[VSA] Volume Spread Analysis Part I

[jjthetrader 10]

Not in my experience. I love how responsive it is when the market really gets moving. It may be your firends computer speed.

An updated version of the software is supposed to be coming out in the next two weeks anyway.

[RAVIN 10]

Hi Ravin,

How does Trade Guider work with real time data of e-signal. I have been told that it does not perform so well. In other words it gets stuck and you have to refresh the data. Is that correct? For such an expensive program, this should not happen. Any comments?

 

As I keep saying you really do not need the software to work/trade with the VSA methodology. You can learn the principles from the book, Bootcamp CD, and from this thread, especially posts by Pivotprofiler

 

Then get hold of Vadym Graifer's book on "Techniques of Tape Reading", here you will find the six main principles and info. on how to construct your strategies and tactics from observing a few setups.

Ignore pedantic definitions of Tape Reading on other threads. We are not here talking about DOM games and Time/Sales where the shortest time frame is reflected. Go to Linda Raschke's website and download "Notes from a Swing Trader" which has a section on "Reading The Tape".

 

As for the Tradeguider Software, there are a few glitches but overall it performs well , forget about all the indicators, the VSA indicators are the most important, as each one has a menu with explanation and "if-then" scenarios, so in that respect can boost your learning curve. Infact it is the only software which does that. Look at all other softwares with 100indicators, none tells you how to trade with them.

 

Hope this helps

[TinGull 10]

Let's see if the ol' Tingull is getting this "test" thang down...

 

[tech/a 10]

Things move fast here.

 

The forex question has been answered well by others.

Glitches.

There is only one glitch with an alert that I'm aware of.While annoying the glitch wont be detrimental to trading.

EsignalSeamless integration.

Software

Firstly I don't think its expensive---everyone has a different view on expensive.I payed for it on my second trade.

Using the software and its proprietary tools will bring you up to speed faster than with conventional software and books.You could trade VSA without the software,personally I want all the VSA gizmo's--commentaries in the one place.

Backup

Frankly since Gavin's take over and as mentioned his marketing bent,I'm of the opinion that his targeting of the Asian market has seen such a tremendous demand that its like grabbing a tiger by the tail.

Gavin is a genuine guy with a passion for Tradeguider bought about I believe by the results he has seen and gained personally.Like most businesses which expand at tremendous rates,its a struggle to control everything.

Gavin has some enormous challenges,but with the success Tradeguider is enjoying I'm confident that the Business issues will be resolved.

Todd left evidently to pursue areas which he couldn't with a connection to Tradeguider,due to confidentiality issues.So they went separate ways.

 

Tingull

 

Just on your chart

The 5th bar back is a very important bar.

Note the extreme volume AND range.The very next bar is an up bar this indicates thet bar 5 was an absobsion bar from buyers absorbing sellers.

One great rule I have found is a bar like this can be identified by the NEXT bar.If selling did indeed hold the trump cards then the next bar would be a down bar.If it was absorbsion then the next would be an up bar.

 

We also need to look at current action relative to past and immediate past action so lets take the 6 bars from the dotted line

Gap down to a spinning top on volume the next bar is wide range heavier volume buying,bars 3 and 4 are down on LOWER volume so not much conviction from sellers.Bar 5 has strong buying met by massive supply.

Price then drifts down on lightish volume until the tests at the lows.

 

Unfortunately this chart is showing a lack of conviction by buyers,the last bar in the chart is wide range with lower volume---a good thing as supply doesnt seem to be present.The previous setup would have confirmed the test bars as you have pointed out.The low risk entry would have been the hammer you have highlighted.

Hope this is of some help.

 

Ill notify both Radge and Gavin of the thread.

[sheptrader 11]

Hi all what a great thread, i have spent the hole day reading it, well worthe the excersise,

can any one tell me if they have coded the metastock code that pivotprofiler post in #275 in a tradestation code and would he/she be willing to share it. thanks to all how have keplt this thread going.

[Tasuki 10]

TinGull, from what I've read, that looks like a textbook test:

1) lower close

2) volume lower than previous 2 bars

3) close near the high.

4) testing previous low

Yup, all four check out---and it worked! Hope you took it long.

