A huge day trading the emini futures, as risk on appetite evaporates

A huge day trading the emini futures, as risk on appetite evaporates

In these traumatic times, it was another big move on the US markets with all the three primary indices falling sharply as risk on sentiment evaporates again. Using the renko optimiser indicator for NinjaTrader in conjunction with the time based charts is such a powerful approach and one we show here for the YM Emini futures.

00:00

Introduction to US markets day trading

00:00

The webinar begins with an introduction to trading in the US markets, focusing on indices, commodities, and some Forex during the US trading session. The presenters emphasize that their approach is applicable to various markets and instruments. Before proceeding, they highlight an important disclaimer about the risks of trading and advise viewers not to use money they cannot afford to lose. They also introduce their trading methodology, volume price analysis, which involves examining charts through volume data.

01:07

Wyckoff method and volume price analysis

01:07

The segment introduces the Wyckoff method, which analyzes price action and volume based on three fundamental laws formulated by Richard Wyckoff: supply and demand, cause and effect, and effort versus result. These laws help identify the structure of the chart and assess whether the price movements are authentic by examining volume. The speaker references a book available on Amazon that explains this methodology in depth, along with a companion book featuring over 200 practical examples. The Wyckoff method not only describes what is happening on the chart but also helps predict future price movements.

02:49

Impact of PMI data and pandemic on markets

02:49

The new trading month begins with the first quarter behind us, amid the global impact of the pandemic on financial markets. Recent PMI data, which measures manufacturing and services activity, reveals a grim outlook worldwide except for China. Chinese manufacturing data hovers around the 50 mark, an inflection point indicating neither growth nor contraction, though this data is met with skepticism. In contrast, Europe and Great Britain report PMI figures below 50, signaling contraction. However, these figures likely do not yet reflect the full impact of recent lockdowns, suggesting conditions may worsen before improving.

04:32

Current market sentiment and risk-off behavior

04:32

The market is showing a risk-off sentiment with major indices like the Dow, Nasdaq futures, and S&P all down, and the VIX elevated though not extremely high. The dollar is strengthening, and in the forex market, there has been significant yen buying, indicating a move toward safe havens. The Canadian yen pair is highlighted for its insightful volume and price action patterns, reflecting current market risk aversion.

05:40

The speaker is analyzing charts using NinjaTrader and discussing lessons from volume price analysis and Richard Wyckoff’s methods. There is emphasis on the importance of daily charts to understand overall market sentiment, noting that recent equity rises appeared misleading and were more of a mirage than a real turnaround. Viewers are encouraged to ask questions for clarification.

06:45

Various trading platforms are discussed, including NinjaTrader 8, TradingView, and MT5. MT5 is praised for its comprehensive multi-asset capabilities, allowing trading across forex, indices, commodities, and stocks without needing a futures account. It also requires a relatively low deposit, making it accessible for traders. The availability of micro futures contracts through CME is mentioned as an encouragement for more traders to enter the futures market.

07:51

The session transitions as the speaker adjusts the charts and chat box, ensuring communication is clear. The discussion is set to begin, inviting participants to engage by asking questions via the chat box.

08:41

VIX analysis and market volatility

08:41

The speaker discusses the VIX index on TradingView, highlighting different timeframes from one minute to daily. The VIX recently peaked slightly above 80 before pulling back, reflecting reversals in equities and fluctuating bearish sentiment over the past few days. The VIX is emphasized as an essential chart for intraday traders, even those focused on Forex, as it provides a clear indicator of market sentiment through futures and options. The speaker recommends having the VIX accessible on any trading platform.

09:53

Attention shifts to volume analysis on various futures indices, including the Dow (YM), Nasdaq-100, and S&P 500 (EES), displayed on short timeframes like 15 seconds to 5 minutes. The speaker adjusts views to better analyze volume patterns. Reference is made to recent posts by a commentator named Anna, noting that volume decline observed in recent candles, particularly on the EES, suggests a shift in market dynamics. This volume drop signals caution and prompts closer attention to market behavior.

10:57

Volume trends and price action in indices

10:57

The market shows weak buying interest as buyers have been scared off, with big money not returning yet. Although price action appears strong, volume data reveals a decline, indicating weakness. Recent candles suggest an attempt to rise on higher volume, but overall trading volume is falling away, signaling a lack of conviction in the rally. The volume levels, while high compared to normal trading days, are not supporting sustained upward movement.

11:51

Price spreads have significantly expanded in the last month, making the trading range wider and causing large price candles even on fast Renko and minute charts. Today’s price action shows dramatic point movements, but this is within an unusually volatile context. A downward candle followed by a similar one on even lower volume suggests the volume is declining further, reinforcing that this is not a bullish reversal but rather a short squeeze.

12:52

The current market pattern resembles a previous event where a seeming rally with high volume was followed by a sharp downturn due to worsening global news. Recent price action has been narrow but volume-driven, with the market failing to rally despite heavy buying pressure. This compression and heavy selling from large operators indicate a further downward move is likely.

