vsa indicators for mt4. The VSA indicator reads the market like an open book.
Volume Spread Analysis (VSA)- is one of the methods of analysis by trading volumes in combination with the shapes and sizes of candles on the trading chart.
This method of analysis makes it possible to identify the activity of the so-called "professional" or "smart" money, that is, to detect the current market mood in a timely manner and make a market entry in the direction of the game of large participants. After all, it is the imbalance of supply and demand that creates price movement in the market.
To facilitate the task of conducting such an analysis, VSA volume indicators have been created. And today we will consider the description of the best of these algorithms.
What does the VSA volume method imply?
Surely you have all been in such a situation – you follow risk management, trade exclusively according to the rules of the chosen strategy and do not even give in to emotions, but at the same time you suffer losses quite often. What is going on? Maybe you are missing some important point?
Most likely it is! And the omission is in such a factor as volumes.
It is very important to take into account the volumes in the trading process, since their analysis allows you to identify the mood of large market participants, and follow them when opening deals. Today, there is already a whole separate type technical analysis, which deals with the study of market volumes in combination with the analysis of candlestick charts. This technique is called VSA.
A few years ago, traders had to manually deal with this type of analysis, but at this stage, some of the functions can be taken over by VSA volume indicators. Let's immediately go in the right direction, and for this we recall a little of the theory ...
Let's start with the fact that most especially beginner traders understand VSA as simply histogram analysis of volumes, and this is not entirely correct.
In this technique, the candle spread is this is the candle range between high and low. You probably noticed that when visiting specialized forums or when studying analytics, phrases such as, for example, are often encountered. short candle - false signal"," do not open a deal, as the price is too spread out "and the like. These are not subjective statements, but conclusions drawn on the basis of the VSA method.
VSA analysis. About bearish/bullish volume
So, the VSA volume technique analyzes the following:
spread, which is the full price range of a candle from its lows to highs or the width of volatility, that is, indicates how actively trading is going on in the current period; bar opening and closing prices, that is, the final decisions of market participants regarding prices; trading volumes in conjunction with closing prices and spread dynamics, that is, it analyzes in which part of the bar they close.The VSA methodology itself, when applied with indicators, includes the analysis of such models:
- characteristics of bars (closing prices, spread, volumes);
- price formations ();
- market phases (figures in parallel with combinations of bars). An example of typical combinations of the VSA technique can be seen in the figure below.
Theoretically, the supply and demand volumes must match, otherwise the orders will not be executed. For example, the greater the demand, the faster the cheaper bids are used, that is, the market should grow. When the equilibrium point is reached, large offers will put pressure on the market in a downward direction, that is, there will be an increase in sales.
The more traders sell, the more bearish the market becomes.
All this allows you to determine the VSA volume indicators.
What do VSA volume indicators show to a trader?
In other words, the VSA volume indicators for MT4 and 5 allow you to catch moments when large volumes intervene in the market, giving strong price impulses.
It is at such moments that even small market participants can make good profits. There is a whole collection of such algorithms that take into account almost all known combinations of candles and visually indicate the height and color of the histogram right moments market entry.
But the whole collection of VSA indicators for MT4 and MT5 is not of interest to us, we will consider the description of the two best and most demanded algorithms today.
Description of the volume indicator for MT4 - VSA WSD HISTOGRAM
As already mentioned, today for MT4 and MT5 there is a whole collection of algorithms for Volume Spread Analysis, among which there are many simple versions that are not worth recommending. We propose to consider the description of one very interesting instance - the VSA WSD HISTOGRAM indicator.
At first glance, the motley markup of this algorithm shocks many, because the main goal of Volume Spread Analysis adherents is trading on clean charts. However, do not jump to conclusions.
The main point is that this algorithm for MT4 and MT5 does not use any additional formulas in its calculations, and it uses all its “painting” solely to make traders better perceive signals.
So, in the indicator's histogram, each bar is a spread, which is indicated in the information board on the right with white numbers. Diamonds above the bars are also not for beauty. So gray diamonds are indicators of neutral market sentiment, red diamonds - bears are stronger, green diamonds - bulls prevail.
