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4 Key Reasons to Use the Wyckoff VSA Trading Method in Your Strategy

Posted by Tradeguider Team on May 29, 2020 8:30:00 AM
Tradeguider Team

Reasons to use the Wyckoff VSA trading method

The Wyckoff VSA trading method (Wyckoff Volume Spread Analysis) has been in use for decades by those who understand that no amount of fundamental or technical analysis will increase their trading performance. If you feel like you lack that one thing that prevents you from missing market tops and bottoms, from excessive drawdown or from exiting the trade at the wrong time, then read on...

1) Wyckoff VSA is the most reliable decision support

Experienced traders know that relying on mathematical formulae leads to failure as often as it leads to success. 

But when Wyckoff VSA trade alerts notify you about a potential trade with a high–probability outcome, it hasn’t identified that opportunity based on formula analysing past performance. It is based on cross-referencing the amount of volume or activity in the market, the range or spread of the price of that instrument and the closing price on that bar. 

What does that tell you? It identifies what the market movers are doing as they do it, as discussed in our recent blog on the Wyckoff VSA method. ‘They don’t want to show their hand but they can’t hide their footprint here’, says Gavin Holmes, CEO of Tradeguider, on how the ‘smart money’ can be tracked on the price chart

By using Wyckoff VSA to follow this system, you can learn to override those unhelpful instincts that have made you lose in the past and do what the data tells you to do. Traders who track their trading in harmony with the big players will find plenty of profitable trades in the aftermath of their actions.


2) VSA offers a three-dimensional view of the markets

The Wyckoff VSA trading method looks at the way closing price, volume of activity and spread interact, spread in this context being the range between the lowest and the highest prices, not the bid-ask price as some people consider it. 

The VSA methodology takes a multi-dimensional approach to analysing the markets, combining the best of fundamental analysis and technical analysis, answering the 'why' and 'when' of trading trends simultaneously. Some technical indicators attempt to combine volume and price movements together, but prices can suddenly go sideways, or even fall off, on exactly the same volume, due to the other factors at work - the market manipulators. Wyckoff VSA crucially monitors these market movers to anticipate and react to trends.


3) The Wyckoff VSA trading method removes subjectivity from trades

VSA seeks to establish the cause of price movements to predict the future direction of prices - the cause is essentially the imbalance between supply and demand in the market. The Wyckoff VSA trading method is all about monitoring the tops and bottoms of trends to identify signs and levels of strength and weakness, in order to detect the movement of the smart money.

In detecting the activity of the smart money and removing subjectivity from trades, the Wyckoff VSA trading method enables traders to:

  • Make moves in the markets at the optimal times
  • Trade with greater confidence and clarity
  • Reap the rewards of timely trades


4) The approach has stood the test of time

The Wyckoff trading method has been around since the early 1900s – read its history at volumespreadanalysis.com – and the person who codified it into the VSA we know today, Tom Williams, taught our CEO Gavin Holmes directly. Tom wanted to stop analyzing the charts by hand and so developed the underlying chart analysis software. Gavin has successfully been trading with it since 2006 and now manages our Gibraltar Fund. You can Gavin trading live with real money here both in our Resource Center and on YouTube.

The Wyckoff VSA trading method, as encapsulated in our SMART Technology, has been used around the world by many big traders. Championship traders Earl Erenler (a contestant in the 2010 World Cup Championship of Futures and Forex Trading) and Tim Rayment (who took first place in the 2009 World Cup Trading Championships FOREX division) credit it for helping them to hit targets consistently.


Learn more about Wyckoff VSA and how to apply the method

If you’d like to learn more about the Wyckoff VSA trading method, we have lots of great resources and in-depth insights about the methodology and how to apply it to your trading strategy in our Free Resource Center. And why not explore our range of SMART trading packages? They combine rules-based strategies with a semi-automated Wyckoff VSA trading system, to help traders of all types and all markets to follow the smart money.

Explore our SMART trader packages

Tradeguider is the home of Wyckoff Volume Spread Analysis (VSA) and the only company to successfully automate the market insights of Richard Wyckoff, and enhance them with modern technology, in a way that really works for professional traders. Our products have a wide range of functionalities but no two traders have the same needs, so let’s schedule a demo where you can see us trade live with them. Then you’ll see how the Wyckoff VSA trading method will help you have greater consistency, increased confidence, better structure and a bigger trading edge.  

Topics: VSA volume spread analysis, Wyckoff VSA, SMART technology, SMART trader software, Trading strategy

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