[VSA] Volume Spread Analysis

[tawe trader]

Where I find VSA very worthwhile is in a situation where a lot of indicators fail, ie an intraday trading range. If the mkt is bouncing around without any major news you can quite successfully pick tops and bottoms.

Over the last couple of days though, I have found it to be quite unsuccessful trading the long side of any of the major index Futures based on a VSA 'buy' signal. On numerous occasions there has been very high volume coming in on down-bars, but there have only been very small bounces before the mkt turns back down again. The bad news has been over-riding most VSA long set-ups.

On the opposite hand if I had only acted on VSA 'sell' signals (ie a no demand up-bar after a small rally) over the last couple of days then my trading would have been a lot more profitable.

It has confirmed to me, that I need to have a trend direction tool in the background to help filter my VSA signals. So if I am trading off a 5min timeframe, I really should only take signals in the direction of the 60 min trend or if I do go against the trend, only risk small amounts, use a tight stop-loss and take any quick profits.

Darren

[TinGull]

Good point Darren. VSA is great when used to take higher odds trades, ie; in the direction of a trend. Tools to use for that....higher highs and higher lows/or opposite.

[jjthetrader]

I agree also. Trend is very important for higher probablilty trades. Thanks for reminding us of that important part of VSA/trading.

[sleepy v2]

This also highlights the importance of why Williams recommends using multiple timeframes. If you dont occassionally look at the bigger picture you may find yourself "too close to the market" and in effect swimming against the prevailing current (or as in this case ... the trend).

Alexander Elder got around this problem by coming up with his "Triple-screen Trading" technique. For example, a long term trader would first look at a monthly chart, then a weekly chart and finally the daily chart before making a trade, and then only if they all lined up.

sleepy

By the way has anyone found a way in TradeGuider to apply a group of charts (ie. a Monthly, Weekly, Daily chart of a particular stock) to ALL stocks in a folder. As creating a 'Group' for every stock I want to monitor is so time consuming.

[jjthetrader]

Well you could try saving your monthly's in one folder and your daily's in another folder. You obviously know about the 'save group' function but you want a timeframe applied to all, correct?
Do you have the RT version or EOD?

[sleepy v2]

JJ,

I have EOD. Im actually wanting to see M,W,D charts for stock AAA on the screen, then be able to see M,W,D charts for stock AAB, etc

... so as I page through EACH stock in a particular folder I have their M,W,D charts appear on screen at the same time.

sleepy

[jjthetrader]

I'll PM you to get you going

[bertg]

	Quote:	TinGull
	Hey Bert, nice work. What i see here... 1: Note that level of support. First area of support where the yellow line starts is a WRB support line. The bottom of the WRB often will provide support, and getting a higher volume spinning top right after...good sign it'll go higher. Then...comes the penetration of the low of that WRB on lower volume. Regular spread, lower volume and closing in the upper third. A break of that hammer is reason to get long for sure. 2: Another WRB that should provide some sort of S/r, and the next bar closes outside of that zone and then we get signs of excess in the form of long tails penetrating that S/R zone of the WRB....killer play.

TG,

Thanks for the reply and all of the contributions. To be honest, I'm not sure I understand which WRB support line you are talking about.

In any case, I am very excited about learning.

I'll post another chart soon that I will appreciate comments on.

Regards,
Bert

[TinGull]

Bert, if you see where the #2 is and there's a yellow box...that is outlining the support/resistance area of the wide range body candle that I marked out. The tops and bottoms of WRB candles as well as long tails on candles mark imbalance/excess. Hope that helps

[bertg]

TG, thanks. yes, i understand the s/r from the WRB, but what is the horizontal line? I assume it's just another support line.

Thanks,
Bert