Trading with Volume Spread Analysis (VSA)

[hills_5000]

maybe we should wait till closing of DOW... a pull back from lows is also a positive outlook

But if as you say happens..then we are f***ed !

BTW..am a net long guy too !

The F&O trade today had overall sell from the FIIs. Dow is in taters, expect a test of 4766 tomorrow and a breach of it will mean we are in complete bearish zone as low for Feb would be lower than Jan, Dec and Nov.

 

[bunny]

Dow

Guys, seems like the Dow is taking a very bad beating and obvioulsly will have our own share of it tomorrow. Right now, its down by 1.75%, down early in trade. It is heading towards 10,050. This was its recent down bar after which the market had reversed. If 10,050 breaks on closing basis, it will bleed further. Other possibility is that it "tests" or "shake-out" and closes in the middle or high - in that case it is strength.

 

[nimish_rulz]

Re: Dow

Guys, seems like the Dow is taking a very bad beating and obvioulsly will have our own share of it tomorrow. Right now, its down by 1.75%, down early in trade. It is heading towards 10,050. This was its recent down bar after which the market had reversed. If 10,050 breaks on closing basis, it will bleed further. Other possibility is that it "tests" or "shake-out" and closes in the middle or high - in that case it is strength.

Just want to ask, what happens if I press cancel all contracts in my futures and options button do they get sold at the market price at which market opens tomorrow or do I get a penalty?

 

[bunny]

If the Dow closes below 10,050 I may have to re-consider my faith, following and skill in VSA. Yesterday's bar was a low volume, narrow spread down bar closing in the middle - and that is a sign of strength. Not only that, the last two up bars had good volume and also closed on the highs. With all this indications of strength in the background, it is totally unexpected by me to see this down bar. However, I do not exclude the possibility of this being a shakeout or test. Without any IFs and BUTs, if Dow closes below 10,050 then I am going to discontinue this thread with immediate effect. There is no point in claiming to track smart money if it does not work for whatsoever reasons - lack of skill on my part included. My pleasure is in trading, and not merely analyzing. I don't know whether I have become a "weak holder" and this is my "weak moment" where I am getting sucked in, but my previous experience of getting sucked in into a poor position during a "weak moment" suggest that 10,050 will hold very strongly.

 

[rajputz]

i think Vsa is for long term traders and most effective on stocks...not future...

 

[bunny]

i think Vsa is for long term traders and most effective on stocks...not future...

VSA works on all timeframes. "Long term" is a word used when one is unsuccessful in short term and still hold the stock for its prospect.

 

[nimish_rulz]

If the Dow closes below 10,050 I may have to re-consider my faith, following and skill in VSA. Yesterday's bar was a low volume, narrow spread down bar closing in the middle - and that is a sign of strength. Not only that, the last two up bars had good volume and also closed on the highs. With all this indications of strength in the background, it is totally unexpected by me to see this down bar. However, I do not exclude the possibility of this being a shakeout or test. Without any IFs and BUTs, if Dow closes below 10,050 then I am going to discontinue this thread with immediate effect. There is no point in claiming to track smart money if it does not work for whatsoever reasons - lack of skill on my part included. My pleasure is in trading, and not merely analyzing. I don't know whether I have become a "weak holder" and this is my "weak moment" where I am getting sucked in, but my previous experience of getting sucked in into a poor position during a "weak moment" suggest that 10,050 will hold very strongly.

1050 is still far away. And tomorrow the Non farm payrolls data comes in I am sure it is going to rise tomorrow because that would be good but I am in no mood to take any further risk...I ll cancel all my positions tomorrow morning. Just want to know what happens if I press the button cancel contract does it get cancelled at the price at which market opens tomorrow?

 

[bunny]

If the Dow closes below 10,050 I may have to re-consider my faith, following and skill in VSA. Yesterday's bar was a low volume, narrow spread down bar closing in the middle - and that is a sign of strength. Not only that, the last two up bars had good volume and also closed on the highs. With all this indications of strength in the background, it is totally unexpected by me to see this down bar. However, I do not exclude the possibility of this being a shakeout or test. Without any IFs and BUTs, if Dow closes below 10,050 then I am going to discontinue this thread with immediate effect. There is no point in claiming to track smart money if it does not work for whatsoever reasons - lack of skill on my part included. My pleasure is in trading, and not merely analyzing. I don't know whether I have become a "weak holder" and this is my "weak moment" where I am getting sucked in, but my previous experience of getting sucked in into a poor position during a "weak moment" suggest that 10,050 will hold very strongly.

I think your orders will be queued in the AMO system. And irrespective of what price it opens, be assured that it will be a gap down opening. Also, since there are indications of strength in background, there is a good possibility that the opening price may turnout to be the day's lowest or near lowest point. Be careful, as emotions have overtaken us now.

 

[nimish_rulz]

I think your orders will be queued in the AMO system. And irrespective of what price it opens, be assured that it will be a gap down opening. Also, since there are indications of strength in background, there is a good possibility that the opening price may turnout to be the day's lowest or near lowest point. Be careful, as emotions have overtaken us now.

I will see how the Asian markets are before our markets open. If they are deep red especially Hong Kong no one can save us...maybe in the afternoon Dow Futures might come to our rescue.

 

[rajputz]

VSA works on all timeframes. "Long term" is a word used when one is unsuccessful in short term and still hold the stock for its prospect.

VSA can give you the better understanding of the market, the way the market operates, and many unanswered questions, but is mainly for those who look for swing trades. they built a sound position when the professionals are building the position and exit with them only. Further more to take the position with the help of VSA takes more time then any thing else. You have to wait for 2 days to 10 days to build up a position. Can you say that a day trading. I THINK NOT. And more over as already discussed VSA cannot be applied to the index, because index is the weighted average of the various stocks and have expiry in the end of the month. What do you think that Professional or smart money will start to enter into the trade at the start of the month and pull out near the expiry. Professional or smart money trades for longer time period. They are not considered about the shorter time frame in daily basis. They tend to look at the bigger picture with the weekly charts.

For last year the VSA may have proved right, because it was recovery year, as the market was in single trend channel, as every one was in uptrend. The professionals were holding their ground from march ownwards and started to exit near the end of the year. also the tax policies, restriction has made the market choppy.

I am not saying that vsa is useless. it gives far more understanding then any other topic, but it cannot be applied on such a small time frame of intraday or on index.