I have been trading using a method called VSA or Volume Spread Analysis which I learned from Tom Williams, a former syndicate trader, who resides in Europe. His main theology is based on 3 principles.

1. Tracking and understanding the volume that shows the true activity of the professionals, which matters most because it is the professionals who move the market and not the retail traders.

2. Tracking the spread, which is the high/low of each bar that occurs, alerts the trader to the uptrend or downtrend of a particular price movement.

3. Follow the closing price, or price action, which tells you how the price reacts to volume and spread.

Using these 3 techniques, you can successfully trade on the right side of the market, with the professionals. Once you learn to understand these principles, you will find that your decisions to enter a trade are rationalized by what you actually see and not a false indicator.

Tom Williams improved on the studies of Wycoff, another great trader, to create a conventional software program that can be used for trading, called trade-guider. They run for around 3K. However, he does not suggest spending his money on this because he can take the principles he has learned and operate successfully without spending any money.

I trade any pair based on what I get from the daily charts, and I watch the spreads and volume when I get a trade, it’s based on the fact that I see a bar with no demand that closed on weak or no level volume professional. support in that movement. Or a move down that has no professional support. As a way to better understand VSA, you can access a car’s volume and accelerator pedal and its extent is the actual movement, the graph represents the hill your car needs to climb. You may have extremely high volume, yet your margin is low, which basically means you got a lot of throttle, but the actual motion of your car didn’t move much.