What is the VSA | Volume Spread Analysis [Kintsugi Trading] Indicator?
I created this premium volume indicator to find and place high probability forex trades as a part of the Kintsugi Trading 3LS | 3 Line Strike Strategy.
Originally developed by Tom Williams who is considered the father of Volume Spread Analysis, this tool is an amazing indicator and would make a great addition to any trading strategy.
You are free to customize all the inputs: • 30 | Moving Average-1 Multiplier (Average Volume) • 0.5 | Moving Average-1 Multiplier (Below Average Volume) • 1.5 | Moving Average-2 Multiplier (High Volume) • 3.0 | Moving Average-3 Multiplier (Ultra High Volume)
**Note The default inputs are based on my research and analysis.
Components of The Volume Spread Analysis: 1. The Volume (i.e. activity) 2. The Spread (i.e. range of the price bar) 3. The Close (the closing price of the current bar)
Volume: Volume is the activity of the frequency of transaction of the price change during a specified period of time. Spread: Spread is the difference between opening and closing price. Close: Close price tells us where the balance point is at the end of the period.
At Kintsugi Trading we strongly believe that we cannot beat or outperform institutional traders, instead, we have to trade along with them. With that in mind, we follow the footprints of smart players who leave behind trails. I have designed this indicator so that it is capable of giving signals for all the phenomena explained in Tom William's book.
This Indicator is successful at visualizing the following phenomenon:
I have some questions for this indicator. Please, explain.
1. How do we identify the signal from this indicator ? Is it based on the color of the volume bar ? I don't see any text or other information (symbol) when ultra high volume or other signals occur (Buying/Selling Climax etc.).
2. Any plan to add signal of Up Thrust in this indicator ?
2. Can we combine this VSA indicator with 3 LS strategy ?
Thank you
Koko
koko_harjanto
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@KintsugiTrading For questions 1 and 3 have been answered your description above. Sorry, I didn't read it carefully.
It ended up being so good we decided to break it out and create this. Although volume is great, specifically measuring volume as it relates to the average like this indicator, we don't think you would want to use it as a stand-alone signal. It's just one piece of the puzzle. Perhaps getting a high-volume red bar at a point of resistance or something like that would be very powerful. This indicator is unique because it defines what a 'big' or "small' volume bar is so you know whether the volume is meaningful.
If you have any thoughts or ideas please don't hesitate to reach out - we are all better off trading together!
- Kintsugi Trading
poo4u30
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Great Indiator. Although what does the colour signifies...? Multipliers.. But there are 03 multipliers and 04 colurs..............?
Thank you for sharing this VSA indicator.
I have some questions for this indicator. Please, explain.
1. How do we identify the signal from this indicator ? Is it based on the color of the volume bar ? I don't see any text or other information (symbol) when ultra high volume or other signals occur (Buying/Selling Climax etc.).
2. Any plan to add signal of Up Thrust in this indicator ?
2. Can we combine this VSA indicator with 3 LS strategy ?
Thank you
Koko