Hi ST,
I don't know long you have been using VSA. I have been using it for around 6 to 8 months now and I have seen many catastrophic responses. Below are real-chart examples I have seen. I see these almost everyday on charts.
Example 1:
Bar 1 is an effort to go down. Next bar is also a down bar. According to Tom Williams, this means that there is a genuine attempt to go down. So we go short here. Suddenly, the next bar is an up bar with good volume!
Example 2:
Bar 1 is an effort to o down. Next bar is a down bar closing in the middle on low volume. Looks like a successful test of supply. But next bar is still a down bar. According to Tom Williams, it means that market markers and professionals are "still" bearish. However, after two days, the price suddenly move up by 7%. What a waste!
Example 3:
The test of supply record high volume, that is - its a failed test. According to Tom Williams, the market will go sideways until the supply is removed(indicated by one more test). However, the stock is trading 7% higher immediately after a failed test. Tom Williams has a excuse for this too. he says, 'such events occurs when there is a bad news - real of imagined'. So basically, whether low volume or high volume test - anything can happen.
Example 4:
The stock was in a life time high. Had signs of weakness in background. Ultra high volume appeared on a down day. The spread was ultra-wide and closed near the low. This was a perfect upthrust satisfying every condition. After 3 days, the stock closed 8% higher, above the high of the upthrust. How can tons of volumes generated during upthrust be negated by 3 days of average volume activity?
So when the reliability of an hallmark event like upthrust has been thrashed, other indicators will obviously.
Many times, after the selling climax, the stock goes into a sideways movements and after few days starts dropping again as if there is no support. Tom Williams simply says that 'If the price has held after a suspected selling climax, then we have all the indications to go long'. Obviously one will lose money if it happens like I said. But then someone will bat for VSA and say that "You should see background". Without a doubt, there will be few sluggish up bars. So a novice will again blame himself for missing the sluggish up bars and be under the impression that VSA requires lot of effort to be correct. However, there is also a selling climax in the background. What about this? My unvarying observation is that at any point of time, there are signs of strength and weakness on the chart. There is no way to compare whether weakness is greater than strength or vice-versa. There is no standard weightage to events like upthrust, test. So basically, anything can "negate" anything. A major upthrust can be negated by a narrow spread ultra low volume bar! This is the height. I cannot take it anymore.
I have many more puzzling sightings on VSA. I always wonder if Tom Williams never faced such conditions in his trading. Given the low reliability and sporadic success of this, I wonder why VSA should not be called a "scam" instead of "analysis"? Its a scam in my opinion. I have not seem many people trading with VSA.
I don't know long you have been using VSA. I have been using it for around 6 to 8 months now and I have seen many catastrophic responses. Below are real-chart examples I have seen. I see these almost everyday on charts.
Example 1:
Bar 1 is an effort to go down. Next bar is also a down bar. According to Tom Williams, this means that there is a genuine attempt to go down. So we go short here. Suddenly, the next bar is an up bar with good volume!
Example 2:
Bar 1 is an effort to o down. Next bar is a down bar closing in the middle on low volume. Looks like a successful test of supply. But next bar is still a down bar. According to Tom Williams, it means that market markers and professionals are "still" bearish. However, after two days, the price suddenly move up by 7%. What a waste!
Example 3:
The test of supply record high volume, that is - its a failed test. According to Tom Williams, the market will go sideways until the supply is removed(indicated by one more test). However, the stock is trading 7% higher immediately after a failed test. Tom Williams has a excuse for this too. he says, 'such events occurs when there is a bad news - real of imagined'. So basically, whether low volume or high volume test - anything can happen.
Example 4:
The stock was in a life time high. Had signs of weakness in background. Ultra high volume appeared on a down day. The spread was ultra-wide and closed near the low. This was a perfect upthrust satisfying every condition. After 3 days, the stock closed 8% higher, above the high of the upthrust. How can tons of volumes generated during upthrust be negated by 3 days of average volume activity?
So when the reliability of an hallmark event like upthrust has been thrashed, other indicators will obviously.
Many times, after the selling climax, the stock goes into a sideways movements and after few days starts dropping again as if there is no support. Tom Williams simply says that 'If the price has held after a suspected selling climax, then we have all the indications to go long'. Obviously one will lose money if it happens like I said. But then someone will bat for VSA and say that "You should see background". Without a doubt, there will be few sluggish up bars. So a novice will again blame himself for missing the sluggish up bars and be under the impression that VSA requires lot of effort to be correct. However, there is also a selling climax in the background. What about this? My unvarying observation is that at any point of time, there are signs of strength and weakness on the chart. There is no way to compare whether weakness is greater than strength or vice-versa. There is no standard weightage to events like upthrust, test. So basically, anything can "negate" anything. A major upthrust can be negated by a narrow spread ultra low volume bar! This is the height. I cannot take it anymore.
I have many more puzzling sightings on VSA. I always wonder if Tom Williams never faced such conditions in his trading. Given the low reliability and sporadic success of this, I wonder why VSA should not be called a "scam" instead of "analysis"? Its a scam in my opinion. I have not seem many people trading with VSA.
