[VSA] Volume Spread Analysis

[Blu-Ray]

	Quote:	Tasuki
	Blu-Ray, good post and analysis. Yes, it'll be red on the time and sales because you bought while the price was going down. But it won't appear on the volume bar because that was one measly contract, and each bar represents hundreds or thousands or even tens of thousands of contracts. Now, if you were to see four trades go off at once on the T&S, each one for 300 contracts on the ES, and they were all red, then you should sit up and take notice, because it's likely that somebody or somebodies knows something that you don't, and maybe you don't want to go long with your one contract into the teeth of 1200 contracts going off as the price goes down. All I can say is, watch it for a week and you'll see that it works.

Tasuki

No problem, I'm on your side here, as I do use the tick delta version of it and I do find it useful. But I was just trying to stress that it can contain hidden volume.

Anyway apologies for de-railing the thread a little.

Cheers

Blu-Ray

[BlowFish]

Guys I dont want to sound all dictatorial but this is very different from VSA. Its still valid, interesting etc. but It would be a shame to mix two distinctly different things up. Worse you could scare off some of the VSA guys. Obviously II can't speak for any one else but from what I know certain individuals have no intention of mixing this stuff into there successful trading methods. I know its not my thread but I feel kind of responsible having invited people here to discuss VSA.

Lets take it to http://www.traderslaboratory.com/for...lume-2994.html a better venue for this discussion and I am sure both threads will flourish.

Cheers.

[Tasuki]

Ravin,
You're asking for the nuances, and that's cool. So, let's go through the four bars you've highlighted. From left to right:
1) stopping volume--if this were simply total volume, what would you see? You'd see one humongous green bar, and they'd tell you that there was very likely selling hidden in that bar. Well, now you can see the selling right there in front of you--if the bulls really were taking over the earth, as it would appear with such a beautiful green WRB, then why the hell is the red volume bar 2/3 as high as the green bar? Why, because there's your hidden selling, staring you in the face. This is EXACTLY why I recommend this type of volume analysis.

2) Here, the price action has been down, and the bar in question is down, but the volume has definitely dropped off, and as you can see from this bar and the previous one (and the the next few after it), the green volume bar is starting to catch up to the red volume bar, showing that the buyers are starting to "nibble" at the market at these prices. It takes a little while for the boat to turn around, and for prices to go back up, but the fact that the green bars are starting to match the red bars in size suggests that at least the selling pressure is abating.

3) Here, the price has been going up smartly, and it looks like blue skies and sunshine for our ES, until you notice that the volume of buyers has decreased on this bar, giving you an advance warning that maybe all is not so damn rosy. The very next bar shows red overwhelming green on the volume, which is a definite warning sign.

4) Here, the price has been going down briskly, and the red volume is nearly identical to the previous bar. So, how come the green bar is nearly twice as high as in the previous bar? Why, because this is "hidden" buying, hidden no longer.

I keep asking people to just watch this (preferably with an open mind) for a week because the nuances of this method are numerous, and they do NOT make sense UNLESS you put them in the context of VSA analysis.

[Tasuki]

	Quote:	BlowFish
	this is very different from VSA.

Blowfish, here we are agreeing to disagree again. The volume analysis I'm proposing, with its up-inside-down indicator, is of little value unless it is put in the context of Volume Spread Analysis. It is able to elucidate VSA to some degree, but it is not different or separate, at least not in the way I am trying to present it. Sorry if I've done a poor job of that, but let me repeat one example---when I first presented this idea, I started out by mentioning that this double volume indicator could show you the "hidden" buying or selling on intraday charts. As I hoped to show in my last post, this method has much more to offer than just shining a light on hidden volume, but if it did nothng else, it would help traders to see when the big money is starting to turn the boat around by "hiding" volume that will eventually take the market in the opposite direction from where it is currently headed. As I think you will see if you watch this for a while, the up-inside-down volume bars can provide useful information to many VSA setups (no demand, tests, stopping volume, etc. etc. etc.), but without VSA, the volume bars make little sense. Rather, they complement each other.

[RAVIN]

Thanks Tasuki,
From the manner of your analysis of the 3 market turns on the chart, it sound very much like VSA and in that respect, both would appear to be two sides of the same coin and hence complementary. However VSA takes into account the spread i.e the range of the bar and the close and ofcourse the background strength/weakness.

Would appreciate if you could post some realtime trades. As I mentioned previously I have no problem examining any method which would enhance my trading edge.

[BlowFish]

Hi Tasuki,

My point is perhaps this is not the thread to discuss it. The fact you use them to supplement VSA does not mean they are a part of VSA. If you think the other thread is inappropriate too maybe start one discussing VSA & upvol/downvol. VSA is very straightforward in this regard. When inventory is transferred from weak hands to strong hands or vice versa it shows up as volume. It matters not one whit whether it was on an uptickvol or downtickvol. Just like when there is no demand it matters not whether there where more uptickvol or downtickvol. Actually I put forward an idea for discussion that this is actually at odds with how smart money actually accumulates and distributes. I think this maybe demonstrable (but not here).


I do think there are some flaws to the uptick = buyer downtick = seller which I have outlined in some detail but again this is probably not the best venue to discuss it that is all Im saying Anyway Im really pleased you are getting good value out of these indicators. One reason being I'd like to learn from that! I can certainly see they have utility but I am still trying to integrate them into my day to day trading. Come over to the other thread and show us all! (Im sure no one will mind if you use VSA as 'context').

Cheers,

[Anonymous]

Tasuki and others,

Please use the other thread for such discussions. This thread is about Volume Spread Analysis. VSA can be used in a multitude of ways and this thread promotes all of them. What you are talking about is NOT VSA period. Could there be some value, maybe. But this is not a forum for that discussion.

We all know what Tom and Todd say about Up/down volume. If you feel differently, that is your proagative. And in fact, you may correct. But let's try to keep the stuff here germane. Post on the VSA aspects of your analysis with links to another thread for the more "specialized" stuff.

[Tasuki]

	Quote:	PivotProfiler
	We all know what Tom and Todd say about Up/down volume.

Well, at least one person (yours truely) has been out of the loop. No, I don't know what Tom/Todd have said on the subject of up/down volume. Actually, I would be surprised if they had anything at all to say on the subject, given the fact that Tradeguider can't view up/down volume (that's already been established by someone on this thread who apparently knows).

PP, please enlighten us as to what Tom and Todd say about up/down volume. Either here or that other thread, your choice, but I'd really like to know. I don't recall any discussion in Master the Markets, maybe I missed it. Was it perhaps mentioned in the bootcamp CD?

[Seb Manby]

I now have camtasia, so i have uploaded video and audio for my analysis of the ES Monday 10th dec

dowmload here 19mb http://www.megaupload.com/?d=AZBX5YW2

[Sparrow]

Thanks Sebastian, I've uploaded the file as an swf, suppose not everybody has camtasia here.