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Understanding Bag Holding in VSA

The document discusses techniques for finding nuance in volume spread analysis (VSA) charts to better analyze trends. It provides examples of VSA sequences that indicate shorting opportunities and emphasizes interpreting the general picture rather than focusing only on exact sequences. Bag holding is described as an indicator of panic selling on ultra-high volume with a narrow spread, representing smart money absorbing supply from panicking sellers. The document advises trading the subsequent strength indicated by bag holding.

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carmenyeo
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3K views21 pages

Understanding Bag Holding in VSA

The document discusses techniques for finding nuance in volume spread analysis (VSA) charts to better analyze trends. It provides examples of VSA sequences that indicate shorting opportunities and emphasizes interpreting the general picture rather than focusing only on exact sequences. Bag holding is described as an indicator of panic selling on ultra-high volume with a narrow spread, representing smart money absorbing supply from panicking sellers. The document advises trading the subsequent strength indicated by bag holding.

Uploaded by

carmenyeo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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The ABCs of VSA:

Subtlety and Nuance


By Lauren Snedeker

Todays Objectives
1. Finding nuance in the charts to help analyze
VSA Sequences
2. Showing how failed SOS is actually
confirming weakness
3. The mother of all VSA Indicators Bag
Holding: What is it? How to trade it?

Nuance
A subtle difference in or shade of meaning,
expression, or sound.
Application to VSA
Applying a broader meaning to the whole
picture
Apply the meaning and not the exact
sequence

Using the Shorting Set Ups


1. Supply Coming In, Supply Coming In,
No Demand
2. Possible Hidden Selling, Supply Coming In,
No Demand
3. Buying Climax, Supply Coming In,
No Demand
4. No Demand, UpThrust, No Demand

Move from exact to general


What do all of these set ups have in common?

They tell a story


The First Indicator
We need rising prices
We need high volume/Ultra high volume
We need Up Bars with Wide Spreads
We start the selling/distribution phase

The Middle Indicators


The prices rise, but the volume does not
Effort to push prices up fails
There is a mushroom over phase when prices
begin to fall can be gradual or volatile
Smart Money is not interested in higher prices

The Confirmation
A failure for prices to rise
They push up off old tops and come down
Now in a DOWNTREND
Exact No Demand bar
Nuance Failed Tests, Trap Up Move,
widespread down bars slicing through old
areas, lower volume

Example #1 - Exact

Example #2 - Nuance

Example #3 - Nuance
Failure to Rise
Trade Entry Range

Failed Tests
Takes out
prior support
to the left

Exit
Range

Take Aways

Use the Sequence Set Ups as Guidelines


Picture the chart and what it looks like
Avoid It must or It has to thoughts
Use trend clusters or support/resistance areas
Trade the Trend

Bag Holding
What is it?
Why are we talking about it?
How do we trade it?

What is Bag Holding?


Narrow Spread
Down Bar
Ultra High Volume
Fresh New Low Ground
Rare & Strong Sign

What does Bag Holding mean?


This occurs when the herd panic and unload at
rock bottom prices
The narrow spread =
Smart Money
absorbing all that
unloading by the herd

Bag Holding - Background


Must must must have a clear downtrend in
place
This is the stop of falling prices

OR

Demand by the Smart Money overcoming the


Supply being sold at bottom prices by the
Herd

Bar A = Bag Holding

Bar B = No Supply

Bar C = Strength Coming In

How to Trade a Bag Holding


Need to volume to decrease = shows Smart
Money has tested all the supply and its
mostly gone
Look for Shakeouts or Tests back into area of
Bag Holding is a very strong Sign of Strength

Thank you!
[email protected]
Skype: lauren13sned
Find out more: www.tradeguider.com/lauren
Call me: 312-373-6294

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