Trading with Volume Spread Analysis (VSA)

[rajputz]

First thing i agree with bunny. we cannot apply VSA completely on Nifty as nifty is index and work as composite wieghtage of various sectors. The main Contributing companies in nifty are Reliance, SBIN, LT, Icicibank, HDFC, HDFC Bank, etc. and they all are giving good strength according to the VSA. Except Reliance which is in weakness. If nifty is composite of all the major movers and all are bullish, then can we expect the nifty to be bullish that way.

Other thing is that Nifty took major support on weeky chart basis near its 34 ema and moved back. but according to indicators its downwad move has just started. According to VSA, the selling is also present on weekly chart basis and no strength. So what can be the major movement side of nifty as both the daily and weekly charts are contradicting?????

daily is starting to go bullish. Weekly has just started to go bearish. my instinct tell me that Longer time frame is best teller. And according to current situation every thing is in CHAOS.

Consider the charts below.

 

[bunny]

Re: Biocon chart

Bunny
Just a small study on the fly to support you

http://www.traderji.com/trading-psychology/37716-myth-friday-down-day.html#post406928

:thumb::clapping:

 

[adultvish]

Re: Biocon chart

Manipulation. Professionals can mark up or mark down the market. That is why volume is important. If the volume is not supporting the move, you know that professionals are not in agreement with the move.

Thanks. But, here is the actual confusion; and kindly bear with me. Not intending to challenge or counter, but a genuine query. I have been having the same eye for volume since long and even till date, as I have no other option. Volume supporting the move - it has to be taken on both sides, am I correct? If yes, then am I correct in understanding that volumes act as fuel to facilitate the direction of trend, whether it may be upside or downside?

Let us speak only in the language of supply and demand. Short covering, long unwinding, etc. are words of media who don't have anything real to publish.

My apologies for using those words.

And even if I were to say that it was because of short-covering, then one must ask this question immediately - "What made the shorts cover their positions?" - obviously they had seen the strength setting in and knew that they could quickly be on the wrong side of the market.

Let us keep all these factors out of VSA. The only thing we must be looking for is an climactic move on some important event. The Friday thing is again a toy of media. If the professionals really accumulated on monday and distributed on friday, who would not make money?

The media has a template of headlines. They just fill in the placeholders and we are obliged to pat the media.

:thumb: Thanks, I got ur point and I also agree with it.

Volumes of a script indicate total number of shares bought and sold during a specific period of time, may it be day or week. Now, heavy volume or high volume denotes that huge number of shares are bought and sold. But many times, I found that this is not actually giving any clue to me. Let me put my confusion with the aid of an example. Let us classify all those who trade in two categories Mr. Buyer and Mr. Seller. Suppose a script is at 100/- rupees and after huge buying by Mr. Buyer the price rose to 104/-. It is taught to be a positive sign for the script because its price increased with good volumes. But how to decide, who among Mr. Buyer and Mr. Seller is a smart player, mere on the basis of volumes of shares traded. Sometimes, the script continue to rise and one can make use of this funda that prices supported by volumes tend to rise more. But, sometimes, the price decreases immediately on the following days, making Mr. Seller a smart player. I hope, I made my weakpoint clear and request a helping hand on this.

 

[adultvish]

First thing i agree with bunny. we cannot apply VSA completely on Nifty as nifty is index and work as composite wieghtage of various sectors. The main Contributing companies in nifty are Reliance, SBIN, LT, Icicibank, HDFC, HDFC Bank, etc. and they all are giving good strength according to the VSA. Except Reliance which is in weakness. If nifty is composite of all the major movers and all are bullish, then can we expect the nifty to be bullish that way.

Other thing is that Nifty took major support on weeky chart basis near its 34 ema and moved back. but according to indicators its downwad move has just started. According to VSA, the selling is also present on weekly chart basis and no strength. So what can be the major movement side of nifty as both the daily and weekly charts are contradicting?????

daily is starting to go bullish. Weekly has just started to go bearish. my instinct tell me that Longer time frame is best teller. And according to current situation every thing is in CHAOS.

Thanks bhai
Just one simple querry, why only 34 EMA is important? because the support and resistance levels will change if one uses different EMAs; what is so imp. with 34 ?

 

[bunny]

Thanks bhai
Just one simple querry, why only 34 EMA is important? because the support and resistance levels will change if one uses different EMAs; what is so imp. with 34 ?

My personal opinion, don't use any lagging indicator.

 

[adultvish]

My personal opinion, don't use any lagging indicator.

thanks, I have stopped using any indicator since last month because I found all of them logging. perhaps, like volume I just could not understand how to use them effectively as thousands of people are doing.

 

[trader.trends]

thanks, I have stopped using any indicator since last month because I found all of them logging. perhaps, like volume I just could not understand how to use them effectively as thousands of people are doing.

I am using only Price as the indicator It does not lag.:lol: Movement in price creates movement in indicators.

 

[adultvish]

I am using only Price as the indicator It does not lag.:lol: Movement in price creates movement in indicators.

very right said bhai

 

[bunny]

S & P CNX NIFTY weekly bar chart VSA

Weekly has just started to go bearish

Last weekly bar is a down bar, low volume, closes in middle. Signs of strength. The next weekly bar should be up, and close on the high.

 

[bunny]

S & P CNX NIFTY daily bar chart - adjusted line

See the red line on the chart below. I have adjusted it at many pivots.