[VSA] Volume Spread Analysis

[Tasuki]

To everyone on this (and all TL) threads:
It would be REALLY helpful if your charts would include:
1) the contract name (or ticker symbol if it's a stock)
2) the timeframe (or tick-frame if it's a tick chart)
3) the X and Y axes of the chart

Many times I want to try to reproduce the charts you post to see what else I can see, but it's really difficult when I have to guess about the essential information about the charts. Why do you not include these details? Most of the people who post on TL are guilty of this, and it reduces the value of the site. Kindly give my suggestion some consideration, and help out your fellow traders. It really would help.

[Tasuki]

jj,
I've managed, I think, to reproduce your chart from permalink #973. It's a five minute chart, right?
Many pages ago on this thread, I recommended an enhancement to VSA in which volume would be broken down into volume up vs volume down. The "experts" on the thread didn't like my idea, but here's an example where it is valuable (in fact, invaluable). See attached chart. On your putative upthrust, the total volume is too high, but just as importantly, the upvolume nearly matches the downvolume (upvolume is seen as a green line inside the wider red line which is downvolume). This clearly shows that there was significant buying on this bar, hence it was not an upthrust. The total volume itself would have been a clue, but the picture is clearer if you separate the up from the down.

[MC]

	Quote:	Tasuki
	jj, I've managed, I think, to reproduce your chart from permalink #973. It's a five minute chart, right? Many pages ago on this thread, I recommended an enhancement to VSA in which volume would be broken down into volume up vs volume down. The "experts" on the thread didn't like my idea, but here's an example where it is valuable (in fact, invaluable). See attached chart. On your putative upthrust, the total volume is too high, but just as importantly, the upvolume nearly matches the downvolume (upvolume is seen as a green line inside the wider red line which is downvolume). This clearly shows that there was significant buying on this bar, hence it was not an upthrust. The total volume itself would have been a clue, but the picture is clearer if you separate the up from the down.

Please correct me if I'm wrong, isn't the volume shown there just at bid or ask? Red if at bid or green if at ask? And if that's correct how reliable do you think it is to expect that an order at bid was a sale and at ask was a buy?

Thanks

[monad]

	Quote:	Tasuki
	jj, I've managed, I think, to reproduce your chart from permalink #973. It's a five minute chart, right? Many pages ago on this thread, I recommended an enhancement to VSA in which volume would be broken down into volume up vs volume down. The "experts" on the thread didn't like my idea, but here's an example where it is valuable (in fact, invaluable). See attached chart. On your putative upthrust, the total volume is too high, but just as importantly, the upvolume nearly matches the downvolume (upvolume is seen as a green line inside the wider red line which is downvolume). This clearly shows that there was significant buying on this bar, hence it was not an upthrust. The total volume itself would have been a clue, but the picture is clearer if you separate the up from the down.

Interesting concept Tasuki, have a question though

On any bar the volume represents contracts buyers = sellers, so how can buying vol be different from selling vol.

[MC]

	Quote:	monad
	Interesting concept Tasuki, have a question though On any bar the volume represents contracts buyers = sellers, so how can buying vol be different from selling vol.

At bid or At ask volume.
My question though is how reliable is it to expect at bid means it was a sale and ask means it was a buy.

It seems highly probably that that tick delta works well, but I'm curious to hear from those that trade on the delta info.

Thanks guys.

[jjthetrader]

	Quote:	Tasuki
	jj, I've managed, I think, to reproduce your chart from permalink #973. It's a five minute chart, right? Many pages ago on this thread, I recommended an enhancement to VSA in which volume would be broken down into volume up vs volume down. The "experts" on the thread didn't like my idea, but here's an example where it is valuable (in fact, invaluable). See attached chart. On your putative upthrust, the total volume is too high, but just as importantly, the upvolume nearly matches the downvolume (upvolume is seen as a green line inside the wider red line which is downvolume). This clearly shows that there was significant buying on this bar, hence it was not an upthrust. The total volume itself would have been a clue, but the picture is clearer if you separate the up from the down.

Thank you for your input. I also was considering that volume may have been too high and that at that level the bar should have pushed down more if it where more selling. So the spread was wrong, in hindsight.
Everytime I make a trade that ends up going the other way I try to see why and hopefully not have it happen again.

Yes it was a 5min chart of the ES. I will post more info on the next chart I post.

[Anonymous]

Let us be clear: Up onto a few days ago when Sebastian made his first post, there were no Volume Spread Analysis experts posting here. Only students on a journey like everyone else.

[marketguy]

I really love this thread, guys. Thanks everyone. By the way, does anyone have the Boot Camp CD's and, if so, are they worth the $? Does it offer much beyond the book?

[Anonymous]

	Quote:	jjthetrader
	Can anyone shine some light onto why I might have misread (VSA wise) this trade I took yesterday? We had a nice run up (this in on the ES), got an ultra High Volume Up bar followed by an upthrust on huge volume as well. We broke the low of the upthrust so I started watching for a short entry. Once I saw that no demand I took it. The next bar moved up against me on increasing volume to close near the top so I put in a break even order and got out on the bar following that. In hindsight you could say I was clearly wrong but in real-time it looked so right. Any ideas about what I may have missed? Was it the no Supply bar 5 bars back from the no demad that signaled higher prices? Thanks

Obviously this is after the fact. However what I will say can be seen in more than one post in this thread-at the very least it is consistent.

1. Ultra High volume on the up bar. Markets do not like Ultra High volume up bars because they can hide selling within them.

2. The next bar is down, confirming that there was some supply entering on the previous bar. This bar also happens to be an Upthrust. Another sign of weakness.

3. The very next bar is the key. It is a narrow range bar on volume less than the previous two bars. It closes lower than the previous bar and the bar that follows it closes up and does not make a lower low. Simply, it is No Supply and is not confirmed until the bar after it closes.

Take a look at what you have as No Demand. Notice that the bar after it is up and makes a higher high. This negates the bar as being No Demand. While the base definition of No Demand would be a narrow range up bar with volume less than the previous two bars (a 1 bar signal), one really needs to wait for confirmation by the following bar. This is how TG works.

Back to the No Supply. This is a repeating pattern that is a good sign of strength. A No Supply bar immediately after the Upthrust that followed an influx of supply.

Since I filter this through my own perspective, I would add that it appears that the No Supply bar would be with in the range of a WRB (the up bar on Ultra High volume if in fact that is a WRB). More reason to be looking to go long not short.

**edit***

Just wanted to add this. There is a sign of supply coming into the market that only moves prices sideways (a sign of overall strength). This is where the triangle on the chart is. Now if you look at the Up bar in question, it is more likely Absorption volume and therefore a sign of stregnth not weakness in and of itself.

[jjthetrader]

I did not wait for the bar following the no demand to confirm it. I just jumped on in. But it is the reason I moved my exit to break even. At least I knew enough to get out in real-time.
Thanks to everybody. It makes me a better trader to see what I may have missed.