Ahead of the FOMC some great futures trading opportunities in all timeframes

The session introduction explains that this webinar will focus on US indices and the futures market, specifically day trading futures using quantum indicators. The speaker clarifies some confusion about the session’s topic and reminds viewers of the trading risk disclaimer displayed on the screen.

00:32

The speaker advises never to use money you cannot afford to lose and introduces the session as a chart analysis tutorial for newcomers. The focus is on understanding charts through volume price analysis, which examines the relationship between price action and trading volume to predict market movements. This method helps traders determine whether the market is reversing, pulling back, or breaking away from congestion, addressing key trading questions.

01:29

The speaker discusses a book titled ‘A Complete Guide to Volume Price Analysis,’ which has gained significant popularity with over a thousand reviews and recent translation into Vietnamese. A companion book has also been created to provide practical examples and signals, including a forex-specific version. The methodology focuses on using volume and price action as a foundation for market analysis, emphasizing candle patterns as a key tool to predict future market movements.

03:11

The discussion emphasizes the importance of support and resistance levels after price and volume in trading analysis. These levels can be price-based or volume-based and become clearer when viewed on charts. Traders can enhance their analysis by overlaying these levels with popular technical indicators such as Bollinger Bands, MACD, moving averages, and Fibonacci tools. The speaker also mentions proprietary software and indicators developed for this purpose. They stress the importance of mastering this foundational level before moving on to more advanced techniques. Additionally, there is a brief note on the upcoming FOMC event occurring later that day, highlighting its significance for the markets.

04:22

The market is experiencing a downturn, with Dow futures down 300 points and the S&P down 40, reflecting investor dissatisfaction. The Nasdaq, which had previously diverged positively from other indices, is also retreating. This decline is occurring amid earnings season, with key companies like Tesla, Facebook, and Apple reporting, which influences market sentiment. Additionally, significant financial events include the confirmation of Janet Yellen as Treasury Secretary and ongoing uncertainty under the new administration in Washington. Overall, the markets appear fragile, impacting intraday trading strategies.

06:06

The speaker advises traders to regularly review the daily chart of the YM futures contract for the Dow Jones to understand market conditions. Instead of just a quick glance to note daily ups or downs, volume price analysis (VPA) should be used to identify anomalies by examining the relationship between price action and volume over a longer period.

07:19

Volume Price Analysis helps detect whether price movements are supported by volume, highlighting anomalies when they are not aligned. The chart shows a break away from the volume point of control, indicating a congestion phase that the YM was in, with attempts to break higher. A large volatility day and a significant candle with high volume serve as an early warning signal of potential market fragility.

08:41

This early warning signal suggests the market is fragile but does not guarantee a reversal; it could continue higher. Observing the volume under up candles reveals a falling volume trend despite rising prices, which is unusual. Volume is also seasonal, so context such as holidays or year-end trading activity must be considered when interpreting these signals.

09:54

Traders must manage cognitive dissonance because the VPA signal suggests caution, but the market may still trend upward. One cannot simply trade based on the initial signal alone; instead, trades must respond to actual chart developments. The speaker emphasizes the importance of trading what the chart shows despite conflicting signals.

11:05

The speaker illustrates how the market continued to rise after the signal, with candle wicks showing buying strength and selling pressure. Candle patterns and wicks are crucial for understanding market momentum. Day traders use the daily chart for context but must also analyze anomalies and let price and volume action guide their decisions.

12:11

The daily chart context helps traders recognize that despite signals of fragility, strong upward days should not be ignored. The recent break above the volume point of control around 30,000 suggested potential for higher targets like 40,000. However, the chart also shows flattening price action, indicating cautiousness in the market’s ability to sustain upward momentum.

13:21

The speaker concludes that while short-term traders using fast timeframes should avoid trades against strong signals, understanding these volume and price patterns on the daily chart provides valuable insight into market fragility. These signals help inform trading decisions, though the speaker also notes they will demonstrate this analysis using a different trading platform next.

13:52

The speaker introduces their MT5 trading platform and discusses recent market activity, highlighting a significant sell-off. They explain the importance of weekly levels based on the Camarilla indicator, noting a break of the S3 support level and rapid movement through S4 resistance. The discussion covers traders spotting opportunities on fast charts and how these levels act as crucial points for potential reversals or rapid price shifts.

15:05

The explanation continues on logical stopping points after breaking through daily levels, moving onto weekly and monthly support and resistance levels visible on hourly and weekly charts. The speaker emphasizes that levels on slower time frames carry more weight, and confluence across multiple time frames strengthens these price points. This layered approach helps identify stronger support and resistance areas in the market.

