TRADE

TO WIN

Trade to Win Operational Manual

Trade to Win Trading Strategy

 Trade to Win VSA Lite for TradingView

Operational Manual

Version 2.0 – September 2022

Contents

Overview ................................................................................................................................................. 3
Getting Started.................................................................................................................................... 4
TradeGuider VSA Relative Volume Indicator .......................................................................................... 5
General Description ............................................................................................................................ 5
Installation .......................................................................................................................................... 6
Parameters .......................................................................................................................................... 7
TradeGuider VSA Lite Indicator............................................................................................................... 9
General Description ............................................................................................................................ 9
Installation ........................................................................................................................................ 11
Parameters ........................................................................................................................................ 12
Alerts ................................................................................................................................................. 15
Appendix 1. Description of Key VSA Principles ..................................................................................... 18
Potential Professional Buying (PB) .................................................................................................... 18
Shakeout (SO) ................................................................................................................................... 19
Test (TE) ............................................................................................................................................ 20
Potential Professional Selling (PS) .................................................................................................... 21
Upthrust (UT) .................................................................................................................................... 22
No Demand (ND) ............................................................................................................................... 23
Appendix 2. Volume Spread Analysis Glossary ..................................................................................... 24
Revision History .................................................................................................................................... 37

Version 2.0 – September 2022 Page 2 of 37

Overview
This Operational Manual provides detailed information about the TradeGuider VSA Lite for
TradingView package which consists of two indicators, TradeGuider VSA Lite (VSA Lite) and
TradeGuider VSA Relative Volume (VSA Relative Volume). Both indicators are based on the Volume
Spread Analysis methodology (VSA) developed by Tom Williams.

Version 2.0 – September 2022 Page 3 of 37

Getting Started
Once you have subscribed to TradeGuider VSA Lite for TradingView you will receive a confirmation
email from TradeGuider. From that point you have access to all the indicators included in the package.
Then do the following:

1. Log in to the Customer Area of the www.tradeguider.com website. Under the Software menu
click on the Access Now button on the right-hand side of the package name (‘TradeGuider
VSA Lite for Tradingview’).
2. Download and read the documentation provided.
3. Install all indicators following the instructions provided in the installation sections for the
TradeGuider VSA Lite indicator and the TradeGuider VSA Relative Volume indicator.
4. We recommend setting up VSA Lite alerts either if you would like to trade them or if you would
just like to learn the VSA methodology. It will help you understand the logic behind VSA
principles and VSA Setups. Do it as follows:
a. Connect to the TradingView paper trading account as described in this link:
https://www.tradingview.com/support/solutions/43000479975-how-do-i-connect-
disconnect-a-paper-trading-account/
b. Set VSA Lite alerts as described in the Alerts section further down in this document.
c. If you would like to trade VSA Lite alerts, wait for the alert to arrive and trade it
following the recommendations provided in ‘The Guide to VSA Lite Alerts’ document.
Please DO NOT USE live accounts to trade alerts UNTIL you have consistently traded
your paper account successfully.
5. We recommend that you also read some of the books that give detailed explanations of
Volume Spread Analysis and how it works. These books can be found in the Tradeguider
Resource Center https://www.tradeguider.com/resource_center.asp

Two additional publications that you won’t find there but that we also recommend are: “My
Journey of Discovery to Wyckoff Volume Spread Analysis” and “A Guide To The Basics Of
Volume Spread Analysis: How The Professionals Operate In The Financial Markets”, both
written by Philip Friston and available on Amazon.

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TradeGuider VSA Relative Volume Indicator
General Description
Together with other VSA indicators and tools, the TradeGuider VSA Relative Volume indicator helps
to determine the interaction between supply and demand as well as assisting traders in their trading
decisions.

In the VSA methodology, all analysis is based on Relative Volume. This means that the exact values of
the volume on the price bars are not nearly as important as their volume in relation to the previous
volume bars.

The following classifications of Relative Volume are used in VSA:

• Ultra High Volume

• Very High Volume
• High Volume
• Average Volume
• Low Volume
• Very Low Volume

Users can easily see how any volume bar is classified by observing which color band in the volume
indicator is reached by the top of any given volume bar.

Apart from the Relative Bands, this indicator provides additional information about the type of price
bar where the volume has appeared (up bar, down bar, level bar), volume average as well as showing
one very important VSA condition: when the volume is less than on the two previous volume bars.

The default colors, location of the bands and other additional indications are shown on the image
above.

Please note that the TradeGuider VSA Relative Volume indicator does not modify the volume values.
The volume appears exactly as it was provided by the broker.

