Hi there PipDaddy , do you think we could speak on skype? Dappadap1 is my screen name. Want to know if trading is going well with the VSA method? If just looking at high volume bars is the way to read the market?
Like your post by the way, nice pics to explain what you were looking at.
what i donāt understand about VSA, is that on a large down bar for instance. with high volume, doesnāt that mean that the volume means that there is a liquidity gap, meaning large amount of sellers in the move so price had to move to fill the sell orders at the next bid level?
How does a large down bar signify buying? I have always been confused with this theory. Can anyone clarify?
and if VSA is the mechanisim in which the market works, how are trends sustained if there is selling into buying and buying into selling. Whoās driving the price in the direction that its going and whoās buying and selling into that directional move?
Someone has to be causing the price to move, so whoās selling and buying into it?
This is my basic understanding of it. VSA is volume spread analysis so you are looking at the spread of the candle and then comparing it to the size of volume to determine what the smart money is doing.
So a large down bar with a large spread and no wicks or very little wicks, accompanied by high volume means that the smart money is selling. This is because there is large volume and the price has closed much lower from where it opened and the fact that there is no wick on the bottom means that there is very little buying resistance coming in. So overall strong bearish sentiment at that particular point in time.
If you had a large down bar but with a decent size wick on the bottom and you had high volume as well then this is telling a different story. This is showing that there is considerable buying pushing price up from its low. So although the bar is bearish, the high volume combined with large wick at the bottom is potentially showing that there is large buying power coming in and market sentiment is changing. This will usually occur near areas of support/resistance.
On the charts that PipDaddy777 posted, it looks like there are some decent size wicks on those candles where high volume is taking place which would mean large buying at those points. They also all seem to be in a congestion area probably near some previous support which suggests accumulation preparing for a mark up.
Hope that helps
InSearchofPiPs and Dappa,
You guys are close and have some pieces of the puzzle. However, one really important thing to remember with VSA is that individual candles in themselves donāt mean a lot. Itās really the reaction to those candles that tells us what is going on. For instance, if you have a high volume wide spread up bar, but then price continues up, then VSA (and logic) tells us that SM is buying. However, if we have a high volume wide spread up bar, with a very bearish reaction, then we can see that SM was selling during that bar. Weāre really looking at 1. the volume and 2. price reaction from the volume. Does price make any more progress in the direction it was headed or does it not make any more progress.
All that said, the candles and where they close are key. A high volume doji or a candle with a large wick is a red flag and something I love to see. But, it doesnāt have that much importance if the price reaction isnāt concurrent with what I thought was going to happen.
In addition, low volume candles can be just as important to look for, as they also provide a lot of information. But, thats a whole topic in itself 
If you havenāt read Master the Markets, definitely do so. It is fantastic. Then read this entire thread, all 433 pages, it is like free money 
Hey Dappa,
Price only moves for one reason; there is an imbalance in the market. Either supply has flooded the market and price is now dropping, or demand has taken over and price is now forced up. In your question, if price is moving down, supply has flooded the market. If volume is high on that large down bar it can mean one of two things. 1. smart money has transitioned to markdown phase or 2. the heard has jumped in short, and smart money is taking profit and buying into the herdās move as they get ready to accumulate. The only way to know with some certainty is by waiting to see the reaction to that high volume down bar and see what price does. Does it make more progress down, or has progress of the down move been stopped.
If price continues down, itās probably smart money aggressively marking price down.
If price is stopped, itās probably smart money buying into the herd as they all go short, and smart money builds up long positions. If volume is really high on that bar, and price stops the down move, that means that there was a lot of buying and selling going on during that bar; not just selling. Smart money does this to hide their intentions so that they can move price more easily in the direction they want to go. In other words, they create temporary balance in the market by buying up all the short positions, until all the shorts are out of the way, and then they mark price up more easily since the market isnāt balanced anymore and demand has overtaken supply.
This is all true in reverse as well.
Hopefully this should address your next post as well.
Remember to read through this thread completely and ask a ton of questions.
Regards
Does anyone have a method when arrived time you may want to erase a s/r level?
As the market unfolds, more and more new s/r displayed. Finally, the chart will be filled with horizontal lines.
What indicates the fact that a level no longer valid? When you delete the s/r line?
Sorry for the poor English.
Thanks.
Hi Cica
I was always taught that the main SR levels to be concerned with are the ones right on your screen. In other words, if itās far enough back that itās not on your screen anymore, it may have lost its importance. However, this applies to all the time frames we are looking at. So, you may end up with levels on your screen that werenāt derived right from your screen, rather a different timeframe.
Peteās advice was to start fresh with SR level every morning and I think thatās great advice. It has helped me a lot.
Hopefully this narrows down the number of lines on your screen, and hopefully the lines that are on there are now more relevant.
