Today I would like to analyze I think the most common mistake amongst traders – opened trade at the top of the market, right before price reversal. The professional knows people react to the two fears – the fear of losses and the fear of missing out, and so trades with this in mind.
After substantial rises, the ‘herd’ will become annoyed at missing the up-move, and will rush in and buy. This includes traders who already have long positions, and want more. The problem is that usually smart money is selling at this moment. They do not have to wary that this selling will put the price down, because they have plenty buy orders coming into the market (from weak holders) which will support the prices (therefore volume is high). Without interest in higher prices from professionals, price will inevitably fall. This will usually happen after up-thrusts: a wide spread up during the bar, accompanied by high volume, to then close on the middle or on the low.
- At the time of entry background is strong – o’k
- Dynamic trend turned from red to green – o’k
- Weak signal at the top of the market without strong signals at this price level (In VSA it is an up-thrust) – Not o’k
- The trade is opened when the price moved too far after trend changed – not o’k
During upward trend it is better to wait a reaction to this trend and enter the market after strong signal which would suggest that the reaction is over and rally will be continued.
Analytical Trader – VSA 4.10 is now released! In the older version, you might have noticed that multi-timeframe signals were rare – this new version looks for MTF signals in an entirely different way, which means they are now much frequent, yet still quite accurate. There are also improvements in the general supply/demand detection algorithms, so more market reversal signals are shown. The timeframes Daily/Weekly and Monthly were further optimized, so that the indicators work better in those now. If you still haven’t tried the demo, use the form on our website! If you have, you can always request another demo by email to test out the new updates.
In this USDCAD chart, minor demand and minor supply on higher TFs can be seen by the blue open circles. Other signals such as No-Demand/No-Supply are also now shown as Multitimeframe signals.
The low-volume rally I referred in my last post was indeed weakness, and the prices quickly rejected the trendline. Since there wasn’t a bullish test or strength above the trendline, there was no confirmation; the strong signal was formed below the trendline, which means it could be buying from traders buying at the broken trendline (in analogy with the commonly seen demand signals near an important support). The prices continued to drift downwards, and the market is now rallying, yet again on low volumes. I only kept the older trendline for reference, as there’s another one validated with the last high, which is the one that should be used.
Eventual shorts should be taken nearer to the trendline, though with the recent strong signals at this price level, I want to see weak signals with significant volumes first to prepare for a short trade. On the other hand, a break of the trendline with good volume would be bullish, given the strength behind; the background should also change accordingly.
Hi my name is Rob Taylor and I am a professional Forex trader and mentor. I teach new and experienced traders how to make money consistently from the markets, by trading with knowledge and understanding.
So what am I doing here you may ask. Well I first came across Leo when he contacted me through Forex Factory about the possibility of creating some VSA related content on my blog. Now I am not a VSA trader myself, but the content he proposed was of high quality, and I felt that it could a benefit to my users, so I decided to publish the content on my site.
After publishing the content I decided to have a look at Leo’s VSA indicator. As I said I am not a VSA trader, but I do use volume as a confirmation on some of my trades. Now a lot of traders say you cannot use volume in Forex trading, as its only tick volume, and it’s not reliable. Well let me tell you here and now, that they are wrong. If you know how to read and understand tick volume, then it’s a really useful tool you can use in your trading.
A lot of traders really struggle with reading and understanding volume. I have spent many hours teaching some of my students how to read volume, and some of them find it very hard to read and understand. So when I had a look at Leo’s VSA indicator I could see that it reads and understands volume in a very similar way to the way I read and understand it, although it is far more advanced than anything I could physically see by looking at the volume data. So I decided to give it a try with the intention of introducing it to my students that were still struggling to read volume.
After using it and testing it myself, I could see that it was a very good tool for analyzing the tick volume data, so I decided to recommend it to my students, and all but one of them that have purchased the indicator has agreed, that it has really helped them to better understand volume, and how to use it in their trading.
I trade pure price action, so I am not a big fan of indicators, but I don’t really see this as an indicator as such – it deciphers tick data and presents the information directly on the chart for the user to see where the buyers and sellers are coming into the market. It also shows no supply and no demand areas too, which is also very useful in my opinion.
The good thing about the VSA indicator in my opinion is it does not just show buying and selling volume for individual candles, it also analyzes multiple candle formations to derive its results, and it has a strength indicator built in, so you can also see when the market is strong or weak, which is a very useful addition. I also find the built in alert system very useful, as you can just set that up to alert you when certain conditions are present on the chart. For example selling in a weak market, or buying in a strong market. So you don’t have to keep staring at the chart all day.
Now you are probably thinking that this review has been put together by myself and Leo to sing the praises of his indicator, but let me tell you this: I have written this review based on my own experiences, and Leo in no way has prompted me to do this, and I am not getting any payment for writing this review. I am merely trying to give an unbiased view, and an honest opinion of his indicator, because I know how hard Leo has worked on this, and he has produced a great product in my opinion, and he deserves some recognition for that.
Rob Taylor is a professional Forex trader and mentor, and runs a Forex training course Hi my name is Rob Taylor and I am a professional Forex trader and mentor. I teach new and experienced traders how to make money consistently from the markets, by trading with knowledge and understanding.
So what am I doing here you may ask. Well I first came across Leo when he contacted me through Forex Factory about the possibility of creating some VSA related content on my blog. Now I am not a VSA trader myself, but the content he proposed was of high quality, and I felt that it could a benefit to my users, so I decided to publish the content on my site.
After publishing the content I decided to have a look at Leo’s VSA indicator. As I said I am not a VSA trader, but I do use volume as a confirmation on some of my trades. Now a lot of traders say you cannot use volume in Forex trading, as its only tick volume, and it’s not reliable. Well let me tell you here and now, that they are wrong. If you know how to read and understand tick volume, then it’s a really useful tool you can use in your trading.
A lot of traders really struggle with reading and understanding volume. I have spent many hours teaching some of my students how to read volume, and some of them find it very hard to read and understand. So when I had a look at Leo’s VSA indicator I could see that it reads and understands volume in a very similar way to the way I read and understand it, although it is far more advanced than anything I could physically see by looking at the volume data. So I decided to give it a try with the intention of introducing it to my students that were still struggling to read volume.
After using it and testing it myself, I could see that it was a very good tool for analyzing the tick volume data, so I decided to recommend it to my students, and all but one of them that have purchased the indicator has agreed, that it has really helped them to better understand volume, and how to use it in their trading.
I trade pure price action, so I am not a big fan of indicators, but I don’t really see this as an indicator as such – it deciphers tick data and presents the information directly on the chart for the user to see where the buyers and sellers are coming into the market. It also shows no supply and no demand areas too, which is also very useful in my opinion.
The good thing about the VSA indicator in my opinion is it does not just show buying and selling volume for individual candles, it also analyzes multiple candle formations to derive its results, and it has a strength indicator built in, so you can also see when the market is strong or weak, which is a very useful addition. I also find the built in alert system very useful, as you can just set that up to alert you when certain conditions are present on the chart. For example selling in a weak market, or buying in a strong market. So you don’t have to keep staring at the chart all day.
Now you are probably thinking that this review has been put together by myself and Leo to sing the praises of his indicator, but let me tell you this: I have written this review based on my own experiences, and Leo in no way has prompted me to do this, and I am not getting any payment for writing this review. I am merely trying to give an unbiased view, and an honest opinion of his indicator, because I know how hard Leo has worked on this, and he has produced a great product in my opinion, and he deserves some recognition for that.
Rob Taylor is a professional Forex trader and mentor, and runs a Forex training course http://www.priceactionforextrading.co.uk/forex-training-course/
