TradeGuider

TradeGuider is based on a methodology called Volume Spread Analysis.  VSA is a proprietary market analysis method which was conceived by Tom Williams (Chairman of TradeGuider Systems). VSA is utilized in the TradeGuider software to analyze a market by observing the interrelationship between volume, price and spread of the price bar (often known as the range of a price bar). This method is particularly good at highlighting imbalances of supply and demand. The highly acclaimed Book Master the Markets by Tom Williams explaining Volume Spread Analysis & more is provided here for free as a pdf, this $99.00 value book is fully printable. Your browser will go blank for about 5 minutes as the book downloads, then it will open automatically so you can then save it to your computer. 17.5MB Download Here: www.tradeguider.com/mtmv3.pdf

Now some background about TradeGuider, which was previously known as Wyckoff VSA. VSA is an abbreviation of Volume Spread Analysis, a trading methodology developed by veteran syndicate trader Tom Williams (more about Tom later), and has been in existence for over 14 years. TradeGuider is unique. Driven by an artificial intelligence engine, the software is capable of analyzing any liquid market, in any time frame, and extracting the information it needs to indicate imbalances of supply and demand on a chart. In doing so, TradeGuider is able to graphically show the essential force that moves every market.
The software works in end-of-day mode using Paritech DataDirector or in Real Time using E-Signal Data, and enables users to see when professional money is entering, exiting, or not participating in the market they are trading, empowering clients to make more intelligent, timely, and informed decisions. TradeGuider is a revolutionary concept that can be used on its own or in conjunction with other trading software platforms, making it an ideal choice for adding value to data vendor platforms or as decision support. The software combines ease of use with the best supply and demand analysis in the business. The extensive Expert System has an innate understanding of market dynamics combined with volume, which means that it is capable of analyzing supply and demand in any liquid market.
The indicators are displayed automatically on the chart. There is no configuration, no setting of parameters, and no optimization. We are of the belief that if a system requires optimization to make it work, then the base methodology cannot have been sound in the first place, since the process of optimization is used to cover up a whole range of flaws in the original analysis method(s). Instead, our concepts are robust and can be applied to any timeframe, with consistent results. The sophisticated Expert System is augmented by a novel set of proprietary tools, which ensure that TradeGuider is most definitely not a ‘me too' product.

As we said earlier, this is not a new concept, and Tom Williams who invented VSA was himself a syndicate trader who could see that the markets were manipulated and that the key to unlocking the truth lay in the relationship between the volume, the range or spread of the bar and the closing price. Tom spent many years studying the concepts of Richard Wyckoff. Richard Wyckoff was a trader during the 1920 and 30’s. He wrote several books on the Market, and eventually set up the "Stock Market Institute" in Pheonix. "At its core, Wyckoff's work is based on the analysis of trading ranges, and determining when stocks are in "basing," "markdown," "distribution," or "markup" phases. Incorporated into these phases are the ongoing shifts between "weak hands" (public ownership) and "composite operators", now commonly known as smart money."

Tom came back from Beverley hills in the early 1980’s and began to investigate if it was possible to computerize the system he had learnt as a syndicate trader, and so began the evolution of Volume Spread Analysis. Together with an experienced computer programmer Tom carefully studied many thousands of charts to recognize the obvious patterns that were left when professional or smart money was active. This methodology although simple in concept took many years to write and is now taught as a methodology combined with the software called TradeGuider.
Volume Spread Analysis seeks to establish the cause of price movements. The ‘cause’ is quite simply the imbalance between Supply and Demand or strength and weakness in any liquid market, which is created by the activity of professional operators or “Smart Money”. If you use the TradeGuider software you will see that it does an excellent job of detecting these key imbalances for you, taking the hard work out of reading the markets and enabling you to fully concentrate on your trading.

