How to do the volume spread analysis?

<p id="isPasted">Volume spread analysis (VSA) is a trading methodology that analyzes volume, price, and price spread to identify trends and make trading decisions. Here are the steps to do VSA in forex:</p><ol><li>Look for a price chart with volume bars: A volume bar chart shows the volume of trades in each bar. The height of the bar represents the volume of trading during that period. You can find volume charts on most trading platforms.</li><li>Identify the high-volume bars: High-volume bars indicate a large number of trades taking place during that period. These bars often coincide with significant price moves.</li><li>Analyze the price spread: Price spread refers to the difference between the high and low prices during a trading period. A narrow price spread indicates indecision or lack of trading activity, while a wide price spread indicates a strong price move.</li><li>Look for price and volume divergences: Price and volume divergences occur when the price moves in one direction, but the volume moves in the opposite direction. This may indicate a change in the trend.</li><li>Use VSA to confirm other technical indicators: VSA is not a standalone trading system. You can use it to confirm other technical indicators such as moving averages or trend lines.</li><li>Practice with a demo account: VSA requires practice to master. Use a demo account to test your skills before trading with real money.</li></ol><p><br></p><p>In summary, VSA is a trading methodology that combines volume, price, and price spread to identify trends and make trading decisions. By analyzing volume bars, price spreads, and divergences, traders can make more informed trading decisions.</p>

<p id="isPasted">Volume Spread Analysis (VSA) is a trading methodology that uses the relationship between price and volume to identify potential trading opportunities in financial markets. The basic premise of VSA is that changes in volume can help confirm or contradict price movements, providing traders with insights into market trends and potential reversals.</p><p>To perform VSA, traders will typically look at a chart of the asset they are interested in trading and analyze the relationship between price and volume. They may use technical indicators, such as moving averages or oscillators, to help identify potential trade setups. Additionally, they may look for patterns in the price and volume data, such as spikes or divergences, that may indicate a change in market sentiment.</p><p>One of the key concepts in VSA is the idea of "smart money" versus "dumb money." Smart money refers to the large institutional investors who have the resources and expertise to move the markets, while dumb money refers to retail traders and smaller investors who follow the herd. By analyzing changes in volume and price, traders can potentially identify when smart money is entering or exiting a market, which can provide clues to potential trading opportunities.</p><p>It's important to note that VSA is not a foolproof trading strategy and requires careful analysis and interpretation of market data. Additionally, traders should use proper risk management techniques, such as stop-loss orders and proper position sizing, to help limit potential losses. By using VSA in conjunction with other technical and fundamental analysis tools, traders can potentially gain insights into market trends and capitalize on trading opportunities.</p>

<p id="isPasted">The volume of transactions or the amount of money that participants pour into the market is the main effort to create a movement, and the price is the result of this process.</p><p>Basic concepts of methodology:</p><ul><li><p>Spread The full range of the bar (from the price high to the low price); it is believed that there are three types ? wide narrow and medium, calculated about the previous bars (usually from 3 to 100). The spread shows, how actively there are biddings in the current period.</p></li><li><p>The closing price of the bar</p></li><li><p>Trading volume</p></li></ul><p>For Forex assets ? the tick volume (total quantity of transactions); for future assets ? the actual volume of transactions (in money). For those who trade in currency pairs on Forex, but doubt the VSA methods on tick volumes, we recommend tracing the dynamics of similar currency futures ? as a rule, they advance the movement of currency Forex pairs by 1-3 bars.</p><p class="forexqa-img-container"><img src="https://prod-forexqna.s3.amazonaws.com/uploads/froala_editor/images/123.png" style="width: 555px;" class="fr-fic fr-dib fr-draggable forexqa-img fr-fil"></p><p id="isPasted">Bars are classified as down-bar (the closing price is lower than the similar price of the previous bar) and up-bar (respectively if the closing price is higher than the previous one).</p><p>Through the dynamics of volumes and their ratio with spreads, the trader must correctly assess the interest (the direction of transactions, the purposes and orders of StopLoss) of market makers and large participants to use them in their trade.</p>