My VSA Notes

Trading in the Shadow of the Smart Money (Gavin Holmes)

MAKE AN INDEX AS WELL
Chapter 1 - The meeting that changed my life
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All financial markets move on the universal law of Supply and Demand.
2. Wyckoff VSA pulls out the information relating to supply and demand out of the price chart to give
clear signals when the big players (Smart Money) are very active or inactive, so you can trade in

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harmony with their moves.

If you can read SUPPLY and DEMAND by reading volume, you can separate yourself from the HERD.
4. Accumulate most of the stocks (Accumulation), create hype by publishing bullish news, raise prices
(Mark Up), and take profits by selling (Mark Down and Distribution).
In order to create VSA software, Tom was interested in only 3 things:
Volume (i.e., Activity)
Spread (i.e., the range of price bar)
Close (the point where the price closes in the current bar) ***MOST IMPORTANT among the
THREE***
6. 9/11 attack example:
Markets were closed for a week and news was filled with the idea that the market will crash.
When the market opened, it did plummet and media sources were predicting an inevitable

bearish market.
In reality, syndicate traders were buying from the panicking sellers because a bargain was to be

had.
A truthful media would have reported it like this: markets have reopened today and prices have
fallen rapidly as presidents have warned of further attacks. This is having a negative impact on
stock prices even though on 10th and 12th September 2001, there was no change in the position
of companies so panic selling seems somewhat irrational. The good news however is that we
have direct contact with insiders and market specialists on various exchange floors and they have
told us that their traders are busying buying everything that is being sold by panick stricken
HERD. So, you will see in a week or two that the market is not bearish at all but bullish and will
rise rapidly as stocks and other instruments have passed from Weak holders to Strong
holders. This will be clear from the massive volume to the downside. Note that the bar
has closed in the middle, not on the low; this indicates that buying must be taking
place and therefore, contrary to what the news is implying, prices will go up, not

down.
This is an ongoing process in varying degrees of intensity. THE chart never lies if you learn to read
it correctly.

Chapter 2 - The Game on Wall Street: Market Manipulation

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