Need help with backtesting VSA conditions

Fran8

Active member
212 1
Hi everyone

I have gone deep into studying VSA since Im a firm beliver that the relationship between price and volume is what moves the market.

The problem is that when you read books like "Master the Markets" written by Tom Wlliams you end up with more questions than answers.

I have decided to try to find the answer in a more scientific way by backtesting, the problem is that I use Tc2000, It does not have backtesting and to be honest even if it had I do not have programming knowledge.

So if you could backtest the following I believe that it will be very veneficial for all that are confuse and interested.

What I would like to backtest is the following:

1-UP and C>O and C>MID and V>V1
2-UP and C>O and C>MID and V<V1
3-UP and C>O and C<MID and V>V1
4-UP and C>O and C<MID and V<V1
5-UP and C<O and C>MID and V>V1
6-UP and C<O and C>MID and V<V1
7-UP and C<O and C<MID and V>V1
8-UP and C<O and C<MID and V<V1
9-DOWN and C>O and C>MID and V>V1
10-DOWN and C>O and C>MID and V<V1
11-DOWN and C>O and C<MID and V>V1
12-DOWN and C>O and C<MID and V<V1
13-DOWN and C<O and C>MID and V>V1
14-DOWN and C<O and C>MID and V<V1
15-DOWN and C<O and C<MID and V>V1
16-DOWN and C<O and C<MID and V<V1

Up means close above previous day
Down means close below previous day
C means close
O means open
Mid means mid point between high and low of the bar
V means todays volume
V1 means yesterday volume

Above you can find all the possible convinations during up bars and down bars.

The backtesting will show how it was able to close in the next day, two days and three days looking forward after the above conditions happened.

Example:

Lets take condition 1-UP and C>O and C>MID and V>V1

what I would like to know is if after this conditions the % of times that it closed up or down the following day, two days and three days after.

To be a valid backtest it will have to be backtested with the S&P 500 and lets say 50 ramdom stocks that have a minimum volume of lets say 50,000 shares daily and a minimum price of 15.

Thanks for the help in advance please fell free to ask any questions
Kind regards
 

MajorMagnuM

Legendary member
9,284 887
Williams work was altererd by his daughter, from what i have read to capitalise onthe proliferation of volume based analysis around the growth in the retail cash cow market. I saw a bunch of vids where the people frontrunning this were wheeling him out in seminars. It all had a slightly inappropriate air about it.
That does not alter the fact that how much of something is bought at a price is useful.Williams states in his book tick vol is useable proxy for real vol data. I dont believe that is true. the only forex volume figures i can get , i would not use to take a trade. You must have noticed by now how the squat barsetc dont really cut it.
If you are trading forex, i would suggest researching L raschke who has some interesting volume alternatives
 

Fran8

Active member
212 1
Williams work was altererd by his daughter, from what i have read to capitalise onthe proliferation of volume based analysis around the growth in the retail cash cow market. I saw a bunch of vids where the people frontrunning this were wheeling him out in seminars. It all had a slightly inappropriate air about it.
That does not alter the fact that how much of something is bought at a price is useful.Williams states in his book tick vol is useable proxy for real vol data. I dont believe that is true. the only forex volume figures i can get , i would not use to take a trade. You must have noticed by now how the squat barsetc dont really cut it.
If you are trading forex, i would suggest researching L raschke who has some interesting volume alternatives
I mainly trade stocks,

I still believe that vsa is a valid approach, I think that wyckof looked at bases and how tops formed vsa is more a study bar by bar
 

Steve

Well-known member
437 108
I mainly trade stocks,

I still believe that vsa is a valid approach, I think that wyckof looked at bases and how tops formed vsa is more a study bar by bar
VSA does not work and nor does it's modern incarnation,Tradeguider.

MM was right, it's all show. The Wycoff and Williams stuff in it's original form had merit but back testing VSA will prove one thing, you will be just as successful tossing a coin.