Volume Spread Analysis (VSA)

[captain black]

Are you able to provide your opinions on my last post in that thread?

Not really, I think skyQuake has summed things up pretty well.

 

[Smack]

Thanks capt.

It is still not clear to me who is the "big money" that drove this market down?

Can you assist?

Smack

 

[CanOz]

Thanks capt.

It is still not clear to me who is the "big money" that drove this market down?

Can you assist?

Smack

Smack, use your imagination...like SkyQuake says, it depends on the circumstances. Generally big money are those with deep enough pockets that can upset the inventory balance and affect the price.

You don't need to know who it is to be profitable.

CanOZ

 

[pavilion103]

Pavi
Io103.

What evidence can u provide that the other codes are not satisfactory?

Smack

No real evidence. Just a feel from when I used it. Give it a go, you might like it. There are just so many considerations to take into account when using VSA. I just wonder if sometimes the code can be a bit rigid.

I don't even really take much notice of the Tradeguider signals. I used it a lot when I was first learning and found it to be great because of the descriptions and the signals that weren't obvious to me at first. But like any art, once you spend a lot of time studying it it starts to become a bit more instinctive and what wasn't obvious before is often processed subconcsiously.

See what works for you

 

[Smack]

Thanks guys.

Pav - what timefreame do u use for tradeguider sw?

You raised a good point about othrr codes being too rigid. I may reconsider.
Smack

 

[Lone Wolf]

Why not buy Tradeguider?
I've found the other VSA codes to be less than satisfactory.

It doesn't seem be to able to be coded easily.

Even TG themselves don't have a solid standard. I have Stand-alone EOD as well as the NinjaTrader add-in, they don't give the same signals.

See the attached comparison. Same database loaded into both. There are a few signals that appear on one but not the other. I highlighted one on the NT version that doesn't appear on EOD. The NT version considers it an up bar, despite the close being slightly lower than the open. Differences appear on most charts, ANZ was just the first one I clicked on.

There are also cases where they both give a signal, but give different reasons for it.

Did they code it differently or poorly? I don't know. I use it as a learning tool much like Pav mentioned. See the signal, read the description, try to understand the reasoning. The general principles may be valid, but even tradeguiders code isn't perfect.

 

[Smack]

Good one lone wolf.

Which sw do u prefer for vsa learning and why?

What eod source do u use?



Smack

 

[Lone Wolf]

Good one lone wolf.

Which sw do u prefer for vsa learning and why?

What eod source do u use?

For EOD data I use Premium Data "Norgate Investor Services".

TradeGuider is the best for learning since you can click on each signal and get a detailed description of what you're looking for. But you need to pay for it. You said in your first post that you aren't interested in it.

I can't comment on the free code since I only used it very briefly.

You sound very focused on software. If you're looking for software that does the analysis for you and tells you when to buy and sell - To my knowledge no such software currently exists. There is software like TG or the free code for Amibroker that generates a signal under certain conditions, but you need experience to know what to do with that signal.

You need education and lots of time watching the markets trying to apply that education. Read about the principles in the books. Try to find examples on your charts. Captain Black took free code and incorporated it into his own style. There's more then one way to succeed if you put the time and effort in.

You said you've read Master the markets by Tom Williams. Gavin Holmes put out a book that was basically a description of all the signals which is good if you weren't going to use TG software. "Trading in the shadow of the smart money" I think it was.

The options given to you earlier in this thread are the only ones I know about.

 

[Smack]

Fantastic lone wolf. Thanks.

Looks like i may well buy the tradeguide sw for the education aspect.

Smack

 

[pavilion103]

One point that I was reminded of this morning that's wanted to mention is that the signals are not to be used as buy or sell signals. They are indicators of price action and make us think about what could likely happen in the future.

Combine these signals with good VSA analysis. Look for other confluence to further support your analysis.

Do you have the Wyckoff book/course from I think the 1930's. I read this all the time as my primary learning tool.

As mentioned and was also mentioned above, Tradeguider is good for learning and has good indicator descriptions. Get your hands on that Gavin Holmes book too mentioned above.
BUT don't get too caught up on the software side of things. Study VSA and learn it so that you can even apply it to charts without VSA indicators.

 

[Smack]

Agreed.

