While I’m on a roll releasing old, lost episodes from the former 52 Traders podcast. I thought I’d get this episode out the door too!
It’s with He Shuhan (a hedge fund manager, multi millionaire trader and central bank educator). I featured him early on in the show after hearing how he took a $1000 account to $100,000 in just one week.
In his first episode he left me on a cliff hanger, suggesting I research something called Volume Spread Analysis (VSA).
In this episode you’ll find out why He Shuhan felt it was so important and learn how VSA could apply to your trading, regardless of the instrument.
And if you’re hungry for more, you can always check out his first episode or his moving averages course.
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[06:47] VSA actually has two components, first the Volume, second the spread.
[07:49] In the Forex market there is no centralized volume because it is OTC (over the counter) traded predominantly by seven or eight large banks.
[08:02] Volume is one of the key driving factors of price.
[08:08] Another key driving factor of price is the level of desperation which is reflected in the spread.
[09:01] The spread will actually tell you the level of desperation that is gonna happen in the market.
[10:07] If you are trading some OTC markets like Forex, for example, there is no centralized, accurate data for volume even if you’re using the institutional platform such as EBS.
[14:22] A transient zone is where the price is transient and usually does not come back through the current zone again.
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[17:42] You need very good money management to reduce the losses and therefore net an edge over time.
[18:05] I’m trained both in fundamentals namely the discipline of global macro, I’m also trained in technical trading.
[19:07] The Markov Chain Stochastic Process only tells you that there are short-term repeatable patterns that are gonna occur.
[22:18] Order Flow is actually one of the most superb tools if you want to trade the futures market or even the stock market.
[22:46] VSA is much more visual because you do need to look at the length of the spread.
[23:09] Order Flow is the even shorter variation of VSA and a less visual way of doing VSA.
He Shuhan’s Trading Account
During my time with He Shuhan I took a 3 week intensive program. This was a screenshot I grabbed during one of our sessions. If you did deep into what’s on the chart and in the terminal you’ll get an insight into how a hedge fund manager manages risk and where they look to take profit.
As a side note, the inidcator at the bottom of the chart was a variation of the one he gave me early on in the 52 Traders podcast. You’ll have to head back there for more detail.
Want to learn more from He Shuhan? Click here for his mini course.