[VSA] Volume Spread Analysis

[ranj]

TG,

great video.
Do you mind going over where you would put your stops in terms of VSA, for each of the possible trades in your video.

Thanks
Rajiv

[TinGull]

Sure, my stops are beneath what you would logically think as pivot lows/highs. So the first stop would be beneath that hammer, maybe 2 ticks or so. If I get stopped and it turns out it just wanted to spike me out, it only takes a commission to get back in.

As for the rest, I use the last area of S/R that's shown on the chart as my pivot for a stop. If you want something more written out as far as prices and such for stops, let me know.

[TinGull]

Also wanted to point out how we can SEE that VSA is working via Volume Breakdown on InvestorRT. Note how price is heading down on decent volume while we're seeing a decrease in the net selling...this means that more buying is happening here and then we're awfully close to net 0 when that HUGE volume down bar comes into the market. Via VSA we know that this could have some hidden demand in the bar, and adding the VB indicator confirms that for us.

[Anonymous]

TG, You are the man. Very nice.

As everyone knows, I have mixed emotions about using indicators. However, this VB seems to be one of the good ones.

Volume Spread Analysis can be used in conjunction with various types of indicators. In Todd's article in Stocks and Commodities mag, he states, that indicators are used to tell the "when" of price movement. Whereas VSA tells BOTH the "when and the why" of price movement.

In this chart I have added a few things to TG's already spot on analysis.

Note that these two trades, as I seem them, do not employ WRBs in the set-up. That is, they key bars, the Test and the No Demand are not completely within the bodies of a WRB. This matters little. What we have is simply another way of trading VSA set-ups. This is what the thread should be about: multiple methods to using VSA to trade successfully.

This is not a bad way to trade. TG, I hope you continue to show some of these types of set-ups. (if I could just get you to drop the MAs ).

P.S. While I know there is a thread on indicators, some more info on the VB would be nice here. Especially from the point of view of VSA. Most volume indicators make assumptions contrary to VSA. This is why they are hard to use in concert. Remember, high volume on up bars in not bullish in and of itself. This, however, is an assumption most volume indicators make. VSA starts from the opposite view: Weakness (bearishness) enters on up bars with high volume.

[TinGull]

Thanks for the kind words Pivotprofiler. I wish I had something to show with today's action...but its just awful. I'll pull up some other charts and get rid of the MA's for ya

Oh...per a request by another member, I'm going to split this thread into another thread since it's long as all heck. Easier to wade through that way.

[TinGull]

I wanted to start another thread on VSA per another members request so that the material is a little easier to chew on.

I'll post up a chart later on...prolly not of today's action since it's been as boring as anything I've ever seen.

[TinGull]

New Discussions to be posted here:

http://www.traderslaboratory.com/for...html#post20650

[TinGull]

Here's a chart of gold from today. Note the HUGE push through the 30min OR low. This alone gets one to think. HUGE range on ULTRA HI volume closing at the lows. Next bar is a lower volume (tho still big compared to the days other bars) doji, then...we get another big range bar on even BIGGER volume...but the VB is showing us that selling is subsiding. Hmmm, interesting isn't it? Price probes the low one more time and then volume drops off a cliff. What happened there? No more sellers.

Note that we get a higher volume bar that closes at the lows of the bar and of the session, but can't crack it. When the next bar shows us yet that the lows can't be cracked...it's a good opportunity to put out a marker position long. Then, when we get some obvious signs of accumulation happening via the VB indicator (note the blue divergence line) we could add. There are 3 levels of S/R to watch for any push higher. Right now...only 1 level that could prove to be resistance via a WRB, and then the high of the session.

One thing to note on the VB...a blue spike on a down bar is VERY telling...very.

[rayl54292]

Hello,

Thanks again to all the contributors, very good work.

Harmonic pattern trader beginning to incorporate VSA, pretty interesting thus far.

Daily chart of cotton. Looking to contribute and for feed back.

From left:

1. effort to fall in the middle of chart, late July - market falls.

2. second effort to fall in mid aug, market rises - BTW a harmonic bullish gartley pattern(http://www.harmonictrader.com/price_patternsgartley.htm) formed there as well.

3. market fails to fall, result positive action.

4. No supply signal in early sept. into former resistance now support of effort to fall bar.

5. test back into resistance area of effort to fall bar from late July - strength?

6. effort to fall the very next day, followed a few days later by a no supply bar.

7. market takes out low of no supply bar today, would this confirm the negative action?

8. clue may be that vol is decreasing on recent price push.

9. Red lines are resistance on effort to fall bars, green are support.

10. FYI. yellow line is the .886 retracement of the July high to the late aug low - the .886 is the final major resistance in taking out new hi/lo in harmonic speak.

In VSA theory the market will restest the area of a high volume test - #5 above - so the question is: is #5 a high vol test?

My "guess" is yes.

3 blue lines overlayed on vol from bottom to top are 30 bar avg and then 2 and 3 Std.

Looking to go long on the restest, the test sits in an area of a text book harmonic retracement zone before new high breakout.

Feedback, input and brutal honesty are all welcomed.

Thanks again, you are all fine contributors and I'm certain fine folks as well.

R

[TinGull]

The last trade ended up going for 60 points, too...I didn't have time to sit and manage it though. But, VSA came to save the day once again!