16:16

Using a Renko chart, the speaker illustrates the consistent downward move with several failed attempts to rally. They point out a wick on the chart that could have offered a quick scalp trade opportunity. The current market shows persistent selling pressure, partly influenced by upcoming FOMC events. Volume profiles on MT5 differ from exchange data, but high volume during price drops suggests strong market momentum.

17:26

The speaker notes periods when trading signals develop slowly, referencing early January as a time with many trading opportunities. They describe recent market behavior around the cash market open, highlighting breaks from the volume point of control and a period of consolidation. Two volatility candles triggered caution against impulsive entries despite the building momentum, advising patience before committing to trades.

18:30

David joins the discussion, acknowledging the widespread market decline described as a ‘perfect storm.’ He introduces the view on TradeStation showing currency futures, preparing to elaborate on the current market conditions and trends. The tone suggests a detailed analysis of the ongoing market environment will follow.

19:10

The speaker explains a radar screen showing various currency pairs against the US dollar, including the Aussie dollar, pound, Canadian dollar, and Euro. Each cell on the radar screen represents the same timeframe, providing an instant snapshot of the market’s reaction to the dollar. Currently, all cells are bright red, indicating strong and continuous buying of the US dollar since early morning, which is reflected in the futures market displayed on the platform.

20:18

The radar screen is powered by TradeStation 9.5 connected to an Interactive Brokers account, providing real-time data and trading capabilities. The platform allows adding various indicators, such as the currency strength indicator, which shows whether individual currencies are overbought or oversold within chosen time horizons. The system links symbols and intervals, enabling quick navigation between different currency pairs and timeframes for efficient market analysis.

21:26

Users can quickly switch views between different currency pairs and time intervals, for example from the Aussie dollar to the Euro dollar on a five-minute chart. The Swiss franc against the US dollar is shown as an inverse pair, which explains its opposite movement compared to others. Despite this, all currencies generally move in the same direction due to the US dollar being the counter currency. The visual trend monitor provides a clear indication of market direction without clutter.

22:25

The radar screen uses color changes to represent trend shifts within various time horizons, starting from one minute and extending longer over time. A true change in trend is indicated by a gradual color shift from bright red to blue, reflecting the broader market movement across the currency complex. This filtering process helps traders identify the start of significant trend changes as they propagate through different timeframes and currencies.

23:28

The radar screen also highlights cases where individual currency pairs move against the major trend, often due to local news or specific events, such as Brexit’s effect on the pound. This divergence is normal in trading. The speaker notes that the system works similarly for both currency futures and the spot market, providing consistent and reliable trend analysis across different market types.

24:29

The speaker briefly interrupts to handle a phone call before showing a different setup focusing on the Nasdaq and other futures. This setup uses a wider range of time windows from one minute to 60 minutes, including daily and weekly views. The speaker emphasizes the importance of observing daily and weekly trends and weaknesses, which align with expectations in the broader market context.

25:06

The speaker discusses observing a bullish market trend that doesn’t show intraday changes but is clearly reflected in sentiment indicators, which have been predominantly negative since early morning. They highlight the advantage of using local timestamps in trading platforms like TradeStation and NinjaTrader for better time alignment. The example focuses on a market breakdown starting around 10:30 local time, showing price movement through low and high volume regions quickly due to strong momentum. A significant volatility trigger candle with high volume indicates intense short-selling activity, creating a ‘perfect storm’ scenario that could be affected by upcoming FOMC announcements. The speaker also mentions monitoring the time and sales data closely to analyze buy orders at various price levels to understand market activity in real time.

27:00

The speaker explains that the focus is on large volume blocks in the market, such as those around 128 contracts, rather than small trades of one to fifteen contracts which are considered noise. These big blocks influence price action significantly, and the market’s reaction to them is crucial. Currently, there is some buying activity, but a large volatility candle suggests upcoming market congestion or even a potential reversal.

27:55

The discussion highlights the usefulness of a volatility indicator that provides real-time insights across different time frames without needing to switch charts. At this point in the trading day, many volatility triggers are expected due to the opening of cash markets and the activation of various trading algorithms. The speaker notes this is a normal market behavior during such transitions.

28:48

Contrary to popular belief, the speaker argues that trading on the Globex platform can be advantageous because its price action is more measured and evenly paced compared to other sessions. The absence of large algorithm-driven volatility spikes makes trading on Globex more straightforward. The speaker emphasizes this perspective as an alternative view to the common criticism that Globex lacks sufficient volatility.

29:18

The speaker discusses their trading approach using NinjaTrader and FXCM accounts, focusing solely on reversal trades in select currencies. They monitor safe haven currencies such as the yen, Swiss franc, and dollar, which are currently being heavily bought. Conversely, commodity-linked risk currencies like the Australian dollar, New Zealand dollar, and Canadian dollar are being sold, creating what the speaker calls a ‘perfect storm’ in the market.