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Installation
Open any price chart and in the top Tool Bar click on the Indicators button.

In the open dialog box under the Search box type TradeGuider VSA Relative Volume.

TradeGuider VSA Relative Volume name with the green-colored lock will appear in the right-side
area of the dialog box. Click on it once to attach to the chart and wait until it appears there.

Note: If the color of the lock is red, you do not have access to the indicator yet. Activation may take
up to one working day (but is usually less). After 24 hours, please contact TradeGuider Technical
Support by email to the address [email protected] or go to the TradeGuider web site, click
the support tab on the menu bar and fill in a support ticket.

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Parameters
The following parameters are implemented in this indicator:

Show relative volume areas – This switches Relative Bands on or off.

Show average volume line – This switches the Average Volume line on or off.

Show volume lower than on two previous bars – If this parameter is checked, the indicator identifies
the condition when the volume is less than on the two previous volume bars. This condition is used in
the VSA methodology to identify the price bars where professionals are either testing specific price
areas or staying away from the market. In conjunction with a corresponding price bar structure and
Climactic Actions in the background, such bars might become the final confirmation of a VSA trade
setup and, as a result, could be a great place for a high-probability, low-risk long or short trade entry.

It must be noted that if this parameter is checked, and the corresponding condition is found on a
particular volume bar, the coloring of this volume bar based on the bar type (see next parameter) is
omitted. It is then painted with the color defined by the parameter Volume lower than on 2 prev bars.

Color volume based on the bar type – If this parameter is checked, the volume bars will be colored
according to the bar type (up bar, down bar, level bar). The corresponding color can be set by the
parameters Up Bar, Level Bar, and Down Bar (see description below).

Ultra High Volume Zone – If the parameter Show relative volume areas is checked, this sets the color
of the Ultra High Volume Zone.

Very High Volume Zone – If the parameter Show relative volume areas is checked, this sets the color
of the Very High Volume Zone.

High Volume Zone – If the parameter Show relative volume areas is checked, this sets the color of
the High Volume Zone.

Average Volume Zone – If the parameter Show relative volume areas is checked, this sets the color
of the Average Volume Zone.

Low Volume Zone – If the parameter Show relative volume areas is checked, this sets the color of the
Low Volume Zone.

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Very Low Volume Zone – If the parameter Show relative volume areas is checked, this sets the color
of the Very Low Volume Zone.

Average Volume – If the parameter Show average volume line is checked, this sets the color of the
Average Volume line.

Up Bar – If the parameter Color volume based on the bar type is checked, this defines the color of the
volume bar when the price bar on the chart is an up bar.

Level Bar – If the parameter Color volume based on the bar type is checked, this defines the color of
the volume bar when the price bar on the chart is a level bar.

Down Bar – If the parameter Color volume based on the bar type is checked, this defines the color of
the volume bar when the price bar on the chart is a down bar.

Volume lower than on 2 prev bars – If the parameter Show volume lower than on two previous bars
is checked, this sets the color for the condition when the volume is less than on the two previous
volume bars.

Unfinished Volume Bar – This sets the color of the currently ongoing (non-closed) volume bar.

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TradeGuider VSA Lite Indicator
General Description
TradeGuider VSA Lite is an indicator that provides information about the balance between supply and
demand on the price charts based on Tom Williams’ Volume Spread Analysis methodology (VSA).

The VSA principles introduced in this indicator can be divided into two groups: Signs of Strength (SOS)
and Signs of Weakness (SOW). By default, each SOS is shown on the chart with a green triangle below
the price bar and identifies the condition when either demand is overcoming supply or when there is
very little or no supply on that particular price bar. SOW is shown on the chart with red triangles above
the price bar and identifies the condition when either supply is overcoming demand or when there is
very little or no demand present on that particular price bar.

SOSs and SOWs can be either major or minor. The major SOSs/SOWs are VSA principles on Ultra High
Volume (Climactic Action), showing significant buying or selling activity by the smart money. Very
often, major VSA principles mark the beginning of accumulation or distribution and in the VSA
methodology are called Trigger Bars. The minor SOSs/SOWs appear on Low or Very Low Volume,
identifying either the testing of specific areas for the presence of supply or demand by professionals
or when professionals are staying away from the market.

The VSA methodology implies that VSA principles need to be confirmed. One of the ways to obtain
such confirmation is to look for the closing position of the next price bar. If the price bar following a
SOS is an up bar, the VSA principle is considered to be confirmed. Similar logic applies to a SOW. If the
price bar following a SOW is a down bar, the VSA principle is considered confirmed. Confirmed and
non-confirmed SOSs/SOWs are distinguished on the price chart by the color of the triangles. The
default coloring for confirmed SOSs is a dark green triangle below the price bar; confirmed SOWs will
show a red triangle above the price bar; unconfirmed SOS/SOWs will show a light green or light red
triangle below or above the price bars respectively.