In addition, the indicator description, which we are now considering, measures the length of the shadows of the candle. On the histogram this information provided by red and green columns. Directly in the information board you can see only the value of the current bar - the "wick" variable.
so precious information should not be ignored., since in most candlestick formations it is the proportions between candlestick bodies and their shadows that are taken into account, and it is very inconvenient to measure them manually, and besides, it takes a long time.
Briefly about the settings of the VSA WSD HISTOGRAM volume indicator
Regarding the settings of this algorithm for MT4 and 5, which can be downloaded here, they are quite simple.
The "ShowText" variable either allows or prohibits displaying text information on the chart screen, the value of "MA_Length" is responsible for the frequency of the moving average (default 100), which measures the average value of the spread, and the remaining parameters are the color setting.Description of the volume indicator - VSA Better Volume
As we have already noted, spread analysis is the most important component of the VSA method, but it loses its meaning without understanding the dynamics of volumes. This is understandable even intuitively, because the candle range on the charts can be seen immediately, but the most significant information regarding the motives of the market crowd and large participants can only be obtained from volumes.
It is for these purposes that the developers created the VSA volume indicators, one of these tools is the algorithm, the description of which we will now consider - Better Volume.
This indicator, which you download above in our collection, has standard data depending on the patterns that appear, certain colors.
On the chart, the indicator looks like this:
During the appearance of a bearish candle on large volumes, the bar is assigned a white color. Such situations, as a rule, arise at the end of a bearish trend, that is, at the moment when professionals connect to sales under the influence of emotions or when stops are massively triggered by buyers. In addition, white bars may be evidence of the emergence of new downtrends.
Here, red bars are the antithesis of white ones, as they form on bullish candles with really high volumes.
As statistics show, such patterns are formed on currency pairs with the same frequency both at the moment of the trend's inception and when the trend ends.
When the indicator draws a green bar, it means that there was a large flat volume on the market, that is, there was a very low spread for the corresponding candle.
This formation on the market is one of the most difficult, since false signals often appear in history, this is the first time, and the second moment of this kind of phenomenon may not be related to the trading of large market participants, but be a banal “news chaos”.
Yellow bars are typical for low volume candles with low spreads. They can most often be observed during the "night flat", but if such a formation is formed during the period when the main financial markets are operating, then this indicates the end of the trend. That is, the yellow bar indicates that even the crowd is no longer interested in this movement.
Well, one more bar, which gives out the Better Volume indicator for MT4, the description of which we are considering, is the magenta formation.
But from practice it is clear that such a phenomenon is so rare (almost never) that it can even be neglected.
As you can see, VSA volume indicators allow traders to clearly identify price pivots, which in general increases the efficiency of the trading process. At the same time, experts recommend in their strategies not to use such algorithms on their own, but to involve other indicators in parallel.
About the VSA method, what is important?
The Volume Spread Analysis method, which reveals manipulations and smart money transactions, is rapidly gaining popularity, but if 5-6 years ago traders studied the market on their own, today the VSA indicator can take over some functions.
To immediately direct the thought in the right direction, let's recall a little theory. Unfortunately, many novice traders understand VSA as simply an analysis of the histogram of volumes, which is not entirely true. Of course, it is the most important link in this technique, but the spread of the candle plays no less important role here.
In this case, the spread is not the difference between the ask and bid prices, but the candle range from High to Low. When reading analytics on specialized forums, you can often come across phrases like “a candle is short - a false signal”, or “the price was too much smeared, it is reasonable not to open a deal”. All these are not subjective opinions, but conclusions based on the VSA.
VSA indicator measuring candle spread
Currently, there are several similar algorithms (even a novice in programming can create them - just subtract the minimum from the candle high), so we will not recommend the simplest versions today, instead, consider one interesting instance called VSA WSD HISTOGRAM.
The motley markup is a little shocking, since the main goal of Volume Spread Analysis supporters is trading on a clean chart, but one should not rush to conclusions, the fact is that this VSA indicator does not use any additional formulas, and all this “painting” is used only for the best pattern perception.
