[VSA] Volume Spread Analysis Part I

[Gordon G. 10]

Hi Pivot,

 

do you know Todd's blog address ?

 

Thanks.

[habi 10]

Chart of the week, I hope PP, you mean this one

 

http://www.tradeguider.com/cotw.asp

 

In Todd's blog ist just an introduction till now and some comments

 

http://supplydemandtradingmentor.blogspot.com/2007/09/introduction.html

[Gordon G. 10]

Thank you Habi !

[shreem 10]

Hello PP and Habi, thank for your posts on Todd Kruger. I do agree that this blog should be very interesting.

 

Also, Todd mentionning his withdrawal of Tradeguider and his intention to start soon a course and mentoring program will be very welcome in the trading VSA community.

 

I do agree that, in tradeguider (apart from Tom Williams of course) is really the one who seems to understand the most about VSA.

 

Will follow this blog with attention.

 

Great thank to PP to have inform us about this blog and to Habi to have post the link.

 

Sincerely

 

Shreem:)

[Anonymous 11]

When I first heard the term "one-time framing", this is what I thought it meant:

 

Taking to timeframes and trading them as if they were one timeframe. In other words, if you placed to charts side by side, you traded as if the you were looking at one large chart. Effectively, "one-time framing" the two different chart timeframes.

 

However, this is not what the term means. It is a Market Profile term, so you know it must have some value . If you want a definition, the extensive MP threads are filled with those who can help.

 

Well, based on my misunderstanding of the term and my understanding of WRB & Long Shadow Analysis, one can place two charts side by side and trade as if they were actually one large continuous chart. In his brilliant analysis, Shreem has touched on this idea often. That is, when the lower volume signal occurs on a lower timeframe but is within the body of a WRB of a larger timeframe.

 

Check out the charts below. Notice that a significant WRB is created on the 15 min @ 0345 hrs. This candle is Ultra Wide Spread with Ultra High Volume. While the next bar is down, we have to take note of the old highs to the left. These old highs tell us that we may well be dealing with pushing thru supply/absorption volume and thus the WRB is Strength, not weakness. There is also a valid dark hammer pattern completed on the candle just before this WRB. More reason to see strength.

 

As we are predisposed to look for longs, we note that @ 0355 hrs a No Supply forms on the 5 min. This candle is within the body of the WRB and comes after an Effort to Rise candle and a push to get past an old top to the left.

 

So we have our High volume bar that creates a WRB. Followed by a low volume sign within that body............... It just so happens that each comes on a different timeframe.

Edited March 29, 2008 by mister ed
Add back chart

[Tasuki 10]

Just sent Todd Krueger an email telling him about this forum and inviting him to visit. A little presumptuous of me, perhaps?

[Anonymous 11]

Interesting chart.

 

Will comment on it later, just wanted to post the pic now.

Edited March 29, 2008 by mister ed
Add back chart

[Gordon G. 10]

Hi Pivot,

 

thanks for your charts !

 

I don't understand why you labeled the doji bar with "squat" ... while it has a narrow range, it doesn't seem to me that it has very high volume.

 

Best regards.

[TinGull 10]

Been getting excited about VSA again lately (not that I'm ever NOT excited about it) and saw this amazing opportunity on the ES today. This trade was good for 3.50 profit on the ES. This picture was taken before the trade finished.

 

[TinGull 10]

Can you say awesomeness? 10 point ES move off that.

 

[brownsfan019 17]

Can you say awesomeness? 10 point ES move off that.

 

 

Tin - I wouldn't mind seeing a thread or two in our Candlestick Corner about some of your analysis here including vsa into the mix. I don't want to intrude on this thread, but I know you've been using candlestick analysis as well, so I'd be curious to see your thoughts on using both. I'm 'seeing' your volume premise, but not getting it just yet.

[Tasuki 10]

Is it just my old eyes, or is anyone else having trouble reading the text inside Tingull's charts?

[Vercingetorix 10]

I think we might have possible buying climax in Bidu. The stock has moved rapidly (50 points in 4 days) on heavy volume. Today we had an up day that closed well off its highs on very high volume. Longer term I don't know where the stock is headed, but limited upside from here I would say.

[ranj 10]

I think we might have possible buying climax in Bidu. The stock has moved rapidly (50 points in 4 days) on heavy volume. Today we had an up day that closed well off its highs on very high volume. Longer term I don't know where the stock is headed, but limited upside from here I would say.

 

Looks like a buying climax to me, will need to see signs of distribution and then some lack of demand prior to shorting.

 

Rajiv

[TinGull 10]

Is it just my old eyes, or is anyone else having trouble reading the text inside Tingull's charts?

 

What would make it easier for you? Not having the bold around the letters maybe? It's an easy change if it'll make it easier for folks to read.

 

And brownsfan...I'll do a writeup this morning pre-market about my looking at the action with candles, too.

[Tasuki 10]

TinGull, yes removing the bold might help. Thanks.

[TinGull 10]

Ill try to make it a bit better from now on. Could you read what I wrote in that previous picture?

[Anonymous 11]

Great stuff TG. Thanks for the posts.

[Anonymous 11]

I think we might have possible buying climax in Bidu. The stock has moved rapidly (50 points in 4 days) on heavy volume. Today we had an up day that closed well off its highs on very high volume. Longer term I don't know where the stock is headed, but limited upside from here I would say.

 

Narrow range bar with Ultra High Volume in new territory............. Possible end of a rising market.

 

Personally, I would not short here, but I would certainly not be getting long. Let us know what happens over the next few days. Thanks.

[Tasuki 10]

TG, if I squint real hard, I can indeed make it out. If nobody else is having trouble with this, I can just copy the chart with Snagit, then enlarge the image so my geriatric eyes can see it more clearly. If you look at some of the charts I've posted, I try to put clear white text on pitch black background. Seems to work well (good example on p. 30, permlink #291).

[TinGull 10]

I totally understand. I just don't use a black background in my charts, so I'll try to just use black text on my lighter background from now on.

[RAVIN 10]

TG, Excellent thread on VSA, great Long setup on chart posted #386, the strategy here is obviously a trend reversal, however what were the exact tactics for trade entry and trade management.

 

Basically there are 3 setups : 1. Breakout of congestion

2. Retracement and continuation

3. Trend Reversal.

 

Breakout, retracement can be considered as trading in the trend direction.

Then relevant tactics have to be setout to trade with discipline and consistency. In this respect I have found info. in "Techniques of Tape Reading" by Vadym Graifer and Christopher Schumacher extremely valuable.

 

Their aspect of exiting trades on WRB with volume in conjunction with support/resistance level has made a huge impact on my trading.

[ranj 10]

EOD XLF chart (S&P Fin. Sector ETF)

 

9/25/07 - Test, Low Vol, Down Bar, Close High,

 

Test bar is occurring within the Body of the Wide Spread bar from the Fed day. I noted that bar as being Pushing through supply (two horizontal lines as possible supply, ultra high vol, Wide Spread, up bar closing on the highs)

 

From 9/20 to today XLF has been heading down on lower and lower volume (lack of interest on the downside)

 

Looking to long on break of the test bar's high

 

Rajiv

 

[Tasuki 10]

Rajiv has the right idea---posting charts that give VSA signals at the hard right edge. Good job, Rajiv! When I get good enough to spot signals like that, I'll post 'em. Taz

[ranj 10]

Rajiv has the right idea---posting charts that give VSA signals at the hard right edge. Good job, Rajiv! When I get good enough to spot signals like that, I'll post 'em. Taz

 

Thanks

 

A lot easier to do on an EOD chart as opposed to intraday.