13:50

The VIX is rising sharply, correlating with the strong downward wave seen in the indices. Support and resistance levels are playing a minor role, with certain minor levels being tested and retested, which could strengthen them. However, the key factor for price support will be volume, requiring price stabilization and a period of congestion with increased buying and more downside wicks before the market can flatten and begin to rally.

14:53

From an intraday trading perspective, the current bias remains bearish, and traders should position accordingly. Monitoring three major indices simultaneously offers insights into price and volume leadership, as one or two indices often lead while another lags, providing clues about potential future moves. The Dow 30 (YM) Renko charts are used to analyze these dynamics further.

15:55

Renko charts and optimal trading speeds

15:55

The speaker explains the functionality of the Ninja Renko optimizer, which operates on short time frames such as 15 seconds, 30 seconds, and one minute. The indicator can either use a fixed brick size or automatically calculate the optimal brick size to match market speed. The faster the time frame, the more frequently the bricks update, reflecting real-time momentum changes. The Renko chart smooths price action into bricks that adjust in size and speed based on market conditions.

17:25

The discussion focuses on the monetary value of each Renko brick, with examples showing point values translating into dollar amounts per brick on different index contracts. The speaker highlights how volatile market conditions lead to larger brick sizes, increasing potential profits. These brick sizes fluctuate dynamically with market momentum, and the indicator continuously adapts to provide an optimal trading size regardless of global market changes.

18:50

As markets calm, Renko brick sizes decrease accordingly, demonstrating the effectiveness of combining non-time-based Renko charts with traditional time-based charts. The speaker also mentions additional indicators like accumulation/distribution and trend monitors that complement the Renko chart. The trend dots closely follow price action to signal potential trend changes, but the trend monitor only updates on confirmed trend shifts, helping traders stay in profitable trends and avoid premature exits due to emotional reactions.

20:22

Support, resistance and volume point of control

20:22

The market shows signs of buying despite initial downward movement, indicated by narrow sprig hands with volume increases. This suggests some buying support, making a rally likely. The volume profile and price action confirm expectations of an upcoming rally, with initial bars showing volume fluctuations but supporting the anticipated move.

21:15

Price and volume analysis highlights a strong resistance zone near the volume point of control, where the heaviest trading volume exists. The market is expected to congest around this area due to the effort required to break through. Visual tools like the accumulation distribution indicator help quickly identify strong support and resistance levels, aiding in understanding market movement speed and volume. The downside is developing steadily with clear volume and trend signals, indicating a controlled and less stressful trading environment.

22:07

Rising volume accompanies a downward trend with strong red Renko trend dots signaling a bearish market. The presenter notes that markets typically fall faster than they rise, meaning quicker profits are often made in declining markets. An overview of various indices across multiple timeframes is introduced, focusing on short-term charts favored for trading analysis.

23:17

The discussion shifts to monitoring multiple indices (NQ, YM) across different timeframes including 15-second charts, preferred for active trading. The trend monitor shows a dominant bearish trend with bright red signals indicating strong selling pressure. Any trend changes would first appear in the shortest timeframe before affecting longer intervals. Early signs of weak buying attempts are noted but are insufficient to shift the prevailing downtrend.

24:28

In a downtrend, candles showing attempts to rally followed by falls on good volume indicate weakness rather than strength. The speaker refers to ‘water-filled balloon’ candlesticks—those with large upper wicks and deep bodies—as a visual metaphor for bearish pressure and likely continuation of the downward move.

25:00

Trend monitoring and market psychology

25:00

The speaker explains a price action pattern likened to water filling up and then cascading out, highlighting the importance of volume confirmation in trading. They emphasize the value of volume and indicators to build confidence and support decision-making, especially when using multiple timeframes.

26:12

The discussion shifts to market conditions, noting the VIX index is climbing, which supports the observed upward price moves. Despite some falling volume suggesting reduced selling pressure, the overall outlook is not bearish. The speaker also mentions checking commodities, specifically gold, which appears to be attempting a rally.

27:07

Gold and commodity volume price analysis

27:07

The speaker discusses technical signals on gold, highlighting a volatility trigger coinciding with the US market open that indicated a possible reversal or congestion. Some signals followed through while others did not, but overall there was significant buying volume under a key candle, leading to a strong upward trend. The daily and 15-minute charts both show multiple factors at play, including volume point of control and resistance levels.

28:12

Focus shifts to resistance near 1608, identified as a strong ceiling that will require significant effort to break. Despite attempts to rally, volume is declining, signaling weakness in the upward move. The market reverses near this resistance, and the volume point of control remains a critical reference point, with volume patterns suggesting a lack of strength in current buying momentum.

29:04

The discussion highlights key support regions below the current price, reinforced by multiple tests that have held, creating a strong support platform. The volume point of control acts as a market fulcrum, where the price is expected to congest. Above this lies the resistance ceiling. The daily chart shows high volatility and volume patterns that mirror equity markets, indicating instability and a cautious trading environment.

