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I read about volume spread analysis recently for stock markets. I have been wondering how much is forex similar or different? Basically is there such a thing as market makers 'accumulating' or 'distributing' a currency, is there ever a restricted 'floating supply' that big players try and grab what's left of or is there just so much currency sloshing around ?
The problem is that there is no central data for the forex market. So you do not get the proper data to determine whether there is accumulation or distribution etc.... Esignal provides you the quotes and data of most of the major banks. But when a trade occurs we really do not know if it is $10M being bought or sold or if it is only $1M. Remember the forex market is a trillion dollar market and is virtually a 24 hour market. I have used VSA via the Tradeguider program to trade the forex market. I have mixed results but overall I have been profitable. I do think that VSA works but it is just not accurate with the forex market, at least in my opinion. I hope this helps.
Yes what lca said. There are no reporting requirements for FX so trades are not reported (no volume onfo). Volume Spread Analysis becomes "Spread Analysis" though some people will tell you that you can use the (hugely) incomplete & inaccurate 'tick' information provided by people like Esignal as a proxy for volume.
To answer the other part of your question. Yes accumulation and distribution goes on with many trillions traded each day (last estimate I saw was7).
Tick volume works fine if you have a decent data feed. Esignal is good, Dukascopy is good, and for a free MT4 broker, ODL has pretty decently accurate tick volume.
Even on the crappy feeds like IBFX, etc. tick volume still pretty much works but there are a few differences.
I have some Tom Williams VSA club vids saved if you want to PM me with your google chat ID or Yahoo chat I I'll file transfer some of them to you.
i like this guys free videos on volume analysis - i am finding that free education is better than the paid for stuff - for some reason Newsletter - Week 1 - TradersCode.com
Platform: NinjaTrader (It's a love/hate relationship)
Trading: CL, TF, 6E
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Agreed, don't buy his Wyckoff Volume or Wyckoff Candle Volume DVDs. I found them to be extremely basic with no more information than is already available in free webinars. For the price, I was was expecting much more. They may be useful to an audience with absolutely no experience with volume, but if you have even a basic understanding of volume analysis, you won't learn much. His boot camp DVDs while still with tradeGuider were much more substantial. TG has since replaced those with their VSA master class though.
hawkeyetraders.com is another way of looking at VSA. Simple system, friendly people and good education. They recently have made very nice improvement to their system and will soon add Ninjatrader platform to their offering.
If you guys have any questions on this method then please speak up. I spent several years trading these techniques. VSA is a good solid way to understand supply and demand via the chart. This is especially useful in the futures market.
