Wow what a ride!
Out at 4032. 145 pips on the other half of my position. Looks like a double bottom on 5min, gonna have to see what the NYSE open does to it though.
Thanks for advice guys. I believe this will be my only trade for the day. Unless a long here screams extremely loud at me.
Well Dodge, my analysis (it took like 5 seconds and was made at a coffee house while chatting with a friend) shows that EUR/USD will go down sharply on short term on whatever public reason (actually not big, but huge money distributing and aiming for the accumulation point) then dramatically up when the volumes burst and they are long gone to dry out SNB cash reserves, with a motivation like âObama didnt announced the tax cuts expectedâ.
Of course, my words like âanalysisâ and âtextbook setupâ were underlining a joke.
Congratulations for the trades to you and HR4!
Hereâs my take on tick volume. I really dont see why there is a debate. I guess its just a total coincedence that tick volume is extremely high on every single reversal. (reversal not retracement)
Im no professor of forex, but I have read enough to satisfy my curiosity.
Ticks are price updates from your forex brokerâs liquidity providers.(the banks who do the heavy trading on the real Interbank market). I should say most of the good brokers work that way. So what you are seeing is actual prices and trading going on in the real market. Some brokers have more liquidity providers than others, so some have more ticks than others and show more trades that have gone through. Thats why there is a discrepancy between brokers, thats also why vsa works best with the biggest forex brokers. At this moment, the average tick size on 5 minute bars on my ibfx account is 829. On my FXCM demo account the average is 1941. FXCM is the largest retail broker as far as I know. If you look at FXCMs volume there is a much greater variance between the bars, and makes vsa a little easier. But I have gotten use to IBFX and have no problem with them.
A tick can be an actual transaction going through, or it can be the big banks on the Interbank trying to make a market. That is one difference between real volume and tick volume. There is one bar on my FXCM demo that is 12.5 pips wide, and has 2,596 ticks. It is an up bar, assume for a minute that this bar had 0 real trades and it was all just banks trying to make a market. In that case this bar would only have 250 ticks, one for bid and one for ask on each price change. Sure you could say that they could have been moving price up and down the bar for more ticks than that, but this isnt going to happen between London open and close. In fact at this time, Iâm not certain, but I would say the banks dont have to do much searching for buyers and sellers. Which is why most vsa traders stick to these times. So it may be pretty safe to say that at least 95% percent of all transcactions during LO and LC are actual trades. Especially on the extremes where vsa works best.
The minimum amount that can be traded on the real IB market is 1 million dollars. The average transaction size on the IB market is 5 million dollars. Believe I read this at investopedia, not sure, take it with a grain of salt. This is chump change to the liquidity providers (big banks who are the ones quoting the prices for the IB), who also trade and speculate in the forex market. If these big banks are to make any profits to make it worth while they are going to have to employ many of the same tactics that are employed in the stock markets. The same tactics that vsa sniffs out. Sure there are many other participants, but its pretty safe to say they all want the best price possible so that keeps the market âhonestâ. Just stay out of the currencies that have intervention going on, like the swiss franc today.
Now all you have to believe in is the law of averages. When working with averages you are going to miss some information that comes from the extremes. Which is why tick volume âonlyâ correlates with real volume 90% of the time. Taken from purplepatchâs post with the article on the study of tick volume. Does any other technical study work 90% of the time? The thing between your ears will cause you to have more losses.
Thats really all I got. Call it ignorant I donât really care. I would much rather be in the minority on this issue. On second thought why am I even posting this.
All of you are right, tick volume is rubbish.
Iâm not judging ticks, if you read my posts. Iâm trying to find a way to use it feeling comfortable. Cause on average, a tick might worth $25,000,000.25; but thats me trading 50 cents and big money trading 50 million. Two ticks.
If you read MY POST, you wouldnât be discussing this theory over and over again. You are completely missing the point and I would recommend you to either read what we say, or study somewhere else if you donât trust our good word.
Also, you for some reason think, that retail traders create Tick volume, which is completely wrong. We are not the ones who make the price move. Therefore we are neglible in creation of tick volume. The SMART MONEY doesnât have to use any of our common retail brokers! Because brokers never derive their price from their own transactions.
This is OT but also complete and utter nonsense. I am sorry but your understanding of physical laws is just ridiculous. Of course people used gravity before they could even think about calculating it. Just think about water mills, hammers, gallows and gazzilions of other inventions based on gravity.
The wise-cracks werenât directed toward you at all. I probably should have pointed that out, sorry. Its more a product of having read so many vsa threads and seeing people come in and express ridicule to all the people trying to study vsa.
I do understand though, at first I was skeptical but decided to keep an open mind, luckily. The only thing thats gonna make you comfortable is chart time. There are definately some good reasons why it should not work. But it does. And it has to be that in the time it takes for the market to put in a reversal, one order for 25 or 50 million really doesnt matter. Kinda like recently when the âGiant Pandaâ was sitting in the area of 4300, look how many times price left that area because it generated so much demand. Who knows how big that order was, but tick volume, the spread and close of the bars will tell you that demand is there. And if demand is there you dont want to sell. Volume is only 1/3 of the equation.
Read enough of the material in this thread and MTM, i like âUndeclared secrets of the stock marketâ more though. Grasp the concepts, watch them play out on the charts. Thats the only thing gonna make you comfortable.
All this sounds like I am trying to be a master or something, so I should probably let you know Iâve only been studying vsa since march and trading since april. But I have so many e-books and videos on my phone, plus threads like these, I spend tons of time on my phone studying. I feel very comfortable putting my money on the line using vsa. Now if I can only get better at mastering my emotions and discipline, I might be a damned good trader.
Just some thoughts.
Let me know if yaâll think Iâm crazy.
