Trading with Volume Spread Analysis (VSA)

[hills_5000]

Guys all is not lost yet..remember DOW has moved up two days in a row... so a move down , albeit sharp and worrisome , must be seen holistically , especially since the economic indicators are good in the background. Plus , SM does work out new tactics to shake out the weak once markets latch on to their strategies , so maybe this is it... ??

regards

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.

 

[bunny]

Guys all is not lost yet..remember DOW has moved up two days in a row... so a move down , albeit sharp and worrisome , must be seen holistically , especially since the economic indicators are good in the background. Plus , SM does work out new tactics to shake out the weak once markets latch on to their strategies , so maybe this is it... ??

regards

That(shakeout) is exactly my presumption about this fall, but if my presumption is wrong and Dow closes below 10050, then what about the strength we saw on the last 3 bars on the Dow?

 

[bunny]

Dow breaks 10,050. New low is 10,039.14

 

[chaitanyagoa]

Dow breaks 10,050. New low is 10,039.14

Get ready for a 100 Point gap down today..:annoyed:

But i guess we shud wait for a close rather getting to conclusions....

 

[superman]

so you guys are predicting a possible huge fallout tomorrow if dow closes below 10500 mark ??
How bad may be the fallout if that happens tomorrow ..? Any predictions ?

 

[anoopkumar]

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 dunno whether VSA can be applied to any time frame but any thing below daily perhaps may not be relevent. Even with dailys I find a serious drawback with VSA. Since it analyses everything bar by bar, it fails to take a bigger picture of the market. Although I recall you coining a term Leftground somewhere in this thread, which essentially amounts to taking a bigger picture, I wonder how much one single bar can communicate?

-Anoop Kumar

 

[adultvish]

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.

Sir, Dow closing below 10050 has nothing to do with ur faith and understanding of VSA. I request you to reconsider ur decision. BE here for just two more weeks to see whether you have been wrong or otherwise. Do not take hasty decisions with emotional upthurst. It can happen with anyone and actually happened with almost everyone over here. There is nothing wrong in being wrong; but we should not miss the lesson. We will check and analyse what actually went wrong and take appropriate decisions.

 

[adultvish]

@ Bunny Sir
did you noticed something weird in todays' intraday chart of nifty?

 

[rajputz]

Hold the position guys...thats what VSA says....!!!!!!!!!!!!!

 

[rajputz]

i am summarizing it once again...vsa is not for intraday...it is for positional swing players who follow the market makers, professionals or smart money...so follow it accordingly...dont try to use it on Index....

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.