High Volume Zones (HVZ) are areas where volume is at it’s highest for a given period and the zone (price levels) it occurred on the long side and the short side. It is very simply what we refer to as Smart Volume Based Support and Resistance (VSR). They tend to be far more accurate than simple S/R due to the additional component of volume.
The screenshot shows our HVZ module (and Smart Volume) that we demonstrated live and in real time within our Google+ Hangout earlier today.
I will note a few things here rather than the chart itself as there is a lot going on.
1. Shows the various HVZ areas drawn automatically by our software.
2. Is where we started our analysis live and the Climax Sell (Painted automatically by Smart) which broke through the preceding HVZ and gave us a new low and high HVZ to trade within. Each bounce and signal within was good for about 4 points. By trading within you end up with many more points than simply holding for a big move.
3. Is a good example of a strong signal breaking through a HVZ which is needed to breakout of an HVZ range. In this example it is a High Volume Effort To Fall (Painted automatically by Smart)
4. Is our Smart Buying Signal (Proprietary) that gave an easy 4.25 points off the HVZ
5. A Shakeout (Painted automatically by Smart) which normally in an excellent long entry point wasn’t able to break through so we would expect a move back down.
The following bars were traded back and forth quite easily using the HVZ areas as S/R lines.
Some additional notes about our HVZ module: HVZ are zones not exact levels, they are very strong areas of support and resistance.
These examples are not cherry picked, the screenshots are real World examples selected from all of the charts I watch where the signal(s) and or concepts being discussed have appeared at the time this article was written.
Please also keep in mind SMART Trader itself is painting these bars which makes these patterns and setups much easier to spot and act on. There is no guesswork, if a signal is painted it is valid.
These patterns repeat themselves day in and day out and using SMART you can clearly see not only standard VSA signals but our advanced multibar SMART VSA patterns as well.
Trade setups are verified using our proprietary background scanners and Smart Advisor which are included with the system.
For more information or if you have any questions about SMART Volume Spread Analysis (VSA) Software please visit the following links:
Smart Trader VSA (Volume Spread Analysis) Software you can also visit our Live and Free VSA (Volume Spread Analysis) Chat, Trading Rooms, and our other free volume spread analysis resource sites (linked below) to learn more.
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Please note: This is an older article posted to our resource site. It got lost in the move so I am reposting it here but as it’s older some things may have changed. We do many free updates and sometimes things change, if you have any questions or notice an outdated reference please contact us from the support link on the website.