[Tasuki 10]

Regarding the Tradeguider software, I took a 30 day trial with it using eSignal datafeed, and Tradeguider was abysmal, crashing constantly. When I spoke to Gavin by phone, he suggested deleting some of my charts, so I was only looking at one or two at a time. I told him that I could, of course, but that this would limit the usefulness of the software-I want to look at several markets (the major ones) for reference, and at least two timeframes of the market I'm trading. If you have a screaming fast computer, you can still do this with Tradeguider, but even a medium-fast computer will crash or hang with more than a few charts up at once. Personally, I think they desperately need to find a better computer engineer to rewrite the software so it is more streamlined.

[jjthetrader 10]

Regarding the Tradeguider software, I took a 30 day trial with it using eSignal datafeed, and Tradeguider was abysmal, crashing constantly. When I spoke to Gavin by phone, he suggested deleting some of my charts, so I was only looking at one or two at a time. I told him that I could, of course, but that this would limit the usefulness of the software-I want to look at several markets (the major ones) for reference, and at least two timeframes of the market I'm trading. If you have a screaming fast computer, you can still do this with Tradeguider, but even a medium-fast computer will crash or hang with more than a few charts up at once. Personally, I think they desperately need to find a better computer engineer to rewrite the software so it is more streamlined.

 

You're right, a fast computer is way better. I run mine on my old laptop sometimes and it's slow but on my trading desktop I've got 10+ charts going plus tradestation and all works well.

This is why their 30 day money back is so important. If it doesn't work for you then send it back.

[Anonymous 11]

Let's see if the ol' Tingull is getting this "test" thang down...

 

 

On the mark.

 

A lower close and a close on the high would make this the ideal text book example, but it is nonetheless a nice example of a test.

 

Don't forget that a test needs to be confirmed on either the next bar or the bar after that with a close HIGHER than the close of the test bar.

 

Keep up the good work TG. You are making us all better traders and I for one say thank you.

[tech/a 10]

Tingull.

 

Your missing the most important bar.

Thats Bar 5 back from the last bar.

This is clearly an Exhaustion bar.

Wide range massive volume and the NEXT day is an up day indicating exhaustion of supply.

The following down days have decreased volume.

Your marked bar is confirmation of bar 5

IMPORTANTLY followed by an up day.

 

Id be interested in how this went on as the wide range last bar on low volume is indicating lack of demand.

 

As for the software.

I have both EOD and Realtime. 7 bourses

Both perform without a glitch. Only ASX equities on realtime.

[tech/a 10]

Sorry

 

lack of demand.

 

Lack of supply.

 

Have a blood supply problem to brain!

[TinGull 10]

On the mark.

 

A lower close and a close on the high would make this the ideal text book example, but it is nonetheless a nice example of a test.

 

Don't forget that a test needs to be confirmed on either the next bar or the bar after that with a close HIGHER than the close of the test bar.

 

Keep up the good work TG. You are making us all better traders and I for one say thank you.

 

Thanks pivot...so you know, that really means a lot to me. you're the one that introduced this all to me and it's made a world of difference to how I see the markets. So, I owe it all to you.

 

And glad I finally posted up that classic test. I'll still probably just use my loose definition of it regarding candle patterns...but glad to get it nailed.

 

Thanks tech/a, too, for your description.

[TinGull 10]

Tingull.

 

Your missing the most important bar.

Thats Bar 5 back from the last bar.

This is clearly an Exhaustion bar.

Wide range massive volume and the NEXT day is an up day indicating exhaustion of supply.

The following down days have decreased volume.

Your marked bar is confirmation of bar 5

IMPORTANTLY followed by an up day.

 

Id be interested in how this went on as the wide range last bar on low volume is indicating lack of demand.

 

As for the software.

I have both EOD and Realtime. 7 bourses

Both perform without a glitch. Only ASX equities on realtime.

 

 

Thanks tech/a...got the description on your previous post.

 

As for how it turned out...that was a 15min chart of IWM.

 

 

That's how it finished the day....higher, and this morning, indicated higher, too. That was a test of the 2 day low in a descending triangle...

[tech/a 10]

Tin.

 

If interested I have daily US charts if you want to try some examples on them I can post the Tradeguider charts to help out as examples if you like.

 

Or I could find either realtime ASX charts to demonstrate/discuss or EOD ASX.

