Jesse Livermore
To understand the methodology of Volume Spread Analysis we have to first search it's origins and I want to start back in the year of 1877.It all started with a man named Jesse Livermore. He was one of the more notiable early traders who learned about price action and was able to translate the price movement and volume had a relation. He further developed which he effectively used for years to profit and the hands of the early bucket shops and eventually Wall Street before his death. There was a book written about his experiences, Reminiscences of a Stock Operator.
Richard Wyckoff
__Wyckoff's research claimed many common characteristics among the
greatest winning stocks and market campaigners of the time. He analyzed
these market operators and their operations, and determined where risk
and reward were optimal for trading. He emphasized the placement of
stop-losses at all times, the importance of controlling the risk of any
particular trade, and he demonstrated techniques used to campaign within
the large trend (bullish and bearish). The Wyckoff technique may
provide some insight as to how and why professional interests buy and
sell securities, while evolving and scaling their market campaigns with
concepts such as the "Composite Operator". He wrote several books however his most notable one was The Day Trader's Bible
Richard Ney
_ He wrote three highly critical books about Wall Street, asserting that the market was manipulated by market makers to the detriment of the average investor. The first of these, The Wall Street Jungle, was a New York Times bestseller in 1970. The second and third are The Wall Street Gang and Making It in the Market. Some of his most notable sayings;
1) Most investors will probably never make money in the market over the long run unless they learn to look at the market as a merchandising operation in which specialist manipulate stock prices in order to sell at retail what they bought at wholesale price levels.
2) Lacking the nourishment of fact about the specialist system, investors have been overfed and underprivileged by the media's fictions.
3) Mass education turns investors into puppets, the media fasten the strings, and the Exchange then hangs them.
4) To know your adversary, you must know his customs; to understand the influence that specialists exercise over the market, you must be able to identify the practices they employ to rig stock prices.
1) Most investors will probably never make money in the market over the long run unless they learn to look at the market as a merchandising operation in which specialist manipulate stock prices in order to sell at retail what they bought at wholesale price levels.
2) Lacking the nourishment of fact about the specialist system, investors have been overfed and underprivileged by the media's fictions.
3) Mass education turns investors into puppets, the media fasten the strings, and the Exchange then hangs them.
4) To know your adversary, you must know his customs; to understand the influence that specialists exercise over the market, you must be able to identify the practices they employ to rig stock prices.
Tom Williams
_Tom Williams and his two books ('Master the Markets'*
and 'The Undeclared Secret that Drive the Stock Market'*) in which he discusses
his adaptation of Richard Wyckoff methodology. Tom Williams named his approach
the 'Volume Spread Analysis' or 'VSA' and it is based on the bar by bar study
of volume (or relative volume), the close and the range of the bar (high less
low) to judge the contest between demand and supply.Both Wyckoff and Tom Williams adhere to the importance of market phases ([re]accumulation, [re]distribution, mark up, mark down), but we feel the Wyckoff definitions are tailor made to determine the change over from (re) accumulation to mark up or (re) distribution to mark down. He created a computer software program named Tradeguider