[VSA] Volume Spread Analysis

[Seb Manby]

	Quote:	jjthetrader
	I don't suppose you'd share your code?

Sorry, I cannot as they are VSA indicators as Tom wanted them in TradeGuider, I would be in breach of copyright, and Tom says that he does not object to me having them on my chart as long as I don't give them away.
Regards S

[Seb Manby]

	Quote:	monad
	VSA question for PP/Sebastian: Under what circumstances can a 1. Wide Ranging Bar with Low vol and 2. WRB with High Volume (above average but not excessive be considered bullish??? other VSA traders, please feel free to comment, am sure all inputs will shed more light

Must be on a down bar on high volume, with next bar up. Look for testing in a rising market or higher prices. If bar closes off the low, then demand swamping supply(bullish)

Regards S

[Seb Manby]

	Quote:	bertg
	Sebastian, The chart looks like a 20-min chart to me. You are correct, 20m bar, I think I switched quickly and forgot to restore 15m chart, but results are the same In any case, how far back do you go to analyze the background and would you say there was weakness in the background? There was an old top in the background, and the previous bar was weak too I assume by confirmation you mean this: the 1620 red no demand bar got painted red when the 1640 bar closed and it was a down bar. Correct Your trade was so simple and so profitable. Congratulations to you. Thank you, I try to keep it simple with no clutter on my charts, else you cannot see what is happening Thanks for all your contributions, Bert You are most welcome P.S. The chart attached is Sebastian's from several posts ago.

Regards Sebastian

[dick_dastardly]

	Quote:	mister ed
	Dick Dastardly ... love it! Muttley must be around somewhere too. I am no computer expert but I think there are a couple of things to try to get the presentation working properly for you. Check you have a recent version of Windows Media Player - at least version 9. If it still doesn't work you may need to download some codecs. I tried a Google search for "wmv audio no video" and found a few places to get up to date codecs so give that a try. Let us know how you go.

Cheers for that mister ed

I've got it sorted now.

dd

[bertg]

Hi,

May I ask a question or two on the attached DJ30 chart?

Yesterday, on the 22nd, I saw what I thought was a failed test (volume was highest in the last 6 months or so), so I thought supply was still present. At the same time the hammer was bullish....... The bar is a long shadow down bar which closed off the high. ?So there was buying in that bar proved by today's bar?

It's great reading my own paragraph above. I am not making any sense and I can't make up my mind if it's a "weak" or "strong" bar, as Sebastian would call a bar. I'm wondering if I even know what a test is... One would think I should, what with PP's and others' scores of examples...

Today's candle (the 23rd) was an up bar, closed just off the high with huge volume. But how would you see it if the 22nd were the last bar on the chart?

Thank you,
Bert

[ranj]

	Quote:	bertg
	Hi, May I ask a question or two on the attached DJ30 chart? Yesterday, on the 22nd, I saw what I thought was a failed test (volume was highest in the last 6 months or so), so I thought supply was still present. At the same time the hammer was bullish....... The bar is a long shadow down bar which closed off the high. ?So there was buying in that bar proved by today's bar? It's great reading my own paragraph above. I am not making any sense and I can't make up my mind if it's a "weak" or "strong" bar, as Sebastian would call a bar. I'm wondering if I even know what a test is... One would think I should, what with PP's and others' scores of examples... Today's candle (the 23rd) was an up bar, closed just off the high with huge volume. But how would you see it if the 22nd were the last bar on the chart? Thank you, Bert

Hey Bert,
Take a look at DIA or SPY, The market really opened on the low and not near the highs on 1/22
Anyway that should not change things much since VSA does not look at the open.
You have a high volume down bar closing on the Highs. That is strength. Look to enter long on the low vol test of the area the 1/22 bar.
Didn't happen on the 23rd, which was a high vol up bar closing on the highs. We have to wait for the 24th bar to paint to determine if this is strength or weakness. I am personally looking for a no demand like bar within the zone of 125 to 127.5 on the DIA. But who knows what the market will bring.

[mister ed]

	Quote:	bertg
	Hi, But how would you see it if the 22nd were the last bar on the chart? Thank you, Bert

My thoughts on the 22nd as the last bar (please keep laughter down to a small guffaw)...

And, of course, this is all with the benefit of hindsight.

There has been a sustained move down since just before the 14th, on huge volume, with the highest volume of all on the 22nd (ignoring the 23rd here). Highest volume after such a big move down suggests capitulation to me.

There is a long shadow/tail, the price closed towards its highs (well, at least in the upper quarter). Big effort to fall, result - close is strong - not bearish. There must have been good buying on this bar.

My rudimentary knowledge of Wyckoff analysis has got to tell me this is NOT a bearish bar and I would be looking for buy opportunities on the following bars. My inner-candlestick guy is screaming at me that it's a fantastic looking hammer too - and taking all that background into account is making it even stronger (try as I might to smother him with Wyckoff I cannot shut the inner-candlestick guy up).

[mister ed]

Ranj beats me to it...

[ranj]

	Quote:	mister ed
	Ranj beats me to it...

Sorry, Working late, had some down time

[Anonymous]

	Quote:	bertg
	Hi, May I ask a question or two on the attached DJ30 chart? Yesterday, on the 22nd, I saw what I thought was a failed test (volume was highest in the last 6 months or so), so I thought supply was still present. At the same time the hammer was bullish....... The bar is a long shadow down bar which closed off the high. ?So there was buying in that bar proved by today's bar? It's great reading my own paragraph above. I am not making any sense and I can't make up my mind if it's a "weak" or "strong" bar, as Sebastian would call a bar. I'm wondering if I even know what a test is... One would think I should, what with PP's and others' scores of examples... Today's candle (the 23rd) was an up bar, closed just off the high with huge volume. But how would you see it if the 22nd were the last bar on the chart? Thank you, Bert

First off, High volume on down bars usually means selling. Unless the volume is excessive. If it is ultra high and a close on or near the low, one needs to look at the next bar. If that next bar is up, then the down bar must of contained buying. Here we do see many Ultra High down bars (prior to the 22) but they have down bars following them. This means the bars are weak.

Also there are no Test bars. For one thing the volume during this period is way to high. There could be a failed Test with this high volume, but in this case there is not.

The "hammer" on the 22 clearly shows strength (demand entering). It is a down bar that closes in its upper portion on Ultra High Volume. If the volume on that candle represented selling, the close would have to be lower. The candle on the 23 is a STRONG BAR. it closes near its high, does not make a lower low, but makes a higher high (buying bar). What you would be looking for is either a down bar on low volume that trades down into the Long Shadow of the Hammer candle and closes on or near is highs: This would be a test. If the Smart Money is still not yet interested in higher prices, we should see a narrow range up candle on low volume (volume less than the previous two).

Remember: markets do not like high volume on up bars. So, while the last candle is strong, there could be no follow through. We may see price move sideways. But at some point should trade back down into the area of the Long Shadow for a test.