PVSRA Trading Method - Take a look at the chart through the eyes of the Market Maker
Hello ladies and gentlemen, Forex traders! Today we will talk about the famous trading method. PVSRA. There will not be any clear rules, which the author of the method draws attention to - this approach provides an opportunity for the manifestation of the personal vision of the trader.
Actually, there are many strategies based on this technique, and one of them (Tvt20) Today we will consider. It should be noted here that the system (the PVSRA trading method) requires experience with it - that is, the skills of the trader play a big role. The system is based on calculating the maneuvers of large players and, most importantly, the direction in which they are gaining ground. It will not be easy, but interesting)
Platform: Metatrader 4
Currency pairs: any
Trading Time: London Session
Recommended brokers: Alpari, RoboForex, Amarkets
First of all, I would like to thank the author of this technique - Traderathome. Initially, this technique appeared on the ForexFactory forum, but then, due to commercial charges (little substantiated), the author decided to create his own forum //pvsrainternationalwithtraderathome.com/. The most valuable section is the Trading Room, where you can see examples of transactions using the methodology, and how various traders understand it. Also, at ForexFactory you can find many ready-made strategies based on this methodology. That is - people take the method and interpret it according to their own vision of the market.
The essence of the PVSRA method
Let's start with the very essence of the method, its theses and premises. PVSRA is an abbreviation: P - Price, V - Volume, S - Support, R - Resistance, A - Analysis.
So, imagine there is some price chart. Imagine that you are a regular trader and you open a position in 10-20 lots. But, in addition to ordinary traders, there are still large players on the market: various funds, banks, etc. It’s not so easy for them to open a large buy position, because when they enter the market they simultaneously make the price rise. At the same time, liquidity is not rubber, therefore the position itself is opened not at one price, but in parts, at an increasingly less favorable price. Everything is like potatoes on the market - with increasing demand, the price rises.
Therefore, in order not to cause a strong price increase in the direction of the position, we can say, hide their intentions, large players enter the market in situations that are called “removal of stops”, or on corrections.
Also, sometimes such situations are artificially created when the price drops sharply and even breaks the previous low. Here, pending sell orders and stop-loss orders of those who held buy positions are immediately activated - all this is additional liquidity for a large player who wants to buy a large amount of currency. In this case, when there are many offers for sale, the price will not move much anywhere - a very convenient situation for a major player.
Our task is to determine what large players did earlier on the chart, and try to guess what will happen next. That is, if we see that there was a take-out of stops and a collection of Sell-liquidity, then we assume that large players are gaining a position to buy and, accordingly, are looking for opportunities for purchases. On the contrary, if large players are gaining positions for sale, then we are looking for opportunities for sales.
The removal of stops should be accompanied by a significant amount. Rising volumes at the lows - opportunities for purchases, high volumes at the highs - opportunities for sales.
As we remember, there are round price levels, for example, 1.3300, and intermediate: 1.3250. Together with them, the system uses levels 75 and 25. So, consolidation under a round level is preparation for long positions, consolidation above a level is preparation for short positions.
Also, pay attention to the news release time. But not the news itself, as you probably already noticed that the price often goes in the opposite direction to the value of the news. In this strategy, we consider news as a possible driver for the price. Say, if before that, major players were actively gaining purchases, then, accordingly, there will be a powerful impulse up.
Opening the archive with indicators, you will find two folders: one with White Charts, the other - Black Charts. The first is for the white version of the graphs, the second for those who prefer the dark version. To install, you need to copy the contents of the folder to the terminal data directory. We have detailed instructions on installing strategies on our site.
Next, open any chart, call the context menu with the right mouse button and select our template. A description of the operation of each indicator will be attached as a separate file.
PVRSA Trade Levels
The indicator does not indicate support-resistance levels, as you might think, but shows data on your positions: stop-loss, take-profit, average profit, etc. If you close the position, the indicator draws a dashed line to the exit point.
PVRSA Access Panel
In the upper left corner, the indicator shows a plate with the current spread value, current range, swaps and time to close the candle. Also, the indicator draws round horizontal levels, the time of trading sessions (Lo - London Open, Lc - London Close), and the value of the current spread relative to the average - a green dot means that the spread is in normal values. See the training manual for more information on setting up the indicator.
PVSRA News Panel
This, as you probably guessed, is a panel with future news. In the settings, you can immediately turn off the display of news with medium and weak influence, since the latter slightly affect the market.
PVSRA Trends Set
The indicator consists of three moving averages - their values are signed at the bottom of the screen. If desired, you can change the periods, the type of averages and the position of the information label itself on the chart.
PVSRA Candles Set
The indicator is responsible for coloring candles in the colors of the histogram of volumes. Green marks the culmination of purchases, red indicates the culmination of sales. These terms are explained in detail in the VSA methodology. Violet and blue colors indicate a situation when the volume of the candle is greater than or equal to 150% of the average volume for the previous 10 candles of the current TF. The bullish signal is marked in blue, and the bearish one in purple. Along with coloring the candles, you will receive an alert in the form of a standard MT4 alert.
PVSRA Volumes Set
In fact, it has the same purpose as the Candles Set, but is displayed in a separate chart window, in the form of a histogram. Compared to the indicator on the main chart, the histogram is more visual, since it allows you to compare the values of volumes with the previous ones.