Euro and Aussie have both seen some accumulation over the past few weeks. They are both coming down with no real distribution up top. Both of these are considered risk currencies. If you look up the s&p500 on stockcharts (symbol is $spx), the heaviest volume in the range above us came on down days in the lower part of the range, which then sent the market back up. No real volume on the up bars up top. This is even more evident on the weekly chart. Then it fell on the fear of a default that was never gonna happen, and went no where on terrible economic data.(it opened lower on the data, but didnt go any further) Now look at the volume on the down days since then. See anything familiar? All risk related markets are being accumulated. If you look at the dollar index futures, a risk off related market, I could be off here, but it looks like a little distribution at support is happening.
The current news on the euro is horrible and they say it will be gone, yet Switzerland just pegged their currency to it. I will believe the SNB before the newspapers. Now we have Operation Twist that will probably be announced at this months fomc, a tool along the lines of QE 1 and 2 meant to stimulate the economy. We saw what the s&p did on QE.
I believe all this is positioning for the announcement of operation twist later this month, which will then break the euro out of this huge range its in and head to 1.55 and the DJIA towards 14000. The franc being pegged, and japan being under pressure to weaken the yen might strengthen the dollar, but I think this just sends gold higher and doesnt effect the dollar much.
I know this is a lot of news and fundie stuff, but if you look at it through the lens of VSA and look at what the charts tell you, then you might be able to predict the future. 
Whats with all the aggression, dude?
Im trying to have a friendly controversy here, to the benefit of us all!
You are right, my bad. We were scalping of some sort. Then again, heres a little twist: water always goes downhill. TSA (VSA) Is not always working.
My take is that we can figure out how it really works we can all reduce our losses.
You definitely need to have some notions clarified.
A [B]tick[/B] (from ticket, back when floor trading) represents an order. Buy or sell.
An [B]FX retail broker[/B] is also a [B]market marker[/B]. That means every single one of your orders gets filled by your broker. You donât trade with other traders, you trade exclusively with your broker. This also means you donât trade on the open market, you trade on your brokers maked market, thatâs why its called a market maker. A maked market is a closed market, with its own cash pool, trades, etc. Two ticks make up a trade. For obvious sustainability reasons, maked markets employ moslty two mechanisms of protection: most of the time they use currency parity feeds aggregated from a number of IB sources, and some times wild spreads. Hence two different maked markets cannot normally have the same behaviour.
[B]smart money[/B] is someone with a privileged position in a market. It can range from lets say a wise guy with a million dollars in cash and friends within a tiny maked market, to ADIA and GPF, the worlds largest investment funds.
I like it, its an open mind sample.
Iâm sure we can fine tune the TSA (VSA) if we work together. And as far as i heard emotion management comes with time, just stay in the game long enough
Was it the news only, or there is something else that went wrong and we cant figure it out yet? HmmmâŚ
Lets check out with other brokers to see if the spike was IB or maked market internal. Exact time and date?
That was SNB interventionâŚthey devalued the CHF. Have a look at the EUR/CHF chart (never seen a spike like that in a while(EUR/USD) and never a rally like that in the EUR/CHF) i.e. they bought EUR in mass and the result also showed up in the EUR/USD chart. Maybe some people who were aware of the news might have also contributed to the spike, but it would have been hard to get a clean entry during that time.
The SNB said that they will do what ever it takes to keep the EUR/CHF above 1.20âŚinteresting times !!!
I believe this is wrong. :45:
I donât think we are really talking in ticks as such. They are pips (point in price). The volume shows all the little changes in price to my knowledge. Regardless, the volume has and does work for forex no matter what it is called or what people think it comes from. There are many who use VSA successfully and I for one totally believe the story it tells along with the closing price and the spread. It all seems to work once understood. People will always knock it though as it is not how the majority of traders trade. Then again, the 90% that lose is also a majority
I have just got to say a big thankyou to Petefader for starting this fantastic thread and all the others who have contributed in a positive way.
That guy is just simply plain wrong and it may look that I am trying to be aggressive here but I think it is really important for those who wants to understand tick volume. (And I agree that it is NOT essential for trading VSA!)
A tick does not represent an order. Period.
A [B]tick [/B]in Forex refers to the moment [B]when the price of a given currency pair changes[/B]. When we refer to Tick data we are usually talking about a combination of ticks that make up the movement of a currency over a specific time period. Some ticks may be milliseconds apart, others are seconds apart. The time between ticks just depends on the volatility of the market at that given time.
More changes in chosen period (M5,H1,D1 etc) means higher tick volume. Tick volume depends on where the brokers derive their price from. But it is almost the same on many different brokers, which is another proof that tick count per bar is NOT a number of orders per bar, because that could be probably very random.
As an outsider who follows this thread daily, I just wanted to add somethingâŚ
This thread is about [B]trading[/B]. That is what makes this thread so great-- very little time is wasted on things unrelated to trading.
I got a good laugh a couple pages back when purplepatchforex said he was a night postman and the other guy didnât get it-- A professional trader recognizes another professional trader when he sees one. Iâve read PPF repeatedly stress focusing on specific setups and filtering everything else out, so I realize heâs trading professionally and not casually.
Thatâs what this thread is all about: Trading professionally. The topic which has been raised in the last few pages should be taken to a new thread.
Here here! nuff said.
This morningâs trade:
Looking for shorts
Trade
Later, looking for longs on GBP/USD
Trade
Had a new idea for my session volume indicator, now as VSAers what we are looking for most is Volume extremes, but just as the extremities themselves the change in volume is important too, so I have added a couple of parameters you can set to so the Volume bars that have most change from one to another are highlighted.
As with the Dark Blue Bars dotted around.
Also, the session timings and colours are now easily configurable.
Enjoy 
SessionVolume.ex4.zip (11.4 KB)