[VSA] Volume Spread Analysis

[Anonymous]

BACK TO BASICS:

Just wanted to post this pic to remind/inform everyone about the essence of Volume Spread Analysis. If we ever get a FAQs thread this post should be included there too.

We see a down candle (close less then previous close) on Ultra High Volume that closes off its lows with the next bar down. If all that volume was selling, then how can the next bar be up? If all that volume was selling, how can the close not be on the low?

So who is buying amidst all the selling? The Smart Money. That group of professionals that always seem to be on the right side of the market. Because of their size, they leave tracks that we can follow and those tracks are in Volume, Spread, and Price.

[jjthetrader]

	Quote:	Sledge
	Question is with the GBP/USD: All indications seem to point at a market reversal to bull. Last week was stellar in taking longs- I honestly thought the bear run was over until the retrace came below the 1.9482 1/11/08 Low last night. I'm using VSA as well as using the COT Index as a background confirmation. I just watched the webcast on Tradeguider.com from the 17th and even the hosts were calling GBP Long--as long as the test was not on Ultra High Volume- My frustration lies in the fact that this damn thing keeps falling. Last night (This Morning) Monday AM London session seemed perfectly placed to be the turn and I fully expected a nice upward turn last evening (London)- But to no avail. Anyone have any light to shed on this- just doesn't seem it could possibly fall any lower than it is. Any insight here? I'd also like to talk with people who do use COT Index in tandem with their VSA as well. Most appreciated. Sledge

I don't think it's good practice to take a trade call from Gavin at tradeguider. I'd ask for Sebastian specifically to do a analysis of the GBP since he's trading forex now. You never know, he seems like a pretty accomodating guy.

Also Sledge, how about posting a chart with an analysis of what makes you think what you think about the GBP then maybe someone can help you with what you're seeing/not seeing.

[Sledge]

JJ-
Well I actually just watched the Tradeguider webcast today- my positions were already in long before I viewed it. My reasoning was if this is what the people who write and sell this software are saying (they saw what I saw) That is why I'm scratching my head.

I have posted the Daily chart below. In it you see a push down to 1.9484 on 1/11/08. On 1/19/08 you see another test down that only makes it as far as 1.9510.
As you can see when the market opened Sunday night you saw a nice gap up. Appears at least a nice bull run would begin. Apparently not. I make no claim I am an expert on VSA- I am still learning daily. So please feel free to tell me exactly what I missed on this- I am open to learning my mistakes so they can not be repeated. I have no fear the market is going to turn- I just would like to be Better at entry points.
gbp2.jpg

Thanks to all.
Sledge

[Seb Manby]

Hello All;

I have just been reading the posts on this thread, and you all seem to be misreading the market, no offense. Cable is not showing any signs of support by the professionals at the moment, and that is why it is trending lower, and will continue until the smart money decide to cover their shorts. I will go through your charts and post a video of why you are wrong.
Regards Sebastian

[Sledge]

Seb-
No offense taken. Please- pick this apart and let me have it! I need to know why I haven't had a losing trade in 8 weeks- and called this one so very wrong!
Thanks in advance!
Sledge

[zdo]

VSA book says 'revise' / 'adjust' volume on short days / holidays.
Mini - poll : how much did you manipulate volume today in the indexes, etc? thx

[Anonymous]

Wanted to get the pic in as soon as possible. Explaination in a different thread.

[monad]

	Quote:	Seb Manby
	Hello All; I have just been reading the posts on this thread, and you all seem to be misreading the market, no offense. Cable is not showing any signs of support by the professionals at the moment, and that is why it is trending lower, and will continue until the smart money decide to cover their shorts. I will go through your charts and post a video of why you are wrong. Regards Sebastian

It will be greatly appreciated if you could compile your videos or comments around the market you trade i.e cable or Euro

[Anonymous]

This post is taking a bit longer than I had hoped. I guess the haters can still hate .

Trade Concept:

1. Retouch of previous day's Point of Control (POC)
2. 80% Value Area trade.
3. Low volume sign within the range of a Wide Range Body.

Okay, We look left to trade right. Many will notice that the PivotProfile is on the trend (15 min) chart. I love this tool. I call this a poor man's Market Profile tool. I wont go into the history/development here as I want to get the post posted. However, I will note that it is based on Mark Fisher's pivot range, which he says is 95% the same as an actual market profile.

First note the squat bar on the 15. The very next bar is a selling bar (lower low and a equal or lesser high) on volume less than the previous two bars. In short, a Test. Now, some may of been able to get in here and more power to them. I prefer a higher probability set up.

Skip up to the No Demand bar. Notice how price did not touch the Yellow line (poc). It did however, close beyond the lower pink line. The Deviation Range Low (DRL). This is the Value Area (a) low. So this makes two bars that have closed within the previous day's value area after trading outside of it. This sets up the 80% rule trade. 80% of the time price trades outside the Value Area and then trades back within it, it will trade to the other side of value. In this case to the Deviation Range High (DRH)- upper pink line. This becomes our second price target. The POC itself, is the first. Because of the tendency of the market to retouch the previous days Point of Control.

Check out the very next bar after the No Demand. It is No Supply. What you see is that while the bar trades below the Value Area, it closes within it. This is true of the following bar which confirms the No Supply Bar.

Let's jump over to the 5 min. We have a WRB. Not a large one but a WRB none the less. We then get a Test that is within the body of the WRB. NOTE THAT THE TEST IS CONFIRMED ON THE NEXT BAR WHICH IS THE EXACT TIME THE NO SUPPLY IS CONFIRMED ON THE 15 MIN CHART.

So we have our set up on the 5 min and a valid reason to take the trade on the 15, even though the 15 does not have a WRB set up or a high volume down bar where demand would of entered.

[tawe trader]

Great call PP, from where your long entry point is the EUR/USD is well up over 50 pips.

You should move to Europe for more sociable trading hours !

Regards
Darren