And volume price analysis can be applied to currency futures too!

And volume price analysis can be applied to currency futures too!

Volume price analysis is a universal methodology and can be applied to any chart in any timeframe. Here we consider currency futures using the Quantum Trading tools and indicators.

00:13

Overview of currency futures and forex matrices

00:13

The speaker apologizes for briefly switching screens and assures viewers they haven’t left. They mention monitoring several financial tools, including minis, currency futures, forex, currency strength, and the currency matrix, to keep an eye on market conditions.

00:47

Explanation of futures contracts for currencies

00:47

The speaker explains various futures contracts for different currencies, starting with the Aussie dollar (6a), British pound (6b), and Canadian dollar (6c). They clarify that the Canadian dollar futures are quoted inversely as CAD/USD, which can be confusing since futures are always referenced against the US dollar as the counter currency. Similar numbers appear across contracts but are not identical unless closing. The speaker then introduces the 6e contract, related to the Euro, and adjusts the view to analyze recent movements tied to an ECB reaction earlier in the session.

01:47

Volatility and volume analysis on currency movements

01:47

The market is experiencing significant volatility as the price moves away from the volume point of control with increased trading volume. The discussion highlights that Volume Price Analysis (VPA) is applicable across all markets, using the example of the Australian dollar (Aussie) which is rapidly climbing. The movement is driven primarily by selling pressure on the US dollar. There is also a comparison between the Aussie and the Japanese yen, noting the different color-coded representations and reversed positions to illustrate currency buying and selling dynamics.

02:59

Strong selling of the dollar affecting currency trends

02:59

The segment discusses the significant selling pressure on the Japanese yen and the US dollar, leading to a strong rise in the Australian dollar. This trend is visible across multiple currency pairs, including the New Zealand dollar and the euro, all reflecting a weakening dollar. The pound, however, is weak and falling against the dollar, which explains why the British pound (Cable) is not showing as strong a trend compared to other currencies on fast time frames.

04:17

Using currency matrix for market sentiment

04:17

The speaker explains the function of the currency matrix, which provides a universal sentiment overview across the currency complex. Currently, the market is selling the dollar, reflected by currency pairs moving to opposite ends of the matrix. Ideally, all pairs would be stacked in a consistent manner. The speaker emphasizes that volume price analysis is applicable across different trading instruments, including spot, futures, ETFs, and stocks, and highlights the importance of charting with volume for effective analysis.

05:25

Switching focus to indices and VIX analysis

05:25

The speaker analyzes market indices, focusing on multiple levels of the enqueue index and examining the VIX (volatility index) across different time frames. They observe a recent surge followed by congestion and an initial rollover in the VIX, noting that the same volatility indicators are used as on MT4 and MT5 platforms.

06:39

Volatility triggers and their trading implications

06:39

The speaker explains the significance of a volatility trigger in the market, emphasizing that it signals rapid price movements often driven by market makers, big operators, or insiders. Traders reacting impulsively tend to enter trades near the end of these moves and risk being trapped as the market either congests or reverses. The advice is to stay out if not already in, and if in profit, consider closing positions to wait for clearer signals.

07:33

When a volatility trigger occurs, if the trade is profitable, it’s wise to close and wait for the market to either continue favorably or reverse. If the position is losing, traders must decide whether to hold or cut losses. The volatility indicator is based on the average true range, detecting when price moves outside its normal range. It fires in real time, not waiting for candle close, allowing traders to make timely decisions.

08:23

The volatility indicator activates as soon as price action exceeds the average true range within a candle, providing early alerts during the candle’s formation. This is especially useful on slower time frames like 5, 10, or 15 minutes. Traders can choose to stay out during high volatility phases until the market calms and price action stabilizes. The current market shows a volatility spike followed by a slight rollover, indicating no strong trending momentum.

09:15

The market is exhibiting minor weakness without strong momentum or trend development. Tick speed data shows predominantly red signals, indicating low buying pressure, with the last significant green tick appearing nearly two hours ago. This suggests cautious trading conditions and a lack of decisive market direction.

09:46

Market nervousness and bearish intraday trends

09:46

The market is primarily showing bearish signals with predominant red and some orange indicators, reflecting weak buying activity and strong resistance overhead. There’s a slight rally noted, but overall selling pressure remains. Volume is low and participation is lacking, creating a nervous atmosphere. This situation suggests a potential upcoming correction, though it may not happen immediately.

By Anna Coulling – creator of volume price analysis