A lesson in volume price analysis

A lesson in volume price analysis

In this vidwo we take a closer look at the NQ emini and apply the volume price analysis methodology to analyze the daily chart for the futures contract.

00:11

Bullish momentum developing across indices

00:11

The speaker discusses a developing bullish momentum across multiple market indices, including YM, NQ, and ES, observed on a five-minute chart. The ES and NQ are in agreement showing upward trends with decent volume supporting recent candles, though the YM is currently struggling. Additionally, the VIX is falling, indicating reduced volatility. The trend monitor confirms this bullish trend progression, showing a shift from 15-second to one-minute intervals, suggesting the trend is potentially sustainable and tradable at this stage.

01:10

Strong bullish trend confirmed on multiple timeframes

01:10

The analysis begins with a strong bullish trend identified across multiple timeframes—3, 5, 10, and 15 minutes. There was a significant volume increase on the latest 15-minute candle, indicating a strong upward move. The price successfully broke through a low volume node and overcame decent volume resistance beneath the last candle. Currently, a minor reversal is occurring, prompting a shift to examine the 5-minute chart for more detailed price action insights.

01:48

Volume analysis and resistance levels overview

01:48

The segment discusses a price movement where volume was falling despite a rising price, indicating caution. A subsequent candle showed a wider spread with decent volume, suggesting potential for upward movement, especially with a low volume node ahead. On the 10-minute chart, resistance is noted with volume dropping at the top, highlighting a critical level at 62 that must be surpassed for continued rally progress. Support levels are emerging, but breaking through the low volume area is necessary to maintain bullish momentum, which is already showing signs of slowing according to the trend monitor.

02:46

VIX falling and cautious bullish outlook

02:46

The speaker analyzes intraday price action, noting some weakness despite momentum suggesting a potential upside pivot. They highlight the importance of monitoring short time frames and the time and sales window. The VIX is falling to 27.3, indicating comfort with long positions in the Nasdaq and S&P 500 indices, while the Dow is more sluggish. Observations include selling pressure likely from profit-taking after a rally, balanced by some buying activity. The speaker emphasizes the necessity of multiple monitors for effective trading, as relying on a single screen is insufficient for managing complex market data.

04:02

Importance of multiple monitors and risk sentiment

04:02

The segment discusses the importance of tracking related markets to understand overall risk sentiment, whether it is risk-on or risk-off. It highlights how this sentiment is reflected in bonds, bond yields, currencies, and risk markets. The speaker notes minimal selling activity under the candles, with prices returning to the volume point of control, which has recently increased. They also mention monitoring similar behavior in other markets, such as the YM.

05:12

Weak momentum in YM versus ES and NQ

05:12

The market is struggling at the volume point of control with weak price action and little momentum. Despite this, there are some moves that traders can capitalize on by being patient and waiting for momentum to build. The ES showed confirmed momentum, making it a lower risk opportunity, unlike the Dow, which is currently less diverse and exhibiting variance. The Dow has entered a congestion phase with sluggish activity, highlighted by a recent block of 100 shares. Multiple time frame analysis is being used to better understand these conditions.

07:18

Volume price analysis (VPA) classic example

07:18

The speaker struggles to locate a specific chart and decides to replace it with a new one, demonstrating a practical example of Volume Price Analysis (VPA) on a 15-second timeframe. This mini example highlights the process of identifying market movements using VPA.

08:28

The example shown is described as an ideal VPA case, featuring widening spreads and rising volume, which represent a classic price waterfall pattern to the downside. This pattern is foundational to understanding VPA, especially when observed on slower timeframes.

09:03

The speaker emphasizes the importance of rising volume during downward moves, noting that both upward and downward price movements require effort. Many traders misunderstand this, but just as it takes effort to push prices higher, significant selling pressure is necessary to drive prices lower.

09:34

It is explained that heavy selling volume causes rapid price declines, which often occur faster than price increases. A recent large volume spike occurred on a doji candle, indicating indecision in the market despite high activity.

10:03

The market shows signs of indecision and resistance, with attempts to rally facing significant volume and price resistance overhead. This suggests a market eager to rise but encountering strong selling pressure, creating a curious and unsettled trading environment.

10:42

Volume reveals market desperation to rally

10:42

The speaker discusses the persistent upward pressure and desperation in the Nasdaq market, emphasizing that traders should disregard external global factors and personal opinions about economic conditions. Instead, the focus should be on analyzing trading volume, whether for intraday or longer-term strategies. A shift from short-term to weekly charts is suggested to better illustrate the powerful insights volume-price analysis can provide, revealing the true market dynamics.

11:44

Big operators selling into weakness explained

11:44

The speaker analyzes a significant price plunge characterized by massive volume, highlighting how large market operators sell into weakness during downtrends. They focus on a classic candle pattern with a large wick and above-average but not extreme volume, indicating that the major selling has concluded. This pattern signals that big operators have stopped selling and are beginning to buy, leading to a sharp V-shaped rally. The discussion also touches on how retail traders often miss these signals, citing an example of the Shanghai Composite and the challenges of interpreting volume behind price action. The speaker emphasizes that understanding these dynamics requires effort and practice but is a powerful approach to trading.

13:42

Traders adopting VPA with other methodologies

13:42

The speaker addresses traders who struggle with Elliott Wave and suggests Volume Price Analysis (VPA) as a complementary method. Many traders have integrated VPA into their existing strategies successfully. The segment concludes with a note about available indicators on the Quantum Trading website, compatible with platforms like MT4/5, NinjaTrader 7/8, TradingView, and TradeStation, with more developments underway.

14:11

Upcoming indicator releases and platform support

14:11

The development update covers two versions of TradeStation: TradeStation Global, which operates on version 9.5 and uses Interactive Brokers as the live data feed, and TradeStation 10 and above, featuring TradeStation Securities with RadarScreen. Most indicators, including RadarScreen, will be available on both platforms, though availability depends on Interactive Brokers’ offerings. Following this, the team plans to port all other indicators to TradingView, leveraging Pine Script’s new capabilities for drawing objects and lines. Additionally, a new screening option will be developed for MT4/5, offered free to full-package subscribers. Future plans include support for MultiCharts and exploration of other platforms.

15:35

Future plans for indicator screening and platforms

15:35

The speaker discusses upcoming releases related to Anna’s analysis and books, which will be available next year. All books can be found at anacooling.com, on Amazon in both Kindle and paperback formats. Additionally, the speaker highlights a comprehensive forex trading program that includes a full set of indicators for any platform, designed to help beginners trade forex confidently.

16:07

Closing remarks and next session info

16:07

The session concludes with thanks to the participants and a reminder about the next meeting on Tuesday at 7:45 London time for the London Forex session. Viewers are wished a great weekend and encouraged to stay safe.

By Anna Coulling – creator of volume price analysis