I tend to think of VSA as being the observation of how people...

  1. 632 Posts.
    I tend to think of VSA as being the observation of how people are actually acting in the market. Often fundamental news is something of an exogenous shock on the supply/demand balance and various actors have different interpretations/priorities driving how they are responding to that shock and the opportunities it is presenting.

    I often find it useful to have an idea of the fundamental news and what people are saying about it, but then watch the market through the lens of VSA to understand how people are 'actually' acting.

    For example, I might be more inclined to interpret some ambiguous price action as being 'absorptive' rather than 'supply' if I have a strong fundamental bias.
    Or if people seem to be getting carried away with some news and I can see some sort of supply event occurring on the chart I might be more inclined to be bearish.
 
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