30:11

Market trends show the safe haven currencies appreciating while risk currencies decline, reflected across various markets including bond markets. The dollar remains strong with ongoing buying pressure. The speaker anticipates potential shifts in sentiment that could reverse these trends, highlighting the mean reversion characteristic of currency markets where currencies cannot remain overbought or oversold for long.

31:13

The dollar generally tracks the yen as a safe haven, with the Swiss franc also following a similar pattern despite occasional interventions by its national bank. Commodity currencies like the Canadian, New Zealand, and Australian dollars often diverge based on factors like oil prices, commodities, and China’s economic influence. The speaker confirms their trading strategy aligns with these observations and continues to monitor these relationships closely.

32:41

The speaker reviews market data on major indices including the Dow, Nasdaq 100, and S&P 500 using NinjaTrader. They reference a recent forecast about market weakness that is currently unfolding, supported by volume data. This segment underscores the ongoing analysis of equity markets alongside currency trades.

33:17

The speaker discusses increased market volatility and congestion, noting a breakdown in the enqueue pattern. Despite some divergence on the day, with the YM closing down and the ES closing up slightly, the enqueue has been leading market movements. Overall, all indices are selling off similarly, reflecting a unified risk sentiment. The speaker then shifts focus to analyzing multiple charts, specifically mentioning the YM on a 15-second timeframe and suggesting a straightforward short position without overthinking it, while cautioning against trading at certain levels on slower timeframes.

34:28

The speaker discusses trading time frames, recommending focusing on three- to five-minute charts rather than very short 15-second charts, which are only useful when the market is moving sideways and less active. They analyze market behavior through volume and price action (VPA) on one-minute charts, noting patterns such as rallies with falling volume, wicks indicating indecision or weakness, and consistent downtrends supported by volume. The emphasis is on watching candle formations and volume to interpret market sentiment and momentum.

35:56

The market shows attempts to rally but continues to weaken overall, with buyers stepping in briefly as indicated by higher volume and candle patterns. Despite occasional strength, broader factors like the rising dollar and other indices suggest the downtrend will likely continue. The market approaches the volume point of control, where congestion is expected—a typical behavior signaling a balance between buyers and sellers.

36:56

As the market opens, there is a natural surge in volume and volatility that gradually attenuates as trading settles into a session pattern. This decrease in volume does not indicate weakening selling pressure but reflects the market stabilizing after an initial burst. Multiple time frames are crucial for understanding market behavior; on the five-minute chart, a volatility trigger suggests either congestion or a potential reversal. This highlights the importance of analyzing several time frames to make informed trading decisions.

38:04

The speaker explains the rotation of the trend monitor in the fastest 15-second timeframe, noting a shift from bullish sentiment to a potential reversing trend. This change will gradually filter through to slower timeframes, including the 15-minute chart. The presence of a volatility candle on the 50-minute timeframe suggests trapped traders who entered shorts expecting a market collapse are now likely regretting their decision as prices move rapidly upward. The advice given is to avoid impulsive trades based on assumptions of continuous downward movement.

39:26

The speaker highlights the impact of an upcoming major news release expected to heavily influence the market, likely causing pauses and reversals rather than a consistent downward trend. They emphasize the importance of anticipating these market dynamics instead of only trading in one direction. The session wraps up with a mention of additional resources for analysis and a note about the next webinar starting soon.

40:01

The speaker introduces where to find their books on Amazon, available in Kindle and paperback formats, including several foreign language editions such as Japanese, Chinese, and Vietnamese. They express gratitude for the feedback received from readers. The discussion then shifts to the availability of trading indicators at quantumtrading.com compatible with multiple platforms like MT4/5, NinjaTrader 7/8, TradingView, and TradeStation 9.5. Upcoming updates to TradeStation 10 and TradingView indicators are mentioned, with a focus on porting previously unavailable indicators to TradingView due to Pine Script limitations. Customers who have purchased the TradingView package will receive these new indicators free of charge.

41:29

It is emphasized that all customers who have bought the full package will receive future indicator updates at no extra cost. The speaker then provides updates on the forex funded trading program, noting several improvements including increased leverage at the portfolio manager stage. A significant enhancement is the addition of new markets; beyond the 28 currency pairs, traders can now trade major indices and gold once they reach the portfolio manager level.

42:30

The session concludes with the hosts taking a short break before resuming in 15 minutes. They thank attendees for joining and provide a brief market update, noting slight reversals and upward movements in currency pairs like the Aussie Yen and the FTSE 100. The commodity currencies appear to be flattening on the hourly chart. The hosts sign off, wishing everyone a good trading day.