The significance and importance of volume appears little understood by most non-professional traders. Perhaps this is because there is very little information and limited teaching available on this vital part of technical analysis. To use a chart without volume is similar to buying an automobile without a gasoline tank.
For the correct analysis of volume, one needs to realize that the recorded volume information contains only half of the meaning required to arrive at a correct analysis. The other half of the meaning is found in the price spread. Volume always indicates the amount of activity going on, the corresponding price spread shows the price movement on that volume. Many traders believe you cannot analyze volume is the FOREX markets because it is unavailable, but we will show you how TradeGuider proprietary system can something that most traders thought was not possible. More about this later.
Some technical indicators attempt to combine volume and price movements together. Rest assured that this approach has limitations, because at times the market will go up on high volume, but can do exactly the same thing on low volume. Prices can suddenly go sideways, or even fall off, on exactly the same volume! So, there are obviously other factors at work.
Price and volume are intimately linked, and the interrelationship is a complex one, which is the reason TradeGuider was developed in the first place. The system is capable of analyzing the markets in real-time (or at the end of the day), and displaying any one of 400 indicators on the screen to show imbalances of supply and demand.


The TradeGuider Indicators
All of the indicators can be grouped into two broad categories:
1.Indicators that show weakness are coloured red. Weakness is indicative of supply, professionals selling the market, or professionals withdrawing from the market (i.e. no participation.)
2.Strength is indicated by green symbols and is indicative of market demand (i.e. professionals buying into the market.)
TradeGuider constantly analyzes your charts for imbalances of supply and demand or strength and weakness. Once an imbalance is found, a red or green indicator is displayed, alerting you to the likely strength or weakness in the market. This chart (link below) shows a number of green symbols, indicating strength (demand). Showing supply and demand graphically on a chart is one of TradeGuider’s major strengths. In the chart below, we can see that following the cumulative effect of a build up of demand, the stock responds with a positive and sustained price rise.


 
 
This chart (link below) shows a number of red symbols grouped together, indicating weakness (supply). The market falls in price following each cluster of supply.



Medium Term Trend Changes – Bar Coloring There is a second trending system in TradeGuider that is designed to be a lot more insensitive to minor trend changes. It’s a volatility-driven system which takes into account how much a market moves. The more a market moves, the more forgiving the system becomes to adverse price excursions against the trend. However, if a market isn’t that volatile, the trending system becomes more responsive to movement. Have a look at the chart below for an example of this system in action: Green signifies a medium term up trend and red signifies a medium term down trend.


 
Here is an example of a TradeGuider chart. (Click link below). Because TradeGuider works in FOREX, Stocks, Futures and Commodities, the actual market we analyze for this document is irrelevant..



Now let’s look at some specific Volume Spread Analysis indications of demand. (strength) Stopping Volume Stopping volume is another indicator variant that shows when buying is overcoming selling. A high volume down move, on a wide spread would normally indicate selling. However, if the next day (or bar) is up, closing on the high, then this shows that absorption buying occurred on the previous day (or bar). Only professional money can do this and it is therefore a good indication of strength.
 


Notice on this chart the ultra high volume activity on a down bar with the price close in the middle of the bar. This can only mean professionals are buying the market otherwise the close would have been at, or near, it’s low. Now, lets look at this in an E-mini chart.
 

 

The concept of stopping volume, as with most VSA indicators, have different variations. By using TradeGuider you will be alerted automatically to all variations as they appear, accelerating your learning curve. The next chart we’ll look at will demonstrate what a test looks like. Tests, by their very name, are the professionals testing the amount of supply present in the market. When they test and there is low volume this clearly shows no residual supply and the market is likely to rise in the near future.



Now let’s look at an E-mini chart, please note that the indicator description box refers to the green VSA indicator which the red vertical line is on. Notice the low volume on this test showing the professionals there is very little supply in the market.



Now let’s look at some specific Volume Spread Analysis indications of supply (weakness). Let’s take a look at what the end of a rising market looks like.



Now let’s see what this looks like on an E-mini chart.
 


Please note the ultra high volume with a very narrow spread closing on it’s high, the professionals are selling at this point to weak holders.
 

For further details call us on 1300 652 511.

 

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General information only - Non Advisory
Before making an investment decision on the basis of this software, the investor or prospective investor needs to consider, with or without the assistance of a securities adviser, whether the advice is appropriate in light of your particular investment needs, objectives and financial circumstances of the investor or prospective investor. Paritech Financial Services Ltd provides extensive training on the use of this and other products. Please do not hesitate to contact us for further information.