Note that the number of SOS and SOW principles implemented in this indicator is significantly less
than in our core VSA software (see www.tradeguider.com). Despite that, we have selected for the
users six principles which are among the best and most powerful. Moreover the TradeGuider VSA Lite
indicator has two modes of operation:

• The VSA Learning Mode wherein all found VSA principles are displayed on the chart. This mode
provides users with the opportunity to read or to learn how to read the price chart.
• The VSA Expert Mode wherein minor Signs of Strength are displayed in an uptrend after
significant buying identified in the background. Minor Signs of Weakness are displayed in a
downtrend after significant selling in the background. This mode is especially useful while
trading.

The user may switch between modes by checking (selecting) and unchecking (deselecting) the ‘Filtered
Tests and No Demands’ parameter of this indicator.

The following six VSA principles are implemented in this indicator:

SOSs:

• Potential Professional Buying (PB) - Major VSA principle

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 • Shakeout (SO) – Depending on market conditions, this can either be a major or minor VSA
principle
• Test (TE) - Minor VSA principle

SOWs:

• Potential Professional Selling (PS) - Major VSA principle

• Upthrust (UT) – Depending on market conditions, this can either be a major or minor VSA
principle
• No Demand (ND) - Minor VSA principle

It must be understood that VSA principles ARE NOT BUY and SELL SIGNALS on their own, but in
combination may create VSA Setups which are used in the VSA methodology to identify low-risk
entries and optimal exits from the trade. In other words, users will see many VSA principles on any
given chart, but only some of them are valid for opening a trade. You will learn how to tell the
difference as you progress through this and ‘The Guide to VSA Lite Alerts’ manual and practice via
paper trading.

The TradeGuider VSA Lite indicator is also equipped with several types of alerts that inform users of
key VSA principles or VSA Setups as they appear, as well as a Short Term Trending Tool. The Short
Term Trending Tool, which is the only tool in the VSA Methodology using moving averages, has several
purposes:

• To display the trend direction identified over the past 10-25 price bars.
• To show the generic activity of retail traders. Many retail traders use moving averages and
they buy above or sell below them. With their understanding of herd behaviour, professional
traders know this fact and often use it to trap retail traders and lock them into losing trades.

The following shows the main elements of the TradeGuider VSA Lite indicator:

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Installation
Open any price chart and in the top Tool Bar click on the Indicators button.

In the open dialog box in the Search box type the following: TradeGuider VSA Lite.

TradeGuider VSA Lite name with the green-colored lock will appear in the right-side area of the
dialog box. Click on it once to attach to the chart and wait until it appears there.

Note: If the color of the lock is red, you do not have access to the indicator yet. Activation may take
up to one working day (but is usually less). After 24 hours, please contact TradeGuider Technical
Support by email to the address [email protected] or go to the TradeGuider web site, click
the support tab on the menu bar and fill in a support ticket.

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Parameters
The following parameters are implemented in this indicator:

Alert PS/PB – When an alert is created and this parameter is checked, all identified Trigger Bars
(Potential Professional Buying (PB) / Potential Professional Selling (PS)) will be alerted.

Alert Tests/No Demands – When an alert is created and this parameter is checked, Tests/No Demands
will be alerted. Please see the description of the Alert Tests above PB and No Demands below PS only
parameter for more details.

Alert Shakeouts/Upthrusts – When an alert is created and this parameter is checked, all identified
Shakeouts and Upthrusts will be alerted. Please see the description of the Alert Shakeouts above PB
and Upthrusts below PS only parameter for more details.

Alert Tests above PB and No Demands below PS only – When an alert is created and this parameter
is checked alongside the Alert Tests/No Demands parameter, only Tests found above or on the high
of the Potential Professional Buying (PB) VSA principle, as well as No Demands found below or on
the low of the Potential Professional Selling (PS) VSA principle, will be alerted. If this parameter is
unchecked, the Tests will be alerted above or on the high and No Demands below or on the low of
either the Potential Professional Buying (PB) or Potential Professional Selling VSA principle (PS).

