[VSA] Volume Spread Analysis

[itai007]

How do I see the pictures in this thread ?
for some reasone I see an x where you probably posted a picture

[BlowFish]

	Quote:	jjthetrader
	I have a question about relational instruments and volume. We all agree that the ES is the big brother of the mini futures contracts right? The other index futures tend to follow the S&P right? Ok now, lets say we're trading the Nasdaq mini (NQ). Will we be given the clues in the NQ's volume about what direction it's going to take even if it's being led along by the S&P? Or will we need to look at the ES direction and volume to determine the directin of the NQ? You see what I'm saying? Are any of the indexes independant aside from the big brother? I've noticed the Dow and Nasdaq mini's tend to be delayed reactions to the ES. And the volume on the YM and NQ don't speak nearly as loudly as to what is going on in terms of supply and demand as the ES does. Anyone with experience in this matter?

I really don't think the S&P consistently leads, it would be far to easy to make money if it did (even if only by split seconds). I know many who argue the YM tends to lead for a variety of reasons (easier to buy/sell a basket of 30 stocks than 500 being one). Sometimes Europe leads sometimes not. Its such a tangled web with powerful computers running sophisticated algorithms to arbitrage things out in a nanosecond.

Some things that I have noticed, thinner markets tend to overshoot then counter correct. When all the traded volume was done on the big S&P it behaved like the elephant the ES like the flies. Also Smaller tick sizes tend to produce more and faster movement (seems to me). I am currently reading Amazon.com: Trading and Exchanges: Market Microstructure for Practitioners: Books: Larry Harris excellent book btw, I am sure it is something that is covered in depth.

Cheers.

[jjthetrader]

	Quote:	BlowFish
	I really don't think the S&P consistently leads, it would be far to easy to make money if it did Cheers.

Thanks for the insight BlowFish. I observed the NQ yesterday while trading the ES and noticed that the NQ was a couple steps ahead of the ES so yes my theory wasn't that sound:-)

To the Joel Pozen students, is there a price/volume benefit to trading the ER2 that you guys are trading? Is that what Joel taught you on? Is it 'easier' to read or something or just a personal preference?

[Soultrader]

Interesting price action on premarket ES. See chart below:

[Gordon G.]

Good afternoon,

can anyone of the experts comment the 10' chart available ?

It's a 10' chart of the mini dow 5$ ... I highlighted the bars that are with the trend and that have less volume than the 2 previous bars.

Today I'm really lost.

Thank you guys !

[tawe trader]

Hello Gordon

I am not quite sure of your question but I did notice an interesting finish to the days action.

Not long before closing (times are UK based) the was a very high volume down bar, very near to the days low (marked with green arrows). I have also attached a 10min YM chart.

Could there be hidden buying in that bar by the so called 'smart money'


# Pls ignore the blue lines on the chart, I forgot about my crosshairs when I took a screen snapshot.
.

[sheptrader]

Hi Gordon G, remember weakness apppears on up bars not down bars, you have marked all down bars with volume less than previous two not up bars.



so simply put,.
down trend looking to go short look for weakness in up bars
up trend looking to go long look for strength in down bars

regards

sheptrader

[mister ed]

	Quote:	itai007
	How do I see the pictures in this thread ? for some reasone I see an x where you probably posted a picture

Hello 007

Are you still having a problem? Try refreshing, rebooting, check you haven't got a block on pictures in your browser?

[Gordon G.]

Goodmorning,

thanks for your replies, tawe and shep.

Tawe: great, when I saw it developing in real time I thought the same thing, but as I do not trade night session, I finally did not pay much attention to it.

Shep: I did read Williams book many times now, not counting the VSA threads on this and on other forums, but I keep doing the same mistake.
I posted a chart following your indications. At point A and B demand seems to be present but
supply kept pushing the market down with less volume.

I was so out of synch that I kept thinking it was only short covering or buying all day long.

Have a great day.

[sheptrader]

Gordon, First thing (A) down trend would need confirmation to go long which you do not get on next bar, it close down , yes, it closes of the lows but if that up bar was buying the next bar should not be down, so it must have had selling within it, then on the third bar it close way below the low of A, this is still in a down trend.

and again on (b) its an up bar on high volume but the next bar closes lower than prior low, no way am i looking to go long, i would need to see some confirmation that the down trend was over.

path of least resistance was down all day.