Trading system TVT20
Now we turn directly to the system, that is, to more pronounced and clear rules based on the described method. So, for entry we need to comply with certain requirements:
- The presence of a clear trend, that is, an acute angle of inclination of the moving 50;
- We enter in the direction of the three averages. That is, indicators should move in a consistent way, in one direction;
- Next, you need to wait for a strong movement against the trend, with the removal of stops per level and increased volume.
After taking out the stops, the price should make a semblance of a zigzag movement. That is, we need movement along the old trend, a slight rollback to the average and the continuation of the trend. We enter the trade in the direction of the trend when breaking through the next round level.
The take profit of the transaction is 20 points. Stop-loss is set for the second rollback (rollback to the average). Nevertheless, the author recommends not to put a stop, but to have it on your mind, as he often makes stops, and an extra pair of points is unlikely to solve anything. It's already up to you, in my opinion, it is better to have a hard stop.
From the additional rules:
- We do not trade on Friday, since at this time many reports come out and large players open positions;
- We are added to the position according to the rules of the strategy. In general, it is recommended to enter in fractions - that is, a bunch of orders. We make refills only near the stop loss;
- We trade in the London session.
The number of strategy entries can be rather large, so money management is quite conservative. Better to trade with a fixed lot, at the rate of 0.01 lots for every $ 500 deposit.
Search for a setup in this system must begin with the removal of stops. Although, if you follow the author, he recommends starting with a clear trend. So, the removal of stops is accompanied by a large volume. Here you can not pay particular attention to the specific color of the candles, the main thing is the presence of a large volume. That is, all colored candles will do.
Next, we are waiting for a return to the trend and a rollback to the average. At the same time, the price is consolidating at a round level, and this, as we recall, means preparing for long positions. At this level, we establish a Buy Stop order. We set stop loss at a local minimum, at a rollback to the average. Take profit according to the system of 20 points. However, again, many apply both trailing and higher profit values, or other types of closures.
Here we also have the removal of stops with a call for the average, then a return to the trend and correction. However, the price broke through the round level before the correction, and according to the rules of the system, we must enter the breakdown. Therefore, we miss such an entrance.
There was a moment with the removal of stops, accompanied by large volumes. However, if you pay attention to the slow (yellow) average, then it is clearly directed downwards, which means that the entrance to purchases is excluded.
Here we have a takeaway stop with a breakdown of a round level. After returning to the trend and rolling back to the middle, we can consider the entrance to the sale. Also, a small takeaway occurred after the activation of the order. As a result, a rather long consolidation above the level has paid off, since subsequently a sufficiently strong downward shot occurred.
Takeaways - this is such a sharp and short-term movement beyond the middle with a return, accompanied by a large volume. Thus, you can purely visually look at the chart for entry opportunities.
Sometimes, even if there is no obvious removal of stops on the chart, other signs of volume accumulation can be used. For example, here we have a long consolidation above the level of 50. In this case, stop-loss is set either at the nearest maximum or at a round level. The second option is more logical, since during the time of consolidation the price just reached the level. Take profit according to the system of 20 points, but, again, you can use different options: trailing, partial closing, or wait for the culmination of sales.
The following example, one can say, is book. Here, with the naked eye, the removal of stops is noticeable, while the huge volume and size of the candles. Then there is a rollback to the average, and after consolidation, you can enter the market for a breakdown of level 25.
Examples of complex transactions
Consider several complex login options from the author’s site. As mentioned earlier, this method requires experience, therefore it is on the forum that you can find really complex and interesting examples of transactions.
In the first example, we see the removal of stops in a downward movement. At the same time, entry here is carried out without waiting for the trend to return and rollback to the average - experienced comrades enter immediately at the removal of stops. Accordingly, the earning potential is higher. Stop loss is set for the maximum removal of stops, and profit is fixed after about 20 points.
Further, an example from the author of the methodology. Again, the entrance to the removal of stops, while at a small volume. But, when the price reverses, he already assumes that there will be a continuation of the bullish movement - there was consolidation below the level of 50. Therefore, the order closes in advance, with a profit of about 25 points.
Here the entrance is already after consolidation, below the level of 50. Take profit is small, about 10 points. The author explains this by reinsurance before the news release.
Another interesting example. Entrance here is carried out by many orders on the removal of stops. The arrows on the chart indicate the moments of the set of Sell-liquidity. But, keep in mind that in order to trade - experience is needed.
Again, an example of how, when taking out stops, the author of the screenshot was gaining a buy position, and then closed all orders at one point.
Another interesting example. Rectangles indicate moments of liquidity gain. The author drew attention to the accumulation of bearish volume, and the divergence that arose - the price goes up, and the volume falls. Then we have consolidation above level 50 as the climax. Entrance is carried out after the breakdown of the level.
In the last example, note that entry into the market takes place after the opening of New York. Therefore, if you trade according to the method, then your interpretation of the situation on the market already plays a role. The screenshot author drew attention to the consolidation above level 50 (white arrow). The position gain is gradual, with several orders. The closure occurred on consolidation at level 50, that is, in preparation for the purchase.
In any case, in the beginning, try using the ready-made TVT20 system, where there are more stringent rules, and then try your own variations based on the described PVSRA method and your experience. The main thing is to understand the general idea and concept - why it happens this way and not otherwise. By the way, if you understand this method, you will already look at the graphs in a completely different way. You will understand why the same removal of stops occurs in reality, how the preparation for sales, purchases, and what prerequisites follow.