Volume Spread Analysis(VSA) is an alternative approach to technical and fundamental analysis. The objective of VSA is to provide insights into the trading activity of the Professional Money or so called Smart Money. This money is the market mover. Its activity can create imbalance between supply and demand and cause the price to move in a particular direction. It can see many more things that ordinary retail traders like us cannot see.
Charting for VSA:
Any charting software with basic ability to plot bar/candle charts and volume is all we need. Technical indicators such as moving averages, stochastic, RSI, MACD, etc. are not required.
Basic pre-knowledge:
It would be nice if you know basic terminologies like supports, resistance, trading range, trendlines, etc. "Spread" means difference between High and Low price of a particular bar/candle.
Why this thread:
I have been trading for 8 months now. During this period, I have had my lessons in chart patterns, candlestick charting, technical indicators, advanced concepts such as Market Profile, Wolfe waves, Market Delta, VSA, etc. I was soon very comfortable with VSA than other methods. However, there is not much reading material and illustration available on VSA unlike chart patterns and candlesticks.
Another motive is to analyze the action as it happens. There is no point in pulling up the chart after 2 months and pointing out how VSA can help in identifying the top/bottom or buy/sell signal. Historical charts always seem to work no matter what indicator or system you are using. But in real time, unfortunately they don't give similar results. (Note: All action will be analysed EOD, not during trading hours)
What to expect in this thread:
I will posting my observations in few selected scrips, and if possible, specific action such as 'Buy/Sell/Short/Hold/etc.' I won't be posting charts unless there is anything peculiar to be illustrated. The main reason for not posting chart is lack of time. Posting chart is time consuming because I to have annotate the chart, upload it on my server and then post the link here. However basic comments indicating the need for action will be posted. You can lookup the charts in your software and relate to them. To understand the comments, you will have to read a small book on VSA.
Reading material for those interested in VSA:
The only book you need to get started in VSA can be downloaded here.
Unlike conventional technical analysis, there is not a lot of reading material available for VSA learners. Some forums do discuss VSA, but the no. of participants in VSA is very low compared to those in technical analysis.
"The stock-market is a story unfolding bar by bar" - Every bar is important to us. One that appears as a strong buy may show signs of weakness after 3 bars. So we have to be alert and vigilant about what the smart money is doing.
Charting for VSA:
Any charting software with basic ability to plot bar/candle charts and volume is all we need. Technical indicators such as moving averages, stochastic, RSI, MACD, etc. are not required.
Basic pre-knowledge:
It would be nice if you know basic terminologies like supports, resistance, trading range, trendlines, etc. "Spread" means difference between High and Low price of a particular bar/candle.
Why this thread:
I have been trading for 8 months now. During this period, I have had my lessons in chart patterns, candlestick charting, technical indicators, advanced concepts such as Market Profile, Wolfe waves, Market Delta, VSA, etc. I was soon very comfortable with VSA than other methods. However, there is not much reading material and illustration available on VSA unlike chart patterns and candlesticks.
Another motive is to analyze the action as it happens. There is no point in pulling up the chart after 2 months and pointing out how VSA can help in identifying the top/bottom or buy/sell signal. Historical charts always seem to work no matter what indicator or system you are using. But in real time, unfortunately they don't give similar results. (Note: All action will be analysed EOD, not during trading hours)
What to expect in this thread:
I will posting my observations in few selected scrips, and if possible, specific action such as 'Buy/Sell/Short/Hold/etc.' I won't be posting charts unless there is anything peculiar to be illustrated. The main reason for not posting chart is lack of time. Posting chart is time consuming because I to have annotate the chart, upload it on my server and then post the link here. However basic comments indicating the need for action will be posted. You can lookup the charts in your software and relate to them. To understand the comments, you will have to read a small book on VSA.
Reading material for those interested in VSA:
The only book you need to get started in VSA can be downloaded here.
Unlike conventional technical analysis, there is not a lot of reading material available for VSA learners. Some forums do discuss VSA, but the no. of participants in VSA is very low compared to those in technical analysis.
"The stock-market is a story unfolding bar by bar" - Every bar is important to us. One that appears as a strong buy may show signs of weakness after 3 bars. So we have to be alert and vigilant about what the smart money is doing.
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