Thanks pav!

Smack

 

[Smack]

What other indicators do u use to confirm vsa signals?

What timframe do u monitor during intraday trading?

Smack

 

[pavilion103]

Look at where the signals are appearing. In relation to various support/resistance levels, retracement levels, background action, where is the stock in the broader trend, etc.

I don't trade intraday. I use daily charts and weekly charts for further confirmation.

I like to keep it as simple as possible.

 

[Smack]

Thanks pav

Smack

 

[banco]

Thanks capt.

Lots of reading ahead...

Is vsa good to use on a 5 min timframe for intraday trading?

If not what timeframe is ideal for vsa for intraday trading?

Smack

I know Tech uses it intraday but I've found it to be much more useful on a daily/weekly timeframe. Intraday is tougher I think because volume levels are heavily influenced by time of day and it's hard to distinguish the "time of day" effect from the "underlying" volume.

 

[mr. jeff]

One point that I was reminded of this morning that's wanted to mention is that the signals are not to be used as buy or sell signals. They are indicators of price action and make us think about what could likely happen in the future.

Combine these signals with good VSA analysis. Look for other confluence to further support your analysis.

Do you have the Wyckoff book/course from I think the 1930's. I read this all the time as my primary learning tool.

As mentioned and was also mentioned above, Tradeguider is good for learning and has good indicator descriptions. Get your hands on that Gavin Holmes book too mentioned above.
BUT don't get too caught up on the software side of things. Study VSA and learn it so that you can even apply it to charts without VSA indicators.

AGREE

I am sure that software helps some people but the worst thing I did was pay good money for it then get data and start paying for that as well. The version I got was a prehistoric lump of a confusing program and whilst I could see the idea, reading the book was far far better and probably the best move I ever made in learning.

When I had TG I started trying to use it to give me signals to trade from rather than printing a chart out and marking it up and making my own plan. Basically it gave me a chance to defer to someone else which did not work that well.

Everyone is different, but don't ever think a program is going to give you a special edge without a lot of development.

 

[Smack]

Thanks guys.

Mr.jeff - you refer to a prehistoric version of tg. Is there a more current version in use now?

Banco - can you elaborate more on time of day heavily influencing volume.

Smack

 

[Mistagear]

One point that I was reminded of this morning that's wanted to mention is that the signals are not to be used as buy or sell signals. They are indicators of price action and make us think about what could likely happen in the future.

Combine these signals with good VSA analysis. Look for other confluence to further support your analysis.

Do you have the Wyckoff book/course from I think the 1930's. I read this all the time as my primary learning tool.

As mentioned and was also mentioned above, Tradeguider is good for learning and has good indicator descriptions. Get your hands on that Gavin Holmes book too mentioned above.
BUT don't get too caught up on the software side of things. Study VSA and learn it so that you can even apply it to charts without VSA indicators.

I also use Wyckoff as my primary. Have avoided using any VSA software and prefer the analysis should happen in my head because of understanding the volume and price relationship, not done by software.

As far as timeframes, on many Aus equities I personally find the lack of liquidity makes periods less than 10 minutes more difficult to read reliably whereas with US Index Futures I'm comfortable using 1min charts during the cash session. I often use both a time chart and a volume chart during the cash session for better vision on what the opposing forces are doing.

 

[Smack]

I also use Wyckoff as my primary........ As far as timeframes, on many Aus equities I personally find the lack of liquidity makes periods less than 10 minutes more difficult to read reliably whereas with US Index Futures I'm comfortable using 1min charts during the cash session.

Thanks Mistagear.

Do you also use point and figure analysis charting if wyckoff is your primary?

In your opinion, what defines an acceptable amount of liquidity for you to trade in periods < 10 mins for Aus equities market ?

How do you measure this parameter of liquidity?

What is your opinion on using 5 min. periods?


Smack

 

[banco]

Thanks guys.

Mr.jeff - you refer to a prehistoric version of tg. Is there a more current version in use now?

Banco - can you elaborate more on time of day heavily influencing volume.

Smack

I mean that if you are looking at volume during the day nearly all instruments have high volume at certain times of the day. If you look at say stocks the first and the last hour have the most volume so if you're looking to analyse intra-day volume you have to take that into account.