Alert Shakeouts above PB and Upthrusts below PS only – When an alert is created and this parameter
is checked along with the Alert Shakeouts/Upthrusts parameters, only Shakeouts found above or on
the high of the Potential Professional Buying (PB) VSA principle, as well as Upthrusts found below or
on the low of the Potential Professional Selling (PS) VSA principle, will be alerted. If this parameter is
unchecked, the Shakeouts will be alerted above or on the high while Upthrusts are below or on the
low of either the Potential Professional Buying (PB) or Potential Professional Selling VSA principle
(PS).

Block Long Setup Alerts – When this parameter is checked, VSA Setup alerts to the long side won’t
appear.

Block Short Setup Alerts – When this parameter is checked, VSA Setup alerts to the short side won’t
appear.

Cancel UHV bar on higher Volume – Even though Ultra High / Very High Volume shows the activity of
the professionals, not all Climactic Bars become Trigger Bars. At the same time, after a Climactic Bar,
the price can reverse, go sideways or continue in the same direction with sharp moves. To prevent
false trade entries, when this parameter is checked and when a price bar is generated which has a

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higher volume than the previous Trigger Bar, but which does not itself meet the Trigger Bar definition,
it will cause the previous Trigger Bar to be cancelled. Trigger lines are also removed from the price
chart and are only restored after the next Trigger Bar is identified. Filtered Tests and No Demands –
This sets the mode of the indicator. If this parameter is checked it turns on Expert Mode in which:

• Tests will be shown above the low of the Trigger Bar last identified.

• No Demands will be displayed below the high of the last-found Trigger Bar.

When this parameter is unchecked, it turns on Learning Mode and all of the identified Tests/No
Demands principles will be drawn on the price chart irrespective of their relation to the last-identified
Trigger Bar.

It has to be noted that when the Show Shakeouts parameter is checked, Shakeouts will be displayed
in either mode of the indicator. Likewise, when the Show Upthrusts parameter is checked, Upthrusts
will be displayed in either mode.

Show Short Term Trend – If this parameter is checked, the Short Term (Diamond) Trending Tool will
be shown on the price chart.

Show Tests – If this parameter is unchecked, Tests will not be shown on the price chart. Otherwise,
Tests will be displayed.

Show Shakeouts – If this parameter is unchecked, Shakeouts will not be shown on the price chart.
Otherwise, Shakeouts will be displayed.

Show No Demands – If this parameter is unchecked, No Demands will not be shown on the price
chart. Otherwise, No Demands will be displayed.

Show Upthrusts – If this parameter is unchecked, Upthrusts will not be shown on the price chart.
Otherwise, Upthrusts will be displayed.

Show Last Trigger Lines – If this parameter is checked, two trigger lines through the high and low of
the last-found Trigger Bar will be drawn on the price chart.

Note that when the Cancel UHV bar on higher Volume parameter is checked, there might be situations
when trigger lines are not displayed (see the description for that parameter).

Up Trend – This sets the color of the dots (diamonds) of the Short Term Trending Tool when an uptrend
is identified on the price chart.

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Unknown Trend – This sets the color of the dots (diamonds) of the Short Term Trending Tool when
the trend is identified as neutral on the price chart.

Down Trend – This sets the color of the dots (diamonds) of the Short Term Trending Tool when a
downtrend is identified on the price chart.

Short Term Trend Size – This sets the size (width) of the Short-Term Trend circles on the chart.

Non-confirmed SOS – This sets the color of the SOS triangles on the price chart when they are not
confirmed by the next price bar.

Confirmed SOS – This sets the color of the SOS triangles on the price chart when they are confirmed
by the next price bar.

Non-confirmed SOW – This sets the color of the SOW triangles on the price chart when they are not
confirmed by the next price bar.

Confirmed SOW – This sets the color of the SOW triangles on the price chart when they are confirmed
by the next price bar.

Trigger Lines – This sets the color of the trigger lines.

Trigger Lines Style – This sets the style (solid, dotted, or dashed) of the trigger lines.

Trigger Lines Width – This sets the width of the trigger lines.

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Alerts
The TradeGuider VSA Lite indicator includes an alert system providing users with notifications about
identified VSA principles or specific VSA Setups.

Default alert settings are shown on the picture below and inform users of potential trade setups based
on the VSA Lite Strategy (see details in ‘The guide to VSA Lite Alerts’ document in your TradeGuider
Customer Area at www.tradeguider.com).

Details about each alert option can be found in the Parameters section above.

To set up an alert do the following:

1. Open the price chart you would like to generate an alert on.
2. Either click the Alert button on the top Tool Bar.

or right-click your mouse in an empty area of the chart and select the Add Alert menu item.

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 The following dialog box will appear on the screen:

3. In the dialog box under Condition open the dropdown list and select VSA Lite.

This will cause the Any alert() function call value to appear in the lower dropdown list.

