[VSA] Volume Spread Analysis Part I

[jjthetrader 10]

No problem.

 

Awesome! I think that's what a lot of us here are looking for.

cheers

[jaybird 10]

We all learn everyday from your comentary, thank you.

Looking forward to the TradeGuider event tonight.

 

 

 

First let me say this is a great thread, tons of great info. Thanks seb. blowfish and all others who have contributed.

 

 

Can someone let me know how i can attend the tradeguider presentation tonight. I looked on the website and didn't see any info for it.

 

Is tom speaking tonight

 

 

thanks

 

jaybird

[jaybird 10]

just saw on the tradeguider website that they have a dec 6th recording with tom and sebastian is that the one that you were talking about.

 

 

is the tradeguider event tonight only for tradeguider customers

 

 

thanks again

[jjthetrader 10]

Customer only tonight with Tom and Sebastian

[Seb Manby 11]

just saw on the tradeguider website that they have a dec 6th recording with tom and sebastian is that the one that you were talking about.

 

 

is the tradeguider event tonight only for tradeguider customers

 

 

thanks again

 

 

Hi Jaybird;

 

6th Dec was last weeks, tonight you have to register I think, yes customers only.

 

Regards Sebastian

[Tasuki 10]

Is it possible to spot the "anvil" as I call it. Sledge

 

 

Hello Percy,

Well, it is possible. Just look at today's trading action on the ES (or probably any of the index futures contracts). In short, what you would look for is:

1) "upthrust"

thrusts up past resistance but closes near low

medium range bar

medium volume (just enough to make the breakout suckers think we're gonna rip)

closes near low of bar

2) "no demand"

narrow range bar

volume lower than the previous 2 bars

 

See attached chart. This is a clear an example as I can think of for your "anvil" trade.

cheers,

Taz

[BlowFish 10]

Great chart Tasuki,

 

I think point 3 is pretty key. Pure Whycoff. I place as much importance on rising falling volume over a handful of bars as within the individual ones. Strictly speaking no demand should appear on an up bar (point 2) but I'd go with you on that, the bulls look spent. Lots of places to hop on too! Doesn't get much better.

 

Cheers.

[bertg 10]

See attached chart.

cheers,

Taz

 

Taz,

 

First, thanks for the volume indicator tip several posts ago. I will be watching it. SierraChart has Bid Volume and Ask volume that I overlaid on the same graph.

 

Now, on the chart above, what chart trading hours are you using? I ask that because it's important to how the 34 EMA is plotted. Is it 9:30ET - 4:15ET

 

On #2, isn't a down bar with volume less than the last two bars a no supply bar?

 

Thank you,

Bert

[Tasuki 10]

Taz,

 

First, thanks for the volume indicator tip several posts ago. I will be watching it. SierraChart has Bid Volume and Ask volume that I overlaid on the same graph.

 

Now, on the chart above, what chart trading hours are you using? I ask that because it's important to how the 34 EMA is plotted. Is it 9:30ET - 4:15ET

 

On #2, isn't a down bar with volume less than the last two bars a no supply bar?

 

Thank you,

Bert

 

Berg and Blow,

First, you're most welcome. In private messages I've gotten several positive comments. Someone even said I should call it my "world famous" indicator. In the public forum, however, I've mostly gotten criticism or dismissal . Glad to hear you'll give it a try.

Regarding the hours, yes, normal session hours. Don't tell anyone but I've found that there are a few moving averages that work (VSA purists would be rolling over in their graves if they weren't still alive!), and the 34 EMA on the 5' chart is one of them. If price marches up to it in that lockstep fashion that it did today, and all the while volume is dropping off, and you also get upthrusts and no demand bars, then there is more chance of snow in hell than an upside breakout through that 34 EMA.

Regarding "no demand" vs "no supply", all I can say is, "Location, location, location". The same type bar with the same type volume pattern could be no supply if it's found during a consolidation at the lows of a market, or no demand if it's found during the consolidation at the top of a market. Capiche?

Taz

[bertg 10]

Taz,

 

Capiche! Thanks for the analysis.

 

BF,

 

When I clicked reply to Taz's post, his was the last. But it took me ages to correct my typing, because my laptop keyboard skips a bunch of letters. So, had I seen your post, I obviously wouldn't have posted about the no supply bar.

 

Andspeaking of Wyckoff, I ordered his "Studies in tape reading" and am looking forwrd to reading it.

 

Regards,

Bert

[RAVIN 10]

Berg and Blow,

First, you're most welcome. In private messages I've gotten several positive comments. Someone even said I should call it my "world famous" indicator. In the public forum, however, I've mostly gotten criticism or dismissal . Glad to hear you'll give it a try.

Regarding the hours, yes, normal session hours. Don't tell anyone but I've found that there are a few moving averages that work (VSA purists would be rolling over in their graves if they weren't still alive!), and the 34 EMA on the 5' chart is one of them. If price marches up to it in that lockstep fashion that it did today, and all the while volume is dropping off, and you also get upthrusts and no demand bars, then there is more chance of snow in hell than an upside breakout through that 34 EMA.

Regarding "no demand" vs "no supply", all I can say is, "Location, location, location". The same type bar with the same type volume pattern could be no supply if it's found during a consolidation at the lows of a market, or no demand if it's found during the consolidation at the top of a market. Capiche?

