Hope this is helpful,

 

Eiger

Edited May 12, 2009 by Eiger

[teodosy87 10]

thanks alot it really helps me!Could i ask my question here or this is no place for question .... if is not where i should i ask my questions abt VSA ?

[Eiger 10]

  teodosy87 said:

thanks alot it really helps me!Could i ask my question here or this is no place for question .... if is not where i should i ask my questions abt VSA ?

 

Glad it is helpful. Best to ask on the VSA III or Pure VSA threads.

[teodosy87 10]

thanks \for your help ; ]

[kuky969 10]

OK I try to post some my ideas (despite my poor english) . Generally I can say that it is a little public sources ( books ,video files...) to quality learn VSA. Yes book Master the markets it is basic and is very good read it a few times or some chapters at least . But if somebody wait for exact patterns for entry and for exit trade ,will be disappointed. Book are about basic principles .

 

So question is where to start as pure greenhorn in VSA . My opinion is : ( in order)

 

1.. first .... very good learn to determine SR levels in market , in particular 15 or 60 min TF. This thred http://www.traderslaboratory.com/forums/f131/dbs-cajas-famosas-3882.html helped me . But in TL or any traders servers are other threads about SR levels. Ofcourse practice in real charts. ( I trade ES 5 min and determine SR on 1h and 300000 volume TF)

 

2 ... next ... I read almost all threads in Wyckoff forum ( basic of VSA is Wyckoff) and study all Wyckoff sources ,that you can find in this thread ( supplly–,demand , effort- result ,waves.....) Thank to DbPhoenix .

 

3 ..... Very important was everything what I consider as important for me put down and make my „own Wyckoff book“ . This book I repeatedly read ( in evening when child gone to bed,or in bath....) As time goes ,you read this book less and less because some capitols you learn by heart.

 

4 ...next I started read Master the markets ( and ofcourse continue with make a notes). You will learn a lot surprising thing.

 

5 Start read thread Volume spread analysis part I .....III , as the time goes you find some users that posts are very useful (thank you Eiger and other contributors) and I started make another „my own books“ with charts and posts ( in this time has more than 200 pages in officeWord)

 

6 Every day I watched live market (ES),tried determine background, SR levels and I wanted to see in market what I study in theory. I started to try find my own setups to entry in market, I prepared exact rules to exit trade . In threads you can find some setups for timing when entry in market , but I think it is needed too find others your own setups and gain confidence in. This take a long screen time and watching price action and volume on significant SR levels.

 

BEST IS TO HAVE GOOD VSA MENTOR AND TRADE LIVE WITH HIM . Few people have this good fortune. But we can be lucky because Eiger and some contributors share with us a lot thoughts and examples,that I think is impossible get in other study sources.

 

Important for every day: ---prepare list of things that I have to do before start market

---read your notes

---- and repeat,repeat ,repeat without end

[winnie 10]

Dear Eiger,

Thanks for your posting. I think the hardest part in using VSA is it makes us focus too much on the current few bars instead of the whole picture. In your diagram, I will focus on picking the bottom to buy instead of waiting for the test of upthrust to sell. How could we deal with such problem ? Just like Tuesday's ES market, will you focus on picking the top as the market seems does not have upside momentum in the afternoon. Do you have any rule for the background ?

Anyway thanks for your help and posting.

Winnie

[pip168 10]

Hi Eiger,

 

Please help to analyze the backround of daily GBPJPY Chart (Attached) with Backround intrepetation, Last 10 bar tape reading, and next week Projection.

 

Please kindly give me a Hint, how to 'read the tape" & backround right.

 

Note : I've have been read twice T. Williams "Undeclare....". but I still have Problem how to apply VSA into chart analysis and prediction.

 

A --Old Top zone(resistence), High Volume, signs fo Weakness ?

B --Higher volume on reaction and decreasing volume on down trend(Bullish Volume).

B to C --Lackluster rally ?

 

1 - Buying climax, signs of weakness

2 - buying pressure, volume with closed near high. signs of strenght

3 - High volume Uptrust, sighs of strenght

4 - Stipping volume ? signs of strenght

 

5- Buying Pressure, signs of strenght

 

Question : How we combine Backround & Last 10-20 bar reading to predict the next Bar ?

