[VSA] Volume Spread Analysis Part I

[bertg]

Taz et all,

Look at this bar on ESH8. The Ask volume is almost double the Bid volume and the bar is a down bar and closes off the low. What do yo make of it?

Also looking forward to Sebastian's recap of the day. Sebastian, maybe you can touch on this bar in your analysis.

Regards,
Bert

[Seb Manby]

ES Analysis for 14th dec.

http://www.megaupload.com/?d=69MMFJL4

I had an interesting email exchange with my datafeed suppler today, i will tell you about it monday.

Regards Sebastian

[mister ed]

Originally Posted by bertg Taz et all, Look at this bar on ESH8. The Ask volume is almost double the Bid volume and the bar is a down bar and closes off the low. What do yo make of it? Also looking forward to Sebastian's recap of the day. Sebastian, maybe you can touch on this bar in your analysis. Regards, Bert

Bert, this is very unusual, it can happen, and on a smaller time-frame it is not so unusual, but is unusual on a 5-min chart. So I looked at my 5 minute chart and I have completely different Bid/Ask figures - to the extent that my equivalent 5 minute bar is showing big net selling (volume hitting the bid), not net buying, as yours shows. I then looked through the chart you posted and compared it to my 5-min chart and there are number of differences.

Are you using tick data or snapshot data? Saying this, maybe it is my data that is wrong! If anyone else can post a 5-min chart with the vol@bid/ask information then we can compare. I am using esignal with IR/T.

[jjthetrader]

Check out my first pic. We see a breakout up through the Pivot on the YM. It goes up and hits a bit of supply (yesterdays close) and does what seems to be a pullback to the Pivot. See the no supply bar on the Pivot? Would this not usually be cosidered a high probability Long position?

Now check out the second pic. Is this just one of those times that that setup wouldn't work?

I know Tawe would have been short right after that upthrust and ridden it straight down through the pivot.

How would one distinguish a pullback from a new trend?

thanks

[jjthetrader]

Would you short this upthrust ? If not or if so, why?

[That One Guy]

What about that big up bar with high volume. Doesn't vsa tell us this is potential weakness? Then, there is an upthrust, which almost confirms the weakness. I am new to VSa, but the little info I have read tells me this. On my 10 min ym chart, the bar after the huge spread bar on high volume, makes a new high on much less volume. Then a huge upthrust, I spotted this all in real time, but was just a spectator and did not trade it. Either way, great thread keep up the good work everyone.

[Anonymous]

So many post I want to reply to-looks like a long weekend. Of course, by Sunday this thread might have 5 more pages of brillance to wade thru. LOL
I love it!! Now this thread is a dream come true.

The first couple of posts be Sebastain have a link to open the charts by clicking on the post itself. Can we get that option back? I do not want to be downloading more software and registering at more sites to get the analysis. Sebastain, please include that "m".

[Anonymous]

Originally Posted by jjthetrader Would you short this upthrust ? If not or if so, why?

We should not be looking at signs in a vacuum.

What the background says is important. I do not agree with your interpretation of the chart. I see much strength and would be looking to go long, not short. Hence my answer to your question is no.

Take a look at the highest volume bar on the chart. This is a down bar with the next bar slightly up. Demand entered on this bar. Also note that the market begins to move sideways a bit.

The Trap Up move you labeled, to me is No result from High Volume (strength in this case as the high volume bar was down.) The bar is down on high volume and a wide spread but the next bar is up. Thus showing no result from all that volume on the down bar.

What I would like to see is a higher timeframe to aid in my decision making. To be clear, I would not short this bar but I would not be going long here either. In fact, for me, If that large bar is a WRB and then we get a No Supply or Test within the range of the body it would be a go.

[tawe trader]

I know Tawe would have been short right after that upthrust and ridden it straight down through the pivot.

Hey JJ, I seen the upthrust on my YM chart but I didn't go short as it was Friday 4pm UK time and I had been watching / trading the FTSE since 8am and the dog needed walking. It would have been a beautiful short to hold until the close though.

I was already long S&P (cash mkt) so what I did do though after seeing the upthurst, was use it as a signal to get out of my long trade at 1485.2 for a profit of 6.2 pts - not that far off the high of the day !

VSA is a great tool, it can be used to get you into a trade and it can also give you a signal of when to get out and take profits and bank more pts than a trailing stop.

[jjthetrader]

Thanks for the good comments PP and Tawe.

Good job on the S&P Tawe. How'd it go on the FTSE? Are you back in the "black" after the bank announcement day now?

Thanks again to Sebastian. Any chance of getting a walkthrough of a day you actually traded with explanation of why you did what you did and what you were seeing at the time?

cheers