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How to Distinguish Accumulation/Distribution with VSA?

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Hello VSA Experts i'm new to VSA.

i'm just curious that when price moving in sideway how VSA distinguish Accumulation and Distribution.

attached image is a stock daily chart.

as you see, after uptrend the stock moved in a sideway for past 3 months

i thought it was accumulation process and i was totally wrong.

is there any certain VSA evidence that can say it's in Distribution process ?

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Hi,

 

Just a very quick thought (I am not a proffesionall).

 

First you see 4 main Tops in your sideways movement. The price action closes on everyone lower and lower. The market makes lower tops. This is a bearish sign.

 

The really that leads to the third Top is wery weak. Almost every up bar in that really has a short spread and a close in the middle. The whole up really happens on a receding volume - a bearish sign.

 

And finally the last Top is a wide spread up Bar on a low volume compared to all other wide spread up bars in your marked area. The demand drying up. A bearish sign. The effort to rise has no follow through on the next 2 to 3 bars. The Market in fact closes below the effort bar. Again a bearish sign.

 

I am just curious - why did you think that it is an accumulation area?

 

LG

GeorgeRDX

(PS. Sorry about my englisch)

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Hello VSA Experts i'm new to VSA.

i'm just curious that when price moving in sideway how VSA distinguish Accumulation and Distribution.

attached image is a stock daily chart.

as you see, after uptrend the stock moved in a sideway for past 3 months

i thought it was accumulation process and i was totally wrong.

is there any certain VSA evidence that can say it's in Distribution process ?

 

First, your reference of that highlight sideway price action on your chart is called a trading range. Secondly, you need to re-study Volume Spread Analysis (VSA) within accumulation (buying) / distribution (selling) via whatever resource you've been using if it contains the information. Simply, the highlighted area (trading range) on your chart does not represent an overall theme of accumulation. In contrast, the overall theme in that highlighted area is distribution. Yet, there are small areas in that highlighted area of distribution that represents accumulation (e.g. mid May and mid June).

 

Therefore, I highly recommend you learn about accumulation/distribution outside of VSA via Wyckoff (supply/demand) or Wyckoff's Market Phases. You should also learn about support/resistance or supply/demand within trading ranges. Next, after you've developed a strong understanding of Wyckoff accumulation/distribution, support/resistance, supply/demand you can then return to using VSA and merge that knowledge with your VSA. Simply, get your evidence or knowledge about accumulation/distribution from outside resources if your current VSA resource lacks the information.

 

By the way, here at Traderslaboratory there are excellent old discussions about Wyckoff via supply/demand.

 

P.S. I don't use VSA. Instead, I've been told by several VSA users that Wyckoff's Market Phases has given them a stronger understanding of VSA and improved their trading of VSA after they've been having problems being profitable via VSA. You have a lot of work to do and don't take another trade until you've mastered accumulation/distribution on its own two feet.

Edited by wrbtrader

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First, your reference of that highlight sideway price action on your chart is called a trading range. Secondly, you need to re-study Volume Spread Analysis (VSA) within accumulation (buying) / distribution (selling) via whatever resource you've been using if it contains the information. Simply, the highlighted area (trading range) on your chart does not represent an overall theme of accumulation. In contrast, the overall theme in that highlighted area is distribution. Yet, there are small areas in that highlighted area of distribution that represents accumulation (e.g. mid May and mid June).

 

Therefore, I highly recommend you learn about accumulation/distribution outside of VSA via Wyckoff (supply/demand) or Wyckoff's Market Phases. You should also learn about support/resistance or supply/demand within trading ranges. Next, after you've developed a strong understanding of Wyckoff accumulation/distribution, support/resistance, supply/demand you can then return to using VSA and merge that knowledge with your VSA. Simply, get your evidence or knowledge about accumulation/distribution from outside resources if your current VSA resource lacks the information.

 

By the way, here at Traderslaboratory there are excellent old discussions about Wyckoff via supply/demand.

 

P.S. I don't use VSA. Instead, I've been told by several VSA users that Wyckoff's Market Phases has given them a stronger understanding of VSA and improved their trading of VSA after they've been having problems being profitable via VSA. You have a lot of work to do and don't take another trade until you've mastered accumulation/distribution on its own two feet.

 

what he said :) (..except for the last sentence...my :2c:)

 

The broader principles of VSA are Wycoff with a little (or lot of :roll eyes:) extra spin of ‘conspiracy’ mixed in.

Plain ole’ Wycoff, etc. is going to give you much better handles on ‘whole chart’ A/D conditions

VSA (and related volume) patterns are more valuable for use with only the last 2 (or 3 or 4) patterns to discover current setups instead of higher level / longer term accum. or distrib.

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Hello VSA Experts i'm new to VSA.

i'm just curious that when price moving in sideway how VSA distinguish Accumulation and Distribution.

attached image is a stock daily chart.

as you see, after uptrend the stock moved in a sideway for past 3 months

i thought it was accumulation process and i was totally wrong.

is there any certain VSA evidence that can say it's in Distribution process ?

 

Hi Rabit

Your chart does not show the big picture

It shows consolidation after a rise in price

 

It looks like you are accumulating at the top of the range

BUT

There is no evidence of Distribution

The price went to a new level

It did not break the high points

It went up and down in a tight range

Thats accunalation that could lead to a new high

Then suddenly on the 1st Aug the price fell

What happened on the 1st Aug?

Volume does not help identify the cause.

You need something else to identify this .

NOT VSA

regards

bobc

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