I have been trading using a method called VSA or volume difference analysis that I have learned from Tom Williams, a former syndicated trader living in Europe. His main theology is based on three principles.
1. Tracking and understanding the volume that shows the actual activities of professionals, which is most important because professionals move the market, not retailers.
2. After the difference, which is the highest / lowest value of each bar present, this warns the trader of an increase or decrease in a certain price movement.
3. Closing rate or price function that tells how the price reacts to volume and difference.
Using these three techniques, you can successfully trade with professionals on the right side of the market. As you learn to understand these principles, you will find that your decision to trade is rational based on what you actually see, and not a false indicator.
Tom Williams stepped up research on Wycoff’s second major trader to create a traditional software that could be used for trading, called a trade-guider. Which takes about 3K. However, I do not recommend that you spend your money on this b / c, you can take the principles you have learned and trade successfully without it coming out of your pocket.
I switch to any pair based on what I get from my daily charts, and look at the differences and volume when I write a trade, it’s based on the fact that I see either a non-demand bar that closed due to low volume or not a professional. support this movement. Or a downward transition without professional support. To better understand VSA, you can use the volume and accelerator pedal in your car, and what you spread is a real movement, the diagram represents the hill your car needs to climb. You may have a very high volume, but your spread is small, which basically means that a lot of gas was used, but the actual movement of the car didn’t move far.