[TinGull 10]

Thanks tech. I do think I've got a grasp on the VSA concepts, I just don't use hard and fast rules to determine things like a test. If you want to post up some charts, by all means do. I'm sure many people can get something out of it.

[Anonymous 11]

Tingull.

 

Your missing the most important bar.

Thats Bar 5 back from the last bar.

This is clearly an Exhaustion bar.

Wide range massive volume and the NEXT day is an up day indicating exhaustion of supply.

The following down days have decreased volume.

Your marked bar is confirmation of bar 5

IMPORTANTLY followed by an up day.

 

Id be interested in how this went on as the wide range last bar on low volume is indicating lack of demand.

 

As for the software.

I have both EOD and Realtime. 7 bourses

Both perform without a glitch. Only ASX equities on realtime.

 

Actually, it is the 6th and 5th bars back.

 

The 6th bar is down with ultra high volume and closes near the middle of the range with the next (5th) bar up. A transfer of ownership bar. THAT IS WHY THE TEST IS SO POWERFUL.

 

Note that if there had been selling on the 6th bar , there was no more selling at the same price levels when the test happened. This is of course, what a test is testing for.

[Anonymous 11]

Thanks tech/a...got the description on your previous post.

 

As for how it turned out...that was a 15min chart of IWM.

 

 

That's how it finished the day....higher, and this morning, indicated higher, too. That was a test of the 2 day low in a descending triangle...

 

 

While I don't spend much time thinking about targets, clearly the first target here would be a close of the Gap. As the saying goes, "Gaps are filled". Many traders trade gaps. If you had seen the test and the strength prior to it, then there would be all the more reason to trade the gap to the upside.

 

It should also be pointed out that we are looking at one timeframe only.

 

Nice trade. We don't have to hit a homerun every timed. Bat for average.

[ranj 10]

While I don't spend much time thinking about targets, clearly the first target here would be a close of the Gap. As the saying goes, "Gaps are filled". Many traders trade gaps. If you had seen the test and the strength prior to it, then there would be all the more reason to trade the gap to the upside.

 

It should also be pointed out that we are looking at one timeframe only.

 

Nice trade. We don't have to hit a homerun every timed. Bat for average.

Hi Pivot,

 

In terms of profit taking, if I remember correctly, you like to trail your stops just below the low of the last WRB, and let the market take you out as opposed to setting targets.

[Anonymous 11]

Hi Pivot,

 

In terms of profit taking, if I remember correctly, you like to trail your stops just below the low of the last WRB, and let the market take you out as opposed to setting targets.

 

Which is why I don't spend much time thinking about targets. However, for those who do and trade gaps, I was just showing that the gap was filled and that would be the first logical target for that type of trade. Hence the term, gap trade.

 

I would still be long with a stop just below the candle 4 back. Whic is both a WRB and a Long Shadow.

[Anonymous 11]

Just a pic of the EURO.

 

This is an example of Looking left to trade right. We look to the higher timeframe to indicate how we want to trade the lower one. When it all comes together, the higher timeframe will often LEAD the lower one. That is, it will actually show a signal PRIOR to a signal on the faster moving chart. Sometimes this takes patience, but said patience is usually rewarded.

 

Interstingly, there was a valid set up during the low volume time which occurs before the big news hits the air. In other words, one could of already been long when the euro jumped up. This begs the questions, What did the Smart Money know and when did they know it?

Edited March 29, 2008 by mister ed
Add back chart

[TinGull 10]

And that is why I love VSA

[RAVIN 10]

Good Trade PP, do you trade Dax or YM?

 

Who is for catching a falling knife:)

 

This morning's price action on Dax 2min, breakout of morning range with gusto, over 3000 contracts on a 2min bar, real effort to fall, cut through all pivot levels with no buyers on retracement, until final capitualtion and short covering with vol. followed by a classic test, the move after that may look small but with 25Euro per point, a very lucrative trade.

[Tasuki 10]

PP, would you please explain for us the difference between "test" bars and "no supply" bars? Thanks so much, Taz

[TinGull 10]

You'll usually see a test break into new low ground to "test" an area underneath the previous low. A No Supply bar will usually not break new ground lower than the previous bar.

[jjthetrader 10]

Hi Pivot,

 

In terms of profit taking, if I remember correctly, you like to trail your stops just below the low of the last WRB, and let the market take you out as opposed to setting targets.

 

What is a WRB?