http://www.sfomag.com/homefeaturedetail.asp?ID=363568822&MonthNameID=June&YearID=2006
Rediscover the Lost Art of Chart Reading: Using Volume Spread Analysis by: Todd Krueger There are more than two approaches to analyzing the market. Go beyond fundamentals and T/A. Most traders are aware of the two widely known approaches used to analyze a market, fundamental analysis and technical analysis. Many different methods can be used in each approach, but generally speaking fundamental analysis is concerned with the question of why something in the market will happen, and technical analysis attempts to answer the question of when something will happen. There is, however, a third approach to analyzing a market. It combines the best of both fundamental and technical analysis into a singular approach that answers both questions of "why" and "when" simultaneously; this methodology is called volume spread analysis. The focus of this article is to introduce this methodology to the trading community, to outline its history, to define the markets and timeframes it works in, and to describe why it works so well. What is Volume Spread Analysis? Volume spread analysis (VSA) seeks to establish the cause of price movements. The "cause" is quite simply the imbalance between supply and demand in the market, which is created by the activity of professional operators (smart money).
