HOW-TO What to look for in the MTP Volume (VS) Trade Setup

Jan 28, 2021

In this help Tutorial, we take a look at using the VS or Volume Spike trade setup in the MTPredictor Advanced trade setups script.

The Volume Spike or VS setup is designed to find a "fake out" when the market fails to follow though on the break of an important prior swing high or low. The idea is that professional traders look to accumulate a position in the opposite direction to the amateur traders who then get caught as the market moves sharply in the opposite direction. The MTP Decision (DP) script is used to find the level at which the reversal often occurs.

Position Sizing is used to keep the losses (and there will always be losing trades) small at -1R (one risk unit), when compared to the potential profit at the target. The profit target for the trade setup is the MTP Decision Point (DP) level from the prior swing pivot. The entry trigger is the MTP coloured reversal bar (available in the MTP Analysis script), blue for a potential buy, red for a potential sell.

The VS setup should unfold when the market "fails to follow though" to new highs or lows, after a break of a "prior important high or low", and not from a prior minor swing in the same direction.

Ideally this should unfold when the MTP Trend colour is in agreement, ie Grey, to show that the larger degree trend is in the process of making a reversal.

Please note: this is not a trade recommendation, you should all perform your own Analysis. Losses can and will unfold when Trading, please always use Stops and keep your losses small.