# ASF Weekly VSA Club



## sinner (29 March 2011)

Hi guys,

This weekend past, I had an idea that it would be nice for the ASF crew to do a weekly Volume Spread Analysis club. I guess the idea is pretty simple, we pick just one large cap stock with high liquidity and solely listed on the ASX (so no BHP or RIO) and follow it on a weekly basis using the standard set of VSA tools:

* H/L/C bars (O/H/L/C bars are ok)
* Volume 
* Bollinger band on volume to delineate above/below average and ultra high/low volume.

The goal is for people familiar with VSA to have a place to share ideas and concepts based around a common understanding of one stock as well as providing learning resource to anyone who is curious. 

The goal is *not* to come up with trading signals for people to follow, or to prove VSA works, or anything like that. Nor is this just a generic VSA thread for discussing the application of the approach.

To clarify: It is an Volume Spread *Analysis* thread. Following the weekly chart means plenty of time for everyone to participate and attempt to build a solid consensus based on discussion of their collective analysis. Only following one stock means that the thread won't be cluttered and get messy with many random charts and comments that detract from the core purposes. Following a stock listed on the ASX rather than other instruments gives us the advantage of some degree of "information reliability", we know the volume is proper volume and is the sole venue for buyers and sellers in the stock we choose. 

I am starting the thread early this week, so we can have some discussion about which stock we should use, thoughts or comments on the idea, etc. I am compiling a short list of links and resources so people who are unfamiliar with VSA can have a basis of understanding if they wish to join in or ask questions which are better answered by a learning resource. This will be posted shortly.

For my perspective, it would be good if we could follow a stock meeting the following criteria:
* Highest liquidity available - ASX100 stocks probably the best list to start from.
* Primary industry stock - manufacturing, mining, drilling, etc.
* High broad market correlation - we don't want to try and and buy/sell in something that likes to spend half a year in weekly ranging.

Stocks like MCC Macarthur Coal should fit that bill. That is not my specific suggestion, just an example. Happy to hear everyones suggestions before we pick the stock.

Let me know what you think. If the idea stinks, I will can it.

-sinner


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## skyQuake (29 March 2011)

Sounds good, but why only pure aussie stocks? Whats this stock discrimination against BHP RIO? :


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## sinner (29 March 2011)

skyQuake said:


> Sounds good, but why only pure aussie stocks? Whats this stock discrimination against BHP RIO? :




As stated skyQuake, we want a stock where we can analyse the volume and price that is the *sole* venue for buyers and sellers in a companies equity.

It obviously isn't necessary for all VSA application, but removes many possible complications and questions in minds of people who are unfamiliar with VSA.


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## Tanaka (30 March 2011)

Great idea sinner! As a recent born again VSAer I'd love to learn more. 

I find the conditions a little restricting. The more stocks the more conversation and the quicker the learning IMO. And I don't need bollinger bands to tell me what's happening. 

Include me in


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## tech/a (29 January 2015)

I've resurrected this thread as I like the idea in context with my post below

 I often receive private mails like this 



> Hi Tech Trader,
> 
> I have taken up trading as a serious hobby about 9 months ago mainly trading using divergences with MACD, forced index and price with quite decent results.
> 
> I now very interested to learn as best i can VSA. I am reading Master the markets at the moment. I strongly believe in modelling other successful people in anything that you want to be successful in, and you seem to be quite successful in VSA. Would you be generous enough to *point me in the right direction to REALLY learning how to use VSA successfully?*




Thought it best to answer in more detail here so others in a similar position can benefit.

Ill answer the most important question in bold.

Ill bullet point the main points and if anyone needs elaboration just ask.

(1) Volume Spread analysis gives *indications* toward future price movement through individual bars and multiple bar patterns coupled with volume.
The bold must not be misunderstood. A VSA alert doesn't necessarily mean a trade has been triggered.
It can but often it doesn't. It should be read in conjunction with the whole chart and in the *TIME FRAME* of the chart.

(2) An alert will often only be valid for a few bars within a time frame. A bullish indication on a 3 min chart has little bearing on a 60 min chart. Daily on weekly--etc.

(3) Not to be used on illiquid instruments.- The more liquid the better.

(4) Time on screen is by far the best teacher. You will develop your own play book and you'll see time and again similar alerts being seen.

(5) Even Trade guiders Algorithm doesn't pick up every valid signal. 

(6) There is much to learn about the *LACK* of volume----in context----as powerful as lots of volume.

(7) Look for VSA signals at important points in history of a chart
EG Support and resistance.
Massive volume needs to be looked at.
How a chart breaks through resistance is very important
On volume or without volume.

(8) Consolidation patterns and the volume in them are important. Are they small continuation patterns or bigger consolidation patterns---where distribution or accumulation occur---you need to identify which.

(9) Keep it simple its a simple analysis technique.

(10) Often one will follow another in quick succession.

(11) Reversals in a trend will be STRONG 

(12) Continuations more subtle.

(13) Always ask is effort being rewarded by the price action. If its trying to move up is it succeeding?

(14) Try reading a chart and labeling before the price does what it does.

*I strongly advise those interested to post your efforts here--right or wrong!!
You'll learn heaps and those of us who have been at this for a while I'm sure will pitch in and help.
*


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## Nortorious (29 January 2015)

tech/a said:


> I've resurrected this thread as I like the idea in context with my post below
> 
> I often receive private mails like this
> 
> ...




Nice work tech/a. Happy to contribute where I can as VSA was my starting point for understanding what technical analysis was and how to read charts...


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## Funda-Struck (19 August 2015)

tech/a said:


> I've resurrected this thread as I like the idea in context with my post below
> 
> I often receive private mails like this
> 
> ...




Hi T/A,

I have just finished reading the tradeguider pdf on VSA.

Just a quick question...
I generally trade medium size asx listed stocks, usually between 100mill to a max 1bill market cap, where the liquidity is ok, but nothing like the large caps.

Would I be correct in saying that a lot of the VSA rules aren't relevant to these stocks? Due to limited interest from the large and influential "smart money".

Cheers!


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## Craton (21 April 2016)

Ahh... what a pity this thread didn't gain traction.


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