 

Next Monday--------Still bullish to break the Old top zone ? or Bearish ?

 

 

PS. Where can we have a list of Bar reading Library ?

 

Thank you

 

Cheers,

 

 

  Eiger said:

Think of the background as a combination of market actions that all point in one direction. In the UT example, I drew a basic graphic to illustrate how to look at background.

 

Starting from the left-hand side of the chart, we have a rally that leaves a print of an "Old Top" or resistance level. Although volume is not shown, were the volume high at the old top, we would note that as well as a potential Buying Climax.

 

We then look at how the market reacts. In this graphic, Lower Lows are put in - weakness. Again, volume is not shown, but if the volume increased on the reaction, that would add to the developing background of weakness.

 

Now we see the market rally. As depicted here, it is rather "lackluster," meaning that volume is relatively low and the spreads are narrow - the market is struggling to advance higher -- more weakness.

 

When we get back to the level of the Old Top, price is unable to sustain a close above the resistance of the old high. This represents an UT and is even more weakness. Aggressive short trades might be taken on the UT, or more conservative short entries would occur on a No Demand following the UT, indicating a lack of interest in higher prices by larger traders, which again, is more weakness.

 

The idea is to read the background as a continuing story with the triggers being the UT and the ND. In this example, the background is the combination of:

 

• An old top that forms resistance
  
• High volume at that old top indicating a climax
  
• Lower low on the reaction
  
• Increased volume to the downside
  
• lackluster rally - low volume, poor spreads
  
• UT and rejection of higher prices
  

 

Hope this is helpful,

 

Eiger

[pip168 10]

Hi Eiger,

 

Please help to analyze the backround of daily GBPJPY Chart (Attached) with Backround intrepetation, Last 10 bar tape reading, and next week Projection.

 

Please kindly give me a Hint, how to 'read the tape" & backround right.

 

Note : I've have been read twice T. Williams "Undeclare....". but I still have Problem how to apply VSA into chart analysis and prediction.

 

A --Old Top zone(resistence), High Volume, signs fo Weakness ?

B --Higher volume on reaction and decreasing volume on down trend(Bullish Volume).

B to C --Lackluster rally ?

 

1 - Buying climax, signs of weakness

2 - buying pressure, volume with closed near high. signs of strenght

3 - High volume Uptrust, sighs of strenght

4 - Stipping volume ? signs of strenght

 

5- Buying Pressure, signs of strenght

 

Question : How we combine Backround & Last 10-20 bar reading to predict the next Bar ?

 

Next Monday--------Still bullish to break the Old top zone ? or Bearish ?

 

 

PS. Where can we have a list of Bar reading Library ?

 

Thank you

 

Cheers,

 

 

  Eiger said:

Think of the background as a combination of market actions that all point in one direction. In the UT example, I drew a basic graphic to illustrate how to look at background.

 

Starting from the left-hand side of the chart, we have a rally that leaves a print of an "Old Top" or resistance level. Although volume is not shown, were the volume high at the old top, we would note that as well as a potential Buying Climax.

 

We then look at how the market reacts. In this graphic, Lower Lows are put in - weakness. Again, volume is not shown, but if the volume increased on the reaction, that would add to the developing background of weakness.

 

Now we see the market rally. As depicted here, it is rather "lackluster," meaning that volume is relatively low and the spreads are narrow - the market is struggling to advance higher -- more weakness.

 

When we get back to the level of the Old Top, price is unable to sustain a close above the resistance of the old high. This represents an UT and is even more weakness. Aggressive short trades might be taken on the UT, or more conservative short entries would occur on a No Demand following the UT, indicating a lack of interest in higher prices by larger traders, which again, is more weakness.

 

The idea is to read the background as a continuing story with the triggers being the UT and the ND. In this example, the background is the combination of:

 

• An old top that forms resistance
  
• High volume at that old top indicating a climax
  
• Lower low on the reaction
  
• Increased volume to the downside
  
• lackluster rally - low volume, poor spreads
  
• UT and rejection of higher prices
  

 

Hope this is helpful,

 

Eiger

[ATTACH]11139[/ATTACH]

[Eiger 10]

What makes you think there is a buying climax there?

[pip168 10]

  Eiger said:

What makes you think there is a buying climax there?

