A volume price analysis lesson on the YM emini

A volume price analysis lesson on the YM E-Mini

Introduction and webinar overview

00:01

The speaker humorously mentions taking control of the webinar from a colleague and welcomes everyone to the session. They comment on the hot weather in the UK and liken the current quietness in the markets to people struggling to stay alert, noting the anticipation around the upcoming Federal Open Market Committee (FOMC) meeting.

00:32

Trading disclaimer and new series info

00:32

The session begins with a reminder about the risks involved in trading, emphasizing that one should never trade with money they cannot afford to lose. The speaker mentions that this is the start of a new webinar series running through to Christmas and beyond. They acknowledge a mix of new attendees and regular participants, including users of their quantum trading platform and forex program students. The speaker also notes some technical distractions during the session but proceeds to focus on the content ahead.

01:31

Volume price analysis methodology

01:31

The speaker welcomes everyone and briefly mentions the disclaimer before introducing the topic of volume price analysis in trading. They highlight a book that explains the methodology, which has received over 800 five-star reviews and is being translated into multiple languages including Chinese and Japanese, with a Vietnamese version forthcoming. The book has a companion volume containing 200 worked examples covering stocks, indices, commodities, and forex markets. The speaker then shifts focus to analyzing the charts directly, specifically mentioning the 10-minute chart of the YM index.

03:11

Volume point of control explained

03:11

The speaker discusses a 10-minute chart that provides a valuable volume price analysis (VPA) lesson, focusing on reversals and the volume point of control. They explain that VPA methodology incorporates not only price action and volume but also support and resistance based on both price and volume. Additionally, candle patterns and multiple time frames are essential tools for traders to identify technical signals. Using multiple time frames helps traders find a confluence of confirmation signals, which strengthens trading decisions.

04:23

Market challenges and fake signals

04:23

The speaker emphasizes the importance of building confidence in trading, highlighting that the market is a zero-sum game where institutions and market makers aim to take individual traders’ money. They warn about fake signals in the market, which Volume Price Analysis (VPA) can help identify. The discussion then shifts to current market conditions, noting a classic signal on the YM index and mentioning that despite some volatility and a sell-off at the open, markets have generally held up well ahead of the key event, the upcoming FOMC meeting.

05:37

Current market sentiment and indices

05:37

The speaker discusses the current market situation, noting that the Nasdaq is lower while the YM (Dow futures) is unusually leading. They recommend using Investing.com for free market charts to create a personalized dashboard that helps gauge market sentiment. The importance of monitoring indices, related sister indices, and volatility indicators like the VIX is emphasized. The volatility for the Dow Jones appears particularly concerning.

06:45

Volatility and FOMC expectations

06:45

The speaker discusses market volatility, focusing on the VIX as a benchmark. They highlight that volatility in currency markets has been low recently, suggesting that the Federal Reserve’s upcoming announcement is not expected to cause significant market disruption. This meeting is especially important as it is the last before the election, but expectations for surprises are low. The speaker touches on broader economic issues, including slowing retail sales, ongoing impacts from the virus, and high unemployment. They acknowledge differing opinions on the Fed’s actions but emphasize the human element behind these decisions, urging understanding of the challenges faced. The segment concludes with a brief mention of analyzing the YM 10-minute chart and volume point of control.

09:36

Volume point of control structure

09:36

The volume point of control (VPOC) provides a structure to price charts by showing where price and volume concentrate over time, indicating the range in which the market or index stays the longest. This area is marked by a yellow hatch line, surrounded by high and low volume nodes. The VPOC highlights sideways market movement and is useful for placing limit orders in fair value zones, as price tends to either return to or break away from these levels.

10:54

The VPOC can shift as the market changes, reflecting where price transactions concentrate over longer periods. It acts as dynamic support or resistance based on price and volume over time. The current range for the YM (E-mini Dow) is relatively narrow compared to recent weeks, suggesting a less volatile trading environment. This observation is supported by daily candle charts showing typical but tighter price movement ranges.

12:08

Recent trading has been less volatile than usual, offering fewer but still present trading opportunities. The 10-minute charts confirm the narrow range around the VPOC, indicating that trading conditions will be challenging but manageable. Despite missing some downward moves and the difficulty presented by the tight range, trades remain available for those who understand how to interpret these volume and price structures.

13:12

Trading reversals and market behavior

13:12

The speaker discusses market reversals, emphasizing that markets tend to fall faster than they rise and that upward reversals usually involve a gradual climb. They highlight the importance of analyzing multiple time frames. Using the four-minute chart for the YM (E-mini Dow futures), the speaker points out that despite falling candles, wicks at the bottom indicate buying pressure and attempts by the price to rise, signaling the presence of buyers even amid volatility.

14:15

The segment explains how traders trying to go long get repeatedly stopped out as volatility causes price to dip sharply before rebounding. The speaker warns against relying on a single signal or candle to predict reversals. Despite visible buying indicated by wicks and volume, many traders begin to doubt the strength of the upward moves and mentally switch to expecting further declines. This shift in trader sentiment can lead to increased selling pressure.

15:17

The speaker describes the mindset of market makers who may trap buyers by pushing prices lower after enticing them to go long. They identify the first reliable signal of a potential reversal as a candle with an anomalous volume spike and a wick to the top, which occurs near the outer limit of the volume point of control (VPOC). This signal suggests a possible shift from downward to upward momentum and marks the start of a long trade setup that the speaker has been monitoring.

16:18

The speaker compares candles to assess the strength of the reversal, noting that smaller volume and candle size indicate the reversal won’t be very strong. The price moves into the volume point of control area, with wicks at the bottom signaling buyers supporting the uptrend. Returning to the 10-minute chart, the speaker points out the formation of a hammer candle near support levels based on VPOC, suggesting a potential entry point. When combined with volume price analysis (VPA) methodology and identifying volume anomalies, this provides confidence in the trade setup.

17:22

Using Renko charts and indicators

17:22

The segment explains the use of Renko charts, which differ from traditional charts by focusing on price movement rather than time. It highlights how Renko charts capture market basing and reversals effectively. The speaker mentions their proprietary Renko optimizer that determines optimal brick size for clearer trend analysis. The discussion includes watching for trend changes indicated by specific signals, such as a color change in trend dots and trend monitors. Additionally, the segment touches on the dynamic nature of accumulation and distribution levels, which adjust based on recent market data, and notes the current market conditions as a grind with narrow daily spreads ahead of the FOMC event.

19:00

Camarilla indicator and trade targets

19:00

The speaker discusses the camarilla indicator and its role in identifying hierarchical price levels, noting the current position at the R3 level where reversals often occur. They highlight a recent upward move signaled on a four-minute chart using volume price analysis, suggesting this movement might pause or reverse. On the ten-minute chart, the price is at the volume point of control (VPOC), indicating potential sideways movement. The discussion includes potential targets such as the R4 level near 26.08 to 28.08, emphasizing the use of multiple time frames and custom indicators like trend darts and the trend monitor on Renko charts to identify anomalies and support the trading methodology. The speaker expresses caution about being stuck at a price level within a narrow range, considering whether the trend will reverse or continue.

20:58

Q&A and session wrap-up

20:58

The speaker explains the importance of observing volume decline on down candles as a straightforward concept. They encourage viewers to ask questions in the chat about the topics discussed, including details about the indicators and comments made by both the speaker and David.

By Anna Coulling – creator of volume price analysis