VSA Chart Analysis Discussion Thread

[Gringotts Bank]

Thomasz has always said that anything - absolutely anything - can be coded into AB. I'm sure the Trader Guider signals can be replicated exactly in AB, if you've got the talent.

Captain, how about it?!

 

[tech/a]

If that's the path you choose and it works for you then that's great. I have a background in open source software and Unix/Linux operating systems and prefer to understand how the underlying code works. The beauty of Open Source software is that you're able to do that. I carry that philosophy into my trading software as well. I want to see the underlying code and why it generates signals and modify that to suit my uses.

I didn't wish to hijack this thread with a debate over the benefits of Tradeguider versus other VSA software, each to their own. If people want something that works out of the box then Tradeguider will suit them. If they enjoy having the ability to modify software to suit different markets then Karthik's or TCoates VSA provides a great starting point to do this.

Lets put it this way.
In the exercise that WYSIWYG has put up for discussion WEC

There is NO VSA TRADE!
So you may as well have taken any bar on any chart and called it a trade.--RANDOM.

VSA works on ALL markets and ALL instruments.If you want to play with it then fine but don't put it on this thread start another.
If we start with Incorrect analysis whats the point of discussion---whats the point of the WEC trade?

I want to see the underlying code and why it generates signals and modify that to suit my uses.

Start with the correct code and work back. Why start with incorrect stuff?
If you or anyone modifies it then don't call it VSA. All it does is bastardize a method which if it gets lost in "Theory and modification" loses its significance as a trading tool.

People have enough trouble grasping the real stuff let alone some interpretation.
(Clearly they didn't "get it"---those that attempted to copy it)

 

[captain black]

Thomasz has always said that anything - absolutely anything - can be coded into AB. I'm sure the Trader Guider signals can be replicated exactly in AB, if you've got the talent.

Captain, how about it?!

Sorry, but I've no interest in replicating Tradeguider. My only interest in Karthik and TCoates VSA formulas over the last couple of years is modifying them to work in a couple of particular futures markets... which I'd better pay a bit more attention to rather than this thread

 

[captain black]

People have enough trouble grasping the real stuff let alone some interpretation.

No probs, I'm happy to get back to trading and leave others to discuss Tradeguider.

 

[tech/a]

No probs, I'm happy to get back to trading and leave others to discuss Tradeguider.

Captain.
Dont get me wrong I want you to keep in the discussion ---- Im not a disciple as such of Tradeguider

The discussion is VSA.----not Tradeguider or the others (specifically).
If you have specifics with relation to Price action --Volume and range
everyone including myself would be happy to hear and discuss them.

A great deal of information is available on VSA signals which are continuation and reversal both setups and actual signals.

But not a lot on reading a chart as you go bar by bar ---which as you know is very handy in trading with VSA.
All are Algorithms and again you'd know that not all signals will conform to the written algo but still be a valid signal---and as such (I think this is your point) worthy of discussion. I too have my own additions not found in tradeguider but definately reading of Volume and spread.

But in the case of WEC we need to know why its a signal---now the suggestion WYsy put up just doesnt conform and as such I wouldnt trade it.

Maybe we dont have to re invent the wheel just put Michelins on it.

Im sure your observations will be interesting---so please share.

 

[captain black]

Captain.
Dont get me wrong I want you to keep in the discussion ---- Im not a disciple as such of Tradeguider

The discussion is VSA.----not Tradeguider or the others (specifically).
If you have specifics with relation to Price action --Volume and range
everyone including myself would be happy to hear and discuss them.

A great deal of information is available on VSA signals which are continuation and reversal both setups and actual signals.

But not a lot on reading a chart as you go bar by bar ---which as you know is very handy in trading with VSA.
All are Algorithms and again you'd know that not all signals will conform to the written algo but still be a valid signal---and as such (I think this is your point) worthy of discussion. I too have my own additions not found in tradeguider but definately reading of Volume and spread.

But in the case of WEC we need to know why its a signal---now the suggestion WYsy put up just doesnt conform and as such I wouldnt trade it.

Maybe we dont have to re invent the wheel just put Michelins on it.

Im sure your observations will be interesting---so please share.

No probs Tech. I don't trade ASX stocks with VSA as I have 2 mechanical systems I use for stocks but FWIW I don't see any reason to take a trade in WEC either. I look for clusters of signals to pick up trend reversals in futures and looking at the WEC chart we are in a congestion zone. I don't see any obvious signals. Something has to be very obvious before I'll take the trade. In one of Gavin's videos I remember him saying that you only need one or two good low risk trades a day. I wait for them to come along in either the Korean or DAX futures. There's too many false signals in congestion zones, unless of course price has been trending and then you get a tight congestion zone.

I start looking for signals in the DAX futures after the physical market opens at 4:30pm SA time (The first hour of futures is too illiquid most of the time). I'm happy to come back and post if I spot something interesting.

 

[tech/a]

I'm happy to come back and post if I spot something interesting.

Even better why not post a chart with something interesting on it even if its a DAX chart (Regardless of timeframe).

There is a perfect example today in the SPI of ONLY TAKE SIGNALS WITH THE TREND. Ive been short since just after 10am (4100) Watching carefully now 4042 trailing.
Still tanking! This is my one trade for the day Captain.