29:59

There is a broad market exodus from risk assets, with investors moving to cash or staying out until volatility eases. This behavior is reflected in the gold market, where volume anomalies and lightweight trading dominate. The volume point of control is currently acting as a strong support level, helping to hold the market in place amid these uncertain conditions. Traders are advised to consider these volume and support-resistance dynamics carefully in their decision-making.

31:00

Intraday trading strategies and stop losses

31:00

The market shows a quick rally on the 15-second chart with high volume, but the price fails to move significantly despite the volume, indicating a weak rally attempt. This lack of upward movement on substantial volume suggests the rally is not strong. Confirmation on the 2-minute chart reinforces the presence of heavy volume with minimal price progress, signaling caution for traders.

32:08

Trading in these fast-moving markets requires wider stop losses than usual, potentially doubling typical ranges to account for increased volatility. While this increases risk, it also offers the potential for higher rewards due to the rapid and large price swings. The discussion shifts to analyzing the VIX and YM indices on longer timeframes, highlighting the significant upward moves observed.

33:31

The weekly chart of the YM reveals extremely large price movements, far beyond normal intraday fluctuations, sometimes spanning thousands of points. This extreme volatility changes the trading landscape, making typical price actions seem small by comparison. The scale of these moves is described as unique and unlikely to be seen again in the current lifetime, emphasizing the unusual market conditions.

34:52

Analyzing different timeframes, including 15- and 30-minute charts, shows the market moving through various phases with volume dropping after initial surges. The price experienced a sharp rally with heavy volume followed by a dramatic collapse. Indicators like the VPOC and trend monitors suggest the market is in a transitional phase, possibly preparing for a trend reversal, which would be confirmed by changes in color coding on longer timeframe charts.

36:07

Canadian dollar weakness and Forex examples

36:07

The discussion begins with an analysis of market movements, focusing on the Canadian dollar’s recent weakness and a successful trade on the CAD/JPY pair. The speaker references earlier commentary about market trends, highlighting a snapback rally followed by renewed downward momentum. Emphasis is placed on volume patterns accompanying price movements, with high volume during rallies indicating market effort.

37:18

The explanation continues by examining candlestick patterns, particularly the significance of wicks on candles to determine bullish or bearish sentiment. The balance of upper and lower wicks provides insight into market direction. Volume is also analyzed, with attention to the relationship between candle size and corresponding volume, noting that lightweight volume during rallies suggests lack of strong market participation.

38:12

Further analysis reveals that major market participants are largely absent during the recent rallies, implying these moves are driven by smaller traders rushing in. This lack of big operator involvement signals potential weakness in the price advances. The pattern of effort to rally followed by price declines is confirmed through multiple instances, indicating a bearish market structure.

38:42

The segment concludes by noting emerging small wicks at the bottom of candles, suggesting some buying interest and the possibility of a pause or congestion phase in the market. The speaker refers to Wyckoff’s principles, particularly the laws of effort versus result and cause and effect, as essential frameworks for interpreting price action and volume to anticipate future market behavior.

39:16

Scalping trades and tick chart optimization

39:16

The speaker discusses trading on tick charts, highlighting a recent rally that presents a profitable scalping opportunity, potentially yielding $350 in under a minute. They emphasize the importance of being quick and knowledgeable, applying volume analysis for successful trades. The session features significant price action and two-way movement, with a quick check on the tick charts to illustrate current market conditions.

40:22

Tick charts operate similarly to Renko charts but require an optimized tick speed setting, which many traders guess incorrectly. The speaker introduces a tick speedometer tool that determines the optimal tick speed for any market or instrument, including Forex and futures. This speed adjusts dynamically with market momentum, indicated by color changes: sluggish markets show red, while active markets display green and orange.

41:19

The discussion continues on combining volume and price analysis using tick charts, which reflect raw market momentum more effectively than time-based charts. Returning to index analysis, the speaker notes a recent rally effort accompanied by a large volume spike, suggesting the rally may not sustain and a downward movement is more likely. The segment concludes with a volatility indicator on the daily chart confirming expectations for market behavior.

42:22

Educational resources and trading platforms update

42:22

The speaker discusses a comprehensive Forex education program available on Anna’s site, which includes detailed information about various books and over 200 hours of video content. The program covers five core modules: psychology, fundamental, relational, technical, and mechanics of trading. It also offers a wide range of tools and indicators compatible with MT4, Ninja Trader, and TradingView platforms, with single licenses allowing use across multiple platform versions.

43:24

The development of tools and indicators for TradeStation platforms is underway, including TradeStation Global, which integrates with Interactive Brokers, and TradeStation Securities. TradeStation Global runs on version 9.5, while TradeStation Securities operates on version 10, requiring separate indicator development due to differences in data feeds. The team is simultaneously working on both platforms, which has extended the development timeline.

44:19

Future platform developments and closing remarks

44:19

The speaker explains that the new platform is taking longer to develop but should be available in two to three months, after which further development will continue. They express gratitude to the audience for attending, hope the session was enjoyable and informative, and encourage everyone to stay safe, care for their families, and maintain health during challenging times.

By Anna Coulling – creator of volume price analysis