Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

John Baron

VSA (Volume Spread Analysis) vs LRA (Locked-in Range Analysis)

Recommended Posts

Let's compare two cause-effect methods of analysis which help us to make our FOREX trading strategy more profitable:

Volume Spread Analysis (abbr. VSA) seeks to establish the cause of price movements, and from the cause, predict the future direction of prices. The ‘cause’ is quite simply the imbalance between supply and demand in the market, which is created by the activity of separate professional operators called "Smart Money".

Locked-in Range Analysis (abbr. LRA) seeks to determine the direction of the prevailing volume of open positions which will allow to join the further profitable price changes for all united market makers called "centralized automated market-making system".

For example, both methods use the chart and volume to analyze, but have different basis:

VSA: Activity of separate professional operators (Smart Money)

LRA: Logic of price changes in the futures markets (where a liquidity is provided by Market Makers)

LRA_vs_VSA.png

Share this post


Link to post
Share on other sites

How can you identify where the smart money is ? By analysing the big passive orders waiting in the order book and the average market contracts executed ? block of 25 contracts or more according to the asset ?

I guess this solution is very expensive, right ?

Tell us more.

 

Share this post


Link to post
Share on other sites

What market do you trade?

Because VSA is better used in Stocks and I use the analysis like LRA for a long time.

And using cause-effect methods of analysis like LRA does not require the use of the order book. We need to search Locked-in Ranges where current Open Positions are locked in loss and it is profitable for the market maker to quote prices above or below the range depending on the sentiment.;)

 

Share this post


Link to post
Share on other sites

Did you realise a video explaining cleary VSA & LRA ?

I do not really understand why Open positions are locked in loss ? Do you refer to positions that are in loss but not closed ?

When a trader use the volume profile such as it is configured here: 


Visible bars + Dominant Bid-Ask Volumes..
VP_Dominant_Ask-Bid.png

If the dominance is showed to be red, it means that the Ask if mostly sollicited by the price action, right ?

Shall we interpret the Ask dominance such as being:

1 - aggressive orders that cross the spread to hit the Ask side
2 - limit orders that have executed at differents price levels
3 - 'Buy Stop' orders that are 'Stops' of sellers that have been triggered,


which means that these buyers did loose money and that it is now a potential zone for sellers to be aggressive...
 

Using Sierrachart Volumes Profiles does not allow to visualise the nature of orders, especially who are behind.

I am curious but perplexe.

VP_Dominant_Ask-Bid.png

YMM8_230418_233trades_Strategy_Volume-Spike.png

Share this post


Link to post
Share on other sites
On 15.05.2018 at 11:42 PM, magicT said:

I do not really understand why Open positions are locked in loss ?

Cause it is the basis of a market?) Market-makers give you a liquidity and don't want to lose their money))

Edited by John Baron

Share this post


Link to post
Share on other sites

Hello John

 

1 > I would to understand if the market makers do see all the pending, the market positions and the stops on the futures markets ?

   In this case, they can move the price easily to catch these stops all day long, right ? (especially on thin order book like CL or YM)

2 > Do you have a dedicated server on Discord or telegram ? A lot of traders are on these platforms and it is much comfortable and dynamic, especially Discord.

3 > I do use Sierrachart and would be interested for a trial of these tools and signals: https://mboxwave.com/three-stooges-signal & https://mboxwave.com/spring-upthrusts-signal

If I am not wrong, it is your website ? If you have real live trading sessions using these tools to measure how good they can be, just tell me.

 

Thanks.

Share this post


Link to post
Share on other sites
On 07.06.2018 at 12:12 PM, magicT said:

Hello John

1 > I would to understand if the market makers do see all the pending, the market positions and the stops on the futures markets ?

   In this case, they can move the price easily to catch these stops all day long, right ? (especially on thin order book like CL or YM)

absolutely yes!:)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date : 23rd August 2019. MACRO EVENTS & NEWS OF 23rd August 2019.FX News Today A confluence of factors whipped the markets around Thursday heading into the Jackson Hole Symposium and Chair Powell’s comments Friday at 10 ET. Hawkish remarks from George (she dissented against the July easing) and Harker (who votes in 2020) weighed on Treasuries and erased early gains from Wall Street. Minutes from both Fed and ECB meetings were not quite the all out dovish signal that some had been hoping for and comments from Fed members yesterday also showed a degree of caution with regard to further easing measures. The curve in the US steepened again after inverting briefly overnight, the curve flattened and inverted further in Japan. Stock markets across Asia moved mostly higher although gains remained contained by caution. New Zealand’s central bank governor said he could afford to wait before declining on additional easing measures. Onshore Yuan set at its weakest for 11 years. Japanese core consumer inflation at a 2-year low in July. Meanwhile lingering geopolitical trade tensions and political jitters in Hong Kong, Italy and the UK add to an uncertain backdrop. US futures are also cautiously moving higher. The WTI future is trading at USD 55.37 per barrel. Charts of the DayTechnician’s Corner EURUSD returned to 3-week lows of 1.1064 today, after rallying to session highs of 1.1099 following the sub-50 US manufacturing PMI. Negative European yields appear to be taking their toll on the currency, keeping the Dollar in demand in place for relatively high yielding US Treasuries. This has likely been a major factor keeping EURUSD under pressure, especially ahead of likely ECB easing in September, and perceptions that the Fed will not be as aggressive in easing as previously thought. Key EURUSD level is the 27-month low of 1.1027 seen on August 1. USDJPY rallied to 106.64 highs. The risk-sensitive pairing can be expected to consolidate into today’s much anticipated speech from Fed chair Powell, from Jackson Hole. GBPUSD: Sterling had its best single day rally since March 13 against the Dollar. Cable’s high was 1.2273, which is the loftiest level seen since late July. The gains were sparked by comments made by German’s Merkel, who indicated that a solution to the Irish border backstop conundrum is doable by the October-31 Brexit deadline. UK Prime Minister Boris Johnson followed this up by saying at his joint press conference with France’s Macron that he was encouraged by his talks in Berlin yesterday, and that a deal, he thinks, can be done ahead of October 31. Macron, said, however, that while he has always respected the UK’s decision to leave the EU, the European project has to be protected, to which the Irish backstop remains an important part of ensuring this. Merkel’s remarks were little more than rhetorical platitudes, though enough to trigger a short squeeze in a heavy shorted currency. Main Macro Events Today   Jackson Hole Symposium – Day 2 Retail Sales ex Autos (CAD, GMT 12:30) – Retail sales are expected to have decreased in Canada, with consensus forecasts suggesting a -0.5% m/m decline should be registered in June and an unchanged ex-autos component at 0.3%. In May, Retail sales were disappointing, falling 0.1% for total sales and declining 0.3% for the ex-autos component. The decline in sales was driven by a 2.0% tumble in food and beverage stores. The report casts some doubt on the resiliency of the consumer sector to the ongoing parade of worrisome geopolitical and trade developments. Support and Resistance levelsAlways trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Thanks for your suggestions man!! Our own decision surely makes us or breaks us. Thanks once again, buddy.
    • Right, as a trader, we are our own boss so there is no fear instead of loss in this market. To learn the market we have to keep learning and following rules or our plan that we have decide for trading.
    • None trader or broker can control the market. There is no single person who is behind the Forex market so there is no way to be controlled the market with a man power.
    • EU is still trading in a range. I'm heading out of town tonight and won't be back until Sunday evening. 
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.