[dod]

Does this mean tick volume is not satisfactory for VSA purposes? The sort of automatic fine tuning described must go on all the time; but, doesn't this represent volume, of a sort?

My knowledge on the subject is very scanty. I guess the answer is I should look carefully at the volume data I get and draw my own conclusions as to whether it and the spread relate in the way Tom Williams describes.

[walterw]

Originally Posted by notouch »

Tick volume can increase even when no trades are going through. E.g. during the Japanese session the Yen may strengthen against the USD but weaken against the EUR so the banks will increase the bid/offer on EUR/USD to prevent arbitrage. So it looks like there's been an increase in volume even though there hasn't - it's just the banks' computers automatically doing their thing. It certainly isn't evidence of "Professional Money" intervening.

ooops... on esignal at least... to be a tick there has to be a trade... I can agree that ticks could represent very diferent amount of real volume, but ticks without trades.... nop

[notouch]

I'm not sure that's right. Banks don't report trades, they just report their bid/ask quote. That's why when you chart forex you have to choose bid, ask or midpoint.

On the subject of whether tick volume can be useful, I think it can for the higher timeframes but not the lower timeframes. 3 minute tick volume would have too much noise to be useful. On the daily or hourly charts though, it should be a good indicator of activity.

[hdcafe]

In the Forex markets volume is made up of changes to the bid/ask and not actual trades. Tom Williams calls this "indicative volume". I have one of Tom's videos where he states that "indicative volume" is actually more useful for VSA than trade volume because it shows areas in price where there is increased or decreased trading activity. Because Esignal uses many different feeds it provides a broader overall look at this activity than a single data feed.

[idaxtrader]

Hello,
I'm new here to T.L. I want to thank all the particpants of this thread for their inputs. They have been invaluable.

A few months back a came across Mr. Williams first book Undeclared secerets and ever since I have been hooked on V.S.A. My first question is it necessary to read his more current book or is the original one good enough?

My second question stems from a recent trade that resulted in a stop out for me. I have included the chart to illustarte the point of how I was tricked by the volume on the ES. My question is this what are the objective ways that V.S.A. can help identify a bar as hidden supply?

In the book he stated if I'm correct that it should be determined as hidden supply if the bar closes in the middle of the range, has enormous volume, a climax typer of bar, or the next bar is down right after an important bar with spread,or the next bar is level then the following bar is down.

In the instance where I was stopped out. The next bar was level right after a breakout. But before a down bar took place there was a follow through up bar. It is apparent that I should have been very alert for hidden supply since right after the break the next bar was level. But in actual practice with the market the bar following a break is often level on good signals.

I thank everyone again for this thread and I really hope someone can shed
some light on the possible ways to determine hidden supply in a up bar.

[Z_trade]

idaxtrader,

I marked your chart to illustrate pretty simple concept. Price revisited supply area where market has spent some time on the way down. Short entry can be taken on the very next candle after narrow range low volume green /up/ candle.

[hdcafe]

idaxtrader,

A few things to look for here some VSA some not.

A) Your trade took place during lunch time trading 11:30 to 12:30 when volume becomes relatively light.
B) The WRB just after 11:30 has no follow thru (lunch time trade?) This tends to cause the shorts to cover their positions prematurely which is what stopped out your trade.
C) You have to consider the WRB with ultra high volume to be a sign of strength whether it truly is or not and once that occurs you then have to get a strong sign of weakness to take a short posistion. That sign does not come until the upthrust occurs at 1:00

I am sure you are fully aware of this but I will comment anyway. When trading the futures markets IMHO it pays NOT to use the terms "Supply and Demand". With futures, the supply is unlimited and demand is not. I prefer to use the terms "Willing Buyers and Willing Sellers". This reminds me that the Smart Money has to be searching for signs of what other traders are willing to do and not do rather than searching for the availability of a limited amount of stock. This makes the futures market that much more of mind game.

It appears that you are using a 2 minute chart here. That is alot of noise to have to filter thru especially with the ES. I use a 5 minute chart on the ES and then use 3 and 4 minute charts to back up the 5 minute. Sometimes the VSA bars will be more recognizeable in different time frames. This also helps with volume changes during different times of the day.

The high just before 12:30 is also an upthrust but a weak one and you could have taken the trade at the close of the down bar. I would have waited and taken the trade at the 1:00 upthrust.

As far as the books go I do not have both so I cannot comment. I think someone else wrote about the difference between the two in this thread.

I have owned Tradeguider for about 18 months now and it was not until I got the Boot Camp CD's that I really got a good understanding of VSA. The Tradeguider folks should not even sell the software without these CD's in my opinion.


Hope this helps
Good luck!

[Anonymous]

Originally Posted by idaxtrader »

A few months back a came across Mr. Williams first book Undeclared secerets and ever since I have been hooked on V.S.A. My first question is it necessary to read his more current book or is the original one good enough?

It is my understanding that the original book, has many mis-labeled charts and grammatical errors.

Master the Markets cleans up these errors. I do not know if there are additional concepts in the new book, but there is more of a Tradeguider (the software) emphasis.

My suggestion is to contact Gavin Holmes at TG and ask for the link to the PDF version of Master the Markets.

and yes, think about the bootcamp either way.

Originally Posted by idaxtrader »

My question is this what are the objective ways that V.S.A. can help identify a bar as hidden supply?

* On the bar itself:

1. Closing in the middle on Ultra High Volume is a good sign of supply within the Upbar. As is closing on the low.

2. If volume is too excessive, there is a good chance that supply is swamping demand.

*the real keys come in the next bar:

1. If we see Ultra High Volume on an Up bar that closes off its highs and the next bar is down. There must of been some selling (supply) in that first bar.

2. If the bar closes on its high but the next bar is down, again, some selling in the first bar.

3. If next bar is up, but the range narrows and the close is in the middle or low, there was selling (supply) in the first bar. Why else would this bar have a reluctance to go up? Reluctance is demonstrated by narrow range and middle to low close.

Also look for tops to the left. If price is trading into new ground, then there may be supply contained within the bar. IF, however, there are tops to the left, or places where supply previously entered, then the volume may mean the Smart Money is willing to absorb the supply.

Nice of you to join us. Keep posting and let's all learn together.