Taz

 

Taz, Your contributions are as valuable as the next person, nobody can dictate to you as long as we keep to the core topic of this thread . Any enhancement on that, like the MA you mentioned or Market delta concepts should only be encouraged and not brushed aside. It is also imperative that we move into some realtime trades . When reading from the middle of the chart with the ensuing move in focus, the mind has a tendency to seek all the evidence to validate that and block other countermanding signals, but in realtime we do not have that luxury;)

Keep posting pal.

[Blu-Ray 10]

Taz

 

Great chart and analysis, thanks very much, please keep them coming.

 

Cheers

 

Blu-Ray

[Sledge 13]

Tasuki-

Incredible. Thank you so very much for the chart and the info, that helps quite a bit!

Regards,

Percy, Sledge

[RAVIN 10]

Great chart Tasuki,

 

I think point 3 is pretty key. Pure Whycoff. I place as much importance on rising falling volume over a handful of bars as within the individual ones. Strictly speaking no demand should appear on an up bar (point 2) but I'd go with you on that, the bulls look spent. Lots of places to hop on too! Doesn't get much better.

 

Cheers.

 

Agreed, infact what Taz has presented actually illustrate 2 of the 6 major supply/demand principles explain in Vadym's book,

and in this respect if he has gainfully blended and employed concepts from Market Delta in his realtime trading, then I see no reason why they cannot be posted here.

On the theme of decreasing vol on rising prices, upthrust, no demand etc, there were 3 on the Dax this morning. The MA here is not 34EMA but my way of keeping track of what is happening on the 15min chart. that way I do not have to flick back and forth.

[Soultrader 12]

Here is a chart from today. Part of my strategy using Market Profile then narrowing it down to techniques such as VSA (in this case) for trade location.

 

 

Price rallied towards the 13520 mark. IB range extension is roughly 50% of IB range with D period tails. Possible normal day under development and predicting minimal opportunities in the afternoon session.

[Tasuki 10]

Agreed, infact what Taz has presented actually illustrate 2 of the 6 major supply/demand principles explain in Vadym's book,

and in this respect if he has gainfully blended and employed concepts from Market Delta in his realtime trading, .

 

Oh heavens, not another book I have to read!!?? RAVIN, please spill the beans---who the heck is "Vadym" and what's the name of his/her book? (and, what's it about?)

 

OK, exactly how have I (accidentally) incorporated Market Delta concepts in realtime trading? Yipes. I just heard about Market Delta yesterday. Looks really interesting, but expensive.

[BlowFish 10]

http://www.realitytrader.com/

 

His book techniques of tape reading is quite interesting but didn't directly effect my trading.

 

Cheers.

[RAVIN 10]

Soultrader,

 

Great trade on the Dow, and very sound reasoning, hope you managed to hold through the lunchtime congestion, should be up over 100pts by now;)

 

Tasuki,

 

I have already mentioned Vadym Graifer's book "Techniques of Tape Reading", here it is not about the traditional way of tape reading, it is more in line with Linda Rashcke's definition , you can get her articles from her website. Vadym has outlined 6 principles of supply/demand and created setups and tactics to trade, although the examples focus on intraday trading on stocks, the strategies work in all markets. Some may find it useful, others not, just like MA, RSI, CCI, some swear by it, some swear at it.

 

Regarding Market Delta what I was referring to was your take on bid/ask vol, I presumed it was market delta, if not, fine, then you can post your readings on bid/ask vol with VSA if that provides an extra edge in realtime trades, that way you have a chance to demonstrate the tool and confront any criticisms. By engaging in who is saying what about VSA or bid/ask vol or any other indicator is not going to be productive:roll eyes:

[BlowFish 10]

Don't think anyone is saying bad stuff about measuring up and down volume like that, its fascinating stuff. A few people have asked that its discussed in that thread

http://www.traderslaboratory.com/forums/newreply.php?do=newreply&noquote=1&p=26728 as its a pretty massive subject in its own right. Personally I have no real axe to grind but that would keep everyone happy .

 

The VSA purists (of which to be honest I am not) are a funny bunch. They are quite zealous sometimes. (just joking guys).

[jjthetrader 10]

I know this should go in the indicator section but I'm sure more people in this forum may want to take a look at it.

Blu-Ray and I worked out a volume indicator that matches TradeGuider's Relative Volume Bands for Tradestation.

Enjoy.

RELATIVE VOLUME.ELD

[BlowFish 10]

Nice work!!:applaud:

 

Based on standard deviations I would guess?

 

Cheers.

[jjthetrader 10]

Based on average and then deviation from that.

[BlowFish 10]

Ahh OK I see you used use a fixed scaler...I am pretty sure tradeguider uses standard deviations. In fact there is a particlar type of variance and standard deviation calculation I believe they use (the name escapes me right now). Still looks nice.

[MC 10]

I know this should go in the indicator section but I'm sure more people in this forum may want to take a look at it.

Blu-Ray and I worked out a volume indicator that matches TradeGuider's Relative Volume Bands for Tradestation.

Enjoy.

 

Incredible, but damnit you're making me a reason to give Tradestation my business still. I guess I may just have to throw them the 10 rounds a month to get the free platform and use a different broker for the rest of my executions.

[jjthetrader 10]

They produce the same results. I have TradeGuider and it matches perfectly.