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 4. Set the required alert expiration time or check Open-ended (if applicable for the Tradingview
service subscription) to make it available until a manual stop or cancellation.

5. Optional: change the name of the alert to something you prefer.

6. Click Create button to submit an alert. The following message box will appear:

Please read this message carefully and click on Continue anyway if you agree.

Important note: Due to the above notice, before opening any trade, please check that all
conditions described in the ‘The Guide to VSA Lite Alerts’ document are present on the
chart. Also, be aware that there might be situations when a FALSE ALERT is generated.

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Appendix 1. Description of Key VSA Principles
Potential Professional Buying (PB)
Bar Description

A down bar with High to Ultra High Volume must contain buying from the professionals especially if it
is into fresh new low ground and the next bar is up.

One or more professional groups will have decided that the underlying market is now good value and
will step in and buy absorbing the supply. Covering of shorts will add to the volume.

Background

There should be a clear down move in place in the background. Weak holders will eventually panic
and sell out regardless of the price offering the professionals the opportunity to acquire holdings at a
good price.

Only buying by the professionals can stop a down move. Covering shorts will add to the volume. This
has to be done on down bars so as not to move prices against them. Study the background carefully.

Future

The next bar should be up to confirm this principle. The market may need to accumulate further before
an up move can begin so be patient. The professionals do this by selling small amounts of their
holdings to push prices back down to the lows. However, overall, they are buying more than they are
selling.

Remember this principle picks up demand coming in but there is still supply present. A market will not
rally far until the professionals have checked to see if this supply has disappeared. This they do with
Shakeouts and testing.

Remember if the market is still weak you would expect High Volume up bars closing off the highs with
the next bar down, Upthrusts especially on High Volume and No Demand.

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Shakeout (SO)
Bar Description

A Shakeout is a mark down on a Wide Spread closing up near the high to shake out Weak Holders.
High volume suggests demand overcame the supply but remember this supply will hold back future
upward progress. If the spread is narrow, it will have less impact.

Exercise caution if the bar has gapped down as this can indicate hidden weakness.

If volume is Ultra High this can be Climactic Action and the start of accumulation.

Background

The background is extremely important. You should see strength in the background with Stopping
Volume or a Selling Climax. Are there some minor SOW in an uptrend or has supply hit the market?

Future

A Shakeout on High Volume shows demand was prepared to absorb the supply on that bar but they
will likely want to test that supply in the future. Any Low Volume testing back into the area of the
Shakeout would be a strong SOS.

Be cautious if the Shakeout is followed by Low Volume up bars, or High Volume up bars closing in the
middle especially on a narrow spread.

If the market starts to whipsaw and goes sideways it may be building a cause for the next up move.

Remember you need to look at the overall picture not just the individual bars.

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Test (TE)
Bar Description

A Test is a mark down during the bar (often on bad news) to challenge any Weak Holders to panic and
sell. If they do not sell the price rebounds up towards the middle or high and the Volume is low (can
be high in the futures market). This lack of selling gives the professionals confidence that they do not
have to absorb large amounts of supply.

Add extra weight if the Low of the bar is into fresh new low ground and also if it is a down bar.

Tests on Low Volume in the cash market will cause the professionals to enter the futures market
resulting in higher volumes there.

Background

The background is extremely important.

Tests work best when there is strength in the background or following minor SOW in an uptrend.

With weakness in the background this principle carries less importance and at best may only cause
the market to rest for a few bars as the professionals stand aside before resuming the down move.

Future

Following a Test expect higher prices. Failure to do so is a sign that the market is not yet ready to go
up.

If the Volume was too high for a reliable test you need to decide whether the market makers are
prepared to absorb that supply and take prices higher.

If there is strength in the background and the Test Bar is back down into the area of buying a successful
Test is a strong indication of strength showing supply has disappeared.

If you are in an uptrend and the Test follows some minor Signs of Weakness you would anticipate the
up move to continue.

Supply appearing after an up move is often tested. If the supply is sufficient to stop the up move expect
any subsequent Test to fail which in itself is a Sign of Weakness.

Give extra weight to a second Test in a bullish phase if the second Test has lower volume than the
first.

Be cautious if the Test is followed by Low Volume up bars, Upthrusts or High Volume up bars closing
in the middle especially on a narrow spread.

Remember you need to look at the overall picture not just the individual bars.

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Potential Professional Selling (PS)
Bar Description

A High to Ultra High Volume up bar closing in the middle shows supply overcoming demand and
indicates professional selling.

