Applying volume price analysis to the forex market

Applying volume price analysis to the forex market

As the London forex market gets underway Anna explains the basic principles of how to apply volume price analysis to the forex market and in particular how this is blended with Richard Wyckoff’s three laws. These are supply and demand, cause and effect and effort vs result.

00:01

Webinar introduction and disclaimer

00:01

The webinar begins on time with a warm welcome to all attendees. The host notes that technical issues have been resolved despite one participant still unable to hear. Attendees are reminded to review the disclaimer displayed on their screens before proceeding.

00:31

Advice on trading risks and audience overview

00:31

The speaker advises viewers never to use money they cannot afford to lose when trading in any market, emphasizing the importance of this caution especially given current market conditions. The session includes a diverse audience, such as Forex program students and users of quantum trading indicators.

01:04

Session structure and volume price analysis

01:04

The speaker welcomes viewers who have discovered them through various platforms like YouTube and Facebook, emphasizing inclusivity. They introduce themselves and David, who is present, and explain that the session will analyze markets using volume price analysis. The discussion will cover the fundamental landscape, related markets, and overall market conditions.

01:36

Impact of global medical crisis on markets

01:36

The current situation is largely influenced by the ongoing global medical crisis caused by the coronavirus. The methodology involving volume price analysis is thoroughly explained in a series of books available on Amazon, including a digital box set that provides detailed information. Additionally, a set of supporting tools has been developed to aid the methodology, especially some that are specific to forex trading, which will be explained further as the presentation continues.

02:20

Quantum Trading program and indicators

02:20

This segment introduces the Quantum Trading Education program, highlighting that it includes around 200 hours of video content, PDF downloads, and five core modules. The program provides a full set of indicators compatible with various trading platforms such as MT5, NinjaTrader, and TradingView, with Tradestation support in progress. The speakers also mention their collaboration in developing a volume price analysis methodology based on five key pillars.

03:31

Wyckoff methodology and its three laws

03:31

The speaker introduces the influence of Richard Wyckoff’s work, emphasizing three fundamental laws: the law of supply and demand, the law of effort and result, and a third implicit law that shapes market behavior. These laws provide a framework for interpreting charts, offering insight into current market conditions and potential future movements. The discussion highlights how volume price analysis (VPA) is tied to these principles to create a narrative for market trends.

04:36

For those enrolled in the program, the technical analysis module covers Wyckoff trends, primary and secondary trends, and methods for reading price and volume to identify trade opportunities and manage exits. Even for those not in the program, a brief overview is provided to demonstrate the value of Wyckoff’s methodology. This approach can be combined with other common trading tools like moving averages, stochastics, and Fibonacci retracements. The key benefit is a clearer understanding of genuine price moves, which helps reduce stress and uncertainty in trading decisions by offering more confidence in trade entries and market behavior.

06:18

Managing trading stress with VPA

06:18

The speaker discusses managing stress when trading with real money by using a clear methodology that provides a narrative of current and upcoming market actions. They mention plans to create schematics to explain this further in future sessions. This webinar series continues with upcoming sessions focused on Forex trading, highlighting the development of specific indicators tailored for the Forex market. Despite Forex being considered the easiest market to trade due to its accessibility, liquidity, and low capital requirements, the speaker emphasizes the value of specialized tools and platforms like MT4 and cTrader (c5) offered by many brokers.

07:22

Forex market complexity and currency strength

07:22

The speaker explains that while the forex market offers easy access, trading itself is complex. They introduce a currency strength indicator developed to analyze money flow across multiple timeframes, such as daily and hourly charts. This tool helps identify which currencies are strong or weak, exemplified by the Japanese yen, which has been declining due to improved market sentiment.

08:25

The Japanese yen functions both as a safe haven and a risk currency, so it falls when investors favor riskier assets like equities. Recent strong equity days have caused the yen to decline on daily charts. However, in shorter timeframes, there are counter-movements, including a rise in the Australian dollar against the yen. Market sentiment is fragile, causing fluctuations and tradable corrections in pairs like the Aussie yen.

09:28

Market sentiment remains unstable with potential for both positive and volatile days ahead. It is uncertain whether the recent sell-off has bottomed out, requiring chart analysis to determine. Understanding the yen’s correlation with market sentiment aids traders in interpreting chart movements, with the hourly timeframe used for observing individual currency behavior.

10:04

Currency matrix and market sentiment

10:04

The currency matrix ranks currency pairs, and currently, yen pairs are scattered on the hourly chart, indicating market uncertainty and lack of clear sentiment. Markets are searching for a stable base amid ongoing concerns. The best news would be control over the pandemic, with hopes tied to reducing death tolls and medical breakthroughs. Despite horrific impacts in Italy, Spain, and the U.S., there is some optimism due to the recent approval of a large rescue package in the U.S., although it still requires further approval and is distinct from a stimulus package.

11:03

Economic impact of pandemic and rescue packages

11:03

The speaker discusses the challenging economic impact of the virus, noting that upcoming unemployment numbers from the state are expected to be very poor, with initial reports from Singapore indicating a 10% decline. They emphasize the difficulty of navigating the markets during this time and highlight a significant increase in demand for physical gold, such as Canadian Maple Leafs and Chinese pandas, which is causing shortages due to refinery closures, particularly in Switzerland.

12:10

Gold demand and euro/Aussie analysis

12:10

The speaker discusses recent market activity, focusing on the Euro and Australian Dollar pairs, analyzing them using multiple timeframes and charting techniques. They mention strong buying interest in the British Pound earlier in the morning. Additionally, there is an emphasis on the ongoing economic impact of the pandemic, with attention drawn to the upcoming Bank of England official meeting and its significance in light of the current economic damage.

13:25

Upcoming BOE meeting and trading cautions

13:25

The discussion covers a significant cut by the Bank of England to a point at Northpoint 1 and highlights the importance of monitoring unemployment claims in the United States. As the month ends, attention shifts to the upcoming London market open, which often brings unpredictable market activity. Traders are advised to be cautious when entering trades just before the London open, recognizing that although the market operates 24 hours a day, certain times such as this can be more volatile and uncertain.

By Anna Coulling – creator of volume price analysis