Each bar in the histogram is the spread, it is also indicated on the right in the information board (in white numbers). Gray diamonds above the bars indicate the neutrality of the situation, while green and red diamonds, on the contrary, show the so-called divergence:
- if a green diamond appears, this is a bullish signal;
- if a red rhombus appears, the bears are stronger.
In addition, the VSA WSD HISTOGRAM indicator measures the length of candlestick shadows, on the histogram these values are represented by green and red bars, and in the information board the EA shows only the values for the current bar (opposite the wick variable).
You cannot disable this feature, but if it overloads the chart, you can always reduce the thickness of the lines in the settings. But we do not recommend ignoring such valuable information, since in many candlestick patterns the proportions between the body of the candle and its shadows are taken into account, and it is very time-consuming to measure them manually.
As for the rest of the settings, there is nothing to tell here, using the ShowText variable, you can enable / disable the display of basic text information, and the MA_Length parameter is responsible for the period of the moving average that measures the average spread (by default, its period is 100). The remaining parameters are for adjusting the color scheme.
VSA indicator for volume analysis
As already noted, spread analysis is an important component of the method considered today, but without studying the dynamics of volumes, it loses all meaning. This is even intuitive, because the range of the candle on the chart is visible to the naked eye, and the most valuable information about the motives of large speculators and the market crowd can only be obtained from volumes.
Especially for this purpose, the Better Volume indicator was created, which assigns certain colors to the bars of the standard Volumes depending on the pattern that has appeared. Currently, this VSA indicator works correctly in all versions of the MetaTrader terminal (mq4 and mq5 versions have been created), and the latest modification is shown on the chart as follows:
White color is assigned to the bar when a bearish candle appears on large volumes. A similar situation can often be observed at the end of a bearish trend, i.e. when non-professionals are connected to sales under the influence of emotions, or at the moment of mass triggering of stop orders from buyers. Also, a white bar may indicate the emergence of a new downtrend.
The red bar in its meaning is the opposite of the previous one, as it is formed on bullish candles with a large volume. According to our observations, the listed patterns are formed on currency pairs with the same frequency both at the beginning and at the end of the trend.
If the VSA indicator drew a green bar, it means that a large volume passed in the market in a flat, in other words, the corresponding candle had a low spread. This is one of the most complex patterns in every sense of the word, because, firstly, it is not uncommon to see false signals in history, and secondly, such a phenomenon may not be associated with the activities of large market operators, but with the usual “news chaos."
Yellow bars are typical for candles with a small volume and low spread, as a rule, they appear during the “night flat” (a period of low trading activity), but if such a pattern appeared during the operation of the main sites, it may indicate the end of the trend (even the crowd lost interest in the movement).
And the last pattern that identifies the VSA indicator is represented by a magenta bar on the volume histogram. The author claims that this signal appears on a series of candles with a large volume, but practice has shown - this phenomenon is so rare that it can be neglected.
Before writing the article, there were plans to consider additionally the VSA signal indicator (with arrows on patterns), but in the process of testing several algorithms, it became obvious that they are useless, and instead of helping the beginner, they will completely confuse him.
This is due to the fact that the provisions of the "analysis of volumes and spreads" are not a guide to action and are not supported strict rules, much here depends on the general situation that has been observed over the past days (and even weeks). In other words, first of all, it is necessary to take into account the context, and only after that, look at how a particular pattern fits into the overall picture.
An example of such a situation is the monthly hype on foreign exchange market before and after the publication of Non-Farm Employment Change statistics. Of course, the patterns formed on such news are often false, moreover, even after a few days the market may give an "echo".
An experienced trader in this case understands the situation, but the VSA indicator does not, since it is a primitive algorithm, it is not even a neural network trained taking into account similar bursts in the past. Therefore, we recommend that you soberly evaluate the capabilities of such tools.
And one more important nuance, which should have been mentioned at the very beginning, is related to the type of volume. The fact is that the MetaTrader4 terminal uses tick data, i.e. the bar of the Volumes histogram does not reflect the real amount of volume for all transactions, but simply the number of price changes.
