Tom Williams, volume spread analysis and Tradeguider

This is a thread to discuss the volume spread analysis methodology of Tom Williams and the TradeGuider software. I hope there are enough TW fans on T2W to keep this going.

There are various references to these topics on T2W, hopefully this thread will give the VSA enthusiasts to a single meeting place.

Please let's stick to the topic, this thread is not to discuss indicators, or broader price-volume issues, for which there are other well-established threads. This thread is to discuss Tom Williams' methods.

Go on, I will start you off in your discussions.

He has three favourite sayings:~

Saying No. 1 = "Futures are Death".

Saying No. 2 = "Currencies are Very Dangerous, ...very..VERY.. dangerous".

Saying No. 3 = "When you see weakness in the background.....Keep Shorting...Just Keep Shorting....."

I bought the Tradeguider (EOD) program years ago when it was called VSA. I also bought Tom Williams book.

I found the book interesting but the software as useless as it was expensive. The VSA indicators, although looking fantastic in retrospect, do not appear in real time. In case I do not make myself clear, a triangle or oblong shown on the chart on, say, Wednesday is not actually placed there by the software until Thursday or Friday. Similarly, indicators 'that did not get it right' disappear. When you read the S&C advertising blurb about the quality of the indicators take it with at least one bucket of salt - preferably 2.

If I am doing something wrong and there is anyone out there who knows how to use this program to make profits I shall be delighted to hear from them, re-load the program and join in the discussion.

I am not holding my breath.

Have a look at this:

http://www.trade2win.com/boards/trading-systems/9407-volume-spread-analysis-vsa.html

Socy,

I've never heard Tom say any of those things.

Tut, and since you used to give out his book I thought you were one of Tom's followers.

Guess you leaders don't follow, eh ?

By the way, the latest version of his book has many of the typos and errors of the first edition corrected.

The Tradeguider software's 'signals' aren't meant to be traded, but instead show areas of activity, based on VSA (Wyckoff) principles that may be interesting. Many 'don't amount to a hill of beans', its up to the trader to determine trend, support, resistance etc.

IMHO, the book is great for getting you to think about buyers and sellers activities, instead of patterns and indicators. Although I don't agree with everything he writes, I highly recommend it.

Porks

I know this observation was made about the old VSA. I must admit I have not noticed indicators disappearing but then I haven't used it for that long, so I will keep a record from now on just to see if this is still the case.

I look at TG as a learning tool, not as a black box. After all this is just price volume analysis. So if one has mastered the principles one should be able to trade off any software that shows high, low, close and volume.

I had a chat with Tom Williams recently and he mentioned that he believes TG people have gone a bit over the top: they have created about 400 supply-demand indicators! One of my goals in this thread is to identify 5 or so most reliable supply-demand formations so one can create a viable trading plan using them.

Another objective of this thread is to define some of the supply-demand formations which are reasonably important but (I feel) are not well defined either in the book or in TG.

OpenMind,

If you use the indicator scanner you will also find the same appearance / disappearance tricks.

Openmind,

Here's a classic VSA as I understand it :

Short entry:

Sign of weakness (High vol up bar after a recent climb in price) followed a few bars later(after a small pullback) by an upthrust (test)


Exact parameters depend on timeframe, S and R, etc. Tom's focus is on bars, whereas it might help to merge bars together(or look at the higher timeframe) to confirm the supply/demand pressures

Also similar to a low volume test or a 'W' pattern(inverted)

You'll find many that work and many that don't work, but for me it's the activity that causes this to form that's interesting.


Porks