Applying volume price analysis to gold futures on a breakaway

Applying volume price analysis to gold futures on a breakaway

Volume price analysis works in all timeframes and for all instruments and markets and just to prove the point we have an excellent intraday example trading gold futures on the faster timeframes.

00:11

VIX overview and importance in trading

00:11

The speaker explains their current setup on TradingView, focusing on the VIX (Volatility Index) displayed in various timeframes including one, three, five, and ten minutes. They mention the significance of the VIX rising, implying an increase in market volatility.

00:45

VIX rising means falling indices

00:45

The speaker explains the inverse relationship between the VIX and equity indices: when the VIX rises, indices tend to fall, and vice versa. Recently, a rally in the VIX caused a sell-off in equities, but the VIX has mostly declined throughout the day, leading to a minor reversal in the markets. They emphasize the importance of monitoring the VIX when trading any index or risk asset class, as it provides real-time insight into market sentiment via the options market. Currently, the VIX is oscillating within a congested range, indicating a pause in market movement.

02:16

Trading futures outside cash markets

02:16

The current market is trading within a fairly tight range, showing oscillations that reflect earlier price movements. There was significant price action on Globex this morning. Traders are advised not to overlook opportunities outside of cash markets, as those price actions tend to be more measured, evenly paced, and less influenced by algorithms. For beginners, it is recommended to start trading with the YM or US 30 futures, as they are the least volatile compared to the ES, which is the most volatile, with the NQ falling in between.

03:18

Gold bullish move and trading tips

03:18

The speaker advises beginners to start trading the YM (Dow futures) carefully and avoid jumping straight into the ES (S&P 500 futures) due to its higher risk. Attention is then shifted to gold, which has experienced a strong bullish move over the past few hours, supported by volume profile analysis and presenting straightforward trading opportunities. It’s noted that gold can be traded on MT5 platforms as well, not just through large futures contracts. Finally, the discussion moves to currency markets, focusing on the Australian dollar which mirrors broader risk sentiment and equity movements, reflecting trends across the ‘Aussie complex.’

04:18

Risk currencies and market impact

04:18

The segment discusses significant price movements in the Aussie dollar against the yen, highlighting a large downward candle indicating a major move typical for the yen currency complex. It compares this with the pound yen, which shows less pronounced movement due to recent economic data and a compressed market condition. The explanation emphasizes that currency markets do not move in isolation; local news can specifically impact individual currency pairs differently.

05:22

Gold as hedge against inflation

05:22

The speaker discusses the strength of certain market drivers influenced by sentiment, noting that the Pandiyan is not sentiment-driven. They shift focus to gold, expressing a bullish long-term outlook due to expected inflation pressures globally, especially rising food prices. Gold is anticipated to benefit as a hedge against inflation, leading to a strong bullish trend. The speaker also mentions applying volume price analysis to trading gold, highlighting a recent congestion phase visible on the chart.

06:28

Volume analysis in breakout trading

06:28

The breakaway trading tactic is effective if patience is maintained and volume is used to confirm the breakout’s validity. Without volume, traders risk falling for fake outs. Volume helps identify genuine moves and prevents misinterpretation of breakouts.

06:56

A volatility trigger combined with strong volume signals a genuine move. Initial strong candles with good volume indicate momentum, but rising volume and wicks on later candles suggest profit-taking and potential caution for traders holding long positions.

07:21

Increased volume and upper wicks indicate significant selling pressure as traders take profits after a rapid price rise. The sizable price move in a short timeframe prompts big operators to reduce or close positions, signaling caution.

07:49

High volume and large upper wicks on candles suggest active selling and profit-taking by major players. This leads to expected consolidation or a pullback rather than a full reversal. The market then shows signs of a weak rally following the selling pressure.

08:14

The market attempts to rally with decent volume and strong candles, but emerging upper wicks hint at developing weakness. This signals a potential pause or slowing momentum in the upward movement.

08:41

Volume analysis shows weakening momentum with lower volume under recent candles. Traders holding profitable positions might consider partial profit-taking. The market appears poised for a pause or minor pullback as strength diminishes.

09:11

Low volume areas on the chart suggest the price can move through these zones relatively easily without much resistance. Traders can manage positions flexibly, taking partial profits while leaving some exposure to potential further gains.

09:35

On the 30-minute chart, volatility candles indicate expected consolidation following a strong move. Price breaks through low volume areas with decent volume, but the presence of upper wicks suggests some caution as the market may slow or pause.

10:08

The 3-minute chart shows similar patterns with a brief run-up supported by decent volume, followed by weaker candles with upper wicks and declining volume, signaling minor weakness and a possible minor pullback rather than a major reversal.

10:37

Volume decline under weakening candles indicates that any pullback is likely minor profit-taking, not a shift in overall market sentiment. The trend remains bullish, supported by strong price action and significant support levels on the trend monitor.

11:06

Key strong support levels have been tested multiple times and held, reinforcing bullish sentiment. The VIX is oscillating, suggesting volatility is present but controlled. The market is attempting to push higher despite some struggle, maintaining an overall positive outlook.

11:39

Market levels, VIX, and trading platforms

11:39

The speaker discusses the market’s attempt to regain bullish momentum on the daily chart, highlighting a key resistance level for the YM that must be breached for longer-term gains. They note that this level holds more significance on slower timeframes compared to faster ones. The market is trying to push higher despite some oscillation, with the Forex market seemingly quiet ahead of a bank holiday in the UK. The speaker concludes this segment by mentioning upcoming market events and providing a brief overview of the day’s trading environment.

12:42

The discussion shifts to available trading tools and platforms, starting with where to find indicators for Quantum Trading across various platforms like MT4, MT5, NinjaTrader, and TradingView. The speaker explains ongoing work to integrate TradeStation with Interactive Brokers, allowing users to leverage TradeStation’s features alongside IB’s liquidity and market access. They also mention TradeStation Securities version 10, which offers enhanced applications and charting tools, including RadarScreen for stock trading. Plans for expanding to MultiCharts and further developments on TradingView are also highlighted. Lastly, the speaker briefly touches on their education program, emphasizing their commitment to supporting traders.

14:14

Forex education program and contact info

14:14

The speaker discusses the forex market’s unique position as the largest and central market that influences others, highlighting its constant flow of sentiment, risk, and reward. They introduce a comprehensive forex trading program that includes over 200 hours of video content, video podcasts, and 13 PDF downloads, offering a full set of tools and indicators. The speaker invites viewers to reach out with questions via email and mentions the schedule, noting a day off before resuming sessions on Tuesday morning for the London trading session.

By Anna Coulling – creator of volume price analysis