Analysis of a trend on the GBP/JPY 10 minute chart

Analysis of a trend on the GBP/JPY 10 minute chart

An analysis of the ten minute chart for the GBP/JPY currency pair using volume price analysis and the Wyckoff methodology.

00:09

MT4 vs MT5 chart flexibility and platforms

00:09

The speaker discusses the flexibility of MT4 and MT5 platforms compared to NinjaTrader. MT5 offers more time frames than MT4, but these are only time-based charts without tick or second charts. Users are limited to what the platform provides unless they switch to platforms like NinjaTrader, which offer more features. The speaker also mentions upcoming integration with TradeStation for futures trading and explains that on MT platforms, futures contracts such as the VIX are synthetic versions rather than actual contracts.

01:18

Trading cash indices vs futures contracts

01:18

The UK 100 cash index is discussed as a popular market among traders, including forex traders, who appreciate access to diverse markets. The US 30 cash index, equivalent to the Dow Jones, is also mentioned, noting that its values closely track both cash and futures markets. Trading these indices can be done on platforms like MT5, but accessing actual futures contracts requires specialist brokers and specific platforms like NinjaTrader and TradeStation, which are optimized for these contracts. The recording and editing process for these sessions begins immediately after the trading session ends, aiming to segment the content into smaller parts for easier consumption.

02:35

Chopping sessions into smaller segments

02:35

The speaker discusses the challenge of audience engagement during hour-long sessions, noting that many viewers do not watch the entire duration despite valuable content. To address this, they propose breaking the content into smaller sections to make it more accessible. The conversation then shifts to a question about Renko charts, with one speaker preparing to hand over the explanation to Rory.

03:05

Dollar liquidity and global financial impact

03:05

The speaker explains that the current financial issue is not about rising interest rates but a liquidity shortage centered around the US dollar, which is crucial for international trade and finance. Many countries and businesses borrow in dollars, so when they need to repay debt, they must buy dollars, driving up its value. This demand for dollars can tighten liquidity globally, which the Federal Reserve has sometimes addressed by injecting dollars to prevent severe economic damage.

Despite efforts by some countries like those in Europe and China to reduce dependence on the US dollar, it remains the dominant global reserve currency, with commodities priced in dollars. The discussion hints at the complexity and power of the dollar’s role in the global economy, and the challenges of moving away from it.

05:13

Wyckoff laws and Pound Yen reversal example

05:13

The speaker discusses the Wyckoff method using the Pound Yen as an example, highlighting one of Wyckoff’s three laws—the supply and demand law, which relates to accumulation, distribution, and reversal points. A notable point of reversal is identified through a Tuba reversal, leading to a shooting stock pattern that initiates a downward move. The volume accompanying this move confirms its validity. The segment also emphasizes the importance of support and resistance, both price-based and volume-based, as key pillars of the Wyckoff method.

06:17

Volume and price-based support resistance

06:17

The discussion focuses on volume-paced resistance derived from the volume point of control, emphasizing the importance of considering both price and volume when analyzing support and resistance levels. A reversal indicated by increasing volume marks the start of a primary uptrend. However, the trend eventually reverses completely rather than just pulling back, with subsequent sideways movement accompanied by weak volume, suggesting limited momentum.

07:20

Price encounters resistance both from a price-based and volume-based perspective, highlighted by a candle with a tight spread but significant volume—an incongruous signal where the effort (volume) does not translate into expected price movement. This mismatch indicates weakness as the price fails to advance despite high volume, confirming the presence of a strong resistance area and resulting in subsequent selling and sideways price action.

08:21

Repeated attempts to break a specific resistance level weaken the price, as shown by candles with reasonable volume failing to push higher. A strong support line is identified below, marked by a red line, indicating balance between buyers and sellers near the volume point of control. The segment concludes with a pivot candle signaling weakness and congestion, suggesting indecision and a potential shift in market dynamics.

09:27

Volume signals primary trend reversal

09:27

The segment explains the significance of candle patterns in technical analysis, focusing on a break away from congestion. It highlights the presence of a wick indicating price support, but emphasizes the strong resistance ahead and the volume patterns that suggest a likely large downward move.

The analysis points out that despite some effort to push prices lower, the trend continues downward with falling volume, signaling the move may be nearing its end. The discussion references primary trends, reversals, supply and demand dynamics, and the role of accumulation and distribution in price movements.

10:34

This part focuses on interpreting volume relative to price action to determine the authenticity of moves. It points out a key candle showing significant selling pressure despite some buying at the lows, indicated by the highest volume in the section. The fading volume suggests the downward move is coming to an end. The speaker stresses that while buyers and sellers are always present through limit orders, the volume patterns here signal a transition phase in the market.

11:36

Price and volume begin to rise again, but volume declines as the price approaches a major resistance zone defined by both volume and price. This leads to a rollover and a potential sideways move due to the time of day, with only the U.S. session open and the deeper liquidity in London and Europe absent. The speaker explains the importance of reading volume in the context of trading sessions and suggests that breaking through this resistance area will be challenging, likely resulting in sideways price action for the time being.

12:46

The final segment summarizes the key trading principles covered, emphasizing the laws of supply and demand, reversals, and the relationship between effort and result. Recognizing these patterns helps traders stay in moves with confidence. The speaker notes the analysis has been conducted across multiple time frames and briefly mentions addressing audience questions before concluding.

13:20

Indicators, platform support, and closing remarks

13:20

The speaker discusses the development of tools to support volume price analysis and Wyckoff laws, mentioning where to find indicator details on quantumtrading.com. They explain that TradingView lacks the full set of indicators due to platform code limitations, and updates are also being made for TradeStation. The session concludes with information about upcoming trading sessions focused on Forex and the London market.

14:29

The speaker reflects on the unprecedented market conditions, comparing them to the 2008 financial crisis and the Great Depression, while emphasizing the importance of controlling the COVID-19 virus to minimize loss of life. They acknowledge the current uncertainty, suggesting more people may turn to trading in the future. The message closes with a reminder to prioritize health and safety during these challenging times.

By Anna Coulling – creator of volume price analysis