Volume Spread Analysis
- Thread starter karthikmarar
- Start date
- Tags karthikmarar technical analysis volume volume spread analysis
Much later in the 70s Tom Williams who worked with a syndicate (read Smart money) for 15 years, developed on the Wyckoffs work and came up with Volume Spread Analysis and later commercialized it. (The critic would say ..why commercialize it, he could have made money himself.. 
). Now many more companies offer their own concoction of VSA, hawkeye traders and genie software to name a few.
Tom Williams VSA basically ignores the open of a bar and uses high, Low and Close. This is where it basically differs from classical candlestick analysis. Most commercial vendors claim to use more than 300 indicators to analyze each bar. I have seen that some of the VSA vendors use other indicators though not explicitly.
One thing is certain that the availability of basic information on VSA is scarce. I have come across much discussion on other forums on VSA. However most revolve around commercially available packages. Our intention in this thread will be to explore the basics so that each one of us can arrive at our own convenient VSA analysis.
). Now many more companies offer their own concoction of VSA, hawkeye traders and genie software to name a few.Tom Williams VSA basically ignores the open of a bar and uses high, Low and Close. This is where it basically differs from classical candlestick analysis. Most commercial vendors claim to use more than 300 indicators to analyze each bar. I have seen that some of the VSA vendors use other indicators though not explicitly.
One thing is certain that the availability of basic information on VSA is scarce. I have come across much discussion on other forums on VSA. However most revolve around commercially available packages. Our intention in this thread will be to explore the basics so that each one of us can arrive at our own convenient VSA analysis.
I have the privilege of knowing Tom Williams and of working closely with him. He is the inventor of VSA. Tom did make his money using VSA, but when he'd done this he then spent 15 years (as a hobby) putting it into software and testing it to see if it would work, and, yes it does (see tradeguider.com).
Something very clear to me is that Tom's passion is to spread the word about VSA so that others may benefit.
If you want to learn about VSA the best place to start is to read his original book "The Undeclared Secrets That Drive The Stock Market" or "Master The Markets". Then join the VSA Club (vsaclub.com) where you will learn from Tom himself as well as other very experienced VSA traders. The Tradeguider software incorporates the VSA signals and is extremely good at teaching as you read the charts bar by bar (tradeguider.com).
I have been studying and practising VSA for just over a year now. What's good about it is that it is simple, clear, and can be taught to others.
2 interesting volume indicators for metatrader4( fxcentral)
Here are 2 interesting volume indicators for metatrader 4.
This thread is amazing and inspired by Karthik, I am experimenting with volume indicators.
Better volume indicator
The Better Volume indicator uses a combination of bid/ask volume and range to identify Volume Climax, High Volume Churn and Low Volume bars.
Market tops are characterized by Volume Climax Up bars, High Volume Churn and Low Volume Up bars (also called Testing).
Market bottoms are characterized by Volume Climax Down bars, High Volume Churn and Low Volume Down bars (Testing).
Pullbacks, in either up or down trends, are similar to market topping or bottoming patterns, but shorter in duration and with simpler volume patterns.
The Better Volume indicator works in all markets and for all time frames but is particularly useful for tick charts.
Volume Climax Up high volume, high range, up bars (red)
Volume Climax Down high volume, high range, down bars (white)
High Volume Churn high volume, low range bars (green, PaintBar blue)
Volume Climax plus High Volume Churn both the above conditions (magenta)
Low Volume low volume bars (yellow)
When there are no volume signals the default histogram bar coloring is cyan
Waddah Attar buy sell volume
The above volume indicator histogram has more than one interpretation, beginning or end of trend or pullbacks in midtrend. To further analyze the predominant bull/bear, there is waddah attar buy sell volume indicator developed for mt4, which looks interesting. It shows total volume and divies it into bull and bear, the yellow colour shows the difference between bull and bear volumes.
In the chart below, SBI shows a gap up at open followed by selloff and remains below opening price.
Then there is a white histogram showing beginning of downtrend with predominant bear volumes.
At the end of downtrend, there is again a white histogram showing climax low with almost equal bull-bear volumes.
Then there is a red histogram that shows large spread and large volume with predominanr bull volumes.
See this chart.
I have not traded these indicators alone live but with woodies CCI system I am using them to support my CCI trades.
Here are 2 interesting volume indicators for metatrader 4.
This thread is amazing and inspired by Karthik, I am experimenting with volume indicators.
Better volume indicator
The Better Volume indicator uses a combination of bid/ask volume and range to identify Volume Climax, High Volume Churn and Low Volume bars.
Market tops are characterized by Volume Climax Up bars, High Volume Churn and Low Volume Up bars (also called Testing).