Click to expand

 

[captain black]

Even better why not post a chart with something interesting on it even if its a DAX chart (Regardless of timeframe).

Ok, I'll see what I can do, haven't posted a chart on here before, really only jump in to help people with Amibroker problems but I'll try to find some instructions.

There is a perfect example today in the SPI of ONLY TAKE SIGNALS WITH THE TREND. Ive been short since just after 10am (4100) Watching carefully now 4042 trailing.
Still tanking! This is my one trade for the day Captain.

It's a text book low risk short setup.
Looking at a 1-minute chart of the SPI (these are all SA times) there's a nice uptrend beginning at around 9:40. A test of that at 9:49, then a reversal signal at 10:17. An aggresive trader may have taken that reversal. I prefer to wait for the trend to establish, then a test, then resumption of the trend. The test came at a number of bars between 10:47 and 10:52. The low volume bar at 10:52 following the double top at 4100 would have been my entry. That low volume bar is one of the keys. There was an attempt to push prices higher on the previous bar but this low volume bar at 10:52 says no-one is interested in pushing prices higher. There's the chart screaming out to Short. You're already in a downtrend so risk is low. Your stop only needs to be a few ticks away. Perfect. The downtrend is still intact so no reason to close yet.

I don't trade the SPI as I prefer the Korean futures so it's all hindsight on my part but hopefully it may give a few interested people an insight into a low risk setup.

 

[captain black]

The low volume bar at 10:52 following the double top at 4100 would have been my entry.

To save confusion I should call the "double top at 4100" a test of resistance at 4100 as it wasn't technically a test of the "top" for the day.

 

[Wysiwyg]

I found this action via an AFL code that the name 'Karthik' created. He suggests this is a sign of strength. Also the volume is above the 50 day MA.

The indication was the low volume, wide ranging down bar test. Followed by an up bar closing high on above average volume suggesting supply depleting and the bulls back in control. The trade was looking good alongside the Index rising this morning but soon as the Index (over 1% down now) was obviously tanking the supply came rushing in to exit.

The WEC trade is a valid volume-spread trade and is still open as long as support holds above $1.75.

 

[tech/a]

The indication was the low volume, wide ranging down bar test. Followed by an up bar closing high on above average volume suggesting supply depleting and the bulls back in control. The trade was looking good alongside the Index rising this morning but soon as the Index (over 1% down now) was obviously tanking the supply came rushing in to exit.

The WEC trade is a valid volume-spread trade and is still open as long as support holds above $1.75.

Seriously this is NOT a test its simply a low volume down bar,followed by an average (well slightly above average) up bar---all pretty common in a trading range.

Click to enlarge

 

[tminus]

View attachment 44484

Is that bottom chart volume? does tradeguider do something else with the volume, when I looked at SPI for Futures for Sep'11 in IB's TWS volume looks different.

 

[tech/a]

Yes it is Volume

Mine is a 1 min chart yours looks a different timeframe ?

 

[Wysiwyg]

Okay no worries with that interpretation Tech/A. Waiting for someone, anyone to place a right hand side of the chart trade using volume/spread analysis on the ASX.

 

[tech/a]

Okay no worries with that interpretation Tech/A. Waiting for someone, anyone to place a right hand side of the chart trade using volume/spread analysis on the ASX.

Away you go then.

 

[captain black]

Okay no worries with that interpretation Tech/A. Waiting for someone, anyone to place a right hand side of the chart trade using volume/spread analysis on the ASX.

I don't use VSA on the ASX so I'll have to leave that to Tech. From memory there's some videos in the Tradeguider youtube page that shows live trading with the ES if that's of any interest.

 

[tminus]

Yes it is Volume

Mine is a 1 min chart yours looks a different timeframe ?

The one I posted earlier was a 2 min chart, here is a 1 minute still there is a big difference. The volume on yours is spread out evenly, on mine there are a few large spikes with little in between.

 

[tech/a]

Yes thats a huge difference.
My data is e signal.

 

[Wysiwyg]

Away you go then.

Too scared now.

 

[Billyb]

Nothing against VSA ...

** please correct me if I am wrong ***

If the book is free, then it is open to interpretation. In the book it makes statements like high volume and ultra high volume and over last few bars.

What is the (mathematical) definition of these terms? Unless proven and consistent is open to what the user thinks and your definition might be different to mine.

Is high volume 2 times timer than average volume? or 3 times higher? or 2 time higher than volume of last 2 bar?

Don't answer that... its just an example!

The program (however) would be using some algorithm to determine this and therefore would some sort of consistent way of determining this.

... back to topic

VSA is not a precise science, it's an art. You can't define 'extreme volume', that's what the computer code does, but no software is going to be able to take the rest of the chart action fully into context even though that's probably more important

The one I posted earlier was a 2 min chart, here is a 1 minute still there is a big difference. The volume on yours is spread out evenly, on mine there are a few large spikes with little in between.

I could be wrong here as I don't have the Tradeguider software but I think perhaps the software does indeed do something to the volume - I think extreme volumes are 'evened out' a bit so that all the other volume bars on the chart remains readable. Otherwise, if extreme volumes were left as is, the rest of the volume bars become unreadable and too small.