A primer in day trading stocks and how to select them using volume price analysis

00:00

The webinar begins with a welcome to all participants. The speaker briefly mentions a previous quick overview of the futures market, commodities, and indices. This session will focus exclusively on stocks. A disclaimer is emphasized, warning that trading is risky and advising viewers to only use money they can afford to lose.

00:31

The discussion introduces volume price analysis (VPA), a methodology that examines the relationship between price action and volume to anticipate future price movements. The speaker acknowledges various audiences including forex students, quantum trading users, and readers of the related book. The primary reference is a comprehensive guide to VPA that mainly covers stocks, with some commodities and indices, and also versions focused on the forex market. Key elements of VPA include price action, volume, candlestick patterns, and support and resistance levels.

02:07

The importance of support and resistance (SNR) levels is emphasized, especially in the current bullish market conditions. Volume point of control, an indicator combining volume and price, helps identify critical SNR levels that serve as potential entry or exit points. The segment also explains the distinction between primary and secondary trends, noting that volume confirms whether observed pullbacks or corrections are genuine and potentially tradable, with relevance depending on the chosen timeframe.

03:34

The speaker discusses the challenge of selecting stocks to trade and contrasts this with forex trading, where traders typically focus on a manageable number of currency pairs derived from major economies. They explain that traders can either scan all pairs for opportunities or specialize in a few, learning their unique technical behaviors and characteristics. The importance of developing a trading tactic, such as focusing on reversals or breakouts, is emphasized, along with the idea of trading based on chart structure and price action.

06:14

The focus shifts to stock selection by sector performance, highlighting the usefulness of identifying which sectors are moving and which are not. The speaker shares resources to help judge sector strength and stock movement, including heat maps showing long-term sector trends such as energy’s prolonged weakness and tech’s strength. They introduce a free tool from Fidelity that tracks sector performance daily, noting its benefits and some limitations compared to other sources.

08:16

The speaker continues evaluating sector data, particularly energy, using Fidelity’s platform to analyze recent performance trends over three years, noting the sector’s consistently low ranking. They mention exploring other tools like Finviz for similar information, but found Fidelity more detailed despite some usability issues. The discussion sets up further investigation into stock and sector analysis using freely available resources.

09:18

The speaker discusses using stock charts to analyze the energy sector, highlighting the tool’s ability to rank stocks from best to worst performing. They focus on the energy sector and its subsectors, noting that oil equipment and services is the top-performing subsector with strong green indicators. This filtering helps identify promising stocks within a sector.

10:20

After identifying strong subsectors, the speaker explains how to drill down into individual stocks within the energy sector, observing mostly positive performance. They mention transferring these stocks to Finviz for deeper analysis, including metrics like relative volume and short interest, which provide insights into market sentiment and potential trading opportunities.

11:25

The speaker highlights Mammoth Energy Services (TUSK) as an interesting stock found through filtering, though they initially used the site only for screening. They emphasize Finviz’s usefulness, especially when signed up to reduce ads, and explain the importance of a high short ratio, which can indicate the potential for a short squeeze, referencing a previous example with AHT.

12:37

The discussion continues on evaluating stocks using relative volume and liquidity. The speaker explains that a minimum average trading volume of 500,000 shares is preferable to avoid low liquidity issues, which can make entering or exiting positions difficult and costly. They compare this with Apple’s high liquidity as a benchmark for strong market participation.

13:34

The speaker examines a stock’s relative volume, noting a figure of 2.61, indicating trading activity more than twice its average, which is positive. They also mention checking the Relative Strength Index (RSI), which was around 30, suggesting the stock is not extremely oversold but may be near a potential buying point. This technical analysis helps in making informed trading decisions.

14:07

The speaker analyzes a downtrend in a stock using Ninja Trader, focusing on support and resistance levels derived from proprietary indicators like price-based support/resistance with Camarilla and an accumulation/distribution indicator. They explain how repeated tests of these levels strengthen them and note volume-based support and resistance derived from the volume point of control. The stock experienced consolidation followed by a significant fall and a bounce off volume support near the S4 level, indicating a potential reversal or upward movement.

15:51

Switching to a 10-minute chart, the speaker examines recent price action including yesterday’s fall and today’s potential bounce supported by deep candle wicks and high volume, signaling buying interest. They discuss how volatility affects market behavior, noting a series of volatile candles followed by consolidation. The speaker also recommends marketbeat.com for more up-to-date data compared to finviz, highlighting current and previous short volume figures that suggest shorts may be reducing their positions.

17:33

The speaker explains the importance of the ‘days to cover’ metric when targeting heavily shorted stocks for potential short squeezes. A higher days to cover number indicates a bigger likely squeeze, while a low number suggests limited upward movement. Additionally, the percentage of the float that is shorted is crucial; a low percentage means less potential for a squeeze.

18:43

The discussion moves to a three-dimensional approach to stock analysis, combining technical analysis methods like VPA and Wyckoff’s laws with fundamental analysis. Understanding primary and secondary trends is important, but so is evaluating fundamental factors such as earnings and economic conditions, especially for financial stocks where interest rates and fees play a key role.

