[Ingot54]

First of all a big thank-you to those who have gone before, in these VSA threads.

Your legacy is the enlightenment and education of traders who now no longer need to be fodder for those market participants we call "professionals". As a raw beginner (in VSA studies) I am already persuaded, and it remains for me to continue to apprise myself of all available knowledge, and bring myself to competitive and professional competence in the practice of VSA in trading.

My chosen instrument is the Foreign Exchange market, traded through Retail Brokers littering the industry, relieving the unwary of their trading accounts before they even knew what happened. Just when I began to master the techniques developed for succeeding in making regular and profitable headway, along comes VSA into my life, and my approach has been turned on its head in one day.

I am heavily into studying the sticky threads in this genre, and am almost saturated with information overload. But I can't put it down.

A few things are emerging:

1) Reliable and accurate volume data is NOT readily available to clients of MT4 brokers
2) MT4 platforms do NOT provide useful (inbuilt) indicators that specifically deal with VSA analysis
3) The limited resources available to Retail Forex Traders come at a price - comparative value of which has not been established.

In simple language, few brokers provide the tools and data to retail forex traders. And of those that do, it not clear whether there is true value in their offerings or not.

This seems to be an area that remains undeveloped, when compared, for example, to the equities and other markets (S&P500, and futures, eMinis etc).

There seems to be a couple of reasons for this:

1) Retail Spot Forex is a derived market, and each broker usually only has, or reveals, the volume that is traded through their dealership.
2) Popular platforms (specifically MT4) are unequipped to handle "plug-in" applications such as volume data from reliable feed sources, and even less equipped with the software required to turn this data into meaningful and tradeable signals
3) There is so far no competition, or at best, negligible competition within the Retail Forex industry that would be needed to drive change and increasing quality of VSA information

While the general markets (for which accurate volume data is available) are well catered for, little is known about volume - true volume - within the Foreign Exchange markets - either Interbank or Retail brokers who only reflect price.

Indeed, far more emphasis is being placed on reducing spread and commissions, than is being placed on bringing all the market data into the ring for all to see, use and benefit from.

Can anyone provide information that will relieve me from my concerns in these areas:

1) Data suppliers that offer reasonably accurate Volume data (eSignal and ibfx have been mentioned)
2) Trading Platforms that are more or less dedicated to at least catering for Retail Forex trading as one of the instruments they offer
3) Software that can utilise retail Forex Data from a dependable volume sorce, once discovered.

I understand the difficulties data suppliers face in this area - Interbank participants are not required to report volume data for three months - by which time it is far too old to be worth considering in current trading decisions, by any but the longest term traders. But there has to be some growth happening in this area.

I suggest that the first broker to secure reasonable volume data would stand head-and-shoulders taller than the industry norm, where Forex trading is concerned at spot level.

I would be keen to learn from any traders who are successfully able to apply VSA to the Retail Forex market. If this is not available to the retail trader, then can it be assumed that it is also unavailable to the 'professionals'?

If indeed we are on a level playing field, where volume data is concerned, should we not learn how the 'professionals' are coping also? After all, if they are supplying the volume to the market that we buy and sell (as our counter-parties), how are they doing it?

[BlowFish]

No one supplies real volume information not just the MT4 brokers. That is because it is just not available. What gets reported as volume is based on bid/ask changes not actual trades.

It all comes down to whether you think changes in quoted prices is a good enough substitute for volume? Why add anther potential hurdle to your success?

[Ingot54]

Originally Posted by BlowFish »

No one supplies real volume information not just the MT4 brokers. That is because it is just not available. What gets reported as volume is based on bid/ask changes not actual trades.

It all comes down to whether you think changes in quoted prices is a good enough substitute for volume?

Thanks Blowfish.

This does seem to place traders of spot Forex at a disadvantage (when compared to equities and futures traders and others) if we are to apply the concept of volume across the whole trading spectrum.