Market bottoms are characterized by Volume Climax Down bars, High Volume Churn and Low Volume Down bars (Testing).
Pullbacks, in either up or down trends, are similar to market topping or bottoming patterns, but shorter in duration and with simpler volume patterns.
The Better Volume indicator works in all markets and for all time frames but is particularly useful for tick charts.
Volume Climax Up high volume, high range, up bars (red)
Volume Climax Down high volume, high range, down bars (white)
High Volume Churn high volume, low range bars (green, PaintBar blue)
Volume Climax plus High Volume Churn both the above conditions (magenta)
Low Volume low volume bars (yellow)
When there are no volume signals the default histogram bar coloring is cyan
Waddah Attar buy sell volume
The above volume indicator histogram has more than one interpretation, beginning or end of trend or pullbacks in midtrend. To further analyze the predominant bull/bear, there is waddah attar buy sell volume indicator developed for mt4, which looks interesting. It shows total volume and divies it into bull and bear, the yellow colour shows the difference between bull and bear volumes.
In the chart below, SBI shows a gap up at open followed by selloff and remains below opening price.
Then there is a white histogram showing beginning of downtrend with predominant bear volumes.
At the end of downtrend, there is again a white histogram showing climax low with almost equal bull-bear volumes.
Then there is a red histogram that shows large spread and large volume with predominanr bull volumes.
See this chart.
I have not traded these indicators alone live but with woodies CCI system I am using them to support my CCI trades.
End of Budget rally for Nifty?
Here is a daily Nifty chart as on 9 th march.
Last 2 days shows an above average volume with narrow spread and down close bars. This is showing a bearish divergence between price and voulme according to my mt4 indicators. Price is at the top of the channel.
The green painted bars show profit taking midtrend or the end of the uptrend.
Views on this chart from Karthik or other experts on VSA are welcome.
Here is a daily Nifty chart as on 9 th march.
Last 2 days shows an above average volume with narrow spread and down close bars. This is showing a bearish divergence between price and voulme according to my mt4 indicators. Price is at the top of the channel.
The green painted bars show profit taking midtrend or the end of the uptrend.
Views on this chart from Karthik or other experts on VSA are welcome.
Reviving the thread after a long time...
EOD Observation for the 11th May
As anticipated yesterdays move did not bring in any strength to the market.. Today the weakness was very evident ..though .. the TIPS channels dubbed it as profit booking
The base of the descending triangle proved to a good supply zone.. The 5200 levels would prove a tough nut to crack in the near future.. The momentum is also waning. So in the near future we can expect at the best some side ways moves if not south.. As of now I am exiting my medium term positions though the peak drawdown is much more than I would like
EOD Observation for the 11th May
As anticipated yesterdays move did not bring in any strength to the market.. Today the weakness was very evident ..though .. the TIPS channels dubbed it as profit booking
The base of the descending triangle proved to a good supply zone.. The 5200 levels would prove a tough nut to crack in the near future.. The momentum is also waning. So in the near future we can expect at the best some side ways moves if not south.. As of now I am exiting my medium term positions though the peak drawdown is much more than I would like
Reviving the thread after a long time...
EOD Observation for the 11th May
As anticipated yesterdays move did not bring in any strength to the market.. Today the weakness was very evident ..though .. the TIPS channels dubbed it as profit booking
The base of the descending triangle proved to a good supply zone.. The 5200 levels would prove a tough nut to crack in the near future.. The momentum is also waning. So in the near future we can expect at the best some side ways moves if not south.. As of now I am exiting my medium term positions though the peak drawdown is much more than I would like
EOD Observation for the 11th May
As anticipated yesterdays move did not bring in any strength to the market.. Today the weakness was very evident ..though .. the TIPS channels dubbed it as profit booking
The base of the descending triangle proved to a good supply zone.. The 5200 levels would prove a tough nut to crack in the near future.. The momentum is also waning. So in the near future we can expect at the best some side ways moves if not south.. As of now I am exiting my medium term positions though the peak drawdown is much more than I would like
EOD observation for the 12th May
As anticipated the move was sideways. However we did see some buying interest at lower levels. This was indicated by the NIFTY seeking lower levels and we had a high volume bar closing in the middle and followed by another high volume Effort to move up bar. This does indicate the the SM is not keen on lower price at this movement. This is clear indication of some strength coming in. However the overall background is still weak. So we can expect more sideways moves in the immediate future..
As anticipated the move was sideways. However we did see some buying interest at lower levels. This was indicated by the NIFTY seeking lower levels and we had a high volume bar closing in the middle and followed by another high volume Effort to move up bar. This does indicate the the SM is not keen on lower price at this movement. This is clear indication of some strength coming in. However the overall background is still weak. So we can expect more sideways moves in the immediate future..
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