In order to sell the professionals have to unload into a rising market by selling to the herd. If they sold
on down bars prices would fall too rapidly against them.

This bar should be into new fresh high ground.

Background

There should be an up move behind you. Eventually the herd panic for fear of missing out on higher
prices and buy on the good news. The professional groups will then sell into this frenzy of buying.

Look carefully to the background. Do you have strength or weakness behind you? After a period of
rising prices this could be the start of distribution by one or more professional groups.

Is there an old top to the left as this could be absorption volume.

Future

If the next bar is down closing near its lows this confirms the weakness. Also High Volume up bars on
narrow spreads show further selling.

Subsequent No Demand Up Bars or Upthrusts confirm the weakness.

The market may need to distribute further before a down move can begin so be patient. The
professionals do this by supporting the market until they have sold their remaining holdings. But
remember this weakness will not suddenly disappear.

If there is strength in the near background or a breakout this supply may be tested so look for Low
Volume down bars closing in the middle or high, or for Shakeouts. If the market is still strong it should
follow the path of least resistance which is up.

Remember the market is an unfolding story bar by bar. You need to adjust your analysis accordingly.

If the market pushes up through this area of supply it may come back down to test it again later. A
successful Test would then be bullish.

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Upthrust (UT)
Bar Description

The bar is marked up but falls off rapidly to close on or near its low normally with an Average to Wide
price Spread.

The Upthrust is a money making manoeuvre by the market makers to catch stops of those who are
short and trap the unwary into buying. Prices are marked up at the open often on good news. High
Volume shows selling by the professionals while Low Volume shows their lack of interest in the upside.
The bar resembles a telegraph pole.

Background

Be very careful here. True Upthrusts appear when you have WEAKNESS in the background. This would
be characterised by High Volume up bars closing in the middle and No Demand up bars.

If there is strength in the background be very cautious. It is likely to be tested or may be a false
Upthrust.

However if the market has already fallen for some time this could be the start of a Shakeout especially
if the news is bad.

Future

Following a true Upthrust expect lower prices. Further SOW e.g. No Demand adds to the weakness.
Be wary of a Test with SOW in the background as it may well fail.

Be cautious if following the Upthrust you see a down bar with a narrow spread with volume lower
than the two previous bars. This shows lack of selling pressure.

Also if you see down bars on High Volume closing off the lows with the next bar up this shows potential
strength. This would need to be tested.

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No Demand (ND)
Bar Description

An up bar on a narrow spread closing in the middle with Low Volume or volume lower than the last
two bars. It can be a down bar if the high is higher than the previous bar. This shows the professional
money is not interested in higher prices at this time.

If the price spread is greater than narrow this can still show weakness.

Background

Pay particular attention to the background.

With strength in the background, this indicator may only cause the market to rest for a few bars as
the professionals stand aside before resuming the up move.

If there has been a major Shakeout in the near background or heavy buying the next bar can be a Low
Volume up bar meaning prices are marked up with minimum resistance as there is little immediate
supply.

If there is weakness in the background this SOW becomes more important.

Future

The next bar should be down to confirm this indicator.

With strength in the background expect testing or an up bar on increased volume to push through this
SOW (effort).

If there are other SOW in the background expect lower prices. The professionals have noticed this
weakness and are not interested any longer in the up move. Further SOW such as Upthrusts will
confirm the weakness.

If you are at or near an old top to the left it is highly unlikely that a market will go up through this old
top on No Demand.

Be cautious if following No Demand you see a down bar with a narrow spread with volume lower than
the two previous bars. This shows lack of selling pressure.

Also if you see down bars on High Volume closing off the lows with the next bar up this shows potential
strength. This would need to be tested.

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Appendix 2. Volume Spread Analysis Glossary
Accumulation

This is the process with which professional traders are trying to build up their position in the
market. During accumulation, the price may go up and down to create enough liquidity on the
one hand but without significantly putting price against their position on the other.

In accordance with the classic Wycoff method and VSA methodology, accumulation takes
place at the bottom of the market after a significant down move.

How long this process will continue for depends on different factors such as, for example, the
expected size of the position, the liquidity of the market etc. and may vary from several hours
to several months or even years.

Bad News

This is the type of news that creates a negative feeling in the trader towards a particular asset,
or about trading, or their own environment in general. Some examples of bad news are a
published quarterly report of the company with significantly lower profit than previously
expected; a dramatic fall in the value of all goods and services produced by a country’s
economy (GDP); a global pandemic; a significant change in a currency exchange rate. There
are many others.

Negative sentiments usually cause the trader to close long positions, giving the professionals
the opportunity to buy from them. This is the reason why bad news is widely used by smart
money as an ‘excuse’ to trick traders and lock them into loosing short trades.