Thanks
Hey Pipdaddy thanks again for reaching out. I posted some pics on skype for you to take a look at and give some feed back. I will also start posting in the thread.
I didnāt understand this statement in its entirety , can you elaborate?
āIf volume is high on that large down bar it can mean one of two things. 1. smart money has transitioned to markdown phase or 2. the heard has jumped in short, and smart money is taking profit and buying into the herdās move as they get ready to accumulate. The only way to know with some certainty is by waiting to see the reaction to that high volume down bar and see what price does. Does it make more progress down, or has progress of the down move been stopped.ā
āRead more: 301 Moved Permanentlyā
What the entry trigger for a scenario like what you described. If price is moving dow on high volume , like you said it could be one out of those two things. But lets say it is moving down because āsmart moneyā is pusing it down, the next bar is a down bar, by the time you realize that , thats what occurring, isnāt the move done all ready?
Or the way to enterpret and get short is to always look for a no demand bar when you have strong down move and price retraces?
Because other than that , seeing high volume all over the place in down and up bars, kinda gets confusing as to whats happening. I think thats where I get hung up.
If you have a clear high volume bar Up Bar( where price closes in the upper range) and price retraces with low volume, you see a low volume sell bar. I know that is a representation of no supply and vice versa for a sell.
But when you have a high volume bar and price does not close in the upper range and then you hava a up bar with high volume, reading the volume becomes disorientating. Iām sorry if I bombard with the questions, but for a long time I have found volume to be confusing in its enterpretation of whosās selling and buying and whoās in control.
Thank PipDaddy.
I do not use indicators, but I found an interesting s/r indicator. What do you think?
http://forums.babypips.com/free-forex-trading-systems/51732-metaneural-vsa-trade-assistant-free-innovative.html
Examined the MetaNeural s-r indicator. I do not recommend it. More powerful s-r level does not designate.
Good call on ignoring this Cica. I really only use Volume, the SR levels I draw each trading day, and fibs. Iām leery of any indicator that would predict any of these things because I personally believe they all need human interpretation.
Hey Dappa,
Sorry it took me so long to respond; Iāve been really busy the last few days.
I wasnāt able to view those pics you sent on Skype and Iām not sure why. They wouldnāt download. Maybe you can upload them here?
I canāt really elaborate more on those points as they kind of sum up what the possibilities are. Remember that if volume is out of the ordinary high, it means there is not JUST selling on a down move; there must also be buying in order for the volume to be high. This is especially true when dealing with tick volume. If there is a lot of tick activity, price had to be moving up and down a lot during that bar, which means that buying AND selling was likely going on. Because we are using tick volume and not regular volume, this is also why we donāt necessarily need to see volume increase during moves. If you are still confused, your questions will definitely be answered as you read through this thread. And like I said, ask questions all along the way.
As for the next part of your post, with regards to what are you looking for in order to enter, or what if it shoots down and you essentially miss the move. The answer to that is by looking at the background first, to make sure this down move is real and not a fake out. If it looks real, then I personally would either wait for a ND or a 50-61.8 fib retracement with higher volume to get in. If I miss the move, then so be it! I have FINALLY gotten to a point where I donāt mind when I miss moves and I donāt mind if I donāt place a trade for the day. Itās more important to me that Iām trading by using my rules and nothing else, and that Iām protecting my capital. Pete has taught me how to assess if the background says I should be looking for longs, shorts, or if I should be staying out because we are in an ugly range. This means that every morning Iām looking at where the high volume bars are to decide which of those three scenarios Iām dealing with. At first and can look like a bunch of high and low volume bars all over the place, but over time you are able to read the āstoryā that is unfolding on the chart. I am getting better at this.
As for the last part about high volume up bars, Iām not 100% sure what youāre asking. But I can say that what is more important than just the two bars you are looking at is, what is the background telling you? Strength? Weakness? Range? Once you read the background, then you can assess these two individual bars and see how they play into that scenario. No single bar or two bars, in themselves, should dictate your decision. They simply add to the story that has been unfolding in the background.
Iād love to answer more questions. If you havenāt started on the thread, start from page 1 and work your way through. Ask questions at every opportunity you have. I learned more about trading from Peteās thread(S) than I have in all of the other books, webpages, and videos I have consumed, combined.
Thanks!
Hey bro thanks for th reply! I will post a few pics for your analysis.
Multiple occurrences that MS stole the Stop Loss.
Thatās why I not tick the Stop Loss, but I call at alerts instead of SL
Hey Cica,
If I remember correctly, English is not your first language. You may want to re-word your last two posts as itās not real clear, at least to me, what you are trying to say or ask.
Thx
Hi Guys,
Will this VSA work on commodities like Gold, Silver, Crude Oil, Natural Gas ? Does anyone of you tracks these commodities ?
Thanks
I donāt trade commodities but VSA works much better in things like stocks, bonds and commodities because these are all traded on regulated exchanges which record the volume accurately.