Some live trades with explanation of the setup: YouTube - petefaders Channel. The market moves through particular cycles. It's a system rigged to take your money. That's how it works. That's why it's there. How you trade actually helps determine the very cycles that are causing you to lose. If you happened to be on the right side of the market, know that most are not..
Indicators pick up on symptoms of a trade setup, but not the cause of the price movement. Jesse Livermore discovered how the markets are manipulated, and developed methods to profit from these manipulations.
Tom Williams added VSA to Wyckoff's work to reveal the specific tactics used to manipulate crowd behavior and expose the footprints of the Smart Money manipulators. Petefader started a thread. You won't get much out if it if you just read a few pages.
My method becomes more refined as my understanding of the market increased. The thread is 3 years old as I write this update. During a distribution phase, smart money has built up short positions, but the "herd" is positioned long.
A markdown phase aka down trend runs through their stop losses. As the markdown continues, eventually it attracts much of the herd to now sell. Smart money is taking the other side of that trade. They're already in profit on the short, but thin out their position and they take the other side of your shorts. Once they are switched over to a position biased long and gone through accumulation, they begin the mark up phase, again catching stop losses.
When and where the cycles take place is largely based on how many people they can get on the wrong side. Trend retraces often go to When the herd is most aggressively selling, it is in turn when smart money is most aggressively buying. This causes the high Volume, large candles, pins, dojis we are so used to seeing absorbtion volume. Sorry for the cheesy thread title.
When I first started it, I figured I need something eye catching to not be overlooked. PS, I am fully aware that we are not talking about actual Volume traded, but Volume of ticks..
I can't fully understand how to use VSA on forex, so i may suggest that this thread can be very very interesting. I use the "volumes" indicator that comes with mt4. So, on a 1 min chart, each volume bar tells you the amount of activity that occured during the coresponding 1 min price candle. So, we now know the amount of activity per 1 min candle, higher volume bar means more activity. The next thing to determine is IF it's buying or selling activity. The most basic way to determine that is to ask "what did the price do".
If you see price moving up during that 1 min candle, we can say there is more "buying" activity. How do we know which one has the increased volume?? The answer lies in the candle close. A large wick on top, with increased volume shows us selling pressure. Very high volume spikes can mean buying and selling in large amounts. That usually happens when for example, buyers made a final push up to resistance, where they found sellers entering, all during that one candle.
So, that could cause a volume spike I think we all need a little more now. I look at all TFs to get the big picture. If I can get a scalp trade in the direction of the larger TF move, I will sometimes let a piece of the trade run for more pips.
I include volume in my trading. I also use common stuff, like SR, Fibbs. Which I draw myself. Also, patterns and channels. Big traders dont use the HV trend analyzer , so why should you?? Indicators are for refence and secondary to SR, fibbs, and Volume The rest is bells and whistles.
The idea is to KNOW what the market is doing and why, not just to be told when to buy and sell. With a basic understanding of those 3 things, a whole world of information becomes available.. You will hate me for that but But seriously, thank you very much for sharing. I've been very interested in VSA, and it seems like people either swear by it, or think it's useless based on the fact that currencies are over the counter, and the indicators really just count ticks.
I guess ticks are price action, and price action can reflect volume. In any case, I've seen screen shots of MT4 charts at the same moment on the same pair, from different brokers that show very different volumes.
Does the broker matter when it comes to the quality of the volume data? It seems that everyone has a different term for different bars and patterns.
When I first started reading on the subject, I was looking at a table of patterns. Several of the patterns said "This pattern could represent a top, a bottom, or a continuation.
My gut tells me that VSA could be a valid tool, but when it comes to applying VSA in currency markets, the available info isn't easy to digest and apply.
Hopefully you will be able to really come down to my level, and help me wrap my head around the methodology. Thanks for the post Babatot. There is a difference between brokers as far as the volume feed. I am aware of the vsa in forex debate. Tick volume is very helpfull to me, I combine that info with SR, fibbs, patterns.. I'll give an example:. Lets say price is moving up to a. We are wondering if it will hit that fib level and pull back , or break up through. One thing you will very often see, to signal a reversal back down, is this.
The 5 or 15 min price candle hit the level and pulled back forming a candle with a large wick on top. If volume level for that candle is high compared to the recent range.. Sell orders were hit during that 5 or 15 mins, which caused the spike in volume.
At what time do you trade? I'm really curious how you use volume I trade London open through min US. Where can I find the chat? Sorry for my bad english There's a head and shoulders pattern forming there.. BTW, can you teach me how to trade using your system? All my trades were annouced when I entered and exited.
You seem to know what you're doing so I say: I will follow your thread and I might ask some questions along the way. Thanks for not branding me a clown, lol I may be a good trader, but I'm a clown too, haha. But really, I have been trading quite a while, and have many friends in the fx "commuinty" that can vouch for my skills.
So, yes feel free to ask questions about volume or whatever. Free Forex Trading Systems. YouTube - petefaders Channel All you need is a naked chart and Volume to realize.. Richard Wyckoff codified Livermore's discoveries and methods and applied them to chart reading. OK, I will start with the basics. Alright, I think we all need a little more now Btw, it was nice to trade with you last night!
Hope I'll read you here in the forum pretty soon! I mainly trade ej, gu and eu. Lots of things confuse me about VSA. I'll give an example: Try to spot this by scrolling through your 5 and 15 min chart. A move up to a.More...