Unfortunately, this circumstance somewhat distorts the result of the analysis, since the boundaries between small transactions and transactions worth millions of dollars are blurred. This problem can be solved very simply - by importing data on real volumes from the futures market. Source:
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In principle, the capabilities of standard volume indicators should be enough for work, especially since tick volumes quite reliably reflect what is happening on the market. But there are a lot of custom developments that can be more convenient to work with. Today we will consider them.
These algorithms allow you to get real data on volumes from the Chicago Stock Exchange in MT4 (in the terminal you can get only tick volume). Until September 2013, they were provided free of charge and did not require activation.
At the same time, you can download the VSA indicator from the site http://my.clusterdelta.com/ even now. They are installed in trading terminal and MetaTrader will see them, but when you try to start you will see a message that the user is not authorized. This is a consequence of the fact that access to indicators is not paid.
We note right away that you will receive the usual tick volume. For clarity, let's add the SonicR VSA indicator and the standard Volumes tick indicator to the chart. As you can see, they are exactly the same, the only difference is in the colors of the histogram columns.
The settings can be left unchanged. Regarding the colors of the histogram bars:
- gray color indicates a flat phase, there is no price movement as such, it fluctuates in a small range and it is not worth trading at this moment;
- blue - the volume is growing on these columns, but the candles do not have a large spread. There is parity between bulls and bears, major players are still out of the market, and what you see is the result of an approximate equality of forces;
- red - indicates that a large player has entered the market, betting on a fall. Volume rises sharply, and the candle on the chart is bearish;
- green - a major player has entered the market, but the stake is already on growth currency pair. The candle on the price chart is bullish.
Compared to the standard one, this VSA indicator is good because it allows you to assess the situation on the market by the colors of the histogram bars. As for the settings, they can be left unchanged.
Unlike the previous one, this VSA volume indicator is sold for $249, a rather big amount, let's see what the author offers for this money.
The author of the indicator, Leonardo Barata, will provide an indicator for this amount that will look for pivot points and mark them on the chart. The market strength scanner is used as a filter. You can find the indicator through the market in the terminal itself, where you can also download a demo version of the algorithm.
You won't be able to work with the indicator, but you can check it in the tester. How it works in real time can be judged by the video from the developer.
As a result of the check, it was found:
- it does not redraw like many other forex indicators;
- there are indeed turning points on the chart. This happens with a delay of a couple of candles, so by this moment part of the price movement has already passed, it is not worth entering the market based on the readings of this instrument alone.
We do not undertake to judge whether it is worth $249, but it fulfills its function - it marks the points of a potential reversal of the chart. Customer reviews in the market are positive, so the tool is worth it.
The network has a similar indicator called Dots, it simply shows the trend based on the angle of the price relative to the horizontal line.
The Bar Dots indicator works in a similar way, but it does not take data from the price itself, but uses tick volumes. A green circle indicates an uptrend, a red circle indicates a downtrend, and gray dots indicate a flat.
It can only be used as an auxiliary tool. It is freely available, so anyone can download it for free.
The tool called Wick Spread Divergence differs from those already described in that, in addition to working with volumes, it measures the length of candle shadows. The signal to enter the market is set as a colored rhombus above the histogram column.
The indicator shows:
- the indicator window itself indicates: the value of the range of the candle, the size of the shadows, as well as the divergence;
- the upper and lower shadow of each candle, the green part of the column shows the upper shadow, the red part shows the lower one. The histogram bar itself is equal to candle spread;
- The diamond above each column indicates the state of the market. Gray color recommends to refrain from trading, green rhombus - it is worth taking a closer look at purchases, red - priority should be given to sales.
In general, the VSA WSD histogram indicator is useful, but it gives a lot of false signals, so it is better to use it as an additional filter in trading strategy.
