Complexity Game and VSA
The VSA is not outdated. But we need to update a little bit our knowledge.
1. The existence of HFT (High Frequency Traders). There are some HFT that are predatory towards the big institutionnal volume.
2. The big institutionnal volume prefers to go to dark pools, instead of placing orders at the stock market. If they do the HFT are so efficient that they are eaten alive.
3. In Forex there is a new emerging pattern. This is again accumulation and distribution but not between little traders and institutional volume but between market makers and retailers.
This can explain some part of the the short term volatility.
The game now is more difficult than ever. I just keep in mind the nice stock charts when the VSA was the ultimate weapon. Today we have a big complexity game between:
- market makers as liquidity providers,
- institutionnal volume
- high frequency traders
- algorythmic traders
- retail traiders
Some new patterns do emerge. The old patterns still work but it is not the same.
For example look at the chart of the Bitcoin digital currency:the
http://bitcoincharts.com/charts bitcoin currency.
For someone who is aware of the VSA analysis the picture was cristal clear. Look at the volume increase in up bars when the market was going higher, then a market baloon developped. Then the market went lower and there was an increase of volume at every downwards trust.
Comments
have you look at algofutures.com? i am sure they must be looking at order flow activity to make their decisions.
best regards.
-guandi
Thank you for the link. I watched the video material. In fact those kind of results can be achieved using the price alone. That is why I wrote them and asked some questions. It looks very interesting.
what questions do you ask them? do share if they reply if possible. i am interested in how they are doing it too.
thanks.