Whether that disadvantage is small and insignificant, or large enough to derange the concepts applied in VSA, will depend on how accurate the trader needs the analysis to be. Given that the Foreign Exchange market has arguably the largest liquidity of all the traded instruments, it is odd that we do accept without question or argument, that statement without measurable proof - the proof that goes with accurate volume data to back up the claims of liquidity. We take that liquidity for granted, yet have no idea of its verity.

An examination of the operation of the MT4 (and other bucket-shop) brokers (eg or IG Index) does therefore seem to support the notion that if they are not personally taking the opposite side of the positions placed by traders, then they are passing those trades directly into the markets from which they derive their spreads.

Thus, tracking the fate of trades "should" lead to a larger and more liquid entity on the derivative side of the Forex market, since the Spot Forex market is only a mirror of the true Interbank quote. One wonders whether large dealers like dukascopy could report volume, and whether other similarly large dealers could be asked to provide volume collectively, to create an industry standard.

Such a feat should be able to be accomplished, in this computer age.

Given that traders may trade with Retail brokers, or through their banks as perhaps Institutions do (or more directly as perhaps countries do through the Interbank if you have big enough accounts) it is intriguing that the Retail Forex Industry has been able to proceed as it does for so long, operating on artificial volume. I suspect a degree of accountability is missing somewhere in all of this, if the retail side of the market is so poorly monitored.

But small fish are not going to make any inroads into the operations of sharks!

Originally Posted by BlowFish »

Why add another potential hurdle to your success?

What I hear you saying is that traders should get on and trade VSA in Retail Forex as if the platform volume offered by the brokers is the real thing. And that not accepting this data places traders at risk of missing out on the wider benefits of using VSA - eg in taking the concepts of price action to higher levels.

Rather than throwing the baby out with the bathwater, I think it is OK - even preferable - to do as you suggest and just get over it and get on with it.

Indeed there are folks who are managing to do just this with Forex, and with great success:

vsa with Malcolm @ Forex Factory

Finally, I made an inquiry to NinjaTrader about how they derive volume for their platforms. They responded with this, in about 4 hours (not bad for a Sunday night query/response turnaround):

Thank you for your note and interest in NinjaTrader!

NinjaTrader uses volume information as provided by the supported broker/data provider that you connect to it. Forex volume data will therefore vary by data provider. Please see the following link for more information on NinjaTrader supported data providers: Historical & Real-time Data

I suggest to contact the data prover directly for more detailed information on the Forex volume data they provide.

Please let me know if I can be of any further assistance and enjoy the rest of your weekend.

I was pleased with the speed (and thus the respect) with which the response came, but predictably, there is nothing new there. The onus is on the trader to select a data stream that is regarded as "good enough" and get on with trading.

But does a trader using an MT4 broker have any disadvantage (when using VSA ) compared to a trader who is using dukascopy?

I think that would have to be affirmative, and it is exactly this anomaly that I am attempting to address. The sheer volume of business transacted by dukascopy would possibly dwarf my local Australian MT4 broker. And this creates the anomaly.

And it brings me back to my original question:

Originally Posted by Ingot54 »

If indeed we are on a level playing field, where volume data is concerned, should we not learn how the 'professionals' are coping also? After all, if they are supplying the volume to the market that we buy and sell (as our counter-parties), how are they doing it?

And it raises other questions:

Are the 'professionals' using volume?
Are they collectively responsible for this volume?
Or do they simply operate at certain levels, with an opinion of where they think the market is going?
If 'they' have no better access to volume figures, then they must be operating on price. What is their alternative?
Does this tilting of the playing field disadvantage the retail trader?

My discovery and reading about VSA over only the past 36 hours, has raised more questions than I have been able to find answers for.

Am I being too anal about this? Does the lack of true volume, or even consistency between data suppliers make any difference to the potential outcome of trading Forex on retail platforms?

Perhaps I should simplify my life and simply stick with a couple of moving average crossovers! Or move to trading the ES where such issues do not exist.