----------------------------

Thank for respone, Eiger,

 

I use Bettervolume Indicator, which give Defination for Upbar high volume high spread as Climax Bar.(shown as Red Bar----my bad, I should not blindly follow Better volume red bar indicator, without look at "5" bar(Pull back)). Thank you.:crap:

 

note : You are correct, it is to early to say that it is buying climax (look at "5" bar, it is Pull back bar, sign of strenght),----also should we wait for "another buying climax" on Monday before make any further incoming Uptrust analysis ?

 

Your Analysis on realtime GBPJPY will help people know how to setup up VSA Uptrust in forex correctly.

 

Thank you

 

Cheers

[Bohunck 10]

Thanks Eiger for the title of Tom Williams' first, more in-depth book. I've read Master The Markets, but this one is much more to the point. Quite possibly I'm now starting to understand more and more; hence "Undeclared Secrets That Drive The Stock Market" is easier to absorb.

 

Thanks again for this thread.

Bohunck

[BlowFish 10]

Beware USTDTSM have a few typos and errata. (Might be corrected in later editions). If you find yourself reading a passage and thinking 'hmm that doesn't make sense' it could be that "buyers" should read "sellers", there is also the odd mis labelled bar on a chart here and there. It's still the best source (and probably all you need).

[orlee 10]

Much appreciated and important / helpfull material.

Thanks!

 

Raanan

[thecloser 10]

Is there any real diference between mastering the market by tom williams and the undeclared secrets that drive the market by tom williams? Do you recommend one over the other

thanks

TC

[SRspider 10]

Hello,

Being a new comer I think new people would benefit from some definitions. I got these terms from another post which is not quoted. I'll start with what I have read and please feel free to add or change anything I may have made a mistake on:

 

1. tests-

2. shakeouts-

3. no demand-a norrow range bar with volume less than the previous 2 bars that closes up from previous bar.

4. stopping volume

5. pushing through supply

6. upthrust

7. selling/buying climax

8. climactic action

9. support/weakness coming in

10. trap up/down move

11. no result after strong effort

12. selling/buying pressure

13. bottom reversal

14. end of a rising market

15. squat-volume greater than the previous bar with range less than the previous bar.

16. WRB-Body greater than the previous 3 bars

17. Narrow Range-

[SRspider 10]

Well the VSA summary pretty much gives you a link to find the definition and chart examples of almost everything described, so i guess it would not be necessary to put up the definitions.

[DbPhoenix 42]

  thecloser said:

Is there any real diference between mastering the market by tom williams and the undeclared secrets that drive the market by tom williams? Do you recommend one over the other

thanks

TC

 

Master the Markets is largely a promotional tool for a software company. The Undeclared Secrets that Drive the Stock Market is Williams' original work. So it depends on what you want. Google either one.

[BlowFish 10]

  SRspider said:

Hello,

 

15. squat-volume greater than the previous bar with range less than the previous bar.

16. WRB-Body greater than the previous 3 bars

-

 

I may be wrong but I don't believe those are VSA terms.

[DbPhoenix 42]

  BlowFish said:

I may be wrong but I don't believe those are VSA terms.

 

No, they're not. Scan Undeclared Secrets using Ctrl+F to find definitions and explanations.

[Gringo 10]

  SRspider said:

Hello,

Being a new comer I think new people would benefit from some definitions. I got these terms from another post which is not quoted. I'll start with what I have read and please feel free to add or change anything I may have made a mistake on:

 

1. tests-

2. shakeouts-

3. no demand-a norrow range bar with volume less than the previous 2 bars that closes up from previous bar.

4. stopping volume

5. pushing through supply

6. upthrust

7. selling/buying climax

8. climactic action

9. support/weakness coming in

10. trap up/down move

11. no result after strong effort

12. selling/buying pressure

13. bottom reversal

14. end of a rising market

15. squat-volume greater than the previous bar with range less than the previous bar.

16. WRB-Body greater than the previous 3 bars

17. Narrow Range-

 

Hi,

 

One word to describe all the above: Sex

[sakthigm 10]

As I am pretty new to this VSP. I badly need of this and I thought of asking thru forum itself before seeing thread and did it also.

 

Tnx,

Sakthi