Trading Volume Spread Analysis

Learn the lost art of VSA or volume spread analysis to help transformthe way you trade the forex markets. Learn to follow price action todetermine when to buy and sell. Most people when it comes to tradingfollow every indicator known to man such as MACD, Bollinger Band,M&S's and RSI's. I tell you it becomes a bit overwhelming at times.However, the fact is that back in the early days traders such as JessieLivermore and Richard Wycoff, had none of the such. They read thecharts following the price action and volume. It wasn't until the late70'-80's that the notion that indicators where introduced as additionaltechnical tools to help traders monitor prices activity.However, thefact it that indicators are lagging. The success with the VSA method isthat your looking to follow the volume,whether tick volume or not isstill a relevant substitute to utilize in determining when professionalmoney is buying or selling. The spread of the bars also gives youinsight into the bullishness and bearishness of the smart money.Finally, the closing price give you a look into what actually occurredon the previous bars. by analyzing all that activity you can determinethe price direction of a particular currency pair. Using volume spread analysis, actually originated from Richard Wycoffmethod of studying price action and further more developed by a guynamed Tom Williams. When trading using the VSA method you aiming todetermining the accumulation phase, which occurs whens occur a longbearish trend. Smart money in essences buy on lower levels, there inthe business of making profit so they wait until supply has reached itsexhaustion point. What happens next is they absorb the selling from themarket, if the volume is high enough it actually knocks the marketsideways. There strategy is then to accumulate at lower levels, whichcan be identified by low spread and low volume near oversold ares.After, they accumulate most of the pair, they naturally test the marketto determine if any more supply exists in the market. If no isapparent, they then begin to mark the price of a pair up.One the pairis marked up, it begins to become oversold, the smart money isbeginning to move out of the distribution phase. They then move to capthe market using a strategy called an upthrust. This is how they put acap on the market and after an upthrust the pair usually lags aroundthe overbought area before dropping on no demand.They begin to finishthe distribution around the overbought area before a pair falls offbecause of no professional. Learn more on VSA Trading on my website http://tradingvsa.weebly.com/

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