[BlowFish]

Actually when I said 'why add another hurdle' what I meant was if you are using an approach that requires volume then why on earth trade an instrument that does not provide that information?

There are those that claim to enjoy some success using VSA principles on spot. As there is no volume on spot one has to wonder whether it works for them because of VSA or in spite of VSA?

[Ingot54]

Originally Posted by BlowFish »

Actually when I said 'why add another hurdle' what I meant was if you are using an approach that requires volume then why on earth trade an instrument that does not provide that information?

Thanks for clarifying - I took it to mean "don't worry about true volume - just get on and trade with the tick volume supplied". Either way I have been placing far too much emphasis on trying to trade (using VSA) as a purist, when it is never going to happen. Without true volume, we have to accept the next best thing (best for whom?)

Originally Posted by BlowFish »

There are those that claim to enjoy some success using VSA principles on spot. As there is no volume on spot one has to wonder whether it works for them because of VSA or in spite of VSA?

The only way for me to know, will be to have a go at it. If it doesn't work, then the knowledge gained will certainly not be a burden.

The more I read the two .pdf files generously supplied in the sticky section, the more I see that there are some brilliant concepts that can still be applied, regardless of the presence of volume data or not.

While I have uncovered the data providers who may have the most accurate data (eSignal looks like being ahead of the rest) I am coming around to the view that it really doesn't matter all that much in the spot market.

Thanks for your input Blowfish - appreciated - and helps me to see the bigger picture.

[stephenfrankel]

Hi Blowfish,
I trade spot Forex using vsa which uses E signal data through the original vsa software called "Tradeguider" which was invented by Tom Williams the creator of Vsa and No one else but copied by many. The volume in Tradeguider I believe is based on tick volume which with my trading I find is very accurate as I use the volume spikes as turning points in the market to get in or out of the trade. You could learn more about Vsa from Tom Williams e book available on the Tradeguider site for about $10 I believe but I don't know of any other software that gives accurate volume. I tried MT4 and it didn't help me. Tradeguider run some free webinairs which show vsa use and volume. I am happy to send anyone that wants one of my forex charts to show you how you can see the volume bars and the spikes to prove this as I wouldn't consider trading without this!
Stephen F.

[dudleymuggins]

Hi Ingot, I have tried VSA on Forex and did not find it easy, so I stopped using that method (I now only trade PA on a naked chart). However, I heard some people have used the volume on currency futures as a proxy for volume on Forex. Hope this helps.

[Ingot54]

Originally Posted by stephenfrankel »

I trade spot Forex using vsa which uses E signal data through the original vsa software called "Tradeguider" .... The volume in Tradeguider I believe is based on tick volume which with my trading I find is very accurate as I use the volume spikes as turning points in the market to get in or out of the trade. Tradeguider run some free webinars which show vsa use and volume ... I wouldn't consider trading without this!
Stephen F.

Thank you Stephen. I am pleased to see someone speak up and come out in favour of Tradeguider as a platform. I do not think the arguments against it are very strong.

The main thing I am hearing from experienced traders is that:

a) It is expensive for what it is/does/achieves for the user (ca $3,000 has been stated)
b) The packaging of the indicators is excessive and complicates the simple, to somehow justify the price
c) Other platforms (eg NinjaTrader,tradestation) can perform better/as good for free, or for a fraction of the cost.

I would be keen to hear your views on these points, since you are an active user of Tradeguider, and are au courant with their add-ons and product accessories.

Particularly I would be keen to understand the disadvantage suffered by users of the standard MT4 platform, when the VSA (custom) indicators are used, as opposed to the streamlined Tradeguider platform. Of interest would not be so much the ease of use (obviously a big plus) but the end result.

Can MT4 be expected to achieve the same results as Tradeguider, NinjaTrader or tradestation, regardless of the bells and whistles?

Sometimes a little expense can be justified.

Is that so in this case?

Apologies for paraphrasing your quote.