19:52

Fundamental and related market factors are considered, using an energy stock as an example. The impact of broader economic trends and government policies, such as the shift away from fossil fuels toward renewables, can affect stock performance. The speaker highlights the importance of considering sentiment in related markets and how companies might adapt their business models in response.

20:59

The speaker introduces a resource that provides comprehensive stock data including earnings, insider trades, institutional ownership, options chains, SEC filings, and social media sentiment. Institutional ownership is noted as influential but market makers ultimately drive stock prices. The discussion also covers the significance of float size, with smaller floats leading to higher volatility, especially in penny stocks.

22:01

The speaker recommends using resources like MarketBeat and Fidelity to thoroughly research and understand stocks, sectors, and their behavior. This process is valuable even for traders with a small portfolio, emphasizing the need to know stocks intimately, including how they perform before earnings announcements and who the buyers are.

23:14

The speaker discusses analyzing stock options and using spreadsheets to gain a deep understanding of a stock, referencing a recent example with AHT. They examine the daily chart, highlighting a waterfall pattern with significant volume and a notable candle that could indicate a re-entry point after a decline. Volume support and key levels such as S1 and R1 on the Camarilla pivot points suggest the stock is in congestion, potentially setting up for a short squeeze that occurred recently, triggering volatility indicators.

24:20

The analysis continues by noting the stock’s need to break through volume resistance and the high of a volatility candle to move higher. The stock has respected weekly pivot levels, bouncing off the R6 level, which acts as support. The speaker emphasizes the importance of validating levels from lower timeframes to daily charts, indicating a cautious but hopeful outlook as they monitor volume and price action for further confirmation.

25:28

Current volume on the stock is more typical following a previous surge, making the market appear somewhat subdued. The speaker examines volume profile support and notes the market’s volatility is causing a lackluster environment. They suggest patience while waiting to see if support levels hold and reflect on insights from a previous commentator, Finvez, regarding the stock’s potential.

26:06

The speaker revisits the AHT stock highlighting news about a possible short squeeze that initially attracted their attention. They discuss integrating additional technical indicators like moving averages and volume-weighted moving averages into their analysis. They also mention exploring a volume forecast indicator, which uses statistical methods to analyze traded volume over time, signaling a future direction for their methodology.

27:16

Plans are shared to sign up for the volume forecast tool to enhance analysis and to input AHT data into MarketBeat for further insights. The speaker invites viewers to ask questions in the chat while passing control to a colleague named David. There is a warm welcome to returning viewers, indicating this is part of an ongoing webinar series.

27:53

David takes over the presentation, sharing his screen and continuing the discussion from the previous webinar. He reviews charts for YM (E-mini Dow), NQ (E-mini Nasdaq), and ES (E-mini S&P 500), noting a generally bearish sentiment since the week opened. The focus is on aligning the analysis across these major indices to provide a comprehensive market overview.

28:26

The discussion highlights the importance of the 14,000 level in the enqueue index as a key threshold for future trend development. Despite nervousness at all-time highs, volume is dropping, indicating hesitation among traders. However, there is no heavy selling or distribution yet, suggesting a bullish sentiment in the medium term before any potential major downturn later in the year or early next. The speaker also introduces the relationship between the YM (Dow derivative), ENQ (Nasdaq derivative), and ES (S&P 500), noting their current aligned movement in the market.

29:54

The analysis moves to shorter time frames, like the 15-second and 1-minute charts, emphasizing the benefits of quick trading styles for spotting shifts in market sentiment. The speaker notes that while fast time frames require skill and agility, they provide a near real-time view of price action and sentiment changes. The volatility candle on the one-minute chart signals congestion and potential trend shifts, with trend monitors still indicating strong bearish momentum.

31:23

Using volume price analysis (VPA) on quick charts, the speaker explains how to interpret volume anomalies and resistance/support levels. Despite attempts at rallying, volume is consistently falling away, indicating weak buying strength and a lack of conviction in upward moves. The price action shows a pattern of alternating falls and rallies without strong volume confirmation, suggesting a congested market phase rather than a decisive trend.

33:29

The market remains bearish with no clear signs of reversal on short time frames, despite some localized buying activity. The presence of a volatility candle on the 10-minute chart is significant, as signals on slower time frames carry more weight and may indicate an upcoming reversal after a congestion phase. The speaker stresses the importance of using multiple time frame analysis to understand market behavior and anticipate potential trend changes.

35:16

The segment begins by examining Apple’s recent blowout quarterly results, which paradoxically led to a price drop. This is explained as a market mechanism where market makers manipulate prices, causing traps for traders who expect the price to rise following strong news. The discussion highlights how such price moves, often occurring in pre-market trading, are common in stocks and currencies. The heavy trading volume in Apple is noted, contrasting it with other stocks that show little or erratic price action in pre-market sessions.

36:59

This part emphasizes the importance of pre-market price action as an indicator of a stock’s liquidity and tradeability. Stocks with significant pre-market movement are easier to trade due to their liquidity. Using Apple as an example, the speaker explains that although it is heavily traded and liquid, the current price movement represents a trap set by market makers. The challenge for traders is identifying the right entry point after the initial price reaction to the news.

