[VSA] Volume Spread Analysis Part II

[jjthetrader]

	Quote:	Eiger
	My question: Does this correspond to good VSA trading? Was Bar F sufficent confirmation to make a trade? I know the trade was successful, but was it successful from a VSA standpoint? Eiger

Textbook VSA actually. But VSA always tends to be 'wait for the confirmation bar'. So that wasn't a test (in their Williams eyes until confirmation). There's a tradeoff to waiting. Best to zoom down to a smaller timeframe to narrow your entry.
I use a 3 min chart and it was clear as a bell to enter there.

I always struggled with an entry without the confrimation bar. But if you look at it, your bar F was the high probability direction there. A long position on my end would have been taken when the high of F was taken out, this would have been confirmation enough for me.

Good trade.

[brownsfan019]

	Quote:	Eiger
	Since the S&Ps are sloppy today, here's a question on trade entry I made from this morning. On the ES 15-min chart, there was stopping volume at B and a test of the high volume at E. It looked like the big money was using the Consumer Confidence news at 10:00 AM to accumulate. This area was the rally high from two days ago (1443.75), and a logical place for support (and, an example of climactic action at higher time frame support). Eiger

Eiger (and others if interested) - you know what could make life a little easier? Convert your chart to a candle chart and just like that you have a very high volume hammer. Doesn't get any prettier (or easier) than that. Instead of wondering if A vs B and compared to D along with the VSA principles that may or may not apply here, candlestick analysis says - BUY.



Good trading!



Note - I took this very hammer for +8. Who knows, maybe got out TOO SOON!

[zeon]

	Quote:	zeon
	Eiger, thanks for the interesting analysis! One paragraph got me thinking though. When price approaches support on increasing volume and wide spread down bars, why doesn't this mean that demand is coming in? After all, professional money stands for high volume right? I'm seen selling climaxes occur on support a lot, and in most of these cases they happened after a couple of WRB formed. And, I've also found the opposite to be true. When volume is relatively low and price bars are small, the chances seem higher for price to break support.

Here are two examples of what I'm talking about.

In the first chart, we have a series of WRBs and high volume, but support is not breached, rather the opposite. The volume is relatively high, look at the "normal" amount of contracts being traded on the right hand side of the chart.

In the second chart: volume is low and eventually, support is broken and we go lower! The rectangle is where I'd take a long trade.

[jjthetrader]

	Quote:	zeon
	Here are two examples of what I'm talking about. In the first chart, we have a series of WRBs and high volume, but support is not breached, rather the opposite. The volume is relatively high, look at the "normal" amount of contracts being traded on the right hand side of the chart. In the second chart: volume is low and eventually, support is broken and we go lower! The rectangle is where I'd take a long trade.

In your second chart you're in a downtrend. Sometimes bars will appear this way in a downtrend as there's not a whole lot of selling pressure and nobody's able to get a bid going. You would also want to look to the background. If there's weakness there then you'll get bars that look like no supply but they're not, they just keep drifting lower slowly.
It's a little hard to apply the methodology to trading because there's no hard and fast rule. All the 'rules' must be applied in context. The whole 'WRB phenomena' may distort things a bit to. WRB are like VSA bars, they need confirmation to have much value. I personally don't pay attention to them in the way that most do. I think Pivot Profiler turned me off to them.

[jjthetrader]

	Quote:	zeon
	Here are two examples of what I'm talking about. In the first chart, we have a series of WRBs and high volume, but support is not breached, rather the opposite. The volume is relatively high, look at the "normal" amount of contracts being traded on the right hand side of the chart. In the second chart: volume is low and eventually, support is broken and we go lower! The rectangle is where I'd take a long trade.

I thought I'd add this to your chart. I think you were focusing on support too far back and missed the most recent swing low break which signals weakness. The low volume pullback to that area was a great short entry.

[Tresor]

Hello Everyone,

I am new to this Forum. The VSA looks prety amazing. I was wondering if there is a signal or indicator for this available for either TradeStation or MultiCharts.

Regards

[Turning Point]

Hi. I am also new to VSA. I bought the books and the boot camp cds. The cds really helped me a lot. I must have seen them upteen times.

[jjthetrader]

	Quote:	Tresor
	Hello Everyone, I am new to this Forum. The VSA looks prety amazing. I was wondering if there is a signal or indicator for this available for either TradeStation or MultiCharts. Regards

Only if you learn it and program 'indicators' yourself from your own observations of how VSA works in real-time. VSA is not an indicator based trading system. It's not mathmatical. It's very discretionary.
Please read VSA thread #1 onwards and Tom Williams Master the Markets to get better aquanited with what we're talking about here. Links for the book are in the first VSA thread.
Good reading.

[jjthetrader]

	Quote:	Turning Point
	Hi. I am also new to VSA. I bought the books and the boot camp cds. The cds really helped me a lot. I must have seen them upteen times.

Welcome Turning Point. This thread is a great place for someone in your position. Are you trading with VSA yet?

[Tresor]

	Quote:	jjthetrader
	Only if you learn it and program 'indicators' yourself from your own observations of how VSA works in real-time. VSA is not an indicator based trading system. It's not mathmatical. It's very discretionary. Please read VSA thread #1 onwards and Tom Williams Master the Markets to get better aquanited with what we're talking about here. Links for the book are in the first VSA thread. Good reading.

Thanks jjthetrader