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Climactic Action (Climactic Bar)

This refers to activity in the market on exceptionally big Ultra High Volume which mostly takes
place on bars with a Wide Spread (range). Very often one or several consecutive Climactic
Action bars are accompanied by extreme news and can mark the end of the trend and the
beginning of the accumulation or distribution phases.

Demand

This is the quantity of the product (for example, shares, currency pairs, commodities etc.) that
a buyer is willing to and can purchase at a specific price. In other words, it tells us how much
an instrument is wanted by traders in the market at a point of time. Demand is a cornerstone
of VSA because in this methodology all market activities are analyzed by considering the
balance between supply and demand. In general, if demand exceeds supply, prices rise and
conversely, if supply prevails over demand, the price falls.

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Distribution

This is the process by which professional traders try to reduce or completely unload their
position in the market. At the time of distribution, the price may go up and down to create
enough liquidity on one hand, but without significantly putting price against their position on
the other.

In accordance with the classic Wyckoff method and VSA methodology, distribution takes place
at the top of the market after a significant up move.

How long this process takes depends on different factors such as, for example, the expected
size of the position or how much liquidity there is in the market and it may vary from several
hours to several months or even years.

Down Bar

This is a bar on the price chart which has a closing price lower than the closing price of the
previous bar.

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Fresh New High Ground

Fresh new high ground is an area on the chart where the price breaks out into new highs and
creates new tops compared to a relatively long time previously in the background.

The top of the area is marked by the high price of one or several bars.

Fresh New Low Ground

Fresh new low ground is an area on the chart where the price drops to new lows and creates new
bottoms compared to a relatively long time previously in the background.

The bottom of the area is marked by the low price of one or several bars.

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Gap Down

In the VSA methodology a gap down is where there is a space (gap) between the low price of
one bar and the high price of the following closed bar.

It must be noted that since VSA does not use the open price of the bar, the definition of this
term in this methodology differs from its generic definition in trading.

Gap Up

In the VSA methodology the gap up is where there is a space between the high price of one
bar and the low price of the following closed bar.

It must be noted that since VSA does not use an open price of the bar, the definition of this
term here differs from its generic definition in trading.

Good News

This type of news creates positive feelings toward a particular asset or about trading or in
general. An example of good news are: a published company report with higher profits than
previously expected; a decrease in the national unemployment rate; the end of a global crisis;
a significant change in the currency exchange rate, and many others.

Positive sentiments usually cause a trader to open new long positions or add more to existing
ones, giving the professionals the opportunity to unload their holdings to retail traders. This
is why good news is widely used by smart money as an ‘excuse’ to trick the traders and lock
them into loosing long trades.

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Herd

In the VSA methodology this term refers to traders or investors who do not understand the
real market situation and make trading decisions either based on their own feelings
(excitement, fears, greed, reaction to good or bad news), or blindly trust the opinion and
follow the suggestions of those who, from their point of view, are well informed and know
what to do.

Smart money often uses herd emotions (sometimes called herd instinct or crowd behaviour)
to significantly raise or lower market prices, to lock traders into non-profitable losing positions
and make a large profit from them in the end.

To be successful, the trader must isolate themself from the herd and become a predator
rather than a victim.

Level Bar

This is a bar on the price chart which has its close price equal to the close price of the previous
bar.

Selling Climax

Selling Climax is the imbalance of supply and demand causing a bear market to transform into
a bull market. It is the huge panic selling of an asset by the uninformed public to the
professionals very often on bad news.

In the VSA methodology a Selling Climax is indicated by down bars after a period of down
move with Ultra Wide Spread on exceptionally high volume, usually closing on or above the
middle of the bar and with the price entering fresh new low ground.

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Sideways Move

A sideways move is a situation in the market when the price moves horizontally. Very often it
takes place when professionals are re-distributing/re-accumulating and do not want the price
to go significantly up or down immediately. Therefore, it is sometimes called a ‘period of
consolidation’.

Sign of Strength (SOS)

Sign of Strength is the VSA principle that identifies the strength on the chart of the particular
asset at the time when the price bar is closed. There are three SOSs in TradeGuider VSA Lite:
Potential Professional Buying (PB), Shakeout and Test. The description of these VSA principles
can be found in Appendix 1. Description of Key VSA Principles.

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Sign of Weakness (SOW)

Sign of Weakness is the VSA principle that identifies weakness on the chart of a particular
asset at the time when the price bar is closed. There are three SOWs in TradeGuider VSA Lite:
Potential Professional Selling (PS), Upthrust and No Demand. The description of these VSA
principles can be found in Appendix 1. Description of Key VSA Principles.