38:00

The focus shifts to technical analysis, particularly volume and accumulation/distribution indicators, to identify strong support and resistance levels for Apple’s stock. The speaker notes that many traders jumped in prematurely and were shorted out, highlighting the need for patience to find the right buying opportunity. The volume point of control and thickness of indicator lines are used to assess strength in price levels, while also acknowledging counterarguments that could justify price weakness despite strong fundamentals.

39:40

This segment continues the technical analysis, discussing heavy buying volume and volatility triggers at key price levels. It stresses waiting for the stock to break above significant resistance areas, identified both by price and volume. The speaker advises against entering trades prematurely and suggests watching for volume to drop off near resistance levels as a sign that price can move more easily through them. Volume resistance is compared to price resistance as a critical factor in trading decisions.

41:10

The discussion moves to higher time frames, identifying major resistance levels around $136.60 and beyond, where price-based resistance is strong but volume is light. This creates potential trading opportunities if those levels are breached. Support levels with decent volume are also highlighted, showing where buying interest is present. The segment concludes with advice on selecting trades that avoid heavy price or volume resistance to improve chances of success, reinforcing the importance of chart analysis and patience in trading decisions.

43:19

The market remains bearish with no significant change. There was a brief attempt to rally, reflected in the 15-second chart, showing a break from the volume point of control with increased volume and a volatility candle. However, the trend monitor briefly transitioned but reverted back to bearish. Despite some minor reversals, the overall sentiment on multiple timeframes, including the one-minute chart, remains weak.

44:13

The rally attempts appear weak as volume falls while prices rise, indicating a lack of buying interest and strength behind the moves. This is evident in multiple candle patterns showing declining volume on upward price moves. Although there are some signs of increased buying at lower levels, the overall effort to rally is diminishing, suggesting limited upside momentum.

45:07

Volatility triggers suggest possible pauses or congestion areas. Scalpers might find opportunities for short-term gains of 10 to 25 points depending on spreads and individual timeframes. However, resistance is expected near the volume point of control, where significant volume congestion exists, likely limiting further upward movement and causing reversals.

45:58

The presence of heavy volume congestion around key levels makes it unlikely for prices to break through easily. Scalpers can profit from short moves but should be cautious of reversals at these resistance points. The principles of volume price analysis and indicator use are consistent across various markets and timeframes, emphasizing the importance of understanding congestion zones and pause points.

46:57

On the one-minute chart, clusters in accumulation/distribution indicators create expected pause points in rallies. Low volume and price resistance levels further hinder upward moves. The market remains weak and range-bound, exemplified by Apple’s slow movement and silver’s price waterfalls, indicating a need for patience until clearer directional moves develop.

48:09

The segment discusses market activity characterized by widening spreads and rising volume, indicating strong momentum driven by significant buying and big operators entering the market. A reversal is beginning to form, though pushing back up through key levels will require considerable effort due to narrow low-volume areas acting as resistance. Gold exhibits a similar pattern, with a notable price waterfall and volume point of control influencing its price action, including a two-bar reversal accompanied by high volume, signaling potential trading opportunities.

49:22

Attention shifts to intraday gold trading, highlighting the need for quick in-and-out trades due to volatility triggers. The trend monitor shows signs of improvement as it starts to turn positive, suggesting favorable short-term conditions. The discussion briefly covers the dollar and broader indices, noting that the market remains generally bearish and flat over the longer term with minimal upward movement so far in the session.

50:19

The speaker discusses a minor intraday bearish trading dip and then directs viewers to quantumtrading.com where various trading indicators are available for platforms like MT4/5, NinjaTrader 7/8, TradingView, and TradeStation. They highlight that TradingView is a strong platform for stock trading and mention that indicators for TradingView will be released soon. Those with the full package will receive these new indicators for free, while the price for new buyers is expected to increase from 677 to 894.

51:20

The speaker outlines plans to develop more indicators, especially volume-based ones for stocks, and mentions exploring MultiCharts due to its TradeStation compatibility with EasyLanguage. They also reference the Complete Forex Trading Program at quantumtradingeducation.com, noting that many stock traders have joined it, recognizing that skills from forex trading can benefit stock traders.

51:50

The speaker explains the importance of understanding sentiment in trading, highlighting that the forex market provides clear sentiment signals. The program covers all essential aspects of forex trading, including technical analysis such as volume price analysis (VPA), relational market dynamics involving bonds, bond yields, commodities, and stocks. It is designed to benefit both forex and stock traders by addressing often overlooked relational market factors. Additionally, the program offers a funded forex trading opportunity for students. Information about Anna’s books is also provided, with links available on anacooling.com and Amazon. The session concludes with a note about upcoming sessions and thanks to the audience.

53:08

The speaker concludes the session by wishing the audience a good weekend and encouraging them to stay safe and well during these uncertain times. They express hope that everyone enjoyed the training and indicate that they will meet again in the future.