The histogram itself is an ordinary tick volume, like two drops of water it coincides with the standard tick volume indicator Voumes. Multi Volume Histogram is valuable to others, because it also displays a lot of useful information:
- By the color of the column, you can navigate the state of the market. Blue indicates that priority cannot be given to either short or long positions, red indicates a large seller has entered the market, green indicates that a large bull player has entered the business;
- this VSA indicator for MT4 smoothes the moving average tick volume data and displays the average volume information in text form. At the moment the volume is below average;
- in addition, a recommendation for entering the market is issued. At the moment, there are no signals about what the indicator tells us.
The indicator is interesting, it can be used as an analogue of the standard Volumes tool, which is in the terminal by default. The histogram will be exactly the same, but by coloring the histogram bars in different colors depending on the market situation and additional information in text form, this algorithm is more useful.
Conclusion
More detailed description VSA indicators can be found either on the websites of their developers or on specialized forums. We note that the vast majority of them are just variations of the standard tick volume indicator. But due to a number of useful additions, they can be used instead of the standard Volumes indicator.
It is advisable to use them as an additional filter in your trading strategy. Entering only on the signals of any of the considered algorithms is strictly prohibited.
From the article you will learn:
Greetings to all readers of our site! We continue the topic of volumes, and today we will consider a very interesting one - this is SonicR VSA. who are a little familiar with financial market, he must have heard about the SonicR system. Yes, at one time this strategy made a splash among many traders. She gained immense popularity, moreover, she really gave positive results.
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At the moment, this system is not used so often, however, many traders who use it often use the indicator from this trading system. In general, I can say that this is an ordinary indicator of volumes, and there is no point in talking about it for a long time and tediously.
In general, the presented SonicR VSA indicator is very similar to, it still paints the histogram in different colors when there is a large volume in the market, which can become a key in changing the current market trend. Given this fact, there is nothing new here, respectively, I don’t see any point in repeating myself for a long and tedious time, since a lot has already been said about this.
I consider it expedient within the framework of this article to consider the most common VSA formations, which are often worked out in market conditions. Of course, their clear identification requires certain skills, but, as they say, patience and work will grind everything. will expand your horizons.
Even, you know, within the framework of this article I will try to explain to you such two concepts as accumulation and distribution. Roughly speaking, we will see what lies behind these processes, which is typical for one and the other phase. In addition, I will try to show you one very interesting example, so that you understand how the so-called crowd breeds.
General knowledge about VSA without SonicR
You must clearly understand that you and I, ordinary ordinary traders, are at the lowest hierarchical level of the exchange sphere. You and I have low level information, we are not so powerful technical support, and in general the level of skills of many leaves much to be desired. Who are market makers?
Here, supply and demand are in dynamic balance, since there is no excess of lots to move the price in one direction or another, here it remains only to wait.
Here we have the distribution phase, as the market moves clearly up. This tells us that at the moment, demand is stronger than supply and there is a strong preponderance of lots from buyers. When will this movement stop? It will stop when there is a redistribution of lots in reverse side then the trend will change.
In summary, a flat is an accumulation phase, and a trend is a distribution phase. It should be clearly understood that the market maker accumulates a position very carefully. That is, he cannot enter the market for the whole cutlet, since everyone will see the movement and enter in his direction, and extra passengers mean a decrease in profit for the market maker. Naturally, he will not go on such an adventure. Where did he accumulate his position?
Pay attention to the flat that I noted earlier, it was in this range that the market maker accumulated his position, without a strong price shift. Well, now, let's justify this in terms of volumes and look at a common situation.
Now carefully look at the example, and try to understand what I will explain to you. In the orange rectangle, we have a flat, where supply and demand are in equilibrium. Then, the price comes out of a downward consolidation and what happens at that moment? At the moment, the stops of buyers are triggered and pending purchases are activated. In addition, the sellers are getting active as the movement went down.
I want to draw your attention to the moment that I marked with a red arrow. Look, large volumes appeared at that moment, which indicate to us that activity is beginning. The SonicR VSA indicator showed us this clearly.
And now, we see a downward movement, but I marked in blue the moment that SonicR VSA shows us a systematic decrease in volumes. From the point of view of logic, this indicates to us what has shown weakness. To determine, you can use the indicator at the link.