[VSA] Volume Spread Analsysis Part III

[[VSA] Volume Spread Analsysis Part III]

Do market makers test for supply by marking it up?

 

I know an official test is done by quickly marking it down into an area where there was previous supply. Then they withdraw there interest to see the result. If the bar comes to finish near its high on relatively low volume you can assume there is not much supply present. If the next bar is up, it confirms the lack of selling pressure.

 

You can also have a failed test if the test bar finishes on its low on relatively high volume and / or the next bar is down suggesting supply is still present.

 

Now the thing that is confusing me: do market makers ever mark prices up to search for overhead supply? Am I just stuffing around with the terminology here? Should I just be calling this a mark up bar or something? I commonly see a stocks price quickly marked up on the open then they withdraw there interest, sometimes picking it up in the afternoon. This is in the mark up phase of accumulation (the last phase). If you were a market maker would you ever mark up price to test for supply? It's not really a test is it because a test is rapidly marked down, usually on the open, then they withdraw there interest to see what happens.

 

I think I have been looking at this the wrong way, if you marked it up in the morning, then waited, and you started to see some selling pressure enter the market, you may as well withdraw and let the price fall as far as it can so you can pick it back up again, especially if there is bad news.

 

Anyway the question is: do market makers ever test for supply by marking the price up?

 

Thanks, Regards,

 

Quinn

 

Hi Quinn,

 

In VSA there is no 'Test for Demand' on a single bar. However, in reality you can find this 'test of demand' bar everywhere. SM do use this tactic just as they use a 'test of supply'. Tom hasn't mentioned a 'test of demand' in his work and there may be a good reason for this. If there is, it eludes me.

[VSA and Retail Forex Trading]

Hi Ingot54,

 

I would like to commend you on your decision to learn VSA. You have raised many questions here(VSA tends to do that to you) and you should seek out the answers or doubt will forever plague your trading.

 

I'm going to say something that will sound a little pompus but, I mean the best when I say it. I could answer just about all of your questions above but I'm not going to. If I just tell you the answers, you will miss the most important aspect to the answers. All the information your require is out there somewhere but to find i, you must read and learn so much. Without this learning curve, you WILL NOT succeed in VSA.

 

Learning the VSA language takes a long time and a lot of dedication on your part. You can write off the next 12 months for sure, probably longer. But I can assure you of this, when you can 'read' the charts, you will NEVER look at the charts in the same light again.

 

There is so much info available for free on the net, forums, pdfs, videos, documents, books etc and you need to read/see it all.

 

I can offer this as a kind of incentive for you. 18 months ago I knew nothing of VSA. Now I trade VSA successfully in ONLY the forex market. Also, I do it using MT4(demo) and it's inbuilt volume feed(FXCM tho I'm just looking into changing to The collective FX due to repainting issues with FXCM during news events). I use the demo feeds mor the charting and separate platform for live trading. I do not trade full time but, this is due to personal circumstances not trading.

 

For all those people out there who say volume/ VSA doesn't work in the forex market.......they are simply wrong. In my experience, the people who say this, do not know how to read VSA.......even tho many think they do (I mean no disrespect to anyone).