Joea

I will try to answer you posts in point form.

1 I am aware of Master the Markets.  The book was provided to me when I boughtTradeguider in 2008. I quoted the book in the Citation on the VSA template Iposted.  I also trade the London marketat night using Tradeguider as Bullcharts cannot access E-signal data.

2. In a previous post I advised that VSA signals are veryjudgemental, particularly if you try to write your own code after studying themarket in context. (BTW my reading of the MM book, p111 is that the 5 signs youlist you would be interested in if you were a Bullish Trader are listed in theBook as being the main signs of weakness. So you would be more interested in them if your were Bearish But seepoint 5 below).

3. Tom Williams in his writings and also Gavin Holmes in hisvideos state that VSA signals  are notbuy and sell signals they are guides to help understand the context  which is what I have said in my previousposts. 

4. Gavin Holmes developed the idea of VSA sequences in hisbook Trading in the Shadow of the Smart Money. I note the sequences you list in your post are from Gavins second book.  Those sequences may work under certain marketconditions using the Tradeguider Software but in some contexts the sequence maynot work.

5. For instance , Gavin Holmes often points out that in downtrends discount the Signs of Strength signals and in uptrends discount Signs ofWeakness signals. Particular sequences from the books may be Ok if you areusing the Tradeguider software and their particular parameters but they areprobably irrelevant if you are writing your own code in Bullcharts, as you maynot replicate exactly the Tradeguider software, and you will want to researchand test your own sequences. 

6. Which brings me to the issue I pointed out in the VSAtemplate post.  The setting of the parametersand in particular selecting a trending system is very important as some signalswhich rely on whether the code interprets the bar as being in an uptrend ordown trend.  In this regard it is oflittle help to me, or even a Tradeguider user, to go to the Read the Tickersite to see their trending system signals as neither Tradeguider or myparticular Bullcharts VSA temp[late uses the Read the Ticker trend system.  (I have tested VSA on various trendmethodologies the H-iLo zig Zag used in the Wave Volume post, the BullchartsTrend System , Laguerre Cross overs, MA Cross overs etc).  I have settled on a trending system thatgives me reasonably accurate turning points over 3 to 5 days because that suitsmy style of trading.  Other people maydiffer and in Tradeguider you can identify many different trends by varyingtheir parameters as well.

7. In regard to the use of judgement , I would also referyou to Sebastian Manby’s Advanced VSA training videos Course provided byTradeguider.  Sebastian is a VSA expertand was mentored by Tom Williams but he admits his interpretation of some VSA signalsdiffer from Tom Williams’s as he has refined his interpretation as he hasstudied the market for himself, and sometimes he points out in his videosincorrect signals shown  in theTradeguider software. 

8 In similar fashion the original Tom Williams Tradeguidersoftware signals and descriptions when released in the current version wereupdated by Both Tom Williams and Phillip Friston another VSA expert, so they canbe updated and refined over time.

8. Getting back to identifying Smart money, here is aTradeguider chart of NAB Bank with an uptrend and a down trend.  The problem I have always had is looking atthe chart how do I easily see if Smart Money is starting to get active oractive. Hence my post as there is something you can do with VSA  in Bullcharts that you cannot do in Tradeguider - or at least I can't.

TomWilliams writing about Volume Spread Analysis (VSA) groups traders into Smart Money and the Herd.   He advises that Smart Money have to sellinto uptrends and buy in to down trends which is the opposite of the waytraders normally think.  This contrarianconcept has puzzled me for a long time. Re-reading Larry William’s (no relation to Tom) book Long TermSecrets to Short Term Trading, offers a possible solution.  Larry Williams states that since 1965 hisoperating rule has been “sellers in any time period are represented by theprice swing from the high of the day to the close, while buying is representedby the close minus the low”, p.36, John Wiley & Co, 1999.  I think Chaikin’s Money flow uses similarconcepts.

Sohere is how my new Bull chart template looks. I adapted as discussed furtherbelow the Wave Volume indicator provided in other post re Weiss Wave.  Two indicators are required. This is not anysort of investment advice but education on writing the indicators. The charts show Buy and Sell becasuse the markers are set up to identify start and end of trend only. Theindicators show the  average or totalvolume for Smart money (Green) buying whilst the Herd (Red) is selling in indowntrends; and vice versa SM (Dark Violet) selling whilst the herd is buying (Cyan)in uptrends.  You may not be into VSA andmay call the similar concept Bulls v Bears. I similarly colored my currentlyused trend indicator to show the same colour coding.

Theconceptual framework works reasonably well as good strong up trends tend to beheavily coloured Cyan or Red as the Herd gathers momentum in Uptrends or panicsin down trends. When SM are heavily buying the downtrends the indicators tendto show the down trend slowing or bottoming or when SM is heavily  selling the uptrend tends to slow or stopsreasonably soon thereafter.  Anyway,something to play with.

Onthe Weiss Wave posts, I posted a formula for preparing a Bullcharts wave Volumeindicator.  The changes needed for analysingthe wave volumes for “Smart Money” and the “Herd” is to change a few lines ofthe previously advised formula as below.

Forconverting previous code to a SM Selling and Herd Selling average and Total  Wave volume indicator.

AddLarry Willaim’s book reference above to the Citation area and add the followingnew line to the code:

Value1 := (((H-C)/(H-L))*Volume); {Selling Vol}

And delete these two lines

BuyVol2:=If(BuyVol,+1*v,0);

TotalBuyVol:=If( BuyVol,+1*v+prev(BuyVol2),0);}

And replace by these two lines

BuyVol2:=If(BuyVol,+1*Value1,0);

TotalBuyVol:=If( BuyVol,+1*Value1+prev(BuyVol2),0);

And replace these two lines

SellVol2:=If(SellVol,+1*v,0);

TotalSellVol:=If( SellVol,+1*v+prev(SellVol2),0);

With these this two lines

SellVol2:=If(SellVol,+1*Value1,0);

TotalSellVol:=If( SellVol,+1*Value1+prev(SellVol2),0);

The above will give you the breakdown ofthe selling wave Volume into a Smart Money Component and a Herd Component.

For the Buying wave just copy theamended formula, change the name to buying  and

Just replace the Value formula to theformula shown below

Value1 := (((C--L)/(H-L))*Volume); {Buying Vol}

That’s it for the second Wave histogram.

To check if you have done this correctlythe average on both these amended formulae will reconcile to the previous WaveVolume formula.

The ribbons shown on the charts are justsubsets of the above amended indicators with Linestyle =Ribbon.  Text for the amount of volume can be added ifyou want to show in text, as well as bars.

I will add some charts below so you can make up your own mind if this is of any use.