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Volume Spread Analysis
Volume Spread Analysis trading forex futures and Indices. Stop losses and stop hunt data. This is how i trade
I will share on separate post one on the EA i coded to trade off the better volume indicator .... BUY LOGIC WILL BE ADDED TO V3
VSA- Volume Spread Analysis
Wyckoff teaches us the basic principles of VSA. I will reiterate and say that without proper understanding of these principles you may struggle to trade VSA profitably. Why do i say this, it because these principles form the backbone of properly understanding and executing trades in a timely manner. I will explain why VSA is such a powerful strategy if properly used. When i say VSA guys, think of volume. ok? Good.
1. Price changes can only be confirmed with the help of volume.
2. Volume is also the earliest indicator of the beginning of a specific trend. Start of an up/downtrend, end of an up/downtrend and continuation of either an uptrend or a downtrend. Volume can also help us know/identify a ranging market.
3. A sudden surge in volume could signal an upcoming event or expected policy action by central banks. Volume in this case acts as a cue (I do not recommend trading news events though)
4. Also a sudden spike or fall in average volume is one of the best indicators of a change in sentiment bulls vs bears.
5. Higher/Increasing volume during an uptrend confirm a bullish tone in the market or rather a continuation of the current trend
6. Volume is not a lagging indicator but a leading indicator. Will get you in early in the beginning of a trend be it up/down
7. Think of volume as tick data from your broker (in fx). In stocks everything is rosy and easy to implement.
8. Tick data varies from broker to broker. Its prudent to always run your indys across several broker platforms for more accuracy or to get the broker with more reliable tick data. stick to that broker for your decision making.
9. Volume indicators will require that you match time on brokers server and your local time. This is key!
Market Making
I will say two things. This has a lot to do with your trading mindset. Here you have to understand the concepts of smart money, market makers, sharks and big players. Dealers too.
Most importantly is understanding their business model and how they run their business daily. By this i mean understanding the Market Makers Business Model [MMBM]. Their job is to provide liquidity.
What is Liquidity?
I leave you to find out. For every buyer there has to be a seller. Think about it. The fx market is decentralized. Ever asked yourself who sells to you when you are long EURUSD?
As soon as you answer this you know who is on the opposite side of your trade. All am saying is backing conventional wisdom is a gateway to constantly being on the receiving end (the 95%)
We are taught that the only way to protect your money is by placing a hard stop loss. Well, that's the gospel truth and its meant to be like that ... that anyone who daen't place a stop is a looser. wrong!
Stop losses are dark pools of massive liquidity as far as fx dealing and manipulation is concerned. I will stop there. I am not allowed to speak more on this topic.
This thread is for VSA traders. I will share and post my chart set ups for all to learn and see. Feel free to post yours as well. explain your rationale and lets learn from each other.
I wish you all FF community a profitable year ahead! Stay focus this 2016 and be very happy always!
This are some of my trade set ups. Purchase analytical VSA trader from their official website. Use coupon: nathanvsa and get 15% discount. Contact me via email: nathan@tfxkenya.com to learn my trading strategy. Skype me for more of my EA's. #TEAMWORK ... Happy Trading to you all!
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