Smart Money (Professionals, Professional Groups, Market Makers, Composite Operator)

A generic term, smart money refers to major players in the market. These individual investors
or groups of traders are well-informed professionals in the trading business. They have
enough capital to move the markets significantly in any direction and often have the capability
to generate or impact key news. Very wealthy individuals, institutional investors, pension
funds, central banks, trading syndicates are all examples of what is termed smart money.

Spread (Range)

In the VSA methodology, the distance between the high and the low of the price bar is called
the spread or the range of the bar.

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Stopping Volume

To stop the price after a down move the professionals need to step in and buy. The VSA
principle showing this activity is called Stopping Volume and is characterised by the down bar
on high, increasing volume.

Usually, Stopping Volume is less dramatic than a Selling Climax and may either cause the price
to move sideways or even reverse the trend.

As stated in the book ‘Master the Markets’ by Tom Williams:

“Stopping volume can be compared to a downhill skier who, as he finishes his long run, has to
stop by turning the skis sharply. This is spectacular, throwing up plenty of snow, which
eventually stops him.”

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Strength

In the VSA methodology strength identifies the condition when either demand overcomes
supply or when there is very little or no supply on the particular price bar.

Supply

This is the quantity of a particular asset that is available for sale at a particular point of time
at a specific price level. Together with demand, supply is one of the cornerstones of VSA
because in this methodology all market activities are evaluated against the imbalance of
supply and demand. In general, if supply exceeds demand, price falls and vice versa, if demand
prevails over supply, the price rises.

Trigger Bar

In the VSA methodology this is the price bar with very significant volume located in specific
areas of the chart which identifies either the buying or selling activity of the professionals from
or to the uninformed public, and marks the beginning of a potential VSA sequence. In many
cases Trigger Bars start the accumulation or distribution process causing the market to reverse
its direction.

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 In the TradeGuider VSA Lite indicator, Trigger Bars are represented by Potential Professional
Buying (PB) and Potential Professional Selling (PS) VSA principles.

Trigger Lines (Trigger Numbers)

Trigger lines are horizontal price levels on the chart which mark the high, the low and, in some
cases, the close prices of the bars with very significant volume (Trigger Bars). Re-approaching
trigger lines on low volume after the price has moved away may create high-probability low-
risk trade setups.

In the TradeGuider VSA Lite indicator trigger lines are drawn on the high (top) and on the low
(bottom) of the last identified Potential Professional Buying (PB) or Potential Professional
Selling (PS) VSA principle.

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Up Bar

An Up Bar is a price bar on the price chart with its closing price higher than the closing price
of the previous bar

VSA Setup (VSA Sequence)

A VSA Setup is a group of particular VSA principles that follow each other, are found in specific
areas of the price chart and identifies high-probability low-risk trades. In general, a VSA Setup
may consist of two or more VSA principles, but it always starts from the Trigger Bar that is
later joined by one or several confirmation VSA principles around support/resistance levels.

In the TradeGuider VSA Lite indicator a VSA Setup always consists of two VSA principles.

Weak Holders

In his book ‘Master the Markets’, Tom Williams provides the following definition of this term:

“Weak holders are traders who have been locked in at higher prices, suffering the fear and
pressure of losses, which cannot be tolerated any longer. These weak holders gladly sell to the
strong holders. This then gives the strong holders, who are on the right side of the market, the
opportunity to buy and to cover their short positions without putting the price up against their
own buying.”

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Weakness

In the VSA methodology weakness identifies a condition when either supply overcomes
demand or when there is very little or no demand on that particular price bar.

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Revision History

Data Version Creator Changes

20/07/2021 0.0 Grigory Margolin Initial document created

30/07/2021 0.1 Arthur Robinson Document update

02/08/2021 0.2 Jean Loftus Document update

05/08/2021 0.3 Grigory Margolin Document update

06/06/2021 0.4 Arthur Robinson Document update

12-20/08/2021 0.5 EB Document edit

03/09/2021 0.6 Grigory Margolin Document update

06/09/2021 0.7 EB Document edit

10/09/2021 0.8 Grigory Margolin Document edit

13/09/2021 0.9 EB Final proof

14/09/2021 0.9.1 EB Final proof with addenda

15/10/2021 1.0 Grigory Margolin First edition

Update in accordance with

07/09/2022 1.1 Grigory Margolin
recent software correction

07/09/2022 1.2 EB Proofread update

08/09/2022 2.0 Grigory Margolin Second edition

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