Volume Spread Analysis

[APBORDIYA]

Scripts valuations by real time data

See the sheet1 & sheet2 of attached file to find last one year valuations of some scripts


http://www.traderji.com/attachments/equities/13195d1252935063-script-valuation-book1-1-.xls

 

[Placebo]

http://img338.imageshack.us/img338/7165/tatatea10min.jpg

Hi Observer. This is my view on the 10min chart posted by you

In the background we have Buying Climax which would be termed as potential Buying Climax while trading it intraday. Buying Climax basically means that there is more Selling that Buying in that particular bar however conformation is required. The next bar market by a horribly drawn blue line has made Lower High and Higher Low. I often think of this as a bar in the middle of a supply zone with the top end capped. Next we have a widespread bar which has dipped drastically in the body of the Climax Bar and then closed very close to its own high. If this would have been genuine buying then the High should have been higher than that of the Climax Bar. The very next bar is down which conforms more supply.

The bar marked by the crooked Red Line is a Test Bar. It is on a narrow spread and has dipped in an area where high volumes were seen before and closed off its own high. The bar after this has not responded to the test and has closed below it. This basically means a "Failed Test". Expect Lower Prices from here.

Just to make things easier i have constructed a horizontal line from the low of Climax Bar. Look carefully , this line has touched the High of a Bar from where price has fallen even further. And the bars prior to this have moved up on low volumes and narrow spread.

One thing that i keep in mind while trading intraday : It is the participation or the lack of participation (activity/volumes) of Professional Money that changes a trend.

P.S Get rid of the moving averages they will just confuse you

Cheers

 

[taomql4]

Observer

Here is my take on the same chart. If you are using Amibroker an afl is available from my blog. Commentary for most VSA indication are available in the chart.

hi kathik--great thread----can you please tell me what platform, you are using and do those indicators/VPA come with the platform?

thanks

 

[karthikmarar]

Hi,

Thanks, I am using Amibroker. The VSA indication are based on afl written by me. The same can be download from my blog.

 

[dawode]

really good karthikmarar

 

[observer]

lnangia, thank you very much for the detailed explanation. I was indecisive on the upthrust bar because
a) I thought that it could be a reaction coz the price was at the previous resistance area.
b) It was a classic upthrust but was not accompanied by high volumes. Can upthrust vol average than previous vol bars be considered climax?
c) Subsequent upbars looked like absorbing bars under selling pressure.
d) Down bars the volume was on decremental.

Thanks

 

[Placebo]

Hi observer. There is no rigid definition or set of rules which define an Upthrust . Although Tom Williams states that an Upthrust occurs when the markets are overbought and occur in a fresh new ground High. The bar on this chart is not an Upthrust in my opinion. It seems more like a bar hit by massive supply.

Look at the background which occurs before Climatic action started. After a surge in prices there was supply . However this supply was taken out on Narrow Spread and More Than Average Volumes. Soon after that we got Climatic Action (Widespread Bar on Ultra-high/High Volumes). However if u notice after the first supply zone (the area within the yellow horizontal lines) was taken out there was no sign of Test/Removal of Supply / No supply Bar. You need to ask yourself one question at this point. Is the professional money willing to buy more at higher prices ? if yes then why the narrow spread bar followed by Climax Bar ?

There is a webinar on VSA at 2am IST 30-08-2009 conducted by Gavin Holmes (one of the partners of Tradeguider). Gavin is more of a trader who relies on Tradeguider indicators and there is not much he can teach. However these webinars were very helpful when i started with VSA. Here is the link if you wish to enroll

http://www.tradeguider.com/events/

Sorry Traderji for posting the Tradeguider link . I am not associated with Tradeguider , my intentions are just to help a fellow trader in need

Cheers

 

[veekay304]

Observer,

In case of VSA it ia better to stick to one TF. Unlike indicators we are looking at actions of different bars... Hence looking at different TF at the same time will only confuse you..

Hello Karthik,

Needless to say, this is really a wonderful thread.. thanks a lot for taking the pain to explain...:clap::thumb::clapping:

Shall I assume that VSA is equally effective in 5 min TF as well.

VK

 

[Mangafreakz]

I tried to download the VPA AFL today from vpa blog by Karthik sir , is it down ? After clicking the 4shared link , there are no folders/files there.

 

[kargocu]

Hi,

Thanks, I am using Amibroker. The VSA indication are based on afl written by me. The same can be download from my blog.

Hi karthikmarar;
Could you please help me to get VSA AFL code link...???